Agenda - Council - 06/11/1992 - Laserfiche WebLink

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CITY SEWER RATES Rates for the surrounding communities vary significantly depending upon the rate structure. Several cities bill sewer at flat rates ranging from $32 to $40 (on a quarterly basis) and some cities have a demand charge plus volume rates. The volume is determined for residential by the metered water usage for a quarter that would generally not include lawn sprinkling and other outside uses. Non-residential accounts are charged for sewer based on actual water usage year-round. The City of Ramsey's current rate is a flat $32.00 per quarter for residential and commercial accounts - without regard to the usage or number of RECs.. Ramsey's current flat rate structure does not provide sufficient revenue to cover the charges from the Metropolitan Waste Control Commission. MWCC bills the City based upon the number of units of potential capacity (RECs) our hook-ups represent. In other words, we are charging $32.00 per quarter to each single family dwelling, the apartment house (for all 27 units), the car wash and other commercial businesses, while MWCC is billing us at the potential capacity of sewage flow per residential equivalent. At some point the City of Ramsey will be charged by MWCC based on the actual flow, but our volume currently is so low it cannot be metered. For 1992 the City's billing from MWCC will total $44,400. In addition to this cost, the City will be subject to repair and future replacement costs and the costs for supervision, Staff time for processing of expenditures, issuing billings and maintaining the sewer utility fund. While the total of these costs can best be estimated at the completion of a full rate study, some recognition of these costs should be made at this time. If we assume the City will incur expenditures for the sewer fund at the rate of 125% of MWCC charges, the 1992 costs will be $55,500. Using f~st quarter water usage for the annual residential base, and full year commercial water usage, 1992 sewer cost will average $2.05/1000 gallons of water. This cost times the average residential first quarter usage would result in a flat rate of $35.92 per quarter. For non-residential accounts, a minimum charge equivalent to the flat rate for residential plus $2.05/1000 gallons for all usage over 17,520 gallons per quarter would provide a charge based upon actual flow. Staff recommended the City of Ramsey establish the following sewer rates for those accounts outside of the special district: Single family residential Flat rate of $36.00/quarter Multi-family, commercial & industrial Minimum charge of $36.00/quarter plus $2.05/1000 gallons of water usage in excess of 17,560 gallons per quarter I I I I I I I I I' I UTILITY SPECIAL DISTRICT The City's special district was omitted from the current rate study due to additional research requirements. It is expected the special district status will be reviewed by the Budget Committee within the next 30 days and any resulting recommendations will be brought to Council at the following regular meeting. Due to this, Staff is not recommending any rate changes within the special district. WATER AVAILABILITY CHARGES (W.A.C.) In the course of surveying other cities as to utility charges, it was noted that many of the surrounding cities have a W.A.C. charge for the purpose of funding future infrastructure replacements. This charge is in addition to the S.A.C. (Sewer Availability Charge) cities are responsible for collecting and remitting to the Metropolitan Waste Control Commission. Although a full rate study has not been performed for the City of Ramsey's utility district, we can say with certainty that the City of Ramsey's rates do not provide for future infrastructure replacement. This apparently was an oversight when the rate structure was first established. I I I I I If a W.A.C. charge of $725.00 had been in place, the City's Infrastructure Replacement Fund balance as of December 31, 1992 would be approximately $380,000. Currently the City does not have an Infrastructure Replacement Fund. I I