City Council Meeting Date: September 22, 2026
To: Mayor and City Council
City Administrator
From: Brenda Angelstad, Finance Director
Justin Wagner, Utilities Manager
David Bennett, Public Works Director and City Engineer
Title
Consider Adoption of Utility Rates for 2027.
Body
Action Requested:
The Northfield City Council approves the attached Resolution Adopting the Utility Fee Schedule for 2027.
Summary Report:
Attached is a resolution for proposed utility rates for 2027. 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, expense projections and 10-year Capital Equipment and Capital Improvement Plans. The City Council has reviewed the proposed rates for 2027 through the 2027-2028 budget process and are proposing the rates adjusted in this memorandum. The City also provided informational meetings including utility rate impacts.
The report was presented by Baker Tilly at the September 16, 2025, City Council Work Session. Annually, the City reviewes updated 5-year capital equipment plan and 5-yeard capital improvement plan as well as operational costs. If there are needs to adjust rates from year to year from the utility rate study they would be appropriately amended. There are no changes to rates based on the proposed 2027 operating budgets as well as the updated 5-year capital equipment plan and capital improvement plan. Attached is the proposed summary 5-year capital equipment plan and capital improvement plan related to the utility funds.
The proposed rate adjustments are following the report recommendations and the adjustments for the 2027 Utility Rates:
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 (approximately +5% increase)
Water
A 9% increase 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 water rates.
Wastewater (Sewer)
A 3% increase 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 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.
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:
Not recommended.
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 (approximately +5% increase).
Tentative Timelines:
New rates would take effect January 1, 2027.