Nevada City hears sweeping water and wastewater rate proposals to shore up aging systems

Consultants from the Rural Community Assistance Corporation (RCAC) told the Nevada City Council on Jan. 14 that Nevada City’s water and wastewater utilities are operating with thin reserves and face substantial capital and replacement costs, and they recommended multi‑year rate increases to avoid debt and fund an expected capital improvement plan.

RCAC’s presentation outlined that current water revenues from ratepayers total about $822,000 annually while the system’s operating budget and capital needs leave it in an operating deficit. RCAC said the water asset inventory has a present‑day replacement value of about $12.6 million (rising to roughly $16.4 million at replacement) and recommended annual cash contributions to an asset replacement reserve. For water, the consultants offered two options: a recommended plan that defers a portion of the CIP by one year and would raise water rates by about 65% in year one then smaller increases in subsequent years, and a pared‑down option that excludes the CIP and would raise rates by about 48% in year one. RCAC said both paths aim to reach a minimum target fund balance (operating and…