Manchester council weighs water and sewer rate increases as infrastructure needs mount

Manchester’s council and staff used a budget work session to put a finer point on utility finances and infrastructure needs, with staff urging the council to consider gradual rate increases, while outlining substantial capital and regulatory pressures facing the city’s water and sewer systems.

City staff told the council they penciled a 5% increase for sewer rates as a baseline while final salary and audit numbers are completed; some council members said they prefer a 7% increase to avoid larger future spikes. Staff noted the city previously used a 7% increase and that drought-driven low flows have skewed recent operating-year numbers, which will be clarified in the upcoming annual water/sewer audit.

The discussion covered several infrastructure and regulatory items tied to operating costs. Staff warned that the city’s DNR discharge permit (which expired Jan. 1) could impose more stringent nutrient- or disinfection-related requirements; staff said many permits now require year-round ultraviolet disinfection in treatment plants, which would raise operating complexity and costs. Staff also reviewed a prior solar feasibility study for the wastewater plant that showed very limited near-term benefit for full-plant arrays (high upfront cost and long payback) while rooftop or targeted installations would produce smaller offsets.

Capital needs highlighted by staff included standby generators for critical lift stations and planned water-system upgrades. Staff presented recent quotes that place generator equipment costs in the low‑to‑mid‑$40,000 range per unit; full installations (concrete pads, electrical work and site preparation) for two lift‑station locations were estimated in the mid‑six figures when combined with ancillary work. Council and staff discussed phasing generator installations and building the expense into the sewer capital improvement fund.

Longer‑term concerns focused on the distribution system: staff outlined the city’s inventory issues with older four‑inch mains, galvanized and lead-connected service lines and the emerging federal/state timelines for lead‑service replacement. Staff said many service connections remain unconfirmed, that the current lead-and-copper rule will require systematic replacement programs, and that competitive contractor bids typically require mobilization scale (roughly $250,000 and up) to attract qualified bidders. Staff explained grant eligibility for replacement programs is tied to median‑income scoring and other federal metrics and cautioned that Manchester may not qualify for the largest funding streams for several years.

Staff recommended a combination of approaches: continuing to budget modest rate increases to stabilize enterprise funds, packaging service‑line replacements into larger street projects to improve bidding outcomes, and pursuing available grant or cost‑share programs where the city qualifies. The council set a March 2 committee‑of‑the‑whole for a final budget review and public hearing schedule; staff will deliver the year‑end water and sewer audit figures ahead of that meeting.

The session produced no binding rate vote; councilors directed staff to bring final audit numbers and refined cost estimates back at the March meeting.