4. Proposed Water Rate Increase.CITY OF �
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
TUROTU 5073 T OWN
TO: Don Ashworth, City Manager
FROM: Pam Snell, Finance Director
DATE: January 9, 1997
SUBJ: 1997 Municipal Sewer & Water Rates
Action by City �tainistrator
Endorsed - Dw A
Podified
Rejected
Date I - 9
Date Submitted to Comm'sssiori
Date Su�7." to Council
This item was tabled on the December 16, 1996 agenda in order that a public hearing could be held. A Notice of
Public Hearing was published on January 9th in the Chanhassen Villager. The last adjustment to Chanhassen
municipal water rates occurred in January of 1993. No increase to municipal sewer rates is proposed. The proposed
modification would increase the average quarterly utility bill for a Chanhassen resident from $74.40 to $78.00 per
quarter.
As a part of the 1995 audit process, Deloitte & Touche, LLP, in their Management Recommendations, noted that the
Metropolitan Council Environmental Service (Met Council) increases rates for sewer and water services annually
and that the City should pass those increased costs along to the consumer. The City has not changed its billing rates
since January 1993. Below are actual costs (per million gallons) passed on to the City of Chanhassen from Met
Council along with cost of living increases for the respective years that would apply to the actual operation and
treatment of the water lift stations.
1993 1994
1995
1996(est.)
Total
Cost per Million Gallons $1,201.10 $1,252.76.
$1,296.44
$1,318.08
Percent Increase 4.3%
3.5%
1.7%
9.5%
CPI 3.2%
2.4%
3.0%
8.6%
Although the proposed increase appears high if you solely look at water rates, the proposed increase of 4.8% to an
average quarterly utility bill appears reasonable and staff would recommend approval.
Publish January 9, 1997
NOTICE OF PUBLIC HEARING
Proposed Increase to 1997 Municipal Water Rates
The Chanhassen City Council will be considering modifications to 1997 municipal water rates at a public
hearing on Monday, January 13, 1997. These modifications would include the following:
(1.) Increasing the minimum charge of $5.75 to $6.35 per dwelling unit or per billing statement generated
for quarterly usage not exceeding 5,000 gallons.
(2.) Increasing the charge of $1.15 to $1.30 per 1,000 gallons, or fraction thereof, for all quarterly water
usage up to 25,000 gallons; and
(3.) Increasing the charge of $1.35 to $1.50 per 1,000 gallons, or fraction thereof, for all quarterly water
usage in excess of 25,000 gallons.
These modifications would increase the average quarterly utility bill for a Chanhassen resident from $74.40
to $78.00 per quarter. The last adjustment to Chanhassen municipal water rates occurred in January 1993.
All interested parties are invited to attend the meeting on January 13,1997 at 7:30 p.m.
CITY OF It",
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
DATE: December 6, 1996
TO: Don Ashworth, City Manager
FROM: Pam Snell, Finance Director
SUBJ: 1997 Municipal Sewer & Water Rates
Attached is "A Resolution Establishing Municipal Sewer and Water Rates" for 1997. These rates are in
accordance with the projected revenues for the proposed 1997 budget. I have also attached a copy of the
Deloitte & Touche 1995 Mana Recommendation referencing the City's utility rates.
City of Chanhassen
Carver and Hennepin Counties, Minnesota
DATE: December 16, 1996 RESOLUTION NO:
MOTION BY:
SECONDED BY:
A RESOLUTION ESTABLISHING MUNICIPAL SEWER AND WATER RATES
WHEREAS, this municipality maintains a public sanitary sewer system and public water
system; and
WHEREAS, Chanhassen City Code Chapter 19 provides that the City Council may from
time to time establish revised rate schedules for usage of the public sanitary sewer system and the
public water system.
NOW, THEREFORE, BE IT RESOLVED, by the Chanhassen City Council:
The following water use rates are hereby established:
A. Connected Structures
The following charges are imposed on each structure connected to the
municipal water system:
(1) A minimum charge of W.745 $6.35 per dwelling unit or per billing
statement generated for quarterly water usage not exceeding 5,000
gallons.
(2) A charge of $444 $1.30 per 1,000 gallons, or fraction thereof, for all
quarterly water usage up to 25,000 gallons; and
(3) A charge of $445 $1.50 per 1,000 gallons, or fraction thereof, for all
quarterly water usage in excess of 25,000 gallons.
(4) A charge of $8.00 per year for each connection to the municipal
water system to support mandated water quality testing services.
B. Unconnected Structures
A quarterly charge of $10.00 is hereby imposed on each single family
attached dwelling, each single family detached dwelling, each commercial
structure and each industrial structure which is not connected to the
municipal water system when municipal water service is available.
2. The following sewer usage rates are hereby established:
A. Structures Connected to Both Sewer and Water
A quarterly charge, based on winter quarter municipal water usage,
is hereby imposed on each single family dwelling, each commercial
structure and each industrial structure, which is connected to both the
municipal water system and the municipal sewer system as follows:
(1) A separate billing statement shall be generated for each water meter,
and
(2) A charge of $2.60 per 1,000 gallons or fraction thereof for all
quarterly water usage provided however, that the minimum quarterly
charge shall be $13.00.
