Altoona Budget Committee Reviews 2026 Utility Budgets on September 25, 2025

The Altoona Budget Committee met Thursday, September 25, 2025, in the Council Chambers at Altoona City Hall for a scheduled 3:30 p.m. meeting to review the proposed 2026 water, sewer, and stormwater utility budgets. Staff presented water supply capacity, meter replacements, galvanized service replacement options, stormwater rate pressures, and the ongoing sewer billing dispute. Although the agenda included The Yard, that item was not presented. A quorum was present, and no formal votes were taken on the budgets.

2026 Utility Budget Overview

• Finance Director Tina Nelson explained that utilities are enterprise funds, funded mostly by user fees rather than property taxes, and are budgeted based on estimated usage and revenue recognized when billed.
• Water rates are regulated by the Public Service Commission (PSC); sewer and stormwater rates are set by the City Council and overseen by the DNR.
• The proposed water utility budget is balanced, including about $2 million in charges for services, a payment in lieu of taxes of about $297,000 to the general fund, depreciation, and debt service.
• The proposed sewer budget remains uncertain because of an unresolved billing dispute with the City of Eau Claire.
• The proposed stormwater budget would apply $349,000 from reserves, which Finance Director Nelson said makes her nervous, and includes about $375,000 in revenue and $352,000 in depreciation/amortization.

Water Supply and Sanitary Survey

• Public Works Director Scott Quick presented the DNR sanitary survey results. The 2022 survey identified inadequate source capacity, driving construction of wells 8 and 9.
• Current average day demand is 907,000 gallons per day; maximum day demand is about 1.781 million gallons per day.
• Total well capacity is 1,645 gallons per minute, equal to about 2.368 million gallons per day. With the largest well out of service, firm capacity is 1,345 gallons per minute, about 1.9 million gallons per day.
• Under DNR guidelines, average-day operation with firm capacity would run wells 11.2 hours per day, within the 12-hour guideline, but a maximum day would require running seven wells 22 hours per day, exceeding the 18-hour guideline.
• Staff said one more well is needed; well 10 at Bartley Crossing is included in the budget and has a test well ready.

Meter Replacement and Customer Technology

• Utility Account Manager Lori Prudlich reported 261 total meter changes this year, including 41 new properties, 61 meters installed with deduct meters, and 200 change-outs. The city has over 5,000 meters.
• The AMI network covers 4,134 meters; just under 1,000 meters still need to be added. There are 250 meters older than 2013 to replace, expected to be completed in the first quarter of 2026, and 747 meters with updated meters but non-communicating reading devices, expected by mid-2027.
• Staff reduced the meter replacement budget from $140,000 to $100,000 per year for the next five years because replacement meters are already in stock, saving about $500,000.
• A new payment portal offers e-check payment for a flat $1.50, lower credit-card fees, auto-pay, billing history, and building-permit payments.
• A future H2O analytics portal through PayStar will give customers one-click access to meter usage, history, and alerts. City staff are already using alerts to identify high usage, including a 145,000-gallon leak and several similar cases.

Galvanized Water Service Replacement Program

• Federal rules require replacement by 2036 of galvanized water services that were downstream of lead connectors or lead service lines. Staff identified 60 such services in Altoona.
• Scott Quick presented three compliance options: requiring homeowners to replace at their own cost; using DNR safe-drinking-water loan funds with partial reimbursement, which is more costly because of prevailing wage and reporting requirements; or directly reimbursing a contractor, the recommended approach modeled on Eau Claire's program.
• Eau Claire's local contractor has performed replacements for about $3,000 per service. The proposed program would budget $100,000 annually for two to three years, with half from the water utility and half from the general fund. Budget offsets would reduce pedestrian-safety funding from $50,000 to $25,000 and the curb/water service contract from $100,000 to $50,000 per year.
• The replacement would be at no cost to the homeowner. An ordinance requiring replacements is expected to come forward, and staff discussed possibly reimbursing homeowners who already replaced qualifying services.
• Councilmember Bruce Thielen suggested exploring whether Altoona could piggyback on Eau Claire's contract. Officials expressed support for avoiding a large financial burden on older homeowners and for improving compliance.

Stormwater Rates

• Stormwater utility rates are set by the Council and have not changed in 15 years. The current equivalent runoff unit (ERU) rate is $36 per year, compared with Eau Claire's $124 per year.
• Staff explained that the utility was formed for total suspended solids reduction, the second planned pond was not built, and rates have been sustainable until recently because of increased assets, road projects, regional pond maintenance, and street sweeping.
• A stormwater rate study by Trilogy was budgeted and will review rate structure, methodology, credits, and use of funds. It will not be ready in time for the 2026 budget; the rate will remain $36 until the study is complete and can be adjusted during the year.

Sewer Treatment Dispute

• The city's sewer is treated under a contract with Eau Claire and billed by volume. Tina Nelson said Altoona believes it has been overcharged and is paying only the undisputed portion while awaiting Eau Claire's response.
• If the dispute is not resolved, next steps could include non-binding mediation, litigation, or submission to the PSC. Eau Claire could also change rates by the end of September, leaving the 2026 sewer budget uncertain.

The Yard and Performance Reporting

• Although the agenda listed The Yard, City Administrator Michael Golott said the Yard budget would not be presented separately because it is part of the general fund/parks budget. Year-end performance reports will show revenue and expenses for The Yard and similar operations.
• Staff said reports would be generated annually and that some funds, such as Solar Circle and River Prairie Center, are tracked through monthly or year-end financial reporting.

Key Outcomes

• No motions or votes were taken on utility budgets; the committee discussed the proposals and adjourned by voice vote.
• The next budget meeting is scheduled for Thursday, October 9, 2025, at 4:00 p.m. to review the first draft of the general fund budget.
• Next steps include completing meter replacements, bringing forward a galvanized-service replacement ordinance, conducting the stormwater rate study, resolving the Eau Claire sewer billing dispute, and considering well 10.