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Grand Portage Tribal Chairman Robert (Bobby) Deschampe holds the signed deed for the two-acre property located below the St. Francis Xavier Church on old North Shore Road one mile east of Grand Marais. The land was conveyed to Grand Portage by the State of Minnesota, a first ever for land to be given to a tribal band off of the reservation. Picture courtesy of Ann Sullivan
Following City Administrator Mike Roth’s recommendations, the Grand Marais PUC voted to increase the water, sewer and electric budgets by three percent for 2023.
The PUC voted for the rate increases at their November 16 meeting.
In discussing the Water Fund budget, Roth said the increase would cover system repairs and improvements and position the water fund to contribute to city priority projects.
The projected 2023 Water Fund budget is $483,898, a smidgeon more than $1,000 higher than 2022.
Giving a history of the fund, Roth said the city made a small rate increase of two percent from 2014 to 2018 and made no rate changes from 2019 to 2022. In addition, Roth noted that 2022 water sales were slightly below those of 2021 and just above sales in 2020.
Staying consistent, Administrator Roth recommended an increase of three percent in sewer rates for 2023.
“The increase is necessary to cover increased expenses, as well as position the sewer fund to contribute to multiple city priority projects: AMI meter upgrades, the 1st Street reconstruction, and 5th Avenue construction.”
Roth added the city was close to reviewing a preliminary capital improvement plan on the treatment plant with projects designed to address odors and aging plant facilities.
Roth said that the three percent rate hike is consistent with the last two years. The 2023 budget is $751,152, with a significant ongoing cost in the services category of $140,000 for sledge hauling.
With SMMPA discussing changes to wholesale rates for 2023, including up to a 15 percent increase and adding energy costs, Roth asked the commission to approve a three percent raise for the electric fund in 2023.
Over the past ten years, the PUC has made some yearly adjustments to the Electric Fund.
Roth noted that retail rate adjustments since 2012 were two percent in 2014-2015, three percent in 2016, two percent in 2017 and no change from 2018 to 2022.
In 2019 sales were even with 2018, down 10 percent in 2020, flat for 2021 and higher in 2022 but still below 2018-2019.
The good news for the Electric Fund is that two debt payments expire in 2023 and there are no plans for additional debt. “After this budget year, our debt payments drop approximately $300,000 ($560,000 with the balloon payment on the 2013B Reconstruction Refund Bond,” said Roth.
With that, Roth concluded the city’s recent rate study suggested the fund balance should be allowed to increase for a few years rather than consider rate decreases.
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