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Council raises culinary water base rate, directs staff to create restricted repair-and-replacement fund
Summary
Perry City Council approved a 25% base-rate increase to the culinary water base from $21.31 to $26.74 and unanimously adopted an amendment directing staff to establish a restricted fund for long-term water-system repair and replacement and return to council with a recommended funding amount by the end of the fiscal year's first quarter.
The Perry City Council on June 26 held a public hearing, received no public comments, and adopted Ordinance 25-J to increase the culinary water base rate from $21.31 to $26.74 effective July 1, 2025. The vote was unanimous.
During discussion Council member Osler proposed adding a legislative action to create a restricted reserve specifically earmarked for long-term water repair and replacement. Osler said the concept was to ensure a portion of new water revenues be set aside to avoid relying exclusively on bonding or using operating funds for capital replacements.
Council and staff agreed to a two-step approach: (1) create the restricted repair-and-replacement account in the water fund as part of the ordinance record; and (2) direct staff (finance and engineering) to return to council with a recommended annual funding amount or percentage by the end of the first fiscal quarter for council deliberation. The council accepted a staff suggestion that the recommended number could be the depreciation amount, the net income produced by the rate change, or a percentage recommended by the city engineer; they asked the engineer and finance staff to prepare a proposal.
Key facts - Ordinance 25-J increases the water base rate from $21.31 to $26.74 (an increase of $5.43). Shanna described the change as a 25% increase to correct a three-year operational loss and to begin saving for capital replacement; the staff presentation showed the plan to phase additional increases over the following two years toward a target suggested by an engineering study. - Council member Osler proposed creating a restricted repair-and-replacement account and initially funding it at approximately the water fund's depreciation amount (~$131,005.29 shown in the staff workbook) or another engineer-determined figure; staff agreed to return with a firm recommendation by the end of the first fiscal quarter. - Shanna said projected additional revenue from the rate change is $119,373 (figure discussed during the meeting); councilors discussed how that amount compared with the depreciation figure.
Action and vote - Ordinance 25-J (culinary water rate increase) was moved and seconded. The council conducted a roll-call vote; Council members Young, Walker, Osler, Wright and Tueller each voted "Yes." The motion carried unanimously. - As part of the adoption, the council also approved a motion to create a restricted water repair-and-replacement fund and directed staff to return with a recommended funding amount by the end of the first fiscal quarter.
Why it matters Councilors said the restricted fund will increase transparency and help the city save for expensive, infrequent replacements (water lines and major capital work) rather than financing them later with bonds that carry interest costs.
Next steps Staff (finance and the city engineer) will prepare a recommendation for the council on the fund's initial funding level and an ongoing approach (percentage, depreciation-based amount or net-income approach) and return within the first quarter for council adoption.
