Perkins commissioners direct staff to seek smallest possible utility rate increase, staff had recommended 10%

City of Perkins staff recommended a 10% increase in utility rates as part of the proposed FY2026–27 operating budget, citing rising costs for health insurance, fuel, chemicals and parts and the need to fund a proposed 5% employee pay increase. Commissioners on April 29 directed staff to return with a balanced budget that uses the smallest possible rate increase (not to exceed 10%) and a side-by-side comparison showing what services or positions would need to be cut if no rate increase is adopted.

Bob, a city staff member presenting the budget, told the commission the proposed rate change reflected the “cost of doing business” and enumerated drivers of the increase: higher health insurance contributions by employees (staff said contributions rose last year and that employers’ costs increased again), higher property and fuel costs, and increased chemical and treatment costs for water operations. He identified three near-term infrastructure needs: replacing a water meter system, adding water lines to connect two pressure planes and addressing lead service lines in response to EPA mandates. Bob said sewer-line replacement will be a much larger long-term expense and described it as a multi‑million‑dollar project; the exact cost range was stated inconsistently in the discussion and staff committed to follow up with clarified figures.

Commissioners pressed for clarity on the packet math. One spreadsheet line showed a projected $162,000 shortfall at 0% rate increase while another table shifted from a $38,191 shortfall at 8% to about an $81,000 surplus at 10%; staff said they had checked calculations but would re-run and reconcile the spreadsheet. Staff provided examples of customer impact: the packet showed about 80% of customers (defined as 5,000 gallons or less) would see roughly a $9.62 per month increase under the 10% scenario, while a 10,000‑gallon user would see about a $14.41 monthly increase. Staff noted a 5% increase would reduce the monthly impact by roughly $5 for those typical users.

Commissioners discussed options beyond rates. Bob suggested considering a dedicated one‑cent sales tax earmarked for water and sewer infrastructure and debt service; commissioners acknowledged the political and legal limits on sales‑tax revenue uses and said any such proposal would require separate public action. Several commissioners also requested a draft resolution or mechanism to automatically adjust rates (for example, indexing to the consumer price index) so future increases would be predictable rather than ad hoc.

On timing, staff said a July 1 effective date would mean meters read in August would reflect the new rate and those bills would be due in September. Commissioners asked staff to publish the draft budget for public comment, present the requested comparison showing cuts versus rate changes, and return with a sharpened budget at the May meeting ahead of the June adoption deadline. No formal motion or vote was taken on a rate increase; the commission’s direction to staff was recorded as a consensus to seek the smallest rate increase possible that still yields a balanced budget and preserves essential services and positions.

The commission also asked staff to correct or explain inconsistencies in the packet’s calculations and to provide clearer estimates for sewer‑replacement costs. The meeting concluded with direction to prepare the budget materials for public notice and for further discussion at the next regular meeting.