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Council told rate study will address wastewater, hookups and potential rate changes
Summary
Council members heard that wastewater and water enterprise reserves have been thin in some years, that a rate study will model hookups, operations vs. maintenance costs and reserve needs, and that staff will return with more detail next week.
Council members pressed staff on utility reserves and an upcoming rate study that staff said will set recommended rates and examine system deficits.
Presenter said the wastewater fund ran a $43,000 deficit in FY2022 and that deficits are carried as due‑to/loans from the General Fund and reconciled through the annual audit. "Because on the financials, it will show that it's due to other funds," Presenter said, describing how enterprise deficits are handled.
Council member (S6) described the rate study as "critical," saying it will separate how much revenue is needed for operations, maintenance, expansion and reserve building. "If there's any area that I'm concerned about, it's your interest funds," the council member said, arguing the utility reserves are not where they should be and that the study should examine potential rate increases and the effect of legislative proposals.
Staff confirmed the rate study will also identify properties that should be connected but are not and how those unconnected parcels affect system deficits; that analysis and capital planning will be incorporated into a five‑year projection used by the consultant. Council members asked whether legislative action limiting rate increases should be modeled; staff said they will include legislative risk scenarios.
The discussion also covered the base fee for service and why some non‑connected properties still pay a fee: staff explained the base fee helps maintain system capacity and readiness even when water service is not currently flowing to a parcel. Staff noted customer relief policies (example: limited forgiveness for high leak bills, reviewed case‑by‑case for amounts above $1,000).
Staff will return with the rate study scope and detailed findings next week; council members indicated they expect the study to clarify whether rate changes or connection‑driven revenue can sustainably build required reserves.
