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Consultant recommends modest, phased utility-rate increases to fund aging systems
Summary
GovReach consultant Brian Mance told the Edgewater council that modest, multi-year rate increases would preserve utility cash reserves, meet debt-coverage targets and fund roughly $42.3 million in water and sewer capital needs through 2029, while keeping bills below EPA affordability thresholds.
Brian Mance, a consultant with GovReach, told the Edgewater City Council on Wednesday that the city should adopt modest, phased increases in water, sewer, reclaimed-water, solid-waste and stormwater rates to preserve access to capital and cover aging infrastructure.
"You have about $117,000,000 in installed cost of depreciable assets under city management," Mance said, adding that many assets are more than 50 years old and would cost two to three times more to replace at today’s prices. He recommended regular, annual reviews to avoid the large, single-year increases that can occur when aging systems reach capacity.
Mance outlined capital needs through fiscal 2029 of roughly $42.3 million for water and sewer, $4.0 million for solid waste and $6.8 million for stormwater. He said proposed funding would come primarily from rate revenues and reserves (about 51%), with debt financing, impact fees and grants covering the remainder.
On proposed adjustments, Mance said the consultant team is recommending lower near-term increases than council previously adopted: roughly 2.5% in 2025 and 2026 and 3% in 2027–2029 (the city had earlier adopted larger step-ups through 2028). He noted the plan remains affordable by common industry measures: the average residential customer uses about 3,000 gallons per month and the consultant’s plan works out to roughly $0.029–$0.033 per gallon. "For 3¢ a gallon, you get water delivered to your house, and then when you're done with it, it gets taken away," Mance said, adding that the combined bill would be well below the Environmental Protection Agency’s 4.5% median-household-income affordability threshold for water and sewer.
Mance also reminded council that wholesale costs tied to the Volusia County contract may increase up to 5% a year and that the city’s reclaimed-water system expansion will require additional operations funding; he proposed a modest reclaimed-water adjustment to reduce subsidization of users who lack reclaimed water service. He said the city’s solid-waste rates are higher than some peers because collection is performed in-house, a choice that affords faster emergency mobilization.
Council members asked staff and the consultant about consequences of holding rates flat. One committee member asked what services would be reduced if the city adopted no increases; Mance said his model shows the city would quickly run down cash and risk debt-coverage deficiencies that could trigger accelerated loan provisions. Another council member emphasized the importance of communicating the fiscal trade-offs to residents.
Mance recommended the council adopt the proposed rates for fiscal years 2025–2029 to maintain healthy cash reserves and debt-service coverage and to enable multi-year capital planning. Staff said it will return a formal rate resolution to the August council meeting for consideration.
The presentation concluded with the council’s questions and staff confirmation that the proposed adjustments and timing will be included in the budget documents presented at upcoming workshops and hearings.
