2019.01.08 CC Packet - Laserfiche WebLink

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December 11, 2018 Page 6 of 10 Community Assets and Development Director Schlichting reported some of the more significant changes to assumptions from the last analysis include:  The classification of townhomes are categorized as residential property versus “other property” and charged respectively for water and sewer. For the purposes of stormwater and street light charges, each townhome unit/address will be charged the same as a single-family unit.  Projections for the New Brighton Elementary Development were added to the analysis starting in the year 2021.  Due to failing street conditions, the Apache Hills Street reconstruction project’s priority was increased to be reconstructed in 2019 versus 2023 as originally scheduled. The water infrastructure cost difference between the Apache Hills project and the originally planned West Long Lake Area is $1,210,000. This along with the capital improvement long-term strategy changes below, created the need for a $2,500,000 5-year loan at 4% interest with the Municipal Development fund.  Water Fund capital improvement changes include the increase in priority and movement of the repainting of the 5th Street Storage Reservoir from 2023 to 2021 along with an increased cost of $450,000. Two Old Highway 8 Watermain upgrades were brought forward to be completed in 2021 and 2022 with an additional price of $355,000. The South Water Tower re-painting project was reprioritized and moved back from 2029 to 2034.  A new sewer rate has been created for properties classified as non-residential or “other”.  The annual cost of sewer lining increased from $100,000 to $200,000.  Re-lamping all the remaining streetlights with LED technology were re-prioritized and moved up in the long-term plan to be completed in 2020. Finance Director Davitt indicated water and sewer charges are based upon water usage, while stormwater and streetlights are flat charges. Water consumption is metered and is read quarterly. Sewer charges for residential properties without metered irrigation are based upon the customer’s water consumption during their “winter quarter”. The quarterly sewer charges are then “fixed” for the summer months and adjusted again the next year based on the next “winter quarter”. Community Assets and Development Director Schlichting stated water and sewer have a “flat rate” component built into the charges. The flat rate is established to pay for the fixed costs of delivering both water and sewer services to the property regardless of the how much of those services are used by the property. The water distribution system and the sanitary sewer collection system need to be maintained regardless of customer’s specific usage during any particular quarter. The flat rate charges are calculated based on a fixed number of gallons. Currently, the flat rate is calculated on 8,000 gallons. The variable “per 1,000 gallons” water charge starts with consumption levels above this flat rate. The proposed flat rates for single, two-family, and townhome residences was reviewed. Finance Director Davitt discussed a table with the current utility rates compared to the proposed rates for 2019. She provided a comparison of the City’s rates to neighboring communities. It was noted the water and sewer rates are per 1,000 gallons. The stormwater and street light rates are flat quarterly charges for a single, two-family, and townhome residence. Staff provided further comment on the proposed utility rates and recommended Council approval. Councilmember Burg thanked staff for the thorough report and commented further on the expense the City had to provide City water and sewer services. Councilmember Jacobsen discussed how the City’s utility rates set a firm foundation for the City. City Manager Lotter thanked his staff for their work on the utility rates and thanked the Council for supporting the City’s long-term vision. 5 Ayes, 0 Nays-Motion Carried