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<br />ARDEN HILLS CITY COUNCIL - December 8, 2008 <br /> <br />9 <br /> <br />with the requirement of encouraging water conservation by charging the high <br />volume users more. <br /> <br />Mayor Harpstead clarified that the base charges are quarterly charges and the <br />dollar amount for additional costs are per 1000 gallons used. <br /> <br />Finance Director Iverson stated that this was correct. <br /> <br />Mayor Harpstead stated that the senior discount would be phased out by 2011. <br /> <br />Councilmember Holden asked why the price per gallon for the 25,000 gallon user <br />was less per gallon than it is for the 16,000 gallon user in the proposed tier system. <br /> <br />Finance Director Iverson stated that the base charge is set to cover the City's fixed <br />costs which are the normal operating expenses and the variable charge is the gallons <br />of water that the City purchases from Roseville (and Roseville purchases their water <br />from St. Paul). Since the low volume user does not use as many gallons of water <br />the fixed costs are distributed over a lower number of gallons. <br /> <br />Finance Director Iverson reviewed the sewer rates and the increases that will be <br />incurred for 2009 which is 16% per 1000 gallons over the 15,000 base gallons and <br />these figures are per quarter. <br /> <br />Mayor Harpstead stated that the reason for the changes is the gradual decline in <br />the fund balances as the cash to cover the operating and capital expenses had been <br />depleted. He asked how long the rates have not covered the costs. <br /> <br />Finance Director Iverson stated that a rate study was done in 2004. The current <br />rates are not sufficient to cover the operating expenses and the City also has capital <br />expenses with the PMP Projects that need to be covered. <br /> <br />Councilmember Holden stated that the 2004 Council knew that the rates needed to <br />be increased but had deliberately left the rates low so the rates were never increased <br />in order to keep up with the expenses. <br /> <br />Councilmember Grant asked for clarification on what the water rates, sewer rates <br />and surface water management charge paid for. <br /> <br />Finance Director Iverson explained that the rates cover all expenses related to <br />water and sewer such as repair and maintenance of water sewers, repair and <br />maintenance of PMP and waterlines, benefits, salaries, and other costs incurred by <br />