Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Water Rates topic
No spam. Unsubscribe anytime.
City staff and consultant recommend 4% annual water and sewer rate increases to shore up reserves
Summary
A Willdan consultant told Clemson City Council that a 4% annual rate increase for water and wastewater through FY2031 would maintain debt-service targets and avoid negative operating results projected for 2031, while funding $40.2 million in capital projects mostly financed by bonds, grants and impact fees.
Michael Cronin, senior project manager at Willdan, told the Clemson City Council on May 4 that the city’s combined water and wastewater system will need steady revenue increases to cover rising operating costs and a $40.2 million five-year capital plan.
Cronin said the firm modeled a five-year financial plan through fiscal 2031 and recommended a 4% annual increase to both the monthly customer charge and the volumetric charge for water and sewer. Under the recommended adjustments, the water monthly customer charge would rise from $15.59 to about $18.96 by 2031 and the volumetric charge would increase to $5.91 per 1,000 gallons; sewer charges would increase on a similar trajectory.
Cronin said the city’s revenues under the status-quo rates look sufficient through 2029 but would produce negative operating results beginning in 2031 without revenue changes. "We have a downward trend and we will need revenue adjustments to maintain a healthy and financially solvent utility system," he said.
The presentation included three core metrics: operating results, cash reserves and debt-service coverage. Cronin said the city’s operating cash reserves and debt-service coverage would decline under current rates and that the recommended 4% adjustment would allow the city to meet a 1.5-times debt-service coverage target while maintaining positive cash balances through the projection period.
Cronin also reviewed the capital improvement plan: roughly $8.3 million in water projects and about $32 million in wastewater projects through 2031. Funding sources he listed included approximately $10.7 million in cash reserves, $4.8 million in grants, $7.3 million from impact fees and roughly $17.4 million from 2024 revenue bond proceeds.
Council members asked for clarification about in-city versus outside-city customers, billing assumptions and the schedule of customer growth used in the model. Cronin said billing counts start with about 13,294 water accounts in 2026 and that forecasted customer additions assumed ~120 new water customers per year and ~100 new sewer customers per year.
Next steps discussed were staff review of the rate study and formal consideration of rate adjustments at a future council meeting. The consultant said he would provide copies of the underpinning schedules and answered follow-up questions from council members.
Ending: Council did not adopt an ordinance at the meeting; the study and its recommendations move to staff follow-up and future council consideration.
