Proposed budget includes rate hikes in PC utility, sewer services

Prairie City residents who use city water, sewer and garbage collection services would see rate hikes in all three utilities after July 1, if the 2018-19 proposed budget passes unchanged.

The $2.58 million budget package was a key point of discussion Feb. 14 at Prairie City’s regular monthly council meeting at city hall.

According to the budget outline prepared by city staff, Prairie City sewer customers would see a 3 percent increase in their monthly bill under the current budget proposal. That translates to roughly a $1.21 per month increase for the average household.

Water rates would increase by 2 percent, 50 cents more per month on average, while garbage collection will increase by 3.5 percent. Depending on the size of a resident’s waste can, that averages between a 37 cent to 52 cent per month rise in cost.

In total, city officials expect residents can see a total city utility cost increase between $2.12 to $2.27 per month.

Matt Stoffel of PFM Financial Management represents Prairie City’s financial advisement firm and broke down the proposed increases for the council last week. Stoffel said the 2 percent water increase is to keep prices in-line with inflation.

Prairie City’s garbage and recycling collection contract with Waste Management has an automatic annual 3 percent increase, and Stoffel is recommending the extra .5 percent in case of unexpected costs such as waste can replacements.

The 3 percent sewer increase, Stoffel said, is so the account can both cover operating costs and keep a cash balance reserve. Prairie City is required by the state of Iowa to keep the fund at 110 percent of its annual debt service loan payment in the sewer, a loan taken for the wastewater treatment facility’s construction five years ago.

Prairie City’s budget committee has held two meetings since January drafting the budget, but not every council member is on board with the increases.

“Who can’t spend $2.25 per month on just anything, but it’s still a rate increase for our citizens,” councilman John Lee said. “... I’m trying to do my job for the public to make this as efficient as we possibly can. Like I said, anybody can waste $2.25 per month. That’s not the issue as much as it is the principle.”

Lee said he wants to find efficiencies in staffing and operations to offset the increases, but Mayor Chad Alleger rebutted the councilman’s comments at the Feb. 14 meeting, asking Lee to have trust in the budget committee and PFM’s calculations.

“The ending cash balance at $53,000 is pretty bare bones, so I would say the sewer fund is sitting on a whole bunch of cash you can continue to shave down,” Stoffel said. “From our perspective, we don’t consider this a fat and happy utility that the city is taking money from to use for other services. You’re really just trying to meet the needs of the sewer from what we can see.”

Councilwoman Diane Taylor reminded the entire group of the complexities of a city budget, especially for the three newly elected council members. She encouraged all council members to bring questions on financial issues to City Clerk Cindy Kane and City Manager/Police Chief Joe Bartello.

“I want us all to be accountable to the citizens, and I think the only way that we can do that is have half an idea of what’s going on financial with the city,” Taylor said.

Lee agreed with Taylor and added he understands city budget projections are part data driven and part speculation.

“This budget here is a guideline, it’s not gospel,” Lee said.

The city council will hold a public hearing on the proposed rate increase and budget at its March 5 regular meeting.

Contact News Editor Mike Mendenhall at mmendenhall@myprairiecitynews.com