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HomeMy WebLinkAbout20150720 UC MinutesUTILITY COMMISSION REGULAR MEETING MINUTES July 20, 2015 ISSUANCE OF OATH — Scott McDonald Commissioner McDonald was issued the oath of office by President Speich. CALL TO ORDER Pursuant to due call and notice thereof the regular Utility Commission meeting of the City of Rosemount was called to order on July 20, 2015, at 5:30 p.m. in the Conference Room of the City Hall, 2875 145th Street West, Rosemount. President Speich called the meeting to order with Commissioners Connolly and McDonald, Public Works Director Wrase, City Administrator Johnson, Finance Director May, Assistant City Engineer Olson, Public Works Coordinator Watson and Recording Secretary Kladar attending. ADDITIONS OR CORRECTIONS TO AGENDA None AUDIENCE INPUT None APPROVAL OF MINUTES Motion by Connolly. Second by Speich. Motion to approve the minutes of the May 18, 2015 Utility Commission meeting. Ayes: 3. Nays: 0. Absent: 0. Motion carried. OLD BUSINESS NEW BUSINESS 7.a. Water and Sewer Rate Update Public Works Director Wrase introduced the Water and Sewer Rate Update outlined in the executive summary. Wrase noted that the goal was to maintain a reserve of one times operating expenses. Watson provided a detailed summary of the model and pointed out several items: • Annual residential growth was adjusted from 3.5% down to 2.5%. • The annual rate increase was adjusted from 5% down to 4%. • $415,400 was removed from the water rate model in 2017 for complete reconstruction in the Motz Addition. This will likely not be a full reconstruction but possibly some sort of future rehab project. • The Water Treatment Plant debt service was reduced from $12 million to $10 million and pushed back from 2016 to 2019. • One-half of the ground storage debt service ($207,700) was added beginning in 2017. Commissioner Connolly would like to explore further discussion about adjustments to the tiers. He would like to know whether the tiers can be modified and still maintain the financial status the City is striving to achieve. Discussion ensued about adjusting the tiers and whether it's feasible to have a smaller rate increase for the lower usage customers and a larger increase for the higher usage customers. Watson showed a spreadsheet showing the revenue projections with different increases throughout the tiers. May advised that the tiered rates were set up to meet the DNR criteria from several years ago to encourage water conservation. There has been discussion since then about whether the tiers are aggressive enough to promote water conservation. May stated that he recalled there had to be certain steps between the tiers. The City chose to comply due to expected City growth. Wrase discussed the standard of 150 gallons per resident per day. This equals 11,000 gallons in a 30 day period. The City wants to increase water conservation but not penalize larger families for water use. Wrase suggested some sort of rate study be done as they would need a rationale before any changes to the tiers. The Commissioners discussed various scenarios including 2% for the first tier and 5-6% for the second tier. Connolly stated that he didn't believe the increase had to be at the same level moving forward but the City could adjust the rates and/or tiers to keep the revenue goal on track. Connolly suggested moving the first tier 0-15,000 or 20,000 and the second tier could be 15-30,000 or 40,000. May said City would have to look at the DNR requirements about gaps between tiers. He also noted that if the tiers were changed the high end users would also get a break on the lower tiers which could change revenue figures. He added that some cities don't allow customers to move through the tiers but rather bill all usage at where the total usage falls. The model shows about 30% of households fall into the first tier. The projected sewer rate increase is 3%. The growth was adjusted down and the annual rate increased from 2 to 3%. The Utility Commission will discuss storm water utility fees at a future meeting. Johnson suggested if Commissioners had ideas as to changes in the rates or tiers they could provide that input before or at the meeting next month. Wrase advised that staff would also put together a comparison to other cities. 8. PRESIDENT'S REPORT President Speich had nothing to report. EXECUTIVE DIRECTOR'S REPORT 9.a. City Projects Update The attached project report was reviewed and Olson provided a brief summary. An obstruction was found during the drilling in Well 16. The design was modified to a triple -cased design and the contractor is currently working on the issue. Several projects are substantially complete including Bacardi, Wilde Lake Estates and Prestwick 11'. Construction begins soon on Bella Vista 3`d and Prestwick 12`h. The 132"d Street Improvements project is moving forward in correlation with the Dunmore development. There is a public hearing scheduled for July 21 regarding Danbury Way and City will move forward with final plans for construction. Horseshoe Lake Lift moving forward and project coordinates with Bella Vista and should be completed in the winter or spring. The ground storage tank is currently out to engineers for proposals. 9.b. 2014 Well Pumping Report The attached report was reviewed. It was that pumping overall was 7.2% above year to date but there was a much earlier spring this year than in 2014. 9c. Set Next Meeting Agenda for August 17, 2015 Meeting scheduled in August to further discuss the rate update. ADJOURNMENT There being no further business to discuss the meeting was adjourned by President Speich at 6:10 p.m. X�_ ysubmiuttted,, Q�� VCY�SO ., Karin Kladar Recording Secretary