07-28-1980 Council Minutes - Laserfiche WebLink

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Page 8 Public Information Aandout for the Public Hearing at 7 : 00 P.M. on July 28, 1980 at the City of Orono _ Council Chambers. As is indicated on the summary sheets the proposed increases in the various water and sewer rates charged by the City are substantial. The City of Orono has a unique situation in the utility systems. Part of the City receives water service from the City of Long Lake or Wayzata, part is served by the City owned water plant in Navarre, 'and the rest of the City has individual homeowner wells. � Because there are three distinct service areas, there are three diff- erent service rates. The last rate increase to the Orono "Navarre" service area was January 1, 1978. A "Ready to Serve" charge is being considered for the Navarre Service Area of the City because the system is being maintained for all poten- tial customers but is being used by only a portion of those where service is available. Certain costs are fixed which include the majority of the maintenance items, miscellaneous items not considered to be administrative, and in- surance. These costs are incurred for the entire system and are not dependent upon the sale of any water. These expenditures �re being made so that the system is maintained to be ready to serve all customers and potential customers at all times. If no one were to use any water, the City would still have to fix water main breaks, paint the water tank from time to time, maintain insurance against fire and similar peril, to keep the system in readiness to serve. In addition to maintaining the system in a ready to serve condition, the properties not currently connected r�ceive the benefit of immediate avail ability in the event of f ailure of their current water supply. These sam properties -are also receiving increased fire protection made available wi the hydrants located throughout the area. The rates in ' the �Long Lake" service area were adjusted on June 30, 1978. The last rate increase to the "Wayzata" service area was January 1, 1974 and the charge to Orono from Wayzata for water purchased has been increas twice since that time. The following summary shows the comparison of water customer rate charges versus costs for 1977 to 1979, and 1980 estimated: WATER OPERATING FUND 1980 1977 1978 1979 Estimated Navarre Area - ' • Customer Charges $33 ,030 $46, 003 $49 , 390 $72, 000 City Costs $38 ,369 $45, 626 $52 , 364 $64, 902