Columbia City Council Work Session: Utility Cost of Service Study - May 19, 2026

At a work session on May 19, 2026, the Columbia City Council received a detailed presentation from Utilities Director Aaron Keys and consultant Kyle Stevens (Stantech) on the findings and recommendations of a sewer and solid waste cost of service study. The study, conducted over the previous six months, covered financial plans, cost allocation, rate design, capacity fees, and surcharge adjustments for both utilities. Council members asked numerous questions and provided initial direction, particularly on residential trash cart rates, commercial rate consolidation, and the need to audit the downtown Community Improvement District accounts. No formal votes were taken, but staff was directed to refine recommendations for budget discussions beginning in July.

Consent Calendar

• No consent calendar was discussed.

Public Comments & Testimony

• No public comments were made; the meeting was a work session with only the council and presenters.

Discussion Items

• Sewer Financial Plan & Rate Recommendation: The last sewer rate increase was in fiscal year 2018. The study found that with no rate increase, the sewer fund would deplete its balance by 2033. The recommended approach is no increase in FY 2027, followed by approximately 3% inflationary increases per year starting in FY 2028. The goal is to match inflation and avoid a large, single-year jump.
• Sewer Cost of Service & Rate Redesign: The study recommends lowering the fixed charge recovery from the current 41% of revenue down to 37%, shifting more cost to volumetric (usage-based) charges. This would reduce the fixed monthly fee for all meter sizes by about 10.3% (from $12.37 to $11.09 for the most common residential meter) and increase the volumetric rate from $2.55 to $2.68 per CCF. The result is that households using 10 CCF or less per month would see stable or slightly lower bills, while higher users would see modest increases. Council questions centered on affordability and the impact on lower-usage households. Councilmember Christina Bartlett noted that older or rental homes may not benefit from water-efficient appliances.
• Boone County Sewer Rates: Currently, Boone County customers pay 80% of the city rate. Analysis calculated that the actual cost-of-service ratio is closer to 92%, meaning county customers are underpaying. The recommendation is to maintain the 0.8 multiplier for existing customers but apply the 0.92 multiplier to all new connection agreements. Councilmember Christina Bartlett asked about the origin of the 0.8 figure; staff stated it dates to the late 1990s/early 2000s and was based on a Springfield example.
• Over-Strength Surcharges: For large industrial/commercial customers sending wastewater above domestic strength (300 mg/L BOD or TSS), the study recommends increasing the TSS surcharge from $0.22/lb to a full cost-recovery rate of approximately $0.71/lb, while the BOD surcharge remains nearly flat. Only a handful of customers are affected, and total bill impacts are estimated to be under 5%. Councilmember Eric H. asked about ways for customers to reduce TSS loads; staff noted that key account managers can help them invest in pre-treatment.
• Hauled Waste Surcharges: The study recommends eliminating the flat fee for haulers (currently tied to the 5/8" meter base charge of $12.37) and moving to a fully volumetric fee based on load concentrations. New rates would be $0.108/gallon for septic/grease/portables (up from $0.092) and $0.055/gallon for sludge (up from $0.049). Councilmember Christina Bartlett asked about potential negative reactions; staff noted few alternatives exist for haulers.
• Sewer Capacity Fee: The study recommends increasing the capacity (connection) fee from $2,400 to $2,800, a 17% increase to achieve full cost recovery. The buy-in methodology was used, as the city has existing treatment capacity without major new investments planned. Councilmember Valerie noted this may impact housing affordability.
• Solid Waste Financial Plan: The solid waste fund faces a structural deficit. With no rate changes, the fund would be below policy reserve by 2028 and out of balance by 2029. To avoid a single-year 17.4% increase in FY 2028, the study recommends a phased approach: 5% increase in FY 2027, 10% in FY 2028, 10% in FY 2029, then 5% and 3% in following years. If the city proceeds with the phase 2 material recovery facility (MRF) (estimated $27 million debt), an additional 4% would be needed in FY 2028 to cover that debt service. Councilmember Eric H. asked about timing; staff explained the 4% was placed in FY 2028 to match when debt payments begin and to stagger increases with the expected water rate increase.
