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Queenstown engineer: water and sewer revenues fall short; per-EDU increases of roughly $13–$58 a month possible
Summary
At a April 11 work session, Town Engineer Bob Rauch told Queenstown commissioners that current water and sewer revenues fall short of projected debt and operating costs and presented scenarios showing per-EDU increases ranging roughly $13.27 to $57.83 per month depending on development and assumptions. Commissioners asked for updated, multi-year scenarios.
At a work session on April 11, 2025, Town Engineer Bob Rauch told Queenstown's commissioners that the town's water and sewer enterprise is projected to run a significant deficit unless rates or other revenues are adjusted.
Rauch said the town's utility revenue is built from two streams: consumption (usage) fees and debt-service fees. He presented spreadsheets showing estimated combined annual usage revenue of $272,684.18 and a schedule of annual debt obligations of $347,499.95. Using current debt-service rates, Rauch said the town would realize $241,380.00 in debt-service revenue without the Wheatlands development, leaving a shortfall of $106,119.95. "At current figures, closing that gap would require roughly $19.78 per EDU per month, about a 44 percent increase in the debt-service component," Rauch reported to the commission.
Rauch walked commissioners through a scenario in which Wheatlands Phase 1 (50 equivalent dwelling units) connects to the system. He said projected usage revenue with Wheatlands would be about $326,108.18 annually, which lowers but does not eliminate the shortfall. With Wheatlands included, the debt-service shortfall fell to $79,119.95; Rauch said closing that gap would require about $13.27 per EDU per month (about a 29 percent increase in debt-service rates).
Rauch also presented broader FY2025 and FY2026 budget estimates. He listed FY2025 water and sewer expenses at $552,200 and projected FY2026 expenses at $612,420 (a roughly 10 percent increase). Under a FY2026 scenario using current usage rates but assuming Wheatlands does not draw water/sewer, Rauch reported total W/S revenues of $649,740.75 and total W/S expenses of $959,919.95, producing a $310,179.19 deficit. He said closing that full deficit would require roughly $57.83 per month per EDU (about a 48 percent increase). Including Wheatlands in the FY2026 usage assumptions produced $703,164.75 in total W/S revenues and the same expense estimate, yielding a $256,755.19 deficit, which Rauch estimated could require about $47.87 per month per EDU (roughly a 47 percent increase) to close.
President Al Hardee asked whether rate increases could be phased in over several years or delayed until after Wheatlands comes online. Rauch said he is developing multiple scenarios to allow multi-year phasing and to account for the possibility that Wheatlands would pay for certain water-tower and water-main work that reduces the town's USDA loan balance. Rauch said those Wheatlands payments were not yet reflected in the numbers he presented and that he would incorporate them and return with updated analyses.
The commissioners took no formal rate action at the work session. Commissioner Bryon Callahan moved to adjourn at 3:04 p.m.; Commissioner Tom Willis seconded and the motion passed 3-0.
What's next: Rauch will deliver updated multi-year rate scenarios that include any Wheatlands payments toward USDA loan obligations and comparative billing-to-income ratios for peer towns; commissioners said they will review those figures before considering formal rate changes.
