Waukesha board recommends 2026 sewer rate package, citing capital needs and higher operating costs

The Waukesha City Board of Public Works voted Thursday to recommend a 2026 sanitary sewer rate package that raises the non-return-flow portion of user rates by 4.51% and the return-flow charge by a little more than 12.5%.

The recommendation, presented by consultant John Cameron, would raise the monthly fixed sewer charge from $6.88 to $7.22 and the volumetric charge from $10.48 to $10.94 per 1,000 gallons. "The recommendation is for a 4.51% increase to the non return flow portion of the rate," Cameron said, and the composite change would raise an average residential customer's bill by about $2.20 per month.

Finance Director Joe Shiro told the board the larger move on the return-flow component is tied to several years without increases and a jump in monitoring and operating costs. "It calls for just a little over 12.5 percent just for the return flow rate," he said, noting roughly a $400,000 rise in operating expenses tied to expanded monitoring required by the state Department of Natural Resources and ongoing debt-service obligations associated with the return-flow project.

Cameron and Shiro walked the board through the utility's cash flows: roughly $22.5 million of total revenue anticipated in 2026, operating and maintenance costs on the non-return-flow side of just over $8.8 million, about $13.6 million in net cash flow before debt service, and debt-service payments just under $10 million. Planned capital outlay next year on the sewer side was presented as just under $16 million and, by design, the utility plans to use unrestricted fund balance and surplus cash flow to pay some cash-funded capital rather than borrowing in calendar year 2026.

Board members pressed staff on cash balances and on whether cash would simply accumulate. Shiro and Cameron said the forecast shows positive cash flow but that the plan anticipates using portions of excess cash for future capital needs to limit additional borrowing. "We're planning on using about $10,000,000 of that towards capital needs in the future," Shiro said when asked to clarify how much of the projected balance might be spent.

After discussion, a motion "to accept or to amend the proposed 2026 sanitary sewer rates and recommend those to council as presented" was made and seconded; the board voted in favor (O'Donnell — aye; Kevin Riley — aye; Piper — aye; Kathleen Boyle — aye) and the recommendation will be forwarded to the Common Council for its consideration.

Votes at a glance: Other actions taken at the meeting - Approval of payments (Item 5A): board approved eight payments, including two final payments, following brief discussion of the Horeb retaining wall project and a material timing delay. - Item 6A (phosphorus-removal chemical): the board recommended awarding the low bid to Kamira Water Solutions for ferric chloride at $2,891 per dry ton (ferric sulfate alternative $2,999 per dry ton). Staff noted chemical prices were down from the prior year. - Item 6B (polymer for sludge dewatering): the board accepted a single bid from SNF Polydyn at $1.83 per pound delivered; staff said last year's bid from SNF was $1.85. - Item 7B (Change order #1, Clean Water Plant Phase 3): the board approved a change order with J.F. Ahern to fill and cap an abandoned 62-inch effluent pipe exposed during dome demolition. "This change order is to fill that pipe with full fill and put a stainless steel top hat at the end of the pipe," Plant Manager Zach Eisner said, explaining crews will pump the wastewater back into treatment, cap and backfill the line while two clarifiers are temporarily drained and bypassed.

Why it matters: Board documents and the presenters said the increases aim to maintain debt-service coverage, fund significant capital needs and avoid rate spikes in single years by smoothing increases across a five-year plan. Staff emphasized the goal of using fund balance and operating cash flow to limit new borrowing where possible while keeping enough coverage for existing debt.

Next steps: The Board of Public Works forwarded its recommendation to the Common Council, which must formally consider and adopt any rate changes.