2026.03.02 CC Packet - Laserfiche WebLink

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2026 Water and Sewer Rates Memo Page 3 of 4 SANITARY SEWER RATES The largest expense item in the sewer department is for sewage treatment. These charges are imposed by and paid to Metropolitan Council Environment Services (MCES). For 2026, MCES charges will amount to $1,022,384, an increase of $47,825 or 4.9%. Staff anticipate continuing yearly fee increases from MCES for sewage treatment. When combined with depreciation and funds for lift‐station rebuilds and submersible pump repairs, staff is recommending an increase in the base portion of the rate schedule. Residential sewer charges will continue to be based on water used in the winter quarter (January, February and March). For residential customers, the base amount per SAC unit will increase 4% to $88.50 per quarter, up from $85.00 per quarter. Commercial, Industrial and Institutional customers will also see a base amount increase per SAC unit of 4%, for a base charge of $27.50 per quarter, up from $26.50 per quarter. This group of customers is charged for actual water use (flow) each quarter. For an average single‐family residential sewer user that means the proposed sewer rates would results in a yearly sewer bill of $378.00 versus $364.00 at the pervious rates. MINNESOTA DEPARTMENT OF HEALTH SERVICE CONNECTION FEE The State of Minnesota collects a Safe Drinking Water Service Connection Fee on each water connection within the City. The City serves solely as a collection agent, collecting the fees from customers and remitting the funds to the Minnesota Department of Health (MDH). MDH uses this revenue to support safe drinking water efforts statewide through its Drinking Water Protection Program. Funds are dedicated to activities such as training and technical assistance for public water systems, ensuring compliance with the federal Safe Drinking Water Act, and protecting the health of all Minnesotans. For 2026, this state‐mandated fee will increase by 56.5%, rising from $9.72 to $15.22 per connection per year. As a result, all water customers will see a quarterly increase of $1.38 on their utility bills. This increase was set by the Minnesota Legislature and is required statewide. SUMMARY All water users will see a base rate increase of $12.00 annually, or $3.00 per quarter. Irrigation that is metered separately will see their usage rate increased to $9.25 per thousand gallons (for all gallons used) up from $8.40 per thousand gallons. Residential sewer customers will see a base rate increase of $14.00 per SAC unit annually, or $3.50 per SAC unit each quarter. Commercial, Industrial and Institutional sewer customers will see a base rate increase of $4.00 per SAC unit annually, or $1.00 per SAC unit each quarter. Overall, an average single‐family residential utility customer would be charged $674.00 annually for both water and sewer services. This equates to $168.50 a quarter or $56.17 a month, reflecting a monthly increase of $2.17 compared to the 2025 rates.