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Cuba City council approves 7% annual water and sewer rate increase beginning 2027
Summary
Cuba City council approved a motion to implement a 7% year-over-year increase to base water and sewer rates beginning in the 2027 implementation window, with advisers urging annual review tied to cost of service. The change is projected to raise about $100,000 in gross revenue in the first year and add roughly $4 per month to an average residential bill.
Cuba City council voted to approve a 7% year-over-year increase to base water and sewer rates to begin in the 2027 implementation window, following a presentation from advisers who modeled several financing scenarios.
Advisers told the council Phase 1 of the city’s infrastructure plan is estimated at about $500,000 and Phase 2 at about $1.3 million, with roughly $300,000 already paid toward work. They recommended restructuring new borrowing around the city’s outstanding 2011 bond (noted in the packet as about $934,000 remaining) to create a more level annual payment and described a 15-year amortization scenario for portions of the borrowing.
On the effect to households, the rate-study presenter said the 7% scenario would raise roughly $100,000 in additional gross revenue for utility departments in the first year and would amount to about $4 per month for an average residential customer combined (approximately $2 on water and $2 on sewer). The advisers emphasized the proposal should be reviewed annually and tied to cost-of-service updates rather than fixed multi-year automatic increases.
Council members discussed implementation timing (advisers noted August 1, 2027 or the FY2027 window as possibilities) and whether the increase should be adopted by ordinance or approved year-by-year. One council member recommended approving the change in one-year increments with annual review tied to actual costs; the motion to approve the 7% rate increase as presented was moved, seconded and carried by voice vote.
The advisers also discussed financing options for later phases, including public bond offerings, direct purchases/private placements and certificates of participation, noting that different instruments have trade-offs for interest rates and voter approval requirements. They recommended keeping audits current and adopting fund-balance and debt policies to improve creditworthiness before major bond sales.
Next steps: the council approved the motion and staff was directed to prepare ordinance language and annual review processes to implement the change and report back with ordinance drafting and timelines.
