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February 26, 2013 Page 3 of 4 over the next ten years along with projected trends for each of the utility operations. Staff then determined what adjustments were required to the rates to best fit the City's long tern objectives. The street light rates were discussed in detail noting this utility currently had a slight deficit, which would be corrected over the next four years with the new rates. He commented the stormwater rates had the most significant changes due to the Flood Mitigation Projects identified after the July 16, 2011 storm. An intemal loan was approved in 2012 for improvement projects and Staff anticipated additional loans would be requested in 2013, 2015 and 2016. Director of Finance Maiers commented the rate increases for 2013 stormwater udW rates were identified by the Council at the August 15, 2012 City Council meeting. Staff reviewed the historical stormwater rates along with the proposed rates. Director of Public Works Wyffels discussed the proposed water utility rates stating that through water conservation efforts, an aging population and new plumbing fixtures, the residents in New Brighton were consuming less water. For this reason, Staff changed their assumptions to be consistent with the current water trends and an average of the last 10 years could not be used to project water usage in the future. Instead, a five -year rolling average has been used to be more conservative. He explained a water increase was required to maintain the same level of service for residents while offsetting the declining revenues and water usage trends. Director of Public Works Wyffels commented the City was also seeing an overall reduction in sanitary sewer due to new plumbing fixtures, an aging population, and water conservations efforts. He commented the MCES represents over 51 % of the total 2013 budgeted expenses for the Sewer Fund and the MCES raised their charges for 2013 by 7.1 % or $90,200. For this reason, a rate increase was recommended to maintain the same level of services to offset the declining revenues and water usage trends and increasing MCES fees. Director of Finance Maiers recommended the water rate be increased to $1.62 per 1,000 gallons, that the sewer rates be increased to $3.62 per 1,000 gallons, that the stormwater rates be $11.79 per quarter per single family residence, and that the street lights be increased to $7.40 per quarter for single and two-family residences. Director of Public Works Wyffels reviewed the water rates for several neighboring cities noting New Brighton's rates were on the low end in comparison. It was noted the sewer rates were rather level along with the stormwater rates. Mayor Jacobsen asked if the street lights could be switched over to LED's. Director of Public Works Wyffels indicated the street lights in the neighborhoods were leased from Xcel. He commented that on the major thoroughfares in the City, the lights were City owned, and these could be switched over at the City's expense. He explained that Staff was working with a vendor that was able to retrofit the current fixtures and adapt them to LED fixtures. Mayor Jacobsen questioned if the increases could be limited or avoided through other financial alternatives, such as bonding. Director of Finance Maiers stated the City has been trying to avoid bonding. He explained that proposed Public Works projects were the major driving force for some of the utility increases. However, these projects were necessary in maintaining the City's infrastructure system. Councilmember Samuelson asked how often utility bills were sent out to residents. Director of Finance Mars noted the City sent out bills on a quarterly basis. Councihneimber Bauman thanked Staff for reviewing this information in detail for the public this evening. She commented the new development at the quadrant could increase water usage in the future and may assist with water rates in the fixture. Councilmember Jacobsen commended Staff for the work completed on the utility rate study stating this information greatly assisted the Council in providing necessary services to the residents. Mayor Jacobsen commented that the proposed rates were necessary in order for the City to maintain its fund balances while meeting the residents' needs for water, sewer and sanitary sewer. Motion by Councrilmember Bauman, seconded by Counc7member Jacobsen to adopt a Resolution establishing the 2013 Utility Rates and Charges. 4 Ayes, 0 Nays-Motion Carried