ITEM 3.5 Utility rates®tom+ Te F o
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT. REQUESTOR. MEETING DATE:
Finance Finance Director Gary Groen February 11, 2013
PRESENTER(s): REVIEWED BY: ITEM #:
Consent Agenda City Planner Licht 3.5
AGENDA ITEM DETAILS
RECOMMENDATION:
recommend the Council approve the prosed water and sanitary sewer utility rates for 2013 effective
with the March 13, 2013 utility meter readings.
ARE YOU SEEKING APPROVAL OFA CONTRACT?
IS A PUBLIC HEARING REQUIRED?
I
No
No
BACKGROUNDIJUSTIFICATION:
In June 2012, the City received proposals to conduct a rate study for the City's water and sanitary sewer
utilities. This was the first utility rate study conducted by an outside professional consulting firm since
the City began providing these services. The utility rate study included:
• A comprehensive review of the current user rates and revenues generated,
• A review of projected water and sewer connection revenues,
• A review of operating expenses, future maintenance and capital improvement plans,
• A review of development and growth projections, and
• A review of existing and future debt service obligations,
The study was completed and first presented to the City Council for review in November. The City
Council reviewed the proposed utility rates again at a special council workshop on Monday, January 28,
2013, After a complete review and discussion, the proposed utility rates were directed to be forwarded
for approval on February 11, 2013. It was also recommended the water and sewer utility rates be
approved for the next three year period through 2015.
SUPPORTING DOCUMENTS; X ATTACHED u NONE
• Water and Sewer Proposed Utility Rates as presented and reviewed in the special council
workshop on Monday, January 28, 2013.
• Resolution 2013-08
• Ordinance 2013-05
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to adopt Resolution 2013-08 and adopt Ordinance 2013-05 approving water and sewer utility
rates.
BUDGET INFORMATION
FUNDING. BUDGETED: NIA ❑ YES
N/A
o NO
ACTION TAKEN
❑ APPROVED AS REQUESTED n DENIED ❑ TABLED a OTHER (List changes)
COMMENTS:
City of Otsego
Summary of 2013 thru 2015 water and sewer utility rate
Monthly Sewer Rates
2013 2014
Flat Rates
Meter Size (All Users)
2015
5/8"
7.88
8.27
8.68
3/4"
7.88
8.27
8.68
1.0"
15.75
16.54
17.36
1.5"
39.38
41.34
43.41
2.0"
78.75
82,69
86.82
3.0"
157.50
165.38
173.64
4.011
393.75
413.44
434,11
Usage Rates
All usage per 1,000 gallons based on
winter usage from mid November thru
mid February 4.88 5.13 5.38
All customers without a usage history
Flat Rate 32.00 33.60 35.28
Commercial sewer charges are based on the monthly water usage
City of Otsego
Summary of 2013 thru 2015 water and sewer utility rate
Monthly Water Rates
Usage Rates
Residential
0 - 5,000 gallons
2013
2014
2015
Flat Rates
1.64
1,68
1.72
Meter Size (All Users)
1.64
1.68
1.72
5/8"
8.20
8.41
8.62
3/4"
8.20
8.41
8.62
1.0"
25.00
25.63
26.27
1.5"
50.00
51.25
52.53
2A"
75.00
76.88
78.80
3.0"
150.00
153.75
157.59
4.0"
375.00
384.38
393.98
Usage Rates
Residential
0 - 5,000 gallons
1.54
1.58
1.62
5,000 - 10,000 gallons
1.64
1,68
1.72
Over 10,000 gallons
1.64
1.68
1.72
Commercial
0 - 10,000 gallons
1.54
1.58
1.62
10,000 - 50,000 gallons
1.64
1.68
1.72
Over 50,000 gallons
1.64
1.68
1.72
City Property
0 - 5,000 gallons
1.54
1.58
1.62
5,000 - 10,000 gallons
1.64
1.68
1.72
Over 10,000 gallons
1.64
1.68
1.72
Irrigation
0 - 10,000 gallons
1.64
1.68
1.72
Over 10,000 gallons
1.64
1.68
1.72
RESOLUTION NO.: 2013 - 08
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
A RESOLUTION ESTABLISHING THE MUNICIPAL. WATER AND SEWER RATES FOR THE
THREE YEAR PERIOD 2013 — 2015 EFFECTIVE WITH THE MARCH 13, 2013 BILLING
WHEREAS, The City of Otsego provides municipal water and sewer utility services to
many of the residential areas within its city boundaries, and
WHEREAS, the utility rates charged to the users of the systems must be sufficient to
finance all expenses related to its operation including operating expenses, debt service costs
and anticipated future capital replacement costs, and
WHEREAS, the City has completed a comprehensive utility rate study conducted with
the assistance of professional consultants, and
WHEREAS, the City Council has reviewed the results of the comprehensive utility rate
study and has determined that is financially prudent to set the utility rates for 2013 — 2015 to
finance all utility related expenses.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego that
the water and sewer utility rates attached as Exhibit A and Exhibit B are approved for the years
2013 — 2015 effective with the March 13, 2013 monthly billing period.
