Consultant warns of steeper water, sewer rate increases as Cloverdale faces deferred capital needs

Mark Hildebrand, the city’s water and wastewater rate consultant, presented preliminary findings on April 22, outlining a 10-year financial plan for Cloverdale’s water and sewer utilities.

Hildebrand said the city could need 7% annual rate increases for five years, followed by additional increases later, to cover higher-than-anticipated capital spending and a sustained drop in water usage. He told the council that capital spending through 2032 now looks closer to $25.5 million, up from the $22 million projected in 2020, and that a roughly 19% decline in water sales created an ongoing revenue shortfall. “If all the forecasts hold, we expect the reserves to be drawn down until about 2033,” Hildebrand said, adding that the proposal assumes a 7% increase in revenue in year one and additional scheduled increases thereafter.

Council members challenged staff on execution and accountability. A vice mayor (speaker 2) and other council members said projects promised in prior rate packages — including tank replacements, pump-station rehabilitation and solar system hookups — have not been completed despite earlier rate increases. One council member called the current trajectory “unacceptable,” saying residents have seen higher rates without the promised capital improvements.

Hildebrand answered technical questions about cost allocation, the Proposition 218 public hearing and protest process, and how the rate design would affect different customer classes. He said the wastewater utility is financially stable with smaller increases proposed (about 4% initially), while the water enterprise faces the larger capital demands.

Council agreed to reconvene subcommittee review of the capital-project list and to bring back additional detail; no rate increases were adopted at the meeting.