Utilities director: Sanitary utility lacks revenue; staff will seek a rate study to restore borrowing capacity

The Columbus utilities director told commissioners that the sanitary department “lacks sufficient revenue to satisfy the minimum debt coverage requirements necessary for proposed borrowing in 2026,” and said staff plan to bring a rate-case study to the commission.

Jason, introduced by the director to explain a memo in the meeting packet, said the city completed a 10-year capital plan that lists plant work and collection-system projects — including biosolids work and lift-station upgrades — that will require financing. He said a pattern of long gaps between small rate increases followed by a large increase contributed to the current shortfall and that a more moderate, periodic approach is being considered.

Why it matters: staff said the sanitary utility’s limited debt-coverage ratio prevents the city from borrowing now for projects such as reconstruction of West School Street and other sewer work. Restoring borrowing capacity is necessary to move anticipated capital projects forward without placing an outsized burden on residents in a single year.

Commissioners and staff discussed several specifics. The director and staff noted prior rate increases in 2018, 2022 and 2025; the transcript lists a 56% increase in 2025, with previous increases of about 9% (2022) and 1% (2018). Jason and other staff said legacy bonds and recent borrowing — including financing for a recent sludge-dryer project — have kept debt on the books and driven down the sanitary fund’s coverage ratio. Staff identified an outstanding old borrowing of about $6,300,000 that remains on the books.

Staff said they will coordinate the rate study with Fall River as required by an intergovernmental agreement, and that Fall River is reviewing the city’s capital plan and contribution shares. Jason said projections from Ehlers (financial adviser) indicate the debt-coverage ratio could rebound in roughly one to three years if projections hold, but the timing depends on the size and pace of any rate adjustments and how capital spending proceeds.

Numbers and next steps: staff said the rate study will propose increases calibrated to cover near-term capital needs and restore a debt-coverage ratio that allows borrowing; the staff suggested the study would inform rate recommendations covering the next one to two years and be revisited periodically. Commissioners requested comparative municipal rate data (Municipal League or other tracking) to put local rates in context.

No formal action: the commission did not vote on any measures at the meeting because there was no quorum. Staff characterized this session as a briefing and said they will return with the formal rate-study request and supporting materials.

Speakers quoted or paraphrased in this article: Director (speaker 4); Jason (speaker 5); Committee member (speaker 3).