Perry City Council discuss 3% rate increase in water and sewer consumption

PERRY — Perry City Council discussed its Fiscal Year 2026 operating budget during its latest city council meeting on Tuesday, Jan. 20. Since it was the first reading, no action had been taken.

Director of Finance Mitchell Worthington explained the budget to Mayor Randall Walker and council. 

The budget is divided into seven categories: 

• General fund 
• Fire protection
• Hotel and Motel
• Water and Sewage
• Gas
• Solid Waste
• Stormwater

Worthington explained the mid-year budget adjustment is a standard process. He said it allows city staff, mayor and council to recognize revenues and expenses that have been approved or changed throughout the year. 

Water and Sewage Fund

According to council documents, there will be a 3% rate increase in water and sewer consumption. This was recommended by a rate study completed by Raftelis last year. The projected rate increase would result in an additional $3.60 per month for the average customer.

Worthington explained the fund includes the sewer connection fee approved by city council in December. 

Worthington shared that on the revenue side they are recognizing an increase in the city’s base charge collection. He estimated they will collect $109,000 more.

He explained it’ll help cover the increase in debt service from the AE Harris Reclamation Facility, which is anticipated to be fully operational in March. He also mentioned it’ll cover the operating costs of the facility. 

Worthington said in the budget they will recognize the operating expenses of the facility which is estimated at $150,000 for the remainder of the fiscal year. The management expenses are an estimated $115,000, according to Worthington. 

Councilmember Dan Peterson shared his concern saying there has been a 7% increase each year. He said he would not like to burden ratepayers. 

City Manager Robert Smith also provided his comments saying they have shifted a number of costs out of the water fund. 

“There are numerous avenues through which we believe we’ll be able to further diversify revenues in a way that will benefit the current ratepayers,” he said. 

Smith said the AE Harris Reclamation Facility is an asset and leverage to the city. He hopes it will mitigate future rate increases to a certain extent for ratepayers. 

Fire Protection

Worthington then explained the fire protection fund saying the only change in revenue is a reduction of $90,700. He clarified there will not be an increase in the fire protection fee.

He said when the original budget was adopted for FY 2026, it assumed a 10 % increase in the fire protection fund. Worthington shared through negotiations and discussions, it was reduced to a 2% increase instead of 10%. 

He explained the $90,700 represents the difference they will not collect because of the fee increase. 

Walker clarified they will be moving money from the General Fund to the fire fund due to it being underfunded by approximately $708,000, according to Worthington.  

Worthington said the fire fee is not projected to bring enough revenue to fully cover the cost of the city’s fire protection services. He shared there will be a $323,500 increase from the General Fund to cover costs. Walker said property taxes will be paying the difference between the $708,000 and $323,500. 

During the regular council meeting, Peterson asked Worthington what causes the increases. Worthington replied saying each year there are increases and expenses in the fire protection fund. 

He shared the main expense in the fund is the firefighters’ salaries and benefits. Worthington said they have to go up each year to keep up with inflation. He explained they budget 2% each year for salary increases. He also shared in the last few years, health insurance has increased dramatically. 

Smith also responded to Peterson’s comment. He said they are aware of personnel costs. He explained they have multiple mechanisms in place such as career tracking, in classification adjustments and tuition reimbursement programs. He shared they have been successful, however, they are looking at options to limit the use of those programs. Smith anticipates they will not experience drastic increases in personnel costs each year. 

Solid Waste Fund

In the solid waste fund, Worthington mentioned the city’s switch to Ryland Environmental as their provider. He shared that the contract is more than what their previous provider charged. The total amount of both contracts is approximately $418,000, according to Worthington. This increase will be covered by the city’s general fund, therefore, will not affect ratepayers. 

Councilmember Amy Fouse shared her thoughts saying the city’s expenses are not covered by what they are bringing in. 

She said it is not best practice to use property tax dollars to subsidize water, however, the city is using the general fund to subsidize solid waste. 

“I appreciate the effort to not raise the solid waste [fee]…I think we need more conversation around how we’re addressing these before we get to our second reading of this budget,” she said

General Fund

Worthington highlighted the bigger changes made in the budget. One of those changes in the general fund was the actualization of their property tax collection. Worthington explained since the city did not rollback the millage rate, property tax collection is projected to be $1.4 million more than the original budget called for. 

To view the full FY 2026 operating budget, visit the council agenda on the city’s website. 

The Mayor and Council will hold their pre-council meeting at 5 p.m. and the regular council meeting at 6 p.m. on Feb. 3. Everyone is invited to attend these meetings, and the agenda can be found here. Both meetings are also livestreamed on YouTube.