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Clean Water Services presents cost‑of‑service findings and proposes 4% baseline rate increase
Summary
Clean Water Services staff told council their cost‑of‑service study found local rates were not covering local sanitary and stormwater programs and presented a baseline 4% rate projection, major capital needs and a timeline for board adoption and public hearings.
Representatives of Clean Water Services presented a cost‑of‑service update and long‑term financial forecast to the council during the April 13 work session. The presenters — introduced in the transcript as a community relations lead (identified in the transcript as “Joe”), Chief Financial Officer Kathy (surname in transcript), and interim CEO/GM Rick Shanley — summarized a study completed in February 2026 that updates how costs are allocated between regional and local components of sanitary sewer and stormwater services.
The study found that local rates were not fully covering the costs of local programs for sanitary sewer and stormwater, prompting Clean Water Services to propose updated cost allocation and a projected baseline 4% annual increase for regional charges used in the FY2027 budget forecast. Presenters showed a combined monthly bill figure for an average residential customer of $49.39 in the slides presented at the session. "The combined rate is $49.39," the presenter said during the briefing.
Clean Water Services staff said the agency plans roughly $754 million in capital spending over the next five years (about 90% regional) for projects including conveyance upgrades, pump stations and upgrades at the Durham treatment facility; these capital needs are a major driver of the proposed rate path. Presenters also described a plan for reserves that will draw down through about 2031 as major projects are completed, with board action and budget hearings scheduled in April–June 2026: board adoption of the allocation methodology (April 14), publication of the FY2027 proposed budget (April 20), Budget Committee review (May 8) and a public hearing with final adoption to follow in June/July.
Council members asked about recycled‑water (purple‑pipe) projects; presenters said a recycled water master plan is underway, that recycled water can be a cost‑effective compliance tool, and that the council will see an intergovernmental agreement for a purple‑pipe project at an upcoming meeting. Presenters also noted an ongoing utility billing feasibility study to evaluate billing options and a customer assistance option for emergency or low‑income customers across the service area.
No vote took place during the work session; Clean Water Services will present the allocation methodology and budget documents to its board and to member cities as part of the public process.
