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Home My WebLink About2.e. Draft Water and Sanitary Sewer Rate StudyAGENDA ITEM: Draft Water and Sanitary Sewer Rate Study AGENDA SECTION: bac1Dh AGENDA NO. PREPARED BY: Andrew J. Brotzler, PE, City Engineer ATTACHMENTS: Memo, Tables APPROVED BY: OF RECOMMENDED ACTION: Discussion Only 4 ROSEMOUNT CITY COUNCIL City Council Work Session: December 13, 2006 EXECUTIVE SUMMARY BACKGROUND: At the May 26, 2006 City Council Work Session, Council reviewed the draft Water and Sanitary Sewer Rate Study. Based on Council discussion, a number of questions and comments were noted. The attached memorandum from utility billing staff provides additional historical information and data m response to the questions and comments by Council noted at the May 26 City Council Work Session. In addition to the attached memorandum, the attached table tabulates the proposed rate increases, corresponding quarterly costs and annual percentage increase For the water utility costs, the quarterly charges are shown both with the existing water surcharge and without. As part of the Council discussion, Council expressed concern with the proposed rate increases and continuance of the water surcharge. As previously discussed, future revenues derived from the continuance of the water surcharge has been modeled to be saved to offset future costs associated with the construction of a water treatment facility. Reductions to or the elimination of the water surcharge will not effect the ongoing water utility operating budget. In regard to the proposed rate increases, the primary variable for Council consideration that effects the proposed rates is the Council philosophy for an ongoing fund balance within the water and salutary sewer utility funds Tables 4.1 and 4.2 within the draft Water and Sanitary Sewer Rate Study show the ongoing fund balance with no increase and with the proposed increases, respectively. With the exception of estimated annual costs for a water treatment facility beginning in 2009, the annual operating cost increases are minimal For comparative purposes, Staff will work to prepare an update to Table 4.1 without the estimated annual costs for a water treatment facility. For the sanitary sewer utility fund, Tables 6.1 and 6 3 within the draft Water and Sanitary Sewer Rate Study show the ongoing fund balance with no increase and with the proposed increases, respectively. Again, the annual operating cost Increases are minimal. SUMMARY: Staff will review the above information with Council. Should Council require additional information prior to the meeting or a copy of the May 24, 2006 City Council Work Session packet with the draft Water and Sanitary Sewer Rate Study please contact Staff. G \Uultoes \Utility Commission Info \RateSmdyCWS12 -13 -06 doc 1 4 ROSEMOUNT PUBLIC WORKS DEPARTMENT M E M O R A N D U M To: Andrew J. Brotzler, P.E. City Engineer; Jeff May, Finance Director From: Denise Werner, Utility Billing Clerk; Cindy Dorniden, Public Works Secretary Date: December 6, 2006 Subject: Additional Information for Water /Sewer Rate Study At the May 24, 2006 Council Work Session, Council discussed the Water /Sewer Rate Study and had some questions. This memo will reflect the answers Staff has put together for you. 1. Number of residential properties that use over 30,000 gallons of water per quarter? October 1, 2005 Quarterly Usage Domestic 1,976 properties October 1, 2005 Quarterly Usage Water Only (Irrigation) 392 properties January 1, 2006 Quarterly Usage Domestic 549 properties January 1, 2006 Quarterly Usage Water Only (Irnganon) 61 properties Apnl 1, 2006 Quarterly Usage Domestic 222 properties There was no Water Only on this billing penod July 1, 2006 Quarterly Usage Domestic 1,163 properties July 1, 2006 Quarterly Usage Water Only (Irrigation) 187 properties October 1, 2006 Quarterly Usage Domestic 2,504 properties October 1, 2006 Quarterly Usage Water Only (Irrigation) 518 properties As of the October 1, 2006 billing there were 5,671 properties on residential water and 5,653 on sewer. 