CR 99-197 Proposed Water Utility Rate Increase
October 30, 1999
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Council Report 99-197
PROPOSED WATER UTILITY RATE INCREASE
Proposed Action
Staff recommends adoption of the following: Move to adopt Resolution No. 99-102 which increases the water
utilitv rate effective on billings rendered from and after January L 2000.
Adoption of this motion will result in staff moving forward with increasing the water rate from $1.10 per 1,000
gallons to $1.20 per 1,000 gallons, effective with all billings from January 1,2000 and there after.
Overview
The present water rate of $1.10 per 1,000 gallons of water used has been in effect since 1997. Operating costs have
increased from $575,000 in 1996 to an estimated $675,000 in 1999. While revenues over the last three years have
decreased from $905,000 in 1996 to an estimated $830,000 in 1999. In the next five years the water fund will incur
capital costs of approximately $2,600,000, (attached CIP). There is not enough working capital in the water fund to
cover these costs so it will be necessary to issue approximately $1,500,000 in revenue bonds in 2000. The increase in
the water revenue will be used to pay for the revenue bonds and maintain a minimum working capital balance into
the future. Another rate increase will be recommended sometime in the future to build up a working capital balance
for future capital projects
Finance published a notification in the Sun paper to inform the public of the proposed increase in water rates.
Primary Issues to Consider
. How will these rates effect the residents and businesses in the City of Hopkins?
. Why is the rate increase recommended?
. What are the proposed capital improvement projects?
Staff Recommendation
Finance recommends increasing the current water utility rate by $.20 per 1,000 gallons to provide revenue for
payment of revenue bonds to be issued in 2000 for capital improvements planned in the near future. This change in
rates would take effect January 1 st, 2000.
Supportine: Information
. Resolution No. 99-102
. Quarterly water utility bill examples
. Cash flow analysis
. Capital Improvement Plans 2000 - 2004, Water Fund
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Lori Yager
Finance Director
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 99-102
WATER UTILITY RATE INCREASE
WHEREAS, the City of Hopkins has established Ordinance No. 92-712, City Code
section 715.03 which defines water rates and allows adoption of fees through council resolution,
and,
WHEREAS, it is estimated the present water rate is not sufficient to cover operating
expenses over the next five years and will not provide sufficient funding for capital improvement
projects identified in the 2000 - 2004 Capital Improvement Plan;
NOW, THEREFORE, be it hereby resolved that the City Council of the City of Hopkins
hereby sets the service charge for the Water Utility at the following rates to be paid to the City
upon billing therefore as follows:
The gross water service usage charge for all classes of users on the system at $1.20 per
1,000 gallons of water used.
EFFECTIVE DATE: The provisions of this resolution shall take effect and be III force III
connection with all billings rendered hereunder from and after January 1,2000.
Adopted by the City Council of the City of Hopkins, Minnesota, this 16th day of November, 1999.
Charles D. Redepenning, Mayor
ATTEST:
Terry Obermaier, City Clerk
TOTAL QUARTERLY WATER UTILITY BILL
1997 rate compared to 2000 proposed rate, at Various Levels of Consumption
Consumption Quarterly
in gallons 1997 rate 2000 rate Increase
5,000 $ 5.50 $ 6.00 $ 0.50
10,000 $ 11.00 $ 12.00 $ 1.00
15,000 $ 16.50 $ 18.00 $ 1.50
20,000 $ 22.00 $ 24.00 $ 2.00
25,000 $ 27.50 $ 30.00 $ 2.50
30,000 $ 33.00 $ 36.00 $ 3.00
35,000 $ 38.50 $ 42.00 $ 3.50
40,000 $ 44.00 $ 48.00 $ 4.00
45,000 $ 49.50 $ 54.00 $ 4.50
50,000 $ 55.00 $ 60.00 $ 5.00
55,000 $ 60.50 $ 66.00 $ 5.50
60,000 $ 66.00 $ 72.00 $ 6.00
75,000 $ 82.50 $ 90.00 $ 7.50
80,000 $ 88.00 $ 96.00 $ 8.00
85,000 $ 93.50 $ 102.00 $ 8.50
90,000 $ 99.00 $ 108.00 $ 9.00
95,000 $104.50 $ 114.00 $ 9.50
100,000 $110.00 $ 120.00 $ 10.00
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PROPOSED PROJECTS BY FUNDING SOURCE
2000 2001 2002 2003 2004 FUTURE
SPECIAL ASSESSMENT
. ST-1 Residential street Improvements SA 100,000 66,000 150,000 150,000
ST-3 Citywide Concrete Alleys SA 56,000 56,000 28,000
ST-5 Fifth Avenue South SA 50,600 212,100
Trans ST-6 County Road 61-Shady Oak Rd SA 48,700
Trans ST-7 Redesign/Rebuild 11 th Avenue South SA 167,400 197,500
TOTAL 56,000 372,100 342,100 362,100 150,000 0
TAX INCREMENT FINANCING
Trans ST-5 Fifth Avenue South TF 51,800
Trans PP-1 Light Rail TranSit Stations (2) TF 150,000
Trans PP-4 Secunty System Installation TF 54,700
TOTAL 0 0 51,800 0 0 204,700
SANITARY SEWER UTILITY
Utll SA-1 Lift Station Reconstruction SF 130,000
Utll SA-2 Lift Station Reconstruction SF 150,000
Util SA-3 Sanitary Sewer Rehab SF 70,000
Trans ST-2 Residential St Improvements-Utll SF 75,000 75,000 75,000 75,000 75,000
Trans ST-11 Lake Street Bndge Replacement SF 20,000
Trans PP-2 Ninth Avenue LRT COrridor S F_ 350,000
TOTAL 295,000 75,000 75,000 75,000 75,000 500,000
STORM SEWER UTILITY
Utll SS-1 Storm Drainage System Maintenance SU 300,000 12,500 12,500
Util SS-2 Storm Water Management Proj SU 125,000 165,000
Trans ST-2 Residential Street Improvements SU 50,000 50,000 50,000 50,000 50,000
Trans ST-3 Citywide Concrete Alley SU 14,000 14,000 7,000
ST-7 RebUild/Redesign 11 th Ave So SU 30,000
Trans PP-2 Ninth Avenue LRT COrridor SU 100,000
TOTAL 489,000 271,500 69,500 50,000 50,000 100,000
WATER FUND
Utll WA-1 Repaint Water Towers WF 500,000 500,000
. WA-2 Water Treatment FaCilities, Elmo Park WF 395,000
WA-3 Watermeter RadiO Read System WF 200,000 200,000 200,000
Trans ST-2 Residential Street Improvements WF 75,000 75,000 75,000 75,000 75,000
ST-11 Lake Street Bndge Replacement WF 10,000
Trans PP-2 Ninth Avenue LRT Corridor WF 250,000
TOTAL 1,180,000 775,000 275,000 75,000 75,000 250,000
PAVILION FUND
TOTAL 0 0 0 0 0 0
HOUSING AND REDEVELOPMENT AUTHORITY
Bldgs MF-1 PubliC Works Storage Facility PI 200,000 1,300,000
OTHER GOVERNMENTAL UNITS
Trans ST-4 County Road 3 GU 2,104,219 2,178,937
Trans ST-6 County Road 61 (Shady Oak) GU 1,200,000 1,200,000
Trans ST-11 Lake Street Bridge Replacement GU 300,000
TOTAL 3,604,219 1,200,000 2,178,937 0 0 0
GRAND TOTAL 8,690,498 5,410,400 5,389,665 1,056,600 555,000 1,534,700
21,102,163