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SH"L+E <br /> w <br /> REQUEST FOR COUNCIL ACTION <br /> Date: 12/05/11 <br /> Item No.: 12 .d <br /> Department Approval City Manager Approval <br /> A <br /> Item Description: Adopt the 2012 Utility Rate Adjustments <br /> BACKGROUND <br /> Over the past several months, City Staff has been reviewing the City's utility operations to determine <br /> 3 whether customer rate adjustments are necessary for 2012. The analysis included a review of the City's <br /> 4 water, sanitary sewer, storm drainage, and solid waste recycling operations. In addition, Staff has also <br /> 5 incorporated the recommendations provided by the Council-appointed Capital Improvement Plan (CIP) <br /> 6 Task Force. This Task Force was asked to make recommendations on creating a financially sustainable <br /> "7 funding model for the City's infrastructure and capital assets. Copies of the Task Force Reports are <br /> 8 attached. <br /> 9 <br /> '10 Staff s analysis included a review of the following: <br /> 1 <br /> dl ❖ Fixed costs including personnel, supplies and maintenance, and depreciation <br /> '1 3 ❖ Variable costs including the purchase of water from the City of St. Paul, water treatment costs <br /> '14 paid to the Metropolitan Council, and recycling contractor costs <br /> '15 ❖ Capital replacement costs <br /> '1 6 ❖ Current customer base, rates, and rate structure <br /> 17 <br /> '1 8 A summary of each operating division is included below. <br /> '1 9 <br /> 10 Water Operations <br /> 1211 The City's water operation provides City customers with safe potable water, as well as on-demand water <br /> pressure sufficient to meet the City's fire protection needs. The following table provides a summary of the <br /> `23 2011 and 2012 (Proposed) Budget: <br /> 24 <br /> 2011 2012 D• D• <br /> Personnel $568,015 $ 56900 <br /> Supplies&Materials 68,850 74,100 <br /> Other Services&Charges 592,450 582,050 <br /> Water Purchases 4,40000 40000 <br /> Depreciation/Capital 1,441,500 1,16500 <br /> Total $7,070,815 $6,990,750 $(80,065) (1.1 %) <br /> `25 <br /> Page 1 of 10 <br />