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-3- Clerk - Administrator Zylla referenced a report prepared to the Village Council dated March 6, 1973 in which he outlined certain problems that are developing in the utility system due primarily to the increased costs in operation. With the use of an overhead projector, he showed a 5 -year history of the water and sewer utility, the effect the rate increase would have on various users, a chart showing the current debt levy for water and sewer, a survey taken by suburban utility superin- tendents showing water rates in effect in the metropolitan area, a 5- year projection of receipts and disbursements, and a 5 -year Village debt financing plan using water and sewer utility revenue. In discussion on water rates, he noted that in 1972 Mounds View residents, institutions, and businesses were billed for 258,936,290 gallons of water. This usage represents about 92 percent of the water pumped in 1972. Random sampling of 337 single family residents revealed that the average single family resident used 88,406 gallons of water per year, and the average residential bill per quarter amounts to around $10.00 or $.00045 per gallon. He noted that income is used to reduce the debt levy which has risen in the water utility from 26,970.00 in 1968 to 144,010 in 1972. While the Village is levying 5.25 mills to pay a portion of the debt levy each year the increased cost of operation is outstripping the increase in revenue generated by new users. While water revenue has risen 50 percent from 1968 to 1972, payroll expenditures have increased only 44 percent but power costs have increased 168 percent, maintenance costs have increased 227 percent, chlorine and fluoride supplies up 950 percent, office supplies up 143 percent, and insurance up 71 per- cent. The current rate structure is $6.00 for the first 10,000 gallons of water used, plus 35 cents per thousand gallons for the second 10,000, plus 30 cents for the third 10,000 gallons, plus 25 cents per thousand gallons of water thereafter. The proposal would be $6.00 for the first 10,000 gallons, and 35 cents per thousand gallons thereafter. The rate increase would effect only those businesses and residents who use over 20,000 gallons per quarter. Apartment owners can expect a yearly increase of $4.43 per apartment unit. The rate increase will generate about $4,000 in added revenue from the apartment building owners, another $3,000 from mobile home parks, and an estimated $1,000 from schools and businesses. In discussing sewer rates, the Clerk said that if it were not for the credit given by the Metro Sewer Board for the elimination of the North Suburban Sanitary Sewer District, net income for 1973 would be about $6,000.00. Village operating costs have gone from approximately $30,000 in 1971 to $42,000 in 1973, while Metro Sewer Board charges have gone from $65,000. to an estimated $127,000. if reserve capacity charges are included.