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Staff proposes water and sewer rate increases to fund $148M WERF expansion
Summary
City staff outlined a 2027 water and sewer rate design tied to a roughly $148 million multi‑year capital plan for the Water Resource Recovery Facility (WERF); staff proposed a $0.75 increase to the minimum water bill and $1.00 to the minimum sewer bill to improve revenue recovery and support expanded capacity.
Water Resources staff presented the proposed 2027 rate design and long‑range capital needs at the council workshop, linking near‑term rate changes to an expansion of the Water Resource Recovery Facility (WERF) and other capital improvements.
"We are taking on a $148,000,000 in debt over the next 4 years," staff said, citing current work under construction (a $33 million solids dryer) and a proposed future expansion (approximately $115 million) to increase plant capacity from 20 million gallons per day to 32 million gallons per day. Staff said the expansion is critical to allow new sewer connections aligned with the city's growth plans.
To help pay for the capital program and recover operating costs, staff proposed raising the minimum residential water bill by $0.75 and the minimum residential sewer bill by $1.00, with small commodity charge adjustments (water commodity +$0.10 per 1,000 gallons; sewer commodity +$0.05 per 1,000 gallons in the initial year). Staff said the water increase would generate about $670,000 in additional revenue in the first year; staff presented account counts of roughly 26,000 water accounts and about 52,000 sewer customers.
The presentation said combined recovery without changes would be about 90% and that with the proposed rate changes staff projects recovery approaching 99% by 2030. Staff also noted planned cost‑of‑service updates in two years and said rate design would be reviewed again then.
Council members asked clarifying questions about growth assumptions, wholesale water arrangements with Marshall County, and affordability metrics. Staff noted an estimated affordability benchmark for very low‑income households (4% of income or 50% of median) indicating typical residential bills would remain below that threshold under the presented scenarios.
No final vote on rates occurred at the workshop; staff said the proposal will return for formal consideration after additional review.
