If nothing is done, the sewer plant fund in 2016 is predicted to have a $711,845 shortfall. Such a gap will eat up the fund's remaining reserve, creating a negative balance of $323,441.
The plan accepted Monday night would mean a typical residential customer — a family of four using about 7,500 gallons monthly — would pay about $5.50 more per month on the sewer plant portion of their bill.
This should leave the fund with a positive balance of about $255,000 at the end of 2016, a budget report states. By 2018, it would be about $575,000.
City Administrator Cole O'Donnell has said the health of the sewer plant fund could effect the city's overall financial rating when it comes time to issue bonds.
The plan would include increases in 2017 and 2018, but these could be adjusted when the budget is revisited during those years. The plan also includes increases to municipal and out-of-city customers' fees.
The vote Monday night was a 3-3 tie because Ald. Gary Westbrook, 7th Ward, was not present. Alds. Helen Heiland, 1st Ward; Gary Almblade, 2nd Ward; and Ed DeJaynes, 4th Ward, voted against the measure. Mayor John Thodos broke the tie in favor of the increase.
Mr. O'Donnell and Megan Petersen, the city finance director, first presented this plan Nov. 16 at the committee of the whole meeting, but it was tabled that night after aldermen asked for other ways to cut costs to minimize or avoid the increase. They were concerned about the increase atop of others already planned for the water and sewer rates for 2016.
The Nov. 16 vote was 6-1 to table action on the rate increase so staff could find alternatives. Ald. Bob Cheffer, 6th Ward, voted against the delay.
The alternatives presented Monday included a $3 increase in 2016, and 80 cent and 60 cent increases in 2017 and 2018 respectively, and the delay of several purchases in 2017 and 2018, Ms. Petersen. These steps would have left the fund with about a $20,500 positive balance in 2016 and a nearly $400,000 reserve by 2018.
After hearing the alternatives Monday, Ald. Cheffer, made a motion to adopt the original plan, leading to the tie vote. The Monday meeting, between normally scheduled meetings, was called to keep the city's budget process pegged to December deadlines.
The $5.50 increase would be on top of an additional increase already planned for 2016, which will add an additional $11.60 to the typical water and sewer bill.
The total 2015 water and sewer bill a month for the typical customer is $113.26, Ms. Petersen said. Counting the sewer plant and previously approved increases in other rates, the 2016 monthly bill would be $130.36.
Also Monday night, the aldermen approved a preliminary budget for 2016. The vote was 5-1 with Ald. Almblade voting against.
The city is expected to have about a $1.6 million overall deficit, Ms. Petersen said. About $1 million of that is in the city's general fund.
Some — $442,875 — would be in expected increases in health insurance costs, Ms. Petersen said. Another $95,000 is expected in salt purchased for the roads.
Another $417,220 are anticipated expenditures from dedicated funds for capital projects and other uses, Ms. Petersen and Mr. O'Donnell said. About $323,225 of that is from landfill host fees to maintain the old city landfill; $79,000 is for the purchase of radios for East Moline's first responders.
The preliminary budget was a version that factors in the sewer plant increases as well as a garbage service increase the aldermen gave tentative approval to at the Nov. 16 meeting.
If nothing is done, the garbage fund has a projected $13,870 shortfall for 2016.
The 20-cent increase in the monthly garbage fee of $7.15 would add about $15,000 to the fund, filling in that shortfall, staff said.
The sewer plant increase, the garbage increase and the preliminary budget must all receive final approval. The measures are expected at the Dec. 7 city council meeting for action.
Mayor Thodos told council Monday that if a final action is not taken Dec. 7 that leaves the city with a finalized budget, then he plans to convene another meeting within 48 hours.