09-03-2024 WS - Laserfiche WebLink

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Surface Water Management Fund Staff is proposing an 8.8% increase. The impact on a household would be $1.50 per quarter or $6.00 per year. This fund will require increases in excess of 5% per year for the foreseeable future. The mandates related to storm water ponds is putting a strain on the fund. Staff will need to prioritize projects and seek grant funding in order to proceed with work. Water Fund As council is aware, this fund is facing some challenges. There is a cash deficit projected in the Water Fund in excess of $750,000 at the end of 2024. Even with the rate increase being proposed for 2025, the budget shows the fund will still lose money. The goal is to try to spread rate increases out over a period of years to bring this fund back into the black. The City assesses two types of water rates – a fixed, flat fee and a rate applied to gallons used. The flat fee is meant to cover fixed costs in the fund. Fixed costs are those that do not change based on water use. These would include wages, debt service, insurance, memberships, training, and some supplies and professional services. These costs remain the same no matter how many gallons of water are used per year. Our fixed costs are currently in excess of $900,000 per year. The revenue being collected from the flat fee is approximately $350,000 per year. The City also has a rate for Service Line Repair Insurance. The cost for service line repairs has more than doubled over the past few years from $90,000 in 2021 to $194,000 in 2023. It is not anticipated that these costs will go down any time soon. Staff is proposing an increase in the flat fee for 2025, from $23.00 per quarter to $38.00 per quarter. Staff is also proposing an increase in the Service Line Repair Insurance fee from $9.00 per quarter to $13.00 per quarter. No increase to the usage rates is being proposed except to bring the two higher tiers of the commercial rates more in line with where they should be. These only affect commercial usage over 700,000 gallons per quarter. The impact of the two flat fee increases on a household would be $19.00 per quarter or $76.00 per year. A summary of all of the proposed utility rate increases is as follows: Average qtrly usage 16,000 gallons 2024 2025 % change Water Base 23.00 38.00 23% Service Line 9.00 13.00 Consumption 46.76 46.76 MN Test Fee 2.43 2.43 Sewer Base 45.69 47.52 4% Consumption 58.24 60.64 Street Light 5.00 5.25 5% Surface Water 17.00 18.50 9% TOTAL 207.12 232.10 12% 24.98$ Quarterly increase 99.92$ Annual increase