Statewide Adverstising



Utility rate hike to help fund City’s street project

January 22nd, 2009

You will soon see an increase in your City utilities bill. Council members, last week, approved a rate hike for sewer, water and storm water utility services.

Gaylord residents will notice a total increase of approximately $2.65 per month or $31.80 per year. The utility rate hike will help fund a portion of debt service payments for Gaylord’s 2008 Street and Utility Improvement Project, according to City administrator Kevin McCann.

In 2008, the City conducted street/utility improvements in the area of Lincoln Avenue. Construction for that project totalled $2,250,245. There were additional fees for engineering, surveying and administration, according to McCann.

Sibley County provided $850,000 in funds for this project because Lincoln Avenue was a State Aid street project. Another $300,000 came from the State as the City rerouted storm water pipes from Lake Titloe to the storm water pond.

The City bonded for the remaining $1,900,000. Special assessments covered nearly 40% of this bond, according to McCann. Utility rates covered a total of 29% with the remaining balance being raised through the City’s annual tax levy, he explained.

According to McCann, to get the revenues on utilities, the City would need to obtain $17,650 per year for water and sewer and $7,350 on storm water. To accomplish this, the City’s financial advisor proposed increasing the base rate for sanitary sewer and water $1.50 per user, and increasing the storm water 6.00% across the board.

City staff recommended another option which would obtain the same amount of revenue for the utility funds. That option was approved by council members and is as follows:

Sewer Utility
• increase base rate by $1.00 (from $9.85 to $10.85) and increase usage rate 9¢ (from $2.70/1,000 gal. to $2.79/1,000 gal.);

Water Utility
• increase base rate by $1.00 (from $9.75 to $10.75) and increase usage rate 6¢ (from $1.90/1,000 gal. to $1.96/1,000 gal.);

Storm Water
The only option to obtain revenue is to increase the storm water utility rate by 6.00%. This would increase a residence’s bill by 52¢ per month (from $8.69 to $9.21) or $6.24 per year.

According to McCann, City staff proposed the above option because the City would get the guaranteed revenue from the increased base rate, but the hike wouldn’t be so large for people who use a minimal amount of water. It is a good balance, he reported.

The last utility rate hike for the City of Gaylord was nearly a year ago. That was the first rate increase in nearly four years.

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