CCP 03-09-1992 - Laserfiche WebLink

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, . R~T1da.tions Increasing Water & Sewer Rates Page Two Based on projections, a water rate increase is necessary. At current rates the SUbcommittee projects net losses for 1992 and 1993 of $125,027 and $150,079 respectively. These losses do not include the depreciation of the infrastructure. The depreciation of infrastructure has never been included in the water rate increases of prior years. The SUbcommittee recanunends continuation of this policy. Based on projections of a $.44/1000 gallons increase in water rates inplemented April 1, 1992, net losses for 1992 and 1993 would be reduced to $15,956 and $4,651 respectively. The SUbcommittee estimted a 20 percent allowance for water leakage. Arden Hills residents have not experienced a water rate increase since July, ,1987. During this 5-year time span, the cost of water and labor have =tinued to increase even though the water rates have remained =nstant. As a result, the cash and cash equivalents of the fund have been gradually declining. As of December 31, 1990, the cash equivalents balance was at $157,952. F= 1991, the water fund will finish out the year with a cash deficit of approxiInately $28,000. The cash equivalents balance at the end of 1991 should fall to about $130,000. . In the event that an unf=seen major repair would be needed for the current water system, that unforseen repair could seriously deplete this cash balance and affect the overall health of the fund. Attachment A shows the effect of the proposed increase on the minimum quarterly water charge f= all pipe sizes. Also shown on Attachment A are the current water rates charged by neighboring connnunities. sewer utility - The utilities SUbcommittee recanunends to Ccuncil to =nsider increasing sewer utility rates by $.84/1000 gallons beginning with the second quarter of 1992. The current charge for sewer is $1.68/1000 gallonsi this would increase to $2.52/1000 gallons. The current residential charge is $31.23 per quarteri this would increase to $46.85 per quarter. Finally, the current charge for senior citizens is $15.62 per quarter. This would increase to $23.43 per quarter. At the rates recorrnnended, residents would pay an additional $15.62 per quarter or $62.48 per year. Individuals on the seni=/disabled discount program would pay an additional $7.81 per quarter = $31. 24 per year. Based on projections, a sewer rate increase is needed. At current rates, the SUbcommittee projects net losses for 1992 and 1993 of $218,638 and $277,857 respectively. Again, these losses are =puted before the depreciation of the infrastructure. .