Public hearing on FY2026 budget includes proposed utility rate increases; resident warns of hardship

City staff presented the proposed fiscal year 2026 budget at a June 9 public hearing, saying the plan totals about $73.4 million and incorporates recommended fee increases for the city’s utilities, including wastewater and water rates.

Perez, a city staff member presenting the budget, told the council the draft budget represents roughly a 4.3% increase over the prior year and includes salary adjustments for public safety, benefit changes, and capital project funding. The presentation noted the utility-rate changes had been recommended by the board of public works and are embedded in the draft budget.

A staff presentation of the wastewater cost-of-service study and proposed rate structure described a set of adjustments to fixed monthly fees and volumetric charges over a three-year plan. The presenter said the proposed 2026 wastewater changes would raise the average residential customer’s bill by $3.39 a month and move fixed fees and usage charges in several tiers; for example, the presenter reported a residential fixed fee moving to $27.20 (from a lower amount stated in the study) and volumetric rates changing at multiple consumption tiers. The presenter also said commercial customers with a 1-inch meter would see a fixed-fee increase of about $5 per month (from $45.69 to $50.69) plus changes to consumption rates.

The presenter said the city paid roughly $32,000 for three utility cost-of-service reviews and that the adjustments are scheduled to take effect July 1 as part of the FY2026 budget if the council approves the budget.

During public comment, resident Glenn Gonzalez cited U.S. Census and federal poverty thresholds and urged caution before increasing utility rates. Gonzalez told the council the median household income in Lebanon fell from $45,634 to $42,157 between 2022 and 2023 and that the city’s poverty rate is about 20.5%; he said local food pantries already serve about 1,800 families per month and asked, “is it prudent to increase utility rates?”

City staff and presenters emphasized rising material and construction costs as a driver of the recommended adjustments and said the board of public works reviewed and approved the changes before recommending them to council. Perez said the council will consider final approval of the FY2026 budget at a subsequent meeting; staff indicated the budget and embedded rate changes are scheduled for final consideration on the June 23 meeting agenda.

The council recessed from the public hearing and took no final vote on the budget at the June 9 meeting. Staff said they are available to answer follow-up questions and will provide additional detail to council members on request.