MOTION BY:
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 11th day of February,
2013.
CITY OF OTSEGO
BY:
Jessica Stockamp, Mayor
ATTEST:
Tami Loff, City Clerk
ORDINANCE NO.: 2013-05
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE AMENDING THE CITY CODE TO ESTABLISH WATER AND
SEWER UTILITY RATES FOR 2013.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. Chapter- 2-4-2.J.1. of the City Code is hereby amended to read as
follows:
1. Municipal Water and Sewage Usage Rates:
a. Water and sewer usage rates are established to be effective with
the 18t Quarter billing and may be adjusted based on a review of
prior year operations, anticipated future repair and maintenance
needs and estimated operating costs.
ob. Water Usage Rate:
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1. Base Charge:
Meter Size
(All Users)
Base
Charge
518"
$8.20
1
314"
$8.20
1.0"
$25.00
1.5"
$50.00
2.0"
$75.00
3.0"
$150.00
4.0"
$375.00
2. Usaae_Rates:
a. Residential/City Property:
Use Rate per
Gallon
0-5,000gal.
$1.54
5,000-10,000 al.
$1.64
More than 10,000gal.
$1.64
b. Commercial/industrial/institutional:
Use Rate per
Gallon
0-10,000 al.
$1.54
10,000-50,000gal.
$1.64
More than 50,000gal.
$1.64
C. Irrigation:
Use Rate per
Gallon
0-5,000gal. $1.64
More than 5,000 al. $1.64
dc. Sewer Usage Rate:
Non-residential users shall be billed in accordance with
actual sewage usage for each month. For residential uses,
monthly sewage usage is estimated based on the average of
the actual usage for the months of December, January and
February.
2
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2. Base Charge:
Meter Size
All Users
Base
Charge
518"
$7.88
3/4"
$7.88
1.0"
$15.75
1.5"
$39.38
2.0"
$78.75
3.0"
$157.50
4.0"
$393.75
3. Usage Rates per 1 000 al.: $4.88
34. Minimum charge for accounts with less than three month
usage history the minimum charge is $32.00.
ed. Bulk Water Fee:
1. $1.001100 gallons plus sales tax.
2. $50.00 minimum charge plus sales tax.
Section 2. This Ordinance shall become effective immediately upon its passage
and publication.
MOTION BY:
SECOND BY:
ALL IN FAVOR:
THOSE OPPOSED:
3
ADOPTED by the City Council of the City of Otsego this 11th day of
February, 2013.
CITY OF OTSEGO
BY:
Jessica L. Sfockamp, Mayor
ATTEST:
Tami LofF, City Clerk
ORDINANCE NO.: 2013-05
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE AMENDING THE CITY CODE TO ESTABLISH WATER AND
SEWER UTILITY RATES FOR 2013.
THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN:
Section 1. Chapter 2-4-2.J.1. of the City Code is hereby amended to read as
follows:
1. Municipal Water and Sewage Usage Rates:
a. Water and sewer usage rates are established to be effective with
the 1" Quarter billing and may be adjusted based on a review of
prior year operations, anticipated future repair and maintenance
needs and estimated operating costs.
b. Water Usage Rate:
1. Base Charge:
Meter Size
(All Users)
Base
Charge
518°
$8.20
314"
$8.20
1.011
$25.00
1.5"
$50.00
2.011
$75.00
3.011
$150.00
4.01)
$375.00
2. Usage Rates:
a. Residential/City Property:
1
Use Rate per
Gallon
0-5,000gaL
$1.50
5,000-10,000gal.
$1.50
More than 10,000 al.
$1.60
b. Commercial/industrial/institutional:
Use Rate per
Gallon
0-10,000 al.
$1.50
10,000-50,000gal.
$1.50
More than 50,000gal.
$1.60
C. Irrigation:
Use Rate per
Gallon
0-5,000gal. $1.50
More than 5,000gal. $1.60
C. Sewer Usage Rate:
1. Non-residential users shall be billed in accordance with
actual sewage usage for each month. For residential uses,
monthly sewage usage is estimated based on the average of
the actual usage for the months of December, January and
February.
2. Base Charge:
Meter Size
All Users)
Base
Charge
5/8"
$7.88
31431
$7.88
1.0"
$15.75
1.5"
$39.38
2.0"
$78.75
3.0"
$157.50
4.0"
$393.75
3. Usage Rates per 1,000gal.: $4.88
2
4. Minimum charge for accounts with less than three month
usage history the minimum charge is $32.00.
d. Bulk Water Fee:
1. $1.001100 gallons plus sales tax.
2. $50.00 minimum charge plus sales tax.
Section 2. This Ordinance shall become effective with the March 13, 2013
billing cycle upon its passage and publication.
MOTION BY:
I+� K*U1Id#r19
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 111h day of
February, 2013.
ATTEST:
Tami Loff, City Clerk
K1
CITY OF OTSEGO
BY:
Jessica L. Stockamp, Mayor