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Freeport debates six water-and-sewer rate options; council tables decision
Summary
City staff presented six rate scenarios to close a roughly $1.1 million shortfall in the water and sewer enterprise fund. Council discussed trade-offs between protecting residential users and generating revenue from commercial customers and ultimately voted to table the issue for further study.
Freeport city staff presented six proposed changes to water and sewer rates and detailed how rising contractor costs and large claims have driven the utility fund toward a roughly $1.1 million deficit.
City Finance Director Ashley Hurst told council that combined increases recently imposed by third‑party contractors have added about $1.2 million in operating costs since the last rate adjustment and that the utility fund has run deficits in five of the prior six fiscal years. “The grand total combined increase in cost since that last rate adjustment totals $1,216,433,” Hurst said during the presentation. She added staff had prepared six alternatives that try to balance residential compassion with the need to shore up the utility’s finances.
The options on the table ranged from targeted increases on commercial customers only to hybrid proposals that split increases between residential and non‑residential users. For example, one option would raise nonresidential rates 20% while holding most residential charges steady; another (Option E) would raise nonresidential rates 15% and give residential customers a 5% water and 10% sewer increase. Hurst summarized the options and their projected revenue impacts and noted that several proposals would bring the utility above the threshold staff identified to avoid continued operating losses.
Council members probed the distributional effects and long‑term consequences. Councilman Rosso emphasized protecting small, locally owned businesses from large price shocks, while Councilman Davis and others said the city must adopt a plan that reduces the risk of repeated back‑to‑back increases. Council members also discussed how new water meters and water sales to an outside customer earlier this year had distorted prior years’ results and complicated projections.
After about two hours of questioning and debate, Council voted to table the rate ordinance to allow more time for review and to consider refined options — including a possible new, targeted option to protect small “mom‑and‑pop” businesses while securing sufficient revenue. Hurst confirmed staff can prepare follow‑up analyses for the council’s next meeting.
The council did not adopt new rates at the Aug. 18 meeting; Hurst said staff will return with additional analysis and recommended language for council to consider before any rate ordinance is adopted.
