Boost in fees needed to stem losses in fund’s reserves
Stillwater property owners will see their sanitary sewer fees increase in 2014 in an effort by the city to stem losses in that fund under a plan approved Tuesday night by the Stillwater City Council.
City Finance Director Sharon Harrison said the fee increase would result in a family of four paying about $78 more a year or $19.50 more per quarter.
The council’s decision came on the heels of a city auditor’s report presented earlier this summer recommending that the city raise sanitary sewer rates for a cash infusion into the fund.
Harrison reported to council that since 2008, cash in the sanitary sewer fund has decreased by 55 percent or $710,000 with a bottom line net loss of $310,000 and a cash loss of $80,000 on a day-to-day basis in fiscal year 2012.
City staff recommended the rate increase, the first in the city since 2006, as the Metropolitan Council has increased its sanitary sewer fees by 3 percent each year for the last 10 years.
Harrison said the sanitary sewer fund loss was not due to depreciation and the rate increase would boost the city’s sanitary sewer budget reserve funds.
“Before I got here, it was 10 years without raising rates and then they agreed to a rate increase. There was another small increase in ‘05 and a one percent increase or less in ‘06,” said City Administrator Larry Hansen. “Every city is reluctant to raise rates but this is not depreciation. This is burning your reserve funds right now. And I’m imploring you to raise the rates and go with option one.”
The sanitary sewer fee increase is also important because of $960,000 in upcoming sanitary sewer-related capital purchases the city plans. The items include:
- $145,000 for Aiple and Nelson Brick lift station generators included in the proposed 2014 budget proposal;
- $60,000 for a one-ton pick up with tool box/crane also in the 2014 budget proposal;
- $350,000 for a jetter truck, and
- $450,000 for a wet well/dry well lift station.
“Sewer and water work doesn’t happen in a $25,000 fashion, it’s a $250,000 fashion and it’s burned up quickly,” Hansen said.
The increase was approved unanimously by council members at Tuesday’s meeting. Mayor Ken Harycki was not at the meeting Tuesday night.