2015-10-27_PWETC_Minutes - Laserfiche WebLink

Home

very unusual and noted he couldn't remember it having happened during his 14 year tenure with the city. Sanitary Sewer Mr. Miller reported that the sanitary sewer operation utility didn't present a similar picture, with overall costs expected to rise 3.7% and personnel costs 8.6% including cost -of -living adjustments (COLA) and increased health care costs. Also, unlike the water utility, the largest operating cost to this fund is wastewater treatment costs paid to the Metropolitan Council Environmental Services (MCES), anticipating an increase of $110,000 for 2016. Mr. Miller noted that MCES was always one behind in their costs, so using a firm flow method over the last 12 months, this was how the annual treatment costs were set, and did allow some certainty in budgeting for the next year. While additional operating costs will require an increase in sanitary sewer usage fees charged to customers, Mr. Miller reported that the base fee used to fund capital replacements would remain the same as in 2015. At the request of Member Seigler, Mr. Culver confirmed that the CIP and base fees funded sewer lining, televising and spot repairs. Mr. Miller concurred, noting that the net available for CIP and depreciation were built into the base rates annually for those improvements. At the request of Chair Stenlund, Mr. Miller addressed the apparent personnel cost discrepancies between the water and sewer utility funds, advising that they did not move entirely in concert, with more staff resources allocated to the water utility than were to the sewer utility. Mr. Miller further noted that the base for each utility is different, and while the dollar impact was similar, percentage changes were different due to the base number that percentage involved. Storm Drainage Operations Mr. Miller reported that, similar to other utility funds, impacts to this fund were related to the same supply and personnel cost increases, with $1 million also set aside annually in this fund for CIP needs. As a side note, combining each of these utility funds, Mr. Miller noted that the currently -funded base rates provided a total of $3 million set aside annually for infrastructure replacement through the CIP fund. Mr. Miller advised this had been intentional on the part of the City Council over the last few years in catching up with infrastructure needs that had been deferred for a number of years in the past, severely handicapping long-term sustainability of the city's infrastructure. Chair Stenlund asked if the CIP was significantly affected or subject to increase due to inflation as the construction and job market improved and affected the bidding climate. Mr. Culver responded that this was one area needing where staff needed to review the CIP in more detail, since it is set up with an annual dollar amount that was Page 5 of 18