Commission approves recommended wastewater bill increase after hearing costs tied to treatment-plant upgrades
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Summary
The commission voted 6-1 to recommend FY2027 wastewater collection rates, citing depleted reserves, upcoming large treatment-plant projects and state regulatory requirements that raise treatment O&M and capital needs.
The Utility Advisory Commission voted 6-1 to recommend the FY2027 wastewater collection financial forecast and associated rate adjustments after staff outlined drivers that include mandated nutrient-removal upgrades, higher treatment operating costs and the need to rebuild depleted CIP reserves.
Eric Wong, resource planner, said staff recommends a 16% wastewater collection rate increase for FY2027, roughly $10.70 per month for a typical residential customer, driven by growing treatment costs, the need to restart a multiyear sewer replacement program in FY28 and replenishment of a depleted CIP reserve. The package includes projections for later-year debt service tied to a $192 million secondary treatment upgrade being carried out jointly by multiple partner agencies.
Plant manager Aaron Gilbert explained that the treatment plant is midway through major upgrades, including nutrient-removal construction required by regulators and several project-specific emergencies in recent years. He described how SRF financing is being used for the large secondary treatment upgrade and noted that debt service on that SRF loan will begin once construction is complete (projected to result in higher costs in outer years).
Commissioners asked for a clearer breakout of the components pushing treatment costs higher (labor, new positions, reduced grant assumptions, chemical and energy costs) and sought more detail on capacity fees and project timelines. Staff said they will provide additional backup showing cost-component breakdowns and will link the wastewater master-plan outputs to CIP schedules.
The commission approved the staff recommendation 6-1. The dissenting vote noted concerns about the magnitude of the increase and requested further effort to identify cost savings at the plant.
Next steps: staff will forward the commission'recommendation to the City Council and provide the requested cost-component detail and project timelines to the commission ahead of council finance-committee review.