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FC CASE INCREASE OF SEWER RATES By: Diana Lund, Finance Officer Background: At the June 21, 1999, City Council Worksession, it was requested that the City of Ramsey's sewer rate be increased by 2%. This increase was recommended based on the findings of the1998 Comprehensive Annual Financial Report which stated that the Sewer Fund's revenue was minimally exceeding the actual expenses of the Fund. The Sewer Fund has seen large sewer service charges from the Metropolitan Council in the past year, in that the Met Council has been completing a "catch up" in its billing for actual usage. Whereas, in the past, the bill that was submitted was based on estimates, now actual figures are being used; thus, the reason for only a slight increase in revenues. This slight increase does not leave a "cushion" for any emergency expenditures. The City currently charges a flat rate of $55.81 for residential usage and $55.81 + $2.54 per 1,000 gallons in excess of 20,000 gallons for commercial properties. The proposed 2% increase would bring these rates to $56.93 and $56.93 + $2.54/1000 gallons, respectively. In comparison, the Metropolitan Council was charging $27,276 for the first quarter of 1999, and $23,225 for each quarter thereafter. A breakdown of total revenues and expenditures is attached. The proposed rate increase would affect approximately 1,700 residential customers and 70 commercial businesses. The increase would go into effect on the third quarter 1999 utility bill. Staff Recommendation: Staff recommends that a 2% increase on sewer rate charges be effective October 1, 1999 and that such rates will be $56.93 per residential customer and $56.93 + $2.54 per 1,000 gallons for commercial customers. Council Action: Recommend Council approval of Resolution # 99-08- approving a 2% sewer rate increase from $55.81 per quarter to $56.93 per quarter effective October 1, 1999. Reviewed by: City Administrator Finance Officer