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Shelby council approves emergency appropriations, addresses water-fund shortfall and proposed rate changes
Summary
The Shelby City Council passed Ordinance No. 2, 2026, approving 2026 appropriations and authorizing a $50,000 temporary advance from the general fund to the water fund while council considers proposed customer-charge increases to stabilize an estimated $270,000 shortfall in the water fund.
Shelby City Council on a roll-call vote approved Ordinance No. 2, 2026, a package of 2026 appropriations that includes a temporary $50,000 advance from the general fund to the water fund to bridge cash-flow gaps until planned rate adjustments take effect.
The council’s Utilities and Streets committee reported that the water fund has weakened: the end‑of‑2024 balance was cited as $259,000, by the end of February the fund was about $26,000 positive, and projected 2026 expenditures were described as $90,000 higher than 2025, yielding an overall shortfall projection of roughly $270,000. Council members and staff discussed several draft rate changes as options to restore the fund balance.
"I've set up transfers to and from the general fund to the water fund as $50,000 as a temporary advance … those funds will get paid back," said Mr. Trump, describing the change included in the ordinance.
The Utilities committee outlined proposed customer-charge adjustments as examples under consideration: raising the residential customer charge from $5 to $6; increasing the senior/disabled charge from $3 to $3.50; moving commercial customer charges from $7.50 to $8.50; and increasing industrial charges from $15 to $18. An administrative application fee was proposed to rise from $5 to $10. Councilmembers discussed the need to balance rate changes against affordability concerns and the need for additional analysis before any final rate ordinance.
The finance director had earlier reported the general fund cash balance at $1.9 million (about $1.5 million after encumbrances) and a general treasury total of $14,062,785 in city bank accounts, figures cited during the budget conversation.
Votes at a glance: Ordinance No. 2, 2026 (2026 appropriations and emergency declaration) passed after suspension of the three‑reading rule. The transcript records council members voting in the affirmative on roll call.
What happens next: The temporary advance is recorded in the adopted appropriations; the council and staff indicated they will pursue a rate adjustment process and return with details to set rates and related effective dates.
