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City hears three water/wastewater rate options as recharge costs, wastewater debt drive increases
Summary
Consultant Jason Gray and Finance Director Alberta Barrett presented three rate scenarios to cover rising costs — notably a $4.1M recharge water purchase coming February 2026 and planned wastewater debt issuances — and outlined options that include a 2,000‑gallon base allowance and varying tiering to reduce impacts on lowest residential users.
Finance Director Alberta Barrett and consultant Jason Gray (Willdan Financial Services) briefed council on a revised water and wastewater rate study developed after public comment at an earlier meeting.
Gray said the single largest near‑term driver is a scheduled purchase of recharge water beginning February 2026 that adds roughly $4.1 million to water operating costs in 2026 and grows in subsequent years; on the wastewater side, planned borrowings (noted in the packet) would add more than $72.6 million in wastewater debt in a near‑term issuance cycle. "When we look at the cost drivers... the largest component between 2025 and 2026 goes from 0 in '25 up to 4,100,000," Gray said.
To respond staff and Willdan modeled three alternatives (A, B and C). All include a new approach that places 2,000 gallons of water inside the base charge so the smallest users get bill stability; the scenarios differ in tier structure, meter‑size base charges and how costs are shifted between residential tiers and larger commercial meters. Gray showed example impacts: a combined residential customer with 10,000 gallons water and a 5,000‑gallon winter sewer average would see roughly $15–$20 monthly increases in Year 1 depending on scenario (Alternative A highest, C lowest in year 1 but higher in year 2 under the plan).
Councilmembers asked for a breakdown of the percentage of bills in each tier by month and urged staff to provide monthly distributions and sensitivity analysis; Gray said those details exist and can be shared. Staff also noted projected 10‑year CIP of about $232.2 million and forecasted bonds and debt service that drive wastewater increases, emphasizing the need to schedule rate adjustments to preserve long‑term fund solvency.
No rate ordinance was adopted at the meeting; council discussed the alternatives and requested additional modeling and customer‑tier breakdowns before deciding.
