Water rate increases scheduled for 2027

Out of three potential paths forward, Creston Waterworks will raise rates by 7% in 2027 in an effort to support continued growth for the utility.

During a special meeting on Tuesday, Creston Waterworks’ board of trustees met to discuss financing options for the water main improvement project, which has already begun on the intersection of Mills and Cherry.

Rates will increase by an already-scheduled 4% in 2026 to a minimum charge of $26.21 per month (280 cubic feet) and $9.36 per 100 cubic feet, and a 7% increase in 2027 to a minimum charge of $28.06 per month (280 cubic feet) and $10.02 per cubic feet.

General Manager Steve Guthrie outlined how with the waterworks’ current path, raising rates by 4% in 2026 and in 2027, the utility would have trouble meeting the revenue required for debt coverage.

Creston Waterworks has to meet 10% revenue over expenses as a requirement for reimbursements on various expenses.

Three paths were outlined; the first would keep a 4% raise in 2026 but raise rates by 8% in 2027.

The second would also keep a 4% raise in 2026 but raise rates by 7% in 2027, in addition to a contribution of $500,000 from the waterworks’ money market account.

This second path was noted by Guthrie as the path which would put the waterworks into “the best position,” as it allows for waterworks to keep reserves and debt coverage. This path would be the one the board would approve.

The third path would keep the current rate structure of 4% in 2026 and 2027 and instead contribute $1.376 million to the project, draining the waterworks’ cash reserves.

“We’d have no, absolutely no, wiggle room for inflationary increases for something in 2028,” Guthrie said.

The second option could be seen as a compromise between the first and third paths, combining a rate increase with a contribution from the waterworks’ reserves.

With the first and second paths, Guthrie recommended contributing the remaining cash reserves into a fixed asset, allowing for a guaranteed amount of return and generating more for the utility’s reserves.

Approved during the special meeting was the rate increases (4% in 2026, 7% in 2027), with no contribution approved as of yet. This will come in a future meeting.

The necessity of the special meeting came from a requirement of a pro forma agreement with a deadline today, July 31. The outlined schedule for finances would confirm financial feasibility.

Creston Waterworks makes up a portion of a utility bill, alongside sewer and trash, which are through public works and Waste Management, respectively.