Agenda - Council - 06/26/2012 - Laserfiche WebLink

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SECTION 5 RATE STUDY A. GENERAL This section reviews the City's current policies for funding trunk sanitary sewer improvements to determine if these policies are capable of funding the improvements proposed in this plan. The City has a connection charge policy which requires all new connections to the sanitary sewer to pay this charge. The current charge rates are: Residential property - $1,271 per unit Commercial/Industrial property - $3,824 per acre The City has a Sewer Utility Fund which is used for funding both capital improvement expenses and expenses related to operating and maintaining the sanitary sewer system. The data on the fund provided by City staff shows the fund to have an unaudited projected 2011 balance of $4,862,722. The fund balance projections through 2025 show the balance generally between $5,000,000 and $6,000,000. The revenue sources for the fund are the revenue from sewer utility billings, trunk sewer connection charges and interest from investment of the fund balance. The revenue from sewer utility billings is approximately equal to the operating expenses. Historically, the City has required properties and/or developers that want access to the municipal sanitary sewer system to fund the required extensions, not only to their site but across their site to provide for future extensions. These costs were offset by crediting their connection and lateral fees, but if the costs exceeded those amounts, the developer was required to fund the difference unless an agreement was reached with the City. The City entered into a watermain and sanitary sewer cost contribution/reimbursement agreement with Oakwood Land Development, Inc. in 2006. This agreement established the procedures for reimbursing $6,000,000 to Oakwood for its contribution to funding the sanitary sewer and City of Ramsey Page 5-1 Comprehensive Sanitary Sewer Plan - 2012 Prepared by Bolton & Menk, Inc.