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Berne council introduces bond, hears rate study after lower-than-expected bids for lead-service and water-main work
Summary
Council introduced a bond ordinance to finance SRF-backed lead-service-line and water-main replacements and heard a consultant's rate study showing the 2026 project would require roughly $170,000 in new annual revenue (about a 17% increase, ~$4/month for a typical residential user); the study outlined a larger future plant project that would require larger phased increases.
Berne officials introduced a bond ordinance to fund a 2026 water project that combines lead-service-line replacements and eight water-main replacements and reviewed a rate study showing how those costs would affect household bills.
City financial staff and consultants said bids came in well under earlier estimates: the construction low bid for the combined project was reported at about $1.622 million, and the total bond-funded project cost is estimated at roughly $2.451 million after contingencies and non-construction costs. The State Revolving Fund (SRF) program will finance the work; about $687,000 of the total is expected to be covered by SRF's lead-service-line program at 0% interest, while the remaining roughly $1.764 million would carry a traditional loan with an estimated interest rate of about 3.33% in current assumptions.
"We were fortunate in the bids," the consultant said, noting the award must still be approved by the board of works before SRF closing. The consultant also explained the bond ordinance contains a not-to-exceed parameter commonly used to accommodate final project costs and bid variances.
The accompanying rate study compared year-end 2025 account balances (about $740,000) with recommended reserves and examined five-year capital needs. That analysis produced two scenarios: the near-term 2026 project would require roughly $170,000 of additional annual receipts (about a 17% increase or about $4 per month for a typical residential user defined as a 5/8-inch meter and 4,000 gallons), while a larger future water-plant rehabilitation or replacement (the study used a mid-range $6.7 million estimate) would require substantially larger rate increases phased over 2026–28. The consultants recommended a phased approach to smooth the impact rather than a single large spike.
The council moved to introduce Ordinance No. 793 (bond introduction) and later introduced Ordinance No. 794 (rate ordinance) to begin public-notice and hearing steps. The motions were made and seconded and passed by voice vote.
What happens next: staff will present the formal bond ordinance for adoption at a later meeting, the board of works must consider construction award before SRF loan closing, and the council will hold public hearings on the rate ordinance as required by statute.
