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City staff outline multi‑year utility rate plan; council weighs using one‑time funds to soften early increases
Summary
A consultant told Milford council a five‑year plan would phase out a $863,000 annual transfer to water/sewer by 2030, making utilities self‑sufficient but producing a short‑term bimonthly household increase; council discussed a $500,000 one‑time infusion to smooth the first‑year hit.
Milford — At the Aug. 19 meeting the council heard a detailed rate‑study briefing from Raftelus consultant Scott Hadler proposing phased rate increases for water, sewer, stormwater and trash to correct decades of deferred maintenance and very low utility cash reserves.
Key figures and proposal: Hadler reported a 2025 interfund transfer of $863,000 from the general fund to support water and sewer operations. The study shows phasing that subsidy out by 2030 and adjusting bi‑monthly rates so utilities build minimum recommended cash reserves and meet debt‑service coverage. The consultant presented an example household impact (8,000 gallons every two months) showing combined bimonthly increases that are more pronounced in the first two years (roughly a $27 bimonthly example across utilities in early years) but flatten as cash balances stabilize.
Council discussion: Members probed alternatives to blunt the early rate shock, including shifting more of the current transfer as a one‑time infusion. The consultant modeled a scenario using a $500,000 one‑time transfer to cut the first‑year water increase roughly in half (example: a $14 increase reduced to about $7 bimonthly for that component), while noting a cash infusion is non‑recurring and does not reduce long‑term levels required to maintain assets. Council also questioned the frequency and cost of lagoon cleaning (estimated at about $200,000 when performed) and whether operation/maintenance frequencies could be adjusted to reduce recurring costs.
Why it matters: The study aims to remove a recurring subsidy and avoid reactive borrowing for large capital projects. Council members emphasized transparency to residents about why rates change and asked staff for scenarios that trade off transfers versus multi‑year gradual increases.
Next steps: Staff will further model a one‑time $500,000 transfer and detail salary allocations across funds; no rate ordinance was adopted at the meeting. Council requested additional scenarios and clearer customer impact sheets for public outreach.
