Edmond City Council Workshop on FY 2026-27 Budget and Water/Wastewater Rate Study

On March 23, 2026, the Edmond City Council held a workshop to review the Fiscal Year 2026-27 budget, including the general fund and parks and recreation department budgets, and to discuss the water and wastewater rate study. The meeting included presentations from staff and a consultant, followed by council deliberation and direction for next steps.

Discussion Items

General Fund Budget Update

• Finance Director Kathy Panis (implied) presented updates: interfund transfers out of the general fund to the field services fund for streets were reduced by $2.6 million (replaced with funds from the 2017 CIP fund), and transfers to CityLink were reduced by $495,000. After these adjustments, the unassigned general fund balance stands at 8.82%.
• Assumptions: 0% sales tax growth, 4% use tax growth, and 1% growth on all other revenue.
• Personnel expenses are up 3.22% (including all budgeted positions, even vacant, with full compensation and step increases). Materials and supplies are down 10.5%, other services and charges down 1.89%, and capital outlay down 0.22%.
• The 2017 CIP fund balance remains at approximately $10 million after the transfer; CityLink is roughly break-even with a $26,000 positive balance.
• Council members asked about the status of the CIP board review of using CIP reserves for road funding; staff noted they would report back on the amount that has been through the CIP board.

Parks and Recreation Budget

• Parks and Recreation Director Brad Rainey presented a flat budget overall, with some divisions increasing and others decreasing. The department is funded through general fund, park tax (one-eighth cent permanent sales tax, approximately $3 million annually), fees, and other sources.
• Benchmarks from the National Recreation and Parks Association showed Edmond has a higher acreage of parkland per capita than national averages but at a lower operating cost per acre. Revenue as a percent of operating expenditure is higher than average, partially due to Kicking Bird Golf and Arcadia Lake.
• Key funds: Park tax fund has a $3 million fund balance; cemetery, festival marketplace, and senior center are largely general fund supported; Arcadia Lake revenue nearly covers direct operations but requires a transfer from park tax (previously general fund); Kicking Bird Golf is self-sustaining and generates a slight profit for capital improvements.
• A proposed $1.5 million from the special tax fund (Charles Land Preserve) is allocated pending a Land and Water Conservation Fund grant ($800,000) to complete the project; total project cost estimate is $1.6 million.
• Total parks and recreation uses across all funds: $21 million, including $4.5 million from the 2017 CIP fund (primarily trails).
• Council members requested clarification on how the parks and rec line items in the general fund (e.g., $4.4 million vs. $4.5 million) reconcile; staff agreed to provide offline follow-up.

Water and Wastewater Rate Study

• Water Resources Director Chris Sniping provided background: Edmond has been planning for water supply independence since 2009; the current water treatment plant is at capacity and needs expansion. A pipeline to Oklahoma City was built but terms became unfavorable, and during the 2011-2012 drought, Oklahoma City restricted supply. The current project (WTP expansion) is the result of decades of planning.
• Jason Gray, Vice President of Will Dan Financial, presented the rate study update. Key drivers: account growth (~1.5% per year) but billing unit growth per account has declined (~0.9% trend). The total capital improvement plan (CIP) for water and wastewater over five years is modeled at a midpoint of $648.5 million and an upper end of $716.6 million, with the difference being the cost of the water treatment plant expansion ($325 million midpoint, $392 million upper end). Wastewater CIP is $172.9 million.
• Four rate plan options were presented, all requiring drawdown from existing reserves ($72-$73 million):
  • Option 1: One-time material base increase (water base charge more than doubles in year one, volume charges unchanged). Draws down ~$30 million in reserves; days of fund balance drops to 170 by 2030.
  • Option 2: Double base charge over two years, with moderate volume increases. Draws down ~$30 million; fund balance stabilizes at ~170 days.
  • Option 3: Uniform percentage increases on base and volume across four years (midpoint CIP). Draws down ~$51 million; fund balance drops to ~95 days but stabilizes.
  • Option 4: Uniform increases with upper-end CIP. Draws down ~$52 million; similar fund balance impact.
• An additional tier for residential water use above 30,000 gallons per month was proposed, affecting about 3% of customers and generating $200-$300 thousand annually. Council expressed support for this tier.
• Wastewater rates are consistent across all options: base and volume charges increase annually (e.g., residential base from $23.59 to $25.00 in year one, volume from $5.66 to $6.00 per thousand gallons).
• Council members emphasized the need for a common comparison metric (e.g., monthly bill for 6,000 gallons including base) to better communicate with the public. They also discussed reserve fund policy: current policy is 180 days for water; council generally favored maintaining that level, though some noted flexibility during heavy capital outlay periods.
• The low-income assistance program was discussed: current programs include a state-provided $10.42 credit, funding to Hope Center ($170,000 split between water and electric), and potential for council to allocate more. Staff recommended continuing and possibly expanding assistance.
• Council members also noted that impact fees could be a future conversation to share costs with development.

Key Outcomes

• No formal votes were taken, but council provided clear direction for staff:
  • Focus further analysis on Options 2 and 3 (and possibly Option 1 for additional comparison) with a consistent reserve target of 180 days of fund balance.
  • Run an apples-to-apples comparison of monthly bills at 6,000 gallons (including base) across local cities.
  • Include commercial customer impact analysis for low, typical, and high-end commercial users.
  • Incorporate the additional tier for >30,000 gallons as part of rate design.
  • Develop a low-income and senior assistance program with recommended funding levels.
• Future meeting dates set:
  • March 30, 2026: Workshop on fund structure and HR discussion (starting at 2:30 PM, originally 3 PM, adjusted to 2:30 PM).
  • April 8, 2026: Public Works Committee meeting to review refined rate options.
  • April 13, 2026: Council workshop to discuss water rate follow-up and police/fire budget issues (2:30 PM).
  • April 20, 2026: Budget summary workshop (2:30 PM).
• Staff will prepare updated analysis for the April 8 Public Works Committee meeting and subsequent council discussion.