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Consultants present sewer-rate study; council hears options that could raise average bills $9–$19 a month
Summary
Consultants from Baker & Ty told the council the town’s sewer improvement fund is substantially underfunded and offered three rate alternatives that would raise an illustrative 4,000‑gallon household bill from about $50 to roughly $58, $62 or $69 depending on the option and whether a payment‑to‑general‑fund is included.
Consultants from Baker & Ty walked the council through a sewer rate study that found operating cash balances roughly in the $250,000–$290,000 range but an improvement fund well short of a recommended target.
"We like to see about 150% coverage," Joey, a consultant, said, explaining the town currently shows about 200% coverage on certain measures but lacks adequate reserves earmarked for capital improvements. The study identified the improvement fund balance at roughly $73,000 versus a recommended target in the neighborhood of $286,900 based on depreciation and capital‑replacement guidance.
Why it matters: without higher dedicated reserves, council members were told, the town will continue to rely on short‑term measures and could face steeper rate or borrowing costs when a major collection‑system or plant project is required.
The consultants presented three policy alternatives. The first is a modest approach that would add roughly 18% to system revenue (illustratively about $9 a month on a 4,000‑gallon residential bill). A middle alternative aimed at meeting reserve‑target guidance would raise bills further (estimated about $12 a month, depending on phasing). A highest option — which includes a payment‑to‑the‑general‑fund calculation discussed as a maximum lawful amount — could increase average bills by as much as about $19 a month in the consultant’s example. The presenters emphasized the 4,000‑gallon example is illustrative: actual customer bills are metered on water use.
Council members pressed on phasing vs. immediate increases. "By easing into it, we're not doing ourselves any justice there," one member said, noting phased raises can leave balances short of target and require additional increases later. Consultants recommended reviewing rates every three to five years and said a larger immediate adjustment would improve reserve balances sooner but increase short‑term customer impact.
Financing context: consultants noted the town’s existing 2020 bonds carry a low interest rate (about 2.1%), a rate unlikely to recur for future borrowing. They discussed SRF and USDA loan terms, explaining USDA loans can be amortized longer (examples discussed in the meeting included 35–40 years) and SRF terms are generally shorter. Grants and SRF assistance may reduce borrowing needs for qualifying projects but are not a guaranteed replacement for local revenue.
Next steps: presenters told the council the legal process would include drafting an ordinance, publishing notice and returning for adoption after required public-notice steps. The council did not adopt any rate changes at the meeting; members asked staff to circulate the full study and consider timing and phasing options in light of upcoming capital needs.
Reported numbers and sources in this article come from the council presentation and the consultants' rate study provided at the meeting; where a figure in the transcript was unclear, the article uses the clearer numerical statements the presenters made (for example the improvement‑fund balance cited as about $73,000 and the consultant’s recommended target near $286,900).
