03-09-2005 Council Agenda - Laserfiche WebLink

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MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Joel Hanson, City Administrator Shelly Rueckert, Finance Director DATE: March 4, 2005 RE: 2005 Sewer Rates Attached is the revised 2005 Sewer Utility Fund Budget. In 2004 we budgeted for a loss of $106,826 in the Sewer Funds including the 2004 rate increases. The actual 2004 revenues exceeded budget by $ 17,431 which basically represents late fees not budgeted. Waste treatment costs for 2004 were $98,936 less than budget. These savings, along with other items, reduced the projected loss of $106,826 down to an actual loss of $6,097. The 2005 estimated loss is $12,036. This includes $85,725 in additional revenues due to rate adjustments. The 2005 waste treatment costs are based on actual billings expected from Met Council. For 2005 Met Council revised its billing procedure and this resulted in the 2005 charges being a known amount versus an estimated figure. We have reviewed the sewer billings to various customers - single family residential, apartments /condos, senior facilities, and commercial properties. Based on this analysis it is staff's recommendation that two rate adjustments be implemented in 2005. First, the rate for usage above 15,000 gallons should be raised from $2.75 to $3.00 (9 %) per 1,000 gallons of water usage. This would make the rate equal to the rate used for the minimum ($45 for the first 15,000 gallons). This adjustment would produce approximately $5,150 in revenues from residential properties and $12,875 in revenues from commercial properties. For a single family account using 20,000 gallons this year, it represents a $1.25 increase in their quarterly charge. The impact on commercial is dependent on volume. We have approximately 130 commercial accounts which regularly exceed 15,000 gallons in usage. Approximately 46% of these accounts would see an increase of 4.5 %, 23% would see an increase of 7% and the balance of the large users would see an increase between 7 -9 %. Again the rates would be level with large users paying closer to the same effective rates as smaller users. The second adjustment impacts multi - family properties. Multi- family properties' minimum sewer charges are based on the $45.00 minimum used for single family times the number of units. Currently this amount is discounted 25% to achieve multi - family sewer minimums.