City Council Meeting Date: May 12, 2026
To: Mayor and City Council
City Administrator
From: Brenda Angelstad, Finance Director
Justin Wagner, Utilities Manager
David Bennett, Public Works Director / City Engineer
Title
Discussion of Utility Rates for 2027, 5-Year Utility Capital Improvement Plan (CIP) and Capital Equipment Plan (CEP) 2027-2031.
Body
Action Requested:
The Northfield City Council discusses Utility Rates for 2027, 5-Year Utility Capital Improvement Plan (CIP) and Capital Equipment Plan (CEP) 2027-2031.
Summary Report:
Staff will be discussing the 5-Year Utility CIP and CEP with the City Council. During the discussion, there will be areas seeking Council input for each Utility Fund.
In 2025, the City conducted a Utility Rate Study with Baker Tilly, Inc., a public sector financial advisor. The study included updated assumptions regarding budget revenue and expense projections and 10-year Capital Equipment and Capital Improvement Plans. The report was presented by Baker Tilly at the September 16, 2025, City Council Work Session. The proposed rate adjustments are following the report recommendations and the adjustments for the 2027 Utility Rates:
Water
A 9% increase is recommended for 2027. The increase is needed to maintain positive operating income as well as to pay for anticipated operating expenses, capital outlay and debt service. Additionally, the increase will provide additional fund balance for the future water treatment plant or a different future water project.
Below is a graph of comparable cities water rates.
Wastewater (Sewer)
A 3% increase is recommended for 2027. The increase is needed to maintain positive operating income as well as to pay for anticipated operating expenses, capital outlay and debt service.
Below is a graph of comparable cities wastewater rates.
Storm Water
A 5% increase is recommended for 2027. The increase is needed to pay for anticipated operating expenses, debt service and capital outlay including the targeted amount to maintain adequate cash reserves.
Below is a graph of comparable cities stormwater rates.
Below is a graph of comparable cities with combined water, wastewater and stormwater rates.
Garbage Rates
A 6.5% increase recommended for 2027. The increase is needed to pay for anticipated operating expenses, debt service and capital outlay including the targeted amount to maintain adequate cash reserves.
Alternative Options:
N/A
Financial Impacts:
The proposed rate increases allow us to maintain our facilities. An average residential customer who uses 589 cubic feet of water monthly would see their water rates grow from $28.31 to $30.85 in 2027. An average residential customer who uses 589 cubic feet of wastewater monthly would see their wastewater rates grow from $42.99 to $44.28 in 2027. An average residential customer that owns 0.33 acres of land would see an increase in stormwater rates from $11.98 to $12.58 in 2027. An average resident that uses a 35 gallon garbage can would see an increase from $13.30 to $13.77 in 2027.
The average monthly residential total water, wastewater, stormwater and garbage rates would go from $96.58 to $101.49 or an increase of $4.91 per month.
Tentative Timelines:
New rates would take effect January 1, 2027.