East Bethel sets initial water, sewer rates

The East Bethel City Council April 17 voted 4-1 to adopt the city’s initial water and sewer rates for those who will be connected to the city’s new system in the municipal utilities project area.

Councilmember Robert DeRoche voted against the rates proposed by city staff, saying that he believes the rates are too high.

Councilmember Heidi Moegerle, who made the motion to adopt the rates, said she wants the council to revisit the rates after one year, by which time City Administrator Jack Davis said true operational costs will be known. At that time rates can be adjusted up or down as necessary to cover the city’s actual costs.

Monthly water costs for those connected to the system will include a base charge of $5 per equivalent residential unit (ERU), plus a plant charge of $10 per ERU and $3 per 1,000 gallons of water used. The number of ERUs assigned to a business is determined by the Metropolitan Council Environmental Services (MCES) based on business type, anticipated peak water usage, building size and other factors. A property with one ERU assignment and a monthly water usage of 7,500 gallons would thus be charged $37.50.

Monthly sewer charges include a base charge of $5 per ERU plus a Metropolitan Council user charge of $2 per 1,000 gallons and a city usage charge of $2.75 per 1,000 gallons. A property with one ERU assignment using 6,250 gallons monthly would be charged $34.69.

DeRoche voiced concerns that setting the rates too high could discourage new businesses from coming to East Bethel.

Some cities charge $1 or $1.80 per gallon of water versus East Bethel’s proposed $3, and also that it is rare for a rate, once set, to ever be lowered in the future, he said.

Councilmember Ron Kollar said he agreed with DeRoche that it was important to keep rates as low as possible, “but we have to make the money to pay for the sewer system. And the fees here don’t seem too out of line.”

Kollar said later that the water and sewer rates for the city of Cambridge are actually a bit higher than what city staff was proposing for East Bethel.

“So we’re probably in the ballpark,” he said.

Cambridge is comparable to East Bethel in that it, too, has a stand-alone water and sewer system.

DeRoche said he wants to make sure that the money borrowed by the EDA from the HRA for this utility infrastructure loan fund program will, in fact, go back to the HRA when it is repaid to the city rather than being diverted elsewhere.

  • Starlight 356

    Mr. DeRoche’s comment at the end of the article is NOT related to the rates for sewer and water! The comment was related to the proposed loan program to assist existing businesses in East Bethel (EB) that are required to connect to the water and sewer infrastructure project.

    The loan program would be funded as follows: A loan from the HRA ($ 281,000) to the EDA to fund the program. The EDA, with the (required)approval of the City Council, would lend monies to existing East Bethel businesses required to connect to the infrastructure project to pay the City’s Sewer Access Charges (SAC), Water Access Charges (WAC) and related costs. The borrowers would have to qualify for the loan with appropriate security or collateral.

    It would work like this: the borrower, who owes the City SAC and WAC fees, would borrow money from the City to pay the City the SAC,WAC and related charges. At the closing of the loan, the SAC and WAC fees would be paid directly to the City. (The borrower NEVER gets those dollars to spend!)

    Since the SAC and WAC are immediately payable to the City, the only dollars that would leave the City’s accounts for any period of time would be for the “related charges.” The borrower would ONLY get the amount of “related charges” to spend on the infrastructure connection.

    ALL loaned dollars (including amounts for the SAC and WAC that is paid directly to the City) would be repaid, with interest, to the City. The borrower’s loan payments would go first to the EDA fund and then be credited to the HRA fund, to repay the HRA’s loan the EDA. (As a practical matter, this is a “paper” transaction.)

    After the closing, the SAC and WAC fees “paid” through the loan would be applied to the bond fund to pay down that expense.

    Again. The borrower would have to repay the entire loan amount, plus interest, even though some of the loan proceeds would have been paid to the City for the SAC and WAC.

    The State Auditor REQUIRES that those monies loaned from one fund (HRA) to another fund (EDA) be repaid to the lending fund (HRA) when they are repaid to the City by borrowers from the City’s loan fund.

    As currently formulated the loan requires that the City MUST make repayment to the HRA (though it is more likely a “paper” transfer than a move of actual funds from one account to another) or be in violation of State accounting requirements.

    Since the City Council approves ALL expenditures recommended by the EDA and the City Council IS the HRA and the only way that the HRA fund would not be repaid is if the City Council, in its role as the HRA approved a “forgiveness” of the repayment so that the funds would continue to fund additional loans of the program.

    The City Council has complete control over the use of ALL funds.

    All of this is made VERY clear in the Meeting Packets that the City Staff prepares for the Council and which are posted on the City’s website for the public’s review.

    Mr. DeRoche’s comment, at the end of this article, is irrelevant to the article’s topic.

    The comment reflects a poor understanding of a topic that was thoroughly described in the meeting packet and further clarified by the City Staff at a City Council meeting that Mr. DeRoche attended. Again.

  • CC deRoche

    Hey Starlight356,

    Why don’t you use your real name? I along with most others can’t give much credence to some one who flaps their gums, but won’t use their real name. It’s easy to hide behind a ficticious name isn’t it. What about tranparency?

    I would encourage anyone to view the meetings on line, cable tv or read the minutes to really understand what is truth.

    It appears that the old saying, those who create a smoke screen and chaos, are only trying to detract away from their true agendas and motives….

    Respectfully submitted, CC DeRoche