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Rate study recommends higher fixed charges, simpler tiers for Crookston water and wastewater
Summary
AHS Nexus presented a water and wastewater rate study recommending increased fixed charges (example: 5/8" meter fixed charge from $3.75 to $7.80/month), simplified volumetric tiers for residential/commercial/industrial users, and wastewater fixed-charge increases; city staff said wastewater still runs a deficit and CIP needs are significant.
Miranda Clavin of AHS Nexus presented the results of a water and wastewater rate study to the Crookston City Council, laying out revenue sufficiency, reserve targets and proposed structural changes to rates.
Clavin said enterprise utilities must be self-supporting and recommended retaining a meter-size-based fixed charge while increasing it substantially on a percentage basis to better cover capital and operating needs. As an example, she said the fixed monthly charge for a 5/8" meter would move from $3.75 to $7.80. For volumetric water charges, the study recommends simplifying the existing multi-tier winter/summer structure into three tiers for residential users with 2025 suggested rates of $3.07, $3.69 and $4.43 per 1,000 gallons to keep the lowest tier as affordable as possible. Large commercial and industrial users would have separate simplified structures; Clavin cited a proposed rate of about $3.71 per 1,000 gallons for large University meters and a higher negotiated rate for American Crystal Sugar (about $6.23 per 1,000) because American Crystal is outside city limits.
For wastewater, Clavin recommended increasing the fixed charge and simplifying volumetric billing by basing sewer charges on a winter average rather than total water use. She said a cost-of-service analysis suggested moving the fixed sewer administrative charge toward roughly $6 for in-city users and $12 for out-of-city users in 2025.
City staff and Council members discussed next steps. Brandon and other staff noted that water currently can contribute to capital reserves but wastewater is operating at a deficit and that the large capital-improvement items ahead—water-tower painting, main replacements and several lift-station projects—would require funding and likely rate adjustments. Brandon said aligning CIP timing with street work and adopting recommended structural changes will be needed to stabilize both funds.
Council did not adopt new rates at the meeting; staff said the CIP inputs will be refined and the model updated before final adoption. Clavin and staff said the study provides a model to revisit each year and to adjust rates based on operating results and CIP timing.
