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515 Little Canada Road. Little Canada, MN 55117-1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www. ci.little- Canada. mn. US <br />TO: Mayor and Council <br />FROM: Shelly Rueckert <br />Joel Hanson <br />DATE: March 3, 2004 <br />MAYOR <br />Michael 1. Fahey <br />COUNCIL <br />Jim LaValle <br />Mitt Anderson <br />Rick Montour <br />Bill Blesener <br />ADMINISTRATOR <br />Joel R. Hanson <br />RE: 2004 WATER & SEWER RATES <br />Attached are revised 2004 budgets for each respective utility fund referenced above. In <br />2003 we budgeted income of $44,499 with a current estimated income of $45,977 in the <br />Water Fund. For 2004 initial estimates with no rate change indicate a loss of $2,403. <br />This loss includes the Water Fund absorbing a 2.7% increase in water rates by the St. <br />Paul Board of Water Commissioners, in addition to last year's 2% increase. <br />The water rate survey attached reflects our rates as comparable to other cities with soften <br />water, excluding water service charge. As noted last year, with the advent of transfers of <br />water systems to St. Paul there has been downward pressure on rates. Given this factor <br />along with additional revenues anticipated from Schroeder Milk, rates were not increased <br />for 2003. While the amount of revenues produced by Schroeder Milk was well below <br />their 2004 estimates, the extreme dry conditions in August drove water sales. The fund <br />also benefited from the tiered pricing during August. Revenues for 2004 are being <br />estimated at a $4,492 increase over 2003. While 2004 usage is expected to be <br />substantially the same as 2003, the revenue increase can be attributed to the growth in the <br />number of accounts being charged a water service charge. If rates were to increase for <br />2004 each one -cent increase in rates would produce additional revenues /profits of <br />approximately $3,650. Given our current rates are comparable to other soften water rates <br />and the fund is projecting a very small loss for 2004, no rate increase is being proposed <br />for 2004. <br />In the Sewer Fund we are projecting a 2003 loss of $154,497 with a projected 2004 loss <br />of $212,206 prior to any rate increase. The rate increase in 2003 from $2.31 to 52.50 did <br />not produce the level of revenues anticipated due to the significant number of accounts at <br />the minimum charges (even in the multi- family situations). Additionally, Schroeder <br />Milk's over estimate of usage carries over to the Sewer Fund revenues being less than <br />anticipated. <br />C:A Documk- IA SI- 1GLLY- 1,000ALOCALS- IAl'empAw Sdoc <br />