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Milan reviews FY2026–27 utility rate model; presentation proposes 4.5% combined change driven by water increase
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Summary
At the April 7 workshop the council reviewed a Plante Moran rate model that assumes $1 million per year in capital improvements, recommends a 4.5% combined change driven by a water increase (water to $5.84 per 1,000 gallons; sewer unchanged at $8.47) and presented a sample rubbish rate increase of 5%.
City Administrator Jim Lancaster and consultant materials presented a FY2026–27 utility rate model on April 7 that outlines operational and capital needs for the Water, Sewer and Rubbish funds and recommends modest rate adjustments.
The presentation described the rate-study steps: calculate total cost pool (capital outlay + debt service + operating/admin costs), subtract miscellaneous revenues, compute variable rates and smooth increases over a multi‑year horizon. The model uses a seven‑year horizon (FY2025–FY2031) and assumes $1,000,000 per year in ongoing capital improvements split evenly between water and sewer, paid from current cash flow unless additional projects require debt.
Slides showed historical water usage trends (decline from 2013–2019, partial rebound thereafter) and noted that FY2025 volume fell about 9% because of major customers Georgia Pacific and Ford. The model documented a starting working-capital balance of about $3.7 million as of June 30, 2025 and sets a target working-capital goal of roughly $5.4 million over the model horizon.
The proposed commodity rates presented for FY27 were: water $5.84 per 1,000 gallons (up from $5.22), sewer $8.47 per 1,000 gallons (no change), combined moving from $13.69 to $14.31 per 1,000 gallons (a 4.5% combined increase driven by the water change). The presentation included next steps for council consideration: adopt rates as presented, finalize project plans and funding sources, and consider additional increases if required for capital or debt service.
Rubbish‑fund slides recommended a smaller increase: a proposed monthly rate rising from $23.57 to $24.77 (about 5%), with a sample monthly family impact shown as +$5.30 and annual +$63.60. The slides also listed capital improvement priorities including valve replacement, vertical asset CIP, lead service line replacement (8–10 full replacements per year estimated at $60,000/year), televising, manhole lining and other maintenance items; a $10,000,000 bond for major water trunk-line work appeared in the capital list as an option.
The council received the presentation for consideration; no final rate adoption was recorded at this meeting. Presentation contacts listed on the materials included Brian Camiller, CPA, and Kari Shea, CPA of Plante Moran.