• Solid Waste Cost of Service: The study analyzed separate customer classes (residential, commercial front-load/rear-load, commercial recycling, roll-off, and Community Improvement District). Residential rates are close to cost, while commercial classes show larger gaps. Council discussion focused on the roll-off rates, which need increases of 36.4% (standard) and 33.6% (mini), yet would still remain lower than private market rates (based on a comparison at 2 tons).
• Residential Cart Rate Adjustments: The study recommends recalibrating the recently implemented tiered cart system (35, 65, 95 gallons) to match cost of service. The 35-gallon would increase 12.9%; the 65-gallon (most common) would increase 5.2%; the 95-gallon would decrease slightly (about -1%). Councilmembers Vera, Valerie, and Barbara expressed concern that decreasing the largest cart fee disincentivizes waste reduction. Mayor Barbara questioned whether rates could be adjusted for conservation goals rather than strict cost-of-service. Councilmember Valerie also noted that the small savings between the 35 and 65 gallon ($4) may still provide an incentive to downsize, but decreasing the 95 rate works against sustainability.
• Commercial Trash Rate Consolidation: The study recommends consolidating the separate front-load and rear-load commercial refuse rates into a single schedule, with rates scaling based on container size and pickup frequency. This would cause significant differential impacts; for example, an 8-yard container picked up once per week would see a 24% increase, while those picked up six times per week would see a decrease. The city did not implement similar recommendations from the 2021 study.
• Recycling Rate Simplification: The study recommends simplifying the commercial recycling rate structure so that all container sizes and pickup frequencies receive the same 10% discount compared to the refuse rate (i.e., recycling rate = 90% of refuse rate). This would provide a uniform incentive to recycle.
• Community Improvement District (CID) Rates: The CID is significantly under-cost recovery (approximately 50%). The study recommends consolidating many small rate categories into three (small, medium, large) and moving toward full cost recovery. Utilities Director Aaron Keys noted they have begun working with the CID and an internal audit is needed to ensure all accounts are recorded and properly charged. Councilmember Christina Bartlett asked about the timeline; staff indicated the audit will take significant time and may be completed after the budget. Council agreed to move forward with the recommended increases and revisit after the audit.
• Combined Utility Bill Impact: Staff presented a chart showing the combined effect of the recommended increases for an average residential customer using 5 CCF water/sewer, 65-gallon solid waste, and 750 kWh electric (with a proposed 6% electric increase). The total monthly bill would rise from $68.31 to $71.19, an increase of about $2.88 (4.2%). Similar figures were shown for higher usage levels.
• Electric Rate Discussion: Aaron Keys noted the electric utility staff presented a 6% increase to the council previously, which would be applied uniformly across all tiers. Councilmember Valerie asked about a tiered increase to align with cost of service; staff replied that a future cost-of-service study may allow that. Councilmember Jackie requested that the previous electric cost-of-service study be shared with new council members.
• Utility Assistance Program: Councilmember Jackie asked whether the rising rates will increase demand on the utility assistance program. Aaron Keys responded that the city’s internal auditors are reviewing the program and may recommend adjustments, potentially reducing the total assistance amount to balance the budget. Councilmember Barbara noted that investing in home energy efficiency could reduce the need for assistance.

Key Outcomes

• No votes were taken; the session was a work session to gather input from council.
• Staff will prepare additional bill impact analyses and a calculator for the public, accounting for any council direction on rate adjustments.
• Council indicated general support for following the cost-of-service recommendations for sewer and solid waste, but expressed reservations about the proposed adjustments to residential trash cart rates (particularly the 95-gallon decrease) and the uniform 6% electric increase.
• The city will proceed with the CID account audit in coordination with the downtown CID committee; rates will be reevaluated after the audit is complete.
• Staff will present refined utility rate proposals for council discussion as part of the FY 2027 budget process beginning in July 2026.