01-10-1994 Council Packet - Laserfiche WebLink

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WxttT and Seww Rate Study Januanr 6, 19^ page5 operating rate alternatives. The total rate increase for those with I sewer unit is 30.1 %. Tte increase for those whose billing is based on a per gallon charge is appnnimately 25%. The sewer rates have not been increased for a period of seven years. A 30% increase translates into a 3.85% per year increase over the 7 year period. Water Operating Budget The water fund has experienced rcdiKtions in retained earnings in K^h 19<il and 1992. This has reduced the retained earnings amount to $104,386 at the end of 1992 At t‘'e same time a new w^ll, pumping station, and water tower have been insullcd and arc operating. This has sigmficanlly increased the number of facilities requiring periodic maintenance and repair. Although the repair expenditures on these new tacilitics should be low, it is imponant that itw reuined earnings balance be maintained at a level that can handle an unanticipated major repair on either the new facilities or the older Navarre fjKilities. W'atfT Rate Increase The City has three water service areas These are; the Navarre area, the Wayzata area and the Highway 12/Long Lake area. The Navarre area is served by a City water tower, pumping station and water softening and iron removal facility. The Wayzata area is served by the City of Wayzata’s water system. The Highway 12/Long Lak.» area is a combination of the area that was served by the City of Long Lake water system but is now served by the new Highway 12 water system, and the area that started on the new Highway 1.2 system (Sugar Woods and Otten Bros.). The aiuchcd Table A shows staffs recommendations regarding water rates and a comparison to current rates. All of the rate calculations arc based on a usage of 25,0(X) gallons per quarter. The rate increases range from 26.6% in the Navarre area lo 30% in the Highway 12 area arxl 29.6% in the Wayzata area. The Navarre area water rales were last increased in 1991. The increase was 12.5%. Prior to 1991, the last increase was in 1986. when the rates were increased by 6.2%. The proposed increase would make the total increase over the past seven years 42.4%, for an average annual increase of 5.2%. The Wayzata area has not had a rale increase for at least ten years. The proposed 29.6% increase translates into an average annual increase of 2.65%. The Highway 12 rate was made effective in 1991, and has not been changed since then. The Highway 12/Long Lake water service area currently has a two tiered rate system. When the Long Lake area was on the City of Long Lake water system, the City of Long Lake was charging $2.50 per 1,000 gallons and Orono added $.25 as a maintenance charge for a total of $2.75. When the Highway 12 area came onto the new Orono water system the rate was set at $1.75.