05/28/1991 Council Minutes (2) - Laserfiche WebLink

Home Search

174 COUNCIL MEETING MAY 28, 1991 the report and recommend a revised rate structure as outlined in Resolution No. 49 - 91. Mr. Schneider noted that the City Council did meet on May 2, 1991 in a work session and discussed the proposed schedule of rate increases in the amount of about 5% for homeowners using 20,000 gallons of water per quarter. He is also proposing that rates be increased annually at about 5% to follow inflation. Mr. Schneider used the overhead projector and presented exhibits detailing his analysis of the rate structure from 1988 through 1994. He gave some reasons for the need to increase utility rates. One reason is that the cost of waste treatment at MWCC is growing much more rapidly than the City's growth rate. Currently approximate 53% of a citizens sewer bills is sent to MWCC. The second reason for the need to adjust utility rates is that the water utility experienced a 15% loss in 1990. Mr. Schneider proposed to increase utility rates according to the rate of inflation. This increase should help recover some of the losses and provide a stable basis for bond repayment. He noted that if inflation is reduced the proposed rates could be adjusted. Council Member Reinert said it was thought that placing more water users on the system would help stabilize the rates. That does not appear to be happening. Mr. Schneider said he felt that the system is getting more efficient and with an adjustment in rates, the problems associated with inflation should be eliminated. Council Member Reinert asked that the rate structure be examined bi- annually to avoid steep changes in rates. Mr. Schneider noted that the sewer and water user rates in Lino Lakes are comparable to other similar sized cities. The problem for Lino Lakes is that an additional charge is added to the water bills to cover some of the bond repayment. This problem occurs in Lino Lakes because of the City Charters restriction on assessments. Mr. Schneider explained that the material presented tonight will be given to the City Bond Consultant for his review. Mayor Bisel asked if there would be any point where the rate structure would allow the utility system to break even. Mr. Schneider explained the biggest break would be to change the City Charter so that the City could assess properly. Mayor Bisel opened the public hearing at 8:40 P.M. There was no one to speak for or against this matter. Council Member Bohjanen moved to close the public hearing at 8:41 P.M. Council Member Neal seconded the motion. Motion carried unanimously. PAGE 8