HomeMy WebLinkAboutItem 7City of Lakeville
Finance Department
Memorandum
To: Mayor and City Council
From: Jerilyn Erickson, Finance Director
Copy: Justin Miller, City Administrator
Date: November 27, 2017
Subject: 2018 Proposed Fee Schedule
Introduction
The purpose of this agenda item is to discuss the proposed changes to the City of Lakeville
2018 Fee Schedule.
History
Annually staff reviews the fee schedule as part of the budget process and makes
recommendations to the City Council for changes or additions as needed. The Council is
required to announce the time and place of the council meeting at which the 2018 official fee
schedule would be discussed, and which would allow for citizen input. A public hearing as
required by State Statute 462.353 is being held on December 4, 2017. The requirements to
adopt a fee schedule set out in Minnesota Statute 462.353 subd. 4 will be met at the
December 4, 2017 Council meeting.
Current Circumstances
A public hearing is required by State Statute 462.353. The hearing will allow citizens and other
interested parties to voice their opinions regarding the fees and charges. The input received
from the November 27th work session and public hearing on December 4th will be
incorporated into the 2018 Official Fee Schedule.
Conclusion
The input received from City Council on December 4, 2017 will be incorporated in the
proposed changes. The 2018 Official Fee Schedule will be incorporated into the City Code
with an effective date of January 1, 2018 unless noted otherwise. New fees, including fees that
have historically been charged but haven’t been reflected on the fee schedule, and proposed
changes are indicated in the table on the following pages alongside their present amount.
Please see the description of the changes following the table.
Attachments:
1) Proposed Fee Schedule Changes and Explanations;
2) Memo regarding 2018 Proposed Utility Rates.
# FEE DESCRIPTION July 1 2017 Fee Jan 1 2018 Fee
Connection charges and Development fees
1 Park Dedication Fee
Residential (High-Density) $2,032 per dwelling unit $2,193 per dwelling unit
Residential (Medium-Density) $2,650 per dwelling unit $2,859 per dwelling unit
Residential (Low-Density) $3,895 per dwelling unit $4,203 per dwelling unit
Commercial $7,693 per acre $7,693 per acre
Industrial $4,558 per acre $4,558 per acre
2 Engineering and Construction Services Staff Services
City Engineer $149.00 $153.00
Assistant City Engineer $123.00 $127.00
Senior Project Engineer N/A $121.00
Project Engineer $107.00 $110.00
Civil Engineer $92.00 $95.00
Graduate Engineer $73.00 $75.00
GIS Supervisor $107.00 $110.00
GIS Analyst $76.00 $79.00
Environmental Resources Manager $107.00 $110.00
Environmental Resources Specialist $76.00 $79.00
Environmental Resources Technician $102.00 $105.00
Forester $97.00 $100.00
Administrative Assistant $69.00 $72.00
Construction Services Superintendent N/A $121.00
Operations and Maintenance Coordinator $97.00 $97.00
Senior Construction Representative $92.00 $95.00
Construction Representative N/A $73.00
General Government services
3 Small Cell Wireless Application fees:
Small Cell Management/Right-of-Way Permit Fee
N/A $225/location plus $100 for
each supplemental application
Small Cell Co-location on City Facility Administration Fee
N/A $2,500/location plus $1,000 for
each supplemental application
Other general government fees
4 Convenience Fees - on-line credit card payments for utility bills $3.75 / transaction $3.75 / transaction
Parks & Recreation- Shelter/Buildings
Other shelter-related fees
5 Special Event Fees -For rental of park spaces for larger events. See the Facility User Guide for additional details. Fee
includes an application fee, refundable deposit and an overall rental fee.N/A $25 - application fee
$150 refundable deposit
$500 for rental of an entire park
space including parking lot,
shelters and green space
6 Private Program Fees - For rental of park green spaces for recurring rentals. See the Facility User Guide for additional
details. Fee includes an annual permit, a base fee for one to ten daily uses of park green space, and an additional fee
per day for rentals longer than 10 daily uses.N/A $25 - annual permit
$100 1-10 daily uses of park
green space
$5 for each additional day after
the first 10 day increment
7 Inflatable Fees- Fee charged by the City when an inflatable is used on park property. See the Facility User Guide for
additional details. Note: there is an insurance waiver that must be signed and provided to the City.
