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Milan reviews proposed utility and rubbish fee changes, including a water rate increase
Summary
City Administrator James Lancaster presented a proposed fee-schedule package at a June 3 work session that would raise the water unit rate to $5.22 per 1,000 gallons, keep sewer rates unchanged, shift commercial dumpster responsibility to property owners and increase rubbish charges; no council vote on rates was taken.
City Administrator James Lancaster presented the Milan City Council a proposed update to the municipal fee schedule at a June 3 work session, outlining increases to utility and rubbish charges and a plan to move commercial dumpster responsibility to property owners.
Lancaster, who led a slide presentation on the fee schedule’s effect on the city fund balance, said the proposal would raise the water unit rate from $4.62 to $5.22 per 1,000 gallons while leaving the sewer rate at $8.47 per 1,000 gallons. The combined per-1,000-gallon charge would rise from $13.09 to $13.69, a roughly 4.5% increase in the combined unit rate, he said.
The proposal also targets the city’s Rubbish Fund (Fund 226), which Lancaster said currently holds a 14.6% fund balance against a stated goal of 26%. To avoid drawing down that balance for operating costs, the presentation recommended at least a $5.26 monthly increase for the typical account and a policy change to require commercial property owners to secure their own dumpster services beginning January 1, 2026. Lancaster said credit-card processing fees would be passed through to payers rather than absorbed by the city.
On the water and sewer side (Fund 592), Lancaster described the rate-study methodology the city is using: (1) calculate the total cost pool (capital outlay, debt service, operating and administration), (2) subtract miscellaneous revenues to determine costs to recover through rates, (3) divide those costs by units sold to set variable charges, and (4) smooth increases across multiple years. He recommended revisiting the model annually or biannually as circumstances change.
Lancaster reviewed capital needs that underlie the rate recommendations, including a proposed $10 million bond focused on main trunk-line work (about 8,700 linear feet cited in the slides), a valve-replacement program, vertical-asset capital-improvement plans estimated at roughly $275,000 per year for water and $200,000 per year for sewer, and an ongoing lead-service-line replacement program estimating eight to ten full replacements annually (about $60,000 per year).
Using a sample family-of-four bill, Lancaster said the combined monthly impact of the proposed changes would be about $8.59 and the annual impact about $103.08. He noted that fixed charges and some billing components vary across jurisdictions and that the sample is illustrative rather than definitive.
During the public-comment portion of the meeting, resident Danette Talbot spoke; the minutes and transcript record her participation but do not summarize her remarks. Council discussion at the work session was framed as preliminary and advisory to staff; no formal action to change fees or to adopt rates was recorded at the meeting.
Councilmember Wayne moved to adjourn the work session at 6:47 p.m.; Councilmember Kofflin seconded and the motion carried unanimously. Mayor Ed Kolar and City Clerk Lavonna Wenzel signed the minutes.
