The Britt City Council is wrangling with what may be rate increases in water, but not in sewer. The city has been working with Bolton Menk on what the rates would actually be. Maggie Burger from Speer Financial walked the Council through the memo on rate increases that Bolton Menk had provided previously.
Speer Financial agreed with their rate projections and takes the approach of increasing revenue overall. The City must increase revenue from a level of approximately $307,000 to $636,000 for a $6,250,000 State Revolving Fund (SRF) loan. It was suggested doing a combination of usage increases along with implementation of flat fees for each user. The rates would be incrementally increased in stages so that the users would not be hit with one single large increase. Speer Financial agreed with the idea.
The timing of the proposed increases would align with the project completion. The council and mayor will determine when and if the increases would take place. The city has not decided to have rate increases or any dates to do so at this time.
The SRF requires that the City maintain a 1.10x coverage factor on the loan, which means that the operating revenues minus the operating expense must be 1.10x the payment amount. In this case that net operating income number must be approximately $420,000 to make a $381,000 payment. There was discussion about the SRF program being reimbursable so that cash on hand at the beginning of the project to cash flow for 7-10 days while awaiting reimbursement. The council and Mayor Ryan Arndorfer discussed using that extra cash near the end of the project to pay on some invoices, maybe allowing the City to borrow a little less in loan proceeds.
The council and Mayor will continue to examine the process thoroughly before taking any action.
In the meantime, the city is still continuing to offer residents an opportunity to vote on a design style for the new water tower. City Administrator Debra Sawyer outlined the choices being considered.