City moves ahead with sewer contract as council debates modest water and sewer rate increases

City staff told the council that, after finalizing state revolving fund (SRF) bonds totaling $3.55 million, the city can meet current debt-service obligations but still faces rising operating costs for the water and wastewater systems. To maintain progress on plant repairs and lift-station upgrades, staff recommended a modest inflationary rate increase — a 5% rise this year — rather than postponing increases that would force larger hikes later.

"We can meet our obligations for the debt service payments on the bond with our current rate; however, staff would recommend an inflationary increase due to rising materials and operating costs," City staff said. Staff outlined a planning scenario in which adding another $3 million in project funding could require roughly a 12% first‑year increase and about a 23.5% total increase spread over four years if larger borrowing is required.

Some council members urged caution. "If there's any way we can afford to not raise a rate this year... personally that's my opinion — I think it's a great year to skip it all together," one council member said, citing the burden on residents. Staff responded with an estimate of household impact: roughly $8–$10 on a two‑month bill for the proposed 5% increase and stressed that delays could lead to larger increases later if work is deferred.

Separately, council authorized the city manager or mayor to execute the contract with V Sewer LLC for the sewer improvement project, pending final review by the city attorney. Staff said some contractor documents remain outstanding but indicated a desire to begin work as soon as the agreement is signed; a pre-construction meeting is expected in late September with work starting as early as October.

A motion to adopt the rate-resolution language and to authorize contract execution was carried by voice vote; the transcript does not record a roll-call tally.