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Preliminary utilities budget shows mixed results, flags lower industrial wastewater revenue and possible refinancing
Summary
The board reviewed a preliminary FY27 enterprise budget that projects a combined enterprise total of about $57.4 million, with solid waste showing an estimated $1.1 million surplus, wastewater revenue down roughly $1.6 million, and the water fund projecting a $2.9 million drawdown of fund balance; staff signaled a forthcoming rate study and potential bond refinance options.
City budget manager Jacob Delid presented the Board of Public Utilities with the first iteration of preliminary enterprise fund budgets and a calendar for next steps, saying staff still needs to finalize CIP entries and negotiated salary projections.
Jacob said the solid waste and street‑sweeping fund is projected to receive roughly $15.1 million in revenue with $14 million in expenditures, yielding a preliminary surplus of about $1.1 million. He said wastewater fund revenue is estimated at about $30.6 million for FY27, roughly $1.6 million lower than FY26 primarily due to decreased industrial sewer receipts, while preliminary wastewater expenditures are about $29.6 million. “Combining these all together, we're looking at about $57.4 million for all solid waste, wastewater, and water fund together combined,” Jacob said.
On the water side, Jacob said revenue is estimated at about $11.6 million with expenditures of $13.8 million, producing an estimated use of fund balance of about $2.9 million. He noted personnel requests and reclassifications shown in the slides are not yet budgeted, and listed requested positions and vehicle replacements that will be finalized in later iterations.
Board members asked staff to explain the wastewater revenue decline; staff attributed it to greater industrial efficiency and lower production at some agricultural/industrial customers, citing Lactalis as one notable example. Board members also discussed debt service from prior revenue bonds tied to the industrial plant and asked about refinancing. Staff said revenue bonds have peaked and are trending down and that refinancing could reduce interest costs without extending loan life; staff also said a water/sewer rate study is underway and could prompt mid‑year rate adjustments depending on timing and council decisions.
Jacob reviewed the budget schedule: council review and iterations in April and May, potential BPU adoption on May 7 (alternate May 21), and city council adoption in early June (alternate June 16). Staff will return with updated CIP and personnel cost information and any recommended rate or refinancing proposals.
