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