02-27-12-WS2 Draft Minutes - Laserfiche WebLink

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ARDEN HILLS CITY COUNCIL WORK SESSION—FEBRUARY 27, 2012 4 Councilmember Holden was in favor with Option 1. Mayor Grant agreed stating he was hoping it would have been more progressive. City Administrator Klaers indicated if a 10,000 gallon users' bill were to go up, it may encourage them to use less water. Councilmember Holmes was concerned that the rates were not reduced further for the 5,000 gallon and less users. She wanted to see the residents pay for the water used. Director of Finance and Administrative Services Iverson indicated the water rate was now being restructured along with a way to cover fixed costs. Councilmember Holmes felt the City did not fully understand what the fixed costs were and for this reason, was not creating a proper solution. Councilmember Werner asked if it was worth $25,000 to discover the City's fixed costs through a rate study. Director of Finance and Administrative Services Iverson indicated the last rate study was completed in 2008 and implemented in 2009. She indicated the predictions within that report have been realized and the City's funds were recovering. A new study was planned to be completed in 2014. Mayor Grant was encouraged that the City was on target through the past rate study and felt the City did not require another rate study at this time. Councilmember Holmes indicated the proposed rate structure was a band-aid and was not properly fixing the problem with the utility rates. She stated a rate study would allow the City to more fully understand where the water expenses were. Mayor Grant asked if a penny could be added to the upper tier and taken away from the lower tier. Director of Finance and Administrative Services Iverson stated she could analyze the numbers further. She indicated the meter charges were the same for all residents. City Administrator Klaers requested the Council discuss their goals for the water rates. Councilmember Holden commented the numbers were reviewed in November and a significant increase was proposed for those using more than 10,000 gallons. Councilmember Holmes stated she would like to see a larger break for those residents using less than 10,000 gallons. Councilmember Tamble indicated his goal would be for staff to have a system for creating and manipulating a water bill that is succinct and as fair as possible.