By Lynda Jensen
DASSEL, MN-- Utility rates for the City of Dassel were approved by the city council last Monday, but not without a split vote.
Rates were adopted according to a schedule printed previously, and will be reviewed again in six months.
Council Member Jason Benzing broached the subject of the city’s sizable reserve in the capital reserve fund, which amounts to $380,000.
Benzing said the League of Minnesota Cities recommends between 35 to 50 percent in this type of reserve, as quoted by the state auditor.
The Dassel reserve fund is 104 percent of what is needed for the water fund, and 75 percent of the sewer fund, Administrator Myles McGrath said at the meeting.
Benzing asked about a past figure that McGrath supplied to the newspaper of $50,000 for replacing a city well. At the time, McGrath was asking the council to use caution in spending down this money, and using the well as an example of how expensive infrastructure can be in a short amount of time.
In the past, McGrath said that the city needs cash flow to fix infrastructure problems, if need be.
“How many wells do we have?” Benzing asked, saying that the city doesn’t need to sit on this much money. “We could replace three wells,” he said.
“There’s more than just wells,” McGrath answered.
Scanlon noted that he wasn’t worried about wells so much as the lift station. “(That) could cost quite a bit more,” he said.
The overage in the reserve funds could be used over the short-term to help ease the pain of utility rate increases during the first year of what will amount to a 35 percent increase over a three-year period, Benzing pointed out.
Council Member Bob Lalone noted that using the money would provide relief only temporarily, and that the rates would have to increase either way.
“I’m just looking to slow it down,” Benzing said.
Scanlon expressed concern about spending down money during such economic times. “I get a little nervous dropping funds too low,” he said. He noted that the gallon usage can go up or down, and that this would impact the numbers again.
“Nobody likes to raise rates,” Scanlon added.
Lalone suggested that an annual review, or six month review could be done.
Scanlon pointed out that the auditor’s report is done in July something that Lalone said reflects 2009 numbers.
During a special meeting Dec. 17, Benzing presented a chart and a program that is able to gauge rates based on actual figures.
Scanlon said that this program could be useful for the future. A review of rates could possibly be done at this time.
In the end, the rates were approved 3-2, with Scanlon, Bob Lalone and Alesia Warner voting yes, and Pat Haapala and Benzing voting against.
The rates will take effect in January and show up on February’s bill.
The following is a reminder of the utility rate increases.
Existing water rates: base fee of $5.25 per month and a usage fee of $6 per 1,000 gallons.
This will be increased to $7.80 for the base fee, and $6.60 for 1,000 gallons for the first year.
Existing sewer rates: base fee of $18 per month (includes 1st 1,000 gallons), and usage fee of $4.75 per 1,000 gallons.
This will be increased to $19 for the base fee, and $5.20 per 1,000 gallons.