Utility rates for 2014 unveiled, approved

Water charge to jump 9 percent; many customers bumped up to full sewer charge

 

Clint Riese
News Editor

The Forest Lake City Council’s decision in September to fund the maintenance of its water and sewer infrastructure based on a shortened life cycle meant the city needed to bring in at least $190,000 in additional, annual funds.

At that time, the expected funding mechanism was to be a combined increase of about 6 percent to water and sewer rates.

Finance Director Ellen Paulseth has since crunched the numbers, and the result, which the council reviewed and approved on Monday, is a rate schedule that represents about a 4.5 percent increase.

The city is in the process of splitting in two the water and sewer fund to make rates more transparent. In calculating what each fund would need to be sustainable, Paulseth found necessary a water rate hike of 9 percent, but no change needed to the sewer rate.

“For a number of years, off and on, the sewer fund has actually been subsidizing the water fund,” she said.

Starting in 2014, average residential users will see their water bill increase by $7.26 per quarter, to $85.76. Their sewer bill will remain $82.50 per quarter.

However, the cut-off point for the base (minimum) sewer fee will be dropped from 10,000 gallons to 5,000, bringing nearly all customers over the usage threshold that determines whether they owe the base charge or the capped maximum of $82.50. Paulseth said that change addresses feelings of inequity due to the lack of ability to measure sewer usage of customers who do not have city water. With no measuring method, those customers have been ineligible for the minimum charge. Now, nearly all users will pay the same sewer rate.

The water rate adjustment will provide $130,000 in additional revenue. The other $60,000 needed will come from the increased sewer fee revenue and savings resulting from the recent refunding of bonds for water debt.

While signing off on the rates for 2014, the council set the stage for broad-based discussion of the rate structure thereafter. Several council members expressed at least some interest in removing the cap for the residential sewer charge to provide incentive for less usage.

Fee schedule

The water and sewer rate discussion was part of an ordinance to set the city’s entire fee schedule for 2014. Licenses, permits, user fees and special charges provide about $5.2 million, including $926,000 in revenue to the general fund. No matter the form, the fees are designed to recover costs for specific activities and services deemed to benefit individuals or businesses at a greater level than the general taxpayer base.

Other than the water and sewer rates, the main change for 2014 is the elimination of fees for initial fire code inspections and one re-inspection.

The council unanimously approved the fee schedule for 2014.

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