City Manager Joel Kramer urged the Nogales City Council on Tuesday to approve a study and a rate plan to shore up the city’s water and sewer systems, saying consultants flagged a large funding gap and that state loan programs may be unavailable without rate fixes. "We're on the Titanic and we know there's an iceberg ahead," Kramer said, arguing the city must act to avoid system failures.

Kramer told council members that consultants Michael Vasquez and Kevin Burnett recommended what he described as a 106% funding target to fully stabilize the enterprise fund and a minimum corrective step of about 56% to carry sewer repairs for five to six years. He proposed commissioning an engineering study (estimated at about $70,000) to map every water and sewer line, locate valves and pressure points, and produce a prioritized replacement plan within roughly six months.

Councilors pressed for alternatives and protections for low‑income residents. Council member Doyle highlighted the strain on households in Nogales and urged consideration of phased increases to reduce immediate hardship; Kramer noted an existing 30% low‑income discount but acknowledged any percentage rise would still increase bills. Several council members proposed gradual increments (examples discussed: an initial 15% or phased multi‑year increases) rather than a single large jump.

Kramer said the city has already taken operational steps to reduce losses — moving three gas tanks to save about $140,000, recovering floating hydrant meters, ordering roughly $200,000 in hydrant locks, and improving meter reading and enforcement. He told the council the study and improved billing processes (including a planned Workday billing rollout) would produce the concrete numbers needed for a vote in January.

The council did not vote on a specific rate increase during the special session. Kramer said he would return with a clear, itemized proposal in January (or sooner, if the council prefers) that would show projected revenue under different increase schedules and how those revenues would enable access to WIFA and other state funding. The council signaled it wants more detailed options, including projected annual revenue, impacts on customers and proposed protections for vulnerable households, before making a final decision.

Next steps: Kramer will ask consultants to prepare a formal proposal and rate scenarios for the January meeting; the council may then choose between a larger immediate increase or a phased approach to restore the utility’s financial stability.