Utility rate increases on hold

     After wanting to pursue water and sewer rate increases at the previous city council meeting, the Monticello City Council decided to table any decision during their Sept. 21 meeting.

     The City of Monticello is looking to build a new $8 to $10 million sewer treatment plant within the next few years. The city last increased utility rates in July 2015.

     City Administrator Doug Herman presented the council with figures going back to Fiscal Year 2017 for both water and sewer expenses and revenues.

     “There is no real trend showing annual increases,” he commented. “The numbers don’t directly show a cost of living increase either. Our expenses are being managed as well as can be (meaning revenue in most cases covered the expenses).”

     A rate increase would allow the city to create a set-aside fund for the new plant, helping in any way to offset the project costs.

     Knowing the city is pursuing a revolving loan from the state to help cover a portion of the sewer plant project costs, Herman said it would be in the city’s best interest to work with a financial planner. Such a service would assist the city in determining utility rate increases and how this would impact the city’s debt service.

     “We need to do this in a way that the rates don’t go through the roof, but go up some,” cautioned Herman.

     It was mentioned whether a rate increase should be applied to water/sewer users or property taxpayers.

     “There’s no big difference between a taxpayer and a user,” noted Council member Tom Yeoman.

     “It’s a perception thing,” commented Herman. “But often times they’re the same person.”

     Council member Brenda Hanken said there are enough residents on a fixed income that a rate increase could be a hardship for them.

     “They (a financial planner) would just look at the cost of the project and our options for paying for it,” explained Herman, “not who pays for it.”

     “It’s too early to raise rates now,” commented Council member Dave Goedken. “I’m not comfortable with it.”

     “We’re not in dire straits at this moment,” Herman offered in terms of a set-aside fund. “But part of the discussion will be how much you want to see in a set-aside/surplus fund.”

     For instance, an increase of $2 a month for a $9 million project over the next two to three years “isn’t going to take a big bite” out of the sewer plant project, noted Herman.

     The city and Water Department, led by Jim Tjaden, are working with an engineer on a final design for the new plant.

     “We’re going to have a new facility and have to fund it whether we like it or not,” added Goedken.

     Herman said the city’s current sewer plant does not meet state/DNR regulations and at some point will be forced to build new if something isn’t done sooner rather than later.

     While the council chose not to increase utility rates just yet, they did, however, approve the first reading of a new ordinance creating a user fee for the new compost site. The new fee is set at $2 per month and will be applied to all utility accounts within the city, approximately 1,700 accounts. This would generate roughly $40,800 annually.

     The vote passed 4-1 with Hanken opposed due to the increase impacting those on a fixed income.

     “It’s a lot when people have other expenses,” she gave of her reason for opposing.

     This user fee would give the city a $10,000 cushion to cover other expenses associated with the compost site such as electricity, security cameras, road maintenance, etc.

     This was just the first reading of the ordinance. It takes three readings before it goes into effect.

     In relation to the compost site, the council approved a three-year contract with T&W Grinding and Compost Services LLC at a cost of $30,000 a year. The company has been providing and will continue to provide grinding services at the city’s compost site.

     “There are not too many companies that do this type of work,” noted Herman. “T&W has a good reputation with the DNR.”

In other city business:

   • The council approved a notice of intent to appoint someone to fill the vacant Ward 1 council seat. The plan is to appoint at their next regular council meeting, Monday, Oct. 5.