West Lafayette council hears wastewater utility's 2025 financial report; debt, sludge costs and modest rate action flagged

Jim Treat, a financial adviser with Cronin & Associates, and Dave Anderson, utility director, reviewed the wastewater utility's annual financial report for 2025 at the May 4 West Lafayette City Council meeting.

Treat told the council the utility held about $50 million in cash and investments at the end of 2025 (roughly $31 million of that is construction funds), about $115.5 million in net capital assets and roughly $80 million in bonded debt. He identified three main balance-sheet elements—construction funds, plant and collection assets, and bond liabilities—and said the numbers largely reflect investments tied to combined sewer overflow (CSO) projects required by EPA and IDEM.

Treat highlighted a $13 million refunding transaction completed in 2025 that replaced a 2016 bond issue without extending the term and that he said will yield about $900,000 in net debt-service savings over the remaining life of the debt. He also described two Indiana Bond Bank loans—about $10 million—to fund lagoon closure and northside lift-station improvements, and a five-year SRF planning and design note the city used to fund near-term planning without issuing long-term bonds.

On the revenue side, Treat said operating revenues rose with growth and the utility accounted for an approved 2% annual inflationary increase in user fees. He noted operating expenses increased by roughly $1.1 million in 2025 and pointed to unpredictable items such as sludge removal, which ranged from about $250,000 to $650,000 in prior years and was $622,000 in 2025.

Dave Anderson described biosolids management practices and said the utility uses permitted fields and performs required testing and reporting before land application. He said the utility is currently producing a drier biosolids "cake" and that when land-application is not possible the material is taken to an out-of-county biosolids facility.

Treat said cash from operations remained stable (about $9 million) but that net cash declined by about $3.5 million because bond proceeds were spent on capital projects. He pointed out a large 2014 refunding bond maturing soon will reduce annual debt service by roughly $2 million and improve the utility's flexibility. For rate policy, Treat said staff are studying alternatives and that council should expect a request later this year to renew modest annual inflationary increases rather than a single large hike.

Councilors asked for clarifications on biosolids destinations, the causes of sludge-cost variability, and whether current funds and coverage ratios are comfortable. Treat said stormwater funds are restricted and that increased professional-services spending in administration reflects engineering, legal and financial work on ongoing capital projects.

The presentation was informational; no formal council action was required.