Consultant urges Perry City to adopt $8,435 sewer connection fee as wastewater debt rises

Perry — A consultant told Perry City Council on Wednesday that the city should adopt a one‑time sewer connection fee of $8,435 per equivalent residential unit and prepare for phased utility rate increases to cover the East Perry wastewater plant expansion and rising debt service.

“For water plus irrigation it’s about $6 million and the wastewater system is also about $6 million. Think of $12 million,” said Rob Ory, senior principal with Repalis, during a 90‑minute presentation of his firm’s revenue sufficiency study. Repalis framed the connection fee as a way to ensure new growth pays its share of expansion costs and to reduce upward pressure on rates for existing customers.

The study describes roughly $112 million in depreciable utility assets, a capital improvement program of about $114 million over the next several years, and an East Perry wastewater expansion with roughly $74–79 million in project costs and about $30 million already invested. Repalis recommended the sewer connection fee be paid at building‑permit issuance, segregated in a separate fund, and applied primarily to debt service or to buy down bonds.

Council members pressed on timing and impacts. Repalis said the fee applies when a building permit is issued, not at preliminary development approval, and noted developers typically pass connection charges through to buyers. Using a hypothetical 400 new single‑family homes, Repalis estimated roughly $3.36 million annually in connection‑fee receipts at the proposed fee level.

Ory urged stronger reserves and fiscal controls to preserve the city’s credit profile: “I would recommend at least 150 days [of operating reserves],” he said, while acknowledging some council members favored a lower near‑term target to avoid sharp immediate rate increases.

On rates, Repalis recommended a modest near‑term adjustment (about 3%) to stabilize fiscal 2026 and then a phased increase that could average larger adjustments in 2027 to cover rising debt and operating costs tied to the new plant. The firm said wastewater debt is the primary driver of larger increases and that connection fees would materially reduce long‑term upward pressure on rates.

Council members expressed concern about multi‑year increases. One member cited a chart projecting cumulative increases to 2030 as roughly 25% for water and 49% for sewer under the current plan; others asked for a workshop to explore mitigation options and to consider alternatives such as changes to rate structure or base charges.

Repalis recommended annual review of the model and suggested the council consider phasing any large adjustments to limit rate shock. The council did not vote on rate changes Wednesday; members requested additional options and follow‑up work before formal action.