Troy prepared to raise sewer rates next May

By Charles Bolinger

Editor • As mentioned during previous meetings, Troy officials have talked about raising sewer rates to build a fund base in part to pay for the city’s sewer treatment plant upgrade.

City Administrator Jay Keeven provided an update at the July 6 city council meeting, along with Cameron Jones, a principal and project engineer with Benton and Associates out of Jacksonville. 

“In discussing the rates and the timing, we won’t know by May 2027 for sure whether we’ll have that funding. So at first, I was thinking maybe we would hold off on a rate increase, just to see what the numbers will be, but we still won’t know.”

He said he has a sewer rate increase ordinance ready to go before the council for approval in August or after and it would not kick in until May 1, 2027. This would remain true even if they secure a low-interest loan from IEPA, which has interest rates in the 2%-2.5% range, he noted.

During a June 15 public works committee meeting, 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.

“If we have to go out to bond, that interest rate is not going to cover payments but the good news is that we have some general fund surplus and we have some surplus in the sewer fund,” he said. “If we have to bond this, I would recommend that we use as much of the revenue as we can that we have so we’re not borrowing at a higher interest rate. Right now, we’re getting about 3.8% in the bank on our fund. If we’re paying 2.5% I don’t mind borrowing all of it if we can, but if we’re paying 4.5%, that’s a losing proposition.”

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. Under that option, which would increase monthly rates 16.5% for five years, it 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.

Also during the meeting, the city council approved a contract addendum with Benton for funding application assistance, engineering design services, bidding phase services and construction phase services.

The funding application assistance portion shall not exceed $25,000 from the city; the engineering design services section will total $2,535,000; for the bidding phase services, the cost shall not exceed $50,000 from the city; and the construction phase services section will not exceed $2,560,000.

Keeven has emphasized that doing nothing is not an option; city officials claim they are adding 100 new homes per year and if the sewer treatment plant is not upgraded, the IEPA will enter the picture and stifle all growth in Troy until the situation is resolved. 

The next Troy City Council meeting is July 20 at 6:30 p.m. at Troy City Hall, located at 116 E. Market St.