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MEMORANDUM <br />To:Saint Anthony Village City Council <br />From:Deborah Maloney, Finance Director <br />Date:October 28, 2025 <br />Request: Proposed 2026 Utility Rates and Budget <br />BACKGROUND <br />The utility rates proposed for 2026 continue the multi-year rate adjustment strategy initiated in 2012. <br />This approach is guided by a consistent framework designed to ensure fairness, transparency, and long- <br />term financial stability. The key principles informing the rate adjustments are: <br />·Align revenues with the actual cost of service delivery <br />·Promote transparency in the methodology behind rate setting and adjustments <br />·Maintain structurally balanced operations <br />·Support the continued ability to: <br />o Deliver safe and reliable drinking water <br />o Effectively collect and treat sanitary sewer flows <br />o Manage and treat stormwater runoff in compliance with environmental standards <br />PROPOSED 2026 RATES <br />As part of the annual rate adjustment process the water production and distribution costs are <br />categorized as fixed in nature or usage driven. The 2026 budgeted water costs are comprised of <br />$838,506 in fixed costs and $1,077,141 in usage driven costs, as summarized here: <br /> OPERATING DEPRECIATION OVERALL <br />FIXED 618,236.50 42% 220,269.31 49% 838,505.81 44% <br />USAGE 843,942.81 58% 233,198.05 51% 1,077,140.86 56% <br /> 1,462,179.30 453,467.36 1,915,646.66 <br />The Multiyear approach to water rates included the phase in of the flat fee which began in 2016. Based <br />on estimated actual results for 2025 and 2026 budgeted costs are reflected in the proposed rates for <br />2026 are reflected below: <br />11