02/09/2010 - City Council SpecialI. ROLL CALL AND ADOPTION OF AGENDA
II. VISITORS TO BE HEARD
{ 1 III. MEETING WITH METROPOLITAN COUNCIL REPRESENTATIVES
P 14- IV. CONSIDERATION OF ENERGY BLOCK GRANT PROGRAM
Ili V. COMPREHENSIVE UTILITY RATE STUDY UPDATE
fag VI. ELECTION JUDGE PRECINCT AND TASK ASSIGNMENTS
if 3) VII. CONSIDERATION OF RESOLUTION IN SUPPORT OF COMPLETE
STREETS
f . tSVHl. FURTHER DISCUSSION OF ENERGY & ENVIRONMENT COMMISSION
AND CIVIC ENGAGEMENT TASKFORCE
IX. OTHER BUSINESS
X. ADJOURNMENT
AGENDA
SPECIAL CITY COUNCIL MEETING
TUESDAY, FEBRUARY 9, 2010
5:30 P.M.
EAGAN ROOM —EAGAN MUNICIPAL CAMPUS
Special City Council Workshop
February 9, 2010
III. JOINT MEETING WITH EAGAN'S METROPOLITAN COUNCIL
REPRESENTATIVES
ACTION TO BE CONSIDERED: No formal action is needed. Eagan's Metropolitan Council
representatives have been invited to the workshop to dialogue with the Council regarding current
issues of importance.
FACTS:
• Eagan is represented on the Metropolitan Council by Daniel Wolter (District 15) and Wendy
Wulff (District 16).
• Mr. Wolter was appointed to the Metropolitan Council in 2005and Ms. Wulff was appointed
in April of 2009, at which time she stepped down from her role as Lakeville City
Councilmember.
• Mr. Wolter and Ms. Wulff approached the City to seek an opportunity to meet with the City
Council to discuss any issues of importance to both the City and Metropolitan Council.
ATTACHMENTS:
• Enclosed on pages C,7
1 through 3 is the City of Eagan 2010 Metropolitan Council
Priorities and Positions handout, intended to assist the Council as a discussion tool with the
Metropolitan Council Representatives.
I
*City ofBalan
City of Eagan 2010 Metropolitan Council Priorities and Positions
Timeline for Completion of Comprehensive Guide Plan Reviews
Like a number of cities, Eagan requested, and was granted, a six month extension of time to
finalize its submittal of its Comprehensive Guide Plan Update. The City submitted its plan by
the extension deadline and has provided timely responses to Met Council staff requests for
additional information. While we believe that staff is working diligently to complete the reviews
of plans for all cities that received extensions, we are not aware of a specific timeline within
which to expect a final approval of the plan by the Council, such that the City may move forward
with implementation of the plan and its related land use changes. The City would appreciate a
clarification of timelines for that purpose.
Inflow & Infiltration (I/I) —Sump Pump and Service Lateral Inspection (SP &SLIP)
There is a very significant economical and environmental need to minimize and eliminate
excessive clear water flows into our regional Metropolitan Sewer Disposal System. A major
source of I/I comes from improper connections of Foundation Drains and Sump Pumps into the
private property's sewer service connection to the public sewer system. A leaking sewer service
itself can also be a source for unwanted I/I. The only way to find and correct these deficiencies is
through an on -site sewer inspection program. While some cities have initiated a successful "point
of sale" inspection requirement (i.e. Golden Valley), it tends to create a localized and
disproportionate burden on property transactions to mitigate what really is a "regional" problem.
Expanding this requirement on a metro wide approach to all communities would create equity
between property owners beyond corporate borders and greatly accelerate the beneficial
corrective action saving millions of dollars in unnecessary expansion of conveyance and
treatment facilities.
In 2008, the Metropolitan Council quickly used up approximately $700,000 in one time grant
assistance funding allowing cities with active SP &SLI Programs to provide financial assistance
to property owners with what can be an expensive private sewer service repair. Additional
funding should be made available from the Metropolitan Council to continue this much needed
grant program further strengthening this partnership to reduce I/I into the MSD system.
Livable Communities Demonstration Grants
The City is aware of and supportive of the Met Council's use of the Livable Communities grants
to encourage and support innovation in the design and implementation of higher density, more
urban developments and redevelopments in the region. As a consequence, applicants are
encouraged to devise new and innovative projects that can be replicated elsewhere to score
competitively in the grant review process. In the face of the current development economy,
however, the City of Eagan would encourage a temporary refocusing of the program to support
the replication of some of those earlier concepts at more locations around the region. Structured
parking, attractive pedestrian spaces and similar features are integral to urban development
patterns and they have become even more difficult to finance in the current market. Until the
market recovers, the region's resources to support such developments would be more effectively
spent by assisting more communities to pay for the types of improvements that have been proven
to be effective and will permit them to leverage private resources to bring about the types of
development that will complement it. Such a refocusing of priorities could provide substantial
support to the City's Cedar Grove Redevelopment District and others that are facing challenges
in the current market.
Regional Roadway Priorities
The City has worked diligently to meet the transportation needs of its businesses and residents,
but we often perceive that communities that permit regional transportation and traffic issues to
worsen and deal with challenges in a reactive way are rewarded through improvements funded at
state expense, whereas communities like Eagan that are proactive in planning for improvements
affecting the local, regional, state and interstate systems are penalized because the projects they
suggest have yet to be included in the state or regional priorities. As a consequence, the City has
had to take the lead and fund substantially more than its appropriate share in projects such as the
recent T.H. 149 upgrade. The City strongly encourages the Council to anticipate issues before
they become crises and place priorities on projects such as the joint study of a north -south
corridor highway improvement south of 494 between T.H. 149 and T.H. 52. Further, the City
supports a focus of resources and solutions within and in proximity to 494/694, to reinforce the
region's focus on compact development and the efficient use of infrastructure, rather than
continuing to focus improvements farther from the core that tend to encourage sprawl and longer
travel times around the region.
Regional Transit Priorities
The City works closely with the MVTA, Dakota County, Met Council and other agencies to plan
for and meet the transit needs of our residents and businesses. We believe the MVTA has done
an extraordinary job of meeting our needs to date and our joint planning efforts on projects, such
as the Cedar Corridor BRT project and other regional system and service improvements will
continue to meet those needs into the future. The City would strongly encourage the Met
Council to strongly support the efforts of MVTA and our cooperative project processes to insure
that our part of the region continues to grow its transit services and have adequate resources to
meet those needs.
3
Agenda Memo
Special City Council Meeting
February 9, 2010
IV. Consideration of Energy Block Grant Program
ACTION TO BE CONSIDERED
The Council is asked to provide feedback to staff on the proposed list of projects and share any
changes they wish to incorporate. The contracts for implementation will be provided for action at
a future Council meeting.
FACTS
• In late 2009, the City received notice of $657,100 in stimulus funding available to the City
through the Federal Department of Energy (DOE), "Energy Efficiency and Conservation
Block Grants" program.
• Shortly thereafter, the City contracted with the consulting firm of McKinstry to conduct a
preliminary energy audit of a number of City buildings and to assist with the preparation and
submission of the application required to procure the grant.
• The City application was submitted under "Energy Efficiency and Conservation Programs
for Buildings and Facilities ". The goals of this activity are consistent with the Council
initiative of reducing the City's "carbon footprint" through the implementation of initiatives
to improve energy efficiency and conservation in City buildings and facilities.
• Attached is the final list of projects recommended for implementation by staff and the
consultants. The list is based upon the results of a second, more detailed energy audit of each
facility.
• Additional input specific to the potential energy savings of the projects was provided by
Dakota Electric. The costs presented on the list are finalized estimates that include rebates
from the electric provider. It also includes the estimated annual savings in utility costs for
each improvement and a quantification of the environmental impact reflected as CO2
savings.
• Implications and Impacts;
• The listed projects will provide an estimated annual energy cost savings of $37,312 and
1,430,924 gallons of water and are spread through a variety of very visible City buildings
and facilities that have a high level of public and staff use.
• The annual CO2 savings will be over 550,000 pounds or the equivalent of removing 48
cars from the road.
• The estimated City expenditure required to leverage the completion of all projects on the
list is $8,407.
• There is an "economy of scale" in clustering similar projects (i.e; internal lighting).
• According to Dakota Electric, the final energy savings will be the result of additional
ancillary benefits and extend beyond that listed for specific elements. (ie; improving the
building envelope = less furnace run time = savings on maintenance cost /fewer filter
replacements /extended life, in addition to less gas use... etc).
4
• The work will be completed by contractors; a number of jobs will be retained and/or
created as a result.
• Staff will be negotiating with McKinstry to develop a contract to manage the
implementation of the project, the cost of which would be paid by the grant proceeds and
savings. Work on the project is expected to be complete within a year of approval.
• Many of the listed projects are replicable in individual homes and local businesses. In
this way, the City is providing a "real life" example to others considering similar
modifications.
ATTACHMENTS
Cover memo from McKinstry on pages la r
List of proposed projects on pages J
3
City of Eagan Energy Conservation Report
The following pages detail the technical energy
conservation audit, including a master list of potential
improvements, and a cashflow projection for a project that
would include all of the listed facilty improvement
measures.
McKinstry was hired by the city to conduct a technical
energy audit of identified city facilities and its municipal
infrastructure and to prepare a comprehensive matrix of
ideas, ranging from the relatively simple improvement of
changing interior room lighting to significant investments
such as geothermal technology. The comprehensive matrix
identifies and individually lists energy conservation
measures, implementation costs, and energy savings, which
include the return on investment estimates, funding
mechanisms, and potential rebates that are available for the
energy conservation improvements.
The primary components of this technical audit analysis included, but was not limited to the
following:
• A technical energy audit of identified city facilities and its municipal infrastructure;
• Identification of system improvements and upgrades that will further reduce energy
consumption and maintain consistent levels of building functionality and reasonable
levels of occupant comfort;
• Preparing a comprehensive matrix that identifies and individually lists energy
conservation measures, implementation cost, and energy savings. The matrix includes
return on investment estimates and identifies the
benefits and ramifications associated with
completing each energy conservation measure;
and
• Identification of funding mechanisms, potential
rebates, and financial incentives that may be
available for the energy conservation
improvements.
e hiStlY •11.0•1011.11 ,
McKintry with the assistance of city staff preformed audits of the City's facilities in an effort to identify
facility improvement measures (FIM) that would include operations and/or energy savings while meeting
the intent of the ARRA EECBG requirements. The initial list was created and presented to staff for
review. The results of this first review are presented on the preceding table and chart.
The total cost of projects on this list was estimated to be between $2.5 and $3.0 million dollars. Staff was
faced with the questions of limiting the improvements to the value of the EECBG funds ($657,100) or
leveraging the savings (approximately $180,000) to implement a larger scope of work. After reviewing
the two options the decision was made that that the City would limit the project to the EECBG fund
amount plus any other rebates or incentives that would result from the final scope or work selected.
To determine what the final scope of work for the project would be, each of the preceding facility
improvement measures were reviewed and prioritized by city staff. They ranked them based upon the
following criteria (no single priority outweighs another):
1) Gross Cost;
2) Annual Savings (energy efficiencies);
3) Annual CO2 Savings (energy efficiencies);
4) Measurable Results (this criteria is stipulated in the ARRA rules);
5) Long Term Goal (this criteria is stipulated in the ARRA rules);
6) Cheapest, cleanest and fastest ways to meet energy demands (this criteria is stipulated in the
ARRA rules); and
7) Current CIP item or replacement needed.
Staff focused on items that both maximized savings to the City and also met the intent of the ARRA grant
allocation. They wanted to be certain that any stimulus funds were used on projects that would have a
meaningful impact on the residents of Eagan while complying with the intent of the grant. They also
wanted to maximize the economic benefits of the Energy Efficiency and Conservation Block Grant
(EECBG) funds.
The outcome of the review resulted in two potential phases of work. The first phase was to be
implemented with McKinstry at this time with the proposed second phase being implemented at a later
date. McKinstry continued development efforts on the potential phase one and two work until a final
project list fitting the financial contains of the EECBG money are rebates was completed. The final list
on the following page constitutes the project that is recommended by city staff. The yellow highlighted
improvements (water conservation) on the following table were originally planned on being in the phase 2
scope of work; however there was adequate funding to include them in the phase one scope of work.
Phase two improvements that were not included in this phase included the following items:
• Exterior LED lighting at the ECC, Municipal Center, Maintenance Facility, and Fire Stations.
• Recourse Conservation Management Program
This project is slightly over the EECBG grant allocation. This recommended project has a cost of
$714,207. Of that amount, $657,100 would come from the city's EECBG grant allocation and $48,700 is
expected to come from rebates. That would leave the city's capital contribution at $8,407. These projects
are estimated to reduce the city's operating expense by $37,312 annually. The costs outlined above also
include the entire Federal EECBG stimulus funding reporting requirements from the current date to the
end of the mandated reporting period, October of 2011.
7
NatwallIal
These projects are being proposed as part of a guaranteed energy savings project as outlined in Minnesota
Statute 471.345. Minnesota Statute 471.345, subdivision 13 allows municipalities to enter into a
guaranteed energy savings contract with a qualified Energy Services Company (ESCo), such as
McKinstry. This statute exempts the municipality from traditional public bid laws, and allows the
municipality to enter into a negotiated contract with an ESCo that is willing to guarantee the price and the
savings. The intent of the legislation is to allow any ESCo who is willing to guarantee the price, and the
results, the ability to control the quality of the work and not be subject to the inferior quality and
performance that can result through the traditional low bid process in a public bid setting.
The project that has been developed by McKinstry will be funded by the City of Eagans's Energy
Efficiency and Conservation Block Grant (EECBG) allocation. This legislation allows an ESCo to work
with the city to procure the work. The ESCo and city staff will develop a short list of pre - qualified, local
contractors, establish a scoring matrix, obtain competitive pricing, and then issue subcontracts to the
successful subcontractors. If McKinstry is chosen they will guarantee the prices that are included in the
project to date, and any reductions in cost will be returned to the city.
The legislation requires the simple payback of the project to be less than 20 years. It specifically calls out
that the municipality may enter into these contracts if it finds that the money it will spend is less than the
savings that will be realized over 20 years. Grants and rebates are used to decrease the amount of money
that the municipality will spend, and as such directly reduce the payback of the project. In this case, the
total guaranteed maximum price for this project is $714,207, of which $657,100 is coming from a federal
grant, the city's EECBG stimulus funding allocation. In addition to the EECBG allocation, we are also
expecting almost $48,700 in rebates. This leaves the city's total capital contribution at $8,400 for the
project, with a guaranteed annual savings of over $37,000. This is a simple payback of under 3 months.
8
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Remove one lamp from biax fixtures,
replace metal halide with florescent
T8 lighting. Remove 20 lamps below
running track, replace MR16 lamps at
food quart with LED, Replace lamps
with induction in Blast, replace
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Upgrade T12 to T8 fixtures and
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metal halide.
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Facility
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Improve building envelopes with
combination of crack ceiling and
_bawler insulation Improvements.
Improve building envelope with
combination of crack ceiling and
barrier Insulation improvements.
Improve building envelope with
combination of crack ceiling and
_farrier Insulation Improvements.
