Utilities director outlines multimillion-dollar sewer and water projects; proposes modest rate increase

Utilities Director Will Sadler presented the water and sewer fund outlook and a multi-year capital plan during the commission's budget work session. He described an ongoing sewer rehabilitation project that bids at about $1.3 million to line roughly 20,000 feet of sewer, repair about 100 manholes and reconnect active laterals; that project had begun construction in the weeks before the meeting.

Sadler said the city plans to apply to the State Revolving Fund (SRF) for a multi-phased project. Phase one will replace force mains from the main sewage pump station and include additional sewer repairs; phase two would address plant electrical infrastructure and digester repairs and is expected to be a larger project potentially in the $6 million range. Staff noted prior principal forgiveness awards and estimated potential principal forgiveness could be about 13% (roughly $800,000 on a $6 million project) and projected long-term SRF financing as an option.

On the water side, Sadler outlined a proposed $8 million SRF application to replace up to 1,600 galvanized service lines. He said the EPA/state deadline requires replacement in a 20-year timeframe, and the city is pursuing principal forgiveness options (staff discussed potential 50% forgiveness scenarios) to reduce local repayment burdens.

Sadler recommended a modest combined water-and-sewer rate increase targeted at roughly 4–5 percent overall — about $3 a month for an average residential customer — to keep pace with operating costs, electrical increases and capital needs. He said the city's rolling averages of usage and conservative budgeting practices informed the proposal.

Commissioners asked about tap fees, industrial sales declines and the timetable for potential bidding and financing actions; staff said many projects will be phased and that bond/loan packaging will be coordinated with SRF timelines.