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Home My WebLink About2022-12-08 UC Packetliwater T H E R RTHPL E M I N K h' 0 1 0 AGENDA UTILITIES COMMISSION MEETING DECEMBER 8, 2022 8:00 AM I. ROLL CALL II. ELECTION OF OFFICERS III. APPROVAL OF MINUTES 1. November 10, 2022 Utilities Commission Meeting Minutes IV. OPEN FORUM — the open forum allows the public to address the commission on subjects which are not a part of the meeting. Commission may take action, reply, or give direction to staff Please limit your comments to 5 minutes or less. V. NEW BUSINESS 2. Update on White Bear Lake Court Case - David Sienko, Levander Gillen and Miller. (No packet materials) 3. Discussion on Annual Water Rate Increase. 4. Discussion on Water Utility Base Fee. VI. DIRECTOR/SUPERINTENDENT UPDATE 5. Monthly Gallons Pumped VII. COMMISSIONER ITEMS VIII. ADJOURN 6. Next meeting date is January 12, 2023 i I I \ i's'Ater THE OIRTIIPLACE OF NINNESOTA UTILITIES COMMISSION MEETING November 10, 2022 8:00 A.M. Utilities Superintendent Benson called the meeting to order at 8:00 a.m. Present: Chairman Speedling, Commissioners Hudak, Hutter, Jensen and Whitcomb Absent: Councilmember Polehna Staff: Utilities Superintendent Benson, Public Works Director Sanders APPROVAL OF MINUTES Possible approval of minutes of July 14, 2022 meeting Motion by Chairman Speedling, seconded by Commissioner Whitcomb, to approve the minutes of the July 14, 2022 meeting. All in favor. OPEN FORUM There were no public comments. NEW BUSINESS Discussion of Water and Sanitary Sewer Connections Public Works Director Sanders stated that a couple of times this past year, property owners on the west side of the City were told they were required to connect to City water and/or sewer due to a Code requirement that they connect if the service is available. He gave several examples where the definition of "available" is difficult to determine due to the way development has occurred. He asked for Commissioner opinions on when a utility (including a trunk water main) in front of a property should be considered available and connection required per Code, or is there a reasonable exception to this requirement? Also, should the requirement to connect only occur when there is both sewer and water available, and if it is feasible? Commissioner Whitcomb suggested if someone sells their property and it remains as a home, the individual property owner should not be required to connect. But if acreage is developed and more homes are built, the developer should understand that City utilities must be put in. The trigger should be not the sale of the site, but the development of the site. Commissioner Hudak suggested it should be development by development. If City utilities are brought in past an existing development in order to serve a new development, it should not be mandatory that the older existing development hook up. Commissioner Jensen voiced concern that if staff members make decisions interpreting the requirement, property owners could dispute them or claim that somebody else got treated differently. Commissioner Hudak added that, for bureaucratic purposes maybe the metes and bounds (unplatted) properties could be combined on paper only. A map could be done that shows these are the areas that are unique, metes and bounds, and although a watermain may come through the area, individuals will not be required to hook up unless they choose to. Mr. Sanders agreed to work on a map and bring something to review at the next meeting. Utilities Commission Meeting November 10, 2022 Commissioner Whitcomb added that in those situations when a private well fails, the property owner should be required to hook up to City water at that time. UNFINISHED BUSINESS There was no unfinished business. DIRECTOR/SUPERINTENDENT UPDATE Water Conservation Rebate Program Mr. Sanders reported that the City received a grant from the Metropolitan Council's Water Efficiency Grant Program in the amount of $25,000. The program required a 20% match by the City, for a total of $31,250. 18 property owners who replaced certain household items with new water efficient and/or energy efficient items received rebates through the program, which runs through June 2024. Well Pumping Report Mr. Benson provided number of gallons pumped so far in 2022. Project Update Mr. Sanders shared updates on the following projects: Mid Oaks lift station; Brick Street watermain replacement; Aiple lift station generator replacement; downtown manhole rehabilitation project; Lily Lake sewer lining project; portable generator for the pump house at Olive Street; Rutherford lift station pump replacement; Northland Park watermain extension; transfer switch/generator hook-up for Olive Street; hydrant painting; fluoride pumps; telemetry upgrades; well house repairs; Lily Lake tower pressure reducing valve. New projects for 2023 include: Tower Drive water