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Pelican Rapids adopts 2025 water and sewer budgets and approves about 12.8% combined rate increase
Summary
After presentations on sewer and water budgets showing rising debt service, wages and capital needs, the council adopted the 2025 water and sewer budgets and approved Resolution 2024-18 to raise rates (combined increase about 12.8%, roughly $11/month on average residential bills).
City staff presented detailed 2025 sewer and water budgets, outlining increased debt-service payments, wage increases, capital needs (lift station and well work), higher maintenance contracts and cyber/SCADA service costs.
Danielle, who led the utility budget presentation, said the sewer budget reflects higher PFA loan debt-service payments, increased wages, and lift-station and clarifier repairs. She noted sludge-hauling and chemical costs are higher than previously projected and that capital outlays and meter replacements are budgeted for 2025.
On the water side, staff described a large debt-service increase tied to Highway 59/108 principal and interest payments; there are also potential well-rehab or replacement costs (estimates ranged from ~$40,000 to a conservative $77,000 worst-case). Staff proposed rate adjustments to stabilize reserves: proposed changes produce a combined water-plus-sewer increase of about 12.8% (presenters estimated roughly an $11 monthly increase for an average residential customer).
Council discussed options to reduce the rate impact, including using additional reserves or liquor-store transfers; staff said applying more reserves could lower the increase toward single digits but would reduce available reserves. The council moved to adopt the sewer and water budgets and the rate resolution (identified as Resolution 2024-18 in the packet) with a correction to an industrial flow figure; motions passed by voice vote.
The council directed staff to finalize resolution paperwork and noted the rate increases will be implemented per the adopted resolution; staff will continue to monitor expenses and reserves in future budget cycles.
