VII.6. Water and Sanitary Sewer Rate Increases; Bishop (CR2017-132)
November 6, 2017 Council Report 2017-132
WATER AND SANITARY SEWER RATE INCREASES
Proposed Action
Staff recommends adoption of the following motion:
Move to approve Resolution 2017-076 “Increasing Water and Sanitary Sewer Rates Effective January 1, 2018”.
Overview
In 2016 staff enlisted the services of Ehlers to complete a rate study on our water and sewer funds in response to the
financial challenges within each of these funds. Water consumption had been decreasing along with revenue in each
of these funds. Due to the operational and capital demands on these funds both the rate structure and rate increases
were explored. Ehlers recommended implementing a tiered rate structure, flat meter charges and a large increase to
rates in the initial year. The study proposed incremental rate increases for 2018, 2019 and 2020 and also balanced
usage revenue and consumption by user type.
The rate increased being proposed is based on the 2016 study and the ongoing operational and capital needs in the
water and sewer funds.
Primary Issues to Consider
How will the increased rate affect the residents and businesses in the City of Hopkins?
Does the plan balance usage revenue and consumption by user type?
What are the proposed capital improvement projects?
Supporting Information
Staff Analysis
Resolution No. 2017-076
____________________________________
Nick Bishop, CPA
Finance Director
Financial Impact: Water $125K, Sewer $155K Budgeted: N Source: Water and Sewer Users
Related Documents (CIP, ERP, etc.): _____ ______________Notes: ____ ________________
Staff Analysis
Rate Increases and Effect on Residential and Commercial Customers
Actual Proposed
2017 2018 $ Increase % Increase
Single Family Residential (Lower User)
Water (3,000 Gallons)9.71$ 10.35$ 0.64$ 6.59%
Sewer (3,000 Gallons)17.43$ 18.36$ 0.93$ 5.34%
Total Monthly Utility Bill 27.14$ 28.71$ 1.57$ 5.78%
Single Family Residential (Median User)
Water (8,800 Gallons)27.60$ 29.46$ 1.86$ 6.72%
Sewer (4,800 Gallons)27.89$ 29.38$ 1.49$ 5.34%
Total Monthly Utility Bill 55.49$ 58.84$ 3.34$ 6.03%
Single Family Residential (High User)
Water (36,000 Gallons)115.46$ 123.30$ 7.84$ 6.79%
Sewer (5,800 Gallons)33.70$ 35.50$ 1.80$ 5.34%
Total Monthly Utility Bill 149.16$ 158.80$ 9.64$ 6.46%
Impact on Low, Median and High Residential User
Actual Proposed
2017 2018 $ Increase % Increase
Commercial Property (Low User with a 1" Meter)
Water (3,000 Gallons)11.76$ 12.56$ 0.80$ 6.80%
Sewer (3,000 Gallons)17.43$ 18.36$ 0.93$ 5.34%
Total Monthly Utility Bill 29.19$ 30.92$ 1.73$ 5.93%
Commercial Property (High User with a 2" Meter)
Water (35,000 Gallons)101.07$ 107.94$ 6.87$ 6.80%
Sewer (35,000 Gallons)203.35$ 214.20$ 10.85$ 5.34%
Total Monthly Utility Bill 304.42$ 322.14$ 17.72$ 5.82%
Impact on Low and High Commercial User
Revenue and Consumption by User Type
Revenue and Consumption - January through October 2017
% Water % Water
User Type Revenue Consumed
Single Family Residential 28.44% 25.69%
Multi Family Residential 43.23% 46.58%
Commercial 22.36% 22.15%
Irrigation 5.97% 5.58%
Total 100.00% 100.00%
What are the proposed capital improvement projects?
Over the next five years we have identified $6,728,000 and $4,106,000 in capital infrastructure projects related to the
water and sewer funds, respectively. The projects are for ongoing utility improvements related to road reconstruction,
maintenance and equipment needs.
The complete detail for all scheduled capital improvements can be found in the Capital Improvement Plan and
Equipment Replacement Plan. The 2017-2021 documents are both available at City Hall and on our website. The
2018-2022 plans are in the final stages of updating and will be available when approved.
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2017-076
WATER AND SANITARY SEWER RATE INCREASES
WHEREAS, the City of Hopkins has established Ordinance No. 92-712 Sewer and Water Utility
rates, City Code section 715.03 which defines water rates and section 715.07 which defines sanitary
sewer rates; and
WHEREAS, the ordinances authorizes water and sanitary sewer to be set forth by
council resolution; and
WHEREAS, a comprehensive Utility Rate Analysis was completed to determine the long-term
viability of the water and sewer fund; and
WHEREAS, it was determined that current rates are insufficient to meet operational and capital
needs;
NOW, THEREFORE, be it hereby resolved that the City Council of the City of Hopkins hereby
sets the service charge for the Water and Sanitary Sewer Utilities at the following rates to be paid to the
City upon billing therefore as follows:
The water service usage charge be set at the rates shown.
Flat Rates per 1,000 gallons
Residential – 5/8” meter 2.55
Residential – 1” meter 2.55
Apt/Commercial – 1-1/2” to 2” meter 5.09
Apt/Commercial – 3” meter 7.64
Apt/Commercial – 4” meter 10.18
Apt/Commercial – 6” meter 15.28
Residential and Multi-Family
0 – 3,000 gallons 2.60
3,001 – 5,000 gallons 3.00
5,001 and over 3.45
Commercial
0-10,000 gallons 2.49
10,001 – 20,000 gallons 2.86
20,001 and over 3.29
Irrigation – all usage 3.12
Production Meter 2.66
All water rates are per 1,000 gallons of water consumed.
The sanitary sewer service charge for all classes of users on the system at $6.12 per 1,000 gallons
of water used.
EFFECTIVE DATE: The provisions of this resolution shall be effective January 1, 2018.
Adopted by the City Council of the City of Hopkins, Minnesota, this 6th day of November 2017.
_______________________________
Molly Cummings, Mayor
ATTEST:
___________________________________
Amy Domeier, City Clerk