tower painting; Maryknoll lift station replacement; hydrant painting (year 3 of 4). COMMISSIONER ITEMS Commissioner Jensen suggested including average residential usage in utility bills so residents can compare their use with that of other users. Commissioner Hudak asked for an update on the White Bear Lake lawsuit, and Mr. Sanders said he will contact the attorney and get an update for the next meeting. ADJOURNMENT Motion by Chairman Speedling, seconded by Commissioner Hudak, to adjourn. All in favor. The meeting was adjourned at 8:41 a.m. The next meeting will be December 8, 2022. ATTEST: Shawn Sanders, Public Works Director Steve Speedling, Chair Page 2 of 2 i11water. THE BIRTHPLACE OF MINNESOTA Memorandum Date: December 5, 2022 To: Utility Commission Members From: Shawn Sanders, Director of Public Works Subject: Water Utility Annual Rate Discussion DISCUSSION Prior to the merger of the Water Board into in the City, the Board was considering an approved rate increase for water usage across the City. New rates were enacted in beginning in 2022. In the presentation report to the Board by CliftonLarsonAllen, the rate for residential properties assumed a 5% annual increase in the following years. Also, in reviewing the presentation, there is no mention whether a rate increase should occur for commercial properties. In reviewing past records from the Board, there does not appear to be any formal action of the 5% annual rate increase for the residential properties or the commercial properties. RECOMMENDATION Staff recommends that the commission members discuss and, if they so choose, to approve the increase for residential properties and whether or not to include commercial properties. At the suggestion of the Finance Director, the rate increase, would begin with the first quarter water usage of each year for the April billing beginning 2023. Stillwater Board of Water Commissioners Rate Analysis September 15, 2020 WEALTH ADVISORY 1 OUTSOURCING I AUDIT, TAX, AND CONSULTING ir.vestme.nt advisory services are offered thro'.,g'h C:ftorLarsonAllen Wealth Advisors, LLC,. ar SEC -registered investment advisor Peer Cities Average Bill $42.89 Peer Cities Residential Average Quarterly Bill $49.88 $54.41 $62.00 Stillwater Stillwater - NEW Oak Park Heights Hugo Current $63.94 Lake Elmo $84.66 Bayport Mahtomedi St. Paul Regional Water Based on most recent published information from respective cities, with average Stillwater consumption of 19,300 gallons per quarter. ©2018 CliftonLarsonAllen LLP No Assurance is Provided Residential Options Considered Alternatives Type of Average Flat Fee First Considered Structure Increase Per Quarter Tier Break * 1 Flat/Tiered 13.10% $ 9 8,000 2 Flat/Tiered 18.60% $ 10 8,000 3 Flat/Tiered 22.90% $ 10 7,000 * Each subsequent tier is in 10,000 gallon increments. All options considered continue to include quarterly billings for residential customers and assume a 5% increase each subsequent year. ©2018 CliftonLarsonAllen LLP ��► Create Opportunities Assurance is Provided 3 Conservation Tiered Structure Includes a tiered structure with an $10/per customer flat fee and all usage billed. Achieves an average increase of 18.6%. Based on average consumption of 19,300 gallons per quarter. Assumes 5% increase in rates each year afterwards. Average Quarterly Bill $42.89 Current Tier Structure and New Test Fee ©2018CIiftonLarsonAllen LLP 6 Create Opportunities Assurance is Provided 4 Scenario #2 Stikwamr Board o: Wat er Commi scorers O.Alnttition- 1 PERFORMANCE IMPROVEMENT ASSUMPTIONS No Net Labor Performance Improvement -: No Net Non Labor Performance Improvement BASELINE OPERATING PERFORMANCE • Xn19Savant Memory.* EMS Aestvaltatd RATE STRUCTURE STRATEGIES 8 Increase to Test Fee in 2020 B $2.43 New Quarterly Test Fee Current Bill = $42.06 New Bill = $42.89 B No Change to Current Flat Rate Gallons Amount a B Change Rate Structure to lier System in 2021 B Flat Rate-$10 Tier 1 Tier 2 Tier3 Tier 4 Current Bill = $42.06 0 8,001 18,001 28,001+ Gallons 8,000 - B 18e000 • I® mom New Sill = $49.88 % Change = 2.0% % Change =18.6% MAJOR PROJECT CAPITAL NEEDS B Major Capital Project #1 in 2023 • NI ® No Major Capital Project#2 MAJOR PROJECT CAPITAL SOURCES aEl Long Term Debt (3.00% over10 years) • • No Philanthropy ' K 100%Cash S1.0M $1 DM S1.OM $0.OM SO.OM $1.0M Net Operating Margin (5367) ($331) — -22.4% 2021P -19.3% 2022P ($287) ($275) -16.0% -14.6% 2023P 2024P No 4ssurance Is provided. See selected Informa04n ($108) _($24) (5221) (5165) — — -11.2% 20250 el. Net Operating Income % — - Net Operating Income Days Cash on Hand 2026P 2027P 202Zm $2.2M $0.7m SS0.4M) ($0.6M) ($0.7M) ($0.7M) ($0.6M) 433 277 199 139 20190 20200 2021P 2022P (75) (112) (118) (117) (106) 2023P 202SP 2026P 2022P 2024P ©2018 CliftonLarsonAllen LLP Create Opportunities No Assurance is Provided 5 New Rates - Residential Current Rates (Bibbed quarterly): 0—10,000 