Baker Tilly: St John sewer fund healthy for now, but Sherville rate and capacity changes could raise costs

At the May 20 meeting of the Sanitary District for the Town of St John, Baker Tilly presenter Amber said the sewer utility showed positive cash flows for 2025 and projected continued fund-balance growth even after modeling potential changes tied to Sherville.

Amber told the board that the sewer utility recorded roughly $5.4 million in total revenues in 2025, with operating disbursements around $2.9 million and debt service near $1.1–$1.2 million. She noted that the retirement of 2012 bonds and a temporary water-loan repayment freed about $700,000 in annual debt costs and that a payment in lieu of taxes of about $129,000 and roughly $1 million in capital were included in the net cash-flow calculation, leaving a positive net cash flow of about $200,000 for 2025.

The consultant said the 2026 budget was built conservatively (three-year averages plus inflation) and that the current model illustratively includes a proposed 19% wholesale-rate increase from Sherville and an additional 10% capacity purchase. Amber said those two items were both included in the 2026 projections and that the 19% increase would add about $300,000 annually to the town’s purchase‑treatment operating expense if executed. "Total revenues of about 5.4 million," she said while summarizing the 2025 cash-flow numbers.

Amber emphasized that the wholesale-rate and capacity figures remain draft and could change; she said Baker Tilly will reissue updated numbers if finalized changes are materially different. The firm also named Gregory Roach as the specialist conducting a deeper review of wholesale-rate impacts for the town.

Board members discussed whether St John should buy additional capacity from Sherville (moving from roughly a 30% share of the plant to 40%) and the trade-offs of paying a higher share of improvement costs versus staying at a lower share and potentially paying to expand later. One board member warned the town is approaching treatment limits on high-flow days, saying, "we're over capacity already per day," and urged the district to investigate sources of inflow and infiltration and to consider how future residential development will affect peak flows.

Amber and other participants noted that timing matters: the debt roll-off eases near-term pressure and, with the current capital plan (roughly $1 million a year on average), the sewer utility does not require an immediate sewer-rate increase based on available data. She recommended continued monitoring and said the firm will return with updates or red flags if assumptions change.

Next steps: Baker Tilly will continue its review and return to the district with any materially updated forecasts; the board also heard a separate task-order update for a sanitary sewer master plan and asked staff to return with a cost proposal next month.

The presentation and discussion ran through the consultant’s slides and data; no formal rate action was taken at the meeting.