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Council schedules utility-rate study as part of long-term financial plan; preliminary levy set at 6%
Summary
Councilors approved an Ehlers utility-rate study and adopted a 6% preliminary levy to support the city's long-term financial management plan, with staff to produce resident-facing communications about the plan and impacts.
The Mound City Council on Sept. 23 authorized a consultant-led utility rate study and set a preliminary 2026 levy increase at 6 percent as part of a multiyear financial-management plan to return utility and capital funds to healthy balances.
Kyle Sawyer of Ehlers described a two-phase proposal: an immediate cash-flow update to confirm rates for 2026 and a deeper 2027 analysis that would examine funding scenarios for a potential water treatment plant and the effects of billing changes such as moving from quarterly to monthly statements. Sawyer said the firm would also review funds with property-tax impacts and provide scenarios for franchise-fee or other property-tax components the city might consider. The council approved Ehlers’ proposal by motion.
City staff and councilors discussed the water fund’s current deficit position and long-term targets: staff said the financial-management plan aims for positive cash balances for utility funds by 2030 if the plan is followed. Council members emphasized the need for clear public communication about why rates and levies are increasing; staff said they will prepare newsletter graphics and layman-friendly materials showing how the plan reduces reliance on debt over time and illustrating dollar impacts on typical homeowners.
Council adopted Resolution 25-78 to set the preliminary 2026 levy at 6 percent. Staff reiterated that the preliminary levy can be reduced before final certification in December but cannot be increased above the certified preliminary figure. Staff displayed sample homeowner impacts on-screen: a $250,000 example showed an annual increase of $23 (about $1.92 per month); a $450,000 example showed $46 per year.
The council also discussed several capital needs that will factor into future budgets, including a planned vacuum-truck replacement in the capital-improvement plan (the truck was noted at roughly $900,000 in the CIP discussion) and work to recoating water towers; staff said those items create pressure to keep the financial plan on track.
What the study will cover - Immediate update of utility cash flows and 2026 rates. - Deeper 2027 analysis of funding scenarios for a potential water treatment plant, including rate impacts and loan/repayment scenarios that PFA (Public Facilities Authority) would expect.
Next steps - Ehlers will work with city finance staff to deliver the 2026 cash-flow update and present preliminary scenarios; deeper 2027 analysis will follow. - Staff will prepare resident-facing summary materials for publication in the city newsletter and for a truth-in-taxation hearing later this year.
Sources: Mound City Council transcript, Sept. 23, 2025; presentation and remarks by Kyle Sawyer, Ehlers.
