Council flags $485,000 gap, depleted reserves as water and sewer budget discussion continues

Council members discussed a proposed water and sewer budget that, while smaller in total than last years proposed figure, includes significant increases in user-fee lines and leaves the city with an estimated funding gap.

One council member summarized the numbers: the proposed combined water-and-sewer revenue requirement is roughly $2,696,000 (down from a prior proposed $2,976,000), yet the proposed sewer user fees total about $1,443,000 compared with prior-year actuals of $1,122,000, and proposed water rents are roughly $945,000 vs prior actuals of $781,000. "If my math is correct," the council member said, that creates an approximate $485,000 difference that the council needs to address.

Councilors also noted that the utility reserve has been depleted after multi-year deficits: the city is currently using a line of credit of roughly $1.4 million and has previously been as high as $2.4 million. Members urged a separate, detailed process to determine rate-setting methodology and fairness across customers because about 1,100 customers are metered while roughly 700 are not, and those groups are billed differently.

Treasury/staff numbers presented at the meeting also indicated higher-than-expected recent quarterly billing (one speaker noted quarterly bills averaging $430,000-$440,000 historically and 580,000 billed this quarter). Members discussed options including a water commission or professional consultant to advise on rate design and recommended bringing in legal and treasurer input before a final vote on rates. No formal rate increase or loan was approved at the meeting; council members agreed to continue discussion and consider a dedicated process to resolve the questions.

The council did not vote on the proposed rates during the meeting and agreed to schedule further review.