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Consultant warns Percival water system needs large rate increases to fund $65M in projects
Summary
A Stantec presentation to the Percival Town Council outlined three water-rate scenarios for FY27 and a 10-year CIP that lists about $65 million in water projects and $13 million for sewer, with FY27 borrowing needs around $28 million. Council and staff pressed model assumptions including a planned $3 million meals-tax transfer in FY27.
Consultant Dave Hyder of Stantec told the Percival Town Council that the town’s water system will require substantial rate increases over the next decade to pay for capital work and debt service. Hyder said the town’s water capital-improvement plan lists about $65,000,000 in projects and the sewer CIP about $13,000,000; the model anticipates borrowing roughly $22,000,000 for water and $6,300,000 for sewer in fiscal year 2027.
Hyder presented three rate paths for water and sewer. Under his “max” water scenario, the town would increase rates 40% in FY27 (with further large increases in subsequent years); a proposed scenario would raise water 24% in FY27; a suggested scenario would raise water 30% in FY27. Hyder said a 1% increase in water rates generates roughly $25,000 per year and a 1% sewer increase about $38,000. He illustrated a typical single-family monthly water bill (4,000 gallons) moving from about $48 today to roughly $59–67 in FY27 depending on the scenario and projected a combined water-and-sewer monthly bill approaching $318 by 2031 under a high-increase path.
Council members focused questions on assumptions: operating-cost escalation, reserve targets, and the use of a one-year meals-tax transfer. Hyder confirmed the FY27 scenarios assume a roughly $3,000,000 transfer from the general fund in FY27 and that the meals-tax contribution is removed in subsequent years, meaning rates must rise later to cover full costs. “This is almost like a bridge,” Hyder said, adding that replacing long-term revenues with one-time transfers delays but does not eliminate the need for rate increases.
Council members asked staff to provide more context on prior CIP forecasts and reserve policy to reconcile the 75% reserve target used in the presentation with the town’s stated 100% fiscal-policy goal. The presentation and the follow-up questions set the stage for the council’s upcoming budget deliberations and a public hearing on utility rates.
