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Consultant recommends holding water rates, a 10% wastewater increase that would raise average bills about 5%
Summary
HDR consultant Grady Reid told Beaumont council members that the utility fund can avoid a water‑rate increase for FY27 by drawing reserves but should raise wastewater rates 10% (senior customers modeled at half the residential increase). The change would raise most customers’ combined water and wastewater bills about 5%.
Grady Reid, a consultant with HDR, recommended on the city’s water and sewer rate study that the City of Beaumont hold water rates for the coming fiscal year while applying a 10% across‑the‑board increase to wastewater rates.
Reid told the council the utility fund is meeting its reserve requirement (HDR models a 25% reserve target, about three months of expenses) but faces heavy debt service: HDR’s FY27 water and wastewater expenditures are modeled at about $72.2 million, including roughly $42.5 million in planned debt issuance for capital projects. Debt service, Reid said, is the primary driver of higher expenses projected through the five‑year model.
Under HDR’s recommendation, water rates would be unchanged for FY27. Reid said the firm modeled an average single‑family residential connection using roughly 10,500 gallons per month. For wastewater, HDR proposed a 10% uniform rate increase; the firm modeled seniors at half the residential increase (a 5% wastewater rise). HDR estimated that the combined effect — no water increase and a 10% wastewater increase — would raise most customers’ total water-and‑wastewater bill by about 5% (the consultant calculated a $3.72 monthly wastewater increase for 5,000 gallons of use as a marker, noting typical single‑family billed wastewater volume is lower than that).
Council members asked whether increases could be shifted off residents and onto industrial or commercial accounts. Councilman Turner and others said they preferred to protect residential and senior customers and asked staff to model alternatives that would raise industrial or commercial classes instead. Reid said he could run class‑specific scenarios and deliver numbers on requested revenue shares and the effect on each customer class.
Reid and staff stressed that water and wastewater were modeled separately within the same fund so revenues and expenses for each utility are tracked individually. HDR’s five‑year model shows substantial capital spending (HDR cited roughly $145 million of water capital spending and about $108.5 million for wastewater in the five‑year CIP in its model) and projects that, if new debt continues at roughly $42–$50 million annually, wastewater will require more frequent and larger rate increases over the planning horizon.
What’s next: staff and HDR will provide follow‑up modeling on class‑specific options (industrial/commercial‑only increases and other alternatives) and return with revised scenarios and bill‑impacts for council consideration before the August/September budget adoption schedule.