N/A $150 refundable deposit
$50 fee per each inflatable
8 Mobile Food Vendor Fees - For use of a food truck in park spaces. See Facility User Guide for additional details.
$50 per day
Parks & Recreation- Field Rental fees
9 Sand Volleyball Courts, per hour (fee is for up to 3 courts)Group 2, 3, 4- $15
Group 5-$25
Group 2, 3, 4- $15
Group 5-$25
Pickleball Courts, per hour (fee us for up to 3 courts)Group 2, 3, 4- $15
Group 5-$25
Group 2, 3, 4- $15
Group 5-$25
Heritage Center
10 Member/ Lakeville Resident/ Business
Heritage Room $160.00 per 4hr, $30 additional
hr $160.00/ 4hr, $30 add'l hours
Heritage Room and Kitchen $275.00 per 4hr, $45 additional
hr $275.00/4hr, $45 add'l hours
Atrium with Kitchen
$45.00 per hour + tax $180.00/4hr, $45.00 add'l hours
Atrium
$30.00 per hour + tax $120.00/4hr, $30.00 add'l hours
Non-Lakeville Business/ Resident
Heritage Room $185.00 per 4hr, $40 additional
hr $185.00/4hr, $40 add'l hours
# FEE DESCRIPTION July 1 2017 Fee Jan 1 2018 Fee
Heritage Room and Kitchen $325.00 per 4hr, $55 additional
hr $325.00/4hr, $55 add'l hours
Atrium with Kitchen $55.00 per hour + tax $220.00/4hr, $55 add'l hours
Atrium $40.00 per hour + tax $160.00/4hr, $40 add'l hours
11 A la carte Items
Up to 10 tables and/or 80 chairs (Table/Chair Pkg A)$25.00 $40.00
Additional table/8 chairs (must purchase Table/Chair Pkg A)$4/table & 8 chairs
Over 10 tables and/or 80 chairs (Table/Chair Pkg B)$80.00
Table(s) only $5 each
Chair(s) only $1 each
Set up fee (over 10 tables and/or 80 chairs)$50.00 $50.00
Take down fee (up to 10 tables and/or 80 chairs)$25.00 $25.00
Take down fee (over 10 tables and/or 80 chairs)$50.00 $50.00
12 Bose Bluetooth Mini Speaker
$25 (plus $250 security deposit)
$25.00 (plus $250 security
deposit)
13 Facility Attendant N/A $35.00/hour
Bar Service
14 Bar service is available upon request. Additional fees may apply. Inquire for more information.
Arts Center
15 THEATER/AUDITORIUM (Theater Seating)
Thursday – Sunday
Performance (4 hour minimum rental time)
25% discount available for Community Theater events advertised in the Playbill.
$60.00/hour for 1st 4 hours
$47.00/additional hour
$60 $65 hour for 1st 4 hours
$47 $50/additional hour
Rehearsal (4 hour minimum rental time)$39.00/hour for 1st 4 hours
$29.00/additional hour
$39.00/hour for 1st 4 hours
$29.00/additional hour
Monday – Wednesday
Performance (4 hour minimum rental time)$38.00/hour for 1st 4 hours
$28.00/additional hour
$38 $45/hour for 1st 4 hours
$28 $30/additional hour
Rehearsal (4 hour minimum rental time)$24.00/hour for 1st 4 hours
$18.00/additional hour
$24.00/hour for 1st 4 hours
$18.00/additional hour
THEATER/AUDITORIUM (Banquet Seating)
Thursday – Sunday
Event (4 hour minimum rental time)
25% discount available for Community Theater events advertised in the Playbill.$121.00/hour for 1st 4 hours
$88.00/additional hour
$121 $125/hour for 1st 4 hours
$88 $90/additional hour
Monday – Wednesday
Event (4 hour minimum rental time)$74.00/hour for 1st 4 hours
$55.00/additional hour
$74.00/hour for 1st 4 hours
$55.00/additional hour
16 Technical Services Fees
Screen rental $28.00/performance $35.00/performance
Projector rental $28.00/performance $35.00/performance
17 Piano Fees
Piano Rental - One performance $55.00 $60.00
Each additional performance on one rental agreement $38.00 $40.00
Piano Tuning Fee (Available upon request with 2 week notification $110.00 $115.00
18 Box office service
Individuals/organizations using our ticketing services must use the City’s ticketing software. Reimbursement of sales
will follow the event on the City's payment schedule, not including credit card fees and ticket surcharge, which will be
removed prior to payout.
$25.00 set up fee $1/ Ticket Sold
19 Large Art classroom
Thursday – Sunday (2 hour minimum rental time)
25% discount available for Community Theater events advertised in the Playbill.
