2012-11-27_PWETC_AgendaPacket - Laserfiche WebLink

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139 The single largest operating cost to the sanitary sewer operation is the wastewater treatment costs paid to 140 the Metropolitan Council Environmental Services Division (MCES). Based on projected flows and 141 increased costs from the MCES, the budget for this category has been increased by 5 %. The City also 142 expects to have moderate increases in personnel and supply - related costs bringing the total increase to 143 5.7 %. The impact on the sewer rates will also be affected by these and other factors. 144 145 The 20 -Year CIP calls for an average capital replacement need of $1 million annually. In contrast, current 146 sewer rates only provide $670,000 annually. Based on a recommendation of the CIP Task Force, the City 147 Council agreed in 2011 to adopt abase rate increase of approximately 60% to alleviate the funding gap. 148 The increase was to be phased in over two years beginning in 2012. For 2013, the increase is expected to 149 generate an additional $330,000 annually. The base rate would still need to be indexed for future 150 inflationary impacts. 151 152 It is further recommended that the usage rate be increased by approximately 3.5% to offsetthe increase in 153 wastewater treatment and other operating costs. 154 155 Storm Drainage Operations 156 The City provides for the management of storm water drainage to prevent flooding and pollution control, as 157 well as street sweeping and the leaf pickup program. The following table provides a summary of the 2012 158 and 2013 (Proposed) Budget: 159 160 161 162 163 164 165 The City expects to have moderate increases in personnel, supply and capital - related costs, which will require an increase in the storm water rates. Previously, the 20 -Year CIP called for an average capital replacement need of $972,000 annually. The 2011 storm water rates only provided $310,000 annually. 166 167 To alleviate this shortfall, the CIP Task Force recommended a one -time base rate increase of approximately 168 65% in 2012. This was expected to generate an additional $660,000 annually and allow the Storm Water 169 Fund to provide for capital improvements over the next 20 years as well as increased operating costs. It 170 was noted at the time that the base rate would still need to be indexed for future inflationary impacts, 171 although no adjustment is needed for 2013. 172 173 Recycling Operations 174 The recycling operation provides for the contracted curbside recycling pickup throughout the City and 175 related administrative costs. The primary operating cost is the amounts paid to a contractor to pickup 176 recycling materials. 177 Page 5 of 12 2012 2013 $ Incr. (Decrease) % Incr. (Decrease) Personnel $ 316,837 $ 324,615 Supplies & Materials 55,301 57,300 Other Services & Charges 277,800 281,000 Depreciation / Ca ital 1,260,000 1,369,000 Total $ 1,909,938 $ 2,301,915 $ 121,977 6.4% The City expects to have moderate increases in personnel, supply and capital - related costs, which will require an increase in the storm water rates. Previously, the 20 -Year CIP called for an average capital replacement need of $972,000 annually. The 2011 storm water rates only provided $310,000 annually. 166 167 To alleviate this shortfall, the CIP Task Force recommended a one -time base rate increase of approximately 168 65% in 2012. This was expected to generate an additional $660,000 annually and allow the Storm Water 169 Fund to provide for capital improvements over the next 20 years as well as increased operating costs. It 170 was noted at the time that the base rate would still need to be indexed for future inflationary impacts, 171 although no adjustment is needed for 2013. 172 173 Recycling Operations 174 The recycling operation provides for the contracted curbside recycling pickup throughout the City and 175 related administrative costs. The primary operating cost is the amounts paid to a contractor to pickup 176 recycling materials. 177 Page 5 of 12