CBPU recommends water, wastewater rate hikes in new budget to city council

COLDWATER — The Board of Public Utilities passed a 2024-25 budget Wednesday evening, along with the water and wastewater rate increases needed to fund those departments' budgets.

The 4.9% rate increase for water would raise revenues for the $4.4 million budget.

The 3.9% rate increase for wastewater raises revenues to $6.3 million.

CBPU Manager Paul Jakubczak said, "These two changes will produce roughly an increase of about $3 per month per customer."

The city council must approve the July 1 rate increases at its May 13 meeting.

Past rate studies projected a 3.9% increase for water. A review found the increase was necessary "to make sure that we're keeping within our debt ratios and our cash on hand," Jakubczak said. "Part of that is some of the capital budgeting items to continue to provide the quality of water that we need in our system. "

The capital budget includes $500,000 for the painting and repair of the Garfield Road water tower.

The wastewater budget includes $4 million in capital projects for the new July 1 fiscal year. An ultraviolet sanitizing system will cost $2 million.

Engineering is included in the new budget for wastewater plant upgrades and expansion. A firm should be hired by June, and the design will take nine to 12 months.

Jakubczak said next year's budget could include bonding for the wastewater plant and probably water system improvements and expansion.

The manager warned, "If we don't do these increases, we risk not being able to have the required debt coverage for some of the bonds that we have outstanding."

Jakubczak said that would make it difficult and expensive to issue new bonds for the expansions. He projected that a $10-a-month increase could be required next year without incremental increases.

CBPU Chairman Rick Stevens said, "We pushed this sewage treatment plant down the road, trying to protect our customers from this increase. At some point, we've got to do it."

Local housing is in short supply. Jakubczak said the utility needs to make certain "We're not holding anyone back from developing. There's quite a bit of talk out there about developments. We just want to be prepared for that."

A delay could reduce cash reserves. The manager explained that without adequate cash reserves, if "Something catastrophic happens, we may need to borrow money from somewhere" to cover expenses.

With current high interest rates, city finance director Tom Eldridge does not want to speculate on loan interest rates or bond financing costs for future projects.

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The electric budget, projected at $50 million, will need a 2% rate increase in September. CBPU decided to delay that increase until after the heavy summer use.

The city council expects to adopt the overall CBPU and city budgets on June 10.

— Contact Don Reid: dReid@Gannett.com

This article originally appeared on Coldwater Daily Reporter: CBPU recommends water, wastewater rate hikes in new budget to city council