Speaker numbers apply only to this recording.
This study session focused on the utility fund forecast and recommended rate and fee adjustments for fiscal year 2026-27, covering water, wastewater, electric, natural gas, and solid waste. Council members discussed the proposed increases, equity between customer classes, and affordability. The meeting also reviewed a consent agenda item for Park North development and a barricade rental contract increase.
Good morning. How are we doing? We on? Yep. Okay, good. Welcome to the Mason City Council study session for September 24th, 2006. Mayor Freeman is out of town, so he is excused. All other council members are present. I know we have uh a hard stop for uh Mr. Adams at right around nine o'clock. So we're gonna go a little bit out of order. We're gonna start with our presentation. Um item 2A is a presentation to discuss the utility fund forecast and recommended rate and fee adjustments. Good morning. Thank you. Good morning, Vice Mayor and Council uh Brian Richel, the uh management and budget director. Uh with me today, I have um Chris Olby, who is the uh deputy uh management and budget, deputy director. And so what we're doing today is we're gonna go through this kind of kicks off the uh rate discussion, utility rate discussion with the city council and with it with the public. And what we'll go through here is the uh the utility fund forecast for 2627, but also for the five years out forecast. But then also what staff has recommended uh for rate adjustments along with the recommendations of the audit and finance committee. This presentation was presented to the audit and finance committee a few uh few weeks ago. And that this presentation includes their recommendations. And what we'll do is uh myself and Chris will kick off the presentation, and then what we'll do is we'll have each individual uh utility departments come up and present their sections. And then Chris and I will come back up and um close out the presentation with a forecast in the next steps. All right, so we'll get started with an overview of the utility operations. So each utility is operated as a separate business center. However, we review the utility fund as one fund. So uh the reason why we do that is utilities have up and ups and downs from year to year. Good example of that is this past year in 25-26. We had a relatively uh warm winter and we had that hot spring. So we had a higher than anticipated water consumption and higher water revenue. But then that same weather also caused lower gas consumption and lower gas revenue. So from year to year, depending on if if we have a cold rainy winter, that situation could reverse. So from year to year, you know, the weather, rainfall, temperatures impact the utilities in different ways. Uh, we also have the reserve balance to provide a safety net for unforeseen conditions or events that may occur. And we also have that fund balance that we can use to smooth rate adjustments from year to year. These are our financial principles, just an overview. These haven't changed since they were last presented. Um, but we're looking at achieving balanced net sources and uses, having a 20% or higher fund balance reserve, uh, having rate adjustments that are predictable and smooth throughout the forecast, um, reviewing equity between residential and non-residential rates, the water resources department will uh talk more about this in their portion of the presentation, and also providing affordable utility services. So this slide is the utility fund forecast as of the adopted budget. So this is where we last left off with council back in May and June. Uh we have three fiscal years highlighted, 25-26 through 27-28. Uh so we have a negative net source and uses for those three years. Uh, it does improve throughout the forecast, but those negative net source and uses are uh were projected to draw down the fund balance from 17.3% in 2526 down to 13.0% in 2728. Um something we do want to note is the bottom section of the table.