Troy officials discuss raising sewer rates in 2027 to fund sewer treatment plant improvements
By Charles Bolinger
Editor • Now that Troy officials have chosen which sewer upgrade plan to go with, the first one of five shown, for $4.7 million, the next step is to talk about funding it.
While city officials have quietly been putting aside some monies in preparation for a new city sewer plant, they haven’t squirreled away enough to pay for the entire tab without securing a low-interest loan from the Illinois Environmental Protection Agency (IEPA) to pay for the balance.
During a June 15 public works committee meeting, City Administrator Jay Keeven said to cover debt service, the city is paying $2.5 million annually. They will need to raise rates to bridge the $2.2 million gap to arrive at the project’s $4.7 million cost by 2032.
Troy has partnered with Benton Engineering Associates, out of Jacksonville, for this project.
Cameron Jones, a principal and project engineer with Benton, met with Keeven on June 8 to review wastewater system rates for users. They presented a sheet listing the current rates with four options for new rates, any of which would start May 1, 2027.
Troy recently updated its sewer rates on May 1, as it has done since 2023. The current monthly sewer rates are: $15.77 in-city for the first 2,000 gallons and $0.00717 per gallon over 2,000 and $27.65 for the first 2,000 gallons for out-of-city users and $0.01355 per gallon over 2,000.
No official vote was taken but a number of council members voiced support for the second option. At least two of them said it would be the least impactful, especially on those who have the least amount of money.
Under the second option, which would increase monthly rates 16.5% for five years, tt would mean residential in-town rates would jump to $18.37 for the first 2,000 gallons and $0.00835 per gallon over that. Out-of-city users would see rates go up to $32.21 for the first 2,000 gallons and $0.01461 for any usage over that.
For larger consumers, a 4,000-gallon in-town bill would be $35.08 per month while any out-of-town users would pay $61.43 for 4,000 gallons. The largest users, up to 102,000 gallons, would pay $851.76. Jones said none of this data takes into account revenue from new customers.
Councilman Troy Turner asked if they could start earlier so the rates would not have to go as high.
“We can and Cameron had potentially looked at doing that for us,” Keeven replied. “If we did it in July to take effect in August, it would get us another eight months of revenue. I thought it would be cleaner to stay with we are because we just did an increase in May [and this would avoid almost back-to-back increases].”
Jones said starting earlier didn’t make enough of a difference because it’s less about the revenue that the city gains this year and more about compounding interest. Councilman Sam Italiano asked Jones about any state funding that could be applied.
“We do not,” Jones answered. “This is all caveated off of a state revolving fund (SRF) loan with similar to current interest rates with no grants. If the city was able to get a grant through congressional appropriations, this would change; if they interest rates were to go up, this would change; if we weren’t able to get IEPA SRF funding and had to go after bonds or things like that, the needed revenue would increase because this is the lowest interest option.”
He added that the rate cannot be locked in until it goes to construction, which right now, is three years in the future. Jones told the council that the city’s project is listed with IEPA but has not been scored yet and won’t be until they complete additional tasks – plans, paperwork, permits, etc.
Keeven said they have no choice but to commit and move forward on this project in 2026 or 2027. If any federal funding can be found, it would be easier to lower sewer rates. If Troy does not get a loan from IEPA, then Keeven would want to borrow less money so any revenue in the city’s sewer surplus fund and any monies they are comfortable using from general revenue to stay at the $2 million debt service level.
If any residents wonder whether doing nothing is a choice, city officials maintain that is not an option. Keeven has been outspoken about the consequences of inaction for Troy – it would mean the IEPA would come in and forbid growth of any kind until the city remedies the problems at the sewer plant. City officials said Troy averages about 100 new homes per year and Keeven recently estimated the city’s population at 11,700.
They also reviewed an amendment to the contract with Benton. There are four tasks that the city and Benton have mutually agreed upon, funding application assistance, engineering design services, bidding phase services and construction phase services.
For funding application assistance, the cost is not to exceed $25,000; the cost for engineering design is not to exceed $2.535 million. These first two happen before they figure out the loan details from IEPA, Jones said, while the other two, the bidding and construction phases, will happen after the loan details are settled.
Jones added that all phases are reimbursable under the loan. Keeven confirmed the city has enough revenue to cover the first two tasks on the list before the loan details are known.
The bidding phase services are set not to exceed $50,000; and construction phase services are set not to exceed $2.56 million. Jones said if construction takes 24 months instead of 36 months, they will renegotiate the contract with the city. All of the listed amounts above cannot be exceeded without authorization from city officials. After City Attorney Fred Keck reviews this amended contract, it will return for a vote by the city council next month.
At the city council meeting that followed the committee forum, the following items were approved 6-0 by the council:
- An ordinance amending the city’s planned development overlay regarding allocation of improvement fees
- An ordinance amending the city’s schedule of fees and fee schedule references
- A resolution approving a special-use permit for Jarrod Mayes to keep four hens on his property in the 400 block of Troy Avenue
Councilmembers Elizabeth Hellrung and Nathan Henderson were absent. The city’s next council meeting is July 6 at 6:30 p.m. in Troy City Hall, 116 E. Market St.
