Water system upgrades may require bonding
The Wyoming City Council on Tuesday, Oct. 2, reviewed recommendations of a water and sewer rate study and decided to use it to determine the 2014 budget. The study included proposals for water and sewer rates, the sewer availability charge and the water availability charge for 2014-2017. If the council adopts the recommended changes, Wyoming’s water and sewer rates would increase, but still be lower than those in neighboring cities. In the case of larger users, these rates would be substantially lower.
Naeem Qureshi, of Progressive Consulting Engineers Inc., explained that current water rates will not cover the capital improvement projects for the next five years. Even with increases in rates, the city would be losing money. The city may need to bond for about $2 million, as it will need an additional water tower soon and it must replace wells and maintain the quality of the water system.
The current rate structure, which charges a minimum of about $36 a quarter for up to 15,000 gallons of water, is not fair to customers who use much less water, Qureshi said. He recommended a water availability charge of $3,590 for new connections, with this fee set to rise $100 a year.
Qureshi proposed fixed monthly charges for meter size. In the more aggressive of two models presented, most meters would cost $22.48 a quarter. Larger ones would have higher fixed rates. These would have rate increases of 10 percent a year.
Qureshi recommended incentivizing conservation by tying the cost of water to usage. The rate for use up to 20,000 gallons would be $0.186 for each 100 gallons. Those who use more would pay $0.232 for every 100 gallons above the 20,000.
He recommended a sewer availability charge of $4,150 for new connections, with this fee set to rise $100 a year. Again, Qureshi explained the current rate structure is unfair, charging a minimum of $92.98 per quarter for 15,000 gallons even to low-volume users. Customers would be charged a fixed cost per quarter of $24.01, with charges per 100 gallons of $1.02. The quarterly fixed cost would gradually increase to about $29.18 through 2018. The sewage cost per 100 gallons would incrementally increase from $1.02 to $1.24 during the same five years.
In examples provided, customers using 9,000 gallons of water per quarter would see an increase in combined quarterly water and sewer charges of about $8, taking into account the fixed charges and the unit charges. A customer using 25,000 gallons per quarter would see a combined increase of $61.17 per quarter.
The city of Wyoming is a member of the Chisago Lakes Joint Sewer Commission. The city is charged a unit price as a member of the commission. For Wyoming, this is 23.8 percent of the operational costs for the system and its maintenance.
The city wants to maintain a balance reserve in the water and sewer fund for a year’s operational expenses. The goal is to see more in capital improvement of the systems than there is depreciation.
Overall the use of water is dropping as a result of improved fixtures and conscious conservation. The number of connections for water and sewer has been climbing very slowly. Even with conservation of resources, capital expenditures do not necessarily go down. Craig Mattson, city administrator, explained that in the case of the Chisago Lakes Joint Sewer Commission, the chemical and energy costs are increasing and there is a decrease in new customers, yet pipes must be replaced.