03-13-2013 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL MARCH 13, 2013 share of costs will drop to 65% while Roseville's remains at 71%. That would equate to a savings of $76,714 from projected 2013 SPRWS charges and would fully negate the projected loss. The Administrator noted that the SPRWS Board has not yet acted on the study, although the General Manager indicated that it is likely they would apply the reduction to all 2013 billed water usage. There are a few complicating factors such as how SPRWS new "fixed fee" rate component impacts the study results, did the City really get the appropriate credit for debt service payments, and is SPRWS willing to address the past couple of years that Little Canada has been paying for unrelated debt. The Administrator indicated that he feels the City will be able to work through these issues with SPRWS. Therefore, staff is recommending a 3% rate increase at this time. The 3% rate increase coupled with the SPRWS 6.5% increase, results in a projected loss of $32,009. Given the 2012 projected profit, City staff believes the City is able to handle this situation on a one year basis. With regard to the Sewer Budget, the Administrator reported that the 2012 Sewer Utility Fund budgeted a deficit of $50,270, with actual operating results at a loss of $56,868. Projected revenues were off by $41,000, but personnel costs were down by about $28,000. Coupled with higher investing earnings and some other expense reductions, the City absorbed most of the unrealized revenue. The Administrator noted that with no rate increase in 2013, budgeted operations are projected to result in a loss of $34,234. The primary reason for the reduced loss is a reduction in treatment costs from Metropolitan Council Environmental Services (MCES) for 2013. Another positive factor is the City's projection that infiltration /inflow corrective work started in 2012 and scheduled for completion in 2013 should result in reduced flows. The Administrator noted that coupled with the fact that depreciation accounts for $130,000 of the City's expenditures, staff believes a sewer rate increase can be avoided for 2013. The Administrator recommended the following 2013 utility rates: Sewer Minimum Sewer Use Rate Water Winter Rate Water Summer Rate Water Service Fee 3 2012 2013 $55.00 $55.00 $3.58 $3.58 $2.95 $3.04 $3.05 $3.14 $12.60 $12.60