Council warned WIFIA bonds and 1.25x sewer coverage may require future rate increases despite no 2027 utility hikes
Staff proposed no utility rate increases for 2027 but warned upcoming WIFIA bonds and a legal requirement for 1.25x bond coverage on sewer revenue could force rate increases in the near term; council asked for a rates feasibility study.
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Staff told the council that the FY2027 proposal includes no utility rate increases. However, staff cautioned that the sewer department will need to maintain 1.25x bond coverage for debt service and that planned WIFIA (or WIFIA-like) bonds and other debt could place pressure on rates in coming years. "It is a legal requirement. So if you agree to the bonds, you agree that you will have sufficient revenue to cover," staff said when describing coverage requirements.
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