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Budget committee forwards enterprise budgets after debate over unimplemented wastewater rate increase
Summary
The budget committee unanimously forwarded four enterprise fund budgets to the city council after learning a previously approved 20% wastewater rate hike was never implemented; staff integrated that amount plus an 11.2% shortfall into the FY27 proposal and recommended pulling a bond to stabilize cash flow.
The city budget committee voted unanimously on June 9 to forward the city’s enterprise fund budgets — including the wastewater fund — to the full council after staff described a revenue shortfall tied to a previously approved rate increase that was never implemented.
City Manager: "That 20% was never implemented going into fiscal year 26," the city manager told the committee, saying staff incorporated the uncollected 20% into the FY27 wastewater revenue estimate and also identified about an 11.2% additional shortfall. Taken together, staff said, the adjustments amount to roughly a 31% total increase needed to bring the wastewater fund into balance.
Why it matters: The committee was told the missed implementation of the earlier 20% increase is a primary driver of the current deficiency. Staff also removed about $1 million in sewer impact-fee revenue from operational revenue estimates after determining those funds should be reserved for capital improvement projects (CIP), not operations.
Bond timing and cash flow: Staff recommended pulling a bond that had been approved in prior years — even if the issuance is delayed later in the year — because deferring it further would risk the city’s cash position. "We would want to continue that pull the bond," the city manager said, adding that delaying issuance might produce modest interest savings but could jeopardize cash flow.
Councilors pressed for specifics about the bond amounts and projects. Public Works Director Jeff Demers, calling in from vacation, said one bond tranche repays prior general-fund advances related to Elm Street (about $4.7 million owed) and the other will fund work on Alfred Street (about $4.8 million), indicating roughly $9 million of project need across the two efforts.
Rate impact and resident expectations: Committee members sought examples of household impacts; one councilor offered a rough illustration showing a quarterly bill rising from about $400 to roughly $538–$550 when the combined increases are applied. Staff and councilors characterized those figures as approximate estimates to set expectations for residents.
Motion and reporting: Councilor Pearson moved to accept the wastewater fund as presented, including the additional 11.2% increase, and forward it to council for approval. The committee voted unanimously to forward the item. The mayor and other councilors asked staff to return monthly financial reports on the wastewater fund so the council can track billing and revenues more closely.
Votes at a glance: The committee also unanimously forwarded three other enterprise budgets to council that evening. Staff summarized small line-item adjustments in the airport fund to reach net zero and presented the ambulance fund with an estimated service-contract payment and a modest surplus.
What’s next: The forwarded items will appear on the full city council agenda for final action. Committee members requested monthly wastewater financial reports while the matter moves forward.
