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Committee hears water and sewer fund outlook: new wells, rising chemical costs and rate modeling
Summary
Staff told the committee two new water wells will come online, discussed rate‑modeling assumptions and projected small service‑charge increases, and warned of large chemical cost increases (line chemical up ~19%).
Finance staff briefed the committee on water and wastewater fund projections, capital needs and operating pressures.
Speaker 1 said two new water wells are expected to come online and outlined the rate‑setting approach: historical compounding of roughly 3% for rates since 2015, billing growth near 5.7% due to usage, and a conservative projection of 2.5% CAGR in the 2027–2030 window for revenues. Staff said they applied modest expenditure growth assumptions (personal services ~5% CAGR, O&M ~2.5% CAGR) and would continue the regular rate‑setting process led by Daryl and Joel over roughly two months before returning with recommended rates.
On costs, Speaker 2 reported a 19% increase in the price for a key line chemical and a cumulative 150% increase since 2020 for that chemical, estimating the line‑item impact at about $700,000. Speaker 2 described the supplier market as concentrated (only two or three entities providing the chemical), limiting purchasing options.
For sewer operations, staff said the coming year will emphasize sewer‑line cleaning and removal of blockages (roots and grease) and blight mitigation. Speaker 1 indicated staff tentatively budgeted a 0.5% service‑charge increase for 2026 as a placeholder; the final rate recommendation could be 1–2% depending on model results.
Staff noted debt service paydowns (debt issuances falling from about $49M projected in 2026 to $36.6M by 2030) will reduce annual debt service (example: $2.275M dropping to $1.89M) and free capacity for capital projects.
No formal rate changes were approved at the meeting; staff said they will return with refined rate proposals following model updates and internal review.
