Agenda Packets - 2004/02/23 - Laserfiche WebLink

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Item No. 9D Meeting Date: February 23, 2004 Type of Business: Council Business Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Second Reading and Adoption of Ordinance 729, an Ordinance Setting Sanitary Sewer Rates for Service in the Year 2004 Background: The public hearing and first reading of Ordinance 729 was held on February 9, 2004. That draft of the ordinance dealt only with residential customers, since commercial sewer bills have always been based on consumption. It would be advisable to expand Ordinance 729 to also cover rates for commercial customers so that it won’t be necessary to refer to two ordinances to have the complete rate structure. Issues: A. Commercial Rate Structure It isn’t my intention to change the rates for commercial customers. The commercial rate structure apparently was set in 1972 based upon average consumption of 73,000 gallons of water per year, per REC (residential equivalent connection). The current study revealed an average consumption of 15,000 gallons of water per quarter (60,000 gallons of water per year), per REC. This difference may be addressed in a future rate study, but to do that now would increase rates for commercial properties. Calculation of commercial sewer charges is done by taking the prior year’s total water consumption, dividing by 73,000 gallons to arrive at consumption in RECs, RECs are then multiplied by the sewer rate of $47.00 per quarter to set the quarterly sewer charge. This charge remains constant for one year, and then the charge is reset based upon the most recent year’s consumption. B. Minimum Billing Another provision of the draft Ordinance 729 was that “In no case shall a variable rate be billed for less than five units.” This was intended to prevent snowbirds who go south for the winter from getting a free ride during the rest of the year.