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Regular City Council Meeting Monday,November 28, 2022 Page 3 Mr. Trudgeon explained the rates are driven by the increase from St. Paul Water. The City has some options as to how to implement the rate structures but the City is anticipating collection of all the underbilling separately from the water rate struc- ture over a period of time so those amounts do not directly affect or increase the utility rates higher than what can be expected. The primary driver is St. Paul Water which raised the rates 9.5%. With no one else appearing to speak, Mayor Roe closed the public hearing at ap- proximately 6:34 p.m. Mayor Roe indicated the public can contact the City for any information related to this item or if there are any comments on the budget or tax levy or questions that need to be answered. Council Discussion Mayor Roe indicated he wanted to clarify on the utility fees, he remembered from prior discussions that the question was asked as to whether the water rates did in- clude some factor for the fact that it would take four quarters to ultimately recoup the underbilling. He thought the response was that there was some factor of that included. He did not want to necessarily give the impression that the City was not including something related to the underbilling in the utility rate charges that are being set for 2023. Mr.Trudgeon explained in the previous iteration prior to the conversation,staff had included dollars for some assumed collection in 2022, primarily for commercial. Since that time, staff is running the spreadsheets with all those dollars coming back in separately from the water rates and anticipating the City is going to have one hundred percent collection. As a result of the underbilling, staff is looking at a lower balance at the start of the year than expected so it is really about the amount of balance the City wants to carry going into the year. He noted staff has deferred a lot of projects moving forward and the City is fine as far as funding projects for 2023 and it is really a question of at what rate does the Council want to raise those rates and get back into policy compliance. Staff will have a couple scenarios for the Council to consider increasing the rates in 2023, less than what is set at eight percent. Staff also knows that St. Paul Water is not just doing a one-year increase of nine and a half percent, it is multiple years. Mayor Roe thanked staff for the presentation and the public feedback on this item. Mayor Roe noted that the council would take up the final budget, tax levy, and utility fees for approval at its next meeting on December 5th. b. Public Hearing to Consider Approving Liquor License Renewals for 2023 Assistant City Clerk Katie Bruno briefly highlighted this item as detailed in the Request for Council Action and related attachments dated November 28, 2022.