Lincoln City Council Split On Water/Sewer Rate Overhaul

A proposal to overhaul Lincoln City’s water and sewer rates stalled Monday night (6/8/26) after councilors split over how fairly the changes would treat typical households versus the biggest users. Finance Director Debbie Bridges told the council the new structure was based on an analysis by consulting firm Waterworth, with two main goals: soften impacts on low-use and fixed-income customers and encourage water conservation, while still raising enough revenue to keep the systems running.

Under the current system, residential customers pay a base rate plus a consumption charge, but the first 400 cubic feet of water each month are effectively included in the base rate. Usage charges only apply above that threshold. Bridges proposed cutting that amount in half, so only the first 200 cubic feet per month would be covered by the base rate. Beyond that, residential bills would move to a tiered structure: a lower rate for 200–500 cubic feet and a higher rate for usage over 500.

Short-term rentals would be shifted from residential to commercial billing. Commercial customers would also move to a two-tier structure, with a lower rate for the first 500 cubic feet and a higher rate above that. Base rates would stay the same for all customer classes. All of the change would come through the consumption charges. Bridges said about 29% of residential bills were for 200 cubic feet or less and would see no change. Another 20% of residential accounts use between 200 and 500 cubic feet and would see increases because they currently get 200–400 cubic feet with no usage charge. The remaining 51% of residential accounts use more than 500.

For commercial accounts, she said 56% use 0–500 cubic feet and would see a decrease in the usage portion of their bills; 44% use more than 500 and would see increases.

Overall, the new structure was projected to raise water fund revenue by about $630,000, a 12.8% increase, and sewer fund revenue by about $974,000, a 17% increase. Bridges and City Manager Daniel Hunter reminded the council that an earlier model showed both systems needed more than a 30% rate hike immediately to fully fund operations, maintenance and capital needs.

“We knew from the outset that that was just not going to work,” Hunter said. “We couldn’t come to the public with a 30% increase and expect anybody to say, ‘Yeah, that sounds like a great plan.’” Instead, he said, the city was proposing smaller increases now and similar-sized increases over the next few years, hoping major system failures do not force the city to halt capital projects or cut operations.

Equity and conservation at center of council debate

Councilor Marci Baker led opposition to adopting the new rate structure without more detailed data. She pointed out that the largest percentage increases would hit what she described as the “median” user at around 400 cubic feet per month. “I just have a hard time not looking at this and seeing a 30% increase on the standard median user as what this is,” Baker said. She added that based on her calculations, customers using 1,000 cubic feet or more would see a much smaller percentage increase, around 19%.

“I would like to see the highest users highest impacted,” she said. “That is a policy decision on who you’re choosing to impact by increasing the rates. If we have to impact people in this community with increased rates. The question is who, and I would like to see that land on the highest users.” Baker also questioned whether two usage tiers were enough to significantly change behavior.

“Two tiers seems very minimal to me to really be encouraging a change in behavior and thinking about how we use water,” she said. She is suggesting additional tiers where the price per 100 cubic feet escalates more sharply at higher usage levels. She also argued the proposal did not truly protect many fixed-income residents. ,“Right now the only people whose rates aren’t going to go up are people who use less than 200,” she said. “It’s based on volume, not by whether they have a fixed income or not, and there are large families on fixed incomes.”

Baker noted that leaving 400 cubic feet included in the base rate meant there was “no incentive for conservation all the way up to 400,” because customers paid the same whether they used 100, 300 or 400 cubic feet. She said the consultants also had to ensure the overall structure remained “fair and equitable to all classes” and still met revenue needs.

Hunter told the council that tying sewer charges more closely to actual sewer flows would likely require either irrigation-only water service or separate sewer meters, both of which would add complexity and cost. He said trying to adjust rates based on income was also difficult in practice, especially for tenants in multifamily housing whose water and sewer costs are bundled into rent.

Councilor Rick Mark argued that, unpopular as rate hikes may be, the city’s first obligation was to keep the water and sewer plants operating. “No one likes to have increased bills,” Mark said. “But we also, I think, the first goal here is not to incentivize conservation. I think that’s a benefit of the plan, but the first goal is to keep the city’s water treatment system and sewage treatment system operating the way it should, and the costs of that just keep increasing.”

Public testimony focused on seniors, renters and irrigation

Three residents spoke against the proposed increase during the public hearing.

Marie McFarlane said summer watering for gardens caused her household’s bill to “almost double,” even though much of that water never reached the sewer system. “We are being billed for 400 cubic feet on the water as well as the sewer, when actually the water was going into plants and into the ground,” McFarlane said. She urged the city to revisit earlier ideas for permits or some mechanism to recognize outdoor-use water and also pressed the city to “think outside the box” by exploring desalination.

Apartment resident Betty McCain said she already paid “for every drop of water I use” through her rent and reminded the council that a previous “6% for water, 6% for sewer” action felt like a 12% increase on her combined bill. “There’s got to be a limit to what we can afford to pay,” McCain said. “I don’t get to change the amount of income I’m receiving every month every time there’s a rate increase.”

Resident Judy Hardy urged the city to present the changes in clearer dollar terms so households could see what the new structure would mean for their specific usage levels.

“I think a better way to present it would be, say, ‘Okay, so right now the minimum rate is 400 cubic feet, it’s going down to 200. So if I use 400 cubic feet, what is the increase on my bill from 200 to 400?’” Hardy said. “I think there’s a better way to communicate to the public what their increases would be.”

Motion for more data passes; rate resolution fails on tie

Baker ultimately made a motion directing staff to bring back detailed financials on current water usage across all customer classes, including how the proposed tiers would land on different users. That motion failed by a tie vote. When Mark later moved to approve Resolution 2026-10, which would have adopted the new rates effective with August 15 billing, the council deadlocked. With a tie vote, the motion failed and the resolution did not pass. Mayor Susan Walke indicated the water and sewer rate resolution would return at a future meeting once staff can provide the additional analysis requested by the council.