Presentation

FY 2026/27
Utility Fund Forecast & Rates
Recommendation for Notice of Intention
City Council Meeting
Presenter: Brian A. Ritschel – Management & Budget Director
October 5, 2026

Financial Principles
BALANCE NET SOURCES 20% OR HIGHER RESERVE RATE ADJUSTMENTS THAT
AND USES FUND BALANCE ARE PREDICTABLE AND
SMOOTHED THROUGHOUT
THE FORECAST
EQUITY BETWEEN AFFORDABLE UTILITY
RESIDENTIAL AND NON- SERVICES
RESIDENTIAL RATES
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Utility Rates Adjustments
Main Focuses
Equity between residential Growth pays for growth Conservation of Smooth rate adjustments
and non-residential rates discretionary water use throughout the forecast
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FY 26/27 Adopted Budget
As of 5/11/2026 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31
Actuals Estimate Budget Forecast Forecast Forecast Forecast
WATER $5,157,415 ($6,321,872) ($4,304,815) $3,877,849 $10,821,514 $14,212,197 $21,758,429
WASTEWATER ($4,094,937) ($6,624,850) ($5,982,727) ($3,819,959) $108,414 $6,387,796 $4,663,843
SOLID WASTE $1,488,195 ($1,618,941) ($112,736) $1,953,496 $4,861,956 $4,972,407 $10,109,813
ELECTRIC $659,688 $2,011,761 ($388,805) ($463,936) ($274,946) ($467,300) ($225,868)
NATURAL GAS ($474,783) ($5,404,411) ($4,587,133) ($3,018,733) $677,156 $62,329 $1,120,156
DISTRICT COOLING ($335,236) ($327,380) ($160,312) ($142,690) ($137,173) ($168,212) ($201,698)
TOTAL NET SOURCES AND USES $2,400,341 ($18,285,694) ($15,536,528) ($1,613,972) $16,056,922 $24,999,216 $37,224,676
Beginning Reserve Balance $117,019,543 $119,419,884 $101,134,190 $85,597,663 $83,983,691 $100,040,612 $125,039,828
Ending Reserve Balance $119,419,884 $101,134,190 $85,597,663 $83,983,691 $100,040,612 $125,039,828 $162,264,504
Ending Reserve Balance Percent* 22.0% 17.3% 13.9% 13.0% 14.5% 17.0% 20.8%
*As a % of Next Fiscal Year's Expenditures
WATER Residential (Tier 1 usage) 6.00% 2.50% 3.50% 3.50% 3.50% 3.50% 3.50%
WATER Commercial (usage) 8.50% 20.00% 13.00% 13.00% 13.00% 13.00% 13.00%
WASTEWATER Residential 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50%
WASTEWATER Non-Residential 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
SOLID WASTE Residential 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
SOLID WASTE Commercial 10.00% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
SOLID WASTE Rolloff 6.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50%
ELECTRIC Residential - svc charge $2.75 $1.00 $3.00 $3.00 $3.00 $3.00 $3.00
ELECTRIC Non-Residential - svc charge $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
GAS Residential - svc charge $0.00 $0.00 $1.00 $1.00 $1.00 $1.00 $1.00
GAS Non-Residential - svc charge $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
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FY 26/27 Recommended Rate Adjustments
As of 9/3/2026 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32
Estimate Projected Forecast Forecast Forecast Forecast Forecast
WATER $5,460,861 ($2,872,881) $4,650,774 $11,317,938 $10,087,066 $8,290,426 $9,257,249
WASTEWATER ($3,781,233) ($5,668,273) ($4,067,116) $587,564 $4,816,543 $7,593,925 $7,282,910
SOLID WASTE $655,139 $210,001 $2,357,854 $5,372,359 $5,258,107 $9,893,037 $10,705,768
ELECTRIC $4,060,522 ($613,600) ($968,075) ($854,339) ($1,269,674) ($1,369,446) ($1,285,440)
NATURAL GAS ($5,312,726) ($2,995,696) ($3,287,572) $448,895 $361,173 $1,141,125 $1,840,407
DISTRICT COOLING ($345,087) ($160,312) ($142,690) ($137,173) ($168,212) ($201,698) ($147,034)
TOTAL NET SOURCES AND USES $737,476 ($12,100,760) ($1,456,824) $16,735,244 $19,085,004 $25,347,369 $27,653,860
Beginning Reserve Balance $119,419,884 $120,157,360 $108,056,600 $106,599,776 $123,335,020 $142,420,023 $167,767,392
Ending Reserve Balance $120,157,360 $108,056,600 $106,599,776 $123,335,020 $142,420,023 $167,767,392 $195,421,252
Ending Reserve Balance Percent* 20.6% 17.5% 16.5% 17.9% 19.6% 21.9% 24.0%
*As a % of Next Fiscal Year's Expenditures
WATER Residential (Tier 1 usage) 2.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
WATER Commercial (usage) 20.00% 13.00% 13.00% 5.00% 5.00% 5.00% 5.00%
WASTEWATER Residential 7.50% 7.50% 7.50% 7.50% 7.00% 7.00% 7.00%
WASTEWATER Non-Residential 8.50% 8.50% 8.50% 8.50% 8.00% 8.00% 8.00%
SOLID WASTE Residential 5.50% 5.50% 5.50% 5.50% 5.00% 5.00% 5.00%
SOLID WASTE Commercial 5.50% 6.00% 5.50% 5.50% 5.50% 5.50% 5.50%
SOLID WASTE Rolloff 5.50% 6.00% 5.50% 5.50% 5.50% 5.50% 5.50%
ELECTRIC Residential - svc charge $1.00 $2.00 $3.00 $3.00 $3.00 $3.00 $3.00
ELECTRIC Non-Residential - svc charge $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
GAS Residential - svc charge $0.00 $1.50 $1.00 $1.00 $1.00 $1.00 $1.00
GAS Non-Residential - svc charge $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 5