2. Average quarterly residential sewer and water bill split between summer and winter? For the October 1' 2005 Quarterly billing the average water charge was $66.22 and the sewer was $47.29 per household. For the January 1 Quarterly billing the average water charge was $41.53 and the sewer was $26.78 per household. G \UoLnes \Utilny Comnnssion Info MemoWtrSwrRateStudyCWS12-06-06 doc 2 3. Longer history of rate increases. For the April 1 Quarterly billing the average water charge was $36.51 and the sewer was $22.48 per household. For the July 1s Quarterly billing the average water charge was $51 02 and the sewer was $33.53 per household. For the October 1 Quarterly billing the average water charge was $80.46 and the sewer was $56.83 per household. 4. When and how surcharge was established. In 1973 a Water Surcharge of $9.00 per single family unit and $7 00 for apartments, condos and mobile homes was established for debt service of the core water facilities. A study had been prepared by Springsted, Inc. and that was what had been determined. Up to and including 1983 these fees stayed in -place through resolutions, but between 1984- 1988 there were no fee resolutions reflecting any change in the surcharge. In 1988 the fee resolution didn't specify an amount; it simply said "A surcharge will be made for debt service of the core water facilities. In 1989, effective July 1, 1989, surcharge rates were established according to single family, multi family and then by meter size above a 5/8" meter. The resolution stated that "the revenue shall be deposited in the Water Surcharge Fund." The charges at that time was $4.50 per quarter for residential and $3.50 for multi family. In May of 1994 the surcharge rates raised slightly for the single family ($6.00), multi family ($4 67) and bigger meter sizes and then again in the year 2000 ($8.00 residential; $6.80 multi family), at which rate they are at the present. G \Unlines \Utility Commission Info \MemoWtrSwrRateStudyCWS12 -06 -06 doc Per 1,000 Gallons Implementing Fixed Charges Year Water Sewer Water Sewer 30,000 Gal Water wlfixed 22,500 Gal Sewer w/fixed 1988 .95 125 29.75 2813 1989 1.10 185 38.75 4163 1990 1991 1800 18,000 usage 2775 15,000 usage 5850 69.38 July 1994 .95 1.35 7.90 No usage 19.10 No usage 47.40 49.48 1999 1 02 1.40 8 90 20 00 45.46 51 50 2006 1.02 1.40 8 90 20 00 58 51 51 50 2 3. Longer history of rate increases. For the April 1 Quarterly billing the average water charge was $36.51 and the sewer was $22.48 per household. For the July 1s Quarterly billing the average water charge was $51 02 and the sewer was $33.53 per household. For the October 1 Quarterly billing the average water charge was $80.46 and the sewer was $56.83 per household. 4. When and how surcharge was established. In 1973 a Water Surcharge of $9.00 per single family unit and $7 00 for apartments, condos and mobile homes was established for debt service of the core water facilities. A study had been prepared by Springsted, Inc. and that was what had been determined. Up to and including 1983 these fees stayed in -place through resolutions, but between 1984- 1988 there were no fee resolutions reflecting any change in the surcharge. In 1988 the fee resolution didn't specify an amount; it simply said "A surcharge will be made for debt service of the core water facilities. In 1989, effective July 1, 1989, surcharge rates were established according to single family, multi family and then by meter size above a 5/8" meter. The resolution stated that "the revenue shall be deposited in the Water Surcharge Fund." The charges at that time was $4.50 per quarter for residential and $3.50 for multi family. In May of 1994 the surcharge rates raised slightly for the single family ($6.00), multi family ($4 67) and bigger meter sizes and then again in the year 2000 ($8.00 residential; $6.80 multi family), at which rate they are at the present. G \Unlines \Utility Commission Info \MemoWtrSwrRateStudyCWS12 -06 -06 doc CD as cn sp ea ct iis c al as CL v L 0 i CD as cn sp ea ct iis c al as CL v L 0 LOZ II 9E 09 II %L2 b 19 99 II %OZ 9 1L19ll I 11 %90 9 II %Ot 91. 1 and 22,500 gal /qtr Sewer .er surcharge 0tOZ 1 ZO8b %80 S 1 9S Z9 %L6 b 1 29011 501% 1 6002 1 OLSb %8Z S 1 09 69 %1l 9 0£ SOl %8l 1 900Z lti £t I %£L 1 OL95 1 %b8 L1001 %6L b LOOZ 1 $17 lb %8l bl 90 7S %l0 S £9 96 02 66 I -428% 1 0£ 8h 09 19 I Jean JOG aseaJoul /°II 1 Total %Increase I Jamul YOGA aaa eseaaaul 1 II Total Increase i I Jean tea aseSJOUI /°II f 1 eseaaoul IaTol l co