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Early council approves transfer for SRF loan payments as consultants flag large rate increases
Summary
The Early City Council approved a monthly transfer to a sinking fund to cover FY27 SRF loan payments and heard consultants and engineers outline a proposed well project and large utility-rate increases needed to sustain water and sewer enterprise funds.
The Early City Council on June 2 approved Resolution 26-12 to transfer monthly funds from the Water and Sewer Utility Funds into the Water and Sewer Sinking Fund to cover FY27 State Revolving Fund (SRF) loan payments. The motion, moved by Councilmember Christine Madden and seconded by Brandon Scadden, carried on a voice vote.
Engineers from Bolton & Menk and financial advisors told the council the transfers are tied to a planned well project. Wes Boyer of Bolton & Menk reported an updated site survey, that bidding packages for a test well and a follow-on permanent well are being prepared, and that an environmental review is under way. Boyer said additional funding sources earmarked for low-interest loans for water projects may be available and he will investigate further; the clerk will consult the city’s financial advisor.
Michael Maloney of DA Davidson presented a rate-study scenario for discussion and advised substantial near-term increases would be required to keep water and sewer enterprise accounts self-sustaining. Maloney suggested increasing water rates by 35% in fiscal 2027 with 2% increases in subsequent years and increasing sewer rates by 30% in fiscal 2027 with 2% increases thereafter; he noted these figures do not include costs associated with the upcoming well project. The council scheduled a Zoom meeting with Maloney to review additional options and set up implementation steps.
Director of Public Works Kris Alesch said the city’s recent equipment purchases are already yielding savings: the new leak detector "has already paid for itself," he said, and staff estimate the device cut 13,000–15,000 gallons of running water per day. Council members said they will pursue follow-up financial analysis before committing to specific rate changes.
Next steps: Bolton & Menk will continue preparing bid documents for the test well and Boyer will investigate low-interest loan options; the council will meet with DA Davidson in a follow-up Zoom session to refine rate and financing options.