Customer Impact
Prior Forecast AF&E
Staff Recommended
Typical Customer Current Bill Recommended Rate Recommended Rate
Rate Adjustment
Adjustment Adjustment*
Residential $44.64 +4.2% $46.51 +4.2% $46.50 +3.8% $46.33
(6 kgals/month) (+$1.87) (+$1.86) (+$1.69)
*AF&E Committee
recommended an
Multi-unit Development $45.12 +9.2% $45.28 +9.0% $45.20 adjustment of the
$41.48 +8.8%
(6 kgals/month) (+$3.64) (+$3.80) (+$3.72) service charge for all
water customers from
+4.0% down to +3.5%
Commercial – General $87.83 +7.6% $94.51 +7.6% $94.53 +7.3% $94.26
(9 kgals/month) (+$6.68) (+$6.70) (+$6.43)
Commercial – Landscape +12.4% $265.09 +12.9% $266.31 +12.8% $266.04
$235.91
(33 kgals/month) (+$29.18) (+$30.40) (+$30.13)
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Affordable Utility Services
High Water Burden
5%
4%
3%
2%
1%
0%
2023 2024 2025 2026 2027 (proposed)
EPA's Threshold of "High Water Burden"
Typical Customer's Annual Water and Wastewater Expenses as a percent of Minimum Wage (yearly)
Typical Customer's Annual Water and Wastewater Expenses as a percent of Median Household Income
The 4.5 percent threshold is widely used in literature (Cardoso & Wichman, 2022a; Berahzer et al., 2023; Heminger et al., 2023; Mack & Wrase, 2017). Use of the 4.5
percent threshold is largely consistent with the Hours of Labor at Minimum wage metric, which suggests a threshold of one day (8 hours), or 4.6 percent of work hours
in a month, assuming a 40-hour work week.
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Residential Rate Adjustments
Typical Customer
Residential Monthly Bill Current Recommended Change
Water (6 kgal) $44.64 $46.33 +$1.69
Wastewater $30.18 $32.44 +$2.26
Solid Waste (90-gal + Green & Clean Fee) $35.99 $37.96 +$1.97
Total – Citywide Service Area $110.81 $116.73 +$5.92
Residential Monthly Bill Current Recommended Change
Electric $123.10 $126.76 +$3.66
Natural Gas $42.28 $44.63 +$2.35
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Next Steps
December 1, 2026 - Introduction of Utility Rate Ordinances
December 8, 2026 - City Council Action on Utility Rates
February 1, 2027 - Effective Date for Utility Rate Changes
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