Spring Lake Park City Council members recently agreed that the city should stop taking a bath when it comes to the financial status of its water and sewer budget.
Nevertheless, city leaders stopped short of raising rates during an April 12 workshop discussion of a 2012 rate study presented by City Engineer Phil Gravel.
Instead, councilmembers agreed city staff should clamp down on delinquent accounts, stop offering a discounted rate to senior citizens and residential customers with disabilities and change the billing method for 17 residential and commercial properties in Spring Lake Park that receive water produced by the city of Blaine.
The properties are located north of Highway 10 and west of Highway 65. Spring Lake park maintains area water mains, but water is provided by Blaine through an inter-city connection.
Homes in the area have water meters that are read by Spring Lake Park.
According to Gravel, in the past, these homes have had a separate charge structure from other Spring Lake Park residents.
In his report, Gravel recommended a change to the same water rate structure.
He also recommended an increase in residential sewer rates from $55.43 per unit quarterly to $62.64 and a hike in apartment, mobile home, institutional, commercial and industrial sewer rates from $55.43 to $62.64 for the first 18,000 gallons used.
Gravel’s 2012 utility review also included a water rate increase that was nixed by the city council during its April 12 discussion.
The water rate for a typical 18,000-gallon customer would have risen from $39.61 to $42.15 per quarter.
“Sanitary sewer and the water system user rates should be increased to reflect current conditions,” Gravel wrote.
Two big factors that impact the rates, he said, are an increase in fees charged for sanitary sewer treatment and reduced water consumption.
Spring Lake Park’s per-gallon sanitary sewer charge from Metropolitan Council Environmental Services has risen an average of 1.9 percent annually since 2009, when the city’s rates were last reviewed, he said.
Gravel estimated the city’s total sewer department expenditures at $722,051 and water department expenditures at $520,284.
Three years ago, total estimated water system expenditures were $589,467. According to Gravel, expenses have gone down since the 2009 rate review, but so has overall water consumption.
Mayor Cindy Hansen didn’t want the council to approve rate increases.
She suggested administrative cost reductions within the budget and a move to online or credit card billing.
Councilmember Dale Dahl was concerned about senior citizens or users with disabilities not exceeding 9,000 gallons.
“They are not going over that mark,” he said. “That’s what’s killing us.”
Public Works Director Terry Randall said the city is losing water revenue from 45 foreclosed homes.
“We are not selling water like we used to,” Randall said.
Gravel replied, “Then you have to look at cutting costs. We can’t do anything about water consumption.”
Councilmember Barbara Carlson asked if the city could return to the practice of publishing the names and addresses of delinquent accounts in the local paper.
City Administrator Barbara Nelson said two residents recently told her to put their delinquent amounts on their tax bills.
“Those types of requests don’t help the city operate its utility system,” she said, referring to a water treatment plant debt service charge included in the council’s water rate discussion.
“We don’t want to raise rates,” Dahl said. “Seniors should pay.”
He supported Gravel’s recommendation on properties north of Highway 10 and west of Highway 65.
The council also agreed with Gravel’s recommendation that the city review its practice of certifying delinquent sewer and water accounts with Anoka County.
Gravel suggested certifying accounts when they are only a quarter behind in order to receive past-due payments sooner.
Nancy Kelm, city utility billing clerk, said it’s current department practice to let two quarters pass before certifying and to work with longtime residents or accounts that haven’t been late.
“Are people really that poor they can’t pay their water bills?’ Carlson asked. “Why are we getting a rash of [delinquencies]?
It’s the economy, Dahl said. “In 2006, people didn’t care about the water bill,” he said. “It adds up.”
He recommended a 30-day past due policy, but after additional discussion, council members concurred with 45 days.
Nelson said the water and sewer recommendations discussed April 12 would be placed in resolution form and presented for approval at a May meeting.
Tim Hennagir is at [email protected]