Boulder City advisory panel reviews rate-study options, weighs loans and reserve targets to limit electric bill hikes

The Utility Advisory Committee on Wednesday heard a detailed presentation from consultant FCS Group on revenue needs for Boulder City—s electric, water, wastewater and landfill utilities and debated how to balance large capital needs, reserve targets and rate impacts.

Consultants led by Melanie Hobart said the study—s baseline (no-rate-change) would deplete some utility fund balances by 2028—notably electric, where a roughly $71 million 10-year capital plan is the primary pressure point. Hobart said the study uses a 2026'2035 forecast, assumes 90 days of operating reserves and a 2%-of-assets capital reserve. She gave two paths for electric: a stand-alone approach that would require larger immediate increases (an illustrative 9% in 2027 followed by smaller increases) and an interfund-loan strategy that would cap near-term increases at about 5% per year but draw on other utility reserves.

"We are not raising rates to build reserves. We—re raising rates to cover the other costs while we maintain the reserves," Hobart said, explaining that all utilities currently start above the recommended targets but that projected costs would push balances below those targets without action.

Under the loan option staff analyzed, two interfund transfers would support electric: a $3.0 million loan from the municipal rate-stabilization fund (transferred in 2028 and repaid from water fund sources at about $600,000 per year) and a $2.15 million loan from the water fund to electric (2029'31) repaid by electric beginning 2032 at roughly $430,000 per year. With those loans, Hobart estimated the typical sample residential electric bill impact in 2027'28 would be roughly $6— per month rather than $11—2 under the higher, stand-alone scenario. She cautioned that final customer impacts depend on cost-of-service and rate-design work to follow.

Committee members pressed several elements: the timing and size of the 2% capital-target recommendation, whether reserves already held (including an extraordinary-maintenance account) meant the city could defer portions of the target, and how new large customers or regional wholesale-cost changes would affect the forecast. Chair and other UAC members said they were generally comfortable locking in 2027 guidance (the year the city will use for next year—s budget) but wanted flexibility and more analysis for 2028'29.

Gary Poindexter, the city—s public works utilities director, and George Khan (staff augmentation/consultant) participated in the discussion and confirmed the city had options to shift capital timing and use available reserves; Poindexter also noted some projects had been rolled forward between fiscal years to balance workload.

Public commenter Fred Bolt urged the committee and FCS Group to account for potential new data-center demand and the risk of reduced hydroelectric supplies from WAPA/Hoover/Glen Canyon as Lake Mead levels change. Bolt said such changes could materially increase wholesale power costs and stressed those risks were not yet captured in the study assumptions.

The consultant also presented the other utilities—stories: water (2026 rate revenue baseline ~$10.7 million) is using reserves to cover near-term operating gaps until a 2019 bond retires in 2032 and would require modest increases (about 3.5% in the consultant—s recommended path); wastewater (2026 revenue ~$2.5 million) faces large lift-station capital in 2030'31 that drives proposed 5% increases in the near term; landfill (2026 revenue ~$1.3 million) largely follows contractual escalation and a modest forecasted fee change.

Several members asked the consultant to return with cost-of-service and rate-design results showing low-, medium- and high-usage customer impacts, and to provide a short set of revenue-requirement options the UAC could recommend to City Council in August. The consultant and staff said they aim to present those cost-of-service impacts at the UAC—s July meeting and to bring a packaged recommendation to council in August, while noting additional meetings could be scheduled if more time or detail is required.

The committee took one formal action at the start of the meeting—it unanimously approved the March 4 meeting minutes—but did not adopt any rate changes or binding recommendations on interfund loans during the session. The UAC set its next meeting for July 8, when FCS Group is expected to present cost-of-service details and the committee may choose from several revenue-path options for 2027'29.