CITY OF VICTORIA BITES THE BULLET
SEWER AND WATER RATES TO INCREASE
At a workshop on Monday evening, October 22^nd, Victoria councilmembers voted unanimously to accept the recom-mendations of a consultant hired to study the city's water and sewer rates. 
Those recommendations will mean higher rates, effective January 1^st, 2008, for most people who use water and sewer in the City of Victoria.  They will also mean the continued availability of water and sewer for existing and future residents of Victoria.
Asked Mayor Mary Thun, "Are you addressing the current imbalance for low-volume users?"
"Yes," replied Carl Brown, president of Carl Brown Consulting based out of Jefferson City, Missouri.  "Rates will be less for low-end users and higher for high-end users."
He added, "We use a lot more water per person than we used to.  Even in some wet areas of the country they are starting to be in short supply, especially in a drought.  We're growing so we've got more issues and we use more water."
"Running a utility is running a busi-ness," said Mr. Brown.  "You have to do all the things it takes to guarantee sewer and water service to people.  In fact, it's more than running a business."
In his presentation to the city council-members he had stated, "You don't have to adjust your rates right now.  You can get by for a year or two.  But it's more fis-cally responsible to bite the bullet now rather than let your reserves dwindle down and then have to build it back up.  You don't have balances as high as they should be."
At the end of the presentation, Coun-cil bit the bullet.
When Councilmember Kim Roden pointed out that Victoria's current water rate is much higher than Chanhassen's but comparable to that of Shorewood, City Administrator Steve Sarvi said, "It's very hard to compare rates from community to community."
Some factors that need to be consid-ered when making comparisons include if a city has a water treatment plant, if a city has a large commercial or industrial base, if a city is in fact planning wisely for the future by guaranteeing availability and in-corporating conservation measures.
City Engineer Cara Gehren added, "You're going to have to demonstrate to the DNR that you have a conservation rate structure or they'll put a limit on new wells that can be drilled."
In that regard, Mr. Brown comment-ed, "I don't expect a whole lot of conser-vation to go on, but it shows good faith on the city's part."  It was acknowledged that at some monetary level residents would forego a green lawn in order to save green dollars.
In looking at today's water and sewer rates in Victoria and those recommended, and accepted, for 2008, it must be remembered that the volume of sewer use is based on the metered water use.  Gallons used in the various scenarios as presented by Carl Brown are for purposes of comparison, he said.  Actual water and sewer bills will depend on actual water usage.

Mr. Brown recommended the mini-mum base rate for water be increased from the current $30 per quarter to $32.16.  In addition, he recommended adopting "conservation rates" to encour-age customers to use less water during the spring and summer months when use soars.
A low-volume residential customer who uses 6,000 gallons of water per quar-ter now pays a total water bill of $30.  Under the new rates they would pay $39.96.  A user of $34,300 gallons - which is close to the average residential use - currently pays $82.04.  Their aver-age bill would go up to $115.90.  These are year-long average bills.  Bills would actually go up less in fall and winter and more during the spring and summer.

The current sewer bill for all custom-ers is a flat fee of $54 per quarter.  Mr. Brown recommended lowering that fee to $25.99.  He also recommended initiating a unit charge fee of $1.75 per thousand gal-lons for all use. 
Thus, a 6,000 gallon sewer user's bill would go down from $54 per quarter to $36.47.  A 23,000 gallon per quarter user - which is close to the residential average - would see their bill go up from $54 per quarter to $66.75.
Because billing would be based on the actual volume of service received in-stead of a flat fee, rates will go down to most residential and other low volume customers.  They will go up markedly for very high volume users.

"I feel pretty good about the model and the information," said Mr. Brown, who also recommended monthly rather than quarterly billing.  Jylan Johnson, the city's Finance Director, was asked to look into the cost of monthly billing, including extra staffing, as well as the cost of out-sourcing the city's utility billing.
In reviewing the increased sewer and water rates for 2008, Mayor Mary Thun stated, "I don't want anybody to be false-ly assured.  I want people to know there can be an increase next year and next year and next year."
Mr. Brown foresees a 2% increase per year but added, "Nobody knows the future."

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