HomeMy WebLinkAbout10B - Water billing Rate
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STAFF AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
NOVEMBER 2, 1998
10 B
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF ORDINANCE 98-XX AMENDING
PRIOR LAKE CITY CODE SECTION 9-4-10 TO INCREASE THE
WATER BILLING RATE BY FIFTEEN CENTS (15~) 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 $1.15 per
thousand gallons established in 1996 to $1.30 per thousand gallons
effective upon the first billing period (2/1/99) in 1999. 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 3%%.
Historv
Water rates have remained stable for the past 6 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 $1.30 level as in
1983. Outlined below is a water and sewer rate table since 1972:
Water Sewer Water Sewer
Year Rate* Rate* Year Rate* Rate*
1972-75 $.60 $.40 1982-83 $1.30 $1.30
1976 $.70 $.50 1984-91 $1.40 $1.40
1977-78 $.70 $.60 1992-93 $1.05 $2.10
1979 $.80 $.70 1994 $1.05 $2.30
1980 $.90 $.80 1995 $1.05 $2.70
1981 $1.05 $.95 1996-98 $1.15 $2.85
* per 1000 gallons.
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 70% of our costs and
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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therefore our sewer rates. Since the past couple of summers have
been fairly 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.
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However on the water side the following four events have caused
our water revenues to flatten out:
1. General water conservation efforts by the public.
2. New City enforced sprinkling ban.
3. More efficient water usage applications i.e., in the area of
dishwashers, washing machines, water softners etc.
4. Anticipated surcharge penalties for excess water usage.
Each item above either has or will have a revenue lessening impact
upon our water stream of income (no pun intended). In addition our
maintenance costs associated with the construction of the
Maintenance Facility has placed additional pressures on operating
expenditures, primarily within the Water Department where these
items are budgeted.
The City's water and sewer utility fund is operated as an entc;lplise
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 and such
long term needs as reserves to assist in sewer and water pipe
replacement and/or a community water treatment plant.
Einancial ImJlJl{;J.
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 3~%
rise on their total water bill amount in 1999. The financial impact of
the rate increases are demonstrated below:
1998 Average Monthly Bill
plus misc. cF Ac charge
plus misc. storm water charge
Monthly Total...
1999 Average Monthly Bill
plus misc. cF Ac charge
plus misc. storm water charge
Monthly Total...
Monthly $ Increase ...
$36.00
3.75
.L.81
$41.62
$37.35
3.75
un
$42.97
$1.35
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.
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ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
Attachments:
Assuming the above average, the typical homeowner will incur an
annual increase of$16.20.
Overall the fifteen cent rate increase will provide the entclplise fund
an additional $60,000 in revenue based upon a projected annual
usage of 400 million gallons.
Conclusion
Staff would recommend approval of the proposed water rate
increase of fifteen 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 98-XX Amending
Prior Lake Code Section 9-4-10 To Increase The Water Billing Rate
By Fifteen Cents (l5~) 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 98-XX Amending Prior
Lake Code Section 9-4-10 To Increase The Water Billing Rate By
Fifteen Cents (l5~) For Every One Thousand (1,000) Gallons Of
W~J L
1. Ordina 98-XX Amending Prior Lake Code Section 9-4-10 To
Increase The Water Billing Rate By Fifteen Cents (l5~) For Every
One Thousand (1,000) Gallons Of Water
10/27/98 Tlill 13:48 FAX 612 452 5550
CAMPBELL
141 002
ORDINANCE NO. 98-XX
fiN ORDINANCE AMENDING PRIOR LAKE CITY CODE SECTION 9-4-10
TO INCREASE THE WAlbK BILLING RATE BY FI1"u~.EN CENTS (15C)
FOR EVERY ONE THOUSAND (1,000) GALLONS OF WAn~..K
WHEREAS, from time to time it is necessary for the City to increase the fee it charges for water; and
WHEREAS, the City has been able to retain the curren.t billing charge of one dollar fifteen cents
($1.15) per one thousand (1000) gallons of water since February 1, 1996; and
WHEREAS, it is now necessary to increase the billing charge by fifteen cents (l5C) per one thousand
(1000) gallons of water.
NOW THEREFORE BE IT ORDAINED by the City Council of the City of Prior Lake, Minnesota that:
1. Pnor Lake City Code Section 9-4-1O(A)1 is amended to read:
Effective on the February 1, 1999 billing cycle a billing charge of one dollar thirty cents
($1.30) per one thousand (1000) gallons of water. (Ord. 96-01, 1-6-1996; amd. Ord. 98-
XX, 10-19-98)
PASSED and ADOPTED this
day of
, 1998,
YES
NO
_Mader
Kedrowski
Schenck
Wuellner
Pet~
Mader
Kedrowski
Schenck
Wuellner
. Petersen
(Seal)
Frank Boyles, City Manager
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