WS 2006 11 27
CHANHASSEN CITY COUNCIL
WORK SESSION
NOVEMBER 27, 2006
Mayor Furlong called the work session to order at 5:30 p.m..
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilwoman Tjornhom, Councilman
Peterson and Councilman Lundquist
STAFF PRESENT:
Todd Gerhardt, Laurie Hokkanen, Paul Oehme, Kate Aanenson, Greg
Sticha and Todd Hoffman
UTILITY RATE UPDATE.
Jessica Cook with Ehlers and Associates gave a power point presentation regarding the utility
rate update. She reviewed the goals for the utility system, water and sanitary sewer funds
(operating and trunk funds), assumptions for growth, capital improvements and the west water
treatment plant. She stated it would be a policy decision of the City Council to decide how they
wanted to fund the west water treatment plan. Mayor Furlong asked for clarification on the
difference or the flip in allocation between the east and west water treatment plants. The council
discussed the pros and cons of constructing the west water treatment plant sooner than later, i.e.
operational costs, inflationary costs and timing. Jessica Cook showed graphs of cash balances
for the water operating reserves and noted that currently the City is not fully funding
depreciation. She recommended increases for hook-up fees, showing a graph of the cash balance
for the water trunk fund. Mayor Furlong asked for clarification on the comparative rate chart
between area charges and hook up charges. Councilman Lundquist asked for a discussion on the
economics of paying fees now versus later. Jessica Cook noted it's more a matter of who's
paying the carrying costs. Todd Gerhardt suggested the City look at implementing area wide
charges for watermain and sanitary sewer. Councilman Peterson noted that if the City's going to
change to an area wide charge, he prefers to do it sooner than later. Greg Sticha stated he would
prepare a study in early 2007 for a change in 2008 on how other cities have handled the
transition. Kate Aanenson noted there is a lot of development slated for 2008. Todd Gerhardt
stated staff would begin an education process informing developers of the proposed change.
Councilwoman Tjornhom asked why the City hasn't done area charges in the past. Jessica Cook
noted she has seen an increasing trend in the last 4 years of cities using the area charge method.
Councilman Lundquist stated he was not necessarily in favor of increasing rates sooner than
later. Todd Gerhardt explained staff's position that doing area charges will allow the west water
treatment plant construction to occur sooner and will create more equity for apartment building
fees versus single family fees. Jessica Cook reviewed the sewer rates, cash balances for the
sewer operating fund and recommended an increase in sewer hook-up fees of 6% annually for
2007 through 2016. She showed the cash balances for the sewer trunk fund, assumptions for
storm water growth and capital improvements. Councilman Peterson asked for clarification on
how the City sets the fund balance amount. Todd Gerhardt noted that staff will propose staying
with the proposed rate increase for December and will discuss changes in 2007 with the Key
Financial Strategy planning.
City Council Work Session - November 27, 2006
2007 BUDGET PRESENTATION: PUBLIC WORKS/CITY ENGINEERING
DEPARTMENT.
Paul Oehme gave a power presentation on the 2007 budget proposal for the public works and
engineering departments. Councilman Peterson asked if the City can investigate looking at
lower wattage or power saving bulbs in the downtown median light fixtures as a cost savings
measure.
Mayor Furlong adjourned the work session at 6:55 p.m..
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
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