CC_Minutes_2015_0817 - Laserfiche WebLink

Home

V� Memorandum To: Roseville City Council and Roseville Finance Commission From: Councilmember Tammy McGehee Re: Utility Rates In a Council packet dated 12/12/11, Council was supplied information on funding needs, conservation pricing requirements, and base water rates in the metro area. (http://www.citvofroseville.com/documentcenter/view/5091) This was followed by a discussion based on a 1/28/13 packet information providing historical base rate changes and other questions. (http://www.citvofroseville.com/documentcenter/view/11519). What is of interest in this material is the difference between our approach to the Met Council and DNR directives regarding water conservation in the setting of rates and the actual effect of what our changes have been as we have tried to maintain a constant $1,000,000.00 to renew our water and sewer infrastructure. We have increased the base water rate from $13.00 in 2008 to $51.60 at the present time. This is an increase of 296.92% over the 7 year period or 42.41% each year. What we have then done is develop a 2 tier system of water usage, 1-30,000 and 30,000+. We have added bells and whistles of "summer" and "winter" rates. We did have a "senior discount" which was instituted long ago, but which was eliminated in favor of"means testing" so that only those who actually needed the discount received it. Now we have the steady stream of$1,000,000.00 annually to continue to update our water infrastructure, but I believe we have placed an unfair burden on those who use the least water and provided a break for those who consume the most water. Here is how our program currently works. A resident, Resident A, using less than 10,000 gallons per quarter, say 8,000 gallons will pay a water bill of$51.60+ (2.25 x 8) or$69.60. Another resident, Resident B, using more than 30,000 gallons per quarter, say 52,000 gallons will pay a water bill of$51.60 + (2.50 x 52) or $181.60. In terms of the commodity they are purchasing, water, resident A is paying$8.70 per 1,000 gallons while resident B is paying $3.49 per thousand gallons. This means that Resident A pays about 148.29% more for every 1,000 gallons of water than Resident B. Currently about 55% of Roseville residents used less than 10,000 per quarter during the winter months. I have assumed that to be what their household needs are when they are not watering their lawns or filling their swimming pools. Rather than reinstating the "senior discount" I would like to propose that the Finance and Council look into one of two options for providing the $1,000,000.00 each year for repair/replacement of infrastructure while making the cost burden more equitable, transparent, and stable. This stable funding could be provided by either bonding on an ongoing basis or increasing the levy by $1,000,000.00 for this need. In either case, there would be substantial savings to our residents in housing stock at the median Page 1 of 2