The Rexburg City Council on Nov. 18 set a public hearing for Dec. 17 at 6:30 p.m. on proposed water and sewer rate increases after staff presented a consultant’s utility rate study showing operating revenue generally covers expenses but capital funding is eroding when the city’s five-year capital improvement plan is included.

CFO Matt Nielsen summarized the study prepared with consultant FCS, saying the analysis targets three goals: stability, revenue sufficiency and rate equity. Nielsen told the council the consultant’s revenue-requirement work supports staged increases to preserve capital capacity: for water, an 8% increase effective Jan. 1, 2026, followed by a 6% increase in October (start of the new fiscal year); for sewer, an 8% increase in January and an 8% increase in October.

“The recommendation for water is that we do an 8% increase effective 01/01/2026, and then…do 6% in October,” Nielsen said. He added that sewer would see “8% in January and then 8% in October.” The study covers a five-year forecast through 2030 and flags that, without increases or debt, the city’s capacity to fund capital projects would be largely depleted.

Council members pressed for clearer, everyday impacts on households and comparisons with neighboring cities. Councilmember Reeser urged the staff to provide an average household bill example; Nielsen said the model can produce household impacts and noted the base water charge would rise about $1.78 and sewer base about $1.47 under the preliminary design.

Nielsen and council members emphasized the approach is incremental rather than a single large increase, and that the city could adjust the model if actual growth differs from projections. The council approved a motion to set the public hearing; details and a formal rate-design proposal will be discussed at the hearing.

Next steps: staff will prepare cost-of-service analysis, rate-design options and example household bill impacts for council consideration and public review at the Dec. 17 hearing.