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125 water consumption. Specific to the capital improvement plan (CIP), Mr. Miller <br />126 noted that costs were projected out twenty years, but reviewed and updated <br />127 annually. <br />128 <br />129 Water Operations <br />130 At the request of Member Seigler, Mr. Miller confirmed that depreciation was built <br />131 into the accounting process, with approximately $1 million built into water rates <br />132 annually to address CIP needs most importantly in addressing the City's aging <br />133 infrastructure. <br />134 muulllll <br />135 Specific to the proposed Intern position, Member Seigler suggested college <br />136 students as a practical part of their course work may be a good fit in forecasting <br />137 data. Mr. Miller advised that this was the intent for this position, provided the City <br />138 Council supports it, for a college student to either fill that role, or provide support <br />139 to existing staff allowing them to per orm data gathering and trending. <br />140 <br />141 Member Wozniak asked if staff loo t customer counts and distinctions between <br />142 residential and commercial accounts an annual basis in determining unit costs, <br />143 particularly if more customers are added, perhaps ere would be no need for the <br />144 proposed 1.5% rate increase in 2016. "°��iiilllllllllllllll <br />145 <br />146 Mr. Miller advised that customer counts and distil ctions were part of the annual <br />147 analysis and reflected accordingly, as well as use patterns over the last twelve <br />148 months and before recommending any rate adjustments going forward. While that <br />149 information is not available yet in real time, Mr. Miller advised that the latest <br />150 available data is reviewed. <br />151 ""'011illllllJE <br />152 At the request of Member Seigler, noting the new developments (e.g. Rosedale <br />153 Center addition, new hotels) that would increase commercial customers, Mr. Miller <br />154 responded that those customers would probably not impact 2016 rates until <br />155 construction was completed and would not be counted until coming on line and <br />156 occupancy became more certain in projecting rates for 2017 and beyond. <br />157 <br />158 At the further request of Member Seigler, Mr. Miller advised that rates had actually <br />159 decreased some years, which he would reflect later in this presentation when <br />160 looking at com arative data. <br />161 011illllllll <br />162 At the request Chair Stenlund, Mr. Miller clarified "personal" services as <br />163 personnel assigned to water operations and including their wages and benefit <br />164 package. <br />165 <br />166 Mr. Miller shared that it was fortunate that the City would not be experiencing any <br />167 increase in wholesale water purchases from the St. Paul Regional Water System, <br />168 the single largest operating cost for the water operation. Mr. Miller stated that was <br />169 very unusual and noted he couldn't remember it having happened during his 14 <br />170 year tenure with the city. <br />Page 4 of 18 <br />