02/26/2001 Council Minutes - Laserfiche WebLink

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• • • COUNCIL MINUTES FEBRUARY 26, 2001 City Engineer Powell stated the City can only assess a limited amount when replacements are made. Depreciation is derived from the total value of the system over 50 years. There will also be increased costs over that time. The increased costs will cancel out the assessments. Finance Director Rolek stated depreciation is based on historical cost only. Improvements based on the cost of the system over 50 years does not factor in inflation. Council Member Carlson referred to the Charter requirement of both systems being self-sustaining. However, the Council also has the responsibility of setting fees that are both just and reasonable. There are many different ways to look at just and reasonable fees. She noted that staff did do a lot of research for the City and other communities fees. A survey comparing rates was also done. The rates in Lino Lakes are very high. She stated she wants to see a compromise. Assessments are one avenue to look at. She stated she does support more discussion on this issue. She stated she has received calls from residents relating to seniors and fixed rates. Those options also need to be explored. One resident that called stated he paid for the system when his lot was paid assurance that the funds will be used for replacement. It is response e fo e Council to set aside dollars for funding depreciation. She stated residents need Acting Mayor Dahl inquired about the amount of addition e re ue i one year. `4ti f City Administrator Waite Smith stated the additional ve to be set aside. They can not be used for anything else. Finance Director Rolek advised that the ra additional $160,000 this year for sewer for depreciation. He noted that in the is not generating enough funds for City Administrator Waite how expensive it will be the future when the syste s the proposed rates will generate an or water. He stated the funds will be set aside ears both utilities have generated a loss. The City ment of the systems. S ed ids important for both users and the Council to understand e systems. The rates are high now, but will be even higher in replaced. Acting Mayor Dahl asked ife e additional revenue indicated in the raw data is the only amount that will be put towards depreciation. Finance Director Rolek stated all the revenues collected go into the water and sewer fund. They are accumulated to pay current and future costs. Most of the increased amount will go to depreciation. Council Member O'Donnell stated the Council did look at the possibility of a senior citizen discount. The administration of a discount would be very difficult to track and probably end up adding more cost in the end. Council Member Reinert stated the reason to table this issue is because it is a very sensitive topic. The Council may end up passing the proposed rates as is. He stated he does not want to disregard the responsibility of future costs. City staff and Council needs to exhaust all possibilities before a 5