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Council narrows proposed sewer-rate increases and links them to $20M bond plan
Summary
Council debated multi-year wastewater rate increases tied to a planned roughly $20 million bond issuance and agreed on a revised four-year schedule (5%, 7%, 9%, 10% as presented in discussion), contingent on meeting debt-service covenants and further legal/financial review.
Staff introduced agenda item 7.3, a proposed multi-year wastewater-rate schedule designed to support a proposed net $20,000,000 bond issuance for capital projects. Staff explained the procedural timeline (first reading Oct. 7, notices to out-of-municipal customers, a public hearing and a 20-day remonstrance period) and that rates take effect Jan. 1 of the calendar year. The staff presentation linked the proposed rates to debt-service coverage requirements and a pilot payment from the utility fund to the general fund.
Council members challenged higher study numbers in the earlier draft and debated a phased schedule. After extended discussion about bond covenants and the pilot payment to the general fund, council coalesced around a revised four-year scenario (5%, 7%, 9%, and 10%) to be incorporated into the ordinance for further review. Staff cautioned that any lower future rates must still meet bond covenants and said the town will confirm viability with bond counsel and financial advisors (Baker Tilly, Frost Brown Todd). "So if, calendar wise we're still good, then the question becomes what rates do you want us to build into the ordinances?" staff asked. Council asked staff to model the 5/7/9/10 schedule and report back before the October meeting.
