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City council approves increases in sewer and water base rates |
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By Charlie Warner
Argus News Editor
Sewer and water rates will be going up for the third time in the past two years. The Caledonia City County approved a combined increase of the water and sewer base rates of $1.50 per month, which would be an annual increase of $18 per customer. The action was taken during the July 14 council meeting.
City accountant Stephanie Mann made the recommendation to the council, explaining the city needs to improve the sewer department fund balance. “The State Auditor’s Office has been pressuring us for some time to address this deficit, Mann explained.
According to the 2007 financial statement, the sewer fund balance was a negative $447,078, while the water fund balance was $12,781 to the good. The increase in the base rates of water and sewer charges will bring in an additional $22,830 per year.
“This is a start, but we’ve got a long ways to go,” City Administrator Bob Nelson said.
After operating the sewer and water funds in the red for many years, the city council decided to take the bull by the horns in January of 2007 when the first rate increase in five years was approved. That increase was five percent on the base rate and a 20 percent increase in the user rate for both sewer and water.
In August of 2007, the council approved another five percent increase on the base rates for both sewer and water and a 10 percent user increase on water and 20 percent user increase on sewer.
Even with the three rate increases since January 2007, Caledonia sewer and water rates are quite comparable with other communities of like size. Plugging in the base rate increases and figuring a monthly usage of 7,500 gallons, the cost will be $51.46 per month. Comparing that with the rates of 60 cities in Minnesota with populations between 1,000 and 4,000, Caledonia’s rates are still in the bottom one third. Breezy Point had the lowest rate at $20.66 per month, while Montgomery with the highest at $139.38 per month.
“There are grant programs out there to help cities improve their utility fund balance deficits,” Nelson noted. “But those grants are only for cities with very high rates. We don’t qualify, because our rates are too low. In order to qualify for this type of grant, our rates have to be sky high. And even with the latest base increases, we’re still on the low side.”
Councilman Gary Klug said he wondered why Mann had recommended increasing the base rates and not usage rates.
“I think people who use more water should pay more. The more water used, the more electricity we use to pump the water, and chemicals we need to treat the waste water. The more usage, the harder it is on the system,” Klug pointed out.
Mann responded base rates are used to cover fixed costs, such as debt service, which is what the city is trying to do. Usage fees traditionally go towards paying for operating expenses.
“But a family of one is getting hit just as hard by the base rate increases as a family of four. And the family of four uses a lot more water,” Klug added. “I realize we need to get a better handle on this (the sewer fund balance deficit), but I hope next year if this is brought up again, we take a look at increasing the user rates and not the base rates.”
A motion was made by Mayor Mike Morey and seconded by Councilwoman Peggy Perry to approve the base rate increases. The motion passed unanimously.
You can contact Charlie Warner at
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