Agenda - Council - 10/22/1996 - Laserfiche WebLink

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project and any future such projects is that Council choose a general tax levy (like occurs with the Public Works garage). Under Chapter 444 of the state statutes, Council also has the opportunity to levy a minimum charge against any property for which sewer, water, or storm sewer service is available but to which connection has not occurred. In the future, when Council is faced with the decision to proceed with a petitioned-for project, Council will need to weigh the general fund contribution to the project against expected benefits. Among the expected benefits is connection to the municipal utility system from which the City will sell sewer and water services. We do not know what the ultimale (most efficient) operating size is for our municipal system. We do know that because of the small number of connections to the existing system, our operating expenses as a percent of gross revenues is greater than would be the case in a larger system. Therefore, at present, one can opine that additional connections improve our operating efficiencies and, therefore, each connection (to some future point) reduces the likelihood for future rate increases upon the existing customer base. If the City constructs additional projects in the future for which the ultimate number of connections do not occur, some opportunity for operating efficiencies is lost. In the case of the Haubr/ch Addition (and future such projects) we have lost the opportunity, at least in the near term, to provide for water and sewer sales. The minimum water and sewer charge against a residential customer (whether or not they use the system) is $64/quarter given that the City provides the opportunity to utilize the system by providing access to it. It appears that, in cases wherein future subdivisions exercise their Charter option and the City constructs the project, a minimum charge for "access" could be billed in a recognition of that access. Given the above, we are requesting that Council entertain three actions. The first is to introduce Ordinance ~)6-XX implementing Chapter 8 of the Charter. The second is to provide for a revenue source for the project fund shortfall. It should be noted that if Council follows the staff recommendation in this regard, we would intend to recommend a 1997 budget levy no greater than $7,225,91 above a 0% levy rate increase. The third action is to discuss your options under Chapter 444 of the state statutes for implementation now or with future projects. Council Action: Motion to introduce Ordinance i~96-XX implementing Chapter 8 of the Charter - and - Motion to direct that staff provide for a $7,225.9I interest expense levy to provide for the Improvement Project g95-14 shortfall. - and - Motion to direct staff to prepare a water/sewer access policy. Reviewed by: City Administrator City Attorney Finance Officer CC: 10/22/96 /jmt //0 I I I '1 I I I I I I ! I I I I ! I I I