Consultant recommends assuming 7.5% sewer rate increase to protect reserves

Jeff Rao, a consultant with Baker Tilly, told the Bristol Town Council on July 2 that the town's sewer utility is meeting current minimum reserve requirements but risks erosion of those cushions without a rate adjustment.

Rao said the Sewage Works held roughly $11.7 million as of Dec. 31, 2025 — largely unspent bond proceeds — and that operating revenues for 2025 were about $2.1'$2.2 million while operating expenses ran about $735,000. He said capital-improvement spending and debt service have driven a long-term cash decrease tied to large project outlays.

Why it matters: the town's debt-service coverage target is 125%; Rao said that if operating costs rise while rates remain flat, coverage will erode over time and a major, unplanned repair could quickly deplete reserves. For that reason he recommended the council assume the planned 2026 sewer rate increase rather than postpone it indefinitely.

Rao summarized the recommendation this way: "At some point it's not needed immediately... my concern with that, though, the further we go out is, you know, if there is an emergency or large repair ... that could eat up our cash reserves pretty quickly." He and staff discussed a roughly 7'to'7.5% increase tied to the 2026 ordinance that had been prepared for implementation.

The consultant also presented water-utility figures, saying the water fund had stronger cash on hand (about $1.7 million vs. minimums near $1.0 million) and that roughly half of current water costs are debt service. Rao noted that retiring outstanding debt would materially lower bills — he estimated on the record that eliminating debt service could roughly halve the average water bill.

Council members asked about the dollar impact on households; Rao walked through examples and base-rate assumptions used in his packet. Council members and staff repeatedly framed the recommendation as contingent and administrative: they did not adopt a new rate at the meeting and said they would "stay the course" and consider timing, ordinance language and the formal adoption process in a future meeting.

Next steps: staff will keep the consultant's analysis in the record, and the council may revisit formal adoption of any rate change after reviewing ordinance timing, notice requirements and additional analysis.

(Reporting note: figures are taken from the consultant's presentation and the public meeting transcript. Where the packet presented ranges or multiple example calculations, this article reports the consultant's rounded estimates as presented.)