City Council Meeting Date: September 16, 2025
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
Review of Proposed Utility Rates and Related Study.
Body
Action Requested:
The Northfield City Council discusses the Utility Rate Study Update.
Summary Report:
Baker Tilly US, LLP, a public sector financial advisor, conducted a Utility Rate Study on Water, Wastewater (Sewer), Storm Water, and Garbage (Refuse) rates for the City. Attached is a copy of the rate study that included updated assumptions regarding budget revenue and expense projections and 10-year Capital Equipment and Capital Improvement Plans. A presentation is in development and will be provided as a supplemental memo.
The previous utility rate study was conducted in 2018 by Springsted Inc. Additionally, the City conducted an updated Utility Rate Study with Baker Tilley US, LLP, on water rates, storm water rates and wastewater rates. All of the scenarios are based on the current Capital Improvement Plan. The proposed rate adjustments based on the 2025 Utility Rate Study are listed below with different scenarios:
Water
There are four scenarios presented in the Utility Rate Study. All options are needed to pay for anticipated operating expenses, debt service and capital outlay including the targeted amount to maintain adequate cash reserves.
- Scenario A - Building modest incremental reserve for future water treatment plant. 9% annual increase for five years. The City would revisit after 5-years the analysis for need of a new plant and related design (study includes 3% for remaining 5-years but again presumes at that mid-point a check in related to future plant planning). The rates would be more gradually phased in which was a concern heard under the last proposal. This is staff recommended option.
- Scenario B - Minimum to meet current operations and Cap...
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