Water, sewer rate increases proposed in Coon Rapids
by Peter Bodley
Managing Editor
City staff recommendations to raise sewer and water rates have been tabled by the Coon Rapids City Council.
The council had been asked to approve the rate increases at its May 3 meeting, but instead set a work session for Tuesday, May 10 to discuss the proposals with the idea that a vote on the rate increases would take place at the Tuesday, May 17 meeting.
It was Mayor Tom Howe who asked that no action be taken on the proposed sewer and water rate increases until council has had a chance to discuss them at a work session.
“I am not ready to raise the rates,” Howe said. “We have got to look at this more in depth and come up with a plan.”
In particular, Howe was concerned that a recommendation to change the sewer rate structure would have a “greater impact” on businesses.
Because both proposed rate increases were scheduled to go into effect with the June 1 billing cycle, the council went along with a staff request to schedule its work session as quickly as possible.
Water rates
According to a memo presented to the council by Finance Director Sharon Legg, the water rate increase has been recommended because the water utility fund had a large loss in 2010 – $973,991.
Two main factors caused this – water consumption was down 5.9 percent from 2009 and there has been an increase in water main breaks, which cost the city some $624,800 to repair in 2010, Legg said.
In addition, the city has been turning off water at the curb to protect vacant homes, but in many cases the curb stop has been found to be inoperable and has had to be dug up and repaired at a cost of $60,500 in 2010, she said.
As well, the city spent about $108,800 last year to replace failed water main valves.
Legg recommended increases in all tiers of the city’s tiered water rate system.
Last year, there was no rate increase in the lowest tier, nor were commercial and industrial rates impacted except for the sprinkling meters, Legg said.
Proposed quarterly rate increases are:
• Residential tier one per 1,000 gallons (first 20,000 gallons) $1.45 to $1.60.
• Residential tier two per 1,000 gallons (20,001 to 80,000 gallons), $1.80 to $2.
• Residential tier three per 1,000 gallons (80,001 gallons and higher), $2 to $2.20.
• Commercial/industrial users per 1,000 gallons, $1.45 to $1.60.
• Sprinkling meters, $2 to $2.20.
• Service charge per account, $7.75 to $8.
According to Legg, approval of the rate increase, assuming similar usage as in 2010, would generate $250,000 more in revenues.
But if 2011 has as many water breaks and curb stop repairs along with low water sales, the water fund will continue to lose money, Legg said.
Efforts are being made to reduce all expenditures or achieve savings through more competitive bidding, but the age of the system is causing much higher maintenance costs, she said.
Water rates have been increased in three of the last four years – 2007, 2009 and 2010.
Sewer rates
Overall sewer rates are recommended to increase about 2.75 percent in 2011 over last year or $80,000.
But Legg is also recommending that a new rate structure start to be phased this year based on a winter quarter consumption method of billing, a time frame which includes the Christmas period when there is more water usage.
Right now, there is a flat rate billing system for residential properties, she said.
“Therefore, no matter how much or little water a family puts into the sewer, all single-family residents will be billed the same amount, except senior citizens do get a reduced cost,” Legg said.
Commercial, industrial and some residential complexes with separate sprinkler meters are billed based on consumption, rather than a flat fee, she said.
According to Legg, a combination rate for sewer would seem to be the most fair, but it would impact customers differently.
“Residents with high usage will see increases and those without low usage will go down except in the case of some senior citizens,” Legg said.
“Even though senior usage is generally lower, the discount that they presently receive is significant.”
Implementation of the rate structure change would be phased in over a number of years because the impact to some users is too great to do all at one, Legg said.
“Therefore, staff recommends that rates be gradually increased in the areas which seem to be subsidized by others,” she said.
Recommended quarterly sewer rates for 2011 are:
• Single-family/duplex: $59 to $61.
• Single-family/duplex seniors: $38.35 or $29 to $42.35 or $32.50.
• Townhomes/condos: no change at $45, but the senior rates will increase from $29.25 to $32 and from $22.50 to $25.50.
• Mobile homes, $46 to $48.
• Apartments/unit (sewer only) will stay at $41.50.
• Commercial from $3.05 per 1,000 gallons plus $4.50 to $3.05 per 1,000 gallons plus $25.
• Restaurants from $3.05 per 1,000 gallons plus $4.50 to $3.05 per 1,000 gallons plus $50.
• Industrial from $3.05 per 1,000 gallons plus $4.50 to $3.05 per 1,000 gallons plus $25.
• Institutional from $3.05 per 1,000 gallons plus $4.50 to $3.05 per 1,000 gallons plus $25.
• Townhomes/condos/apartments (individually occupied with one meter) from $1.90 per 1,000 gallons plus $17 to $2.65 per 1,000 gallons plus $7 a unit.
Peter Bodley is at
peter.bodley@ecm-inc.com
