Milford council adopts FY2026 appropriations and approves utility rate changes after budget review

Milford City Council adopted the city's FY2026 appropriations and approved a package of utility rate adjustments following a city manager's presentation of the proposed budget.

City Manager Gunderson walked council through the binder and slide deck for the proposed fiscal-year budget, highlighting a projected general fund revenue of about $8.2 million for FY2025, income-tax collections near $5.9 million, and all-funds revenue in the $25 million range. He flagged several capital projects and funding sources, including a Wallace Avenue water tower project with a total cost stated as $4,600,000, funded by a $3,000,000 state grant and $1,600,000 in financing. Gunderson also discussed utility fund consolidations, grant-funded park work (5 Points), and one-time reimbursements that affect year-to-year figures.

Gunderson described options on police fleet replacement (purchase vs. lease) and recommended the council consider leasing as a potential cost-saving measure; he said staff will present firm figures before a vote. He also raised operational issues including PFAS settlement money (he said Milford has received $721,000 to date and is budgeting conservatively), the ongoing Lime Lagoon cleanup (noting vendor estimates appear high) and a proposed part-time customer-service position to support events and front-desk coverage.

On utilities, Gunderson reviewed a rate study conducted with Raftelis and presented scenarios that included transfers of $0, $500,000 and $1,000,000 to test impacts on rates. He said water and wastewater funds are not sustainable at current levels and recommended increases to those rates; he recommended a 3% stormwater increase and proposed a 10% increase to trash collection (noting the consultant's original recommendation was 20%). Gunderson described moving garbage collections out of the general fund to the stormwater fund, saying that change reduced an annual garbage subsidy previously estimated at about $300,000 to roughly $190,000.

Councilmembers debated the fairness and timing of rate changes. Some members expressed concern about raising costs for residents, noting that certain fees had not substantially increased in decades. Others stressed that failing to address shortfalls would require cuts elsewhere or larger increases later. After that discussion, the council voted to have the law director draft an ordinance directing the city manager to adjust rates and amend the codified ordinances.

Under new business, Councilmember Pacheco read Ordinance 25-415, setting FY2026 appropriations (the ordinance text and attachment were filed with the council packet). A motion to adopt Ordinance 25-415 carried on roll-call vote with recorded "yes" votes from Miss Evans, Mister Parrish, Mister Velardo, Mister Price, Mister Thompson and Miss Chamberlain.

Council then considered Order/Ordinance 25-416, the implementing ordinance to adjust water, sewer, stormwater and trash rates based on the Raftelis study and the scenarios presented. The order states the proposed changes will take effect during the first utility billing cycle in fiscal year 2026. Council voted to adopt Order/Ordinance 25-416; the roll-call recorded Miss Evans Yes, Mister Parrish Yes, Mister Velardo No, Mister Price Yes, Mister Thompson Yes and Miss Chamberlain Yes.

The budget presentation and the two adopted ordinances close the formal budget-review step; the city manager will bring detailed purchase vs. lease figures, contract bid outcomes and any drafted ordinances back to council for implementation, as required. The meeting then moved to an executive session on personnel matters and did not return to take further public action.

Quotes from the meeting reflect the themes of sustainability and caution. Gunderson said, "It is absolutely imperative that we increase those rates" when describing the need to stabilize water and wastewater funds. Chief Mills, speaking earlier during reports, gave guidance for holiday safety, urging residents to "submit a vacation house check request" and to be cautious with packages and parked vehicles.

What happens next: the appropriations ordinance is in effect upon adoption; the rate adjustments adopted in Order/Ordinance 25-416 are set to take effect on the first utility billing cycle of FY2026 per the order's language. Council signaled staff will return with implementation details and final figures that will underlie any specific billing changes.