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Perry staff propose one-time water rate increase to stabilize utility fund; council hears alternatives
Summary
City finance staff proposed a one‑time water rate increase (about $3.41 per billing unit) on top of the existing automatic 3% to reduce multi‑year operating losses and preserve reserves for capital projects; council asked for more analysis and deferred a decision.
Finance staff on April 10 told the Perry City Council the water fund has experienced multi‑year operating losses and presented options to restore fiscal balance, including a one‑time increase of $3.41 (in addition to an automatic annual 3% increase) or a smaller $2.57 increase if the council lowers the base allowance from 10,000 gallons to 5,000 gallons.
Shanna Johnson told the council the water fund showed a year‑over‑year pattern of operational losses: roughly $8,000 in FY24, about $98,000 in a prior year referenced as FY25, and a projected FY26 loss of approximately $73,009. Johnson said the automatic 3% increase previously adopted by the council is helping but will not close the gap in the near term. She described the proposed $3.41 adjustment as a one‑time measure that would bring the fund closer to balance without drawing further on reserves needed for capital projects such as a storage tank and well and waterline improvements.
On average, Johnson said the household water use in Perry is about 5,000 gallons per billing period (data checked with staff member Anita); under the average use the alternative approach (lower the included base use to 5,000 gallons and levy a smaller per‑unit increase) would reduce the one‑time cost per customer. Johnson and council members discussed that the $3.41 proposal combined with the recurring 3% would be a substantial single‑year increase (council members calculated an approximate total increase in the high single digits to mid‑teens percent range depending on usage patterns).
Councilmembers raised concerns about the affordability of a single large increase and about long‑term rate policy. Several members urged staff to present additional operational analyses before a vote, including verification of one‑time versus sustained expense drivers (for example, costs tied to replacing PRV units and meter upgrades) and comparisons with neighboring municipalities. Staff said water operations will be further reviewed by utilities staff (Zach) at the next meeting; council deferred any rate decision to a later meeting when department presentations are complete.
No formal action on rates was taken April 10. The tentative budget currently includes an assumption of the automatic 3% annual increase; staff presented the additional one‑time options for council consideration during the budget review process.
