Consultants recommend water and sewer rate increases for Aberdeen to fund 5‑year capital plan

Consultants presenting to the City of Aberdeen City Council on the water and sewer rate study recommended adopting their cost‑of‑service plan ("Option 1") to fund near‑term capital projects and meet financial coverage targets.

The consultant told council the water and sewer departments are enterprise funds "intended to be self funding," and the study recommends putting more of the rate increase on usage charges while keeping smaller percent increases on monthly customer charges. For water, Option 1 would raise the residential per‑thousand‑gallon usage rate to about $5.25 in 2026 and to $8.30 by 2030; the recommended monthly customer charge for smaller meters would rise from the current $20.32 to $21.55 in 2026 and to $27.20 in 2030. For sewer, the recommended usage fee under Option 1 would increase to about $5.25 in 2026 and to $9.05 in 2030, with the monthly service charge rising to $15.10 in 2026 and to $22.75 by 2030.

Why it matters: consultants said the increases are designed to fund planned capital improvements (including an anticipated large 2030 treatment‑facility or other project), achieve a target cash reserve around 70% of operating revenues by the study end, and satisfy a 1.1 coverage ratio that many funding agencies require. The study showed capital needs varying year‑to‑year — from roughly $2.5 million to nearly $5.8 million for water and $1 million to $8.5 million for sewer in later years — and modeled how rates would sustain the departments without recurring transfers from the general fund.

Cost allocation and irrigation rate: the presenters explained they used American Water Works Association methods to split costs between base (average day) and extra (peak/irrigation) capacity. They recommended exploring an irrigation or increasing‑block structure for residential irrigation demand but flagged a practical obstacle: billing classes currently mix multifamily apartment meters with single‑family homes, and separating accounts would require manual data work and billing‑system effort. City staff said the separation can be done with existing software but would be labor intensive.

Affordability and comparisons: the consultants compared Aberdeen with other large cities in the state and reported Aberdeen’s current rates are generally in the bottom third. Using a median household income figure cited in the presentation (~$66,008), the consultants said a 5,000‑gallon residential example is roughly 0.89% of median household income for water alone — below commonly cited EPA affordability guidance (1.5%–3%). The presenters emphasized these are guidance figures and acknowledged some households remain burdened despite the averages.

Pretreatment and surcharges: the sewer analysis accounted for pollutant loadings; consultants recommended raising the industrial pretreatment fee from $0.32 to $0.44 per thousand gallons and modestly increasing surcharge rates for BOD, TSS and ammonia consistent with ordinance provisions and the pretreatment program required by state and federal guidelines.

Use of reserves and a 2030 project: to reduce borrowing for a large East Side trunk sewer and lift‑station project planned for 2030, the consultants proposed applying $5 million of sewer reserves to the project to lower loan size and repayment burden; they modeled how that contribution would affect cash balances and reserves.

Council response and next steps: council members thanked the presenters and asked staff to update the per‑customer impact spreadsheet used previously so elected officials can review typical household and business bill changes. The consultant recommended the council consider the cost‑of‑service Option 1 for both water and sewer but did not record a formal motion or vote during this session. The meeting adjourned to an executive session to discuss a contractual legal matter.

Representative quotes from the presentation include: "the water and sewer departments are enterprise funds" and "we recommend water rate Option 1 and sewer rate Option 1," both statements made by the consultant during the presentation. The council did not take a formal vote at the meeting; staff will provide updated impact spreadsheets for further review.

The council scheduled no final vote in this session; presenters recommended retesting rates every 3–5 years and further discussion about separating customer classes before implementing an irrigation rate.