03-13-2013 Council Agenda - Laserfiche WebLink

Home Browse Search

�� of YeS ganaa�a MAYOR Bill Biesener COUNCIL Rick Montour John Keis Michael McGraw Shelly Boss 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson www.ci.little-canada.mn.us MEMORANDUM TO: Mayor Biesener and Members of the City Council FROM: Joel Hanson, City Administrator Sharon Provos, Finance Director DATE: March 8, 2013 RE: 2013 Water and Sewer Rates With first quarter utility bills going out by mid - April, we need to finalize our water and sewer rates for 2013. Here is a summary of each component: Water The 2012 Budget for the Water Fund anticipated a net loss of 522,305. The actual results show a net profit of $21,007. This positive variance of $43,315 is largely attributable to higher than anticipated water sales (drier late summer /early fall) and a savings in personnel costs (no Finance Director for 1/2 year and no Accounting Assistant for most of the year). The 2013 budgeted operations, before any Little Canada rate increase and after St. Paul Regional Water Services (SPRWS) rate increase of 6.5 %, projects a net loss of 563,275. (Note: Our water purchases from SPRWS and our water sales are based on averages from the last three years. We also apply a 4% under billing factor to our charges based on historical averages.) If we passed on the same percentage increase we are absorbing from SPRWS (6.5 %), our projected loss drops to 519,530. There is one other factor in play for 2013 and that relates to the Cost of Service study SPRWS recently completed. Our current contract has us paying 71% of St. Paul rates as a wholesale customer. As you may recall, SPRWS has increased their rates more substantially the last few years given the large debt issue they had to finance system improvements (water meters, lead line replacement, and changes to the Dale Street reservoir to name a few) that had little to no benefit to Little Canada. To help rectify this issue, they conducted a rate review study. While we haven't completed a detailed review, the good news is our percentage share of costs, according to the study, should drop to 65% while Roseville's remains at 71 %. (That equates to savings of $76,714 from the projected 2013 SPRWS charges and would fully negate the projected loss noted above without any H:VoelH \CorrespondenceUoel 2013 \Water & Sewer Rate Memo - 3.0f 13.docx