Tom Nelson, director of the Grand Marais Water and Sewer departments, reported his crews have been very busy over the last month making repairs to sewer/water lines before the snow flies.
Nelson gave his report on November 2 at the Grand Marais Public Utilities (PUC) board meeting.
Grand Marais City Administrator Mike Roth came before the PUC board of Tim Kennedy, Karl Hansen, and George Wilkes to discuss the 2017 budget.
Roth reported that Southern Minnesota Municipal Power Agency (SMMPA) had adopted a wholesale rate increase of 1 percent with the potential of making big increases in the next few years. SMMPA also changed the on-peak time from 10 a.m. to 8 a.m.
Roth said sales of electricity have remained somewhat steady for the last few years and the refinancing of debt service slightly decreased the city’s expenses. “We have a healthy reserve of cash and investments to cover capital expenditures over the next few years,” said Roth. “These projects will include the public works facility, a new load management system, meter upgrades and further plant upgrades.”
Following his comments Roth recommended the PUC ask for a 1 percent increase in electrical rates for 2017.
Next Roth discussed the water fund with the board. He said water sales have continued to decline because of conservation measures were taken by the public. Due to past increases the water fund currently has a healthy reserve fund balance, said, Roth. But, he added, with planned meter upgrades, the public works facility that will be built, street reconstruction projects and ongoing system repairs to equipment, he recommended a 2 percent increase to the water fund.
Last to be discussed on the agenda was the sewer fund. The biggest significant capital expense the city will face will be the mercury recapture project. In 2007 the Environmental Protection Agency approved Minnesota’s Statewide Mercury Total Maximum plan, which seeks to reduce the amount of mercury in the air and water. The town’s water plant may have to go through a significant upgrade to capture the minimal amount of mercury that the Minnesota Pollution Control Agency and EPA are requiring. The cost for that upgrade isn’t known yet as engineering plans are still being sought.
Other budgeted items include the cities meter upgrade project and street reconstruction projects. Street repairs include the Highway 61, 1st Street and 5th Avenue West street projects in 2019. The city will lose one primary revenue source because the sledge that is hauled from Minnesota Power and processed at the Grand Marais waste water plant is ending at because Minnesota Power is shutting down its power plant at the site.
Roth recommended a 3 percent rate increase in the sewer fund to allow the PUC to continue to set aside enough funds for the upcoming capital projects.
Last year the PUC raised the electric rate 3 percent, the water fund 2 percent and the sewer fund 4 percent.
The PUC took no action on Roth’s recommendations at the meeting because board member George Wilkes wasn’t in attendance. The board is expected to vote on all three rate hikes at its next meeting.
Should the proposed rates be adopted by the PUC, they will go into effect in January 2017 but won’t show up on people’s bills until February.
The increases prepare the sewer/water and electrical funds to meet its obligations and to contribute to two City Council priority projects: the public works facility, and First Street area reconstruction.
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