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Utilities report: water consumption down, electric fund stable; city retains A-minus credit rating
Summary
Utilities staff said water consumption declined (reducing metered sales by an estimated $600,000), the city expects a $334K Air Force reimbursement (including $250K for ion-exchange media), and the electric fund projects a surplus while passing transmission/power cost increases to customers; S&P A-minus credit rating was confirmed.
Utility managers briefed the council on the water and electric funds and on steps taken to stabilize utility finances.
Water: Utilities Director Dan reported projected water revenues of about $12.5 million and expenditures around $10.4 million. Staff noted a five-year downward trend in metered sales and expect approximately $600,000 lower meter-sales revenue for 2026. The city reported an environmental-agreement reimbursement from the Air Force of roughly $334,000, part of which ($250,000) will cover periodic replacement of ion-exchange media at the AGA treatment plant.
Dan emphasized principal debt payments exceed $2 million annually for the water fund and that staff budget conservatively to ensure cash flow sufficiency: "Principal is not part of the operating budget, so we look at cash in/cash out," he said, reiterating that the water-stabilization plan remains a near-term council priority with a scheduled detailed update at the regular meeting.
Electric: The electric fund projects roughly $33.6 million in revenue and about $30.7 million in expenditures; net of principal the fund shows a multi-million-dollar cushion. Wholesale purchase-power and transmission costs have increased and are passed through via a fuel adjustment adder to customers. Staff deferred a planned bucket-truck replacement to preserve capital flexibility. Dan said S&P Global reaffirmed Fountain’s credit rating at A-minus, credit staff attribute in part to prior adoption of the water-stabilization plan.
Next steps: staff will present the water-stabilization update and additional detail at the next regular council meeting and continue monitoring consumption trends and wholesale power costs.
