Consultants present Waterworth models showing large potential water and wastewater rate increases without transfers or financing

Gabriel, a client-success representative for Waterworth, told the Tenino City Council on June 9 that the city’s water and wastewater funds face a potential cash shortfall under a status‑quo forecast. Using a continuous revenue‑management model, Waterworth loaded Tenino actuals for 2023–2025, the FY2026 budget and 3% inflation assumptions to project future expenses, transfers and cash positions.

In the water fund’s “worst‑case” scenario — assuming no transfers from the general fund — Waterworth modeled a roughly 50% one‑time rate increase in FY2027 to avoid a negative cash position by 2028, followed by 4% annual increases to keep pace with inflation. Gabriel said that on an average monthly water bill of $12.65 that 50% increase would be about $6.70 per month. He emphasized the figure is model‑based and can change when transfer/grant information is updated.

For wastewater, the council heard the headworks/screens project is modeled at about $1.5 million in FY2027. Under a worst‑case (cash‑funded) scenario the wastewater fund would likewise require a large rate increase (Waterworth modeled 50%) to remain solvent; including the repayment of prior transfers or partial grant awards reduced modeled increases to roughly 30% in one scenario. Waterworth presented a financing scenario in which bond or loan proceeds fund the screens project; that scenario showed far smaller rate impacts — roughly 4% annual increases — and produced a healthy cash position in projections.

Council members and staff asked technical questions about the assumptions. Council members were told that a $1.05 million transfer out to the general fund in 2024 materially contributed to a projected cash dip and that if those transfers are repaid on the schedule discussed, rate pressure would be substantially reduced. Waterworth also noted the Washington Department of Ecology’s guidance that includes a 4% baseline increase for the year, and that grant opportunities from the Department of Commerce or Ecology could materially change outcomes.

Waterworth offered follow‑up sessions and viewer access to the live model for deeper review and said the software allows scenarios to be updated as new grant, transfer or capital cost information arrives. The presenters and staff also said they had reviewed the budget closely and corrected earlier overstatements in sewer revenue by approximately $500,000 when reconciling actuals.

The council did not take any formal action on rates at the June 9 meeting. Waterworth and city staff said they will revise scenarios as grants, transfer schedules or financing terms become firmer and can return with further analysis.