PFM consultant recommends 8.75% water rate increase for Eldridge City starting July 1, 2026

A consultant hired by the Eldridge Electric and Water Utility Board recommended an 8.75% increase in water rates to take effect July 1, 2026, citing declines in billed usage, higher operating costs and planned capital projects that will raise the utility’s debt service needs.

Carrie Schwartz, a PFM consultant, presented a one-year update of the utility’s water rate study and said the recommendation is driven by a roughly 3% drop in billed usage for fiscal year 2025 (and a further decline of about 4.5% through January), $30,000 lower-than-budgeted operating revenue and about $100,000 higher operating expenses in FY25. “We are recommending an 8.75% rate increase, for starting fiscal year ’27,” Schwartz said.

Why it matters: PFM estimated the average residential customer (about 4,400 gallons per month) currently pays about $24.21; under the 8.75% recommendation that average would rise to about $26.37, an increase of roughly $2.16 per month. Schwartz said the consultant seeks to preserve a healthy cash balance (roughly 50–100% of operating and maintenance expenses) as the utility plans capital projects and potential debt issuances.

Capital projects and debt: Schwartz said the cash-flow model includes several capital items and a proposed water bond issuance that are raising the debt-service profile. She described a $275,000 Clearwell project and a $450,000 retention and aerator project as among the major items; PFM has built approximately $875,000 in construction funding into the model and included additional cost-of-issuance estimates to reach the $920,000 bond figure shown in the presentation. “We want to be conservative when building everything in, to make sure that you are going to have rates sufficient to pay your debt and also to pay your operating,” Schwartz said.

Board and staff questions: Board members asked whether the usage declines reflect billed residential consumption only or total system usage including unbilled losses. Keegan (water department staff) responded that the 3.26% decline figure referenced billed usage to customers. Keegan and other staff said improved metering and changes to flushing and backwashing practices have reduced internal and unbilled use; the staff reported system water loss below 6%.

Timing and next steps: The board did not vote to adopt a rate at this meeting; Schwartz said the recommendation would be revisited in future annual updates and that some projects (a proposed new well) will not begin principal-and-interest payments until fiscal 2028 and therefore were not fully factored into the FY27 recommendation. Schwartz also noted that SRF loan rates change quarterly and the timing of issuance will affect the eventual interest rate and debt-service amounts. The consultant said she will supply more detailed project-by-project breakout of the loan inclusions upon request.

The consultant’s slides and cash-flow exhibits were the primary supporting materials for the presentation; staff and the board discussed follow-up requests to clarify billed vs. total usage and to confirm which projects are included in the planned borrowing.