HomeMy WebLinkAbout08-25-2025 CC Minutes - Work Session Minutes
City Council Work Session
Monday, August 25, 2025, 4:00 PM
1
tqIP(:---?-tkESHo�``` City Council Chambers 12780 Kelley Parkway, Orono,MN 55356
ROLL CALL
Council members present: Mayor Bob Tunheim, Alisa Benson, Jacqueline Ricks, Steve Persian, Jon
Schwingler.
Staff present: City Administrator Adam Edwards, Finance Director Maggie Jin, Accountant Anne
Hentges, City Clerk Christine Lusian, Parks and Facilities Superintendent Joe Ruthenberg, Public
Works Superintendent DJ Goman, and Abdo Financial Solutions CPA Justin Nilson.
UTILITY RATE STUDY
Nilson presented a utility rate plan designed to meet cashflow goals, with the study emphasizing
data-driven recommendations to ensure adequate reserves and long-term stability. Water remains the
most pressured utility,with declining revenues and reserves not projected to reach targets until 2032,
driving a proposed 15% rate increase and acknowledgment of future treatment plant needs. The
sewer and stormwater funds are more stable, with modest increases (3%for sewer and 10% initially
for stormwater, followed by 5% annually) expected to maintain positive cash flow by 2030.
Key challenges include Orono's low density, limited commercial base, and high fixed infrastructure
costs, all of which constrain revenue growth. The average water customer uses about 4,000 gallons
per month, resulting in a utility bill of roughly$141 that covers water, sewer, stormwater, and
recycling. Because new homes are not required to connect to municipal water and only about 30% of
residents use the system(most rely on private wells), the financial burden is carried by a relatively
small group of users. Options beyond rate increases, such as connection fees, assessments, or levy
support, were discussed and staff were directed to model alternatives to the 15%water rate increase.
ENTERPRISE FUND BUDGET
In the 2026 enterprise fund budget, challenges are driven by inflation, union negotiations,paid
family medical leave requirements, health insurance, as well as rising information technology and
facilities priorities. While cable fund revenues continue to decline and training and development
costs rise with staff turnover, golf course green fees have remained stable. The Metropolitan Council
wastewater fee increase (5.85%) may be split out for transparency. The next steps in the budget
process include a September 8 work session on the general and internal service funds, followed by
adoption of the preliminary budget and levy on September 22.
ADJOURNMENT
Work session ended at 5:51 p.m.
ATTEST: CITY COUNCIL
qa----L____.
Chris ' usia , Clerk Bob Tunheim, Mayor