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Association of Metropolitan Municipalities Page 1 of 2 W Metro Cities News September 10, 2009 Archives Met Council Adopts SAC Modifications and 3.8% Increase for 2010 MWC On Wednesday, the Metropolitan Council adopted 2010 Municipal Wastewater Charges (MWC) at a 3.8% increase, as well as formula changes for calculating SAC reserve capacity. The Council also adopted our recommendation to establish a stakeholder task force to study the SAC system and recommend options going forward. As we reported previously, SAC revenues are seeing a sharp decline, and the Council was divided about how to address the problem. Met Council's Environmental Services staff was asked to present alternatives for Council consideration. The Council was reluctant to go too far in raising the SAC charge, and members were also hesitant about dipping too deeply into the SAC reserve fund. Staff came back with a proposal that alters the way SAC capacity is calculated to a flow - based model that MCES staff contends provides technical improvements to the program. As part of the proposal, MWC rates would need to be increased to help offset the decline in SAC revenues. This is a funding shift that puts more of the burden for new SAC costs onto the wastewater charge, which currently, for the most part, funds operations and maintenance costs of the system. The proposal quickly wound its way through Council channels, with the Council considering a phase in of two or three years, which with a two year phase in would have put the 2010 MWC increase at 5.1 %, a spike from the original 3.1 % increase provided to cities in June for their budget planning purposes. On Wednesday, the Council elected to move forward with the formula changes (moving to a "flow" based system), with a three year phase in that increases the MWC charge 3.8%, and the creation of a task force, which we recommended. The Council's concurrence with our recommendations for a longer phase in and task force will allow the opportunity to comprehensively study the issues and consider options for the SAC financing structure. While we appreciate the urgent need to address the SAC revenue decline, we are concerned about how quickly these changes have proceeded, without adequate time to analyze the implications for cities under the new structure. At the meeting on Wednesday, several Council members voiced similar concerns, and the need to make sure that these formula changes are consistent with the Council's policies around growth and maintenance costs. In addition, the Council also adopted MCES' recommendation to alter the criteria for the SAC outdoor seating charge to allow for a 75% reduction of these charges. This change will take effect on October 1, 2009. Please stay tuned for further information on the task force. If you have any questions, please contact Patricia Nauman at 651-215-4002 or email: patCicia@i-n-e-trocitie-smn.org. http://www.metrocitiesmn.org/newsletter.litm 9/11/2009