Instal software to have computers
go Into sleep mode city wide
(assumes 150 computers)
Apnss 6up 3 aauibu3 pa ago —1
Upgrade existing eoctertor lighting
to high efficient LED technology
Upgrade existing exterior lighting
to high efficient LED technology
Upgrade existing exterior lighting
to high efficient LED technology
Upgrade existing exterior lighting
to high efficient LED technology
Upgrade existing exterior lighting
to high efficient LED technology
Upgrade existing exterior lighting
to high efficient LED technology
AboWu4oa1
a11g Mau 41 raw 6u16e aaelday
Set money asside for geotheramal
Prided assistance
Install a heat pump to recovery
heat from the chiller plant and
raise to a usable heat grade to
replace summer balers
Replace existing humidifiers with
new high efficient high pressure
ultrasonic systems
Install new premium efficiency
pump and VFD
Develop communication Interface
possibly In conjunction with RMC
Improve building envel
combination of crack o
barrier insulation Imorg
Existing original building
Existing original buildings (ail fire
stations)
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auoN
Existing standard efficiency
exterior lighting and wall packs.
Existing standard efficiency
exterior lighting and wall packs.
Existing standard efficiency
exterior lighting and wall packs.
Existing standard efficiency
exterior lighting and wail packs.
Existing standard efficiency
exterior lighting and wall packs.
Existing standard efficiency
exterior lighting and wall packs.
Exiting filter is large and aging
Current summer heating Is done
with the existing boiler plant
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Maintenance
Facility
Equip existing Liebert units with
economizer capability to take
advantage of cool outdoor air
werecud yny dopnaO
Recommissioning building, focus
on core loop temp reset and other
energy savings control strategies.
Recommission building, focus on
core loop temp reset and other
energy savings control strategies.
Recommissioning building, focus
on core loop temp reset and other
energy savings control strategies.
Install reflective ceiling over two
existing ceilings (City In ROM
meeting has dedded that it would
like both ranks, they also are
concerened about acoustic issues
in the welt rink)
Install new high efficient heating
system equipment
replace motor driven mixer with a
static In line mixer
Replace existing RTU with new
high effddent unit
Provide engineering study to
determine feasibility of solar on
several City sites
Upgrade to more efficient
lamps/ballast, Install occupancy
controls
Upgrade to more efficient
lamps/ballast, install occupancy
controls
Upgrade to more efficient
lamps/ballast, install occupancy
controls
Upgrade to more efficient
lamps/ballast, install occupancy
controls
Upgrade to more efficient
lamps/ballast, install occupancy
controls
Upgrade to more efficient
lamps install occupancy
controls
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improvements
Opportunity existing for control
Improvements
Opportunity existing for control
Improvements
Existing ceiling is standard
cons notion in both rinks
Standard efficient boilers nearing
the end of their life.
Existing mixer is motor style
Existing RTU Is aging and the end
of its life
auoN
Existing standard effidency
lighting
Existing standard effidency
fighting
Existing standard efficiency
lighting
Existing standard efficiency
lighting
Existing standard efficiency
lighting
Existing standard efficiency
lighting
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I Llebert Unit
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Reflective
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lamps/ballast, install occupancy
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controls
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lamps/ballast, install occupancy
controls
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Egiup beverage machines with
vending miser technology (based
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Modify select fixtures to low flow
M05 Mol 01 saJny%)alas Mpow
Eglup work stations with
occupancy control to tum off local
plug bads when the station Is
unoccupied
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lighting
&sting standard efficiency
lighting
Existing standard efficiency
lighting
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Standard plumbing fixtures
Standard plumbing fixtures
Standard plumbing factures
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13
City of Eagan, Potential Facility Improvement Measures
Agenda Information Memo
February 9, 2010 Special City Council Meeting
V. Comprehensive Utilities Rate Study
Action to be Considered:
• To receive Springsted's final recommendations for user rates for all utilities, and direct
rates to be approved at a subsequent regular City Council meeting.
Facts:
• In June 2009, the Council authorized staff to engage Springsted, Inc. to complete a rate
study for all public utilities. The purpose was twofold: first, to assist the City in adopting
a water rate structure that encourages water conservation, as required by State law;
and second, to review all utility rates in relation to long -term operating and capital
financing requirements, and recommend changes as appropriate.
• In a special Council workshop on October 13, the Council gave direction to Springsted on
conceptual aspects of the water and storm drainage /water quality rate structures.
• On January 8, the Finance Committee (Mayor Maguire and Councilmember Bakken) met
with Springsted representatives and staff, providing additional input on tiered water
rates and on the timing of implementation of the new rates.
• Patty Kettles from Springsted will present the report with Springsted's rate
recommendations for all utilities at tonight's meeting.
• If the rate recommendations are accepted, a public hearing to adopt the rates will be
held at an upcoming regular City Council meeting.
Attachments:
• Springsted's report and rate recommendations are attached without page number.
• PowerPoint slides of Springsted's presentation for this evening's meeting are attached
on pages 15 through .
/ 4
Public Sector Advisors
PRESENTATION TO
February 9, 2010
Pu bllc Sector Advisors
Springsted
I5
2/4/2010
1
Public Sector Advisors
Review and analyze Water, Sewer, Street Lighting,
and Storm Water/Water Quality Funds
— Determine appropriate rate structure and other revenue
needed
• Anticipated operating and maintenance expenses
• Continue to fund reserves for renewal & replacement and
expansion & modification
• Debt service (ending 2010)
• Adequate cash reserves
Springsted
Cash Reserves
• Sufficient cash needed:
— Current expenses
— Principal and interest on outstanding debt
— Unforeseen expenses, budget shortfalls
• Amount needed dependent on number of factors:
— Tolerance for risk
— Customer types
— Anticipated future capital needs
• Recommendation:
— Minimum 3 months operating expenses
— Future year's debt service
Public Sector Advisors
Springsted
2/4/2010
2
Public Utilities Fund
Historical Financial Information
• Combination of five utilities
• Increasing cash balance
Public Sector Advisors
2008 Cash Balance
coital Funds:
$evr
Water Quality
Springsted
Water Utility
• Goals:
- Costs are being allocated equitably
Public Sector Advisers
— Reserves (operating and restricted cash) being met
• Projected capital outlay 2010 -2019 = $14,540,000
— Water Conservation
Springsted
I
2/4/2010
%of Allocated
Costs
%ofRevenues
Collected
7 /1/08. 6/30/09
Difference
Residential
75.7%
74.9%
0.9%
Comrorcal
18.3%
19.6%
-1.3%
Industrial/Institutional
5.9%
5.6%
0.4%
Public Utilities Fund
Historical Financial Information
• Combination of five utilities
• Increasing cash balance
Public Sector Advisors
2008 Cash Balance
coital Funds:
$evr
Water Quality
Springsted
Water Utility
• Goals:
- Costs are being allocated equitably
Public Sector Advisers
— Reserves (operating and restricted cash) being met
• Projected capital outlay 2010 -2019 = $14,540,000
— Water Conservation
Springsted
I
2/4/2010
Water Utility (continued)
Pubic Sector Advisors
Recommend Seasonal Water Conservation Rates:
- Commercial accounts typically have separate irrigation
meter so: Process water $1.40/1,000 gallons
Separately- metered irrigation water
$1.75/1,000 gallons
Springsted
Sewer Utility
• Goals:
— Costs are being allocated equitably
Public Sector Advisors
— Reserves (operating and restricted cash) are being met
• Projected capital outlay 2010 -2019 = $6,308,000
Springsted
2/4/2010
4
2009
2010
Fixed Rate, per quarter
$ 6.00
$ 6.00
Winter Quarter Use, per 1,000 gallons
$ 1.40
$ 1.40
Non•WInter Quarters (Up to Winter Quarter Use)
$ 140
$ 1.40
Non• WInter Quarters (Over Whiter Quarter Use)
$ 1.40
$ 1.75
Water Utility (continued)
Pubic Sector Advisors
Recommend Seasonal Water Conservation Rates:
- Commercial accounts typically have separate irrigation
meter so: Process water $1.40/1,000 gallons
Separately- metered irrigation water
$1.75/1,000 gallons
Springsted
Sewer Utility
• Goals:
— Costs are being allocated equitably
Public Sector Advisors
— Reserves (operating and restricted cash) are being met
• Projected capital outlay 2010 -2019 = $6,308,000
Springsted
2/4/2010
4
Annual Flow
%ofTotal
Arnaud
Revenues
% of
Total
Difference
Residential
1,371,761
69.9%
$3,604,307
70.4%
0.6%
Commerical
329,114
16.8%
$ 842,724
16.5%
-0.3%
Industrial;
- 190,773
- 9.7%
$ 487,045
9.5%
` -0.2%
Institutional
71,659
3.6%
$ 183,184
3.6%
-0.1%
Water Utility (continued)
Pubic Sector Advisors
Recommend Seasonal Water Conservation Rates:
- Commercial accounts typically have separate irrigation
meter so: Process water $1.40/1,000 gallons
Separately- metered irrigation water
$1.75/1,000 gallons
Springsted
Sewer Utility
• Goals:
— Costs are being allocated equitably
Public Sector Advisors
— Reserves (operating and restricted cash) are being met
• Projected capital outlay 2010 -2019 = $6,308,000
Springsted
2/4/2010
4
Sewer Utility Financial Projections
• Outlook if no rate increase:
— Reserves not met beginning in 2011
— Cash projected to be negative in 2016
• Recommended Rate Increases:
— 6.00% annually, 2010 -2016
— 4.75% in 2017
— 4.50% in 2018 &2019
• Apply to volume charge only, flat charge remains
at 2009 levels
Public Sector Advisors
El Springsted
Street Light Utility
• Goals:
— Costs are being allocated equitably
• Maps currently under review
Puhlic Sector Advisors
— Reserves (operating and restricted cash) being met
• Projected capital outlay 2010 -2019 = $508,000
Springsted
I9
2/4/2010
5
Street Light Utility Financial Projections
• Outlook if no rate increase:
— Reserves not met beginning in 2013
- Cash projected to be negative in 2015
• Recommended Rate Increases:
— 3.85% annually, 2010 -2019
• Apply to all charges
P;abHc Sector Advisors
TA Springsted
Storm Water & Water Quality Utility
• Storm Water Utility — to maintain the City's collection,
conveyance and pond storage systems
• Water Quality Utility - to protect and improve the
quality of Eagan lakes, ponds, and wetlands
• Current Residential Charge is $8.11 /quarter
• Current Non - Residential Charge is based on REFs*
*Residential Equivalent Factor is based on lot size and
percentage of impervious surface
Pub lic Sorter Advisors
Springsted
oc
2/4/2010
6
Storm Water & Water Quality Utility
• Goals:
— Costs are being allocated to users equitably
• REF system very extensive and determined accurate
— Determine adequate allocation of revenues
• Currently 70% operating, 20% E&M, 10% R&R
— Reserves (operating and restricted cash) being met
• Projected capital outlay 2010-2019 $8,011,000
Public Sector Advisors
'12
Springsted
Storm Water/Water Quality Utility
Financial Projections:
• Outlook if no rate increase:
— Restricted cash for capital outlay declining
— Operating cash projected to be negative in 2017
• Recommended Rate Increases:
— 4.25% annually, 2010-2019
• Recommended Revenue Allocations:
Public Sector Advisors
. 5 _
Renewal -a Replacement 1 0%
Water Quality
Current
Proposed
0%
13
10%
10%
Springsted
2/4/2010
7
Storm Water/Water Quality Utility
Financial Projections (continued)
• Introduce a pollutant impact charge for water
quality?
— City monitoring pollutant loading levels by land -use
type
Public Sector Advisors
Springsted
Residential Impact /Annual Bill - #1
• If a resident chooses to continue current water use
patterns and water the lawn in the summer the
proposed bill could be:
Public Sector Advis
Average Annual Residential Utility Bill
*Proposed water bill could be lowered through conservation efforts.
Iii
Springsted
as
2/4/2010
8
Current
Proposed*
$Change
%Change
Water
$ 431
$ 505
$ 74
17%
Sewer
$ 210
$ 222
$ 12
6%
Street Light
$ 27
$ 28
$ 1
4%
Storm Water
$ 32
$ 34
$ i
4%
Total
$ 701
$ 789
$ 88
13%
Storm Water/Water Quality Utility
Financial Projections (continued)
• Introduce a pollutant impact charge for water
quality?
— City monitoring pollutant loading levels by land -use
type
Public Sector Advisors
Springsted
Residential Impact /Annual Bill - #1
• If a resident chooses to continue current water use
patterns and water the lawn in the summer the
proposed bill could be:
Public Sector Advis
Average Annual Residential Utility Bill
*Proposed water bill could be lowered through conservation efforts.
Iii
Springsted
as
2/4/2010
8
Residential Impact/Annual Bill - #2
Public Sector Advisors
If a resident chooses to conserve water and not water
the lawn their proposed bill could be:
Average Annual Residential UUIIty Bill - Flat Water U se'
Springsted
Residential Impact/Annual Bill - #3
• If a resident chooses to conserve water and
water the lawn minimally in the summer their
proposed bill could be:
Public Sector A lvisor
Average Annual Residential Utility Bill .Average Water Use
Springsted
a3
2/4/2010
9
Current
Proposed
$Change
%Change
Water
$ 179
$ 190
$ 11
6%
Sewer
$ 210
$ 222
$ 12
6%
Street Light
$ 27
$ 28
$ 1
4%
Storm Water
$ 32
$ 34
$ 1
4%
Total
$ 449
$ 474
$ 25
6%
Residential Impact/Annual Bill - #2
Public Sector Advisors
If a resident chooses to conserve water and not water
the lawn their proposed bill could be:
Average Annual Residential UUIIty Bill - Flat Water U se'
Springsted
Residential Impact/Annual Bill - #3
• If a resident chooses to conserve water and
water the lawn minimally in the summer their
proposed bill could be:
Public Sector A lvisor
Average Annual Residential Utility Bill .Average Water Use
Springsted
a3
2/4/2010
9
Current
Proposed
$Change
%Change
Water
$ 91
$ 91
$ -
0%
Sewer
$ 210
$ 222
$ 12
6%
Street Light
$ 27
$ 28
$ 1
4%
Storm Water
$ 32
$ 34
$ 1
4%
Total
$ 361
$ 375
$ 14
4%
Residential Impact/Annual Bill - #2
Public Sector Advisors
If a resident chooses to conserve water and not water
the lawn their proposed bill could be:
Average Annual Residential UUIIty Bill - Flat Water U se'
Springsted
Residential Impact/Annual Bill - #3
• If a resident chooses to conserve water and
water the lawn minimally in the summer their
proposed bill could be:
Public Sector A lvisor
Average Annual Residential Utility Bill .Average Water Use
Springsted
a3
2/4/2010
9
Conclusions
The City will need to monitor the performance of each
utility and make adjustments as actual capital costs are
incurred and the impact of conservation rates can be
observed.
Public Sector Advisors
Thank you to the City for providing us the
opportunity to work with you!
Springsted
2/4/2010
10
Agenda Information Memo
February, 2010 Special Eagan City Council Meeting
VI. ELECTION JUDGE PRECINCT AND TASK ASSIGNMENTS
ACTION TO BE CONSIDERED:
To provide direction to staff regarding a process for additional City Council feedback on
election judge precinct placement and task assignments as part of the election judge
approval process.
FACTS:
Through the process outlined in the following chronology it was determined that no
changes to the election judge screening /qualifications for eligibility included in the
approval process are appropriate or necessary; however, the City Council has
expressed an interest in further exploring a process for additional City Council vetting of
election judge precinct placement and task assignments.
• At the August 4, 2008 Listening Session staff was directed to review the City's
ordinance pertaining to the approval of election judges. (The City does not have
an ordinance specifically covering the appointment process and has historically
used the Statutes exclusively.)
• The City's practice pertaining to appointment of election judges was placed on
the agenda and discussed at a Special City Council Meeting on October 13,
2009.
• At the October 13 meeting the City Council directed that an Ad Hoc Election
Judge Appointment Committee consisting of Councilmembers Bakken and Tilley
further discuss the issue of election judge appointment.
