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MAR 1 6 1990 Jw KDA TOLTZ. KING, DUVALL, ANDERSON _ AND ASSOCIATES, INCORPORATED E<( ,EERS ARCHITECTS PLANNERS 2500AMERICANNATIONAL BANK BUILDINO SAINT PAUL. MINNESOTA 55101 51V2024 00 March 15, 1990 FAX 51=2-00" Honorable Mayor and City Council Lake Elmo, Minnesota Re: Public Hearing 1990 Rate Structure for 201 Systems Lake Elmo, Minnesota Commission No. 9150-000 Dear Mayor and Council: One of the requirements of the 201 Grant was that the City set nip and maintain a user charge system for the operation, maintenance, and replacement of the off -site and collector sewer systems. Sections 707.050 and 707.060 of the City Code require that the Council annually review the fund balance and adjust the rate structure accordingly. A public hearing has been scheduled to receive public continent. In 1988 and 1989, the sewer charge was $120 per year for each residential equivalent unit. In 1988, the expenses were $3,607 and the income was $4,870, leaving a year end balance of +$1,263. In 1989, the expenses were $6,291 and the income was $4,870, leaving a year end balance of-$1,421, for a cumulative fund balance of-$158.00. The fund should have a 2 year ending balance of +$720 to cover future replacement of pumps and controls. See the attached worksheet from the Finance Director. A more detailed review of the maintenance records reveals two observations: The maintenance expenditures in 1988 is below what should be considered normal. The systems were completed late in 1987. In 1988, the systems were under the Contractor's warranty and any repairs to the system were performed by him, not the City. Also, the turf was just beginning to become established; therefore, there was very little mowing. 2. The maintenance expenditures in 1989 are above what should be considered normal because of a sewer repair on 32nd Street. A pipe joint to a house service had separated and the street had to be dug up to make the repair. The total cost of this repair was $2,110. Had this break not occurred, the fund would have a healthy two year balance of $1,952.00 We have recommended raising the rates for 1990 from $120 per year to $180 per year for each equivalent residential unit (ERU) except the two individual off -site systems which require minimal maintenance. The new rate structure would be as follows: