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October 14, 2019

Shafer water, sewer rates increase by 3%
Proposed water and sewer rate increases brought several Shafer residents to a public hearing prior to the Sept. 16 council meeting.

City Treasurer Richard Hill explained why the city is looking at a rate increase for 2009 water and sewer rates.

Both systems are experiencing negative cash flow, and a small increase would allow the city to prevent hitting residents with substantial increases in the years to come, he said.

Projected 2008 revenue for the water and sewer funds combined is $304,000, while expenses are projected to total $394,000.

Hill cited three reasons for declining revenues: reduction in new housing permits, which leads to a reduction in connection fees (WAC and SAC), more vacant properties which leads to lower sales receipts and lower interest earnings on investments.

Adding to the expenses are higher fuel and utility costs and increased repair and maintenance costs.

Hill said the city has a healthy cash balance to fall back on, so they should be able to continue with only moderate increases to water and sewer rates in the next few years.

"Other cities are going to $5 or $7 per 1,000 gallons of water used," he said.

The current rates are $3.71 per 1,000 gallons of fresh water and $7.43 per 1,000 gallons of water used in sewer systems, paid quarterly. Residents pay a base fee of $37.16 for water and $74.33 for sewer, up to 10,000 gallons.

The council requested to review a chart of what charges would be based on 3, 4 and 5 percent increases to both rates.

Some residents were learning for the first time that rate increases of 3 percent each year have been in place since 2005, when the city had a water study completed.

"They determined at that time that rates need to go up 15 percent, but they didn't want to do it all at once," City Clerk Lynn Jawish said.

Mayor Kyle Johnson said the council is empathetic with residents who are having difficulty with increased expenses.

"We know it's going to be bad, but we don't want it to be a big hit," Johnson said. "Rates in other towns are offset by commercial properties and our EDA and Planning Commission are working furiously to get something in here. Unfortunately, the burden of water and sewer rates goes back on the residents."

"You can't run a business in a negative cash flow situation," Hill said.

At the close of the public hearing, council passed a 4-1motion (Patti Kowalski opposed) to raise water and sewer rates by 3 percent for 2009. Base charges for up to 10,000 gallons will increase to $38.27 (an increase of $1.11) for water and $76.56 (an increase of $2.23) for sewer per quarter.

Maintenance position eliminated

Mayor Johnson made a motion to eliminate the part-time city maintenance (public works) position, due to decreases in work load.

Because development has slowed, there just isn't the amount of work making it necessary to have two full-time employees and one part-time on staff, Johnson said.

"At this time, with the work we have, we don't need the part-time position," he said. "Hopefully, we can bring this position back."

Council member Patty Mattson, who meets with the public works staff as part of the Human Resources Committee, didn't agree with making the decision to essentially lay off a worker during a council meeting.

"This should have been brought up before - I would have liked to know about it," she said.

Johnson said he was just following procedure and open meeting law, by not discussing it with anyone prior, and it was something he began to look at only after the preliminary budget was approved.

A motion to eliminate the position effective Oct. 31 passed 4-1, with Mattson opposed.

The move will lower payroll expenses by about $14,700 next year.

In other business:

• Tina Hempel was approved to fill a vacancy on the Planning Commission

• The council approved purchasing a used dump/plow truck from the city of Lindstrom for $7,500 to replace an existing, smaller truck

• The first council meeting of November was changed to Monday, Nov. 10 at 7 p.m. because the first Tuesday is election day.

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