$28.00/hour for 1st 6 hours
$18.00/additional hour
$30.00/hour for 1st 6 hours
$25.00/additional hour
Monday – Wednesday (2 hour minimum rental time)$17.00/hour for 1st 6 hours
$11.00/additional hour
$17.00/hour for 1st 6 hours
$11.00/additional hour
20 Kitchen/Catering
Kitchen fee $33.00 $45.00
Permits
21 Building Permits, Landscaping (Adopted by Ordinance)
$1000 escrow for landscaping to be collected with building permit $1000 escrow charged through
development contract (but not
previously included in fee
schedule) $1000 escrow
22 Building Permits, Erosion Control (Adopted by Ordinance)
$1000 escrow for erosion control/grading certification to be collected with building permit.$1000 escrow charged through
development contract (but not
previously included in fee
schedule) $1000 escrow
23 Plumbing Permits (Adopted by Ordinance)
Residential - Minimum (repairs and alterations, lawn sprinkler systems)$39.50 $40.00
Other Heritage Center charges
Parks & Recreation Staff Services
(hourly fees are associated with staff time to facilitate rentals when the building would not otherwise be open).
# FEE DESCRIPTION July 1 2017 Fee Jan 1 2018 Fee
Commercial 1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $39.50
1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $40.00
RPZ Valve (new) $39.50 $40.00
RPZ Valve (replacement or rebuild) $39.50 $40.00
Water softener/water heater $39.50 $40.00
Heating Permits (Adopted by Ordinance)
Residential - Minimum repairs and alterations $39.50 $40.00
Commercial 1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $39.50
1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $40.00
Sewer and Water Permits (Adopted by Ordinance)
Residential - Minimum repairs and alterations $39.50 $40.00
Commercial One percent (1%) of
contract/valuation price
*minimum fee $39.50
One percent (1%) of
contract/valuation price
*minimum fee $40.00
Private sewer systems: New installation $199.50 $200.00
Private sewer system repair $199.50 $200.00
Electrical Permits (Adopted by Ordinance)
Residential - Minimum repairs and alterations (one trip)$39.50 $40.00
Commercial 1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $39.50
1.5% of contract/valuation price
up to $10,000 and 1.0% of
contract/valuation price above
$10,000
*Minimum fee $40.00
Manufactured Home Inspections (Adopted by Ordinance)
Installation permit (foundation, sewer, water, gas)$89.50 $90.00
Separate permit for electrical hookup $39.50 $40.00
Swimming Pools (Adopted by Ordinance)
All in-ground pools, regardless of capacity, and above-ground pools that exceed 5,000 gallons $49.50 $50.00
Demolition (Adopted by Ordinance)
All structures other than residential accessory $49.50 $50.00
Miscellaneous Commercial Mechanical (Adopted by Ordinance)
Refrigeration, piping, fuel tanks, etc. 1.5% of contract/valuation price
up to $10,000 and 1% of the
contract/valuation price in
excess of $10,000
*Minimum fee $39.50
1.5% of contract/valuation price
up to $10,000 and 1% of the
contract/valuation price in
excess of $10,000
*Minimum fee $40.00
Re-Roof, Re-Side, Re-deck and retaining walls over 4 ft . high (Adopted by Ordinance)
Residential $49.50 $50.00
Commercial $149.50 $150.00
Windows – Comprehensive or Egress (Adopted by Ordinance)
Residential $49.50 $50.00
Commercial $149.50 $150.00
Construction application fees
24 Grading Permit Application Fee and escrow $75.00 $75.00 application fee plus $200
refundable escrow per LOT; OR
$75.00 application fee plus
$3,000 refundable escrow per
ACRE
25 Draintile Permit Fee and escrow $75.00 $75.00 application fee plus $200
refundable escrow
Planning & Zoning
Other planning and zoning fees
26 Special Home Occupation Permit (Adopted by Ord.)$300.00 (includes legal notice
publications).Eliminate fee
Public Safety
Other public safety charges
27 Police Officers $85.00/hr.$88.00/hr.
28 Fire inspection services (provided to other cities)
Regular time
Overtime
$67.50/hour
$95.00/hour
$83.00/hour
$103.00/hour
Public Works
29 Streets and Parks staff services (per hour) (Per Hour)
Part-time seasonal $30.00 $35.00
Service Tech $75.00 $78.00
Maintenance II $72.00 $74.00
Lead Maintenance $76.00 $79.00
Lead Service Tech $80.00 $83.00
Fleet, Streets, Parks Supervisor $97.00 $100.00
# FEE DESCRIPTION July 1 2017 Fee Jan 1 2018 Fee
Superintendent $117.00 $121.00
Administration $63.00 $65.00
Utilities staff services (per hour) (Per Hour)
Maintenance II $72.00 $74.00
Lead Maintenance $76.00 $79.00
Supervisor $93.00 $100.00
Superintendent $113.00 $121.00
Administration $59.00 $65.00
30 Equipment Use Fees (per hour) (Hourly fees are typically charged in cases where FEMA is involved, or if City staff
assists another community/agency in an emergency situation).
