Garden City council approves large water, sewer rate increase after public hearing

Garden City — The Garden City City Council on June 23 adopted an ordinance amending sections 53.03 and 53.04 of Chapter 53, Title 5 of the Garden City Code to raise rates and charges for water and sewer service, a move council and staff said was needed to stop an operating deficit in the city's water fund. Council member Witt moved and Council member King supported the ordinance; the measure passed 6-1.

City Manager Tim Gibbons told the council at a public hearing that the water fund requires roughly $12,200,000 in annual revenue to break even while current revenues are about $9,200,000. "We need to close the gap," Gibbons said, adding the city had used an earlier fund balance that was drawn down since 2017 and now is operating with no reserve and an amount owed to the general fund.

The change matters because the city lacks the reserve typically recommended for a municipal water enterprise. Consultant Brian Kamenmiller of Plant Moran, who presented to the council alongside Gibbons, said: "Everything that city manager Gibbon said is exactly right. The city has a a problem." Kamenmiller and Gibbons described the adopted plan as the least-painful option among several models considered.

Why it matters: The council said the increase is intended to restore minimum operating reserves and stop ongoing borrowing from the general fund. During the hearing, staff and consultants sought to show the increases were tied to documented operational needs rather than to create excessive reserves that could trigger legal challenges under user-fee case law.

Key details and debate - Financial numbers presented: Gibbons said the water fund needs about $12.2 million in annual revenue and currently brings in about $9.2 million. He said a bare-minimum reserve recommendation is about $3 million and that the fund has been drawn down since 2017. Staff described a multi-year shortfall that requires corrective rate action. - Legal questions: Several public commenters and council members raised Bolt v. City of Lansing and other court cases. Kamenmiller addressed those concerns, saying accumulating a bare-minimum reserve to repay the general fund and maintain operations "is the bare minimum that we would want you to have" and would not necessarily trigger a Bolt claim as described in the presentations. - Rate structure and timing: Council and staff described the adopted plan as a "rip the bandage" approach. Council member Kara Fotis summarized the plan as a roughly 49% increase in the first year followed by smaller annual increases (discussed as about 5% thereafter in staff presentations). City Treasurer Shannon Shepherd said the new rates take effect July 1; reads that cross the July 1 billing date will be billed pro rata (split bill) based on read dates. - Public concern: Several residents said a sharp increase will hit seniors and people on fixed incomes. Morgan Price (public commenter) asked why the city had reached the current deficit; Gibbons and staff responded the water fund had been used without replenishing rates since 2017 and that spending had been for water-system needs rather than unrelated items.

Formal action - Motion: "To adopt the ordinance to amend sections 53.03 and 53.04 of chapter 53, title 5 of the city of Garden City Code, providing for rates and charges for water and sewer servicing, and providing billing for water and sewage disposal services." Mover: Council member Witt. Second: Council member King. - Vote: Passed 6-1 (council recorded "Aye"/"Nay" votes; roll-call individual votes were not recorded in the transcript). Outcome: approved. - Implementation: Treasurer Shannon Shepherd said the ordinance and new rates are effective July 1, 2025; bills that span the effective date will be split between old and new rates according to meter read dates.

What was not decided or remains uncertain - Exact per-customer impact depends on usage; staff recommended calculating the unit increase using the bill's per-unit charge (example given: roughly $0.55 per unit increase for the first-year bandage adjustment). Council and staff said other multi-year scenarios were modeled and the chosen plan was the least costly over five years.

Who spoke (selected) - Tim Gibbons, City Manager (presented water fund condition) - Brian Kamenmiller, consultant, Plant Moran (financial analysis) - Shannon Shepherd, City Treasurer (billing and effective date) - Council members: Witt (mover), King (support), Kara Fotis, Hughes (questions and comments) - Public commenters included Morgan Price and other residents who expressed affordability concerns and legal questions about user fees.

Ending Council members who backed the ordinance characterized it as a difficult but necessary step to stabilize the water fund and restore minimum reserves. The council instructed staff to continue public information about the change and to answer individual billing questions at the treasurer's office.