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Perkins staff previews FY2026–27 budget, flags $81,555 water/sewer surplus and potential 10% rate increase as loan options loom
Summary
City staff presented a reduced FY2026–27 budget driven by one-time ARPA and grant spending, proposed a 10% water and sewer rate increase (estimated $81,555 in excess revenue), and heard a Public Works update on possible OWRB loans — including a $950,000 FAP request that could be raised to roughly $1.107 million to include $150,000 reimbursement for sewer repairs — while DEQ timing threatens loan forgiveness for other projects.
Perkins staff on April 14 presented the proposed FY2026–27 operating budget and highlighted how one-time federal and state funds spent this year have produced a large year-over-year budget decline, while public-works leaders pressed the commission to weigh borrowing options to address failing sewer lines.
Rachel, the city’s budget presenter, told commissioners the overall budget shows a 37.33% decrease from the prior year because the city expended large OWRB ARPA and EPA grants on projects such as the water-tower and lift-station work, sanitary-sewer assessments and sidewalk grants. She listed operating-cost pressures including health insurance (up about 12.4%), software and contract increases, utilities and an estimated $159,000 in increased operating costs.
On revenues, staff noted sales-tax receipts rose 4.3% last year and projected a conservative 6.7% gain for the coming year based on new businesses arriving; use tax spiked 27% in the most recent year due to several large, one-time transactions. Rachel said she included a 10% water/sewer rate increase in the Public Works Authority packet that would generate about $81,555 in excess revenue to help cover operations and repairs.
Separately, Charles Dun of The Baker Group — the city’s loan advisor — briefed the Perkins Public Works Authority on multiple loan applications. He said an application for a FAP loan for replacement of mains is currently for $950,000 but could be increased to roughly $1.107 million to include about $150,000 in reimbursement for recent sewer-line emergency repairs. Dun warned that unrelated delays at DEQ could reduce the amount of loan forgiveness available for other projects (automated meters and lead-service-line replacement) if approvals miss a June window.
Dun also estimated the cost to address identified sewer-line failures could reach about $4 million; being early in application processes could qualify the city for approximately 25% loan forgiveness on some sewer funding programs but would raise debt-service obligations. Commissioners discussed options — per-bill fees, a sales-tax approach or increases to rates — and staff favored a possible dedicated sales-tax question as more palatable to voters; staff noted the earliest such a tax could generate revenue would be Jan. 1 following an August election.
After discussion, the commission voted to call a special meeting on April 29, 2026 at 6:00 p.m. to focus on utility rates and the FY2026–27 budget to allow more analysis and to craft any amendments before the formal May budget hearing. Charles said he would include the $150,000 reimbursement in the FAP application for now; any final loan terms would come back to the commission for approval.
