Wastewater Utility Rate Study

Wastewater Utility Rate Study

Overview

The City of Willmar engaged Springsted Incorporated to review the financial performance of its Wastewater Utility, and to make recommendations on rate changes necessary to meet the Utility’s required cash flow needs. These needs consist primarily of operational expenses, capital replacement and maintenance, debt service, and cash reserve requirements. Documents below contain the findings of our review, and our recommendations for rate adjustments based on these findings.

Documents

AN ORDINANCE AMENDING CHAPTER 16, UTILITIES, ARTICLE IV, RATES AND CHARGES, DIVISION 3, SEWER SERVICE

The City Council of the City of Willmar hereby ordains as follows:

Section 1.  AMENDMENT OF MUNICIPAL CODE SECTION 16-158, DETERMINATION OF CHARGES.  Willmar Municipal Code Section 16-158, Determination of Charges, is hereby amended to read as follows (deleted material is crossed out; new material is underlined; sections and subsections not being amended are omitted):

(a) The approving authority shall make sewer service charges to offset the cost of operation and maintenance, including replacement, and local capital costs, such as debt retirement, depreciation and previous years' operating debt, of its wastewater treatment facility, wastewater pumping stations and collection system. The sewer service charges shall consist of an administrative charge, utility improvement charge, a meter or availability charge, a usage charge, a surcharge, noncompliance fine, a violation fine and a sump pump fee, if applicable. The costs shall be reviewed and the rates adjusted by the approving authority on an annual basis; except, if necessary, the rates may be adjusted more frequently. The amounts of sewer service charges shall be kept on file at the office of the city clerk-treasurer.

RATE SCHEDULE
SEWER SERVICE CHARGES

Sewer service charges will be billed for the following described items, as applicable to a given user, at rates established and updated from time to time by Ordinance of the City Council and set out on the Table of Sewer Rates, attached set out as Exhibit A to this rate schedule. [The amounts of sewer service charges shall be kept on file at the office of the city clerk-treasurer.]

Section 2.   AMENDMENT OF TABLE OF SEWER RATES, EXHIBIT A TO MUNICIPAL CODE SECTION 16-158, DETERMINATION OF CHARGES.  Exhibit A to the rate schedule contained in Municipal Code Section 16-158, Determination of Charges, which most recently was updated to list sewer rates through the year 2012, is hereby updated and amended to read as shown on Exhibit A attached hereto.

Section 3.  EFFECTIVE DATE. This ordinance shall be effective from and after its adoption and second publication.
This Ordinance introduced by Council Member:  Anderson    
This Ordinance introduced on:   June 3, 2013     
This Ordinance published on:     June 8, 2013     
This Ordinance given a hearing on:      June 17, 2013   
This Ordinance adopted on:       June 17, 2013   
This Ordinance published on:     June 21, 2013    

EXHIBIT A TO RATE SCHEDULE – SEWER SERVICE CHARGES
TABLE OF SEWER RATES 
 
  2013 2014 2015 2016 2017
1. Administration (Billing) Charge $2.62 $2.70 $2.78 $2.86 $2.95
2. Utility Improvement Charge 4.00 4.00 4.00 4.00 4.00
3. Usage Charge (basic metered rate)     
  1 Unit = 1,000 Gallons          
  Usage 0-1,200 3.20 3.36 3.53 3.70 3.89
  Usage 1,200 units 4.89 5.13 5.39 5.66 5.94
  1 Unit = 100 Cubic Feet          
  Usage 0-1,605 units 2.39 2.51 2.64 2.77 2.91
  Usage 1,605+ units 3.66 3.84 4.03 4.23 4.44
4. Meter Charge     
    5/8 inch 28.00 28.00 28.00 28.00 28.00
    3/4 inch 42.00 42.00 42.00 42.00 42.00
    1 inch 70.00 70.00 70.00 70.00 70.00
    1.5 inch 140.00 140.00 140.00 140.00 140.00
    2 inch 224.00 224.00 224.00 224.00 224.00
    3 inch 448.00 448.00 448.00 448.00 448.00
    4 inch 700.00 700.00 700.00 700.00 700.00
    6 inch 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00
5. Surcharge     
BOD & TSS charge per pound over 250mg/l          
    250 mg/l - 299 mg/l 0.15 0.16 0.16 0.17 0.18
    300 mg/l  -399 mg/l 0.17 0.17 0.18 0.18 0.19
    400 mg/l - 499 mg/l 0.18 0.18 0.19 0.19 0.20
    500 mg/l - 599 mg/l 0.19 0.19 0.20 0.20 0.21
    600 mg/l - 699 mg/l 0.20 0.20 0.21 0.22 0.22
    over 700 mg/l 0.21 0.21 0.22 0.23 0.23
 TKN per pound over 40 mg/l* 0.65 0.67 0.69 0.71 0.74
 TP per pound over 5 mg/l* 1.22 1.26 1.30 1.34 1.38
6. Non-Metered Rates     
    Residential $61.93 $63.13 $64.42 $65.71 $67.10
   Commercial/Industrial** 101.71 103.68 105.80 107.92 110.21
   Eagle Lake 60.60 61.64 62.76 63.88 65.09
*  Note charges only apply when TKN & TP removal are in place
** Maximum charge;  may be increased if City engineer determines that flow and/or strength of sewage to be more than the average commercial/industrial user. 

7.  Non-Compliance Fine 
     a.  Maximum Day Loading        $1,000.00  per day 
     b.  Maximum Month Loading    $5,000.00  
     c.  Maximum 12-month rolling average  
     d.  Instantaneous Maximum     $1,000.00  per occurrence

8. Violation Fine                          $100.00 to $25,000.00

9. Sump Pump Users Fee          $ 10.00 Per Month