Lindon staff recommend utility rate increases as Orem wastewater upgrades drive costs

Lindon City staff presented proposed utility rate increases and a multi-year capital plan at the council’s budget kickoff work session, citing a required share of upgrades at the Orem Water Reclamation Facility and other aging infrastructure.

The city’s utilities director, Juan Garrido, told the council that Lindon’s proportional share of the Orem plant upgrade is about $6,800,000 and that Orem’s full project cost runs roughly $151,000,000. He said Lindon is contractually obligated to pay a percentage of treatment-plant upgrades and that raises will be needed to cover those costs and related sewer, water and stormwater projects.

“The sewer, our hands are largely tied. I mean, it’s — we’re contractually obligated to pay a percentage of the treatment plant costs for any upgrades that they have to do,” Garrido said. He proposed a sewer rate increase that would raise the city’s average sewer bill from about $47.54 to roughly $51.50 (base rate to $28.40 and a per-unit treatment charge to $3.85). He also proposed smaller adjustments for culinary and secondary water (a 5% base increase and a 4% tier increase in the lower zone) and a 4% stormwater increase. Together staff estimated a typical central-Lindon household could see a roughly $9.35 monthly increase under the package discussed.

Why it matters: Lindon sends wastewater to a regional treatment plant and buys capacity. Large, statewide mandates on nutrient removal and aging treatment equipment have prompted upgrades across the valley; those costs are passed through to partner cities. Garrido said Orem’s recent investments (including polishing processes to reduce phosphorus and nitrogen) improved discharge quality and created reuse opportunities, but added capital and operational costs.

Council discussion focused on alternatives to rate increases. Several council members and staff suggested transferring some general-fund dollars into the utility funds to blunt rate impacts, and explored timing and borrowing options. City Administrator Adam Cowie said transfers and targeted bonding are options the council could use to spread costs or reduce near-term rate pressure. “If you don’t feel appropriate to do this rate increases, we can push projects out,” Cowie said, noting trade-offs between delaying projects and future cost escalation.

Staff also described a continuing program to reduce infiltration and inflow into the sewer system. Garrido said the city completed an initial study, will fund a next-phase $40,000 sensor deployment and targeted basin investigations to find leaks and reduce flows sent to Orem; the goal is to defer capacity purchases by lowering wastewater flows.

What’s next: Staff will incorporate council direction into a proposed budget and bring formal rate ordinances through the tentative/proposed/final budget schedule. The council asked staff to model scenarios that include partial general-fund subsidies or bonding, and to return with revenue and expense projections showing impacts to customer bills and fund balances.

Sources and evidence: Presentation and rate tables presented by Juan Garrido and follow-up budget discussion with City Administrator Adam Cowie during the Lindon City budget kickoff work session.