10/27/26 Water rate presentation to the Fountain City Council

The City of Fountain City Council’s water-rate presentation on October 27, 2026, reviewed the water utility’s finances and options for future rate increases. Staff explained that water rates cover the utility’s cost of service, while growth-related capacity is funded separately. The utility has more than $40 million in outstanding debt, has reduced annual operations and maintenance spending by about 25% since 2020, and still needs to build a three-month operating reserve. Without future rate increases, staff projected declining cash beginning in 2027 and renewed reliance on the electric fund. A $1.9 million tank rehabilitation was identified as a critical 2027 expense.

Staff compared rate scenarios for 2027–2029, accounting for differences in water use and weather. The prior proposal was 9% increases in 2027 and 2028, followed by 6% in 2029; alternative scenarios ranged from initial increases of 5% to 9%, with later increases varying by consumption scenario. Staff favored making one year’s increase at a time and updating the rate model annually, since future water use is uncertain. The presentation ended with discussion invited; the transcript identifies no council vote or procurement action, contract award, or vendor selection.