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January 26, 2000
Study showsNew Ulm waterrates should increasePUC approves 3.5 percent raise for non-unionized employeesBy KREMENA TODOROVA Journal Staff Writer NEW ULM - Average residential customers in New Ulm in 2000 may see a 7.22 percent increase in their water bill from last year, if the Public Utilities Commission acts on the findings of a new water rate study unveiled to the commission Tuesday night. The report, by Progressive Consulting Engineers of Minneapolis, looks at the cost of water services and tries to "allocate" this cost into different customer classes, such as residential, commercial, industrial and municipal, Utilities Director Bob Stevenson said. By comparing the cost of service for each class to each group's revenue contribution, the study shows that residential and industrial customers are currently being undercharged. In contrast, commercial and municipal customers are being slightly overcharged. To make charges more equitable, an average residential customer should pay 7.22 percent, or $21.84 more than last year, the report says. An average industrial customer can expect an increase of 9.7 percent, or $9,024.24. An average residential customer is one who uses 7,000 gallons of water a month, and an average industrial customer uses 4 million gallons a month. The changes should be effected by increasing the "commodity rate" part of a monthly bill - or dollars per 1,000 gallons, says the report. A fixed "class charge" - or dollars per month - should stay the same. Commodity rates should be $2.86, $2.14, $2.10 and $2.45 for residential, commercial, industrial and municipal classes respectively, reflecting 10 percent increases for the residential and industrial groups. The fixed monthly charge should remain at respectively $7, $20, $25 and $25. "We are satisfied that the base data is correct [and] the projections are within the range of our own projections," Stevenson said. "We need to ensure that everyone is paying their fair share, without [making] any radical changes." But he stressed that rate decisions may be politically sensitive, and the commission should take time to ponder the findings of the report. If rate changes are approved at the commission's next meeting in late February, they would be applied to March usage and April billing, Stevenson said. New Ulm's current water rates run higher than rates in other cities of similar location and size (see table). Officials explain the difference with the nature of New Ulm's water supply, as well as a need to repay a sizeable city investment in a new water treatment plant. Another factor is assessment policy: only 10 percent of the cost of new water main extensions is paid for with assessments, according to Stevenson. The difference is made up with revenue from general water users. In other developments, the PUC: * Approved 2000 wage adjustments for non-unionized full-time employees. The adjustments range from 3 to 3.5 percent, except for a 4.5 percent raise for the Director of Utilities and the Utility Planning and Development Engineer. These increases will cost PUC an extra $34,604, or 3.5 percent. * Authorized steps for emergency repairs of a steam turbine generator, after a routine inspection discovered a fault in its insulation. The preliminary cost estimate for the repairs is $250,000.
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