03-09-2005 Council Agenda - Laserfiche WebLink

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When we compare the multi- family account's effective rate per 1,000 gallons to the single family residential effective rate, we learned that multi- family units were paying an effective rate of $3.67 vs. single family at or below minimum paying $5.93 per 1,000 gallons. Based on this comparison, staff believes the 25% discount factor should be removed from the multi - family properties. This would create $67,700 in additional revenues. The increase in sewer costs from these properties is partially offset by the savings these properties are receiving by lower water service charges and water rates. The net increase in billed amounts ranges from (-2.3%) to 25 %. The typical increase is 3 to 5 %. See exhibit B. The apartments seeing the 25% increase are all located in Vadnais Heights along County Road D. Little Canada provides sewer for these properties but not water. Therefore, these properties have no savings due to water adjustments. The 2005 Sewer Rate survey attached (see exhibit C) contemplates these rate changes. As you can see from this survey, Little Canada remains competitive for rates. With the rate adjustments described above the 2005 operating loss would be $12,036. This loss does not factor in anticipated revenue growth from the redevelopment along Rice Street and additional single family homes slated for construction in 2005. With this growth, along with non -cash depreciation expense this operating loss is considered acceptable for 2005. Staff is continuing to pursue Inflow and Infiltration issues. If we are successful in detecting and correcting these sources of I & I, it will reduce future treatment costs and help keep rates as low as possible. Staff is recommending that the council approve the rate adjustments as described above.