• As a result of the Ad Hoc Election Judge Appointment Committee meeting held
on October 27, the following (highlighted) information was presented to the City
Council in the October 30, 2009 Additional Information Memo:
• Following distribution of the above memo, staff was subsequently directed to
further review the logistical issues of including additional City Council vetting of
election judge candidates as part of the approval process.
• Staff has prepared a draft checklist with a couple of options that could potentially
be used to approve the list of election judges as well as to provide a format for
City Council input on precinct and task assignments.
ATTACHMENTS:
• Enclosed on pages through _ 0 is a copy of a background memo
from City Clerk/Coordinator of Administr tive Services Petersen providing an
overview of the election judge appointment process. The memo includes a draft
checklist that can serve as a basis for discussion by the City Council providing for
additional City Council input into the placement and assignment of election
judges.
PUBLIC POLICY QUESTIONS AND /OR CONCERNS FOR CONSIDERATION BY THE
CITY COUNCIL:
1. Does the City Council desire additional public vetting of election judges as part of
the appointment process.
o What is the desired outcome of additional election judge vetting.
o Will additional public vetting further reduce the number of citizens willing
to serve as election judges.
atg
o How many City Council votes does it require to revise election judge
assignments.
o Very few, if any, election judge candidates could be disqualified from
appointment per the parameters in State Statutes.
2. If additional vetting is desired, should the process take place as part of a regular
meeting, as part of a listening session or in some other manner.
o Can an effective public vetting process take place without compromising
information that is not designated as public data.
o What will the impact be on a Council meeting as individual City
Councilmember election judge assignment decisions cycle through the
appointment process.
4 City of Evan demo
To: Gene VanOverbeke, Director of Administrative Services
From: Maria Petersen, City Clerk/Coordinator of Administrative Services
Date: January 13, 2010
Subject: Election Judge Appointment Process
Per the Council's direction subsequent to the October 27, 2009 AD Hoc Election Judge
Appointment Committee meeting, I have developed a draft checklist to aid Council in the
election judge appointment process should they desire to implement a more detailed
screening process.
As background, historically there has not been an overabundance of individuals desiring
to serve as election judges. As a result, most of the people who sign up to perform the
duties of an election judge are needed and are appointed by the City. As part of the
recruitment process, potential judges are given the opportunity to indicate which polling
place they would like to be assigned. Staff strives to honor that preference while
maintaining party balance and ensuring that the adequate staffing levels are met at each
polling site.
The head election judges are responsible for assigning their precinct judges to specific
tasks that they feel are best suited to the individual's ability and/or interest level. Certain
tasks are required by law to be performed by judges of different political parties. All
judges are trained on which duties must be carried out in this manner. Judges that
become incapable of performing certain tasks or who have created problems in the
polling place are assigned different tasks or locations and those individuals may not be
suggested for appointment in subsequent elections. Feedback from head judges is
considered in these circumstances. All efforts are undertaken by staff and head election
judges to ensure that judges' behavior is consistent with expectations of judges which is
to prevent fraud, deceit and abuse in conducting elections and to perform the duties in a
fair and impartial manner and not attempt to create an advantage for one party or for any
candidate. In general, there have been relatively few issues or complaints that have
surfaced in past years regarding the behavior of election judges.
If the Council chooses to implement a more detailed screening process than has been
used in the past, it is important to understand the parameters identified in the state statutes
when appointing election judges. Minnesota Statute 204B.19 states what qualifications
must be met in order for an individual to serve as an election judge. Specifically, any
individual who is eligible to vote in the state of Minnesota is qualified to be appointed as
an election judge. Further, the statute states that no individual shall be appointed as a
judge if the person is unable to read, write or speak the English language, is the spouse,
parent, child or sibling of any election judge serving in the same precinct or of any
candidate at that election or is a candidate at that election. The statute allows the
appointing authority to establish additional qualifications which are not inconsistent with
the provisions of the section and which relate to the ability of an individual to perform the
duties of an election judge. Eagan's past practice has been to not screen potential judges
to any extent beyond those in the statutes.
Minnesota Statute 204B.21, subd. 2, states that the appointing authority must appoint
judges from the list of eligible voters as provided by each major political party, subject to
eligibility requirements and other established qualifications as found in M.S. 204B.19. If
no lists are supplied or after the lists have been exhausted, the appointing authority may
appoint other individuals to serve as election judges. Both M.S. 204B.19 and 204B.21
address party affiliation providing as follows:
• At least two judges in each precinct must be affiliated with different major
political parties.
• No more than half of the judges in a precinct may be members of the same
political party unless there is an odd number of election judges.
With respect to information on election judges, the Council has the authority to examine
all data to determine if the individual meets the statutory qualifications and any
established by the Council; however, it's important to note that certain information
related to the individual such as party affiliation is not designated as public data. For
discussion purposes, the names of judges seeking appointment are considered public data.
If a new appointment process is approved by Council, there are some additional items for
consideration:
• Should the screening/discussion related to the appointment of judges occur at the
Listening Session, under Consent or New Business or in a combination of venues.
• If a judge meets the criteria set forth in statute but does not have sufficient support
of the Council for other reasons, what implications for the City could result if the
judge is not appointed.
• Appointments must be made at least 25 days before the election at which the
judges will serve.
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Special City Council Workshop
February 9, 2010
VII. CONSIDERATION OF RESOLUTION IN SUPPORT OF COMPLETE
STREETS
ACTION TO BE CONSIDERED: To approve a resolution expressing support of a statewide
complete streets policy.
FACTS:
• At the January 12 Special City Council meeting, during the joint meeting with the Eagan
Legislative delegation, the Council discussed the concept of Complete Streets, which
promotes streets that are safe and convenient for all users, including pedestrians, bicyclists,
transit riders, and motor vehicle drivers of all ages and abilities.
• At the January 18 regular City Council meeting, while further discussing the legislative
issues identified by the City for 2010, the Council requested that a resolution of support for a
statewide Complete Streets policy be prepared for consideration at the February workshop.
• The resolution is modeled after the City of Edina's resolution, which was passed on January
19, 2010.
ATTACHMENTS:
• Enclosed on pageki through3 is a summary of the Complete Streets proposal prepared
by the MN Complete streets Coalition.
• Enclosed on pages through is the legislative bill that was anticipated to be introduced
on February 8, 2010.
• Enclosed on page
Streets policy.
is the proposed resolution expressing support of a statewide Complete
31
PAP
•
A
Y
•
Of)
Complete Streets
Making roads safer for all Minnesotans
Chief authors: Sen. Tony Lourey and Rep. Mike Obermueller
What is Complete Streets?
Complete Streets means that our roads are planned and designed to be safe and accessible for drivers,
pedestrians, transit riders, and bicyclists -all users, regardless of age or ability.
Complete Streets is about flexibility in project planning and design —it is not a prescriptive one- size -fits-
all roadway design. Final designs for Complete Streets vary based on context, topography, road function, the
speed of traffic, pedestrian and bicycle demand, and other factors.
Complete Streets vision
Complete Streets maximizes the long -term benefits from our transportation investments by working toward
multiple goals:
Safety
Minnesota roads are safer for everyone, regardless of
how they get around.
Access
Roads are designed so that seniors, children,
and people with disabilities can lead active and
independent lives.
Affordable choices
Our transportation system offers options for families
facing increasing and volatile gas prices.
Cost effective
We build roads right the first time rather than leaving
gaps that may require costly future retrofits. We save
money by building roads that fit the local context.
Local needs
Our state policies give local communities more
flexibility to design roads to meet their local context
and needs.
Public health
Our transportation system promotes public health by
supporting walking and biking as a part of daily life.
Economic development and tourism
Our roads support vital and connected communities
that attract people, businesses, and tourism.
Environment
Our transportation system supports clean
transportation choices that reduce our dependence on
costly energy sources and help protect Minnesota's
rivers, lakes, and air quality.
Traffic Congestion
We reduce congestion by providing safe transportation
options that increase the overall capacity of the
transportation network.
Quality of life
Our transportation investments enable walkable
neighborhoods that improve quality of life and help
build community.
Minnesota Complete Streets Coalition
www.nnncompletestreets.org
FFI: Ethan Fawley, Fresh Energy 1 651.294.7141 1 fawley @fresh - energy.org
Existing barriers to Complete Streets
• Too often, Minnesota roads are built to prioritize moving cars faster without full consideration for the ability
of children, seniors, pedestrians, bicyclists, transit riders, and others to travel along and cross those roads.
• Current rigid state design mandates can lead to roads that cost more, jeopardize safety, and do not serve
important community needs.
• Too many state highways running through small town Minnesota are converted from walkable Main Streets
to high -speed corridors without consideration of the full impact on the local economy, quality of life, and
character.
Examples of "incomplete" streets
What would the legislative proposal do?
1. Make Complete Streets a policy of the state
2. Involve stakeholders to help Mn /DOT implement Complete Streets by addressing the existing barriers in
relevant protocols, guidance, standards, and requirements
3. Direct Mn /DOT to report back on work to implement Complete Streets
4. Provide immediate design flexibility for local communities by creating a 3 -year state -aid standards flexibility
evaluation program for communities interested in implementing Complete Streets
5. Encourage (but does not require) local governments to consider Complete Streets policies
Support for Complete Streets
• Minnesota Department of Transportation 2009 Complete Streets Report to the Legislature recommends a
Mn /DOT Complete Streets policy
• Minnesota Department of Health 2008 Minnesota Plan to Reduce Obesity and Obesity - Related Chronic
Diseases recommends implementing Complete Streets
• Rochester, Hennepin County, and Albert Lea have all adopted local Complete Streets policies, while
numerous other local governments have passed resolutions or are actively considering Complete Streets
• The Minnesota Complete Streets Coalition is made up of more than 45 supporting organizations, including:
» AARP
» Blue Cross and Blue Shield of Minnesota
» Minnesota Environmental Partnership
» Minnesota Consortium for Citizens with Disabilities
» Minnesotans for Healthy Kids Coalition
Minnesota Complete Streets Coalition
www.mncompletestreets.org
FFI: Ethan Fawley, Fresh Energy 1 651.294.7141 1 fawley @fresh - energy.org
33
1.1 A bill for an act
1.2 relating to transportation; requiring the commissioner of transportation to
1.3 implement complete streets policy; requiring reports; proposing coding for new
1.4 law in Minnesota Statutes, chapter 174.
1.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6
1.7
01/20/10 REVISOR XX/AA 10 -4902
ARTICLE 1
COMPLETE STREETS POLICY
1.8 Section 1. LEGISLATIVE FINDINGS.
1.9 The legislature finds that a cost - effective and common sense complete streets policy
1.10 can support the goals of the state transportation system in Minnesota Statutes, section
1.11 174.01, including improving safety, advancing independence and mobility for people
1.12 of all ages and abilities, enhancing economic development, maximizing the long -term
1.13 benefits of transportation investments, and reducing negative impacts on the environment.
1.14 Complete streets can also enhance public health and wellness by supporting safe walking
1.15 and biking as a part of daily life.
1.16 ARTICLE 2
1.17 IMPLEMENTATION
1.18 Section 1. [174.751 COMPLETE STREETS.
1.19 Subdivision 1. Definition. "Complete streets" is the planning, scoping, design,
1.20 implementation, operation, and maintenance of roads in order to reasonably address the
1.21 safety and accessibility needs of users of all ages and abilities. Complete streets considers
1.22 the needs of motorists, pedestrians, transit users and vehicles, bicyclists, and commercial
Article 2 Section 1. 1
01/20 /10 REVISOR XX/AA 10 -4902
2.1 and emergency vehicles moving along and across roads, intersections, and crossings in a
2.2 manner that is sensitive to the local context and recognizes that the needs vary in urban,
23 suburban, and rural settings.
2.4 Subd. 2. Application. Complete streets applies to every road construction,
2.5 reconstruction, or rehabilitation project funded partially or completely by the state.
2.6 Subd. 3. Implementation. The commissioner shall implement a complete streets
2.7 policy after consultation with stakeholders, state and regional agencies, local governments,
2.8 and road authorities. The commissioner, after such consultation, shall address relevant
2.9 protocols, guidance, standards, requirements, training, and shall integrate related
2.10 principles of context - sensitive solutions.
2.11 Subd. 4. Report. Beginning in 2011, the commissioner shall report on the
2.12 implementation of the complete streets policy in the agency's biennial budget submission
2.13 under section. 174.02.
2.14 Subd. 5. Local road authorities. Local road authorities are encouraged, but not
2.15 required, to create and adopt complete streets policies for their roads that reflect local
116 context and goals. Nothing in this section may be construed to prohibit a local road
2.17 authority from adopting a complete streets policy that incorporates or exceeds statutory
2.18 complete streets principles.
2.19 ARTICLE 3
2.20 REPORTS
2.21 Section 1. STATE -AID STANDARDS FLEXIBILITY EVALUATION.
2.22 Subdivision 1. Program established; reports. The commissioner of transportation
2.23 shall conduct a statewide pilot program from August 1, 2010, to July 31, 2013. The
2.24 commissioner may extend the pilot program until July 31, 2014.
2.25 Subd. 2. Program components. Upon request of a local road authority and with
2.26 approval of the state aid engineer, the standards in the latest edition of A Policy on
2.27 Geometric Design of Highways and Streets from the American Association of State
228 Highway and Transportation Officials must be accepted as an alternative to the minimum
2.29 state -aid standards in Minnesota Statutes, sections 162.02 and 162.09, and in rules
2.30 adopted under those sections. State -aid projects that meet the alternative standards as a
2.31 means of incorporating the complete streets policy are not subject to the variance process
2.32 requirements in Minnesota Statutes, sections 162.02 and 162.09.
2.33 Sec. 2. COMPLETE STREETS REPORTS.
Article 3 Sec. 2. 2
01/20/10 REVISOR XX/AA 10 -4902
3.1 The commissioner of transportation shall submit to the chairs and ranking minority
32 members of the house of representatives and senate committees with jurisdiction over
33 transportation policy and finance reports that:
3.4 (1) by November 15, 2010, summarize the department's complete streets initiatives,
3.5 outline plans to develop and implement a complete streets policy, and identify any
3.6 statutory barriers to complete streets implementation;
3.7 (2) by November 15, 2011, summarize the results of the collaboration under
3.8 Minnesota Statutes, section 174.75, subdivision 3; identify modifications made to or
3.9 recommended for protocols, guidance, standards, or other requirements to facilitate
3.10 complete streets implementation; report status of development of complete streets
3.11 performance indicators; outline other work planned relate� to the complete streets
3.12 policy; and identify statutory recommendations to facilitate complete streets policy
3.13 implementation; and
3.14 (3) by November 15, 2013, overview the department's implementation of complete
3.15 streets policy; note updates to protocols, guidance, standards, or requirements; report
3.16 on results of the state -aid standards flexibility evaluation; and identify statutory
3.17 recommendations to facilitate complete streets policy implementation.
3.18 The reports in clauses (1), (2), and (3) must be made available electronically and
3.19 made available in print only upon request.
Article 3 Sec. 2. 3
Attest:
STATE OF MINNESOTA)
COUNTY OF DAKOTA) ss
CITY OF EAGAN )
RESOLUTION NO. 2010-
EXPRESSING SUPPORT OF A STATEWIDE
COMPLETE STREETS POLICY
WHEREAS, the "Complete Streets" concept promotes streets that are safe and convenient
for all users, including pedestrians, bicyclists, transit riders and motor vehicle drivers of all ages and
abilities; and
WHEREAS, the October 2009 draft of the Minnesota Department of Transportation
Complete Streets Report includes the recommendation: "Mn/DOT should build on existing Context
Sensitive Solution practices and develop and implement a statewide Complete Streets policy...",
and
WHEREAS, the Eagan City Council recognizes the importance of complete streets, as
shown in its 2008 Comprehensive Plan update;
NOW, THEREFORE BE IT RESOLVED, that the City of Eagan encourages the Minnesota
legislature, with input and guidance from the Minnesota Department of Transportation, to authorize
the development of a statewide Complete Streets Program, which would provide for the
development of a balanced transportation system, through appropriate planning, that integrates
multiple transportation modes, where appropriate, for transportation users of all types, ages and
abilities.
