Consultant proposes three‑phase sewer rate increases to cover $34.5 million in capital needs

Jeff Rao of consulting firm Baker Tilly told the Middlebury Town Council that the town’s sewage works faces substantial capital needs and recommended spreading a rate increase across three phases rather than one large jump. "So what we are proposing is, the first phase to go into effect around August of this year, so August 2026," Rao said during his presentation, then described a model that would phase additional increases into 2027 and January 2028.

Rao said the five‑year capital plan totals in the tens of millions and identified roughly $34,500,000 in projected needs driven primarily by lift‑station and gravity‑line improvements. His financial model assumes a mix of funding: tax increment financing (TIF), approximately $1,300,000 of cash on hand, and potential bond issuance to cover remaining costs. Under the illustrative three‑phase approach, Rao showed examples for a 4,000‑gallon monthly user: the sewer portion of a typical bill rising from about $49.15 to roughly $55.54 after the first phase, then to about $62.79 and $70.95 after the second and third phases respectively — an aggregate increase of about 44%.

Council members asked about timing and whether to delay the first phase to give customers notice; several members suggested moving the first step to Jan. 1, 2027 to create more lead time and to align with expected bond timing. Rao said the town could adopt an ordinance to set rates and then hold the required public hearing, a roughly 60‑day process if the council directs staff to proceed. No final action was taken at the June 15 meeting; staff and the consultant will return with updated timing scenarios and ordinance language if the council directs them to prepare it.