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W BATE: January 27, 2005 TD: IMiko Morrison, City Manager FROM: Roger Larson, Finance Director Todd Hubmer, PF - City Engineer ITEM: 2005 WATER/SEWERRATES This memo has been. written to provide Council with an update and recommendation for adjustments to the 2005 water and sewer rates. These recommendations are based on projected. expendifures for operation and maintenance of the water and sewer utilities. i7Ate . St. Anthony water rates for 2004 were $1.73 per 100 cubic feet (CCF) of water used. The 2004 watcr rates are broken down as follows: $1.16 - Annual Operating Budget $ .52 - $2,200,000 Water/Sewer Revenue Bonds 2003E a) Kenzie'rerracc/27°i Avenue Sanitary Sewcr b) Water Treatment Chemical Upgrades c) Well house 3,4 & 5 Upgrades °L05. - Non/Recurring Maintenance (implemented in 2003) $1.73 The water rates have not been adjusted for changes in annual operation costs since 2003. Based on the proposed 2005 operations budget and the anticipation of additional non-recurring maintenance items, it is proposed to increase water rates in 2005 by $0.'10 CCF, which equates to a rate of $1.83 per '100 cubic feet. A breakdown of the proposed 2005 water rates is as follows: $1.21 - Annual Operating Budget (05 cent increase) .52 - $2,200,000 Water/Sewer Revenue Bonds 2003E a) Kenzie Terrace/27`h Avenue Sanitary Sewer b) Water Treatment Chemical Upgrades c) Well House 3,4 & 5 Upgrades $_L0 - Non/Recurring Maintenance (.05 cent increase) $1.83 The non-recurring maintenance portion of the water rate was approved in 2002 and implemented in 2003. The purpose was to provide funding for improvements to the sewer and water system. These improvements are not to be considered as projects with an immediate need for funding or completion; rather they are improvements that are made over time as funding becomes available.