Peoria proposes modest utility rate increases, schedules public hearing for May 20

Peoria City Council members heard a presentation March 4 from city finance staff on a multi-utility rate study that recommends phased increases in water, wastewater and solid waste charges to maintain cost recovery and fund capital needs.

City Deputy Manager Kevin Burke and Finance staff explained the study and the drivers for higher costs, while City staff described a timeline that would put new rates into effect July 1, 2025 if adopted after the public hearing. The council approved a notice of intent to increase rates as part of the consent agenda (7-0). The city plans a public hearing and possible adoption on May 20, 2025, with the required detailed rate report posted 30 days before that hearing.

The study recommends a combined bill increase of 5.5% in fiscal 2026 and 5.1% in fiscal 2027. By utility, staff proposed a 3.5% increase for water in each year, a 5.8% increase for sewer, no increase for stormwater in this cycle, and a roughly 10% increase for solid waste in FY 2026 followed by an 8% increase in FY 2027. Staff said the FY 26–27 solid waste increases were lower than earlier projections because fleet and capital costs came down from initial estimates. Finance staff said the average combined residential monthly bill in comparison data is about $106.61 today; the recommended changes would modestly raise that amount.

Staff described primary cost drivers: inflation for chemicals, electricity and labor; plant expansions and redundancy work tied to Colorado River uncertainty; aging infrastructure and replacement needs; landfill and recycling market swings; and fleet and equipment costs for solid waste. The city’s water rate structure includes a base charge for meter size (a typical 3/4-inch meter base is currently $21.24 per month) plus tiered volumetric charges to encourage conservation. Wastewater charges are based on a winter average and include a base monthly charge (reported as $10.84 for a 3/4-inch meter). Residential solid waste is billed as a flat fee (currently $23.55) that includes one trash and one recycle container and two bulk pickups per year.

On a related operational risk, staff said the city has tested wells for PFAS (per- and polyfluoroalkyl substances); one well previously tested positive and the city took that well offline. Kevin Burke told council that federal PFAS regulations are expected to take effect in coming years and the city is balancing when and how to invest in treatment — whether to act now or wait until rule details and costs are clearer.

Staff also proposed an across-the-board 3.5% adjustment to miscellaneous fees (initiation fees, late fees, container relocations, locking devices) so smaller administrative charges remain current.

The council approved the statutory notice of intent as part of the consent agenda (7-0). City staff said the notice is required to be adopted 60 days prior to the public hearing; staff will post the supporting rate report at least 30 days before the May 20 hearing. If council adopts the rates on May 20, staff said new charges would take effect July 1, 2025.

Members of the council asked detailed operational questions about typical residential usage (sample bills are based on roughly 10,000 gallons per month for an average home), the share of fees used for repair and replacement versus operations, how large new water users would affect system loads, and the number of solid waste accounts (staff said about 64,000 accounts) and bulk pickups (roughly one-third of customers use the annual bulk pickup program based on past data). Staff said more detailed analysis could be provided offline and recommended that the council consider resident surveys and additional data if it wants to revisit service elements such as bulk collection frequency or landfill pass ideas.

The council will consider written and oral testimony at the May 20 public hearing before deciding whether to adopt the final rates.

Ending

The city framed the rate adjustments as measured steps to preserve cost recovery, stabilize revenue, and pay for capital needs including water redundancy and plant expansions. The council’s adoption of the notice of intent begins the statutorily required timeline leading to the May 20 public hearing; staff will post the detailed rate report 30 days before that hearing and return with formal adoption language for council action.