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Board forwards proposed water and wastewater rate increases to City Council after cost‑of‑service review
Summary
Utility financial consultants presented a cost‑of‑service study recommending phased rate adjustments (water ~3.9%, wastewater ~3% over five years) to stabilize cash reserves and debt coverage; the board approved resolution 2650 to send the proposal to City Council, with an estimated combined impact of about $2 per average residential customer.
The Cola Board of Public Utilities voted to forward proposed water and wastewater rate adjustments to City Council after a presentation by Utility Financial Solutions that reviewed cost‑of‑service results and rate design options.
Don Lund (remote) and Dawn Lund of Utility Financial Solutions told the board the study focused on three targets: operating income, cash reserves and debt coverage ratio. Dawn Lund summarized the modeling that showed doing nothing would erode operating income and cash balances, while modest, phased increases and potential bonding for planned capital work would stabilize the utility’s financial position. She said the consultant recommends a water rate plan that includes a 3.9% adjustment (phased over study years) and a wastewater plan including 3% adjustments to meet targets; the presentation estimated an average combined impact of about $2 a month for the typical 5/8‑inch residential customer.
Carmen and staff told the board a portion of the water budget included a $1.5 million local share for lead service line replacement (assuming a 50% DWSRF reimbursement). Board members discussed the flexibility to delay bond issues if capital projects are deferred and noted that final project costs for the wastewater treatment expansion would inform future rate steps.
The board adopted resolution 2650 by voice vote to send the proposed rate changes to City Council; if the council approves the adjustments they would take effect July 1 as in prior practice. Staff will provide detailed cost and timing updates as engineering estimates for projects are finalized.
