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Consultant: Wilmar wastewater rates must rise over several years; council schedules Dec. 2 public hearing
Summary
Consultant Doug Green told the Willmar City Council that rising debt-service obligations and operating costs mean sanitary sewer revenues should increase roughly 12.5% in 2025, 10% in 2026 and 5% in subsequent years; the council set a Dec. 2 public hearing to consider rate amendments.
A consultant told the Willmar City Council on Nov. 18 that the city’s wastewater utility faces a short-term spike in debt-service payments that likely requires multi-year rate increases to meet bond covenants and operating needs. Doug Green of Baker Tilly, the consultant on the wastewater rate study, said the study’s objective was “to ensure that the rates are sufficient to cover projected operating expenses, capital requirements … and debt service.”
Green showed historical trends and projected a jump in debt service from about $4.8 million this year to more than $7 million by 2029 because of a set of state loans tied to the 2008–09 wastewater treatment project. He highlighted planned capital needs, including an estimated $1 million biological nutrient removal project in 2025 and lift-station work extending into 2028, and noted uncertainty around future nitrogen mandates and a Lakeland Drive sewer main project.
To preserve debt-service coverage above the minimum covenant, the study recommends revenue increases of roughly 12.5% in 2025, 10% in 2026 and 5% in 2027–28. Green noted rates have not been raised since 2017 and said the proposed increases would bring coverage closer to the required minimum while also rebuilding cash reserves.
Council members asked for clarification about transfers from the general fund and whether staffing costs were included; the consultant said staffing for the wastewater enterprise remains in the utility fund and that he would supply comparative rate information for neighboring communities on request. Mayor Reese raised concerns about state nitrogen rules and their potential cost impact; Green said the city should plan as if mandates will remain in place until otherwise changed.
After the presentation, the council voted 8–0 to call a public hearing on amendments to the sanitary sewer rates for Dec. 2 and approved publishing the rate change by summary. The hearing will give residents an opportunity to review the proposed rate schedule and the study findings before any final vote.
