2017.12.18 CC Minutes - Laserfiche WebLink

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Hugo City Council Meeting Minutes for December 18,2017 Page 6 of 8 Geislinger& Sons Inc., in the amount of$21,500.00 for a total construction cost of$195,654.00 for the Beaver Ponds Sanitary Sewer Project. Approve Resolution Establishing Water and Sewer Rates City Administrator Bryan Bear explained the Finance Department had completed its analysis of water and sewer billing data and has prepared a pro forma financial guide and corresponding service rates for the 2018 fiscal year. This is the first program that had been prepared in-house. He invited Finance Director Ron Otkin to present his findings and recommendations to the Council. Otkin began by saying different consulting firms would result in different rate schedules, so he gathered, sorted, and analyzed billing data to present his own method for Council consideration. Otkin used data from years when there was a high rainfall, with the assumption that water use was not for irrigation. He reviewed the quarterly averages from those years and presented a rate schedule based on that. He talked about the White Bear Lake lawsuit regarding the ban on residential watering and the judge's order on phasing down water use per capita, saying these things could have an effect on the budget and will require monitoring. Ron concluded by saying the budget includes one additional employee at Public Works, reflects actual expenses and true conservation rates, and matches expenses with a cushion built in. He recommended Council approve the resolution. Klein asked if there was funding for replacement costs related to equipment, and Otkin replied that the goal is to keep the amount of accumulated depreciation in cash, but the City would need to come up with the inflationary cost. Weidt asked Otkin if he foresaw any fluctuations for the reuse projects. Otkin stated that he netted out the gallons and revenue for the water reuse irrigation. They will set the amount for the water being taken out of the pond at a lower rate. This will be worked on next year. Petryk talked about the RCWD and asked if there was anything we needed to ask of them. Otkin stated that there may need to be some money in the stormwater fund for cleaning out ponds and would like to see the District participate. The Council liked the higher rate for huge water users in an effort to discourage irrigation. Otkin thanked Billing Clerk Jody Guareschi for providing the data and Roly Guareschi for help with the complicated formulas need in the spreadsheets. Weidt made motion, Klein seconded, RESOLUTION 2017-51 ADOPTING A PRO FORMA FINANCIAL GUIDE FOR WATER AND SANITARY SEWER OPERATIONS FOR THE 2018 FISCAL YEAR AND ESTABLISHING SERVICE RATES. All Ayes. Motion carried.