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<br /> , . <br /> CITY OF ARDEN HILLS <br /> . MEHEOOXJM <br /> DM'E: March 5, 1992 <br /> W: Mayor and city Council <br /> Gary R. Berger, city Mministrator <br /> FRCM: TJ SWanson, City 1\CCOUntant <br /> SUBJECT: utility In=eases <br /> The utilities Subcornmi.ttee has reconnnended increasing water rates 35 <br /> percent and sewer rates 50 percent. Due to the financial ilnpact of <br /> these increases on the city's residents and businesses, I have put <br /> tcgether a =uple of options Council may wish to consider when <br /> inplementing the utility increases. The various options project the <br /> ilnpact of the utility increases if they were to be inplemented in a two <br /> step process. <br /> Attachment A shows the first option. This option, Option A, shows the <br /> i1npact of a 20 percent increase April 1, 1992, and an additional 15 <br /> percent increase on January I, 1993, in the Water Fund. Based on <br /> . projections with the 20/15 percent increase in water rates, the <br /> projected loss for 1992 would be $63,054. For 1993, there would be a <br /> projected inccnne of $8,573. <br /> Please note, due to compounding, the 1993 rate using the two step <br /> increase ($20.01 or $1. 75/1000 gallons) would be $.43 per quarter or <br /> $.04/1000 gallons higher than the rate using a one step increase ($19.58 <br /> or $1.71/1000 gallons). <br /> Due to the large deficit projected under Option A for 1992, the cash <br /> equivalents balance would be reduced to approximately $67,000. <br /> What does this Option A mean to the customers in dollar figures? For <br /> individuals billed the minimum charge, there would be an additional <br /> $2.90/quarter or $8.70 for three quarters in 1992 and also another <br /> $2.61/guarter or $10.44 per year more in 1993. OVerall, customers <br /> billed the minimum charge would pay an additional $47.27 during the two- <br /> year period using the two step process as compared to $35.56 using the <br /> one step method. <br /> For all other customers, there would be an additional $.25/1000 gallons <br /> in 1992 and another $.23/1000 gallons in 1993. OVerall, customers would <br /> pay an additional $.73/1000 gallons during the two year period using the <br /> two step process as compared to $.44/1000 using the one step process. <br /> . I recommend Cotmcil increase water rates by 35 percent beginning April <br /> 1, 1992 in a lump SI.nll increase. <br /> -------- <br />