City staff have asked the Sycamore City Council to increase utility rates to cover higher costs, fund capital improvement projects and maintain financial stability for Sycamore’s water and sewer funds.

In his Oct. 14 letter to City Manager Michael Hall, Sycamore Public Works Director Matt Anderson said he and city staff recommend increasing the water user fee, the meter maintenance fee, the radium removal fee, the infrastructure fee and the sewer user fee by 2.75%.

Sycamore residents who use an average of 800 cubic feet of water a month, with a three-quarters of an inch meter, would pay an additional $3.50 a month on their utility bill if the rates are increased as proposed, according to Anderson’s letter.

The City Council is expected to consider the proposal Monday at its regular meeting, which is set to start at 6 p.m.

Anderson said his request is being made at a time when the consumer price index for water, sewer and trash collection services has increased at a faster rate, 5.3%, than the normal consumer price index, 2.9%, has over the past year.

“Utility costs, especially capital improvements, are not linear,” Anderson wrote. “It is vital to maintain a proper fund balance to cover future improvements. By adjusting rates annually, significant increases can be avoided.”

The water rate and sewer rate increases are expected to bring in $118,000 and $104,000, respectively, in additional revenue. Each of those services and their associated funds is projected to operate with deficits in the fiscal 2026 budget, according to city documents. However, Anderson wrote that that’s due to planned capital improvement projects.

Sycamore’s water division is projected to have a $550,000 deficit in 2026, with its budget including $1.5 million worth of capital improvements, documents show. The city’s sewer division is projected to have a deficit of $2.9 million, while its budget allocates $4.39 million for capital improvements.

Anderson wrote that the deficits won’t mean the two funds will be drained.

“Although budgeted expenditures exceed revenues for water and sewer, and include using fund balance in [fiscal 2026], the projected fund balances for both the water and sewer funds will remain above 50%,” Anderson wrote.

The Sycamore City Council last voted to increase water user fees in March 2023. In November 2020, officials voted to impose a $6.90 water bill base fee.