03-14-07 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL MARCH 14, 2007 $33,126. This negative budget variance was the result of lower revenues of $24,440, additional depreciation expense of $15,000 related to GASB reporting requirements, and a higher allocation of the Lino Labor Crew. The Finance Director reported that 2007 budgeted operations are expected to produce an income of $89,740. However, this revenue does not include a rate increases and reflects minimal growth. Expenses include Met Council's charge for wastewater treatment adjusted for intercommunities' flows. Treatment costs for 2007 are significantly less than prior years due to a substantial reduction in metered flows for mid 2005 through mid 2006 due to dry conditions as well as Public Works continuing efforts to correct inflow and infiltration issues. Based on these factors, the Finance Director recommended no increase in the sewer rate for 2007. The Director reviewed a survey of current sewer rates, pointing out that Little Canada's rates are in the middle of the cities surveyed. The Finance Director next reviewed the 2007 Water Budget and recommended rate increase. She noted that in 2006 the City budgeted a new loss of $9,166 in the Water Fund. The aotua12006 operations results in an estimated loss of $72,517. This negative variance was comprised of an increase in unaccounted water usage and a $35,000 increase in depreciation expense, again related to GASB requirements. The Director explained that for the past two years the City had almost no unaccounted water use, meaning that 100% of the water purchased by the City was in turn billed to end users. In 2006 the City only billed 95% of the water it purchased versus 98% assumed for budgeting purposes. The Finance Director attributed $29,395 of the loss in the Water Budget to this factor. The Director indicated that the 2007 budgeted operations are expected to produce a loss of $35,987. This projection factors in a rate increase of $.12 per 1,000 gallons from St. Paul Regional Water Services. The Finance Director reviewed a proposed increase in 2007 water rates as outlined below, and indicated that the increase is not sufficient to bring the fund to a breakeven level, but will keep the expected loss to a reasonable level: 2006 2007 Winter Rate $2.07 $2.25 Summer Rate $2.14 $2.33 Water Service Fee $10.26 $10.50 The Director reviewed the results of staff s water rate survey, and pointed out that Little Canada's rates are in the range of other cities that purchase water from St. Paul. 12