03-25-2015 Council Packet - Laserfiche WebLink

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515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766-4029 / FAX: (651) 766-4048 ww w,ci.l i tt lc-canada.nn.us MEMORANDUM TO: Mayor Kcis and Members of the City Council FROM: Joel Hanson, City Administrator Sharon Provos, Finance Director DATE: March 20, 2015 RE: 2015 Water and Sewer Rates MAYOR John Kcis COUNCII. Rick Montour Michael McGraw Toni Fischer Christian Torkclson ADMINISTRATOR Joel R. Hanson With'first quarter utility bills going out by mid-April, we need to finalize our water and sewer rates for 2015. Here is a summary of each component: Water The 2014 Budget for the Water Fund anticipated a net loss of 4 H,11(. The projected actual results anticipate a net Loss of 4 i C 0,112. This negative variance of i i=; ,6% is largely attributable to the wetter than normal summer that kept lawn watering usage down. The negative variance was also impacted by the cost to repair the eight water main breaks (and the resultant water loss) that occurred when the water tower was repainted and not in use due to the higher system pressure that resulted. In 2015, we are anticipating receiving a credit of approximately $135,000 from St. Paul Regional Water Services (SPRWS) for charges associated with the execution of a new contract with them. That contract amendment results in lower wholesale water costs by dropping the percentage of St. Paul rates we pay from 71% to 65%. This credit more than offsets the $116,442 loss in 2014. Projecting a shall loss in the water fund has been an acceptable practice as long as we cover our operating costs and the projected transfer of depreciation to the Water & Sewer Capital Replacement Fund. From a depreciation standpoint, we project $250,000 in the Water Fund (601) and $146,000 in the Sewer Fund (602). To service debt associated with the new Public Works Building and still provide some capital funding for system needs going forward, we have budgeted $300,000in the 604 fund so we have an adequate cushion to absorb some loss. However, to keep the loss manageable and avoid more dramatic increases in the future, staff is recommending a 3.25% increase in our water rates for 2015. As a result, the winter rate would increase from $3.10 per 1000 gallons of water to $3.20. The summer period rate would increase from $3.21 per 1000 gallons of water to $3.31. 'these rates are still very competitive with other users of SPRWS water as evidenced by the 1