Water and sewer rates in Dillon will increase in 2026, as the Dillon Town Council voted Nov. 4 to approve a fee schedule that includes water volume charge fees overall increasing by 21%.

A water and sewer rate study the town commissioned this year influenced the decision, as engineers from consulting firm AE2S NEXUS recommended the town enact the increases to cover costs and eliminate deficit spending. The rate study recommended increases of 3-4% annually from 2027 to 2030 after the larger 2026 increases.

At the Town Council’s Nov. 4 regular meeting, town manager Nathan Johnson said the primary reason staff suggested “such a large rate increase” was because past councils had not followed the recommendations of previous rate studies.

“The council at the time directed us to go lower,” Johnson said. “They didn’t want to listen to the engineers that we brought on. So now, we’re behind the eight ball and have to do this 21% increase.”

Ryan Graf from AE2S NEXUS presented rate study results to the Town Council during a work session Sept. 23, outlining the rate increases for 2026. The water capital fee, a fixed rate fee based on the number of EQRs a property has, will increase from $23.77 to $24 per EQR, or single-family residential equivalent.

The 2026 fee schedule adds another EQR-based water fee for operation and management of $6 per EQR, meaning the overall fixed-rate for water increases from $23.77 to $30.

The water volume fee, which fluctuates based on water usage, has two tiers, and Graf said the first tier will now be “a bit larger.” Any usage under 1,000 gallons per month per EQR will cost $7 per 1,000 gallons. Above that level of usage, the fee will be $12 per 1,000 gallons.

The sewer fees now have a capital rate and operations and management rate as well. The operations and management rate will increase from $43.50 to $45.50 per EQR, while the capital rate will be introduced at $12 per EQR. Together, they total $57.50 per EQR.

Graf said the rate study took into account major capital projects the town has planned for its water and sewer systems. The increase in rates are not driven by capital projects, Graf said, as those funds go to operation and management as well as repair and replacement costs listed in the capital improvement plan.

Finance director Mary Kay Perrotti emphasized at the Nov. 4 meeting that the overall 21% fee increase was not because of a planned water plant expansion or other capital projects.

“There are capital projects that need to be done,” Perrotti said. “This increase is separate from the water plant expansion project. This is strictly to avoid deficit spending and to get us back to revenues covering our expenses.”

Tap fee revenue is used to fund capital projects, Graff said. Dillon’s tap fees will increase as well, based on the water engineering firm’s recommendations. For water, tap fees will increase from $9,008 to $12,084 per EQR. Sewer tap fees will increase from $5,807 to $10,130 per EQR.

The Town Council unanimously approved the ordinance setting the 2026 fees.