ADOPTED this 9th day of February, 2010.
Maria Petersen, City Clerk Mike Maguire, Mayor
CERTIFICATE OF CITY CLERK
I, the undersigned duly appointed and acting City Clerk for the City of Eagan do hereby
certify that the attached and foregoing Resolution was duly adopted by the Eagan City Council at its
Special Meeting of February 9 2010, and as recorded in the Minutes of said Special Meeting.
WITNESS my hand and seal of said City this day of , 2010.
City Clerk
Agenda Information Memo
February 9, 2010 Special City Council Meeting
VIII. FURTHER DISCUSSION OF ENERGY & ENVIRONMENT COMMISSION
AND CIVIC ENGAGEMENT TASK FORCE
ACTION TO BE CONSIDERED: To provide direction to staff on the desire for the formation
of an Energy & Environment Commission and/or a Civic Engagement Taskforce.
FACTS:
• As part of the 2009 Goals retreat, the Council discussed their interest in dialoguing
further about the formation of task forces or advisory commissions to address the issues
of civic engagement and energy& environment.
• The interest in considering such groups stemmed from the Council adoption of the
following two City goals:
o Exemplify a broad -based and comprehensive commitment to environmental
sustainability and energy efficiency by adopting conservation and alternative
energy strategies pursuing the use of local, non - polluting, renewable, and recycled
resources, while encouraging residents and businesses to do likewise.
o Strengthen our community through volunteerism and civic engagement in the
community.
• The City Council previously discussed the two possible commissions /taskforces at the
November 10, 2009 Special City Council meeting, and directed at that time that
proposals be refined to suggest that an Energy and Environment Commission would
serve as an advisory commission of the Council to meet monthly or bi- monthly, while the
topic of civic engagement would be better suited for a taskforce with a defined timeline
and deliverables.
• Enclosed for the Council's review and discussion are revised proposals for an Energy and
Environment Commission and a Civic Engagement Taskforce, as requested by the
Council at the November workshop.
• The Council directed that the refined proposals be brought back to the Council at the
February workshop in order that a decision can be made as to whether to pursue the
formation of the Energy and Environment Commission during the 2010 -2011 advisory
commission appointment process, while also further discussing the desire and/or timeline
for a Civic Engagement Taskforce.
• While advisory commission applications are accepted year round, typically, there is an
advertising push in February and March of each year, with applications accepted through
March, interviews in early April, and appointments made in late April /early May.
• As part of the discussion at the November 10 workshop, the Council raised the issue of
how the Commission and taskforce would impact the 2010 or 2011 budget, particularly in
a time of budget contraction.
• The staff time for both the proposed commission and/or taskforce is the primary budget
impact. For comparison's sake, the staff liaison to the Airport Relations Commission
(ARC) estimates that approximately 5 hours per week is allocated to supporting the
Commission and responding to airport issues in the community. It is anticipated that at
least 5 hours /week (20% of an FTE) would be necessary for the startup and work product
needed for a new Energy and Environment Commission.
• If there is concern about the staff allocation needed for a new commission, one possible
scenario for the Council to consider is to have the Energy and Environment Commission
meet on a bimonthly basis, and change the Airport Relations Commission current
schedule to meet bimonthly as well so that the two commissions would alternate each
month. This scenario has been discussed with ARC Chair Thorkildson, and he voiced his
opinion that the change to having the ARC meet every other month would still allow the
Commission adequate time to carry out their duties and meet the airport needs of the
City.
• It is the City's policy that advisory commissions do not have any budget authority, nor
do they have budgets allocated to the individual commissions. However, the point was
raised by the Council at the November workshop that the Council will need to consider
the likelihood that an Energy and Environment Commission could make
recommendations to the City Council on the allocation of funds to carry out their
suggested projects and initiatives, which could be difficult during this time of budget
constraints.
• The Council is encouraged to provide direction to staff on both the creation of and
timeline for an Energy and Environment Commission and/or a Civic Engagement
Taskforce.
ATTACHMENTS:
• Enclosed on pages is the proposed structure for a Civic Engagement Taskforce,
which was revised with the input provided by the Council at the November 10, 2009
workshop.
• Enclosed on page is the proposed structure for the Energy and Environment
Commission, which was also revised with the input provided by the Council at the
November 10, 2009 workshop.
Eagan Civic Engagement Taskforce
40
DRAFT (Revised)- 02/09/10
PROPOSED TASKFORCE STRUCTURE
Purpose: To respond to the City Council's goal of strengthening the community through
volunteerism and civic engagement.
Taskforce Make Up: Up to 7 members
• Taskforce members could be citizens in the community who are active in and/or
cognizant of service and volunteer organizations in the community, including the faith
community.
Taskforce Duties/Functions:
• Serve as a resource to the City by summarizing the citizen engagement and volunteer
opportunities that already exist within the community.
• Identify service needs in the community that are not currently being met, and make
recommendations as to how appropriate volunteer efforts could be made to address those
needs.
• Serve as resource to citizens looking for volunteer opportunities in the community.
Taskforce Timeline/ Meeting Schedule: October 2010 -March 2011 (6 months); meet monthly,
or as needed (to be determined by the taskforce)
Commission Staff Liaison: Dianne Miller (with assistance as needed by appropriate staff)
Eagan Enemy and Environment Commission
Commission Make Up: 7 members (2 -year terms), 1 Alternate (1 -year term)
DRAFT (Revised)- 02/09/10
PROPOSED COMMISSION STRUCTURE
Purpose: To respond to the City's environmental goal by making recommendations to the City
Council on environmental sustainability and energy conservation strategies for the City's
residents and businesses.
Commission Duties/Functions:
• Explore and recommend best practices for energy conservation for Eagan's residents and
businesses, including:
o Recommendations on modifications to the City's zoning code to promote "green"
development and opportunities.
o Communicate benefits of Energy Star appliances and energy efficiency federal tax
credits
o Exploration of public loan programs to assist residents in financing energy
reduction measures in their homes.
• Examine and recommend changes or enhancements in the City's purchasing, operations,
vehicle fleet, and facility management to conserve energy and lower green house gas
emissions.
• Evaluate and monitor the City's residential recycling program.
• Educate the public about energy issues, reductions, conservation, reuse, recycling, and
environmental protection.
• Explore partnerships with utility companies and local businesses to promote energy
reduction.
• Evaluate and encourage improvements in air and water quality.
• Receive and review recommendations from citizens on environmental and energy
reduction measures.
Commission Meeting Schedule: Meet bi- monthly on the 2 Tuesday of the month, 7:00 p.m.
(alternate monthly with Airport Relations Commission) or meet monthly on the 4 Thursday of
the month at 7:00 p.m.
Commission Staff Liaison: Dianne Miller, Assistant to the City Administrator (with additional
staff support as needed to address technical issues /recommendations)
Final Report
City of Eagan, Minnesota
Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis
February 9, 2010
Table of Contents
t pringsted
1 EXECUTIVE SUMMARY 1
2 INTRODUCTION 4
3 BACKGROUND 5
Public Utilities Fund Historical Information 5
Current Rate Schedules 7
Cash Reserves 9
Depreciation 9
Assumptions 10
4 WATER UTILITY 11
Capital Outlay 11
Financial Projections at Current Rates 13
Cost of Service Allocations 15
Water Utility Financial Projections 16
Conservation Rate Structure 17
Financial Projections 21
5 SEWER UTILITY 24
Capital Outlay 24
Financial Projections at Current Rates 25
Financial Projections 29
Impact on Sewer Charges 32
6 STREET LIGHT UTILITY 33
Capital Outlay 33
Financial Projections at Current Rates 34
Financial Projections 37
Impact on Street Light Charges 40
7 STORM WATER!WATER QUALITY UTILITY 41
Capital Outlay 41
Financial Projections at Current Rates 43
Financial Projections 45
Impact on Storm Drainage!Water Quality Charges 47
8 CONCLUSIONS AND RECOMMENDATIONS 48
APPENDIX A • RATE COMPARISONS 51
LETTER OF TRANSMITTAL
February 9, 2010
Mr. Tom Colbert, Public Works Director
Mr. Tom Pepper, Chief Financial Officer
City of Eagan
3830 Pilot Knob Road
Eagan, Minnesota 55122
Dear Mr. Pepper and Mr. Colbert:
Respectfully submitted,
maj
Springsted
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101 -2887
Tel: 651- 223 -3000
Fax: 651 - 223 -3002
www.springsted.com
Re: Summary of Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light
Utility User Rate Analysis
Springsted Incorporated was hired to perform a user rate analysis for the Water Fund, Sanitary Sewer
Fund, Storm Drainage Fund, Water Quality Fund and the Street Light Fund of the City of Eagan. Each
Fund was looked at individually. This Study includes a review of the past performance of each fund,
determines the adequacy of revenues in each of the Funds, and provides rate recommendations which
reflects recent cost experience as well as anticipated capital improvement costs of each Fund.
Recommended water rates were determined in order to promote water conservation.
We appreciate the opportunity to conduct the Utility User Rate Analysis for the City of Eagan.
Patty 7(ett David llacgill vray
Patty Kettles, Vice President David MacGillivray, Chairman
Executive Summary 1
1. Executive Summary
Springsted
This report was prepared to review the financial performance of the City of
Eagan's current Water, Sanitary Sewer, Storm Drainage/Water Quality, and
Street Lighting Funds and determine the appropriate rate structure, connection
charges, and other revenue needed to adequately fund operations through 2019.
The process included a historical review of each utility fund, a cost of service
analysis, the evaluation of the appropriate rate structures needed to fund
operations over the planning period, an inclining block rate structure to
encourage water conservation, connection fees, a comparison of rates with other
similar utilities, and the establishment of charges for other utility services.
Minnesota State Statutes, Section 103G.291, requires all water suppliers serving
more than 1,000 people to adopt a water rate structure which encourages
conservation. Therefore, in determining the water rates and rate structure,
Springsted reviewed historical water consumption patterns and used this
information to recommend a rate structure that would promote water
conservation.
A conservation rate structure provides a financial incentive for users to reduce
water consumption based upon the general economic theory that demand for a
commodity decreases as its price increases. Water conservation rates generally
involve increasing block rates or seasonal rates where the marginal cost of water
to the user increases as water use increases. Increasing block rates or seasonal
rates generally have the highest impact on heavy irrigation users. The
responsiveness of customers to such a conservation rate structure depends on the
existing price structure, the water conservation incentives of the new price
structure, and the customer base and their water uses.
It is important to point out that conservation rate structures by themselves do not
constitute an effective water conservation program. Rate structures work best
when coupled with a comprehensive water conservation program. A water
conservation program should include, at a minimum, a public education
program and public assistance program to achieve the reduction in per capita
water use envisioned by the City.
All recommendations are based on information provided to us and on the
assumptions stated for the financial projections. The City will need to monitor
the performance of each fund and make any necessary adjustments based upon
its actual performance and on the actual construction costs of the anticipated
capital improvements.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Executive Summary 2
Springsted
The following conclusions were determined as a result of this study and the
financial projections prepared:
1. The Public Utilities Fund as a whole shows historical revenues and
expenditures have remained fairly stable over time. Cash in the fund is
projected to be $40.0 million in 2009.
2. The City should maintain a minimum cash balance in each utility fund of
at least three months of anticipated operating expenses and one year's
debt service at the end of each year. The cash balance in the Public
Utilities Fund is very healthy and currently meets the recommended
reserve levels.
3. Water user rates should be set to promote conservation. After analyzing
current and historical consumption patterns, our recommended seasonal
rate structure is as follows:
Fixed fee /quarter $6.00
Winter quarter
All water use charged at $1.40/1,000 gallons
Non - winter quarters
Winter water use is charged at $1.40/1,000 gallons
Water use above winter use is charged at $1.75/1,000 gallons
The City's current water rate structure is as follows:
Fixed fee /quarter $6.00
All domestic water use is charged at $1.40/1,000 gallons
Separately- metered irrigation water is charged at $1.42/1,000
gallons
In the non - winter quarters, residential customers will be billed for water use
up to their winter water use at $1.40/1,000 gallons of water. Water use
above this amount will be billed the rate of $1.75/1,000 gallons. A majority
of commercial accounts in the City have a separate meter for irrigation.
Therefore, all commercial water use will be billed based on the winter
quarter rate and commercial irrigation water use will be billed at the rate of
$1.75/1,000 gallons. For those commercial accounts that do not have a
separate irrigation meter, they will be charged in the same manner as a
residential account where their winter quarter water use is charged at
$1.40/1,000 gallons and water use above this amount will be billed the rate
of $1.75/1,000 gallons. It is recommended that the proposed seasonal rate
structure be implemented in 2010. Future projections indicate no rate
increases are necessary over the planning period.
4. We recommend the City include a notice of proposed water rates in the
first utility bills following rate adoption informing all users of the
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Executive Summary 3
Springsted
proposed changes, potential impacts, and methods to conserve water,
limiting impact of the proposed rates. The Council has indicated that they
wish to introduce rate changes July 1, 2010 to provide a gradual
introduction of non - winter water rates, allowing customers to adjust their
water use should they choose to do so.
5. The current water supply & storage charge of $1,185 and the water
treatment plant charge of $735 are adequate to fund projected capital
costs.
6. Assuming no significant increases are imposed by Metropolitan Council
Environmental Services for regular disposal charges, sewer user rates
should be increased annually by 6.00% 2010 through 2016, 4.75% in
2017 and 4.50% in 2018 and 2019. These increases are needed to pay for
anticipated operating and maintenance expenses, capital improvements, to
provide sufficient cash flow for operations, and to maintain adequate cash
reserves for future capital improvements.
7. Street Light user charges should be increased annually by 3.85% 2010
through 2019. These increases are also needed to pay for anticipated
operating and maintenance expenses, capital improvements, to provide
sufficient cash flow for operations, and to maintain adequate cash
reserves for future capital improvements.
8. The Storm Water/Water Quality charges should be increased 4.25%
annually 2010 through 2019. This is projected to maintain cash at current
levels while providing funds for renewal and replacement and expansion
and modification in addition to operating and maintenance expenses and
cash reserves.
9. The Storm Water/Water Quality charges should be allocated to the
following funds:
• 17% of operating revenues should be deposited to the Storm
Drainage System Expansion & Modification account
• 10% of operating revenues should be deposited to the Storm
Drainage System Renewal & Replacement account
• 10% of operating revenues should be deposited to the Water Quality
account
• 63% of operating revenues should be used for operations
10. The City should establish the user rates for each utility fund for a three -
year period and review them on an annual basis. The rates should be
reviewed on an annual basis concurrent with the development of the
following year's budget.
These recommendations are based on information provided to us by City of
Eagan. The City will need to monitor the performance of each utility fund and
make any necessary adjustments based upon its actual performance and on the
actual construction costs of the anticipated capital improvements.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Introduction 4
2. Introduction
Springsted
The purpose of this report is to review and analyze City of Eagan's current
Water, Sanitary Sewer, Storm Drainage /Water Quality, and Street Lighting
Funds to determine the appropriate rate structure and other revenue sources
needed for its operation and financing of capital assets. The rate structure and
other revenue in each fund must provide sufficient revenue to cover anticipated
operating and maintenance expenses, debt service including principal and
interest, capital improvements, replacements, and to provide adequate cash
reserves. At the same time, the rate structure should promote water
conservation. The total revenue collected should reflect not only recent cost
experience, but should recognize anticipated future costs during the period for
which rates are being established.
