Ad hoc review flags water and sewer operating deficits; council urged to consider rate and policy changes

Council and ad hoc committee members told the City Council that the water and sewer operating funds show multi-year deterioration and require near-term attention.

During the budget presentation, staff said the water operating fund (fund 60) is a particular concern: eight years ago that fund had a projected balance of more than $1 million, the presenter said, but current projections show that balance has been drawn down sharply. The sewer operating fund was described as operating at or near a small loss and trending downward.

Public commenters with rate-study experience urged policy changes that could be implemented administratively. One commenter estimated that changing how multifamily and mixed-use connections are billed — reverting to historic unit-based charges instead of meter-size assignments the staff applied — could yield about $75,000 in additional revenue for the water fund.

Council members and the ad hoc committee discussed short-term fixes (fee and billing policy changes) alongside longer-term work (a formal rate study and forensic audit). Staff said a multi-pronged approach — immediate policy changes where permissible, a targeted rate study, and regular quarterly financial reporting — is necessary to stabilize the funds.

Council asked staff to bring back timelines and options for revenue increases and expenditure reductions as part of the revised draft budget.