A proposed 5% electric rate increase was a point of focus for council members and meeting attendees during a 2025 budget discussion Monday, Nov. 25.
The council appeared to be split on a potential increase, with members formulating arguments for and against it.
Three aldermen – Sam Kelley, Ward I; Tim Ceplina, Ward II; and Don Romines, Ward III – appeared to be in favor of an increase.
Kelley argued that electric rates are the “moneymaker” for the city, and generally have to be increased to make the budget work. He also stated that reserves are meant for catastrophic situations, not to balance the budget, or pay for the city’s infrastructure needs.
Romines said that the city has some of the lowest electricity rates in the area, citing a study from March 2022. He believes a 5% increase is justified since the city opted against a 2.5% increase for 2024.
Ceplina stated that he felt an increase was necessary to balance the budget and avoid any further losses.
Mayor Viki Narancich and council members Fred Stottlemyre, Ward I, and Sheila Walker, Ward II, presented opposing views.
Narancich believes interest income from Certificates of Deposit (CD) and checking account reserves can be used to resolve any deficits in the budget. Currently, the city’s draft budget has an approximately $400,000 deficit when factoring in the 5% electricity rate increase.
During the meeting, a business owner suggested the city could change its health insurance offering to balance the budget. Currently, the city pays insurance premiums for employees and their families. The service costs the city over $61,000 per month. The city could pay for fewer family members or increase deductibles to help balance the budget.
Additionally, transfers from various funds such as pool payments, land purchases and tax fund expenditures to the general fund are only made at the end of the year. Once those transfers are made, the city will have a better understanding of where the budget stands.
Narancich also argued that revenue in the electric fund cannot be used for general fund expenditures, and would only marginally help other parts of the budget.
Several chamber board members were present to discuss the negative impacts an increase would have on local business.
The city council has a regular meeting at 6:30 p.m. Monday, Dec. 2 at city hall.