Per Hour
Sign Truck/Crane N/A $35.00
Velocity Patch Truck N/A $67.00
Other public works fees (Per Hour)
31 Hydrant meter deposit- 3" meter (available for rental on City capital improvement projects only).$2,000.00 $2,000.00
Hydrant meter rental- 3" meter (available for rental on City capital improvement projects only).
(Other size meters no longer available to rent).
$10.00/calendar day; $50
minimum/agreement
$10.00/calendar day; $50
minimum/agreement
32 R900 hybrid radio transmitter sales Cost plus 15%Cost plus 15%
33 SEWER USAGE RATES- Quarterly Charges
Residential, Apartments and Manufactured Homes
(Apartment & Manufactured Homes Base charge and consumption limits are multiplied by the # of units at the time the meter is read)
Base Charge- per dwelling unit, per quarter $7.91 $8.38
Usage Charge
• Based on actual consumption during the first quarter of the year, or actual water consumption during the billing period,
whichever is less
• When an account is newly established, the maximum sewer usage charge shall be set at 18,000 gallons. Sewer for the
remainder of the year will be set at this figure or actual usage, whichever is less.
• Residential customers shall be billed for a minimum of 5,000 gallons per quarter.
• For apartments and manufactured homes served by a single meter, the usage charge is determined by dividing the
total gallons of water by the # of units.
$3.92/1000 Gal $4.15/1000 Gal
Flat rate- per dwelling unit, per quarter shall be charged to those residential customers who do not have metered
water.
$78.40 $83.10
Commercial, Industrial and Institutional
Base Charge- per account, per quarter $7.91 $8.38
Usage Charge
• Based on actual consumption during the first quarter of the year, or actual water consumption during the billing period,
whichever is less
• When an account is newly established, the maximum sewer usage charge shall be set at 18,000 gallons. Sewer for the
remainder of the year will be set at this figure or actual usage, whichever is less.
• Industrial, Institutional, and Commercial customers shall be billed for a minimum of 5,000 gallons per quarter.
$3.92/1000 Gal $4.15/1000 Gal
34 WATER USAGE RATES- Quarterly Charges
Residential, Apartments and Manufactured Homes
Base Charge- per dwelling unit, per quarter $6.57 $6.90
Usage Charge
• Based on actual metered gallons consumed each quarter
Tier 1- up to 30,000 gallons per quarter $1.32/1000 Gal $1.38/1000 Gal
Tier 2- over 30,000 gallons up to 49,000 gallons per quarter $2.09/1000 Gal $2.19/1000 Gal
Tier 3- over 49,000 gallons per quarter $3.57/1000 Gal $3.75/1000 Gal
Irrigation sprinkler meters $3.57/1000 Gal $3.75/1000 Gal
Commercial, Industrial and Institutional
Base Charge- per account, per quarter $6.57 $6.90
Usage Charge
• Based on actual metered gallons consumed each quarter
Tier 1- up to 30,000 gallons per quarter $1.32/1000 Gal $1.38/1000 Gal
Tier 2- over 30,000 gallons per quarter $2.09/1000 Gal $2.19/1000 Gal
Irrigation sprinkler meters $3.57/1000 Gal $3.75/1000 Gal
Bulk Water Accounts
Usage Charge
o Based on actual metered gallons consumed each quarter
$4.01/1000 Gal $4.21/1000 Gal
35 STREET LIGHTS
Utility accounts served by water and/or sanitary sewer
Residential and multiple family units $8.76/dwelling unit/quarter $8.85/dwelling unit/quarter
Commercial, Industrial and Institutional $0.2451/front foot/quarter $0.2477/front foot/quarter
New subdivisions, as part of development contract $35.03/residential dwelling unit $35.40/residential dwelling unit
Utility accounts NOT served by water and/or sanitary sewer shall be billed annually
Residential and multiple family units $35.03/dwelling unit $35.40/dwelling unit
36
First and second out of cycle meter read no charge no charge
Third and subsequent out of cycle meter reads no charge $52.00/visit
37 Testing of Water Meters (only if meter tests correct, in accordance with Ordinance 7-5-4-6)
5/8" to 1"$45.00 $54.00
38 Water Disconnection, Reconnection or other Service Call
During normal business hours $51.00/visit $52.00/visit
After normal business hours $100.00/visit $107.00/visit
Other
Out of Cycle Meter Read (during normal business hours only)
# FEE DESCRIPTION July 1 2017 Fee Jan 1 2018 Fee
39 Mini Manhole Cover
*Includes cost of mini manhole plus an additional 15% for staff administrative processing time.
