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The VcAX/TS budget is very straightforward and there are no surprises for 2002. Revenues are <br />projected to increase by 6.9 percent or $84,000 and this is due mainly to an increase in the <br />number of customers on the sewer system. The expenditures are proposed to increase 5.2 <br />percent or $59,850. Most of this increase is in the capital outlay category. The '9C¢7TS <br />department includes the chief operator, three full time employees, plus one seasonal <br />employee during the summer. <br /> <br />In order to keep pace with inflation and cost of living expenses, and to ensure that adequate <br />funding is available to meet operating expenses and major repair/replacement expenses, the <br />city has increased sewer rates about 2 percent per year for the past seven years or so. It is <br />recommended that these inflationary increases in the sewer rates continue. Attached for your <br />consideration is a resolution, which increases the rates by 2.5 percent for 2002 and for 2003. <br /> <br />Additionally, it should be noted that SAC fees (connection charges) have not increased since <br />1987 and are still at the $1,300 per unit amount. In the late 80's the city had the highest SAC <br />rate in the area but at this time we are slightly low when compared to our neighboring <br />communities. An increase in the SAC rates may be appropriate but our timing is not good. A <br />new State law was passed that requires the reporting of all municipal building related <br />revenues and expenditures. The purpose of the report is to see if cities are making a "profit" <br />off of development and if city fees are making it difficult for the construction of affordable <br />housing. In this regard, SAC fees will be part of the equation. The SAC fee allows new <br />homeowners to "buy into" the existing plant and infrastructure that has been constructed <br />for the sewer system to operate in accordance to MPCA laws. These are one time funds <br />collected when building permits arc issued and are generally used to pay for debt on the <br />facility. <br /> <br />Recomrne~datio~ <br /> <br />It is recommended that the City Council adopt a motion approving the three attached <br />enterprise fund budgets. <br /> <br />It is recommended that the City Council adopt Resolution 01-__ establishing the sanitary <br />sewer rates for 2002 and 2003. <br /> <br />s:\ finance\budget\entfunds,doc <br /> <br /> <br />