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Northlake consultant recommends ~4.75% annual water and sewer increase to meet rising wholesale costs
Summary
Consultant NewGen told the NorthlakeTown Council an annual increase averaging about 4.75% would preserve fund balance and meet projected debt-service on a $52 million capital program, with adoption planned for Dec. 12 and rates taking effect in January if approved.
NewGen Strategies and Solutions presented its annual water and wastewater rate study to the NorthlakeTown Council on Nov. 14 and recommended a modest annual increase—about 4.75%—to meet rising wholesale and operational costs and to maintain target fund balances.
"Your operating costs are rising about 9.8% per year," Matthew Garrett of NewGen said, noting that wholesale supplier price increases are the primary driver. He told the council Northlake has capital improvements programmed at $52,000,000 that the study assumes will be debt-funded and that growth—about 800 new connections projected next year—helps offset some fixed costs.
Council members asked why the recommended increase is lower than the full wholesale rise. Garrett responded that the study's revenue forecasts assume continued growth that cushions some of the wholesale cost increases: "If those [growth] don't materialize, then our revenues are likely going to be less," he said. He added the five-year financial plan with the proposed increases hits the town's debt-service-coverage and 50% fund-balance targets; without any rate change the model projects the fund balance going negative by year five.
Staff and the consultant provided illustrative bill impacts. Garrett said the representative residential winter-average bill in 2024 (8,000 gallons water and 5,000 gallons sewer) is about $150.90 and would increase by roughly the proposed percentage next year, with commercial results varying slightly based on meter size and rounding.
Johnson (staff) told the council the briefing was informational and said adoption is scheduled for Dec. 12: if the council adopts the ordinance then, staff would notify residents on the December billing and the rates would take effect in January. The council was encouraged to ask follow-up questions at the Dec. 12 meeting; several members asked for additional comparative context on neighboring towns' tax subsidies and rate structures.
Next steps: the council will consider the ordinance on Dec. 12; if adopted, the increases would begin with January bills.
