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City staff recommend beginning sewer rate increases now to prepare for $120 million wastewater plant
Summary
Staff and Raymond James advisers outlined a $120 million wastewater treatment facility estimate and financing scenarios, recommending phased rate increases (staff analysis cited ~11–13% early increases) to avoid steeper future hikes and to build reserves ahead of bond financing.
City staff and financial advisers presented preliminary financing options for a proposed wastewater treatment facility estimated at about $120,000,000 in capital costs. Raymond James analyst Greg Varnberg summarized financing pathways including general obligation and revenue bonds, KDHE SRF loans and USDA programs, and ran a 20-year repayment example to show potential impacts on annual debt service and user rates.
Varnberg cautioned that interest-rate assumptions will change before the city would actually borrow and noted options that can push repayment out to 30–40 years (for lower annual payments but more interest over time). "We showed general obligation bonds ... you can see that it ends up saving ... about $27,000,000 in interest over a 20 year period," Varnberg said, explaining tradeoffs between lower rates and city debt ratios.
Staff framed a policy choice: start phased rate increases now (examples discussed in the meeting ranged from roughly 11–13% over the first five years) or risk deferring increases and then imposing much larger one-time hikes. Staff noted the average homeowner impact at the cited rates could be about $4–$7 per month depending on usage and billing tiers, and commissioners requested additional breakdowns and updated grant/loan feasibility (KDHE, USDA) to refine the proposed schedule.
