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City Engineer Himmer stated the water treatment plan was supposed to be on line five years ago <br />so those dollars remained in the account and delaying construction generated additional fees and <br />rates to create a larger fund balance. <br />Mayor Ramsey asked if current residents are being penalized. <br />Public Works Director Olson explained the City has been collecting fees from users and new <br />people coming into the system because the Comprehensive Plan indicated there will be some <br />form of treatment. Lately, there has not been a lot of new development so the majority of the <br />fund balance was created by existing users, resulting in an expectation that better water quality <br />should be provided. He noted the creation of this fund has put the City in a good position going <br />forward. <br />City Administrator Ulrich asked what portion of the $8 million is for the water treatment plant <br />and what portion is for capital improvement costs and repairs. <br />Public Works Director Olson anticipated a bond of about $20 million so just over $1 million a <br />year was collected for the water treatment plant from existing users. <br />Mayor Ramsey stated support that something be done to improve water quality and asked how <br />water quality can be portrayed as a regional problem when there is excess revenue in the City's <br />account. Mayor Ramsey also asked if water rates can be lowered as additional fees are collected. <br />City Engineer Himmer stated this analysis factored in 2% and 2.5% rate increases but growth <br />may exceed or fall behind so rates should be analyzed on an annual basis going forward. <br />Councilmember Elvig commented that in the past, a lot of residents were fighting growth so the <br />City tried to make growth pay for itself. He cautioned there is a need for balance and dropping <br />rates too far may stimulate the idea to encourage people to come to Ramsey because it is cheaper <br />to build here. <br />Mayor Ramsey stated he believed the reason people came to Ramsey was for cheap land, not <br />cheap utilities. <br />Councilmember McGlone stated he has an issue with how much of this cost is a City resident <br />issue as opposed to a developer or current user issue. He noted Ramsey is a developing <br />community but residents who do not want water will push back. He asked how much of the cost <br />should be borne by all residents, developers, or new residents. He also asked how it is <br />progressing to make this a regional problem. <br />Public Works Director Olson advised the City cannot charge residents a utility fee unless they <br />gain benefit. If the resident has a private well, it would be impossible to prove benefit. As it <br />relates to the regional discussion, staff felt it was important, after analysis, to not fully fund with <br />user rates and fees so the City can show a deficit and unfunded amount when it goes before the <br />Legislature to request capital to address this regional issue. <br />City Council Work Session / April 24, 2012 <br />Page 5 of 10 <br />