Staff tells council 8.5% utility rate rise likely as city seeks to replenish reserves, fund CIPs

Manassas City staff told the City Council on April 7 that electric and water rates are likely to rise about 8.5% in the coming rate-setting cycle to restore fund reserves and pay for planned capital improvements.

The rate increase is driven in part by a projected 18% increase in purchase power costs for the electric fund in fiscal 2026, staff member Anna said, along with multi-year capital needs and steps to rebuild reserves after recent drawdowns. "The expenses are expected to increase by about 18% in FY26 based on the forecast we just received," Anna said. She added that the 8.5% rate recommendation is intended "to cover our reserve policy, which is 60 days of operating, 1 year of debt service, and 1% of net assets."

Why it matters: staff said several enterprise funds have used reserves in recent years for maintenance and emergency work, and the recommended rate changes are meant to replenish those buffers and avoid future service interruptions. Council members asked for clearer, itemized breakdowns to show how purchase…