Consultants and staff summarized a utility-rate analysis that models multi-year capital and repair-and-replacement needs for Orem's water, sewer and stormwater systems, and proposed a combination of rate increases and debt financing to fund projects.

LRB public finance and city staff said capital investment needs drive the evaluation: the water fund's model included approximately $16.1 million in master-plan capital and about $77.7 million in repair-and-replace costs through a 2033 horizon; the sewer fund showed roughly $130.3 million in master-plan capital and $41.8 million in repair-and-replace; the storm fund showed about $33.1 million master-plan and $10.3 million repair-and-replace. The presentation noted these figures are the primary driver of proposed rate increases.

Recommended approach: the consultants proposed a combined path of modest annual rate increases plus issuing debt to amortize large projects rather than a single, large one-time rate spike. They showed scenarios based on 20-year bond amortizations and explained that financing terms (interest rate, term and potential WIFIA or other federal programs) would change the long-term outcomes and could reduce near-term rate pressure.

Proposed rate changes presented by staff included: a universal 3% annual increase for water base and usage rates (with example base-rate changes for a 3/4-inch meter rising from $21.17 to $21.81 in year one and projected to $24.54 later in the five-year plan); a substantive one-time sewer increase (the presentation used a 28.5% figure for a proposed up-front increase) followed by smaller inflationary increases; stormwater a front-loaded increase near 6% and then smaller annual increases thereafter. Staff said the sewer fund requires the larger up-front correction because of heavier near-term capital needs.

Two new pass-through charges for raw-source water were proposed for inclusion on consumer bills rather than rolled into the base rate: a per-meter Deer Creek charge and a Jordanelle charge tied to a longstanding Jordan Valley payment. Staff provided example per-meter impacts (for a 3/4-inch meter they cited about $0.86 for Deer Creek and about $2.91 for Jordanelle, or roughly $3.75 combined) and said these are items the city has paid and that attaching visible pass-through line items would make them transparent to ratepayers. Staff emphasized that historically the Jordanelle payment (about $1.2 million per year) had been paid from impact fees or capital but that impact-fee revenue has declined.

Debt and financing: presenters recommended issuing debt (modeled at 20-year amortization) to spread the cost of master-plan projects, noting that a longer amortization or lower interest rates (for example WIFIA-type terms) could improve affordability but may increase total long-term interest costs. Presenters noted the treasury/market environment affects interest costs and that Salt Lake City's low-cost borrowings earlier in the year reflected a different market point.

Comparisons: staff showed the combined utility bill would remain competitive with peer cities under the proposed increases. They also recommended periodic, ongoing rate reviews and stressed the importance of pursuing federal or state financing programs that could improve terms.

Next steps: staff and consultants will return with formal rate ordinances and fee schedules for public hearings and council action; they recommended continued monitoring and pursuing favorable financing options.