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Marion County Utilities proposes staff additions, says no rate increase needed for FY26 but warns of 2027 pressure
Summary
Tony Cunningham, director of Marion County Utilities, presented a FY26 budget that increases roughly 5.8%, driven by personnel and operating cost pressures (electricity, chemicals, permitting) and proposed seven new positions; an independent analysis shows no base-rate increase is needed for FY26 but warns of possible pressure in FY27.
Utilities Director Tony Cunningham told commissioners the utilities enterprise budget for fiscal 2026 increases about 5.8% overall, driven roughly half by personnel adjustments (including 7 recommended full-time hires) and half by operating costs such as higher electricity bills, chemicals and consumptive-use permitting work.
Cunningham said the department is seeing upward pressure from Duke Energy's recently approved rate increases (about $500,000 of budget impact next year) and from more intensive permit work to renew the county's water-use permits. "We are attempting to get a 20-year permit; it is a significant effort," Cunningham said, noting the technical and engineering work required to demonstrate withdrawals will not harm natural systems.
Personnel changes included a recommendation to add two meter-reader positions (to reassign current meter-reading duties to lower-cost entry-level staff), an environmental compliance officer, two customer-service/billing staff, a construction inspector/coordinator, and converting a 0.6 business-technologist role to full time.
Cunningham said the independent rate-sufficiency report (Stantec) concluded Marion County Utilities does not need a rate increase for fiscal year 2026, but forecasted potential base-rate pressure beginning in fiscal year 2027 depending on how quickly CIP projects proceed and conservative growth assumptions in the model.
Commissioners asked about staffing and the long-term trajectory of rate changes. Commissioner Zalick pressed for careful moderation of personnel-driven increases; Cunningham identified earlier April pay-grade adjustments to field techs and added fringe costs as drivers of personnel expense increases and agreed to provide more detail on the personnel-cost drivers.
The department requested continued CIP funding to maintain and expand capacity (including plant projects and water tanks), and said it is monitoring growth-driven demands and procuring inspection and construction capacity internally where feasible.
Why it matters: Utilities is an enterprise fund with significant infrastructure and regulatory costs; changes in energy prices, chemical costs and large multi-year capital projects can drive rate needs. Staff said FY26 can be managed without a rate increase, but 2027 may require rate action if CIP timing or growth assumptions change.