This report includes a review of each of the City's Utility Funds' revenues and
expenditures, historical budgets, a projection of revenues and expenditures
through 2019 (incorporating the City's plans for capital improvements), and a
determination of the rates and charges necessary to provide sufficient revenues
that will cover capital and operational costs.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background 5
3. Background
Public Utilities Fund
Historical Information
FA S P
ngsted
The City of Eagan, which is a southern suburb of the Minneapolis /St. Paul
metropolitan area, provides approximately 18,434 residential accounts and
1,662 commercial, industrial, and institutional customers with water and sewer
service and approximately 19,267 accounts with storm drainage /water quality
service. The City also operates a street light utility that has over 19,250
community street light accounts and 15,000 neighborhood light accounts. The
City encompasses approximately 34.5 square miles and has an estimated 2008
population of 65,847 persons.
Currently, the City obtains its water supply from twenty-one raw water wells.
Water storage for consistent pressure and for fire protection occurs in six
reservoirs and elevated storage towers throughout the City. The City owns and
operates two water treatment facilities with a combined capacity of
approximately 38.0 million gallons per day.
Wastewater treatment is provided by the Metropolitan Waste Control
Commission. Collection is accomplished through a series of trunk lines that
discharge into three existing Metropolitan Council interceptors located
throughout the City.
The Storm Drainage /Water Quality program consists of over 200 miles of pipe
and approximately 530 natural and constructed lakes throughout the City. The
City is a recognized leader in stormwater pollution prevention and water quality
issues.
The City's street light utility is comprised of over 3,100 street lights owned by
Dakota Electric or Xcel Energy, with a small number owned by the City. The
City is responsible for operating the street lights while each Utility company is
responsible for the maintenance, repair and replacement of the street lights.
The City currently combines each of the five utilities into one fund; the Public
Utilities Fund. A review of the City's most recent financial reports shows the
Public Utilities Fund ending cash balance has increased since 2006. The 2006
ending cash balance was $34,886,649 and increased to $40,340,754 in 2008.
The cash is comprised of operating cash, restricted cash, and cash due from
other funds (operating cash). The composition of cash from 2006 -2008 is
shown in the table on the following page.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storrs Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background
Springsted
6
As shown above, operating cash is declining to low levels while the restricted
cash and cash due from other funds in increasing each year. The City may wish
to develop a policy regarding appropriate levels of operating cash that is held in
the Public Utilities Fund. A discussion of cash reserves occurs later in this
report.
Historically, the fund has recorded negative operating income, due primarily to
depreciation expense.
Revenues and expenditures for the past three years and the 2009 budget, as well
as the City's current rate schedule for each utility are shown on the following
pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
2006
2007
2008
Operating Cash
$11,045,628
$12,241,621
$11,724,289
Restricted Cash for:
Water projects:
$13,830,826
$15,409,114
$17,946,780
Sewer projects:
$6,621,381
$6,894,795
$7,194,466
Storm projects:
$2,641,168
$1,666,499
$3,289,413
Water Quality projects:
$707,646
$806,207
$185,806
Total Restricted Cash:
$23,801,021
$26,198,125
$28,616,465
TOTAL CASH
834,886,649
$38,439,746
$40,340,754
Background
Springsted
6
As shown above, operating cash is declining to low levels while the restricted
cash and cash due from other funds in increasing each year. The City may wish
to develop a policy regarding appropriate levels of operating cash that is held in
the Public Utilities Fund. A discussion of cash reserves occurs later in this
report.
Historically, the fund has recorded negative operating income, due primarily to
depreciation expense.
Revenues and expenditures for the past three years and the 2009 budget, as well
as the City's current rate schedule for each utility are shown on the following
pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background 7
Current Rate Schedules
Springsted
Administrative Fee (per quarter)
Volume Charge (per 1,000 gallons)
Domestic/Potable usage
Separately Metered Irrigation usage
2
$ 6.00
$ 1.40
$ 1.42
SE W
2 1
Administrative Fee (per quarter)
Volume Charge (per 1,000 gallons)
All usage
Sewer only (no water connection) - per quarter
Manual reading/billing fee - deduct meters (per meter /per read)
$ 1.45
$ 2.55
$ 52.45
$ 10.00
All properties except R3 (per quarter per REF)*
R3 properties (20% credit) (per quarter per REF)*
$ 6.48
* REF= residential equivalent factor
This fee is currently split between storm water and water quality.
Neighborhood lights
Single - family, twin homes (per qtr/lot)
Town homes (per qtr/unit)
Multiple Residential (per qtr /acct)
Non - continuous (per qtr /acre)
Continuous (per LF basis) (per qtr/LF)
Continuous (per acre basis) (per qtr/acre)
Individual Lights
100 WHPS (per light/qtr)
150 WHPS (per light/qt)
200 WHPS (per light/qtr)
250 WHPS (per light/qtr)
Community and signal lights
R1/R2 (per unit/qtr)
R3 (per unit/qtr)
R4 (per unit/qtr)
Non - residential (per unit//qtr)
$ 4.99
$ 4.00
$ 8.74
$ 5.90
$ 0.127
$ 11.28
$ 35.46
$ 51.40
$ 45.25
$ 57.23
$ 1.85
$ 1.48
$ 1.09
$ 7.45
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background 8
Public Utilities Fund Information
Operating Revenues
Service Charges
Connection Permits
Penalties
Sale of Materials and Meter Charges
Other Revenue
Total Operating Revenue
Personal Services
Supplies, Repairs and Maintenance
Other Services and Charges
MCES Disposal Charge
Merchandise for Resale
Other
Existing Depreciation
Actual
4
454
4
6
10,571,807
Total Operating Expenses
11,935,723
New Depreciation
Operating Income (Loss)
(1,363,916)
Non Departmental
Investment Earnings
Existing Special Assessments
Bond Interest - Existing
Connection Charge -Water Supply & Storage
Connection Charge -Water Trmt Plant
Water Quality Dedication Fee
Other
Intergovennental
Other Public Utilities
Interest Earnings (non - specific)
Total Non Operating Revenues (Expenses)
Net Income (Loss) Before Transfers
Operating Transfe
4
1,8
. 1,963;800;
41
M0
26
4
606,4
4 !
0
7 '
47 3, 375,290 ... , 3,219,993 5
3,4914,791
6
00
1,506,416
81,875
(183,895)
357,536
618,366
2,380,298
4,442
4,442
2,384,740
1,020,824
From Individual Funds*
In Public Utilities Fund 31,958,541
Net Income 574,216
Depreciation
3,490,791
7
Actual
10,858,925
8,860 !.
2
40,71?
C71
11,024,906
12,862,228 13,153,010
(1,837,322) (2,063,971)
2,118,534
85,367
(149,978)
304,807
629,639
2,988,369
2,988,369
1,151,047
Other
Transkrs (Out)
(446,608) (125,041)
Total Operating Transfers
Net Income (Loss)
Beginning Cash Balance
(446,608) (125,041)
574,216 1,026,006
34,886,649
1,026,006
3,520,948
Actual
Budget
,56,39C
21
111111$23C 11111 '7A
11,089,039 12,358,900
93,575
2,123,137
(114,186)
00 )
241,633 20, 00(
691,888
3,036,047
15,717,500
(3,358,600)
239,000
35,000
390,300
1,083,600
(260,491) 15,000
711,585 (1,595,700)
3,036,047 1,747,900
972,076 (1,610,700)
(260,491y
15,000
38,439,746 459,583
(1,595,700)
3,543,962
3,477,100
Acquisition and Construction of Assets
(301,668) (268,629) (1,690,372) °; ,4
Payments on Existing Long -Term Debt (675,000) (715,000) (725,000)
(73
Adjustments to Accruals
(160,231) (10,228) 60,833
Ending Cash Balance
34,886,649 38,439,746
40,340,754 39,996,154
Springsted
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background 9
Cash Reserves Springsted's clients often ask about the amount of cash that should be available
in their Utility funds. Utility funds need sufficient cash to pay current expenses,
together with principal and interest on outstanding bonds. This would typically
require each Utility fund to have a minimum of three months of anticipated
operating expenses and one year's total debt service in cash at the end of each
year. However, this does not provide any level of cash reserves for unforeseen
expenses, emergencies, or to cover any shortfalls in the budget. The amount of
cash reserves that the Water and Sewer Funds should have is dependent on a
number of factors, including:
Depreciation
Spring ted
• Reserves that are legally required
• Variability of the annual revenue stream
• Variability in annual expenditures
• Variability in rainfall
• Age and condition of fixed assets
• Anticipated future capital needs
- Capital improvement plan
- Regulatory compliance
• Tolerance for risk
• Number of relatively large customers
Unfortunately, there are no prescribed formulas, and the amount of reserves
varies considerably between utilities. We encourage the City to maintain a
minimum cash balance in the Public Utilities Fund of at least three months
(ninety days) of anticipated operating expenses and one year's debt service at
the end of the year.
Costs incurred in the operation of each Utility are either recorded as operating
expenses or capitalized as assets. Whether the cost is expensed immediately or
capitalized, the City actually pays for the asset at the time it is acquired.
Generally, anything that is used up in the period in which the cost of acquiring it
is incurred is treated as an operating expense. Personnel, supplies, and repairs
and maintenance are typical examples of costs that are treated as operating
expenses. These costs are shown on the income statement each year in the total
amount of the expenditure for each category. The cost incurred in the
acquisition or construction of assets such as buildings and major pieces of
equipment are capitalized. That means their cost does not show up as an
expense on the income statement in the year in which the expenditure occurs,
rather the cost of these assets are depreciated. Depreciation is the process of
allocating the cost of an asset over its useful life in a systematic and rational
manner.
The City currently includes depreciation in its annual budget; however, user
rates in each utility do not fund annual depreciation.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Background 10
Assumptions The City provided Springsted with a variety of material including:
• 2006 -2008 Financial Reports
• 2009 & 2010 Operating Budgets for the Public Utilities Fund and each of
the five component budgets
• 2010 -2014 Capital Improvement Plan — listing cost and year of expenditure
in 2009 dollars
• Depreciation and accumulated depreciation for all utility assets as of
December 31, 2008
• Water consumption data by quarter for the most recent five quarters (April
1, 2008 -June 30, 2009)
• Current number of water accounts
• Current number of sewer accounts
• Water treatment plant design factors to be used in the cost of service
analysis
• Number of water meters by size and customer class
• Sewer usage for the period July 1, 2008 -June 30, 2009
• Bonestroo's Water Supply and Distribution Plan, dated July 2008
• Bonestroo's 2030 Comprehensive Sewer Plan, dated September 2008
• Bonestroo's Stormwater Management Plan, dated December 2005, revised
in 2007
• Bonestoo's Water Quality and Wetland Management Plan (from website)
• Current utility rates
Springsted
We have used the information provided by the City as the basis of our
projections, as well as several comprehensive discussions with City personnel.
In order to determine the cost of in providing each utility service to the various
customer classes, we have broken out the Public Utilities Fund into five separate
utility funds; water, sewer, stormwater, water quality and street lighting.
Several revenue and expenditure items are not currently broken out in this
manner; therefore, assumptions were made regarding non - operating income for
each utility fund. All relevant assumption will be noted in the discussion of
each utility fund.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility
4. Water Utility
Capital Outlay
Springsted
To determine the appropriate fees and rates needed for the operation of the
Water Utility over the planning period, we have incorporated the anticipated
future capital outlay needs provided by the City. These capital costs and their
projected source of funding are shown in the table below.
Water Utility
608,000
2009 545,000
2010 `', 3,083,000
1,128,800
608,000
2014 608,000
015 4,000,000
6
500,000
2017 1,200,000
2 1
500,000
9
20
500,000
Total
13,280,800
Water Trunk
Fund
700,000
200,000
170,000
1,070,000
Special
Assessments
(Non- Bonds)
90,000
100,000
190,000
Totals
545,000
3,783,000
1,328,800
608,000
868,000
708,000
4,000,000
500,000
1,200,000
500,000
500,000
14,540,800
The capital improvements planned for the Water Utility are related primarily to
general maintenance and facility upgrades.
11
A detailed listing of the anticipated capital improvements, based on information
provided in the City's 2010 -2014 Capital Improvement Plan, shows estimated
capital expenditures through 2019 of approximately $14,540,800. The
anticipated capital improvements are shown on the following page.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 12
Springsted
Year Project Totals
2009 Miscellaneous repair & maintenance 545,000!
._.___.... __.._
144, 000':;
2010 Pull & Inspect Wells #7, #8, #11 & #16
2010 Southern Lakes Water Tower Maintenance 174,906
2010 Upgrade Cliff Booster controls & pressure- storage 350,000
2010 Deerwood Reservoir General Maintenance 414,100
2010 South Water Treatment Facility Upgrade 2,000,000
2011 Pull & Inspect Wells #1, #4, #19 108,000
2011 Yankee Doodle Reservoir - General Maintenance 384,700
2011 Sperry Tower - Rehab 636,100
2012 w Pull & Inspect 3 Wells 108,000
2012 New Well South Field 500,000
2013 Pull & Inspect 3 Wells 108,000
2013 P &I Wells and Miscellaneous repair & maintenance 500,000
2014 Pull & Inspect 3 Wells 108,000!
2014 P &I Wells and Miscellaneous repair & maintenance 500,000
2015 P &I Wells and Miscellaneous repair & maintenance 500,000
2015 ,2 MG elevated tank @ Thresher's Fields 3,500,000
2016 : P &I Wells and Miscellaneous repair & maintenance 500,000
2017 P &I Wells and Miscellaneous repair & maintenance 500,000;
2017 New Well 700,000
2018 P &I Wells and Miscellaneous repair & maintenance 500,000'
2019 P &I Wells and Miscellaneous repair & maintenance 500,000
2010 Cliff Road Pt J 700,000
2011 PR Station /Standpipe -Pilot Know & Pebble Beach Way 200,000
2013 Cliff Rd Booster Station toe Parkview 140,000'
2013 '' Fairway Hills to Park Cliff 160,000
2013 P.R. Station to Point J 60,000
TOTAL 14,540,800
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 13
Financial Projections
at Current Rates
The following pages show the historical revenues and expenditures in the
Water Utility as well as the projected operating statement and annual cash
balance in the Water Utility, assuming no rate increases, over the planning
period 2009 -2019.
Although the fund is projected to maintain negative operating income over the
planning period, the ending cash balance is very healthy over the entire
planning period.
Operating Revenues
Service Charges
Connection Permits
Penalties
Sale of Materials and Meter Charges
Total Operating Revenue
Operating Expenses
Personal Services
Supplies, Repairs and Maintenance
Other Services and Charges
Other
Existing Depreciation
New Depreciation
Total Operating Expenses
Actual
4,465,054
7,556
28,198
47,831
4,548,639
827,483
244,910
1,730,934
591
1,836,404
Actual
4,615,870
25,500
40,711
4,686,941
,001,625
341,055
1,977,974
1,419
1,842,954
Actual
4,571,355
2,700
29,261
30,721
1,905,519
931,019
416,711
1,875,041
4,640,322
5,165,027
5,128,290
Operating Income (Loss) (91,683) (478,086) (494,253)
Springsted
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Water Utility 15
Revenue requirements include operating and maintenance expenses, debt
service payments, capital outlay, and any operating or working capital reserves.
Operating and Maintenance expenses in the Water Utility consist of pumping
and treatment, distribution and transmission line costs, administration, and
utility billing costs. Increases in these expenditure items were based on
historical activity in the fund, while taking into consideration future events that
may impact operating expenditures.
