The Free Press, Mankato, MN

November 25, 2013

Major changes coming for city water users

Tuesday hearing will preview fee hikes, conservation measures

By Mark Fischenich
mfischenich@mankatofreepress.com

---- — MANKATO — Apartment buildings and mobile home parks will face major changes in how they're charged for municipal water starting Jan. 1 in Mankato, and a new era of water conservation will be coming to all city water users a year later.

A public open house to discuss the changes from 6-7:30 p.m. Tuesday at the Intergovernmental Center will touch on the broader changes coming but will focus on the more immediate impact on multi-unit residential housing. While all water users will see a 2 percent increase in rates at the start of the year, apartment and mobile home park owners will see for the first time every individual residential unit charged the basic monthly water fee.

Until now, those multi-unit complexes — regardless of how large — paid that base charge just once and the rest of the bill was based on the amount of water used. With the changes, a 48-unit apartment building or mobile home park would see the monthly $4.42 cost-of-service water fee and $7.89 sewer fee 48 times.

"Each individual unit will have a base unit cost assigned to it," said Deputy City Manager Tanya Ange.

City staff will have sample bills on hand at the open house to show the impact on ratepayers. The change in how multi-family housing is billed was mandated by state lawmakers looking to promote water conservation. The impact of that law will widen in 2015 when volume discounts for water use will be prohibited.

Currently, and continuing for one more year, the first 300 units of water (equal to 225,000 gallons) is charged at one rate with additional units costing nearly 40 percent less. Starting in 2015, each unit of water will be charged at $3.29 no matter how many units are consumed.

That could be a costly change for heavy industrial users of water and other big consumers such as Minnesota State University. The city, and others around the state with more than 1,000 water users, don't have any choice, however, under the revised state water regulations. Volume discounts, the state reasons, discourage consumers from looking for ways to reduce their water usage.

"We have to abandon that (two-tier) rate structure under the statute," Ange said.

Property owners who do a lot of irrigation, including homeowners who regularly water lawns, could save money by having a second water hook-up for their outdoor watering. By having the second meter, they can avoid being charged the sewer fee for water that's landing on lawns rather than going into the municipal wastewater treatment system.

The end of volume discounts will be discussed more in the coming year, and the city will be working to finalize other conservation measures required by the new law, Ange said. The continuation of the even-odd watering schedule, which began this year, is likely to be one of those measures.

As for the 2 percent increase in water rates, the hike is aimed at ensuring that revenue keeps up with the short-term and long-term costs of operating and maintaining the city's water and sewer system. A consultant hired as part of a comprehensive study of Mankato utility rates found that the city wasn't currently generating enough money from utility bills to fully cover the operations, maintenance and replacement of the roughly $150 million worth of facilities that provide clean drinking water and treat wastewater and sewage.

Gradual increases to keep revenue in line with expenses, along with maintaining adequate utility fund reserves, is the best course, Ange said.

"It's important to look at this on an incremental basis so that we don't have significant spikes in our rates," she said.