Ephraim staff: water and sewer rates don’t cover long-term costs; plan urged

Ephraim City staff and consultants told the City Council on March 18 that current water and sewer fees are insufficient to cover long‑term operating and capital costs, and recommended developing a capital improvement plan and asset management strategy as a first step toward rate adjustments.

Rita Trick of the Rural Community Assistance Partnership presented a water rate study that examined operations, maintenance, debt obligations and long‑term replacement needs. The study used a 4% annual inflation assumption and included required debt and system reserves. Trick said the analysis showed existing water rates do not fully reflect the cost of service.

Chad Busch, also with RCAC, presented the sewer study, which was funded by grants and included three scenarios to reach sustainability. Busch recommended “Scenario 2A” as a balanced approach to phase in increases gradually while prioritizing affordability.

City Engineer Bryan Kimball and Public Works Director Jeff Jensen told the council the city has deferred many capital projects and has often used temporary repairs rather than full replacements. Jensen described recent work as “band‑aid” solutions driven by limited funding. Staff estimated the shortfall at roughly $17 per connection per month to reach a break‑even position and warned that, absent rate adjustments, utility reserves are projected to be depleted by about 2031.

Council members and staff discussed several rate approaches: one‑time increases, gradual annual increases, or hybrids that combine immediate and phased adjustments. Staff recommended additional planning steps before any ordinance changes, including development of a formal Capital Improvement Plan (CIP) and a full asset management and engineering evaluation to prioritize replacements.

The presentations noted assumptions used in the analyses—4% annual inflation and an approximate 1% annual customer growth rate for sewer modeling—and emphasized that federal or state funding reductions could increase pressure on rates. The water and sewer studies are available for public review at the City Recorder’s Office and on the city’s public notices website.

Council did not adopt rate changes at the meeting; staff said they will return with more detailed financial modeling and specific rate proposals after completing recommended planning work.