The discussion on an increase in water and sewer rates continued at two open house sessions hosted by the city of Red Wing. With concerns on the rate changes, business owners and landlords attended to ask questions about how the increase affects them.
The first water and sewer open house session focused on individual and multifamily housing prices. The increase will affect each home a little differently and this presentation walked through the expected changes and why the changes are happening.
Karen Cavett, from Short Elliott Hendrickson Inc., the engineering company that helped with the water study, presented a powerpoint with information on what residents can expect.
For nonresidential and industrial prices, the prices are going to increase more than the single family home prices. For each unit in multifamily building, the charge will increase to $13 per unit.
At the Wednesday, May 18, open house Rick Moskwa, director of public works said, “The cost of business is going up and that is the economy right now and there isn’t really a way to get around that. What we are trying to do is stabilize these rates because our fund balance is way below what the requirement is to run the operation.”
The main concern was in relation to usage, if the businesses use much less water then would the increase still be as drastic. The short answer was no, the usage doesn’t change the fixed costs that need to be paid monthly.
The goal of the change in water and sewer rates is equity. The City Council wants to be sure that single family homes, multifamily homes, businesses and anything else are all paying an equitable amount for the availability of water.
“One of the main goals is equity, we want to make sure that the rates are fair for users. As we went through we realized that single-family residential homes are paying quite a bit more than other users connected to the system,” Cavett said.
The question of how this increase will make rates more equitable is answered by the city saying, “single family homes have paid more percentage wise for availability. In the new rates everyone is paying a more equal amount.”
Aside from equity, the raise in rates also includes room for improvements on the city’s water treatment plants when it is needed in the future. With the new rates, the city can improve the infrastructure as needed with the increase of rates covering parts of that future cost.
“We also looked at the expenses, we reviewed operating expenses and wanted to make sure that the income could cover incoming expenses going forward and make sure that we are looking to the future and making sure that there isn’t a huge rate increase in the future,” Cavett said.
An alternative was offered and discussed during the open house. For those who want to save on some of the fixed costs they can always replace their meter with a smaller meter. If code permits the downsizing of a meter, that may save businesses money.
“If you feel that the facility has cut down on water use and a six inch meter isn’t needed, as long as fire protection is maintained you can downsize your meter and greatly cut the cost,” Cavett said.
The new rates will begin on July 1. For more information visit https://www.red-wing.org/1090/2022-Water-and-Sewer-Rate-Changes.