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Council hears staff, consultant say 5% annual utility-rate increase needed to fund $77M in capital
Summary
Councilors and consultant Matthew Garrett of NewGen reviewed a five-year utility rate plan proposing a 5% annual increase to fund roughly $77 million in water and wastewater capital, smooth future debt service and maintain reserve targets. Staff will return with refined numbers before a November vote.
Councilors heard a briefing on proposed water and wastewater rate changes that would phase in a 5% annual increase over five years to fund capital needs and preserve financial metrics.
"We do need to fund about $77,000,000 of capital through our rates," said Matthew Garrett of NewGen Strategies and Solutions, who presented the study and said the figure excludes some items funded by impact fees. Garrett told the council the plan smooths increases so future councils avoid sudden large spikes in charges.
Staff framing noted three cost drivers: wholesale water and sewer charges, capital projects and rising operational costs. The town’s staff said the study assumes winter-averaged residential usage to set typical bills and that a late bid on the TRA interceptor project came in at about 75% of the original estimate, which could reduce rate pressure.
Garrett gave an illustrative bill impact: a typical residential customer paying about $166.50 today could see an $8.70 increase next year to about $175.20, with projected bills rising toward about $213.20 by 2031 under the model. He said the plan aims for debt-service coverage that meets the town’s minimums and can rebound to a stronger coverage ratio by year five.
Councilors questioned comparators, rate tiers and whether the town should add an extra usage tier to better protect baseline water use while charging more for discretionary peak use. One councilor asked staff to verify comparative communities’ numbers and to add explanatory notes (for example, whether comparators are purchasing wholesale water or operating their own systems).
Staff said the town will return with narrower options, recommended rate design choices and a November presentation ahead of any implementation effective Jan. 1. The council did not vote on rates tonight; this was a briefing and direction-setting item.
