Users to pay one-fourth of upgrade costs
Instead of billing the entire cost of recent upgrades to the taxpayers, at their Dec. 18 meeting the Scandia council voted to recoup part of the cost through user fees.
In 2012 the uptown sewer underwent a series of upgrades that cost about $160,000. The money was borrowed from the city’s capital improvement fund.
The first vote, for the city to pay the total cost of improvements, failed 1-4, with only Mayor Randall Simonson in support.
The second vote was to charge users for 25 percent of the project costs, paid back over 15 years.
This vote passed 3-2, with Simonson voting no because he thought users should pay none, and council member Jim Schneider voting no because he thought users should pay more than 25 percent.
Under the new ordinance the average annual sewer bill for the Scandia Store and Scandia Café is estimated to be about $5,000. The total for Elim Church and the parsonage, which is rented out, would be almost $4,000. The Schmitt Mall’s average annual bill would be almost $3,000, and R&B Auto would pay almost $2,500.
The average annual sewer bills for Gammelgarden Museum, Yoga Hus, and the Edward Jones building each would be under $2,000.
The city-owned community center and ice rink warming house are also served by the Uptown Sewer; their annual bills would total about $4,500.
In the past, users were billed annually for the previous 12 months of expenses. The amount due was figured solely by volume of water used. The new system charges a base rate plus volume: the monthly base rate will be $114.18; the volume charge will be $14.98 for every 1,000 gallons.
The payback of 25 percent of the money borrowed from the capital improvements fund will come from the volume charge.
“I don’t want to hurt businesses in the city, but is the city gonna support other businesses, too?” Schneider asked. “I have one of the big sewers in town. I was required to put pretreatment in, and so was Meister’s. It cost me $60,000 to put in.”
Council member Chris Ness said, “When people have their roads paved, they pay 25 percent of the cost. Seventy-five percent is pretty generous.” Member Sally Swanson agreed that fully subsidizing the uptown sewer repairs would not be fair to other businesses.
Users argued that the city was at fault for not maintaining the system adequately. Scandia Café owner Holly Kaufhold said, “I thought it was established that a lot of the [expense] was to preserve and prolong a system that had been abused.”
Wayne Schmitt, owner of the Schmitt Mall and Edward Jones buildings, said his property taxes have increased dramatically in the last few years but it has been impossible to increase the rents charged.
Kevin Nickelson, representing Gammelgarden, urged the council to vote for the first proposal, with no payback to the capital improvements fund. Nickelson said the system is really important to the uptown area; “It’s keeping us alive.”
The council also approved a 5 percent rate increase for the 201 system serving homeowners on Big Marine Lake, beginning Jan. 1. Rates had not been increased since 2009. This vote was unanimous, with Ness abstaining because his home is on the 201 system.
In other business, the council reappointed Fire Chief Jim Finnegan to another four-year term. Finnegan will serve through 2016.
The council also adopted the 2013 budget, with a property tax levy of $2,171,074, and approved the 2013-2017 Capital Improvement Plan.