Alternate System of Billing Computation
If water consumption during the winter billing quarter does not
accurately approximate actual sewer usage throughout the entire
billing year, the quarterly sewer charge shall be based upon water
consumption during such other billing quarter as most accurately
reflects actual sewer usage during the entire billing year. If water
consumption during any particular billing quarter does not accurately
approximate actual sewer usage, the quarterly sewer charge shall be
based upon average quarterly water consumption during the entire
billing year, or such other method as in the opinion of the City
Engineer which most closely approximates actual sewer usage.
B. Structures Connected to Sewer But Not to Water
(1) Regular Residential Rate
A quarterly charge is hereby imposed on each single family attached
dwelling and each single family detached dwelling which is
connected to the municipal sewer system but not to the municipal
water system as follows:
$52.00 per dwelling unit.
(a) Senior Citizen Discount. Provided, however, that the
quarterly charge shall be $26.00 per quarter if said dwelling
unit is occupied by no more than two persons:
i) at least one of whom is at least 65 years of age, and
ii) at least one of whom is the owner of
said dwelling unit.
(b) Alternate System of Billing Computation.
The quarterly sewer charge shall be based upon actual private
source water consumption and upon the rates set forth in
Section A, above, if a water metering system acceptable to
the City has been installed, through which accurate water
consumption records can be established.
(2) Non - Residential Rates
A quarterly charge is hereby imposed on each commercial
structure and each industrial structure, which is connected to
the municipal sewer system but not to the municipal water
system, at rates set forth in Section A, above, and on the
basis of deemed sewer usage as estimated by the City
Engineer on a case -by -case basis approximating as closely as
possible actual sewer usage of similar land used actually
connected to the municipal sewer and water systems.
C. Structures Not Connected to Sewer
(1) A quarterly charge is hereby imposed on each single family
attached dwelling and each single family detached dwelling,
which is not connected to the municipal sewer system though
connection is required by City ordinance as follows:
$104.00 per dwelling unit, provided, however, that
the quarterly charge shall be $52.00 per dwelling unit
if said dwelling unit is occupied by no more than two
persons, at least one of whom is at least 65 years of
age, and at least one of whom is the owner of said
dwelling unit.
(2) A quarterly charge is hereby imposed on each commercial
structure and each industrial structure, which is not
connected to the municipal sewer system though connection
is required by City ordinances, at the rates set forth in Section
A, above, on the basis of deemed sewer usage as estimated
by the City Engineer on a case -by -case basis approximating
as closely as possible two times actual sewer usage of similar
land uses actually connected to the municipal sewer and
water systems.
D. Effective Date
BE IT FURTHER RESOLVED, that these rates shall be effective in
entirety commencing with billings after January 1, 1993.
Passed and adopted by the Chanhassen City Council this 16th day of December, 1996.
ATTEST:
Don Ashworth, City Clerk/Manager Donald J. Chmiel, Mayor
YES NO ABSENT
Utility Fees. DELOITTE & TOUCHE 1995 MANAGEMENT RECOMENDATION
Observation:
The Metropolitan Council Environmental Service (Met Council) provides sewer and water to the City.
Generally, the Met Council increases the rates for sewer and water services on a yearly basis. However,
the City has not changed its billing rates for utilities since early 1993. The City recognized operating
income of $71,000 in the Enterprise funds during fiscal 1995.
Recommendation:
The City should review the sewer and water charges and consider adjusting them on a yearly basis so that
they can pass - through the increased cost to their customers. The following graphs were included to
provide additional information on how the City compares to the rates that other cities charge for sewer
and water services.
Quarterly Combined Charges
$too
$90
$80
$70
$so
$80
$40
$00
$20
$to
$o
Water Charges
$too
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
Based on water usage of 24,000 gallons per quarter during 1994
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Sewer Charges
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
Based on water usage of 18,000 gallons per quarter during 1994
Source: Municipal Utility Billing Departments for respective cities
Management Response:
Management defends the City's higher- than - average sewer charges in recognition of the higher sewer
rates paid to Metropolitan Council Environmental Services (MCES) to treat clean water due to the higher
clay content in Chanhassen soil. Water rates are lower than average when compared to comparable cities,
and management would propose an increase in water rates as a part of the 1997 budgetary process.
Duties of the Volunteer Fire Fighting Department:
Observation:
The City currently uses volunteers for first responder and fire fighting services. Using volunteers is the
most cost effective means to provide these services. As a result, most of the administrative duties such as
purchasing, maintaining fixed assets, keeping records of the pension plan, and ensuring that the fire-
fighters have met the proper education requirements are also the responsibility of the volunteers. These
duties are beyond the reasonable expectations of volunteers where responsibilities are not typically
consistently performed.
Recommendation:
Due to the growth in the size of the City and the related reporting and operational demands placed on the
fire department, we recommend that an administrator with the appropriate background to perform these
duties be added to assist the volunteers.
Management Response:
Management would propose that this recommendation be submitted to the Public Safety Commission, and
they be requested to prepare a study of suggestions back to City Council that would address this issue.
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