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City Council Regular Meeting Minutes October 13, 2009 Page 5 1 expenditures of $810,920. The deficit of ($13,560) was offset by miscellaneous revenue such as 2 late fees, interest earnings and sewer connection charges. 3 4 City Manager Mornson and Finance Director Larson provided a PowerPoint presentation on the 5 proposed City of St. Anthony Sewer Rate Increase, including the following information: 6 ■ 2008 Sewer Revenues & Expenditures 7 ■ 2009 Projected Sewer Operating Costs 8 ■ Charges for 2010 Sanitary Waste Disposal Increased by the Metropolitan Council 9 • 2009/2010 Projected Sewer Operating Costs 10 ■ Rate Needed to Balance Budget: 11 o Recommended rate of $3.50 per 1,000 gallons 12 o Current rate = $3.30 per 1,000 gallons 13 ■ Residential Impact 14 ■ Impact, of Future Increases 15 16 City Manager Morrison requested direction from Council on amending Ordinance 33.108 by 17 increasing the current sewer rate to $3.50 per 1,000 gallons. He advised staff recommends that 18 discussion on providing funding for future infrastructure improvements by increasing the sewer 19 rate to more than $3.50 per 1,000 gallons be deferred to the 2010 goal setting. 20 21 Councilmember Thuesen expressed concern that cities seem to be penalized for the Metropolitan 22 Council's inability to anticipate the loss in SAC Credits. Mayor Faust commented that the 23 growth in the past likely subsidized a lower rate than should have been charged. 24 25 There was additional discussion on the role and authority of the Metropolitan Council. 26 27 Councilmember Roth questioned what funds will be used to cover the 2009 shortfall of $45,990. 28 Finance Director Larson replied that there is an adequate balance in the Water and Sewer Fund to 29 cover the shortfall. 30 31 Councilmember Roth inquired whether there should be consideration of a rate increase higher 32 than the $3.50 recommendation. Finance Director Larson explained that this fund has been 33 looked at as a break even fund. This should be achieved with the rate of $3.50 per 1,000 gallons. 34 35 Councilmember Roth asked whether it would be appropriate to repay the Water and Sewer Fund 36 for the $60,000 used to cover the 2008 and 2009 deficits. Finance Director Larson replied that 37 the fund balance is approximately $200,000. Periodically the City Engineer has looked to this 38 fund as a funding source for projects. Mayor Faust noted that previous surpluses in the fund were 39 used to cover the deficit. 40 41 Councilmember Gray suggested future discussions about designating the $200,000 fund balance 42 for capital improvements. There should also be discussions on the additional revenue that may 43 occur from the tiered water rate structure that will be implemented. 44