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the lowest bid at $850,000 for Phase I, and only $1 million allotted for the entire <br /> project. Ms. Bloom advised that staff was now meeting with MnDOT to <br /> determine the next steps; whether quantities in the bid document aligned with <br /> proposed work; and whether the bid will proceed to award or be rebid as <br /> concurred by the various partners (MnDOT, U of MN, Cities of Falcon Heights <br /> and Roseville, and Livable Communities Grant funds administered through TLC). <br /> Ms. Bloom noted there was a possibility of additional grant funds being available, <br /> but it was too soon to tell at this early stage. <br /> 5. Utility Rate/Capital Improvement Program Funding Discussion <br /> Mr. Schwartz apologized for Finance Director Chris Miller being unable to attend <br /> tonight's meeting; and proceeded to detail the information on the proposed 2012 <br /> utility rates, as outlined in the July 18, 2011 memo and referenced documents <br /> attached. While staff annually reviews utilities for rate adjustments, Mr. Schwartz <br /> noted that an added piece this year was recommended by the Council-appointed <br /> Capital Improvement Plan (CIP) Task Force, consisting of Mayor Roe, <br /> Councilmember Johnson, City Manager Malinen and Finance Director Miller. <br /> Mr. Schwartz noted later during the discussion that the Public Works Department <br /> had provided technical assistance on the various infrastructure systems and their <br /> needs anticipated and projected over the next thirty (30)years. Mr. Schwartz <br /> noted that that infrastructure overview had been presented to the Commission at <br /> last month's meeting. <br /> Member Vanderwall observed that documentation confirmed that the CIP was <br /> underfunded by huge amounts. <br /> Mr. Schwartz reviewed how the analysis had been done, through addressing fixed, <br /> personnel and variable costs (wholesale water purchase and treatment of storm <br /> water); and the resulting recommendations of the Task Force for all utility <br /> operations as detailed in the report. <br /> Mr. Schwartz reviewed the underfunding for capital financing over a number of <br /> years between annual funds available and actual annual needs; with the Task <br /> Force recommending these one-time significant rate adjustment to bring funding <br /> levels in line with capital needs for the next twenty (20)years, providing for less <br /> of an impact annually than by projecting needs in advance. Mr. Schwartz <br /> identified proposed base rate and use rate impacts. <br /> Mr. Schwartz advised that the City Council and Task Force was asking the PWET <br /> Commission if they were supportive of that recommendation; and if not, an <br /> alternative recommendation. <br /> Mr. Schwartz responded to Commission questions, comments and clarification <br /> needs throughout the presentation. <br /> Water Operations <br /> Page 4 of 18 <br />