1982 Water and Sewer Ratesb
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November 12, 1981
To: Mayor Council
From: Wm. P. Craig, City Manager
Subject: 1982 Water and Sewer Rates
It has been City Council policy, during this period of double -digit
inflation, to review water and sewer rates annually, and make the neces-
sary adjustments. Sometimes, no increases are necessary (no increase was
made in the water rate between early 1978 and the beginning of 1981).
Unfortunately, the combination of rising costs for energy (the pumping of
water and sewage throughout their systems, around the clock), and the
surrealistic increase in Metropolitan Waste Control Commission charges,
have together put both utilities in financial danger, if rate increases
are not made in 1982.
WATER FUND
Water use in 1981 has been extremely low. Even assuming 1982 to be
an "average" year for water use (around 700 million gallons), inflation
will not allow 1981 rates to cover 1982 expenses (see exhibit "A
Futhermore, as the system ages the depreciation factor gets larger. Even
though the depreciation adjustment is a paper exercise, please note the
trend shown in the bracketed area of exhibit "B which you may recognize
as a sheet from your annual financial audit. After considerable discussio
the Finance Director and I decided to recommend a rate of $.70 per thousan
gallons to you for water consumption. After reaching that independent
conclusion, we reviewed Anne Norris's recapitulation of area water rates
(exhibit "C and discovered that a) We are currently 4c per thousand
gallons cheaper than the area average cost, and b) through independent
analysis Minnetonka and Eden Prairie have concluded that their rates for
1982 will be $.70 and $.71 per thousand gallons, respectively. I would
conclude that the proposed rate of $.70 is both justified by our own cir-
cumstances, and well in line with area water rates.
SEWER FUND
The grim nature of the Sewer Fund's situation is caused by one thing
the Metropolitan Waste Control Commission. Although we have not yet re-
ceived their "official" numbers, we have been told unofficially that our
annual fee will rise from $366,215 (1981) to $498,891 (1982). This is an
Q increase of 36.2 Since this se wage disposal fee is the majority of our
expense in that fund (62.5% in 1982), such a large increase cannot be
buried or "absorbed" anywhere. Please see the worksheet labeled "D" foi
the calculations of what will be necessary.
Based on the figures in the above exhibit, it appeared wise to recom-
mend an increase of 25C per thousand gallons of sewer use, bringing the
total cost to $1.20 per thousand gallons. At present, for all the in-
creases we have been forced to pass, we are still relatively low among
suburban municipalities (we charge $14.25 for a typical quarterly sewage
bill; the average is $15.16). We can only suspect that the Metro Waste
charges will be going up proportionately for all. A review of Anne's
O
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survey of area sewer rates (exhibit "E will show our relative standings,
and the 1982 rates nearby (if established yet)
WPC: dmj
Att:
Respectfully submitted,
i
William P. Craig
City Manager
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Customer Charges
Hookups, Penalties Permits
Demolition Credits Admin-
istration Fees
Rentals
Other
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Revenues
Total Operating
Revenues
LESS Operating Expenses
Before Deprec.
Net Operating Income
(Loss) Before Deprec
LESS: Depreciation
Net Operating Income
(Loss)
ADD: Nonoperating Income:
Transfer from General
Fund
Interest Income
Gain on Sale of Equip.
211
City of Hopkins
Hopkins, Minnesota
ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN CONTRIBUTIONS /RETAINED EARNINGS
For the Years Ended December 31, 1980 and 1979
Water
Utility
Fund
408,494
7,517
264,102
LESS: Nonoperating Expenses:
Interest Expense
Fiscal Agent's Fees
Total Nonoperating
Expenses
Net Income (Loss) for
the Year 36,649
Contributions /Retained
Earnings Jan. 1 2,121,134
Add (Deduct):
Property, Plant Equip.
(to) from P.I.R. Fund (113,447)
Water Control System 3,645
Equip. from General
Fixed Asset Group
-81-
Sewer
Fund
672
6,717
3,050
568,782
Refuse
Utility
Fund
510,944 $200,726
3,623
58,451 (109 ,258) $(67,228)
Total
12 -31 -80
$1,120,164
11,140
EXHIBIT E -1
672
6,717
3,261
Total
12 -31 -79
901,828
8,800
2,002
7,939
3,717
416,222 525,006 $200,726 $1,141,954 924,286
255,301 1,088,185 790,266
152,120 (43,776) $(54,575) j 53,769 134,020
93,669 65,482 12,653 171,804 160,605
(118,035) (26,585)
60,000 60,000
35,081 35,081 38,148
35 35 715
58,486 (74,177) (7,228) (22,919) 12,278
21,772 30,425
65 41
21,837 30,466
1,662,304
(30,309)
33,252
52,197 58,892
106 110
52,303 59,002
(104,643) (7,228) (75,222) (46,724)
3,816,690
(143,756)
3,645
3,723,268
100,586
39,560
Contributions /Retained
Earnings Dec. 31 $2,047,981 $1,527 ,352 26,024 $3,601,357 $3,816,690
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