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Council hears FY27 enterprise fund overview: utilities would see combined rate increases
Summary
City staff told the council combined utility rates (water, wastewater, sanitation) would rise about 7.6%—roughly $62 per average household—while stormwater and capital transfers face larger adjustments; staff presented options for funding the Hiawatha project and described recalculated ERUs that moderated rate pressure.
City staff presented the proposed FY27 enterprise operating and capital budgets for water, wastewater, sanitation, stormwater and related program funds and summarized the net effect on ratepayers. "We are at a combined utility rate... at a 7.6% increase, or roughly $62 per year for an average household," Jess said while walking the council through changes in capital transfers, postage savings and program allocations.
Jess described changes in the water fund (about a 3.8% budget increase with a 6.2% fee increase in prior versions), modest adjustments in wastewater (including a new maintenance management program), and a sanitation budget lower than the February version due to $53,000 in cuts and updated two-party revenue. The stormwater fund, Jess said, had the largest budget change (about $77,000) but a third-party account review recalculated impervious areas and credits; that recalculation left the proposed ERU rate at $88.91 per ERU—only about $0.40 higher than the February rate.
Councilors questioned how capital timing and bonding decisions would affect rates and whether spreading large projects over multiple fiscal years could reduce immediate rate pressure. Staff explained options for the Hiawatha project and noted the council has authority to set enterprise budgets and rates and can revisit budgets during the fiscal year if circumstances change.
