Oak Creek board approves 2026 water and sewer operating budget with no rate increase

The Oak Creek Board of Public Works & Capital Assets approved the 2026 operating budget for the Oak Creek Water & Sewer utility on Oct. 14, voting to adopt separate enterprise fund budgets for water and sewer that the presenter said do not require a rate increase for 2026.

City staff told the board the utilities operate on two enterprise funds, with revenue derived solely from customer rates. The presentation said the 2026 proposal assumes no customer growth and no rate increases, a 3.5% wage increase included as a cost of living adjustment, a 10% increase in benefits largely attributable to healthcare costs, 4% general inflation for other expenses, a 5% increase for MMSD pass‑through costs and 3% depreciation assumptions.

Staff emphasized the budget is conservative: water revenue projections are flat year to year; the utility expects income before capital and depreciation that together fund the capital improvement program. The water fund showed an income before capital contribution figure staff described as about $3.5 million; water operating revenue and capital program figures were discussed as the basis for next month’s capital improvement program discussion. Staff also noted the utilities have been using investment income and capital contributions (developer‑donated improvements) in recent years to support capital needs and that those items can vary from year to year.

Board members asked about cash‑flow planning and long‑term debt. Staff said their cash‑flow analysis extends to 2050 and that projected debt service for a full loan would be higher than currently planned; however, the utility has funds saved to cover some of that additional debt service. Staff cited a projected interest rate on a potential loan of about 2.2% (as presented), and said some lean years are expected around 2032 when existing debt is scheduled to be paid off.

Sewer budget presentation: staff said the sewer fund is in a similar conservative posture, showing roughly $500,000 income before capital and no current debt in the sewer fund. The presenter noted that much of that $500,000 is interest income and that the utility watches that number closely because changes in investment returns could reduce that cushion.

Marshall moved to approve the 2026 operating budget for the Oak Creek Water and Sewer utility; Czarnecki seconded. The board approved the motion by roll call.

Staff did not propose rate increases for 2026; board members asked follow‑up questions about cash balances, interest earnings, and the timing of major projects to be discussed in the capital improvement program.