Council signals consensus to add $10 monthly sewer improvement fee to shore up wastewater finances

City finance staff presented a multi-option financial plan to address a negative wastewater plant construction fund and long-term debt service. The finance presenter said the construction fund is "currently sitting at a negative total with only $158,000 in remaining KDHE loan funds to advance upon" and that the city must correct the construction fund and produce cash flow into Fund 520 (wastewater).

Staff outlined four options: a $10 flat monthly sewer improvement fee assessed to residential and commercial sewer accounts (estimated annual revenue $852,000), a $5 flat fee (estimated annual revenue about $426,000), a $5 fee combined with scheduled water-department transfers, and relying on water transfers as needed. Staff said earlier rate increases (a 25% minimum sewer rate increase effective 04/01/2024 and 04/01/2025 per Resolution No. 2410) were insufficient to sustain full repayment through the loan term.

On the $10 fee, staff projected that with about 7,100 sewer accounts the fee would generate approximately $568,000 in 2025 (April–December) and an estimated $852,000 annually thereafter, allowing the city to rebuild fund balances and plan for catastrophic events. The presenter noted the loan repayment schedule would otherwise push the fund into a negative position by 2028 if no action were taken.

Commissioners discussed affordability concerns and agreed to build in hardship relief. Commissioner Warren suggested provisions for low-income or elderly residents to apply for relief; staff confirmed an existing waiver process tied to a 1¢ sales tax housing fund could be adapted to provide wastewater fee waivers. Council members expressed that enterprise funds (water, wastewater, solid waste) should operate independently but acknowledged short-term use of transfers as a possible temporary measure.

After discussion, the council reached a consensus to pursue Option 1 — a $10 flat monthly sewer improvement fee — and directed staff to draft a resolution for formal adoption at the next meeting (staff indicated April 1 as the implementation date for billing adjustments). The council also agreed to include hardship-waiver language modeled on the existing 1¢ sales tax housing program and to continue reviewing financials with monthly or routine transfers if needed. Staff committed to provide regular updates and to return with the formal resolution for a future vote.

No formal recorded vote occurred on this item; the record shows a council consensus and direction to prepare the resolution for the next meeting.