11-27-2017 Council Packet - Laserfiche WebLink

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Minutes of the Orono City Council Work Session Monday, November 13, 2017 Council Chambers 5:00 p.m. PRESENT: Mayor Dennis Walsh, Council Members Aaron Printup, Richard F. Crosby II, Victoria Seals and Wendy Dankey. Representing staff were City Administrator Dustin Rief, Finance Director Ron Olson, Community Development Director Jeremy Barnhart, City Attorney Soren Mattick, Director of Public Works Adam Edwards and City Clerk Anna Carlson. Printup joined the meeting at 5:35 p.m. Dankey joined the meeting at 6:43 p.m. Meeting Start Time: 5:20 p.m. 2. Enterprise Fund Finance Director Ron Olson presented the Enterprise Fund item. Olson began discussion about the Water Fund. The fund has historically been operating at a loss but the loss has been covered by revenue received from antenna leases and changing technologies. Olson mentioned that water rates have been increased by 11 % each year for the past four years and with the present 5% increase for 2018 in the budget, the future increases are projected to be in the 3% range. Olson also noted that the operating budget as presented for 2018 will break even. Mayor Dennis Walsh mentioned that he would like to see the antenna revenues transferred out of the Water Fund and put into the General Fund. Discussion regarding the Water Fund budget followed. Olson stated that the Sewer Fund has also been operating at a loss. The 2018 budget is presented with a rate increase of 4%. The Met Council disposal charges are the single largest expense in the Sewer Fund. The past two years we have seen approximately 9.5%-9.6% increases from the Met Council for disposal charges and 4% has typically been the rate increase used annually. Olson noted that we typically do not match the Met Council increases due to the differing Inflow & Infiltration totals annually. Walsh pointed out that in the next six years we will be at a significant loss unless we begin to plan now. Walsh asked how we can solve this. Olson mentioned that the only way to compensate this would be by either raising rates or gaining more users.