Centerville staff urge Main Street waterline rebuild; internal loan and rate changes proposed to cover cost

Centerville public-works leaders told the council that aging water infrastructure near Main Street and Chase Lane has produced costly breaks and that a full waterline reconstruction is the most sustainable fix. Staff proposed financing the project through an internal loan from reserve Fund 47 to the water enterprise instead of issuing external debt.

Staff said the internal-loan approach would reduce interest costs compared with a bank bond and allow the city to repay itself over a 10-year schedule. The council was told the project is time-sensitive: coordination with large state roadwork (I-15/Main Street reconstruction) will limit construction windows and that delays could increase costs and complexity. Staff estimated the loan repayment could necessitate a rate change; a 7% preliminary water-rate increase was referenced in discussion as one model to cover debt service and future water-system needs.

Council and staff also discussed rate design. Staff recommended exploring a revised structure with a higher consumption block for heavy users and a lower base to incentivize conservation; the water-rate consultant (WaterWorx) and a prior study were cited as inputs. The water presentation also reviewed operational needs: replacement of valves and hydrants, an expanded valve-rehabilitation program, and investments in water-operator training and CDL certification to reduce costly contractor repairs.

Staff noted that the city has retained 500 acre-feet of Weaver Basin water at a historically low cost compared with current market rates and emphasized the value of retaining those shares.

Next steps: staff will refine project scope and financial modeling for the Main Street waterline, produce a rate-impact scenario for council review (including inclining-block alternatives) and coordinate construction timing with UDOT and other utilities.