The City of Grand Marais’ water budget is “doing great” compared to its condition over the last 10 years, City Administrator Mike Roth told the Public Utilities Commission on November 17, 2010. “It’s come from a terrible place to something that’s manageable now,” he said. Thewater budget was negative for most of the years he’s been city administrator, Roth said.
At that meeting, Roth reviewed a conservative budget for 2011. The budget covers three funds—water, sewer, and electric, and each are carefully calculated to provide services and plan for future needs while keeping consumer costs down.
One of the challenges to the water budget is actually the result of a good phenomenon: people are using less water. Water use has been decreasing for three years now, Roth said. Trends bringing water use down include installation of low-flow toilets, water-saving showerheads, and newer washing machines that use less water as well as more conservative approaches to water use, such as less yard watering.
Water/Wastewater Superintendent Tom Nelson said the slow start to this summer’s tourist season along with repairs to underground leaks in the Recreation Area water system probably led to less water use this year also.
The PUC board approved a 1.9% increase in water fees to $5.35 per 1,000 gallons. “I think we should continue to be cautious with our water rates,” Roth said. The 2011 budget includes depreciation of $151,215 that is earmarked for future capital improvements. The plan is to fund improvements with cash rather than borrowing money.
In a memo to the PUC board, Roth said, “With regular small rate increases we have managed to build a small fund balance and even pay cash for the 2010 water improvements.”
Roth recommended no increase in the sewer rates. Next year’s sewer budget will be almost $3,000 less than this year’s. Depreciation will be reduced from $145,000 in 2010 to $115,467 in 2011. Roth reported, “We have healthy reserves in the sewer fund to use for our future capital projects.” The sewer treatment plant was built in 1989 and is still in good shape.
The expected cost of purchasing electricity in 2011 is $1,620,000 at most, 62% of the total electric fund budget. An expected increase of $13,545 in personnel costs is due mainly to the increased cost of health insurance. Electric rates are not being increased at all. Offsetting the health insurance increase in the electric fund is a decrease in the amounts budgeted for supplies and services (things like engineering, contractors and garbage disposal).
PUC chair Hal Greenwood said he was proud that they could avoid an increase in electric rates this year.
Bill arrives for old work
About seven years after the Minnesota Department of Transportation (MnDOT) hired a construction company to install water and sewer pipes under Highway 61 on the west end of Grand Marais, the state has sent the city a bill for the work. The city had worked out an agreement with the state for the work to be done when MnDOT reconstructed a portion of Highway 61.
The state had told the city that it would be billed when it made its final payment to the contractor. Grand Marais’ bill was $38,489.55. Public Utilities Commissioner Tim Kennedy recommended payment but expressed concern over the time that had elapsed between the completion of the project and the billing.
Qualified candidates for sewer job
Tom Nelson reported that the city received applications from 20 qualified applicants for a job at the sewer plant recently vacated by Colin Voss, who took a similar job in Duluth. Nelson considered it “a good pool to pick from.”
Conservation Improvement
Program
The PUC board and staff discussed the city’s progress toward reducing its energy use as mandated by the state under its Conservation Improvement Program.
The city is required to spend a percentage of its gross operating revenues on energy-saving devices. This is why the PUC gives out light bulbs to PUC customers. The percentage the city must spend increases over time, and eventually the city will be required to reduce its energy consumption according to a formula required by the state. If it does not meet the standards, it must pay money to the state.
Tom Nelson said his department could reduce its energy consumption by switching out blowers and electrical control panels, but he wouldn’t want to spend a lot of dollars in order to save a few pennies.
Commissioner Kennedy pointed out that the city would spend money either on retrofitting equipment or on energy.
Utility Administration Specialist Jan Smith said that the city doesn’t have heavy industry or large commercial buildings that they could work with to significantly reduce the city’s energy use. She thought consumers would be able to make the biggest reductions through changes in lighting.
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