Beaver City says awarded sewer financing but consultant outlines likely water and sewer rate hikes

Beaver City officials told residents at a public hearing Tuesday that the city has secured a mix of grants and low-interest loans to advance a long-planned sewer lagoon project, but a utility-rate study presented the same night made clear larger, phased rate adjustments are likely to sustain utility finances over the coming decade.

Marcus Keller of Cruz and Associates, the city’s municipal adviser, told the council the community won additional funding to cover rising project costs. "The city's gonna be getting $4,934,000 of grant and $3,289,000 of loan," Keller said, and he explained an extra $754,000 in grant funding and about $502,000 in loan availability were awarded to address additional costs such as installing liners.

At the same meeting Chris Lund of Utility Financial Solutions walked the council and the public through a multi-year water and sewer financial study. Lund said the city’s water base charge (currently $35/month for an in-city residential customer) last changed in 2020, and sewer last changed in 2008. His baseline findings showed the city’s water fund would likely need a total increase in the neighborhood of 25–32.5% (about $13.50/month, raising a typical in-city water bill to roughly $48.50) and the sewer fund could require roughly an 80% increase (about $26/month, taking a $22 sewer bill to roughly $48), depending on how the council phases adjustments. Combined, Lund said, a typical in-city residential customer could see monthly bills near $96.50 under some modeled scenarios, compared with about $57 today.

Lund presented four broad approaches: gradual incremental increases (example: ~6.5% annually over five years), front-loaded increases (larger early adjustments then smaller annual increases), a single large one-time increase, or hybrids that mix those strategies. For the sewer ponds project specifically he stated estimated project costs of roughly $8.2 million, with approximately $3.3 million to be financed by bonds and nearly $4.9 million in forgivable grants reducing the community’s borrowing burden.

Council members asked for additional, locally focused comparables and alternate scenarios — including fixed-dollar monthly increases instead of percentages, a two-years-at-7% then three-years-at-3% variant, and combined-impact tables showing how water, sewer and other municipal utilities would affect total monthly household bills. Lund agreed to provide those scenarios in a follow-up PDF and to return with more detailed rate schedules.

Residents pressed the council for clear public outreach. Brian Conde noted a city notice about the bond award had said it would "not affect your rate," and asked the council to explain potential impacts. Mayor/Moderator and staff responded that the bond award was granted under the current rate structure (i.e., the award did not require immediate rate action), but the rate study shows the city will likely need rate increases in the medium term to avoid running funds into deficit.

No rate change was adopted at Tuesday’s meeting. Councilors reiterated that changes would follow formal public notice and public hearings; Lund and staff said they would deliver the slide deck and the additional scenarios requested so the council could consider specific rate ordinances in the coming months.