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CITY COUNCIL WORK SESSION JANUARY 17, 2001 <br />Staff explained the process used to determine the new utility'rates. Staff recommended <br />sewer charges be raised to $72.00 per quarter. This is an increase of $21.00. Staff noted <br />there was no increase to the sewer charge last year and recommended the rate increase be <br />consistent for the next three -(3) years. The price includes depreciation, usage operating <br />costs, and disincentive for high use. Staff also recommended the following tier system be <br />used for the water charges, noting the base rate of $10.00 per quarter would stay the <br />same: <br />0-10,000 gallons of water <br />10,000 — 30,000 gallons <br />above 30,000 gallons <br />$1.70 <br />$2.05 <br />$2.40 per thousand gallons <br />Mayor Bergeson inquired about the number of customers in the highest rate. Staff <br />advised average water use is 32,000 gallons per quarter. The most usage is in the summer <br />months. <br />Mayor Bergeson stated the City does need to determine rates base <br />and operating costs. He stated that the question is whether the <br />or eases into the appropriate numbers. <br />Staff advised the proposed numbers do allow for de <br />erving water <br />all at once <br />The Finance Director added that if depreciate . {,; ded, the water and sewer funds <br />have been working at a loss for the las - including depreciation. <br />Council Member O'Donnell a pr posed rates compare to other communities. <br />Staff advised the rates are <br />the fty of Lino Lakes has always been higher. <br />The Finance Dire ,: 3 . is ed a handout regarding the Combining Statement of <br />Revenue, expenses � a s in retained earnings. <br />Council Member 0' nnell asked how the new rates would be communicated to the <br />residents. Staff advised a public hearing has been published and notices went out. Staff <br />noted the bottom rate is a nominal increase to take place of a specific senior rate. <br />Council Member Reinert asked what will be done with the additional revenue. The <br />Finance Director stated the revenue will accumulate in the water fund to pay for future <br />replacements. <br />The City Engineer noted the core budget of sewer and water will not be affected. <br />Council Member O'Donnell indicated he will support the staff recommendation. <br />11 <br />