Wastewater Finances: What It Means for Sewer Bills 

In the previous issue of Wastewater Matters, we explained the planning-level capital costs associated with constructing a locally controlled wastewater treatment facility. A natural follow-up question residents are asking is: 

What does this investment mean for monthly sewer bills? 

This article explains how sewer rates are calculated, what the current rates cover, and what preliminary modeling suggests future rates could look like as the City moves forward with a new wastewater facility. 

Current Sewer Rate Baseline 

Victor’s sewer utility operates as an enterprise fund, meaning the system is funded by user fees rather than general tax revenue. 

For FY2026, the proposed sewer fund budget is approximately $2.19 million, compared with $2.2 million in FY2025. 

Victor currently has approximately 1,765 equivalent residential units (ERUs) connected to the sewer system. Based on the current budget and user base, the monthly sewer rate is $98.47 per month per ERU. 

This rate supports the existing system, including sewer collection infrastructure, staffing, and treatment costs currently paid to the City of Driggs. 

How Sewer Rates Are Calculated 

Sewer rates are designed to cover the full cost of operating and maintaining the wastewater system. In general, sewer utility budgets include three major categories: 

• Debt service, which repays borrowed funds used to construct infrastructure 
• Operating costs, such as power, testing, equipment maintenance, and plant operations 
• System maintenance and replacement, which ensures pipes, lift stations, and other infrastructure continue to function reliably over time 

Sewer utility funds are restricted by law. Revenue collected through sewer bills can only be used to operate and maintain the sewer system. Sewer fees do not fund roads, parks, or other city services. 

What Changes With a New Wastewater Facility 

Under a locally controlled wastewater treatment facility, several costs within the sewer system would shift. The City would continue maintaining its existing sewer collection system and staffing structure. However, the current payment made to the City of Driggs for treatment services would be replaced by operating and financing costs associated with Victor’s own facility. 

Preliminary modeling includes several major components: 

• Existing sewer collection system costs 
• Existing City staffing costs 
• Plant operating expenses estimated at approximately $300,000 per year 
• Debt service associated with constructing the facility 

The plant operations estimate reflects operating expenses only. Salaries and capital financing are accounted for separately within the model. 

Preliminary Rate Scenarios 

Based on current planning-level estimates, preliminary modeling suggests the following potential rate range. 

If the project cost were approximately $35 million, the modeled monthly sewer rate would be about $138.96 per month. 

If the project cost were approximately $30 million, the modeled monthly sewer rate would be about $126.45 per month. 

For context, the current rate is $98.47 per month. 

These modeled scenarios represent an increase of roughly $28 to $40 per month, depending on final construction cost and financing terms. 

The Role of Growth in the Rate Model 

The rate model does not assume or rely on any future growth. Sewer rates must be projected using only the existing customer base to ensure they are sustainable without new development.  

As additional homes and businesses connect to the system, the cost of infrastructure is distributed across a larger number of users, which helps moderate individual monthly rates. 

How Grant Funding Could Reduce Rates 

Grant funding can also play a significant role in reducing the cost borne by local ratepayers. 

Based on the current model, every $1 million in grant funding could reduce monthly sewer rates by approximately $2.50 per household. $5 million in grant funding could reduce monthly rates by roughly $12.50 per month. 

The City is actively pursuing grant and low-interest financing opportunities to reduce the overall cost of the project where possible. 

What Happens Next 

These figures are preliminary modeling scenarios, not final rates. Several factors will influence the final cost of the project and the resulting sewer rates, including: 

• Final construction bids 
• Interest rates at the time financing is secured 
• Grant funding availability 
• Final engineering design 

Before any final financing decision is made, the City will present a detailed public rate model and discuss the financial implications in an open Council meeting. 

Looking Ahead 

Wastewater infrastructure is a long-term investment in community reliability, environmental protection, and public health. By moving forward with a locally controlled wastewater facility, Victor will take responsibility for operating and maintaining the infrastructure that protects local water quality and serves the community. As engineering and financing details become clearer, the City will continue sharing information with residents about the financial aspects of the project.