HomeMy WebLinkAbout10A - Water Bill Rate Increase
STAFF AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
JANUARY 3, 2000
lOA
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF ORDINANCE OO-XX AMENDING
PRIOR LAKE CITY CODE SECTION 704.1001 TO INCREASE
THE WATER BILLING RATE BY TEN CENTS (10~) FOR
EVERY ONE THOUSAND (1,000) GALLONS OF WATER
DISCUSSION:
Introduction
The purpose for this agenda item is to consider increasing the City's
water utility billing rate from the current charge of $1.30 per to
$1.40 per thousand gallons effective upon the first billing period
(2/1/00) in 2000. The present sewer rate of $2.85 per thousand
gallons is proposed to remain unchanged. This recommended
adjustment would represent an overall rate increase of 2.4%.
,
History
Water rates have remained fairly stable for the past 8 years going
back to 1992 when the water and sewer rates were restructured to
support actual expenditures within each activity. In fact, if approved,
this will actually establish the water rate at the same $1.40 level as
in 1984. Outlined below is a water and sewer rate table since 1972:
Water Sewer Water Sewer
Year ~ Rate* Year Rate* ~
1972-75 $.60 $.40 1984-91 $1.40 $1.40
1976 $.70 $.50 1992-93 $1.05 $2.10
1977-78 $.70 $.60 1994 $1.05 $2.30
1979 $.80 $.70 1995 $1.05 $2.70
1980 $.90 $.80 1996-98 $1.15 Id $2.85
1981 $1.05 $.95 1999 $1.30 $2.85
1982-83 $1.30 $1.30 2'D D () IOq
I ~ 0
* per 1000 gallons.
The City Council reviewed the water rate increase proposal during
the budget workshop that was conducted on August 19th, 1999 and
directed Staff to prepare the proposed 2000 water utility revenues
based upon a water utility rate of $1.40 per thousand gallons.
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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Current Circumstances
Because Prior Lake does not have a sewage treatment plant (our
sewage is actually piped to Blue Lake treatment plant located
outside of Shakopee) the MCES (Metropolitan Council
Environmental Services) controls nearly 68% of our costs and
therefore our sewer rates. Since this past fall and early winter has
been extremely' dry we have not experienced any significant
fluctuations in our sewer flow as a result of inflow and infiltration
from ground sources. As a result we do not propose an increase in
the sewer rate.
An estimated Water Department Statement of Earnings position is
projected below based upon a water rate of $1.40/1 000 gals (10 cent
increase):
*
Water Dept. Expenses
Budget Expenditures
Enterprise Fund Transfer
Equipment Fund Transfer
$553,300.00
$100,000.00
$25.000.00
$678,300.00
*
Water Dept. Revenue Projection
Utility Water Receipts
Water meter/pressure reducer sales
Water connection fees
Misc. revenue (incl. penalties,
interest etc.)
$602,000.00
$48,330.00
$60,000.00
$74.400.00
$784,730.00
*
Statement of Earnings Position
Preliminary income before
depreciation
$106,430.00
*
Depreciation (Water Only)
<$142,000.00>
NET LOSS
<$35,570.00>
The City's water and sewer utility fundis operated as an enterprise
fund which is intended to generate revenues to provide contributions
to the General Fund to offset administrative and operating costs,
revenue for fund transfers, i.e. the Maintenance Building, Equipment
Fund and such long term needs as reserves to assist in sewer and
water pipe replacement and/or a community water treatment plant.
Financial ImlJact
When considering the entire water and sewer utility bill, which
includes the capital facility charge of $7.50 and the storm water
charge of $3.75, homeowners would experience, on average, a 2%
rise on their total water bill amount in 2000. The financial impact of
the rate increases are demonstrated below:
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ALTERNATIVES:
RECOMMENDED
MOTION:
1999 Average Monthly Bill
plus misc. CF AC charge
plus misc. storm water charge
Monthly Total...
$37.35
3.75
ill
$42.97
2000 Average Monthly Bill
plus misc. CF AC charge
plus misc: storm water charge
Monthly Total...
Monthly $ Increase...
$38.25
3.75
ill
$43.87
$0.90
The above figures are based upon average monthly usage of 9000
gallons which is equal to an approximate daily consumption of 100
gallons per individual and a per capita household of three members.
Assuming the above average, the typical homeowner will incur an
annual increase of$10.80.
Overall the ten cent rate increase will provide the enterprise fund an
additional $43,000 in revenue based upon a projected annual usage
of 430 million gallons.
Also attached is a comparison of various municipalities and their
waterrates which was derived from the 1999 AMM License and Fee
S\lrvey.
Conclusion
Staff would recommend approval of the proposed water rate
increase of ten cents. The proposed increase is modest and required
to maintain the revenue stream required to defray water related
costs.
1. A motion and second to approve Ordinance OO-XX Amending
Prior Lake Code Section 704.1001 To Increase The Water Billing
Rate By Ten Cents (10~) For Every One Thousand (1,000) Gallons
Of Water.
2. Amend the water rate to an amount based upon Council'
consensus.
3. Take no action at this time and direct the staff to provide
additional information.
A motion and a second to adopt Ordinance OO-XX Amending Prior
Lake Code Section 704.1001 To Increase The Water Billing Rate By
Ten Cents (10~) For Every One Thousand (1,000) Gallons Of Water.
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REVIEWED BY:
Attachments:
1. Or'n e oo-xx Amending Prior Lake Code Section 704.1001
To Increase The Water Billing Rate By Ten Cents (10~) For Every
One Thousand (1,000) Gallons Of Water.
2. City Water Rate Comparison
ORDINANCE OO-XX
AN ORDINANCE AMENDING PRIOR LAKE CITY CODE SECTION 704.1001
TO INCREASE THE WATER BILLING RATE BY TEN CENTS (10~)
FOR EVERY ONE THOUSAND (1,000) GALLONS OF WATER
WHEREAS,
the City reviews its sewer and water rate structure on an annual basis; and
WHEREAS,
the City has determined it is financially necessary to increase the existing
water rate to generate sufficient water revenues to offset current operating
expenses; and
WHEREAS,
it is now necessary to increase the billing charge by ten cents (1 O~) per one
thousand (1,000) gallons of water.
NOW THEREFORE, BE IT ORDAINED by the City Council of the City of Prior Lake,
Minnesota that:
1. Prior Lake City Code Section 704.1001 is amended to read:
Effective on the February 1,2000 billing cycle a billing charge of one dollar forty cents
($1.40) per thousand (1000) gallons of water.
Passed and adopted this 3rd day of January, 2000.
YES
NO
Mader
Ericson
Gundlach
Petersen
Schenck
Mader
Ericson
Gundlach
Petersen
Schenck
{Seal}
City Manager
City of Prior Lake
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
r 1
~
CITY WATER RATE COMPARISON
(AMM License & Fee Survey)
Municipality
Golden Valley
Roseville
Savage
New Hope
Bloomington
Bumsville
Chanhassen
Robbinsdale
Mounds View
Crystal
Hastings
Prior Lake
Stillwater
Minnetonka
Brooklyn Park
Fridley
Water Rate
$1.80
$1.72
$1.65
$1.57
$1.55
$1.54
$1.50
$1.47
$1.45
$1.35
$1.30
$1.30
$1.25
$1.15
$1.10
$1.00
2000 PROPOSED...
$1.40
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