Not previously included in fee
schedule
Actual cost of mini manhole
cover + 15%
Mini Manhole Cover plus installation
*Includes cost of mini manhole plus an additional 15% for staff administrative processing time, and staff time to install
(including staff use of City patch truck).
Not previously included in fee
schedule
Actual cost of mini manhole
cover + 15%; plus $212 for
installation
40 ENVIRONMENTAL RESOURCES FEE
Utility accounts served by water and/or sanitary sewer
-Single family (residential equivalent utility factor) Environmental Resources Fee $9.30/dwelling unit/quarter $10.42/dwelling unit/quarter
Utility accounts NOT served by water and/or sanitary sewer
Utility accounts not served by water and/or sanitary sewer shall be billed annually.
-Residential equivalent utility factor Environmental Resources Fee $37.20/dwelling unit/year $41.68/dwelling unit/year
Other
New subdivisions, as part of development contracts; one-time fee $37.20/dwelling unit $41.68/dwelling unit
Explanations of Fee Changes
1. The residential park dedication fees are proposed to increase by 7.9% as of January 1,
2018, following an evaluation of the current fees, the estimated market value of
unplatted land, and a 10-year Park Dedication Fund plan. Increases to these fees are
recommended by the Parks, Recreation, and Natural Resources Committee along with
the Finance Committee.
2. Revised the staff hourly fees to reflect changes made to the Engineering and
Construction Services staff positions during 2017. The position title of “Operations and
Maintenance Coordinator” is no longer used, so this has been deleted from the fee
schedule. Likewise, the position titles of Senior Project Engineer, Construction
Representative, and Construction Services Superintendent were revised during 2017,
and the fee schedule has been reflected to include these existing position titles. The
rates are calculated using 2.5X payroll costs (to account for benefit and other indirect
costs, consistent with prior year fee schedule methodology).
3. Added new fees for small cell wireless applications. Fees are intended to recover City
costs incurred related to processing the applications, including costs such as consultant
and attorney fees and are consistent with state law.
4. Removed the convenience fees for online credit card payments for utility bills, pursuant
to Resolution 17-102.
5. Added Shelter Event Fees to be used for larger events, typically when a customer
would like to use an entire park space (for larger events than the typical graduation
party or family reunion). The application fee, refundable deposit, and rental fee are all
in one place in the fee schedule, and are based on using all rental spaces in a park. The
fee amounts are based on comparable rates charged by surrounding communities, and
are intended to recover costs of staff involved in the rental including park
administration, park maintenance, and police department.
6. Added Private Program Fees, to be used for rental of park green spaces with recurring
rentals (for example, every Saturday for 10 Saturdays). This fee is intended to streamline
the rental process for these customers, as well as reduce necessary paperwork and staff
time.
7. Added Inflatable Fees, to be charged by the City when an inflatable is used on City park
property. The $50 fee covers administrative costs, and an insurance waiver must be
signed and provided to the City in advance of inflatable use.
8. Added a Mobile Food Vendor fee, to be charged when a vendor uses a food truck in
park spaces. This fee is consistent with the $50/day Food Truck fee that was added to
the Fee Schedule during 2017 for downtown spaces.
9. No changes were made to the sand volleyball and pickleball court rental fees, however,
a point of clarification that the stated fee is for up to three courts was added.
10. The presentation of several Heritage Center room rental rates has been adjusted,
though the rates themselves have not changed. The newly worded rates are consistent
with how we have been charging customers previously (in four-hour minimum blocks
of time plus additional fees for additional hours).
11. Several changes were made to the A la Carte items for Heritage Center rentals.
Customers were previously charged separate set up and tear down fees based on
number of tables and chairs needed. The revised fees include a combined set up and
tear down fee for various amounts of tables and chairs.
12. Eliminated the rental fee for the Bose Bluetooth mini speaker, as this equipment is
never requested.
13. Added a fee for Facility Attendant time to be charged with Heritage Center rentals
during times when the building would not otherwise be open. The fee is intended to
recover costs incurred by the City, and is consistent with the proposed 2018 part-time
staff rate in the Public Works section of the Fee Schedule.
