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Covington hears utility rates assessment that could raise unmetered bills by $14 a month in year one
Summary
Raftelis presented a utility finance study showing projected revenues at current flat rates would not cover expenses; the consultant and city staff proposed a $14 monthly increase for inside‑City unmetered water and sewer customers in the first year, with further phased increases in later years to meet debt and capital needs.
Covington City Council on April 14 heard a presentation from consultant Raftelis outlining shortfalls in the city’s water and sewer funds and a proposed phased increase to monthly bills for unmetered inside‑city customers.
"At existing rates, projected utility revenues would not be sufficient to cover projected utility expenses and maintain required cash balances and debt coverage," Chad Cowan of Raftelis told the council, summarizing the firm’s review of the city’s customer accounts, billing data, consumption, existing debt, covenants and capital needs.
Raftelis said the city currently pays about $1.2 million per year in debt service on six VRA/state revolving fund loans and must maintain a 1.15 times debt service coverage. The consultant identified roughly $9.1 million in five‑year water and sewer capital needs (approximately $7 million for water and $2.1 million for sewer) and modeled an assumption of about $6 million in new debt to fund projects.
Under the city’s current structure, inside‑City unmetered residential customers pay a flat $29.50 monthly charge for water and $38.50 for sewer — $68.00 combined regardless of usage. Raftelis warned that flat rates may cause low‑usage households to subsidize higher‑usage customers and that meter data can help target leaks and identify usage patterns.
As a budget‑stage proposal, Raftelis and City staff outlined a possible first‑year increase of $14.00 to the monthly utility bill for inside‑City unmetered customers, followed by a projected $8.00 increase in the second year and $4.00 increases in subsequent years, subject to future review and actual utility performance and formal approval through the city’s budget process.
City Manager Allen Dressler said staff are repairing and replacing commercial meters and stressed the proposal covers water and sewer only. "The proposed $14.00 increase would be presented as part of the budget process for water and sewer only, with refuse remaining unchanged at this time," Dressler said, adding that any future refuse changes would be communicated separately.
Council members and a resident asked questions about meter installation, leak detection, commercial meter repairs and equity between low‑ and high‑usage customers. Dressler described the city’s transition away from the landfill business and noted long‑term costs for landfill closure, capping and monitoring when responding to a citizen question about refuse rates.
Next steps: Raftelis’ findings and the staff recommendation will be included in the city’s upcoming budget discussions in May; any rate changes must be adopted through the formal budget and ordinance process before taking effect.
