By Chad Koenen

Publisher

Henning Public Utility water and sewer customers will likely see an increase in their utility rates beginning in 2027, but just how much of an increase has yet-to-be-determined.

During a special city council meeting on Monday, Sept. 28, the Henning City Council approved a resolution to increase water rates by 38 percent and sewer rates by 21 percent beginning in 2027. As part of the resolution the council also agreed to an annual increase of three percent for each rate through 2055. 

The resolution came at the request of the Public Financing Authority (PFA) to help fund the latest utility and street project that will cover a wide portion of School Avenue, Marshall Avenue, Hipple Avenue, Front Street, Jensen Street, Milne Avenue, Minnesota Street and portions of several other streets in town.

Sam Rupert, of Apex Engineering, said the resolution has always been a requirement of the PFA to ensure projects are fully funded, but past loan officers at the PFA operated with the understanding that the cities that who received the financing would act in the best interest of the community and ensure adequate funding was available to service the debt. He said recent retirements by long-time PFA employees have given way to new employees who require the resolutions be followed more closely moving forward. 

“It’s always been a requirement of the PFA…but past loan officers we had that were experienced and tenured had more of a mutual understanding that the city would do whatever it had to do (to fund the project),” he said. “It used to be a mutual understanding. With the new staff they are kind of cracking down (on the resolutions).”

After hearing several concerns from council members about making such a significant jump in rates in one year, Rupert said he made the PFA aware that additional funding could be coming into the city’s utility coffers in the near future if a new extension to the water contract with the City of Ottertail is approved by both communities. Rupert said it was his understanding that the new contract with the City of Ottertail could lead to more revenue for the City of Henning to provide water to the community and a representative he spoke with at PFA said there may be some wiggle room with the resolution to decrease the amount that Henning needs to increase its rates to fund the project.

“If things change, if things come up and the budget moves you can alter it,” said Rupert.

After both council member Jessica Strege and mayor Jesse Hermanson questioned Rupert if a smaller increase could be made now knowing that additional revenue could be coming into the city just a year or two down the road, Rupert said it was his understanding the city could do that as long as enough funding is coming into the city to fund the project. However, he said until the final numbers are known regarding the water contract with the City of Ottertail and potential additional income, Rupert recommended the city approve the resolution as presented and attempt to finalize how much of an increase the city council will need to approve to fully fund the project by the end of the year.

“I’ve gotten the sense they don’t really care much as long as that last number is in the black,” said Rupert. “And right now this is where the math comes out.”

The city council approved the resolution to increase water rates by 38 percent and sewer rates by 21 percent beginning in 2027, as well as an annual three percent increase through 2055 with the goal of potentially lowering that initial number before the new rates are implemented.