The debt service payments to be made from the Water Utility are for the 2005B
G.O. Water Revenue Refunding Bonds, which mature December 1, 2010.
The City should maintain a cash balance in the Water Utility equal to three -six
months of anticipated operating expenses and one - year's debt service. The
current operating reserve held in the Water Utility is adequate to fund this
amount.
Cost of Service Allocations Cost of service allocations provide a method for the City to determine the cost
of providing water service to various types of customers and ensure that a rate
schedule is adopted that is fair and equitable and adequately recovers cost
incurred to provide services to each customer type.
Springsted
The costs that are allocated include the revenue requirements, less any other
sources of revenues. The revenue requirements consist of operating and
maintenance expenditures, capital outlay, debt service, and reserves. In
addition to operating revenues, the Water Utility also generates other sources
of revenue such as interest earnings and connection fees.
Costs are allocated based on the characteristics of the customer and are based
on factors that include:
• Peak monthly water demand
• Peak daily water demand
• Average daily water demand
The allocated costs can then be compared to the revenues collected by each
customer class to insure that rates are imposed in a manner whereby each class
funds its proportionate share of operating costs.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 16
Water Utility Financial
Projections
Sprinsted
The percentage of costs allocated to each class of customer compared to the
revenues collected is shown in the chart below.
A difference of 5% or less is excellent and clearly indicates that each user class
is contributing funds to cover their portion of operating and capital costs.
The financial projections assumed the City would maintain a minimum cash
balance in the Water Fund equal to six months of anticipated operating
expenses and one - year's debt service within the planning period. This
assumption was made to ensure that the Water Fund would have sufficient cash
to fund operations going forward.
To determine the appropriate user rates needed for the repayment of debt
service and operation of the Water Fund, we have projected future revenue
and expenditures and have incorporated the anticipated future capital outlay
needs for the time period covered by this study.
The financial projections began with the Water Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income,
cash flow, and level of ending cash balances. Our expenditure projections
are generally based on an analysis of past trends, anticipated changes in
operations, and our significant experience in preparing Water rate studies.
Increases for the expenditure projections were developed based on City Staff
projections while adjusting for exceptions for specific line items where the
increase will most likely deviate from inflation. The individual line item
percentage increases are shown for informational purposes. We encourage the
City to review line items with variations exceeding inflation for opportunities
to control costs.
We determined that revenues currently generated in the water utility, or
approximately $5.0 million annually, are sufficient to fund operations, debt
service and future capital needs through 2019.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
% of Allocated
Costs
% of Revenues
Collected
7/1/08- 6/30/09
Difference
Residential
75.7%
74.9%
0.9%
Commercial
18.3%
19.6%
-1.3%
Industrial/Institutional
5.9%
5.6%
0.4%
Water Utility 16
Water Utility Financial
Projections
Sprinsted
The percentage of costs allocated to each class of customer compared to the
revenues collected is shown in the chart below.
A difference of 5% or less is excellent and clearly indicates that each user class
is contributing funds to cover their portion of operating and capital costs.
The financial projections assumed the City would maintain a minimum cash
balance in the Water Fund equal to six months of anticipated operating
expenses and one - year's debt service within the planning period. This
assumption was made to ensure that the Water Fund would have sufficient cash
to fund operations going forward.
To determine the appropriate user rates needed for the repayment of debt
service and operation of the Water Fund, we have projected future revenue
and expenditures and have incorporated the anticipated future capital outlay
needs for the time period covered by this study.
The financial projections began with the Water Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income,
cash flow, and level of ending cash balances. Our expenditure projections
are generally based on an analysis of past trends, anticipated changes in
operations, and our significant experience in preparing Water rate studies.
Increases for the expenditure projections were developed based on City Staff
projections while adjusting for exceptions for specific line items where the
increase will most likely deviate from inflation. The individual line item
percentage increases are shown for informational purposes. We encourage the
City to review line items with variations exceeding inflation for opportunities
to control costs.
We determined that revenues currently generated in the water utility, or
approximately $5.0 million annually, are sufficient to fund operations, debt
service and future capital needs through 2019.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 17
Conservation Rate Water utilities have traditionally relied on increased capacity to meet their
Structure growing needs for additional water resulting from population growth and
economic development. However, utilities are increasingly looking to
conservation as an alternative strategy. This change in philosophy is the result
of several factors including:
Springsted
• Growing competition for limited water supplies;
• Increasing cost and difficulties in developing new water supplies;
• Increasing cost of capacity expansion;
• Increasing cost of water treatment and testing;
• Statutory requirements for increased water supply permits;
• Growing public support for the conservation of our natural resources.
In 2008, Minnesota Statutes were amended to require public water supply
systems serving more than 1,000 residents to adopt a conservation rate
structure by January 1, 2010. A conservation rate structure provides a
financial incentive for users to reduce demands based upon the general
economic theory that demand for a commodity decreases as its price increases.
Water conservation rates generally involve one of the types listed below:
• Increasing block rates where the marginal cost of water to the user
increases in blocks of usually two or more steps as water use increases.
• Seasonal rates where the cost of all water is higher in the seasons when
irrigation is most likely to occur.
• Flat rate where the cost of water is the same regardless of consumption
(assuming declining block rates are currently in place).
• Seasonal pricing where the cost of water consumed only during the
season of peak demand is charged at a higher rate than water consumed
in the off -peak season.
The City currently tracks consumption patterns for the following types of
users: residential, commercial, industrial, institutional, and irrigation. The
total annual consumption by user type for April 1, 2008 — March 31, 2009 is
shown in the charts on the following page.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 18
The average use by each user type is:
1,000,000
800,000
600,000
400,000
200,000
01
Total Water Consumption
(1,000's gallons)
02
03
Q4
— 41-- Residential
Springsted
600
500
400
300
200
100
01
Total Water Consumption
(1000's gallons)
02
Q3
Q4
\\isle r Qua rte r°
—•r— Commercial
-f— Commlrrigation
Industrial
—fie— Institutional
ANT rage of all
Othe r Qua rte rs
City of Eagan, Minnesota. Water, Sanitary Sewer, Storrs Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 19
Springsted
Based on our analysis of consumption patterns and average use by customer
type, we recommend the following seasonal rates:
Fixed fee /quarter $6.00
Winter quarter
All water use charged at $1.40/1,000 gallons
Non - winter quarters
Winter water use charged at $1.40/1,000 gallons
Water use above winter water use charged at $1.75/1,000 gallons
For example, if in the winter a resident uses 15,000 gallons of water in a
quarter, they will get billed:
Fixed Fee:
Consumption Charge:
Total Bill
Fixed Fee:
Consumption Charge:
Total Bill
$ 6.00
$21.00 (15,000 /1,000 * $1.40)
$27.00
If in the summer, the same resident decides to irrigate their lawn and uses
25,000 gallons in a quarter, their bill would be:
$ 6.00
$21.00 (15,000 /1,000 * $1.40)
$17.50 (10,000 /1,000 * $1.75)
$44.50
In the summer months, residential customers will be billed for water use up to
their winter average at $1.40/1,000 gallons of water. Water use above this
amount will be billed the rate of $1.75/1,000 gallons. A majority of
commercial accounts in the City have a separate meter for irrigation.
Therefore, all commercial water use will be billed based on the winter quarter
rate and commercial irrigation water use will be based on the summer quarter
charge or $1.75/1,000 gallons. For those commercial accounts that do not have
a separate irrigation meter, they will be charged in the same manner as a
residential account where their winter quarter water use is charged at
$1.40/1,000 gallons and water use above this amount will be billed the rate of
$1.75/1,000 gallons. It is recommended that the proposed seasonal rate
structure be implemented in 2010. Future projections indicate no rate increases
are necessary over the planning period.
The corresponding charges /unit were set to promote conservation. If
consumption patterns remain as they were in 2008 -09, this rate structure is
projected to result in more total revenue for the Water Utility Fund. However,
because the rates were set to promote conversation (resulting in lower than
normal water use), we have assumed consumption to be at 95 percent of 2008 -
09levels. We recommend the City hold the excess funds, if any, in a rate
stabilization account. The rate stabilization account can be used to offset future
rate increases and possibly lower water rates in the future. A more defined plan
can be made when consumption patterns are observed under the new rate
structure.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility
Springsted
Based on the proposed seasonal rates and charges /unit, the total revenue
projected to be collected from each block, at the proposed and current rates is
shown below:
The impact of the proposed rate structure on an average user from each of the
City's user classes are shown in the chart below:
A chart showing proposed quarterly water consumption and the resulting the
water bill for a various users in Eagan is shown in Appendix A. Also included
in Appendix A is a complete utility bill (water, sewer, street light and storm)
for an average residential account.
We recommend the City include a notice of proposed rates in the first utility
bills following rate adoption informing all users of the proposed changes,
potential impacts, and methods to conserve water, limiting impact of the
proposed rates. The Council has indicated that they wish to introduce rate
changes July 1, 2010 to provide a gradual introduction of non - winter water
rates, allowing customers to adjust their water use should they choose to do so.
The City will charge all use beyond winter quarter use at $1.75/1,000 gallons.
This includes extraordinary cases such as filling swimming pools or
commercial greenhouses that do not have a separate irrigation meter.
20
The City should establish the user rates for the Water Fund for a three -year
period and review them on an annual basis concurrent with the development of
the following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Projected
Winter Use
(1,000 gallons)
Projected
Summer Use
(1,000 gallons)
Current
Annual Water
Bill
Projected
Annual Water
Bill
Dollar
Increase
% Increase
Residential
20
32
$ 169
$ 177
$ 8
5%
Commercial
139
156
$ 850
$ 850
$ -
0%
Commercial Irrigation
33
249
$ 826
$ 1,012
$ 186
23%
Industrial
408
424
$ 2,352
$ 2,352
$ -
0%
Institutional
167
210
$ 1,078
$ 1,078
$ -
0%
Water Utility
Springsted
Based on the proposed seasonal rates and charges /unit, the total revenue
projected to be collected from each block, at the proposed and current rates is
shown below:
The impact of the proposed rate structure on an average user from each of the
City's user classes are shown in the chart below:
A chart showing proposed quarterly water consumption and the resulting the
water bill for a various users in Eagan is shown in Appendix A. Also included
in Appendix A is a complete utility bill (water, sewer, street light and storm)
for an average residential account.
We recommend the City include a notice of proposed rates in the first utility
bills following rate adoption informing all users of the proposed changes,
potential impacts, and methods to conserve water, limiting impact of the
proposed rates. The Council has indicated that they wish to introduce rate
changes July 1, 2010 to provide a gradual introduction of non - winter water
rates, allowing customers to adjust their water use should they choose to do so.
The City will charge all use beyond winter quarter use at $1.75/1,000 gallons.
This includes extraordinary cases such as filling swimming pools or
commercial greenhouses that do not have a separate irrigation meter.
20
The City should establish the user rates for the Water Fund for a three -year
period and review them on an annual basis concurrent with the development of
the following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Projected
Volume (1,000
gallons)
Revenue
Generated at
Current Rates
Revenue
Generated at
Proposed
Rates
Residential
2,244,663
$ 3,585,807
$ 3,784,356
Commercial
352,899
$ 508,051
$ 508,051
Commercial Irrigation
307,140
$ 445,691
$ 520,172
Industrial
150,558
$ 212,839
$ 212,839
Institutional
55,345
$ 79,133
$ 79,133
Total
3,248,845
$ 4,831,521
$ 5,104,551
Water Utility
Springsted
Based on the proposed seasonal rates and charges /unit, the total revenue
projected to be collected from each block, at the proposed and current rates is
shown below:
The impact of the proposed rate structure on an average user from each of the
City's user classes are shown in the chart below:
A chart showing proposed quarterly water consumption and the resulting the
water bill for a various users in Eagan is shown in Appendix A. Also included
in Appendix A is a complete utility bill (water, sewer, street light and storm)
for an average residential account.
We recommend the City include a notice of proposed rates in the first utility
bills following rate adoption informing all users of the proposed changes,
potential impacts, and methods to conserve water, limiting impact of the
proposed rates. The Council has indicated that they wish to introduce rate
changes July 1, 2010 to provide a gradual introduction of non - winter water
rates, allowing customers to adjust their water use should they choose to do so.
The City will charge all use beyond winter quarter use at $1.75/1,000 gallons.
This includes extraordinary cases such as filling swimming pools or
commercial greenhouses that do not have a separate irrigation meter.
20
The City should establish the user rates for the Water Fund for a three -year
period and review them on an annual basis concurrent with the development of
the following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Water Utility 21
Financial Projections
Sprinsted
Revenue requirements indicate the amount of revenue needed each year for the
City to continue efficient operations, as well as maintain an adequate cash
balance in the utility. Revenue requirements include operating and
maintenance expenses, debt service payments, capital outlay, and any
operating or working capital reserves. The City will make the final debt
service payment related to the water utility in 2010. The final principal and
interest payment is approximately $804,625.
The following pages show the projected operating statement and annual cash
balance in the Water Utility, assuming the proposed seasonal rates are adopted
and kept in place over the planning period 2010 -2019.
The fund is projected to maintain the cash position and recommended reserve
levels from 2010 -2019. Cash is projected to go from $21,253,484 in 2009 to
$21,477,737 in 2019. The cash balance includes restricted monies held for
water system renewal and replacement, water supply storage and the water
treatment facility, in addition to operating funds. It is assumed that
approximately $1,200,000 will deposited into the restricted accounts each year.
This is similar to 2009 levels and provides for only a slight decrease in
restricted cash over the planning period. Projected capital outlay expenditures
are projected to be made primarily from cash held in the restricted funds.
The financial projections assumed the City would maintain a minimum cash
balance in the Water Fund equal to six months of anticipated operating
expenses and one - year's debt service within the planning period. These
assumptions were made to ensure that the Water Fund would have sufficient
cash to fund operations going forward as well as meet debt service
requirements.
To determine the appropriate user rates needed for the repayment of debt
service and operation of the Water Fund, we have projected future revenue
and expenditures and have incorporated the anticipated future capital outlay
needs for the time period covered by this study.
The financial projections began with the Water Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income,
cash flow, and level of ending cash balances. Our expenditure projections
are generally based on an analysis of past trends, anticipated changes in
operations, and our significant experience in preparing Water rate studies.
The 2010 budget was used as the basis for expenditure projections. Increases
in expenditures were developed based on City Staff projections while adjusting
for exceptions for specific line items.
Our projections show that the new seasonal rate structure combined will
provided sufficient revenues for the operation of the Water Utility through
2019 and no future rate increases are projected.
The financial projections are shown on the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Sewer Utility 24
5. Sewer Utility
Capital Outlay
pringsted
To determine the appropriate fees and rates needed for the operation of the
Sewer Fund over the planning period, we have projected future revenue and
expenditures and we have incorporated the anticipated future capital outlay
needs provided by the City. The capital items are projected to be paid from
both the Sewer Utility Fund and the Sewer Trunk Fund. The capital costs and
their projected source of funding are shown in the table below.
Total
Sanitary Sewer
Utility
150,000
155,000
660,000
660,000
660,000
500,000
500,000
500,000
500,000
500,000
5,000,000
Sanitary Sewer
Trunk Fund
4,000
4,000
1,100,000
200,000
1,308,000
Totals
154,000
159,000
660,000
1,760,000
660,000
700,000
500,000
500,000
500,000
500,000
6,308,000
These capital projects are primarily related to repair and maintenance of
existing infrastructure as well as capital costs related to infiltration and inflow
repairs. The repair and maintenance costs will be paid primarily from user
fees. Additions to plant and equipment will be repaid from trunk charges
collected and deposited into the Sanitary Sewer Trunk Fund and are not
reflected in any rate projections or sewer utility pro formas included in this
report.
