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Council accepts Stantech's water and sewer cost-of-service analysis; rate and hookup changes to be proposed
Summary
Council accepted a Stantech cost-of-service and rate design study showing sewer fund vulnerabilities without rate increases; Stantech recommended 3.95% annual sewer inflationary increases, meter-sized base charges, a tiered water structure, and raising hookup fees toward full cost recovery. Formal rate votes will come at a future hearing.
The Caldwell City Council voted June 1 to accept a cost-of-service and rate-design analysis produced by Stantech Consulting Services that outlines recommended changes to the city's water and sewer rates and hookup fees.
Kevin Cook, project manager for Stantech, said the sewer financial model projects that if rates remain unchanged the sewer fund would be depleted by fiscal year 2032. "If we do not increase rates by fiscal year 32 we will have no money in the fund whatsoever," Cook told the council.
Stantech recommended an inflationary increase of about 3.95% on the sewer side to sustain revenues and meet a 10-year capital improvement plan; on the water side the consultant reiterated previously adopted FY26 increases and proposed continued adjustments. The firm recommended scaling base charges by meter size, introducing a three-tier residential water usage structure (a low "lifeline" tier, a middle tier and a conservation tier) and updating sewer strength tiers to better match measured data.
On hookup fees, Stantech recommended combining the main extension and interceptor connection fees into a single collection-system fee and moving plant and collection fees to full cost recovery using updated asset valuations. The consultant presented an example increase in the combined hookup fee from roughly $3,790 (current) to about $8,760 under full cost recovery assumptions.
Council members asked whether the higher hookup fees could be phased in. Cook said a phase-in is possible but would require rerunning the model and could increase rate pressure on customers. He emphasized the fundamental choice: "ultimately someone is paying for it," either through higher hookup fees now or through higher rates later.
Councilor questions focused on distribution of costs among impact and utility funds, how water department contributions for a training-building water line were handled, and timing for any formal rate adoption. City staff and the consultant clarified the June 1 vote accepted the study and rate design; any fee or rate changes would be proposed at an upcoming public hearing (staff indicated July 9 for proposed fee changes).
The motion to accept the Stantech study carried 5-0; council did not vote on specific rates or fees during this meeting.
