11-10-2004 Council Agenda - Laserfiche WebLink

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review of neighboring cities' rates, and the completion of negotiations with SPRWS regarding wholesale rates, revised rates will be discussed with the Council. The addition of Schroeder Milk as a customer in 2003 and other recent growth has generated additional revenues in 2003 and 2004. These additional revenues have helped offset rate increases by SPRWS and other operating increases over the past two years. The SPRWS has proposed a 2005 rate increase of 6.7 cents per 1,000 gallons in 2005, an approximately 3.2% increase. The 2005 Budget is prepared on the basis that there is no change in the wholesale contract price and includes the impact of the SPRWS 2005 rate hikes. Even with this conservative scenario, the fund's 2005 projected loss is just $9,462. Therefore, it would be unlikely that staff would recommend any rate increase for 2005 even under the worst case scenario. Again, any rate revisions will be presented to the Council prior to 2005 Is' quarter billing. Sewer Like the Water Budget, the 2005 Sewer Budget does not reflect any increase in rates. Again, upon the billing of the 4th quarter, the review of neighboring cities' rates, and the further analysis of 2004 revenues and expenses, revised rates will be proposed. It should be noted that Met Council has modified its billing method. The City will be billed based on its actual usage for July, 2003 through June, 2004. The Met Council determined the amount of overall billing revenues they required for their 2005 Budget. From that, they determine the City's 2005 cost based on their pro -rata share of total metered flow. Our cost for 2005 is set at $774,607. The City raised its rates in 2004 which generated additional revenues. The Sewer revenues were also impacted by 2004's 1st quarter water usage being greater than the prior years. Since sewer billing rates are set based on 1" quarter water usage, this increase positively impacted 2004 Sewer revenues. Assuming revenues similar to budgeted 2004 revenues, the fund is projected to have a loss of $112,692 in 2005. We will address the need for further rate adjustments in connection with our review of the Inflow and Infiltration Study findings with the engineer. Rate revisions will be presented to the Council prior to 2005's 1st quarter billing. As always, we will address any of your concerns regarding this proposal at your convenience or during the Council meeting.