Gallons Winter Quarters Summer Quarters $20.00 $2.20 per 1,000 gallons $2.40 per 1,000 gallons MN Department of Health Fee $2.43 per quarter (subject to change) NEW RATES (Billed Quartrivll: Flat Fee $10.00 per Quarter 0 — 8,000 $1.60 per 1.000 gallons 8,001-18,000 $2.10 per 1,000 gallons 18.001— 28.000 $2.60 per 1,000 gallons 28,001 and over S4.10 per 1.000 gallons MN Department of Health Fee $2.43 per quarter (subject to change) ©2018 Clifton La rsonAllen LLP a:7P Create Opportunities No Assurance is Provided 6 New Rates - Commercial Percentage Old Rates New Rates of Increase Winter Rates (Monthly) $ 2.20 $ 2.61 18.60% Summer Rates (Monthly) $ 2.40 $ 2.85 18.60% MN Test Fee (Quarterly) $ 2.43 $ 2.43 Winter Rates - January, February, March, April, November, and December Summer Rates - May, June, July, August, September, and October ©2018 Clifton LarsonAllen LLP 6 Create Opportunities rance is Provided Peer Cities Water Rate Information City Flat Rate cha 2020 Peer Cities Water Rate Information Tier 1 or Winter Rate Tier 2 or Summer Rate Ter 3 or Notes Tier 4 Tier 5 Stillwater - Current Stillwater - NEW Saint Paul Regional Water iServices (SPRWS) Oak Park Heights Bayport Hugo Lake Elmo Mahtomedi $20.00 Base Rate $10.00 Base Rate $18.00 (for a meter smaller than 1") $40.00 for the first 15,000 gallons $10.00 for the first 1,000 gallons $34.00 Base Rate $21.22 Base Rate $18.88 Base Rate $2.20 per 1,000 gallons in winter $1.60 per 1,000 from 0 to 8,000 gallons $2.92 per 748 gallons (100 cubic feet) in winter $3.35 per 1,000 gallons from 15,000 to 50,000 gallons $4.08 per 1,000 gallons from 1,001 to 25,000 gallons $1.00 per 1,000 gallons from 0 to 11,000 gallons $2.12 per 1,000 gallons from 0 to 15,000 gallons $2.89 per unit from 0 to 20 units (0-14,960 gallons) $2.40 per 1,000 gallons in summer $2.10 per 1,000 from $2.60 per 1,000 from 8,001 to 18,000 18,001 to 28,000 gallons gallons $3.02 per 748 gallons (100 cubic feet) in summer $3.90 per 1,000 $4.86 per 1,000 gallons gallons from 50,000 to from 99,000 to 199,000 99,000 gallons gallons $5.08 per 1,000 gallons over 25,000 gallons $2.00 per 1,000 gallons from 11,001 to 20,000 gallons $2.54 per 1,000 gallons from 15,000 to 30,000 gallons $3.02 per unit from 21 to 33 units (14,961- 24,684 gallons) $3.00 per 1,000 gallons from 20,001 to 29,000 gallons $3.06 per 1,000 gallons from 30,001 to 50,000 gallons $3.65 per unit from 34 to 45 units (24,685- 33,660 gallons) $4.10 per 1,000 over 28,001 gallons $5.78 per 1,000 gallons above 200,000 gallons $4.88 per 1,000 gallons above 29,000 gallons $3.67 per 1,000 gallons from 50,001 to 80,000 gallons $5.10 per unit over 45 units (over 33,660 gallons) $4.40 per 1,000 gallons over 80,001 gallons Based on most recent published information from respective cities ©2018 CliftonLarsonAllen LLP Create Opportunities Na Assurance is Provided 8 i11water. THE BIRTHPLACE OF MINNESOTA Memorandum Date: December 5, 2022 To: Utility Commission Members From: Shawn Sanders, Director of Public Works Subject: Water Utility Base Fee Discussion DISCUSSION The Finance Department has asked the commission to consider adding the base fee rate to commercial properties. Currently, all commercial properties and certain multi- family residential properties are not billed the $10.00 base fee as residential properties are. The finance department mentions examples of where some commercial properties, due to the lack of usage, have a water bill that is less than $5.00, where as a residential property with the same usage have a bill that would be $10.00 more. In polling around other communities, a base rate for all properties seems to be the norm and would be consistent throughout the City. RECOMMENDATION It is recommended that the commission, discuss the option adding the base fee rate to all properties. If in the affirmative, further action would be taken to the Council for final approval. January February March April May June July August September October November December 2015 Gallons Pumped 2016 2017 2018 2019 2020 2021 2022 Monthly Totals Monthly Totals Monthly Totals Monthly Totals Monthly Totals Monthly Totals Monthly Totals Monthly Totals 44996 45271 47827 54174 47578 43126 44488 43203 42145 42187 42360 50969 42335 41409 39016 39417 47375 44082 43799 55676 47276 43148 41908 41176 50242 48484 45235 52580 45808 44003 41587 41248 61822 65753 56415 77250 57949 61400 66124 55346 68400 82031 84085 77502 78308 74342 112800 91793 80989 99063 93342 89533 78536 81984 110149 111197 97156 78478 75439 99896 78626 87645 93628 89626 67282 56973 74893 67085 61054 71455 64168 87366 53465 46825 49115 48481 50054 52576 49781 59028 41445 40135 41620 43112 43786 41754 40311 37840 42465 49230 52404 46710 44426 42857 41322 Total 697782 698512 706534 762968 675736 685699 745282 697240 Jan - Nov 655317 649282 654130 716258 631310 642842 703960 697240 DNR Permited Amount 865,000,000 MGY