Hutchinson council adopts new water, sewer rates and authorizes bonds, temporary notes for water projects

The Hutchinson City Council on Oct. 21 unanimously approved updated water and wastewater rates, authorized the issuance of general obligation bonds to pay for water system improvements and gave staff authority to proceed with public sale of bonds and temporary notes to preserve flexibility for planned projects, including possible purchase of local water rights.

The action follows a lengthy presentation by David Gwynn, Hutchinson utilities director, and consultants from HDR who said the city must raise rates to fund an expanded capital improvement program aimed at aging mains, valves, and major wastewater plant work. Josiah Close of HDR described a 10‑year capital plan that included about $30 million proposed for water main replacement and $36 million for sewer line and wastewater plant improvements, with an immediate State Revolving Fund (SRF) loan application for the treatment plant. The council approved the rate ordinance to take effect Jan. 1, 2026.

Why it matters: city staff said the current approach of “run to fail” on underground infrastructure is not sustainable. The rate changes and bond authority are designed to increase pay‑as‑you‑go capital funding, reduce long‑term borrowing costs, and qualify Hutchinson for certain grant programs that require higher cost recovery metrics.

Details of the rate plan and assistance program

David Gwynn told the council the city serves roughly 15,000 residential and 1,400 nonresidential water customers and that the water system has roughly 300 miles of water main; the wastewater system has about 240 miles of sewer main. HDR proposed restructuring residential water volume charges into an increasing‑block design so the lowest‑usage customers pay less per unit and high seasonal users pay more to better reflect capacity costs.

Josiah Close said the proposed water changes would lower bills for many typical users in the 3–6 HCF (hundred cubic feet) range while shifting greater cost recovery to larger seasonal users. For sewer, HDR proposed a two‑tier system that again lowers cost for low use and increases charges for higher contributors to reflect capacity and treatment costs. HDR also recommended seeding a utility billing assistance program with roughly $100,000 per utility to help qualifying low‑income customers; the eligibility rules and application process were not finalized and staff said they would return with program details before implementation.

Smart meters and prioritizing mains

Mark Manus, water superintendent, described recent field work near a well house where multiple valves failed when the system was shut down. He said a large number of valves in the area were broken and that many mains date to the 1890s and require custom fittings when replaced. Staff said the city is budgeting for a multi‑year smart‑meter rollout, which would allow near‑real‑time leak detection for customers once installed.

Bonds, temporary notes and water rights

Finance Director Angela Richard presented two related bond measures. One resolution authorizes the issuance of general obligation bonds to finance certain water system improvements and permits staff to incur expenditures before formal bond sale; the other resolution authorizes staff to proceed with public sale of GO bonds and to issue temporary notes (including temporary notes tied to the possible purchase of water rights) so the city can preserve structuring flexibility if new major water users emerge. Richard said approving the authorization does not commit the city to purchase water rights or accept bid awards and that staff would return with the final bond sale documents. A bond‑market advisor on the phone indicated the actions should not harm the city’s bond rating.

Council action and votes

Council voted unanimously on each measure: the rates resolution, the resolution authorizing GO bonds for water improvements (including the water‑rights authority), and the resolution authorizing public sale of bonds and issuance of temporary notes.

What remains

Staff and consultants said more analysis and planning remains: HDR will deliver a prioritized water‑main replacement plan by September 2026 based on age, break history and material; the low‑income assistance program rules will be finalized before Jan. 1, 2026; and staff will continue work to secure SRF loan approval for treatment plant work. Council members asked for follow‑up on staffing and administrative capacity to deliver the capital program.

Quotes

"We basically run to fail. There is no proactive look at down the road," David Gwynn said of current water‑main replacement practice.

"The goal is to get out of the practice of bonding the water main replacements," Mayor Stacy Goss said, adding that having cash on hand for pay‑as‑you‑go projects could save residents interest costs over time.

Ending note

The council’s approvals move the city toward a multi‑year capital program for water and sewer that staff say is necessary to reduce emergency outages, modernize aging infrastructure and make Hutchinson eligible for certain state and federal funding programs.