14. The Heritage Center would like to offer bar service with rentals, similar to the Arts
Center. Proposed added wording is consistent with what is stated in the Arts Center
section of the fee schedule.
15. The Arts Center staff reviewed rental rates compared to theater rental fees of other
nearby communities, and is proposing increases in theater/auditorium rental rates
based on this market review. Changes include elimination of the distinction between
rental fees for a performance versus a rehearsal, increases to the weekday and weekend
rental rates, as well as an addition of a 25% discount on the rental rates for Community
Theater events that are advertised in the Playbill.
16. Arts Center screen rental and projector rental rates are proposed to increase from
$28/performance to $35/performance, to become more consistent with the Heritage
Center projector rental rate.
17. Piano rental and tuning fees are proposed to increase to better recover costs incurred
by the Arts Center on piano maintenance and tuning.
18. Changed box office service fee to be $1/ticket sold rather than a $25 set up fee, to
better match costs incurred and market rates.
19. Changes to the Large Art classroom fee include an increase based on the market
review mentioned above, as well as elimination of the distinction between weekday
and weekend day rentals.
20. Proposed increase in the Arts Center kitchen fee from $33 per rental to $45 per rental,
to get closer to a market rate.
21. Addition of $1000 landscaping escrow to the fee schedule. This fee is already being
charged through development contracts, so it is not a new fee to our customers.
However, we would like to include the fee on the fee schedule to be more transparent.
22. Addition of $1000 erosion control escrow to the fee schedule. This fee is already being
charged through development contracts, so it is not a new fee to our customers.
However, we would like to include the fee on the fee schedule to be more transparent.
23. Several permit charges are proposed to increase by $0.50. The reason for the increase
is to have round dollar amounts for ease of payment collection.
24. Added $200 refundable escrow per lot or $3,000 refundable escrow per acre to the
existing $75 application fee for grading permits. These escrows are already being
collected, but were not previously included in the fee schedule.
25. Added $200 refundable escrow to the existing $75 draintile permit application fee. This
escrow was already being collected, but was not previously included in the fee
schedule.
26. Removed the Special Home Occupation Permit ($300), as this is not a permit that we
offer any longer.
27. Increased the hourly Police Officer rate from $85/hour to $88/hour, to reflect increases
in labor costs since the rate was last updated in the 2015 fee schedule.
28. Increased the regular and overtime rates for Fire Inspection services provided to other
cities to better reflect cost recovery of staff time and vehicle expense.
29. Updated staff rates to reflect estimated 2018 payroll changes. Staff rates continue to be
calculated using 2.5X payroll costs, consistent with prior fee schedule methodology.
30. Added new equipment fees for a Sign Truck/Crane and Velocity Patch Truck. Fees are
based on the 2017 FEMA schedule of equipment rates, or comparison to similar
equipment if not on the FEMA schedule.
31. Added clarification that the 3” hydrant meter rental is only available for use on City
capital improvement projects (not available for the general public to rent).
32. Removed the R900 hybrid radio transmitter sales fee, as this equipment is no longer
sold separately.
33. Sewer rates are proposed to increase 6% to cover infrastructure improvements to lift
stations in the 2018-2022 Capital Improvement Plan, as well as a 14.5% increase in the
MCES charges, which are not controllable by the City. A 6% increase results in a $.47 per
quarter increase in the basic sewer charge and $.24 increase per thousand gallons of
discharge. For the average residence using 18,000 gallons, the increase in the quarterly
bill is $4.71.
34. Water rates are proposed to increase 5% to cover infrastructure improvements and
future debt payments associated with those improvements as proposed in the 2018-
2022 Capital Improvement Plan. These increases result in a $0.33 per quarter increase
in the basic water charge and a $0.07 increase per thousand gallons of consumption
(tier 1). For the average residence using 18,000 gallons of water, the increase in the
quarterly bill is $1.52.
35. Street lights rates are proposed to increase 1% to finance future infrastructure and will
increase a resident’s quarterly bill by $0.09.
36. Added a fee for third and subsequent out of cycle meter reads to be $52/visit,
consistent with the utility service call fees (during normal business hours). There was
previously no charge for first, second, third and subsequent out of cycle meter reads,
however, staff believes adding a fee for more than two out of cycle meter reads will
help recover costs incurred on a greater than normal number of trips.
37. Increased the water meter testing fee for 5/8” to 1” meters to ensure we are recovering
costs incurred on water meter testing.
