Council weighs water-fund fixes: rate hikes, transfers or pausing capital projects

The South Ogden City Council studied multiple scenarios on Oct. 21 to address a projected shortfall in the city's water fund and restore a healthy days-cash-on-hand balance.

Peter, a finance staff member presenting the analysis, said consultants at Zions flagged 180 days as an industry benchmark for liquidity, particularly if the city seeks to bond. He summarized a baseline that holds annual capital spending near a historical average of $1,500,000 and warned that "79 days is the end of the world" if the city does nothing and bonding becomes necessary. The council discussed options to avoid tying up funds long-term, including a combination of a one-time enterprise transfer and a moderate rate increase.

Council members debated how deep to cut capital spending. One scenario would trim annual capital from $1.5 million to $500,000 for a two-year period to shore up cash; another considered an intermediate $1,000,000 level to shorten the recovery window. Staff said the $500,000 plan would pause larger projects but still allow essential work such as meter replacements and tower maintenance.

The packet model included an illustrative 6% revenue increase effective January, which staff said would, in the model, begin returning the fund to a healthier position in fiscal 2028–29. As Peter explained, staff can run alternate scenarios with 3%, 4% or 5% additional revenue and different mixes between base-rate and tiered increases to show resident impacts in dollars per month. "Once a decision's made on the direction you'd like to go," a staff member said, "we'll run those scenarios and translate it into what the user group would be impacted by x number of dollars monthly."