Georgetown council adopts $25.36 million FY‑26 water and sewer budget, stresses plant upgrades and conservative growth assumptions

The Georgetown City Council on Monday approved the Fiscal Year 2026 operating and capital budget for the Georgetown Municipal Water and Sewer Service, a $25,359,991 revenue plan City staff said will fund ongoing operations, capital projects and the completion of a wastewater treatment plant upgrade.

City staff presented the budget and answered council questions before the council voted by voice in favor. Staff said the budget is built on the city’s February 2023 water and sanitary sewer rate ordinance and conservative assumptions about new connections and consumption.

City staff said the budget reflects revenue of $25,359,991, an 18.59% increase from the FY25 budget, and projects operational expenditures of $24,289,856 plus roughly $3.1 million in interest expense. Major drivers include depreciation tied to Plant 1 becoming beneficially usable (staff projected beneficial use by Sept. 30, 2025 and included 10 months of depreciation), increased water purchases while the plant is taken offline for maintenance, higher sludge disposal costs, and planned capital work on interceptors and distribution lines.

Chase, a city staff presenter, said the FY26 budget continues the city’s multi‑year capital plan, including continued work on Wastewater Treatment Plant 1 upgrade and expansion, the DeShaix/Water Street interceptor replacement, a south side tank and distribution upgrades and a Pump Station 20 replacement (partly developer funded). Jeff, identified as the city’s finance director, walked council through revenues and expense categories and noted that depreciation on a roughly $60 million investment in Plant 1 is a major new expense included for FY26. Jeff said fund‑level revenue for Fund 1 is budgeted at $22,730,279 and Fund 2 at $2,629,007.12.

Staff said the budget uses a conservative approach to new connections, budgeting 150 new water and sewer connections (a figure the administration described as intentionally cautious after prior overestimates). Chase and Jeff said the administration will revisit connection assumptions when Plant 1 reaches beneficial use and when backlog projects come online. Staff also noted a recent renegotiation of a wholesale purchase agreement with Frankfort Plant Board that will reduce the wholesale price while the city purchases more water during planned plant maintenance.

Council members pressed staff on consumption and connection trends. Jeff said consumption assumptions in the city’s rate model do not include escalators and are based on recent fiscal‑year consumption; staff reported about a 5.7% increase in water consumption since FY22 and roughly an 11% increase in sewer consumption over the same period, with FY25 projected higher still. Chase said backlog demand for Plant 1 is small (six or seven projects remain queued for Plant 1) but larger projects could shift timing into FY27.

The budget package also includes personnel and benefit assumptions: a 2.9% cost‑of‑living increase for employees, an additional merit pool up to 1%, and a projected 5.85% decrease in Kentucky CERS retirement system contributions as provided by the retirement system. Staff said group health insurance renewals were favorable; the high‑deductible plan saw no increase and the PPO rose about 4%.

On capital, staff highlighted FY26 departmental capital of $1,794,697, a Toyota‑reimbursed fund 2 capital line of $2,650,000 and a vehicle replacement budget of $130,227 (including continuing a multi‑year sinking fund for a camera truck). Chase said fleet age and possible additional vehicle needs remain concerns and he may return with supplemental requests.

Council approved the FY26 water and sewer budget by voice vote after the presentation. Staff said several capital projects are partially funded through rate revenue and grants, and noted that an ARPA allocation must be spent by December 2026 for at least one project (the DeShaix/Water Street interceptor).

The council also approved a separate municipal order at the same meeting covering other routine items (see "Votes at a glance" for details). Staff said they will bring additional grant‑funded projects to council later with no rate impact to customers.

Looking ahead, staff said they will monitor connections and consumption when Plant 1 reaches beneficial use and will return to the board with any recommended adjustments to assumptions or to request additional capital or vehicle funding if needed.