Alma City commissioners debate reallocating utility rates to cover wastewater projects; average customer would see small net savings

Alma City staff told commissioners on April 8 that they plan to reallocate existing water and wastewater fee dollars to cover near-term wastewater capital work and restore staffing, and to include the changes in the fiscal 2026 budget.

City Manager Eric (named in the meeting packet as the presenter) said the changes are driven by federal and state State Revolving Fund (SRF) funding that opened options for the city and by an updated five-year capital plan. He said: "we would actually save per month for the average rate here, dollars 3.85 per month," and that "the average family of 4, using 4,500 gallons, they see a decrease in that bill of $1.71." He added the reallocation would also restore a distribution position the city has been operating without.

Why it matters: staff said the swaps would let Alma shift resources where capital needs are greatest—particularly wastewater clarifiers, aeration basins and line repairs—without increasing total utility-system revenues. Maintaining SRF program thresholds is a stated condition: staff said the plan keeps required coverage levels so the city remains eligible for low-interest loans.

Discussion details: commissioners agreed staff should bring formal rate language back with the FY2026 budget, but several voiced hesitation about lowering any rates after a recent increase. Commissioner Roxanne (first name given in the meeting) said she was concerned about reducing rates now and risking a large increase in five years, saying the city had already “set kind of the floor” that residents had accepted. Another commissioner asked whether moving dollars between funds could jeopardize SRF eligibility; staff answered that both proposed plans stay above SRF thresholds.

Staff direction and next steps: commissioners asked staff to return next month with detailed rate exhibits for inclusion in the FY2026 budget. Eric also said the administration will resubmit a Clean Water SRF application (due May 1) and include additional PFAS mitigation documentation to improve scoring.

Constraints and uncertainties: staff emphasized that the proposed decreases are reallocation effects, not new cuts to system revenue, and that capital costs for wastewater repairs can range widely (examples given in meeting discussion included “$30,000, $40,000, $50,000 a hole” for major line repairs). Commissioners asked staff to ensure fund balances remain sufficient if any anticipated external funding is delayed or reduced.

Ending: Staff will provide formal rate tables and a budget amendment proposal before the commission adopts the FY2026 budget; commissioners did not vote on rate changes at the April 8 meeting.