Water rate increase proposed
Last hike took
place in 2001
by Mary Ann Menendez
A memorandum from Estherville City Administrator Steve Woodley to members of Estherville city Council proposed a water rate adjustment and generated much discussion Monday night.
Giving some background, Woodley said the city staff had foreseen an operating loss of $167,421 as of June 30, 2008, during the preparation of the 2008-09 city budget.
It was noted that Vaughn Brua, city clerk, had recommended a water rate increase for this fiscal year.
Woodley said the two biggest operating costs amount to $127,854 of the increase in expenditures are for:
n Electricity, $84,854/year to $108,197/year (+28 percent).
n Salt, $137,784/year to $242,295/year (+76 percent).
Woodley said there has been a 76 percent raise in the delivery of salt due to transportation costs. “Salt itself is not that much but is a big part of the centralized softening plant.”
The council was reminded the last treated water rate adjustment was seven years ago (2001).
Woodley is recommending a hike in the demand charge for three-quarter inch metered customers from $5 per month to $10. He anticipates this will generate approximately $161,000 a year in additional revenue, noting that 95 percent of the city’s water customers have three-quarter inch meters (residential and small commercial).
Another factor in the formula is that it costs $2.69/CCF to produce, process and deliver the product to water customers. Information was based on metered water sold during 2007 and the city’s net operating cost for production.
“It is my recommendation we move to a flat rate on our commodity charge to encourage conservation like we have done for our electric and sewer rates. I am proposing a commodity rate of $3/CCF for all water consumed. This should generated approximately $199,000/year of additional revenue,” Woodley said.
He also recommended elevating the minimum charge for water service from $10 to $15 per month as it was done for sewer service.
It was proposed the additional $360,000 generated per year would permit the city to keep up with operating costs and maintain the infrastructure for a few years.
The city administrator also cautioned the body that it will be planning a $2 million water treatment plant expansion and ground storage reservoir project in 2009.
“This rate adjustment will not finance that capital improvement project,” he added.
The Council was reminded the proposed rate increase is conceptual and can be reworked.
After much discussion, the council had a general consensus on raising the $5 charge to $10 for three-quarter meter customers as well as setting the minimum charge at $15 per month.
The city staff will research the matter further.
(See Wednesday’s edition of the Estherville Daily News for additional Estherville City Council highlights.)