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cc�2� Cam• <br />(9/0 a _ Gdt e (JIItGClCL /I <br />515 Lillle Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www. ci.1it( le -Ca Hach. in ns <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Joel Manson, City Administrator <br />Shelly Rueelcert, Finance Director <br />DATE: March 9, 2012 <br />RE: 2012 Water and Sewer Rates <br />Water <br />MAYOR <br />1011 Illesener <br />COUNCIL <br />(tick Montour <br />John Ms <br />Michael McGraw <br />Shelly Boss <br />A.DAMINIS7RATO12 <br />Joel It. Hanson <br />The 2011 Budget for the Water Utility Fund anticipated a net loss of $22,761. The estimated actual <br />2011 net loss is $4,832. This positive variance of $ 17,929 is attributable to an improvement in gross <br />margin on water sales through the 3rd quarter water, along with catch up billings generated in the 4111 <br />quarter by the meter replacement program. <br />The 2012 budgeted operations are expected to produce income of $2,136. The budget includes St. <br />Paul Regional Water Services (SPRWS) rate increase of 6.5 %. The 2012 revenues include a 2.5% <br />increase in the usage rate and no change in the water service charge. Projected revenues assume 4% <br />in unaccounted for water. Given the completion of the meter replacement program in 2012 this is <br />considered a conservative allowance. Gallons of water sold have been projected at a 4 % increase <br />over the prior year. This is also considered a conservative estimate given that the three year average <br />of gallons sold would produce a 6% increase in sales. 2012 personnel costs were reduced by $6,538 <br />to reflect lower costs anticipated due changes in staffing levels (partially offset by temporary help <br />used to input new meter information generated by the replacement program). <br />The 2012 Water Fee Survey reflects that the City's proposed 2012 rates compare reasonably to other <br />municipalities purchasing their water from SPRWS. Furthermore the conservative estimates used in <br />connection with sales and gross margin may again provide the ability to absorb future rate increases <br />proposed by SPRWS. <br />11:AIoc111VCorrespondenceAloci 2012 \Water & Serer Rate Memo - 3.09.12.doc <br />1 <br />