03-08-95 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL MARCH 8, 1995 rates be based on either a flat rate or family size. Morelan pointed out the table on page 76 of the agenda. He noted that only four of the cities shown on the table charged for sewer based on water usage. The rest charged residential sewer on a flat rate basis. Pedersen asked how the City was charged for sewer. The Administrator reported that sewer is metered, and the City is charged accordingly. Morelan also noted that based on the table on page 76, the City has higher residential sewer rates than the average of the 10 to 12 cities shown. The City is considerably lower in its commercial rates, however. Therefore, in order to equalize rates, it seems that commercial rates should be increased. Fahey asked if rates were a pass-through charge or if personnel costs were included. The City Administrator replied that rates are determined by a combination of expenses based on personnel costs and operating system expenses, but the major portion of the rate is the pass-through cost from the MCWWSD. Fahey asked why the City's rates were so different from those of other cities. The Administrator replied that many times differences can be explained by accounting issues involving what expenses are charged against the funds, what is being written off, depreciation, etc. Morelan pointed out that depreciation is a biq portion of the City's expense. Morelan pointed out that on page 76, the City's residential rates mirror the average while commercial rates are under the average. Morelan felt that based on that information, a commercial rate increase was warranted. The Administrator pointed out that under the current system a residential home with high water usage is paying the same sewer costs as a low-volume water user. Multiples are currently paying 70% of the residential rate. There may be some logic to this since it is 10