A detailed listing of the anticipated capital improvements shows estimated
capital expenditures through 2019 of approximately $6,308,000. The
anticipated capital improvements are shown in more detail on the following
page.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Sewer Utility 25
Financial Projections at
Current Rates
Springsted
Year
2009
2010
2011
2012
2013
2014
Project
Mscellaneous repair & maintenance
Lining for root and I &I
Lining for root and I &I
Lining for root and I&I
Lining for root and I&I
Lining for root and I&I
2010 VI Improvements
2011 VI Improvements
2012 Mscellaneous repair & maintenance
2013 ° District C -GG - extend trunk main
2013 `` District N (Pt. NII 1 2 to NII 1.1)
2013 District N (Pts NU.1 to NW.1, etc)
2013 Mscellaneous repair & maintenance
2014 Miscellaneous repair & maintenance
2015 District C -Z Lift Station & 4" Force Main
2015 Miscellaneous repair & maintenance
2016 Mscellaneous repair & maintenance
2017 Mscellaneous repair & maintenance
2018 Mscellaneous repair & maintenance
2019 Miscellaneous repair & maintenance
TOTALS
Totals
215,000
150,000
155,000
160,000
160,000
160,000
4,000
4,000
500,000
50,000
150,000
900,000
500,000
500,000
200,000
500,000
500,000
500,000
500,000
500,000
6,308,000
The following page shows the projected operating statement and annual cash
balance in the Sewer Utility, assuming no rate increases, over the planning
period 2010 -2019.
Based on current flows and revenues collected, the allocation of costs among
the users is very precise, with the percent of revenues collected from each
customer class versus the percentage of total flow for the respective customer
class differing by less than 1 %. Acceptable ranges are typically within 0 -5 %.
Operating income is projected to be negative through the end of the planning
period, related in part to depreciation expense. The cash balance in the Sewer
Utility, which includes both restricted and unrestricted cash, is projected to go
from $12,106,878 in the beginning of 2009 to ($11,308,031) in 2019. These
projections include the annual $343,700 Infiltration and Inflow Mitigation
Surcharge currently imposed by the Metropolitan Council through 2011. In
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Annual Flow
% of Total
Annual
Revenues
% of
Total
Difference
Residential
1,371,761
69.9%
$3,604,307
70.4%
0.6%
Commerical
329,114
16.8%
$ 842,724
16.5%
-0.3%
Industrial
190,773
9.7%
$ 487,045
9.5%
-0.2%
Institutional
71,659
3.6%
$ 183,184
3.6%
-0.1%
Sewer Utility 25
Financial Projections at
Current Rates
Springsted
Year
2009
2010
2011
2012
2013
2014
Project
Mscellaneous repair & maintenance
Lining for root and I &I
Lining for root and I &I
Lining for root and I&I
Lining for root and I&I
Lining for root and I&I
2010 VI Improvements
2011 VI Improvements
2012 Mscellaneous repair & maintenance
2013 ° District C -GG - extend trunk main
2013 `` District N (Pt. NII 1 2 to NII 1.1)
2013 District N (Pts NU.1 to NW.1, etc)
2013 Mscellaneous repair & maintenance
2014 Miscellaneous repair & maintenance
2015 District C -Z Lift Station & 4" Force Main
2015 Miscellaneous repair & maintenance
2016 Mscellaneous repair & maintenance
2017 Mscellaneous repair & maintenance
2018 Mscellaneous repair & maintenance
2019 Miscellaneous repair & maintenance
TOTALS
Totals
215,000
150,000
155,000
160,000
160,000
160,000
4,000
4,000
500,000
50,000
150,000
900,000
500,000
500,000
200,000
500,000
500,000
500,000
500,000
500,000
6,308,000
The following page shows the projected operating statement and annual cash
balance in the Sewer Utility, assuming no rate increases, over the planning
period 2010 -2019.
Based on current flows and revenues collected, the allocation of costs among
the users is very precise, with the percent of revenues collected from each
customer class versus the percentage of total flow for the respective customer
class differing by less than 1 %. Acceptable ranges are typically within 0 -5 %.
Operating income is projected to be negative through the end of the planning
period, related in part to depreciation expense. The cash balance in the Sewer
Utility, which includes both restricted and unrestricted cash, is projected to go
from $12,106,878 in the beginning of 2009 to ($11,308,031) in 2019. These
projections include the annual $343,700 Infiltration and Inflow Mitigation
Surcharge currently imposed by the Metropolitan Council through 2011. In
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Sewer Utility 26
Springsted
2012, it is assumed that the annual Metropolitan Council surcharge will cease to
exist and existing disposal charges will increase 5.0% annually. All other
operating expenditures are projected to increase 3.0 -4.0 %. Capital Outlay
varies from $150,000 annually to $660,000 annually throughout the planning
period. The increase in expenditures without an increase in projected rates
results in the negative cash balance forecast.
Sewer utility projections through 2019 without any rate increases are shown on
the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Sewer Utility 29
Financial Projections
Springsted
We have developed financial projections showing the balance in the
Sewer Fund equal to six months of anticipated operating expenses and funds
for repair and replacement within the planning period. This assumption was
made to ensure that the Sewer Fund would have sufficient cash to fund
operations going forward and meet future capital requirements.
We have projected the appropriate increases in revenues for the City to fund
operations of the Sewer Fund and anticipated future capital outlay needs for
the time period covered by this study.
The financial projections began with the Sewer Fund expenditures;
subsequently, revenues were adjusted to provide the recommended income, cash
flow, and level of ending cash balances. Our expenditure projections are
generally based on an analysis of past trends, anticipated changes in operations,
and our significant experience in preparing sewer rate studies.
In order to have sufficient revenue for the operation of the Sewer Fund and
assuming no significant increases are imposed by Metropolitan Council
Environmental Services for regular disposal charges, we recommend
consumption rates be increased 6.0% each year from 2010 through 2016, 4.75%
in 2017, and 4.50% in 2018 & 2019 when net income is positive. In order to
minimize the impact on low -end users, we recommend that the fixed fee remain
constant, keeping in mind that the fixed fee is currently not sufficient to fund all
fixed charges of the Sewer Utility.
The City has recently implemented an Inflow & Infiltration reduction program.
Costs for this program have not been finalized and therefore are not reflected in
the projected rate increases. However, the $343,700 Infiltration and Inflow
Mitigation Surcharge currently imposed by the Metropolitan Council through
2011 is included in the financial projections.
These projections assume that cash in the Sewer Utility is projected to go
from approximately $12.9 million at the end of 2009 to $12.4 million in
2019. This amount includes restricted and unrestricted cash projections and
is sufficient to fund a reserve equal to five months of operating expenditures
as well as the restricted reserve. The restricted portion of the ending cash
balance is projected to be $7.4 million in 2009, declining to $6.6 million in
2019. This projection assumes that the restricted cash will increase annually
by approximately $400,000 (funded from rates), and decrease each year by
capital expenditures. The annual addition to restricted cash is based on 2009
estimates and projected capital outlay.
The financial projections are shown on the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Sewer Utility 32
Impact on Sewer Charges
Springsted
The proposed sewer rates are shown below. The proposed user rates were
determined by increasing existing rates by the percent increase calculated
for each year.
We recommend the City establish Sewer rates on a three year basis. The rates
should be reviewed on an annual basis concurrent with the development of
following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Fixed Fee
Volume Fee
(per 1,000 gal)
2009
$ 1.45
$ 2.55
2010
$ 1.45
$ 2.70
2011
$ 1.45
$ 2.87
2012
$ 1.45
$ 3.04
2013
$ 1.45
$ 3.22
2014
$ 1.45
$ 3.41
2015
$ 1.45
$ 3.62
2016
$ 1.45
$ 3.83
2017
$ 1.45
$ 4.02
2018
$ 1.45
$ 4.20
2019
$ 1.45
$ 4.39
Sewer Utility 32
Impact on Sewer Charges
Springsted
The proposed sewer rates are shown below. The proposed user rates were
determined by increasing existing rates by the percent increase calculated
for each year.
We recommend the City establish Sewer rates on a three year basis. The rates
should be reviewed on an annual basis concurrent with the development of
following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Street Light Utility 33
6. Street Light Utility
Capital Outlay
Springsted
To determine the appropriate fees and rates needed for the operation of the
Street Light Utility Fund over the planning period, we have projected future
revenue and expenditures and we have incorporated the anticipated future
capital outlay needs provided by the City. The capital items are projected to be
paid from both the Street Light Utility Fund. The capital costs and their
projected source of funding are shown in the table below.
2015
6
7
2019
Total
Street Light
Utility
44,500
70,500
44,500
57,000
41,500
50,000
50,000
50,000
50,000
50,000
508,000
These capital projects are primarily related to insta ling and upgrading street
lights as well as painting existing street lights. The capital costs will be paid
from user fees.
A detailed listing of the anticipated capital improvements shows estimated
capital expenditures through 2019 of approximately $508,000. The
anticipated capital improvements are shown in more detail on the following
page.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Street Light Utility 34
Financial Projections at
Current Rates
Sp
ngst
Year Project Totals
2010 Install Streetlights 9,000
2010 Traffic Signal Painting 14,500
2010 Upgrade Various Streetlights 21,000
2011 Street Light Painting 25,000]
2011 Traffic Signal Painting 14,500`
2011 Upgrade Various Streetlights 24,000?
2011 Upgrade/Install Streetlights 7,000
2012 Traffic Signal Painting 14,500
2012 'Upgrade Various Streetlights 30,000
2013 Street Light Painting 10,5001
2013 Traffic Signal Painting 14,500
Upgrade Various Streetlights 32,000
2014 'Replace Streetlights 27,000
2014 Traffic Signal Painting 14,500
2015 1Mscellaneous repair &maintenance 50,000
2016 1Mscellaneous repair & maintenance 50,000
2017 Mscellaneous repair & maintenance 50,000
2018 Miscellaneous repair & maintenance 50,000
2019 ; Mscellaneous repair & maintenance 50,0001
TOTALS 508,000
The following page shows the projected operating statement and annual cash
balance and annual cash balance in the Street Light Utility, assuming no rate
increases, over the planning period 2010 -2019.
Operating income is projected to be negative through the end of the planning
period, related in part to depreciation expense. The cash balance in the Street
Light Utility is projected to go from $518,704 in the beginning of 2009 to
($771,960) in 2019. Capital Outlay is approximately $50,000 annually
throughout the planning period. The increase in expenditures without an
increase in projected rates results in the negative cash balance forecast.
Street Light Utility projections through 2019 without any rate increases are
shown on the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Street Light Utility 37
Financial Projections
Springsted
To determine the appropriate user rates needed for operation of the Street
Light Fund, we have projected future revenue and expenditures and have
incorporated the anticipated future capital outlay needs for the time period
covered by this study.
The financial projections assumed the City would maintain a minimum cash
balance in the Street Light Fund equal to six months of anticipated operating
expenses and funds for repair and replacement within the planning period. This
assumption was made to ensure that the Street Light Fund would have sufficient
cash to fund operations going forward and meet future capital requirements.
The financial projections began with the Street Light Utility Fund
expenditures; subsequently, revenues were adjusted to provide the
recommended income, cash flow, and level of ending cash balances. Our
expenditure projections are generally based on an analysis of past trends and
discussions with City staff.
In order to have sufficient revenue for the operation of the Street Light Utility
Fund, we recommend rates be increased 3.85% each year from 2010 through
2019.
These projections assume that cash in the Street Light Utility is projected to
go from approximately $522,304 million at the end of 2009 to $515,115 in
2019. This is sufficient to fund a reserve equal to six months of operating
expenditures.
The financial projections are shown on the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
J
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Street Light Utility 40
Impact on Street Light
Charges
pringsted
The City has established a relatively complex system of street light rates
based primarily on the location of the light and light type. As part of this rate
study, the City has obtained GIS data from both Dakota Electric and Xcel
Energy related to the location, type and wattage of street lights and traffic
lights in the City. This data can be used to develop alternative street lighting
fee structures for consideration once it has been fully integrated into the
City's GIS system.
The street lights currently in use in the City are predominantly high pressure
sodium lights and are approaching their 25 -year replacement cycle. If Dakota
Electric and Xcel Energy offer the opportunity, the City may consider
partnering with them to replace the current lights with the next generation of
energy - efficient lights to reduce operating costs and to minimize the
environmental impacts associated with energy used to operate them. Until
the integration of street lighting GIS data is complete and the City has
considered the alternatives for future lighting, the current rate structure
should be maintained. The current rates should be increased by the
percentages determined in the financial projections to insure annual revenue
requirements are met.
We also recommend the City establish street light rates on a three year basis.
The rates should be reviewed on an annual basis concurrent with the
development of following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Storm Drainage/Water Quality Utility
7. Storm Drainage/Water Quality Utility
Capital Outlay
Springsted
To determine the appropriate fees and rates needed for the operation of the
Storm Drainage Fund over the planning period, we have projected future
revenue and expenditures and we have incorporated the anticipated future
capital outlay needs provided by the City. The capital items are projected to be
paid from both the operating revenues as well as money held in the restricted
funds. The capital costs and their projected source of funding are shown in the
table below.
These capital projects are related to repair and maintenance of existing
infrastructure as well as capital costs related to storm basin improvements and
drainage treatment.
A detailed listing of the anticipated capital improvements shows estimated
capital expenditures through 2019 of approximately $8,011,000. The
anticipated capital improvements are shown in more detail on the following
page.
41
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Storm Sewer
Utility
Storm Sewer
Trunk Fund
Expansion &
Modification
Fund 1125
Renewal &
Replacement
Fund 1126
Water Quality
Dedication
Fund 1127
Special
Assessments
(Non- Bonds)
Other
Totals
2009
285,000
-
233,000
147,000
66,000
-
-
731,000
2 010 ' -'
30,000
-
650,000
150,000
150,000
20,000
50,000
1,050,000
2011
30,000
-
300,000
150,000
150,000
40,000
-
670,000
2012.
30,000
-
500,000
250,000
150,000
60,000
50,000
1,040,000
201
30,000
-
400,000
200,000
150,000
80,000
50,000
910,000
2014
30,000
-
350,000
290,000
150,000
100,000
50,000
970,000
2015
30,000
120,000
200,000
100,000
150,000
-
-
600,000
2016 -
30,000
120,000
200,000
100,000
150,000
-
-
600,000
2017
30,000
-
200,000
100,000
150,000
-
-
480,000
2018
30,000
-
200,000
100,000
150,000
-
-
480,000
2019
30,000
-
200,000
100,000
150,000
-
-
480,000
Total
585,000
240,000
3,433,000
1,687,000
1,566,000
300,000
200,000
8,011,000
Storm Drainage/Water Quality Utility
7. Storm Drainage/Water Quality Utility
Capital Outlay
Springsted
To determine the appropriate fees and rates needed for the operation of the
Storm Drainage Fund over the planning period, we have projected future
revenue and expenditures and we have incorporated the anticipated future
capital outlay needs provided by the City. The capital items are projected to be
paid from both the operating revenues as well as money held in the restricted
funds. The capital costs and their projected source of funding are shown in the
table below.
These capital projects are related to repair and maintenance of existing
infrastructure as well as capital costs related to storm basin improvements and
drainage treatment.
A detailed listing of the anticipated capital improvements shows estimated
capital expenditures through 2019 of approximately $8,011,000. The
anticipated capital improvements are shown in more detail on the following
page.
