Municipal advisers report $2 million net cash flow for St John water in 2025; $10M in projects could prompt future rate review

Amber Nielsen, municipal advisor with Baker Tilly Municipal Advisors, told the St John Town Waterworks Board on May 20 that the water utility ended 2025 with "just over a $2,000,000 net cash flow for 2025." She presented a multi-year financial review covering historical fund balances, receipts, operating disbursements and capital spending.

The consultant said the utility saw a large drawdown of bond proceeds after projects earlier in the decade but that operating cash increased in 2025 because capital spending was lower than anticipated. "You did see an increase in all of those areas," Nielsen said of receipts, and she noted operating disbursements fell in part because the town no longer purchases water from Schererville.

Nielsen walked the board through forward-looking assumptions and stressed that projected multi-year negative cash flows were primarily driven by capital projects, not operations. She identified three major projects as primary drivers: phased 41 North Corridor water-main replacement, the 41 East Side water-main relining and additional corridor work. Together those projects account for roughly $10 million in estimated work. Nielsen said the analysis assumes the town could cash-fund some work but recommended the board consider financing options — including revenue bonds on the open market or the state revolving fund — especially when the town’s 2017 bonds mature around 2029–2030.

"If you cash fund the first $5,000,000, essentially you won't have $5,000,000 sitting to cash fund" later phases, Nielsen said, explaining why refinancing or staged financing may reduce rate impacts.

Nielsen placed the discussion in context by showing St John’s combined water-and-sewer bill for a 4,000-gallon user is about $42, below nearby peers and approximately half the statewide average. She said that affordability provides flexibility but warned the board to keep an eye on reserve levels and capital timing: "A rate increase ... might be something down the road that the water utility may want to consider in 2028–29, especially if there are large capital projects happening and they are cash funded."

The board asked questions about bond terms and treatment capacity. Nielsen said revenue bonds typically run about 20 years and that state revolving fund terms can be longer for qualifying projects. She asked the town to share engineering cost estimates as they become available so Baker Tilly can rerun scenarios and refine rate-impact projections.

The board did not take any immediate rate action; Nielsen said she will reissue a corrected capital-plan page after fixing a $50,000 entry for the Heron Lake lift station and will provide the sewer presentation separately.