Marion County utility director outlines multi‑year capital improvement plan and warns of future rate pressure

Tony Cunningham, Marion County’s utility director, presented the county’s multi‑year utilities capital improvement plan at a workshop and told commissioners the plan emphasizes large capacity projects while preserving funding for ongoing renewal and replacement.

Cunningham said the county now maintains about 913 miles of water mains, having added roughly 31 miles last year, and delivers about 18,000,000 gallons of water per day — an increase he estimated at about 10% year over year. “We now have 913 miles of water mains,” he said, and highlighted that the system recently added about 2,100 water customers and a little over 800 wastewater customers.

Why it matters: Cunningham framed the CIP around two needs that drive long‑term spending — capacity to serve growth and steady investment in aging assets. He identified three large capacity projects as the primary cost drivers: the Northwest Regional Water Treatment Plant (near 90% design), the Southwest Regional Water Reclamation Facility (wastewater expansion) and the Southeast Regional Water Treatment Plant. He said about 52% of the draft CIP budget is for capacity projects and roughly 30% for renewal and replacement work.

Septic‑to‑sewer and connections: Cunningham said the county’s septic‑to‑sewer work is near completion, with Phase 2 substantially complete and Phase 1 expected to be substantially complete in August. On expected connections he said the program will make water and sewer available to roughly 1,000 parcels (about 500 of them developed homes); deputy director Josh Kramer clarified that number includes both developed and undeveloped lots and staff reported roughly 200 connections have occurred so far.

Grants and alternative supplies: Staff described roughly $4.5 million in recent grant/loan funding applied to projects including the Lowell connection work and said some project design work has been funded by grants that can be converted to loan forgiveness. Cunningham emphasized the Southeast regional test well’s promising results as an alternative supply and said the county is continuing to seek state and federal grants for additional phases of septic‑to‑sewer and for well work.

Meters, technology and right‑of‑way coordination: The CIP includes a persistent meter‑replacement program — Cunningham said the county has about 55,000 meters and that accuracy begins to decline around 15–16 years — and staff discussed advanced metering infrastructure (AMI). “The meter is not the issue,” Cunningham said; the larger cost is building a communications network to collect AMI data. He proposed selective rollouts in focused areas and investigating partnerships with electric utilities where communication networks already exist. He also said the utility tries to place water and sewer infrastructure during roadway projects where feasible to avoid much more costly retrofit work later.

Funding, reserves and rates: Cunningham estimated capital reserves in the neighborhood of $80–$90 million (allocated to projects) and described three revenue streams that fund capital: reserves, capital charges collected when developers connect (he said capital charges are roughly $5,500 per equivalent residential connection), and base rates that cover operations and some renewal and replacement. He also explained why the county is considering borrowing for the large capacity plants: spreading the cost over a 30‑year period aligns payment with the future users who will benefit and reduces immediate rate pressure for current customers. “If you borrow for capacity, you’re now having the people that are going to be using that capacity paying for that over time,” he said.

Commissioner concerns and next steps: Commissioners pressed staff on the risk that future development might slow — reducing developer contributions and stressing the revenue mix — and on whether the utility’s base rates will reliably cover ongoing maintenance in the long term. Cunningham said the rate sufficiency analysis is still in progress and that while the study currently shows no immediate rate change, the county has not raised utility rates in 11 years and future increases remain under consideration as the CIP and O&M projections are finalized.

What happens next: Staff will continue the rate sufficiency work, return to the board with funding and borrowing scenarios, and pursue grants and selective design/expansion work to spend or obligate expiring funds. The workshop closed without a formal vote; commissioners asked staff to provide additional detail on reserves, long‑term operating assumptions and the planned debt strategy.