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1 <br />1 <br />1 <br />CITY COUNCIL MEETING JULY 25, 1994 <br />proposal to increase sewer and water rates as outlined in <br />Resolution No. 94 - 44. <br />Mr. Schneider explained that a utility rate study had been <br />completed in 1991 by a consultant. Following the study, the City <br />Council enacted a resolution establishing utility rates for the <br />remainder of 1991, 1992 and 1993. The City staff has completed a <br />study of utility rates using the latest 1993 audit information. <br />A summary of the study was included in the Council packets. The <br />summary shows the necessity of maintaining an approximate 5% <br />average increase in rates for the sewer and water utility <br />billings for 1994, 1995 and 1996. <br />Mr. Schneider used the overhead projector and outlined the status <br />of the utility system and proposed rate increases for three (3) <br />years. He noted that the recent study indicated that the rates <br />should be monitored each year so that the City Council could <br />react quickly to changes. <br />Mr. Schneider explained how the study was conducted and showed <br />several exhibits on the overhead projector. The first exhibit <br />showed the revenue and expenses for the Sewer Utility Fund. He <br />noted that there is no provision for a reserve to handle an <br />emergency and also noted that the receivables are growing. The <br />Water Utility Fund is operating with more of a reserve. Mr. <br />Schneider also explained that the Metropolitan Waste Control <br />Commission (MWCC) is paid two thirds of all revenues collected by <br />the City for the Sewer Utility Fund. Mr. Schneider also noted <br />that the MWCC is being absorbed into the Metropolitan Council. <br />There should be a redefinition of their role, however, it is <br />anticipated that there will be no reduction in the rates charged <br />by the MWCC. <br />Mr. Schneider displayed an exhibit that compared the sewer and <br />water rates charged by the City of Lino Lakes to rates charged by <br />several similar cities. He noted that cities that have <br />substantially lower rates, subsidize their rates from the General <br />Operating Fund. The Lino Lakes City Charter requires that the <br />Utility Fund operate without the help of the General Operating <br />Fund. <br />The Water Utility Fund shows a small reserve balance. If the <br />proposed rates are adopted, the reserve should grow to <br />approximately $350,000.00 at the end of three (3) years. Mr. <br />Schneider noted the water user rate charge to each consumer. The <br />money generated by this fee is used to fund repairs and make bond <br />payments for water trunk lines, wells and tower facilities. The <br />City Charter does not allow area wide assessment for these <br />facilities. <br />PAGE 11 <br />305 <br />