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Beaver City council schedules public hearings on water, sewer and PI rate changes after review of utility funds and debt payoffs
Summary
Councilmembers directed staff to prepare public hearings for proposed changes to water, sewer and PI rates and discussed using on‑hand cash to retire select debts, while staff outlined scenarios showing how 10–20% rate increases would affect utility fund margins.
Beaver City council members agreed to place public hearings on proposed changes to the city’s water, sewer and PI (public infrastructure) rates on a February meeting agenda and asked staff for recommendations on which debts, if any, to retire with available cash.
Staff presented a multi‑year view of enterprise fund revenues and scenarios showing the effect of 10%, 15% and 20% increases on the city’s water fund. Stacy, who prepared the slides, said fiscal‑year 2024 water revenues (everything minus transfers) are “right at about $2,000,000” and that a 10% increase would move the water fund to roughly break‑even: “If we increased it by 10% so if we just increase ourselves by 10%, we would be at 0%.”
Council members discussed several policy choices: whether to retire interest‑bearing bonds first, or to prioritize paying off 0% instruments tied to nonrevenue facilities such as the opera house and the library. One council member argued that eliminating payments for facilities that do not produce equivalent revenue would free cash for higher‑return uses, noting that “if you take and get rid of that payment and then you turn around and have a ball tournament…that’s more money that’s coming to us to help pay for these other things.” Another member supported retiring some debt with on‑hand cash: “I generally very much agree with the idea of retiring some of them with some of the cash that we have on hand.”
Staff reviewed recommended rate structure changes discussed during the meeting: lowering the base allotment of water included in the base fee from 10,000 gallons to 7,500 gallons and increasing the base fee to $38.50 were presented as an initial scenario. The attendees discussed tier pricing examples in which the next block of consumption would be charged at approximately $0.50 per 1,000–5,000 gallons (participants used the example of $0.50 for the next 5,000 gallons). Staff also modeled an alternate example that raised the average 3/4‑inch residential base by about $7 and estimated revenue increases in several scenarios.
Council members asked staff to refine the numbers and to return recommendations on which debt instruments to retire and which rate design to pursue. Staff noted one water bond with an interest rate of about 2.62% and said the city expected a related receipt in September; another item discussed was a prior ARP‑era allocation that staff described as a benefit to the city. Council members and staff discussed whether to hire an outside consultant to perform a complete utility rate study; some members favored using internal staff and available expertise, while others recommended contracting a specialist to validate assumptions and the proposed rate structure.
As next steps, council members directed staff to place public hearings for water, sewer and PI rate changes on the council agenda (the group discussed the second meeting in February as a possible date), to circulate the slide deck and to return a written recommendation that prioritizes (1) which debts to consider paying off with cash balances and (2) a recommended rate schedule for the water and sewer funds.
The discussion was technical and focused on the city’s enterprise funds; no formal ordinance or fee change was voted on at the meeting. Council members noted that water and sewer fee changes must be set by ordinance rather than a resolution and that public hearings are required before final action.
