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Staff outlines options to reduce water and wastewater rates; council asks for more analysis and possibly to advance the next rate study
Summary
Public-works staff presented several levers that could reduce utility rates — shifting base vs usage charges, reallocating personnel costs, lowering reserves, cutting operations or using state revolving funds — and council asked staff to run models and work with the water/wastewater committee and the rate consultant.
Public-works staff presented rate-policy options and financing alternatives for Saint Helena's water and wastewater enterprises at the council meeting on March 11, advising that some choices would reduce customer bills but could raise other risks to bond covenants, operations or long-term capital delivery.
Director of Public Works Jason Leach (presentation) said staff and the city's rate consultant can model specific scenarios. He listed levers staff could analyze: shifting more costs into the base (meter-size) charge or the commodity (usage) charge for water; changing the allocation of management and personnel charges between the enterprise funds and the general fund; reducing reserve targets; trimming operations budgets (with service impacts); and using state revolving-fund (SRF) financing instead of bond tranches for some capital projects. Leach noted that SRF loans often carry lower interest rates but have eligibility rules and administrative requirements.
Leach said moving costs from usage to base or changing allocation percentages is feasible but could increase bill volatility for some customers and might affect debt-coverage ratios and bond covenant compliance. He also warned that deferring capital projects or lowering reserves carries operational and legal risks, including the possibility of failing to meet settlement agreements tied to prior regulatory work (Leach cited ongoing obligations tied to river/permit matters).
Public comment and next steps: Several public commenters asked for careful study and for the city to consider monthly billing; staff said a new rate study would normally be done in about a year and that consultants (Raftelis) will prepare modeling for council review. Councilmembers directed staff to coordinate with the Water & Wastewater Advisory Committee and the finance committee, run the consultant models and return with options — including whether the rate-study timeline should be advanced — before making policy changes.
Ending: Staff will engage the rate consultant and committees to run models for the council and return with recommendation(s); council members emphasized the need to protect bond covenants and operational resilience while seeking rate relief.
