CC PACKET 02251992 - Laserfiche WebLink

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• MEMORANDUM DATE: February 20, 1992 TO: Thomas D. Burt, City Manager FROM: Roger Larson, Finance Director ITEM: INCREASE IN 1992 WATER RATES At the May 7, 1991 work session, staff reviewed with Council the water filtration budget to determine an appropriate strategy to maintain funding for the carbon filtration plant. As we discussed, for the first ten years federal funding is to maintain 90% of the operating costs and the City of St. Anthony 10%. After 10 years, St. Anthony will bear the full cost. These costs can be significant with carbon changes costing approximately$80,000 plus which make it essential to carefully plan the use of these monies to fund plant operation/maintenance. Four funding analysis' were presented showing the costs of operation, paying off the debt, rebonding the debt and what financial direction the City needed to take to provide funding for operation of the plant at a minimal or no cost to the resident. • These options included: 1) Paying off the debt. 2) Keeping all existing cash and rebonding in '93. 3) Paying off the debt in '93 and levying a one time 3 cent per 100cf of water consumed. 4) Rebonding the debt due in '93 and levying a one time 3 cent per 100cf of water consumed. After reviewing the financial data, Council was in agreement with staff to pay off the debt in '93 and levy a one time increase in water rates of 3 cents per 100cf. These funds (approximately $15,000 annually ) will be used to fund the City's portion of operating costs for the first 10 years and all years thereafter will be used for building maintenance, repairs, improvements and modifications to the system. This one time levy will help provide all St. Anthony residents with clean/safe water and costs the average homeowner 75 cents per quarter. Other funding will come from interest earnings from investment of the Army money over the life of plant. Recommendation: • Council amend Ordinance Section 550.00, subdivision 2 & 3, increasing water rates to 83 cents per 100cf (beginning 1/1/92) to establish funding for the operation and maintenance of the water filtration plant.