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Utility presents 2026 draft budget with $4 million grant; operating costs expected to rise
Summary
Staff presented a first draft of the 2026 operating budget showing higher operating expenses driven by Milwaukee Water Works rate increases, increased administrative costs (new billing software maintenance), legal fees tied to litigation, and a $4 million grant expected in 2026 that boosts nonoperating income.
The Voxewater Utility Commission reviewed a draft 2026 operating budget at its Oct. 21 meeting that projects higher operating expenses and includes a $4 million grant expected in 2026.
Courtney, presenting the draft, said the utility did not include a rate increase in the 2026 budget pending a rate case that staff do not expect to be approved until late next year. The utility’s purchased water cost — primarily from Milwaukee Water Works — was estimated to rise about 7 percent beginning in September. Courtney said administrative costs will rise in 2026 largely because of maintenance and cloud‑hosting charges tied to the new billing software and other process improvements, and because of legal fees associated with an ongoing billing/contract lawsuit.
Courtney also told commissioners the utility received a $4 million grant award at the end of September and staff consider those funds available to the utility in 2026. "We did get that $4,000,000 so that is available to us," Courtney said.
On compensation, Courtney reviewed the utility’s pay‑for‑performance history and proposed a 3.25 percent merit increase aligned to market averages; after accounting for filled vacancies the net effect was presented as a 4.4 percent increase to compensation and benefits for the utility. Courtney noted that the city is considering a 3.5 percent increase for city employees in the same period and that the utility is budgeting one additional full‑time operations hire.
Commissioners and staff discussed several large line items (hydrant painting, pump equipment maintenance, a water system master‑plan model update, and a planned emergency‑response plan) and departmental reallocation of costs between operations and construction. Staff emphasized that some budgeted contingency amounts will only be spent if needed.
Courtney said the utility’s 2026 projected revenues are approximately $10.9 million and that conservatively budgeted interest income and a planned grant are responsible for a portion of the increase in nonoperating income. Commissioners asked for continued detail and scheduled a follow‑up review at the next meeting.
