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HomeMy WebLinkAbout11.25.2002COUNCIL WORK SESSION November 25, 2002 4:00 p.m. Council Chambers Members present: Mayor Rooff, Welper, Clark, Jordan, Hurley, Getty, Greenwood. Members absent: Berry. Moved by Jordan, seconded by Clark that the Agenda, as proposed, be approved. Ayes: Five. Absent: Berry, Greenwood. Motion carried. Mayor Rooff stated that the purpose of the work session is to discuss proposed sewer rates. Michelle Weidner, Chief Financial Officer, reported that she has reviewed the industrial user agreements, and it appears some rate increase would apply to them. Jim Walsh, City Attorney, stated that there is some contractual limitation on industrial users, but the proposed rates should apply to the majority. Greenwood now present at 4:03 p.m. Ms. Weidner reported that there are funds in the construction project cash account and bond funds available, which would reduce the rates to one-half of the 30 percent increase we thought would be necessary. The proposed rates would increase the fee $2.50 per month or $30.00 per year. Ms. Weidner stated she believes the proposed $2.50 per month rate increase will take care of the operational costs after a full 12-month cycle. Mayor Rooff stated other than a ten cent rate increase in 2000, it has been ten years since the city increased the sewer fees. Mayor Rooff stated maybe it would be better to increase the sewer rates each year. Mr. Walsh reported the proposed $2.50 per month increase along with the ten cent increase in 2000 represents less than 14.5 percent increase in the past ten years. Mr. Walsh suggested the council adopt a three year rate increase, which would automatically go into effect each year. If we find that an increase is not needed, the council can change the rates later. Mr. Walsh stated that sewer rate increases should be built in as it is good planning for the council and the citizens. Mr. Walsh will put together a fact sheet and an ordinance change for council approval. Mr. Walsh stated the city is significantly lower than our sister city and the state average and not anywhere near market rates for sewer. Mr. Walsh stated he feels the sewer fund could easily stand a 14.5 percent increase. Ms. Weidner reported that $1.5 million is available in the construction project cash fund. The council could elect to use $500,000 of construction project cash fund to keep the rates down. Councilperson Jordan stated it is his understanding if the city does not raise sewer rates, the sewer fund will be $1 million in the hole. Councilperson Jordan stated he would like to look at the chemical fund and local option sales tax funds. Mr. Walsh reported that local option sales tax funds can only be used for storm sewer and not sanitary sewer. Councilperson Getty asked if when the sewer lines are televised and the lines are bad, could the city use the local option sales tax funds. Mr. Walsh responded that if the sewer improvements are part of the street improvement, local option sales tax money could be used if part of normal examination. Mr. Walsh reiterated that the local option sales tax funds can be used if the storm sewer improvement is being done as part of the street reconstruction, but cannot be used for sanitary sewers. Mr. Walsh stated that the city could as part of the road project look at the sewer before and after construction and make the road contractors do the work. Councilperson Getty stated that the Waterloo Water Works is in the process of increasing the water rates and the city is also looking at increasing garbage rates, and he has a problem increasing sewer, water and maybe garbage rates. The total increase could be $10 to $15 per month per household. Councilperson Greenwood asked where the $1.5 million construction project cash funds came from. Ms. Weidner responded some of the money came from bonding, some from rate adjustments from years back. The money was going to be used for capital improvements. Council Work Session November 25, 2002 Page 2 • • Tim Shea, Superintendent of Waste Management Services, reported that the city has the same problem with the sanitation fund. The primary drain is recycling. The city has made no decision on yard waste. There has been an increase in cost for televisions, appliances and computer equipment. The landfill rates are established. Councilperson Getty stated that most of the retirees utilize the middle size garbage can. Right now without any increase in garbage fees, the city is talking about $30 per year increase which is a lot of money for citizens on a fixed income. Councilperson Getty stated he has looked at the dollar amount that is being taken out of the sewer fund and he does not agree that the sewer fund should be paying for all these costs. Ms. Weidner responded that those dollars are for administrative costs, maintenance, insurance, etc., which the sewer fund could pay on its own. Mr. Shea reported that the city has a little over 400 miles of sanitary sewer and replaces three to four miles per ;year. Councilperson Jordan stated that he is looking at the big picture. The city raised taxes and is now talking about increasing sewer, water and garbage rates. Councilperson Jordan stated the $2.50 per month increase will not break anyone, but he is looking at all the other fees. Councilperson Getty stated that we are proposing a 14.5 percent increase this year, then other increases for the next two years. Councilperson Hurley stated with the 14.5 percent increase there is still a gap in the sewer fund, and we are just looking at spreading it over a few years to make it more palpable. Mayor Rooff stated we are spreading the increase to all users, industrial and residential. Ms. Weidner stated if the council is comfortable using $500,000 from the construction project cash fund, there would be a 14.5 percent increase in fees rather than a 30 percent increase. Mayor Rooff stated the council is going to have a goal setting meeting on December 17, 2002 and should look at all five funds at that time. Councilperson Getty stated he would like Mr. Walsh to investigate if any local option sales tax funds can be used for sanitary sewer improvements. Mr. Walsh responded he will ask the city's bonding counsel to look at the local option sales tax ordinance. Councilperson Greenwood stated he feels the city should be able to do charge backs for camera work, etc. Councilperson Jordan asked that the sewer rate increase be put off until the council has a better picture of the other fees, such as water and garbage. Mr. Walsh stated if an ordinance is not in place by January 1, the city will lose a whole quarter of fee increases. Councilperson Hurley stated he spoke with the Waterloo Water Works and they said they could put the new rates into the system in a matter of days. Councilperson Hurley stated that there are costs the city cannot control such as insurance and salaries. If the sewer fees are not increased, the city will have to lower cost somehow and it could mean people. Councilperson Hurley stated that he attended a class put on by the Iowa League of Cities and they said cities need to capture all our costs with fees. Mayor Rooff asked the Chief Financial Officer to show the health of the sewer fund over the past three years. The ordinance with the proposed $2.50 per month increase will be placed on the council agenda of December 9, 2002. With no further business before the council, it was moved by Getty, seconded by Jordan that the meeting be adjourned at 4:52 p.m. Ayes: Six. Absent: Berry. Motion carried. Nancy Eckert City Clerk