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Montrose staff outlines utility-rate scenarios, proposes 10% option to close shortfalls
Summary
At a July 22 workshop staff presented utility-rate modeling showing a 10% rate increase would raise base charges (example: water base from $12 to $13.20) and yield about a 9% increase in monthly bills; staff also showed preliminary 2025 water-fund spending near $800,000 and said a 5% rate would still leave a small shortfall.
City of Montrose staff presented preliminary utility-rate scenarios at the July 22 council workshop and recommended the council consider larger, structured increases to smooth future budget pressure.
Staff showed a model in which a 10% across-the-board increase would raise several base charges (for example, the water base shown moving from $12 to $13.20, sewer from $4.50 to $4.95) and estimated that a 10% rate action equates to roughly a 9% increase on a typical monthly bill. "At a 10% increase right now ... we're looking at about a 9% increase in the bill," the staff member said.
Staff framed the choice as either "ripping a bandaid off" with a larger near-term increase or applying smaller, steady increases (for example, 5% annually) to reduce future volatility. The presentation included preliminary 2025 expenditure projections: staff said the water fund shows planned spending around $800,000 and that a 5% rate increase would leave a modest shortfall (staff cited approximately $31,000 under the 5% scenario).
Why it matters: utility rates fund ongoing operations and capital spending for water, sewer and storm systems. Staff recommended reviewing comparable rates in neighboring communities and building sustainable rate-trajectory options into the preliminary 2025 budget.
Next steps: staff will provide rate scenarios and supporting materials at a preliminary budget meeting before the September council meeting; no rate ordinance or vote was taken at the workshop.
