WES staff outlines 5% rate target, long-range forecast and reserve strategy at advisory meeting

WES staff presented the utility’s annual budget update and long-range financial forecast to the WES Advisory Committee, saying the plan relies on steady, predictable rate increases and a continued focus on capital delivery.

Erin, WES staff, told the committee that "this year's proposed rate adjustments are 5% to our base monthly rates for sanitary sewer service and surface water service," and said that the agency is continuing a 10-year phase-in of system development charges in line with prior committee direction.

The presentation explained the utility’s three rate zones and a legacy-debt component that will be phased out by 2031 so that customers receiving the same service will ultimately pay the same rate across the service area. Staff said the legacy-debt element currently accounts for about a $7.20 gap between comparable charges and that phasing will reduce that differential.

On the financing side, Erin said WES carries roughly $115 million in outstanding debt composed of state revolving fund loans and revenue obligations and that the utility maintains a strong debt-coverage ratio that provides access to favorable borrowing. Staff previewed applications for state revolving fund sponsorship that could lower future borrowing costs by roughly 1 percentage point on qualifying projects.

Reserves and contingency planning were highlighted as key risk-management tools. Erin said staff expects to end the fiscal year with roughly $122.2 million most of it in construction and SDC reserves, and described contingency policies (25% of budgeted capital outlay for capital funds and a 60-day operating reserve target) that guide any transfers or supplemental budget requests.

Cost drivers discussed included chemicals (about $2 million annually), electricity (about $2 million annually) and labor, where Erin said WES’s near‑term increases reflect both market-based compensation adjustments and restored staffing to reduce contracted services. Staff said fuel is a smaller direct line (about $150,000 annually) but that tariffs and equipment supply issues can affect repair-and-maintenance costs.

Erin said the budget was distributed publicly on May 7 and that the next formal opportunity for public testimony is the county budget committee meeting on May 26 at 9:45 a.m.; adoption by the board is scheduled for June 17, when rates would be formally adjusted.

The committee asked for follow-up materials and data points, including more detail on population/annexation trends used in the long-range forecast and construction‑cost indices. Staff said it will provide an evaluation memo (a “soup‑to‑nuts” summary) and pointed to planned outreach and forecasting work with PSU and other partners.

The presentation closed with staff noting that the budget document reflects assumptions locked in March and that any events after that date (for example, changes in fuel or chemical markets) would be managed through contingency and, if necessary, supplemental budget actions.