Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Water Rates topic
No spam. Unsubscribe anytime.
Isanti staff warns water rate study may require higher rates to cover near‑term capital
Summary
Staff said the July rate‑study recommendation may be too low and that rates likely need to rise to cover planned water capital (wells, tower) by 2028; staff proposed targeting high users with a steeper top tier or using bonds with conservative assumptions and will return with formal recommendations before year end.
City staff presented an update on the water‑rate study and said they are reconsidering the recommendation presented in July because projected capital needs through 2028 could require stronger revenue measures.
Mike said the original July recommendation left the water fund near zero capital availability (roughly negative $109,000 by 2028 under the original plan) and that he is “not comfortable with my own recommendation” and believes the city should consider higher rates or alternative structures to ensure capital coverage. Staff identified two bond financings on the water fund in coming years that will be repaid from water charges rather than taxes.
As one option to target heavy users, staff described a fourth (highest) rate tier intended to escalate in 25% steps above the prior tier and suggested making that top tier steeper (for example, a 50% step) instead of the current 25% increment. Council discussed the possibility of exemptions or administrative processes for businesses that legitimately require high water use so that critical commercial needs are not unfairly penalized.
Staff also said hydrology, geology and topography work is ongoing for a planned well; timeline estimates have the well and related tower work in the mid‑to‑late 2020s but exact dates must be confirmed. No rate ordinance or resolution was adopted; staff asked council to review options in November and possibly again in December to finalize decisions before the end of the year.
Why it matters: water rates and rate structure changes affect all customers and determine the city’s ability to finance capital improvements without transferring costs to other funds.
Next steps: staff will return with refined rate options, tier‑design recommendations, and draft ordinance/resolution language for council consideration before year end.