41
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Storm Drainage/Water Quality Utility 42
* L2
Sprinasted
Year Project
2015 Future projects
2016 Future projects
2009 Mscellaneous Projects
Totals
120,000
120,000
178,000
2009 Mscellaneous Projects 553,000
2010 Fish Lake - Alum Basin Construction 300,000
2010 Fish Lake - Direct Drainage Treatment Imp 2 50,000
2010 Fish Lake - Storm Basin Improvements 1 150,000
2010 General Pond Maintenance 30,000
2010 LeMay Lake - Direct Drainage Treatment Imp 2 150,000
2010 Schwanz Lake - Direct Drainage Treatment Imp 2 150,000
2010 Schwan Lake - Storm Basin Improvements 1 50,000
2011 Blackhawk Lake - Direct Drainage Treatment Imp 150,000
2011 Blackhawk Lake - Storm Basin Improvements 1 50,000
2011 Fish Lake - Storm Basin Improvements 2 125,000
2011 General Pond Maintenance 30,000
2011 Schwanz Lake - Storm Basin Improvements 2 125,000
2012 Blackhawk Lake - Direct Drainage Treatment Imp 100,000
2012 Blackhawk Lake - Storm Basin Improvements 2 250,000
2012 Fish Lake - Storm Basin Improvements 3 125,000
2012 General Pond Maintenance 30,000
2012 Schwanz Lake - Storm Basin Improvements 3 125,000
2012 Thomas Lake - Direct Drainage Treatment Imp 1 150,000
2012 Thomas Lake - Storm Basin Improvements 1 50,000
2013 Blackhawk Lake - Storm Basin Improvements 3 125,000
2013 Carlson Lake - Direct Drainage Treatment Imp 1 150,000
2013 Carlson Lake - Storm Basin Improvements 1 50,000
2013 General Pond Maintenance 30,000
2013 Schwanz Lake - Storm Basin Improvements 4 50,000
2013 Thomas Lake - Direct Drainage Treatment Imp 2 100,000
2013 Thomas Lake - Storm Basin Improvements 2 175,000
2014 Blackhawk Lake - Storm Basin Improvements 5 50,000
2014 Carlson Lake - Direct Drainage Treatment Imp 2 100,000
2014 Carlson Lake - Storm Basin Improvements 2 250,000
2014 General Pond Maintenance 70,000
2014 Hay Lake - Direct Drainage Treatment Imp 1 150,000
2014 Hay Lake - Storm Basin Improvements 1 50,000
2014 Thomas Lake - Storm Basin Improvements 4 50,000
2015 Direct Drainage Treatment Imp 2 100,000
2015 General Pond Maintenance 30,000
2015_, Storm Basin Improvements - Msc. 200,000
2016 Direct Drainage Treatment Imp 2 100,000
2016 General Pond Maintenance 30,000
2016 Storm Basin Improvements - Msc. 200,000
2017 Direct Drainage Treatment Imp 2 j 100,000
2017 General Pond Maintenance 30,000 ,
2017 Storm Basin Improvements - Msc. 200,000
2018 Direct Drainage Treatment Imp 2 100,000
2018 General Pond Maintenance 30,000
2018 Storm Basin Improvements - MSc. 200,000
2019 Direct Drainage Treatment Imp 2 100,000,
2019 General Pond Maintenance 30,000
2019 Storm Basin Improvements - Msc. 200,000
2010 Water Quality Stewardship Programs 170,000
2011 Water Quality StewardshipPrograms 190,000
2012 Water Quality Stewardship Programs 210,000
2013 Water Quality Stewardship Programs 230,000
2014 Water Quality Stewardship Programs 250,000
2015 Water Quality Stewardship_programs _ 150,000
2016 Water Quality Stewardship Programs 150,000
2017 Water Quality Stewardship Programs 150,000
2018 Water Quality Stewardship Programs 150,000
2019 Water Quality Stewardship Programs 150
TOTALS 8,011,000
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Ught Utility User Rate Analysis.
Storm Drainage/Water Quality Utility
Financial Projections
at Current Rates
Springsted
�
Revenue requirements indicate the amount of revenue needed for the City to
continue efficient operations as well as maintain an adequate cash balance in
the utility. Currently, the City maintains one operating fund for both the Water
Quality and Storm Drainage utilities. In addition to the operating fund, a
portion of the revenues from rates are deposited into restricted funds. They
include the following:
• Storm Drainage System Expansion & Modification
• Storm Drainage System Renewal and Replacement
• Water Quality
Currently, the City allocates 70% of user fee revenues into the operating fund,
20% into the Storm Drainage System Expansion & Modification account, and
10% into the Storm Drainage System Renewal and Replacement account. As
part of the rate study, the City has asked Springsted to determine if this
allocation is adequate in terms of current and future activities planned for the
Storm Drainage and Water Quality Utilities. Our recommended allocation is
shown later in this report.
43
The following page shows the projected annual cash balance in the Storm
Drainage and Water Quality Utility, assuming the current allocation and no rate
increases, over the planning period 2010 -2019. Ending operating cash is
projected to become negative at the end of the planning period. Cash held in the
restricted funds for repair and replacement and expansion and modification is
projected to remain positive over the planning period, but drop from current
levels.
Storm Drainage/Water Quality utility projections through 2019 based on current
deposit allocations and without any rate increases are shown on the following
pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
•
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Storm Drainage/Water Quality Utility 45
Financial Projections
Springsted
To determine the appropriate user rates needed for operation of the Storm
Drainage/Water Quality Fund, we have projected future revenue and
expenditures and have incorporated the anticipated future capital outlay needs
for the time period covered by this study.
The financial projections assumed the City would maintain cash at current
levels. This assumption was made to ensure that the City would have sufficient
cash to fund operations going forward and meet future capital requirements.
In order to maintain the current cash position, we recommend consumption rates
be increased 4.25% each year from 2010 through 2019. We also recommend
the following reallocation of revenues:
• 17% of operating revenues should be deposited to the Storm
Drainage System Expansion & Modification account
• 10% of operating revenues should be deposited to the Storm
Drainage System Renewal & Replacement account
• 10% of operating revenues should be deposited to the Water
Quality account
• 63% of operating revenues should be used for operations
These projections show that cash in the Storm Drainage/Water Quality Utility
is projected to go from approximately $4.6 million at the beginning of 2009
to approximately $4.4 million in 2019. This amount includes restricted and
unrestricted cash projections and is sufficient to fund a reserve equal to three
months of operations.
Should the State or Federal government impose additional or different water
quality regulations /mandates, the projected rates and revenues allocations will
be need to be reviewed and adjusted accordingly.
The financial projections are shown on the following pages.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
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Storm Drainage/Water Quality Utility 47
Impact on Storm DrainagelWater
Quality Charges The proposed storm drainage /water quality rates are shown below. The
proposed user rates were determined by increasing existing rates by the
percent increase calculated for each year.
Springsted
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Volume Fee
(per REF)*
$ 8.11
$ 8.45
$ 8.81
$ 9.19
$ 9.58
$ 9.99
$ 10.41
$ 10.85
$ 11.31
$ 11.80
$ 12.30
* Residential Equivalency Factor
As part of our analysis we discussed adjusting the storm water /water quality
rates to include a surcharge for pollutant loading factors. The City had a Water
Quality and Wetland Management Plan prepared by Bonestroo that identifies
phosphorus runoff concentrations and loading rates by major land use
categories. Our attempt to use these factors led to the City's desire for more
specific phosphorus and total suspended solids data for specific land use types
before adding a pollutant surcharge. The goal is to provide an equitable basis to
recover costs related to phosphorus and other pollutant remediation based on
various land uses. A more complete analysis is being prepared by the City at
the time of completion of this report.
We recommend the City establish the storm water /water quality user rates on an
annual basis until a pollutant loading fee is added to the current user charge. At
that time, we recommend rates be set on a three year basis and reviewed on an
annual basis concurrent with the development of following year's budget.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Conclusions and Recommendations 48
8. Conclusions and Recommendations
This study was undertaken to review and analyze the City's Water, Sanitary
Sewer, Storm Drainage, Water Quality and Street Light Utility Funds to
determine the appropriate rate structure needed to pay for anticipated operating
expenditures, to provide for anticipated capital improvements, to provide
operating cash flow, and to ensure an adequate level of cash reserves. In
addition, water rates recommended were set to promote water conservation.
Springsted
Minnesota State Statutes, Section 103G.291, requires all water suppliers serving
more than 1,000 people to adopt a water rate structure which encourages
conservation. Therefore, in determining the water rates and rate structure,
Springsted reviewed historical water consumption patterns and used this
information to recommend a rate structure that would promote water
conservation.
The following conclusions were determined as a result of this study and the
financial projections prepared for the years 2010 through 2019.
1. The Public Utilities Fund as a whole shows historical revenues and
expenditures have remained fairly stable over time. Cash in the fund is
projected to be $40.0 million in 2009.
2. The City should maintain a minimum cash balance in each utility fund of
at least three months of anticipated operating expenses and one year's
debt service at the end of each year. The cash balance in the Public
Utilities Fund is very healthy and currently meets the recommended
reserve levels.
3. Water user rates should be set to promote conservation. After analyzing
current and historical consumption patterns, our recommended seasonal
rate structure is as follows:
Fixed fee /quarter $6.00
Winter quarter
All water use charged at $1.40/1,000 gallons
Non - winter quarters
Winter water use is charged at $1.40/1,000 gallons
Water use above winter use is charged at $1.75/1,000 gallons
The City's current water rate structure is as follows:
Fixed fee /quarter $6.00
All domestic water use is charged at $1.40/1,000 gallons
Separately- metered irrigation water is charged at $1.42/1,000
gallons
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Conclusions and Recommendations 49
Springsted
In the non - winter quarters, residential customers will be billed for water use
up to their winter water use at $1.40/1,000 gallons of water. Water use
above this amount will be billed the rate of $1.75/1,000 gallons. A majority
of commercial accounts in the City have a separate meter for irrigation.
Therefore, all commercial water use will be billed based on the winter
quarter rate and commercial irrigation water use will be billed at the rate of
$1.75/1,000 gallons. For those commercial accounts that do not have a
separate irrigation meter, they will be charged in the same manner as a
residential account where their winter quarter water use is charged at
$1.40/1,000 gallons and water use above this amount will be billed the rate
of $1.75/1,000 gallons. It is recommended that the proposed seasonal rate
structure be implemented in 2010. Future projections indicate no rate
increases are necessary over the planning period.
4. We recommend the City include a notice of proposed water rates in the
first utility bills following rate adoption informing all users of the
proposed changes, potential impacts, and methods to conserve water,
limiting impact of the proposed rates. The Council has indicated that they
wish to introduce rate changes July 1, 2010 to provide a gradual
introduction of non - winter water rates, allowing customers to adjust their
water use should they choose to do so.
5. The current water supply & storage charge of $1,185 and the water
treatment plant charge of $735 are adequate to fund projected capital
costs.
6. Assuming no significant increases are imposed by Metropolitan Council
Environmental Services for regular disposal charges, sewer user rates
should be increased annually by 6.00% 2010 through 2016, 4.75% in
2017 and 4.50% in 2018 and 2019. These increases are needed to pay for
anticipated operating and maintenance expenses, capital improvements, to
provide sufficient cash flow for operations, and to maintain adequate cash
reserves for future capital improvements.
7. Street Light user charges should be increased annually by 3.85% 2010
through 2019. These increases are also needed to pay for anticipated
operating and maintenance expenses, capital improvements, to provide
sufficient cash flow for operations, and to maintain adequate cash
reserves for future capital improvements.
8. The Storm Water/Water Quality charges should be increased 4.25%
annually 2010 through 2019. This is projected to maintain cash at current
levels while providing funds for renewal and replacement and expansion
and modification in addition to operating and maintenance expenses and
cash reserves.
9. The Storm Water/Water Quality charges should be allocated to the
following funds:
• 17% of operating revenues should be deposited to the Storm
Drainage System Expansion & Modification account
• 10% of operating revenues should be deposited to the Storm
Drainage System Renewal & Replacement account
City of Eagan, Minnesota. Water, Sanitary Sewer, Storm Drainage, Water Quality and Street Light Utility User Rate Analysis.
Conclusions and Recommendations 50
Sprin sted
• 10% of operating revenues should be deposited to the Water Quality
account
• 63% of operating revenues should be used for operations
10. The City should establish the user rates for each utility fund for a three -
year period and review them on an annual basis. The rates should be
reviewed on an annual basis concurrent with the development of the
following year's budget.
These recommendations are based on information provided to us by City of
Eagan. The City will need to monitor the performance of each utility fund and
make any necessary adjustments based upon its actual performance and on the
actual construction costs of the anticipated capital improvements.
City of Eagan, Minnesota. Water, Sanitary Sewer, Storrn Drainage, Water Quality and Street Light Utility User Rate Analysis.
APPENDIX A
Rate Comparisons
CURRENT & PROPOSED WATER BILLS
ity Bill
Consumption
Current
Proposed*
$ Change
% Change
USAGE
# Accts/
Meters
Q1
Q2
Q3
Q4
Total
Volume
$ 222
Current Bill
Proposed
Bill
$Change
%Change
Resident w /flat usage
1
12
12
12
12
48
4%
$ 91
$ 91
$ -
0.0%
Resident w /high summer usage
1
20
118
121
32
291
$ 431
$ 505
$ 74
17.1%
Average Resident
1
20
40
31
20
111
$ 179
$ 190
$ 11
6.0%
Customer#1
1
14
13
39
19
85
$ 143
$ 154
$ 11
7.3%
Customer #2
1
14
29
28
17
88
$ 147
$ 158
$ 11
7.6%
Snow Bird w /flat usage
1
-
12
12
-
24
$ 58
$ 66
$ 8
14.6%
Snow Bird w /high summer usage
1
-
60
60
-
120
$ 192
$ 234
$ 42
21.9%
Company #1
Domestic
6
10,963
17,578
17,713
11,540
57,794
$ 80,948
$ 80,948
$ -
0.0%
Irrigation
6
-
6,807
7,459
-
14,266
$ 20,294
$ 25,002
$ 4,708
23.2%
Company #2
Domestic
1
12
9
9
8
38
$ 59
$ 59
$ -
0.0%
Irrigation
1
-
169
548
12
729
$ 1,041
$ 1,282
$ 241
23.1%
Company #3 (no separate irrigation)
1
420
401
767
485
2,073
$ 2,908
$ 2,908
$ -
0.0%
Company #4 (no separate irrigation)
1
1,474
920
1,335
1,262
4,991
$ 6,993
$ 6,993
$ -
0.0%
Company #5
Domestic
6
5,813
7,210
6,946
6,823
26,792
$ 37,545
$ 37,545
$ -
0.0%
Irrigation
2
-
1,550
2,027
-
3,577
$ 5,091
$ 6,272
$ 1,180
23.2%
Company #6
Domestic
9
2,979
3,989
4,405
2,981
14,354
$ 20,150
$ 20,150
$ -
0.0%
Irrigation
5
-
11,092
9,210
-
20,302
$ 28,859
$ 35,559
$ 6,700
23.2%
Company #7
Domestic
1
1,177
1,570
1,702
1,190
5,639
$ 7,901
$ 7,901
$ -
0.0%
Irrigation
1
-
2,345
3,023
-
5,368
$ 7,629
$ 9,400
$ 1,771
23.2%
Company #8
Domestic
3
1,833
2,188
2,283
2,108
8,412
$ 11,795
$ 11,795
$ -
0.0%
Irrigation
3
-
943
1,371
-
2,314
$ 3,304
$ 4,068
$ 764
23.1%
Average Annual Residential Uti
ity Bill
Current
Proposed*
$ Change
% Change
Water
$ 431
$ 505
$ 74
17%
Sewer
$ 210
$ 222
$ 12
6%
Street Light
$ 27
$ 28
$ 1
4%
Storm Water
$ 32
$ 34
$ 1
4%
Total
$ 701
$ 789
$ 88
13%
*Proposed water bill could be lowered through conservation efforts.
Water Bills for Various Users