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Council adopts water rate plan, approves ordinance repeal to implement new rates
Summary
Fountain City Council adopted Resolution 25‑007 to implement the first two years of a five‑year water rate plan and approved an accompanying ordinance repeal on second reading to allow the new rates to take effect.
Fountain City Council voted Feb. 25 to adopt a multi‑year plan to raise water rates and to repeal the existing rate ordinance so new charges can take effect.
City finance staff and utilities presented a five‑year water cost of service study and a rate design intended to generate revenues sufficient to meet projected expenses, eliminate an interfund payable owed to the electric utility and build an operations and maintenance reserve equal to at least three months of operating costs. The city presented the study and solicited public input in December, January and at two public input sessions in February.
The council approved Resolution 25‑007, which implements the first two years of the five‑year plan: the first increase effective March 1, 2025, and the second scheduled for Jan. 1, 2026, aligning the rate changes with the city’s biennial budget process. Mr. Blankenship summarized the timeline and the city’s intent to update the rate model each year once audited financials are available and report back in third quarter 2026 to determine whether later years of the plan require adjustment.
Blankenship also noted that under the resolution, customers located outside the city limits will continue to pay twice the applicable rates; staff said seven commercial and six residential customers outside the city currently pay the out‑of‑city multiplier. After discussion, Councilmember Estes moved to approve Resolution 25‑007; Councilmember Hinton seconded and the council voted 6‑0 to adopt the resolution.
Because the council adopted the resolution establishing new rates, the meeting continued with the second reading of Ordinance 18‑10 — which repeals Ordinance 17‑29 (the prior rate ordinance) — so the repeal and new rates are concurrent. Councilmember Rick moved approval on second reading, Councilmember Hinton seconded, and the ordinance passed on a 6‑0 vote.
Staff said the results of each rate year will be evaluated against audited financials and incorporated into future budget processes; the first formal review is scheduled for Q3 2026. No specific dollar amounts per customer class were included in the presentation transcript; staff said more detail was available in the rate study presented earlier.
