A recommended change to billing in Le Sueur could make waves in residents’ water bills.
At the Nov. 12 Le Sueur City Council meeting, City Finance Director Zach Dowd presented a series of billing changes recommended by the Personnel and Budget Committee. The proposed changes would see a 2% increase in utility costs for the average household and the implementation of a tiered billing system for water bills to incentivize residents to conserve water.
Water Usage Rates
The most significant change is the proposed addition of a tiered system to bill for water usage. Currently, the city bills residents $4 for every 1,000 gallons they use, but under the new system, how many gallons you use could impact the rate residents pay. For essential water usage, (faucets, showers etc.) residents would pay $3.25 on every 1,000 gallons they use between 0-10,000. Every 1,000 gallons a resident uses over the 10,000 mark would be charged at a higher rate. Between 10,001-20,000 gallons, residents would pay $3.75 per 1,000 gallons and for anything above 20,001 residents would be charged at a rate of $4.25. The average resident in Le Sueur uses 6,000 gallons a year, so they would save money on essential water usage for this tiered system.
However, for non-essential water usage, (sprinklers, irrigation and lawncare) residents would be paying more under the proposed rates. Every 1,000 gallons between 0-20,000 would be charged $5 and rates rise to $6 between 20,001-40,000 and $7 for everything over 40,001 gallons.
The primary purpose of these changes and why non-essential water usage would be charged at a higher rate is because of recent water conservation incentives pushed by the Minnesota Department of Natural Resources (DNR).
“The DNR basically doesn’t want you water your lawn,” said Dowd. “As much as you like to keep it green, the DNR doesn’t like wasting water on lawns so they’re trying to implement tiered rates as much as possible and we’re getting push from them to do this.”
City Administrator Jasper Kruggel explained that it could be beneficial for the city to comply with the DNR’s requests. Kruggel stated that city staff are anticipating the need to install another water supply well in Le Sueur, but to do that, the city would need a permit.
“The DNR doesn’t like to issue permits, the Minnesota Department of Health doesn’t like to issue permits for this aquifer but if we implement conservation rates or tiered rates the likelihood of them doing that is much higher,” said Kruggel.
Kruggel also argued that the tiered system would benefit consumers since the proposed rates would cost the average resident less than the current rates and residents have control over how much water they use.
“It’s a trade-off,” said Kruggel. “It all depends on you as a consumer having control, especially when we have our new meter system. When that’s rolled out, you’ll be able to, if you choose, to micromanage your water consumption and really watch it on a daily basis.”
Accessibility fees for water, sewer, electric are proposed to rise in 2020 to fund new expenses, current bonds and future projects, but usage rates for these utilities are proposed to drop. For the average homeowner, these changes would result in a total billing increase of 2% or $5.57.
The proposal for 2020 would raise essential water meter accessibility fees for people with a ⅝” meter from $15/month to $20/month, but for non-essential water meters the price would drop from $15/month to $5/month. The changes to these accessibility fees, also known as fixed fees, are driven by current and future costs to the water fund. These costs include the Doppy Lane water main and the future costs including a water system master plan and the County Road 22 turnback bond.
Sanitary sewer accessibility fees for people with a ⅝” meter would also increase by $5 from $20/month to $25/month. However, sewer usage rates would drop from $13.50 in 2019 to $12.85 in 2020.
For electricity, residential and rural homes would see $0.50 increases to their monthly accessibility fees; $8.00 to $8.50 for residential homes and $10 to $10.50 for rural homes. Interdepartmental buildings would see their fees double from $10 to $20. Meanwhile, usage fees would see a slight dip across the board with the exception of fees for large industrial buildings in summer months.
The proposal would also add to the franchise fee and add an underground fee. The fees at $0.0042 per Kwh and $0.005 per Kwh respectively would cost the average home that uses 450 Kwh a year $4.25. The new underground fee would be used to help a city project to convert overhead powerlines into underground powerlines as well as fix underground powerlines that were installed incorrectly.
Proposed changes to stormwater and refuse rates are fairly minor. Base rates for stormwater are rising from $8 to $9.50 to keep up with bond payments and refuse rates are rising 2% to cover the cost of Waste Management raising prices.
These changes will not be implemented until City Council adopts a budget for 2020 in December. Currently, that budget sets a levy at a 9.47% increase, though the tax rate from last year is set to decrease by 2.48%. Still, homeowners who saw their home values rise in 2019 by the average 12% would end up paying more. The city is attempting to reduce the levy to an approximate 6% increase.
“Hopefully we’ll get it down to 6-7% as far as the preliminary levy increase,” said Kruggel. “That would equate to a tax rate decrease of about 3.47% which is something we’re trying to achieve. We will whittle it down from the 9.47%.”