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Huntsville discussed a no-bond staged approach that delays projects but avoids interest
Summary
Option 3 would impose a 70% rate hike in FY2026 and a 30% hike in FY2027, begin projects in 2027 spread over five years at about $300,000/year, and avoid bond interest but raise short-term rates and delay infrastructure work.
Susie Becker presented a third alternative that avoids issuing bonds: an initial 70% increase in FY2026 followed by a 30% increase in FY2027, with projects beginning in 2027 and spread roughly $300,000 per year over five years. The approach reduces interest expense but increases near-term customer costs and delays capital work compared with bond-funded options.
Modeling for Option 3 showed higher net-revenue metrics in later years once projects commence because debt service is avoided; however, days-cash-on-hand projections dip in early years and project timing pushes replacements and upgrades out by about one year compared with bond-funded scenarios. Council members must consider timing and risk of delaying replacement of a troubled water line that the water board identified as a priority for 2026.
