10-28-2019 Council Work Session Packet

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Sewer The calculated amounts for Sewer are based on a 20% increase in 2020 with a 15% increase in 2021. In years after 2021, the rate increases would be in the 2% range. Recyclin2 As discussed when the recycling RFP was approved, recycling rates need a significant (60%) increase next year. This is due to an increase from 3.07 per month in 2018 to the new rate of 5.05 per month per household. This would be followed by a 10% increase in 2021 and 4% increases thereafter. Future increases could be less if there is a recovery in the recycled materials market. Cable The Cable Fund is funded through a franchise fee on Cable bills. No rate adjustment is needed. Cable franchises are currently trying to apply the value of the free service provided to municipalities to the amount required under the franchise agreement. If this happens, revenues to the fund would decrease. Other Issues • One of the growing complaints that we are receiving concerns the cost of the utilities. Staff feels that part of this concern is a direct result of our quarterly billing cycle. Currently, customers that are connected to both the water and sewer systems are seeing bills approaching $400 or more. If we billed customers quarterly, a $400 quarterly bill would be reduced to $133 per month. This amount is in the same range as cable TV, cell phones, electricity, and gas. The City also has a relatively high number of customers that have all or part of their bills certified for collection with their taxes. Monthly billing may help reduce this occurrence. Monthly billing would help to equalize cash flow from payments, with a smaller amount collected every month versus the quarterly collection of a larger amount. Staff is also considering a shut off policy to help reduce the number of delinquent accounts. This would only work for accounts on water system which on an annual basis represent approximately one-third of the certifications. Monthly billing would also help identify high usage do to leaks in a more timely matter. This would reduce customer frustration at receiving large bills for water that is wasted. Staff estimates that a monthly billing cycle would add around $25,000 in expenses, not including staff time. • Staff is also exploring ways to televise individual sewer connections. It has been estimated that as much as 80% of I&I occurs in these private sewer connection. The City has been contacted by a company that provides insurance for private water and sewer connections. Staff has discussed offering to televise sewer service connections at no charge for residents that sign up for this insurance. Staff has also discussed adding an $8.00 to $10.00 fee to customer's bills and the City would in effect self -insure the private connections. There is also the possibility to work with the Metropolitan Council for funding assistance for servicing private sewer connections. Staff is looking for council input on this matter.