03-12-2003 Council Agenda - Laserfiche WebLink

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of Little canerd COP1PIUIYITv PRIDE 1953 - 9003 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766 -4048 wmw.ci.1ittle- canada.mn.us MEMORANDUM TO: Mayor Fahey and Members of the City Council FROM: Joel Hanson, City Administrator DATE: March 7, 2003 RE: 2003 Water & Sewer Rates MAYOR iA Michael 1. Fahey COUNCIL. Jim LsValle \Iatr Anderson Rick Montour Bill Blesener ADAmyis 1C i1OR Joel R. 1- .Ianson Attached are the revised 2003 budgets for each respective utility referenced above. In 2002 we budgeted for income of $2,388 with a current estimated loss of $21,028 in the Sewer Fund. For 2003, initial estimates with no rate changes indicated a loss of $66,279. Please note that Metropolitan Council Waste Water Services (MCWS) increased its rate for 2003 by 5.7 %, the 2002 increase was at 4.2 %. While the maximum charge for sewer was dropped in 2002 no other rate changes have been made since 1998. An increase in the rate per 1,000 gallons to $2.50 would generate additional revenues of approximately $58,000 (at an 80% application rate). Additionally modifying the percentage of minimum unit charge for multi - family from 70% to 75% would increase revenues by $7,500 annually. With these two modifications the 2003 estimated loss for the Sewer Fund would be less than $1,000. Based on the attached survey of 2003 Sewer rates, our recommendation results in rates that are comparable to neighboring Cities. in the Water Fund, we are projecting income of $46,749 without rate increases. This income includes the Water Fund absorbing a 2% increase in water rates by St. Paul Board of Water Commissioners, in addition to last year's 2.9% increase. The Water Rate Survey attached reflects our rates as comparable to other cities with softened water. However, the survey also reveals the downward pressure on rates given prior transfers of certain water systems to St. Paul. Little Canada has had four straight years of water rate increases. The $179,382 projected increase in water revenues is substantially attributed to Schroeder Milk being added to the water system in late 2002. Given the anticipated income levels for 2003, no rate increase for water is being proposed.