38. The water service call fees are proposed to be increased from $51/visit to $52/visit for
calls during normal business hours and from $100/visit to $107/visit for service calls
after normal business hours. The purpose of these increases is to better reflect the
actual costs incurred by the City in performing the service calls. These fees are charged
for water disconnection, water reconnection, other service calls, and for meter reading
of two customers who have opted out of the radio-read type meters (meter must be
read manually).
39. Added fees for mini manhole cover purchase and mini manhole cover purchase plus
installation. These fees were not previously included in the fee schedule, but have been
added to ensure we are recovering costs incurred in providing these services.
40. The Environmental Resources Fee is proposed to be increased $1.12 per quarter to
offset the costs associated with environmental and forestry related programs.
1
City of Lakeville
Finance Department
To: Mayor and Council
From: Justin Miller, City Administrator
Jerilyn Erickson, Finance Director
Date: November 27, 2017
Subject: 2018 Proposed Utility Rate Update
The purpose of this report is to provide the City Council with an overview of the
proposed utility rates to support the services provided in the Utility Funds.
NOVEMBER 2017 UPDATE
Per the Council’s direction at the October 23 work session, City Staff further reviewed
the proposed utility rates with the goals of decreasing the impact of the increases in
2018, along with consideration of the preliminary results of the utility rate study being
completed by Northland Public Finance. Staff is recommending changes to the water
and sewer rates that were presented in October.
WATER OPERATING FUND
Staff is recommending a smaller increase in water rates than what was presented in
October. The 2018 revenues for water sales reflect increases of $0.07 to $0.18 per
thousand gallons for the tiered consumption as well as an increase of $0.33 in the
quarterly base charge. Years 2019-2027 also reflect increases in the tiered
consumption and the base charge, though the increases shown may not be sufficient to
meet the goals listed below. Staff will reassess the 2019-2027 rate projections during
2018 following completion of the utility rate study.
The underlying goals with these rate adjustments are as follows:
Maintain a minimum cash balance to fund three months of operating expenses,
debt service payments, major maintenance expenses (net of any bond proceeds
during the period) and emergency maintenance expenses;
Potentially get to a point where the users of the water system are paying for
some or all of the depreciation of the system (replacement costs) and it is not
necessary to issue debt (the current rate projections assume no new debt will be
issued after 2020).
SANITARY SEWER OPERATING FUND
Staff is recommending a larger increase in sewer rates than what was presented in
October. The 2018 revenues for sanitary sewer sales reflect a $0.24 increase per
thousand gallons for the sewer rate as well as an increase of $0.47 in the quarterly base
charge. Years 2019-2027 also reflect increases, though the increases shown may not
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be sufficient to meet the goals listed below. Staff will reassess the 2019-2027 rate
projections during 2018 following completion of the utility rate study.
The underlying goals with these rate adjustments are as follows:
Not reduce the unrestricted funds any further;
Maintain a minimum cash balance to fund three months of operating expenses,
debt service payments, and emergency maintenance expenses.
STREET LIGHT OPERATING FUND
Staff is recommending the same rate adjustments that were presented in October. The
2018 revenues for the Street Light Operating Fund reflect an increase of $0.09 in the
quarterly charge. Future rate increases range from $0.18 to $0.21 in the quarterly
charge.
The underlying goal with this rate adjustment is to maintain a minimum cash balance to
fund three months of operating expenses, debt service payments, and emergency
maintenance expenses.
ENVIRONMENTAL RESOURCES OPERATING FUND
Staff is recommending the same rate adjustments that were presented in October. The
revenues for this Fund reflect an increase of $1.12 in the quarterly charge.
The underlying goal with this rate adjustment is to maintain a minimum cash balance to
fund operating expenses and emergency maintenance expenses.
UTILITY RATE STUDY
Staff is in process of working with Northland Public Finance to complete a utility rate
study. Given we were able to review the progress of the study prior to finalizing our
recommendations for utility rates in 2018, we did consider the projections calculated as
part of the utility rate study when revising the 2018 rates.
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UTILITY FEE CHANGES
The following chart reflects the fee changes that have been incorporated into the
proposed revenues for each of the Utility Funds:
The following chart reflects the impact of the proposed rate increases on a property
using 18,000 gallons/quarter:
Impact of Utility Rate
Increases
2017
2018
Change
Water $ 30.30 $ 31.82 $ 1.52
Sewer 78.39 83.10 4.71
Street Lights 8.76 8.85 0.09
Environmental Resources 9.30 10.42 1.12
State Surcharge 1.59 1.59 0.00
Total $ 128.34 $135.78 $ 7.44
This equates to about $2.48 monthly and $29.76 annual increases for City water, sewer,
street lights and environmental resource services.
