Water, sewer fees subject to hikes
By Forrest Adams

The city of Chanhassen, faced with reduced city utility revenues as a result of slower-than-anticipated growth, must now choose between capital improvements and higher than anticipated rate increases.

Water, sanitary sewer and storm water fees are all scheduled to increase in 2009. Water is scheduled to go up 5 percent, sewer 5 percent and storm water 4 percent. But even with the increases, the city must defer scheduled capital improvement projects, for instance delaying construction of a second water treatment plant, and pushing back a handful of other water, sewer and storm water projects.

Not deferring them would result in the need for even higher increases.

Ehlers & Associates, the firm that was employed to analyze the city’s rate increases fist discussed with city councilors on Nov. 13, 2007, the need for consistent 5 percent increases. On Monday, they reviewed the executive summary of their findings in 2008. Their report concluded that “the economic and real estate crisis has affected the city of Chanhassen.

In 2008 councilors adopted a water billing system, which bills water users 5 percent up to 50,000 gallons and 22 percent for usage above 50,000 gallons. This would remain consistent in 2009 if the city council stays on track.

Councilors questioned city staff and the Ehlers spokesman several times during Monday’s meeting about the need to increase fees, and the Ehlers associate agreed to bring back additional information to the work session meeting scheduled for Nov. 24. Rate increases will be set at the Dec. 9 council meeting.

Recommendations in the report include a water rate increase of 5 percent per year; sewer fee increase of 5 percent per year; a storm water fee increase of 4 percent; water connection fee increase of 6 percent; sanitary sewer connection fee increase of 7 percent; storm water quantity fee increase of 7 percent; and storm water quality fee increase by 20 percent (before a Met Council credit to the city based on the cost of improvements the city funded in 2008 to reduce clear water inflow into the city’s storm water pipes).

These are based on assumptions that city growth will occur more slowly, reducing the connection and platting fees that the city would collect and the number of new quarterly customers. The revenue accumulated through these increases would provide sufficient funds to pay routine operating expenses, pay for capital improvements to upgrade and expand the system and provide prudent cash balances in the city’s water operating fund, according to the analysis.”