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Muskego staff outline stable 2026 water and sewer operating budgets; future rate adjustments likely
Summary
Staff presented the 2026 operating budgets for the water and sewer utilities, saying both funds currently show adequate balances and no immediate rate change was proposed; officials warned rate cases will likely be needed in coming years to cover rising capital and operational costs.
Muskego’s Committee of the Whole reviewed the water and sewer utility operating budgets on Oct. 14 and heard that staff expects both utilities to maintain adequate balances for 2026 without rate increases in the coming year, while flagging the need for full rate studies in future years.
Sewer utility
Finance staff reported the sewer utility serves roughly 9,200 customers and currently carries a healthy working capital position (the packet showed working capital approximations). There is no outstanding debt in the sewer utility; staff noted the last sewer rate increase was a 2% adjustment effective in January 2010. Capital projects and lift‑station upgrades are on the capital plan, including major work at the McShane lift station that will require bypass pumping for any substantial vault or lining work.
Water utility
The water utility serves about 4,500 accounts and had a 4.1% rate increase that took effect on Jan. 1, 2025. Staff said both operating revenues and costs are expected to remain relatively stable for the upcoming year but cautioned the utility is no longer eligible for a simplified rate case adjustment; that means a full rate case study will likely be required within the next few years to maintain financial stability in the face of rising capital and inflationary pressures.
Why it matters: Utilities are enterprise funds governed by cost‑of‑service and regulatory practices; the committee’s review confirmed current stability but signaled planning for future rate adjustments and capital projects (lift‑station upgrades, pipe work) will be necessary.
Ending
Staff asked councilors to raise any questions promptly because utility rate studies and capital project decisions will come back to the committee in the months ahead.
