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Council hears water-system failures and Zion's Bank rate study proposing large multi-year increases
Summary
Town water-board chair and staff told the council of repeated pipe failures and major unaccounted-for losses; Zion's Bank recommended a phased base-rate increase (50% FY2026, 25% FY2027, 20% FY2028) to qualify the town for bonding to pay for needed repairs.
Huntsville Town heard a technical briefing Aug. 7 on recurring failures and persistent losses in the town’s culinary water distribution system and a rate-study recommendation from Zion’s Bank that would raise base water rates over three years to make the system bondable.
Ron Gault, chair of the town water board, presented slide data showing two recent major repairs along 1800 S. — a May 30 repair that staff reported saved roughly 60 gallons per minute and a June 16 repair that saved roughly 30 gpm — but said substantial unaccounted-for water remains. Gault summarized options ranging from continued spot repairs to selective refurbishments (estimated in the low six figures) up to a full distribution rebuild he said could exceed $9 million.
Beckki Endicott, the town clerk, summarized Zion’s Bank’s model and staff recommendation. The bank’s proposed base-rate increases are: Fiscal year 2026, 50%; FY2027, 25%; and FY2028, 20%. The model ties those increases to improved “coverage ratios” needed for municipal bonding. Endicott said a public hearing on proposed rate changes is scheduled for Aug. 21, 2025, and recommended adoption to address insolvency concerns in the water fund.
Staff also presented a pipe analysis from a vendor that concluded the failed PE3608 pipe section failed from mechanical stress and external loading rather than oxidative embrittlement, and urged evaluation of external support conditions. Operational graphs shown at the meeting indicated recurring midweek mid-day surges in distribution flow; staff flagged that contractor sales recorded by the town did not account for the scale of some observed surges and suggested further operational review to determine whether unbilled contractor use or other causes explain the discrepancy.
Councilmembers discussed whether to accelerate a single large rate increase or phase increases as the bank recommended. No final rate ordinance was passed Aug. 7; staff sought council direction and scheduled the public hearing for Aug. 21 to collect public input before any vote.
