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Finance director: utilities in 'good financial shape' but reserves need years to rebuild
Summary
Finance Director Jennifer Knapp told the council the Department of Utilities is stable but expects higher costs in FY26 due to a plant outage and higher gas prices; the sewer fund reserves are down to about 1.5 months and are projected to be rebuilt to the eight-month target over four to five years.
Jennifer Knapp, the city's finance director, presented the Department of Utilities quarterly financial report covering FY25 compared with FY24 and described the department as "in good financial shape" while identifying near-term pressures.
Knapp said higher gas consumption at the electric plant (Unit 8 outage) and general inflationary pressures will increase costs in FY26 and noted the city aims for eight months of reserves per fund. "In the last year, we built up about a month and 0.5," she told council, adding that at the current rate it would take roughly four to five years to rebuild those reserves without abrupt rate increases. She also referenced a density study of the coal pile used to estimate inventory and explained the density-testing method used to compute tonnage.
Councilmembers asked technical questions about the coal pile density tests and whether reserve levels would affect bonding; Knapp said the city expected to continue issuing bonds as needed and that credit ratings had been reaffirmed during recent reissuance. After public comment, Councilman Jensen moved to receive the utilities report and Councilwoman Gannon seconded the motion.
