City Council Minutes 02-27-2012 SpecialMINUTES
SPECIAL WORKSHOP /MEETING — MONTICELLO CITY COUNCIL
Monday, February 27, 2012 — 5:00 p.m.
Mississippi Room, Monticello Community Center
Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf
Absent: None
Others: Tom Kelly, Jeff O'Neill, Bruce Westby, Chuck Keyes, Matt Theisen, Bob
Paschke
1. Call to Order
Acting Mayor Brian Stumpf called the Special Meeting to order at 5:07 p.m.
2. Purpose of Workshop: Discussion of 2012 water & sewer rates
Tom Kelly explained that the City is looking at establishing rates for 2012. These will
need to be approved at the next Council meeting in order to get them on the schedule for
Quarter 1 utility billing.
3. Consideration of adjusting water and sewer rates for 2012 Fee Schedule
Tom Kelly reviewed the calculations that he has been working with. In order to maintain
revenues at a similar level to 2011, this would require an 8% increase of water rates and
12% increase for sewer rates. Using this formula, the City would basically cover their
expenses in each of these departments and a small amount of depreciation.
Tom Kelly explained that depreciation is calculated on the water and sewer
infrastructure: lines, wastewater and other facilities, lift stations, wells, electronic
monitors, equipment for operations and collections. At this time the City is not looking
at any capital replacements; however, at the time improvements are needed, the City has
to determine the method of paying for those improvements as the revenues are not
creating any surplus to go toward those future costs. Tom Kelly pointed out that the City
will also be facing a need after 2014 to find funding for the Wastewater Treatment
Facility (WWTF) loan payments. Currently half the payment is made from the sewer
fund and the other half comes from trunk funds. The hunk funds will be depleted in the
next couple years.
Brian Stumpf asked if there was any way that the City could implement the
recommended increase over a 2 year period. Torn Kelly explained that would put the
City even further behind as it is anticipated there would be an additional increase for
2013.
Clint Herbst commented on the fees that he pays in Albertville for water and how much
lower the costs are in Monticello. There was some discussion on a rate comparison chart
that Bob Paschke presented.
Special Council Meeting /Workshop— February 27, 2012 Page 1
Lloyd Hilgart asked Tom Kelly how much the sewer rates would have to be increased to
cover the additional payment on the W WTF. Tom Kelly estimated that would create an
increase of approximately $10 per month for users. Lloyd Hilgart commented that might
be a fairer method rather than levying the amount on the taxes, which would put a greater
burden on commercial and industrial property.
Jeff O'Neill pointed out that the trunk and access funds were designated to go toward
capital improvements. With little money going into those funds, there are dwindling
resources to go toward payments for the W WTF. If the economy should pick up in the
future, the Council could decide if they wanted to replenish money that will need to come
from other sources or put those funds toward WWTF upgrades that will be needed in the
future.
Jeff O'Neill mentioned one other item to consider in this picture is whether Council
wants to charge fees for garbage hauling. Bob Paschke explained the current formula and
noted that there is a surcharge on garbage pickup that is adding to the city's costs. Brian
Stumpf pointed out that the residents and businesses are paying for garbage no matter
which way the City collects, either levy or user fees.
Clint Herbst stated that he thinks the fairest way to collect for water, sewer or garbage is
through user fees rather than the tax levy. Brian Stumpf asked what the balances are in
water and sewer funds for depreciation. Tom Kelly said there is about $1 million in
water and $2.5 million in sewer.
Torn Perrault asked about the Sewer Discharge Environmental fee, which is listed on the
fee schedule. Bob Paschke explained that was started a few years ago to cover costs for
future phosphate studies and removal. Tom Perrault expressed concern about the rate
structure and its effect on the ratepayers as they use more water. Tom Kelly explained
that the structure follows state guidelines which emphasize water conservation.
Council directed Tom Kelly to bring back some more calculations with full depreciation
included in the rates and also to incorporate funding for W WTF loan payments.
4. Adjournment
Mayor Herbst adjourned the special meeting at 5:40 p.m.
Recorder: Catherine M. Shuman
Approved: March 12, 2012
Attest:
O3" ynistrator
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