03-09-2016 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL MARCH 9, 2016 Keis introduced the following resolution and moved its adoption: RESOL UTION NO. 2016-3-51— APPR O VE THE FISCAL POLICIES UPDATES AS PRESENTED BY THE CITYADMINISTRA TOR IN HIS STAFF REPORT The foregoing resolution was duly seconded by Montour. Ayes (5). Nays (0). Resolution declared adopted. 2016 WATER & The City Administrator stated that Staff is proposing a three percent SEWER RATE increase in water rates for 2016 to get rates that sustain the Water Fund. ADJUSTMENTS He explained that in 2015, a $28,000 loss was projected for the Water Fund, but it ended up having a profit that was largely attributable to the refund and rate reduction from the St. Paul Regional Water Service. The City Administrator stated that in 2016, St. Paul Regional Water Service is not changing the rates the city pays, and a net loss of $75,509 is projected with no increase in rates. He explained that having a small loss in the water fund has been an acceptable practice as long as we cover our operating costs and the projected transfer of depreciation to the Water & Sewer Capital Replacement Fund. He noted that in order to keep the loss manageable this year and avoid more dramatic increases in the fiiture, staff is proposing a three percent increase in the water rates. The winter rate would increase from $3.20 per 1,000 gallons of water to $3.30, and the summer rate would increase from $3.31 per 1,000 gallons to $3.41. The City Administrator stated the 2015 budgeted loss for the Sewer Utility Fund was $52,520, but it also ended up with a profit. He explained that our sewer rates have been helped in the last few years because of the large reduction in treatment costs paid to the Metropolitan Enviromnental Services during that time. The City Administrator stated that Staff believes the minimum sewer charge is too high for lower volume users. He explained that the current $50 minimum covers usage up to 15,000 gallons, however, users of 6,000 gallons are paying $8.33 per 1,000 gallons of sewer usage versus our rate of $3.58 per 1,000 gallons for users over 15,000 gallons. He stated that disparity is too high, and reviewed the key factors for the Council to consider. The City Administrator stated the option that Staff feels is best consists of implementing a $15 per quarter base fee, a minimum charge including the base fee totaling $43.64 that covers up to 8,000 gallons, and then keeping the per gallons charge at $3.58 per 1,000 for amounts over 8,000 gallons. He explained this would generate additional revenue of $65,500, and reduces minimum charges by 13 percent for lower volume accounts. He noted that the downside is that a 15,000 gallon user would see a 37 percent increase their quarterly bill 11