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Mound City adopts 2026 fee schedule after rate study projects higher water and sewer bills
Summary
Ehlers consultant Kyle Sawyer presented Phase 1 of a utility rate study recommending 2026 water and sewer rates to close funding gaps; council adopted the fee schedule (Resolution 25-92). The study shifted franchise fees into utility funds and modeled scenarios for a future water treatment plant.
Mound City on Nov. 25 adopted a 2026 fee schedule that incorporates updated water and sewer rates recommended in a Phase 1 study presented by consultant Kyle Sawyer of Ehlers. The council approved Resolution 25-92, which reflects those changes.
Sawyer told the council the update was necessary because usage patterns and capital needs have changed since the last full study. Key assumptions included projecting 2026 consumption at 90% of 2023 levels, continuing a 4% annual inflation assumption for capital costs, and increasing the assumed Met Council sewer charge — a major sewer expense — to reflect recent spikes. Sawyer noted the Met Council charge produced a 16.6% increase in 2026 in the model.
To help cover increased capital and operating costs, the plan shifts a portion of franchise-fee revenue (gas and electric) into the water and sewer funds (split 50/50) and adjusts rate schedules. Sawyer presented estimated residential impacts: a low-volume residential customer would see about a $28 increase per quarter, a medium-volume user about $37 per quarter and a high-volume user about $49 per quarter under the proposed 2026 rates. He also described larger user impacts for multifamily and commercial classes.
The study incorporated near-term capital projects that raised the water and sewer fund needs, including a $2 million water meter replacement project and approximately $1.3 million in sewer force-main work. Phase 2 of the study will incorporate water treatment plant funding scenarios (ballpark estimates presented were $15 million or $30 million) and is scheduled to return to council in the spring of 2026 to refine rate paths depending on funding outcomes.
Council members asked practical questions about execution and communication: where franchise fees are recorded (staff said the fees may be recorded directly into utility funds), whether the liquor-store transfer used for stabilization is sustainable given shifting consumption patterns, and how the city will explain the changes to residents. Staff agreed to post materials and historical charts on the city website and recommended continuing outreach.
The council voted to adopt the fee schedule, which sets the formal rates and enables staff to implement billing changes for 2026.
