Consultants advise Delaware City to redesign water, sewer and stormwater rates ahead of $100M capital program
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Summary
Raftelis consultants told Delaware City Council the utilities need rate changes to fund roughly $100 million in water and wastewater capital projects through 2030, proposing a customer-class volumetric water rate that lowers bills for most residential users while increasing charges for high-volume users and a multi-year financing plan.
Consultants from Raftelis presented a year-long rate study to Delaware City Council on Nov. 10, recommending structural changes to the city’s water, sewer and stormwater rates to finance nearly $100 million in capital projects over 2026–2030.
"We've been working with staff for over a year on evaluating the water, sewer and stormwater rates," said Joe Kria, a Raftelis consultant. He and colleague Delaney Ridgeley laid out a financial plan that embeds 6% annual escalations for water revenues and designs volumetric rates to protect low-volume residential customers while charging higher per-unit prices for discretionary, high-volume use.
The consultants said the combined capital forecast is about $100,000,000 between water and wastewater, including roughly $64,000,000 on water projects and about $41,000,000 on wastewater projects, and identified an almost-$40,000,000 upstream reservoir scheduled for 2029. To finance those investments, the team modeled revenue bonds; a representative borrowing example was a 30-year term at 5% interest with a 1% cost of issuance.
Delaney Ridgeley summarized the rate-design change: "We're introducing a volumetric rate specific to single-family residential customers...we're keeping that rate as low as we can for low-volume customers. If you use more than that, you're going to pay a little bit more."
The proposed structure makes the first 0–2 CCF effectively covered by the minimum charge (no change for 24% of residential customers), lowers bills for customers using 2–12 CCF, and increases unit prices for customers above that threshold. Raftelis said wastewater currently carries a substantial fund balance and does not need rate increases in the forecast period, while stormwater—being a smaller fund with near-term capital needs—would see a $0.50 increase in 2026 and $0.25 in later years.
Council members raised questions about sensitivity analyses and financing terms. "We definitely do [sensitivity testing]," Kria said, describing a working financial planning model that staff can update annually to re-run scenarios for account growth, usage, or cost escalations.
Council and staff framed the recommendation as a path to both fiscal sufficiency—ensuring each utility pays for its own costs—and conservation by charging higher prices for discretionary consumption. The consultants said their proposed bills for a typical 4 CCF residential customer remain competitive with regional peers under the recommended structures.
Next steps: staff and council will continue committee-level review and coordinate moving rates into the official fee schedule and the ordinance process.