CHARTS
The following charts reflect the expenses, revenues, cash position and projected rate
changes for each of the utility funds. These will be referenced during our discussion.
2018 2017
Quarterly rates Basis Proposed Actual
Water base Account
6.90$ 6.57$ 0.33$ 5.0%
Water tier 1 (<30,000) Gallonage
1.38$ 1.32$ 0.07$ 5.0%
Water tier 2 (30,000 - 49,000) Gallonage
2.19$ 2.09$ 0.10$ 5.0%
RESIDENTIAL ONLY-Water tier 3 (>49,000) Gallonage
3.75$ 3.57$ 0.18$ 5.0%
Irrigation sprinkler accounts Gallonage
3.75$ 3.57$ 0.18$ 5.0%
Water testing fee 1.59$ 1.59$ -$ 0.0%
Sanitary sewer base Account
8.38$ 7.91 0.47$ 6.0%
Sanitary sewer usage Gallonage
4.15$ 3.92$ 0.24$ 6.0%
Sanitary sewer non metered accounts Account
83.10$ 78.40$ 4.70$ 6.0%
Street lights Account 8.85$ 8.76$ 0.09$ 1.0%
f.f.0.2477$ 0.2451$ 0.0025$ 1.0%
Environmental Resources Fee Account 10.42$ 9.30$ 1.12$ 12.0%
Increase
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Percentage of total operating fund expenses by year by type (2017-2022):
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Water Operating Fund Expenses by Year
Operating expenses Capital/equipment purchases
Major maintenance expenses Debt payments
2017 2018 2019 2020 2021 2022
Operating expenses 54% 49% 50% 50% 55% 53%
Capital/equipment purchases 2% 1% 1% 1% 2% 1%
Major maintenance expenses 29% 31% 27% 25% 16% 21%
Debt payments 15% 20% 22% 24% 27% 25%
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Water Operating Fund Revenues by Year
Revenues Bonds issued
5
(1) 2010 through 2017 are actual percentage changes in rates. 2018 through 2027 are
proposed changes in rates.
8,000,000
6,000,000
4,000,000
2,000,000
0
2,000,000
4,000,000
6,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Cash on handYear
Water Fund Cash Position at December 31
Cash position-with rate increases
Cash position-with no rate increases after 2017
Desired cash position
-60%
-40%
-20%
0%
20%
40%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Proposed Water Rate Changes by Year (%) (1)
Water base Water tier 1 Water tier 2 Water tier 3
6
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Sewer Operating Fund Expenses by Year
Operating expenses MCES wastewater charges Capital/equipment purchases
Major maintenance expenses Debt payments
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Sewer Operating Fund Revenues by Year
Revenues Bonds issued
7
(1) 2017 is the actual percentage change in rates. 2018 through 2027 are proposed changes in
rates.
(20,000,000)
(15,000,000)
(10,000,000)
(5,000,000)
-
5,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Cash on HandYear
Sewer Fund Cash Position at December 31 by Year
Cash position-with rate increases Cash position-with no rate increases after 2017
Desired cash position
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Proposed Sewer Rate Changes by Year (%) (1)
Sanitary sewer base rate Sanitary sewer usage rate
Sanitary sewer non-metered accounts
8
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Street Light Operating Fund Expenses by Year
Operating expenses Major maintenance expenses Debt payments
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Street Light Operating Fund Revenues by Year
Revenues Bonds issued
9
(1) 2017 is the actual percentage change in rates. 2018 through 2027 are proposed changes in
rates.
(800,000)
(600,000)
(400,000)
(200,000)
-
200,000
400,000
600,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Street Light Fund Cash Position at December 31 (by
year)
Cash position-with rate increases Cash position-with no rate increases after 2017
Desired cash position
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Proposed Street Light Rate Changes by Year (%) (1)
Street light fees
10
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Environmental Resources Fund Revenues and
Expenses
Revenues Operating expenses
(4,000,000)
(3,000,000)
(2,000,000)
(1,000,000)
-
1,000,000
2,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Environmental Resources Fund Cash Position at
December 31 (by year)
Cash position-with rate increases Cash position-with no rate increases after 2017
Desired cash position
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(1) 2017 is the actual percentage change in rates. 2018 through 2027 are proposed changes in
rates.
COUNCIL DIRECTION
Staff is seeking direction regarding the water and sewer utility rate adjustments.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Environmental Resources Rate Changes by Year (%)
(1)
Environmental Resources fee