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HomeMy WebLinkAbout2023-12-05 City Council Work Session PacketAgenda City Council Work Session City of Edina, Minnesota City Hall Community Meeting Room Tuesday, December 5, 2023 5:30 PM I.Call To Order II.Roll Call III.2024-2024 Budget and Tax Levy Presentation IV.Adjournment The City of Edina wants all residents to be comfortable being part of the public process. If you need assistance in the way of hearing ampli)cation, an interpreter, large-print documents or something else, please call 952-927-8861 72 hours in advance of the meeting. Date: December 5, 2023 Agenda Item #: III. To:Mayor and City Council Item Type: Reports / Recommendation From:Alisha McAndrews, Finance Director Item Activity: Subject:2024-2024 Budget and Tax Levy Presentation Discussion CITY OF EDINA 4801 West 50th Street Edina, MN 55424 www.edinamn.gov ACTION REQUESTED: Discussion only. INTRODUCTION: Staff will provide an overview of the 2024 - 2025 Budget, Budget Work P lan, and proposed 2024 Property Tax Levy. ATTACHMENTS: Description Staff Presentation 2022 Utility Rate Study Presentation EdinaMN.gov 2024-2025 Levy and Budget December 5, 2023 Agenda 1.Budget timeline and process 2.2024-2025 Budget work plan 3.2024-2025 budget and levy 4.Community impact of investments 5.Market value and tax impact 6.Next steps 7.Questions and discussion Timeline Date Type Topic June 1 Dept head budget entry, new positions submitted June 8 S&B projections posted June 7-13 Finance reviews and enters remaining budgets June-July Staff develop scenarios July 19 ELT Meeting ELT Reviews Budget Draft Scenarios Aug 2 CC Work Session Draft budget scenarios & work plan Sept. 5 CC Work Session City Manager preliminary levy and budget Sept. 19 CC/HRA Meeting Adopt preliminary levy Nov. 21 CC Work Session Budget and Work Plan Nov. 29 online Better Together comment period closes Dec. 5 CC/HRA Meeting TNT budget presentation & public meeting Dec. 19 CC Meeting/HRA Meeting Last day to adopt budget/levy Biennial Budget Process 2022 (Even Year) First year of 2022-2023 Budget Review/approve of 2023-2028 CIP 2023 (Odd Year) Second year of 2022-2023 Budget Approve 2024-2025 budget, including CIP levy 2024-2025 Budget & Work Plan Budget Pillars •Must be achieved by every budget •Broad goals •Evergreen Values •Guide decision making •Evergreen Strategies & Actions •Strengthen progress toward each pillar •Specific actions for each budget cycle Goals (Pillars) Budget Pillars Budget Values Budget Strategies & Actions Budget Values Stewardship •We make wise investments that focus on the best long-term value for residents. Equity •We provide equitable opportunities for people to participate in their City government and access City institutions, facilities, and services. Health •We use a Health-in-All Policies approach to promote and protect the physical, mental, and social wellbeing of all people who live, work, or visit Edina. Sustainability •We ensure that our policies, decisions, and plans have a positive impact on people and the planet now and for future generations. •Fred Richards Park & Braemar Park and Arena •Art Center facility and programming •Cahill Area sanitary sewer capacity expansion •Fire Station 3 site selection and planning •Grandview area transportation improvements •York Avenue sanitary sewer capacity expansion 2024-2025 Budget Work Plan •Mental health calls for service resources and training •Planning for Edina Public Schools elections for 2025 and beyond •THC/cannabis legislation impacts •Support staff who experience wellness and PTSD needs 2024-2025 Budget Work Plan •Advance affordable housing goals •Prepare for Comprehensive Plan update 2024-2025 Budget Work Plan •Administer 2025 Quality of Life survey •Refine community engagement processes 2024-2025 Budget Work Plan 2024 Proposed Consolidated Budget Edina Consolidated Budget $189M Governmental Funds $106.8M General Fund $63M Debt Service Fund $7.8M Construction Fund $25.6M Special Revenue Funds, including HRA $10.3M Enterprise Funds $73.8M Utility Fund $44.6M Liquor Fund $15M Park Enterprises $14.2M Internal Service Funds $9.1M Risk Management $2.7M Equip. Operations $2.2M IT $2.8M Facilities $1.4M Enhanced Services or Functions •Police, Fire, & Public Health •Advanced Life Support (ALS) Ambulance Service* •911 dispatch for Police, Fire & Medical (Edina & Richfield)* •Southwest Metro Public Safety Training Facility (Joint Powers) •Public Health (Bloomington, Edina, & Richfield)* •Rental Inspections •General Government •Assessing* •Edina Liquor •Parks & Recreation •Braemar Golf Course & Dome •Braemar Arena & Field •Centennial Lakes* •Edina Aquatic Center •Edinborough Park •Senior Center* •Art Center *supported by property taxes revenue Proposed Tax Levy Budget Proposed 2023 2024 2025 General Operating 39,820,200 43,744,165 48,535,573 8.48%9.85%10.95% Debt Service 3,230,000 3,471,700 5,785,900 -0.06%7.48%66.66% Construction 6,560,400 6,951,000 7,172,000 26.40%5.95%3.18% HRA 244,400 251,700 259,300 2.99%2.99%3.02% Total Tax Levy 49,855,000 54,418,565 61,752,773 % increase 9.89%9.15%13.48% What Makes Up the Levy Increase? % of levy increase $ amount Salary & benefits 4.62%$4.2 million Services contracts, supplies 2.38%$2.3 million Debt and construction levies 0.70%$639,600 IT Systems & security 0.59%$540,000 Facilities and equipment mtc 0.33%$300,000 New positions 0.32%$291,000 Support for CLP operations 0.22%$200,000 2024 Levy Increase 9.15% $2 million of one-time revenue from budget stabilization fund helps offset spending increases Investment & Impact •Increased investment in technology systems to ensure secure reliable systems that protect against threats and work when they are most needed, in times of emergency or natural hazard. •Street Lighting replacement to keep streets safe and reduce energy use. •Increased support to the City’s utility system and on-call winter response duties. Addition of 1 utility supervisor in 2025. Investment & Impact •Improve public safety response and outcomes.Addition of 4 patrol officers, mental health response officer and neighborhood engagement officer. •Respond to increasing calls for service/complexity of calls for emergency medical response by adding additional paramedic/firefighters (6) in 2025 at the new fire station. •Provide market wage increases and competitive benefits to attract and retain a high-performing skilled workforce needed to deliver services to the community. •Improve safety and ability to adequately respond to social disruption events in recreation enterprises. Addition of 1 Facility Coordinator in 2024 and 1 in 2025. 2024 General Fund Uses Police Fire Public Works Parks & Rec Engineering Community Development General Government Sources Property Tax Levy Charges for Services Fines & Forfeitures Licenses & Permits Intergovernmental Franchise fees & Other taxes Other Our 2024-2025 Budget’s Response to 2023 Quality of Life Survey •Finding: Residents continue to rate their overall quality of life in Edina highly Response: Maintain current service levels at current quality levels •Finding: Residents generally feel safe in the community, but that feeling has decreased Response: Enhance law enforcement staffing to keep robust staffing levels on the street; increase levels of public safety programming through MAC, neighborhood officers, traffic enforcement and mental health response team •Finding: Residents gave very high ratings to the work of the Fire Dept. Response: Continue the growth and development of the Fire Dept., particularly around their ALS services and preparing for the new Fire Station Estimated Market Value 9.4 9.1 8.9 9.0 9.8 10.4 10.9 11.6 12.4 12.9 13.3 15.5 16.8 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023$ Billions 2024 Estimated Levy Impact Edina Median Value Home 2022 2023 Change $659,900 $696,600 5.3% Edina Estimated Market Value 2022 2023 Change $15.54B $16.8B 8.2% 2024 Estimated Levy Impact Change in Levy on Median Value Home (MVH) 2023 2024 Difference Change MVH $659,900 $696,600 $36,700 5.3% Annual $1,973.23 $2,121.93 $148.71 7.5% Monthly $164.44 $176.83 $12.39 7.5% Hennepin County 29% City of Edina 23% Edina School District 41% Watershed, Metro Districts, & Other 7% 2023 Property Tax Distribution 2024 Change in Property Tax by Property Type 14% 38% 15% 14% 11% 5%3% Commercial/Industrial >(5.0)%(4.9)-(0.0)%0.1-4.9%5-9.9%10-14.9%15-19.9%>20% 4% 10% 39% 37% 7% 2%1% Single Family/Apartments >(5.0)%(4.9)-(0.0)%0.1-4.9%5-9.9%10-14.9%15-19.9%>20% Property Tax History 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Median Value $396,300 $399,700 $438,800 $457,300 $466,500 $501,000 $530,650 $548,500 $551,300 $571,800 $659,900 $696,600 City tax $1,102 $1,140 $1,195 $1,266 $1,319 $1,393 $1,474 $1,566 $1,623 $1,706 $1,964 $2,122 Total tax $5,449 $5,606 $5,835 $6,276 $6,367 $6,715 $6,982 $7,251 $7,119 $7,413 $8,396 $8,962 $1,102 $1,964 $2,122 $5,449 $8,396 $8,962 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 "Median" Value Home Property Tax History 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total City (2003 dollars)$869 $884 $927 $972 $991 $1,021 $1,062 $1,115 $1,076 $1,059 $1,214 Total Tax (2003 dollars)$4,298 $4,347 $4,527 $4,872 $4,782 $4,922 $5,030 $5,128 $4,805 $4,663 $5,170 Median Value $396,300 $399,700 $438,800 $457,300 $466,500 $501,000 $530,650 $548,500 $551,300 $571,800 $659,900 $869 $1,214 $4,298 $5,170 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 "Median" Home Property Tax History Adjusted for CPI (2003 dollars) Property Tax History $943 $1,052 $1,069 $4,550 $4,602 4,618 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 201020112012201320142015201620172018201920202021202220232024$400,000 Edina Home Property Tax History City tax Total tax How Does Edina Compare? City Tax Rate Tax $ on $700,000 Tax $ on $1M Plymouth 24.44%$ 1,833 $ 2,750 Maple Grove 27.36%$ 2,052 $ 3,077 Eden Prairie 28.35%$ 2,126 $ 3,189 Edina 28.45%$ 2,134 $ 3,201 Lakeville 30.18%$ 2,264 $ 3,395 Eagan 33.54%$ 2,515 $ 3,773 Minnetonka 34.44%$ 2,583 $ 3,875 Apple Valley 36.68%$ 2,751 $ 4,126 Burnsville 42.27%$ 3,170 $ 4,755 St. Louis Park 46.36%$ 3,477 $ 5,215 How Does Edina Compare? City MVH Levy Increase Tax Rate Tax $ on MVH Plymouth $ 470,000 7.50%24.44%$ 1,130 Maple Grove $ 431,600 6.68%27.36%$1,134 Edina $ 696,600 9.15%28.45%$ 2,122 Eden Prairie $ 536,400 5.60%28.35%$1,546 Lakeville $ 446,500 9.62%30.18%$1,307 Eagan $ 393,400 6.90%33.54%$1,230 Minnetonka $ 496,500 7.47%34.44%$1,707 Apple Valley $ 362,300 8.40%36.68%$1,203 Burnsville $ 351,500 7.60%42.27%$1,329 St. Louis Park $ 373,000 7.60%46.36%$1,582 Next Steps •Adopt Resolution No. 2023-95 Adopting 2024 Property Tax Levy and Operating Budget •If not adopted today, final date to take action on 2024 budget is Dec. 19 •Nov. 21 Questions/Discussion •Nov. 21 Review of 2022 Utility Rate Study City of Edina April 10, 2023 2 Maintain Financial Health of Utility Funds •No property tax support for utilities •Maintain healthy reserves and keep funds solvent Inform Capital Planning •Determine how we will fund Capital Improvement costs (CIP) Enhance Policy Objectives: •Help achieve climate goals •Increase utility fee equity Purpose of Periodic Rate Studies 3 Utilities: Capital Intensive Utility 2022-2031 Capital Costs Water $62 Million Sanitary Sewer $35.5 Million (excludes Cahill capacity expansion project) Storm Water $103 Million (includes priority flood mitigation projects) These capital cost estimates reflect historical inflation levels. If current rates of inflation continue, the 10-year costs would be significantly higher. 4 •Volumetric Charges for Water and Sewer Rate per 1,000 gallons For water, rate increases for higher consumption (“tiers”) •Sewer Minimum Charges Customers pay for a minimum amount of use even if actual is less Customers billed on winter quarter’s average water consumption •Meter Charges for Water Fixed fee per quarter based on meter size •Connection Fees (WAC and SAC) Pay for system expansion Rate Components: Water & Sewer 5 Water Rates: Structural Issues 722 1972 2592 2115 1397 957 632 435 316 242 221 158 116 97 79 67 41 52 47 26 38 15 13 15 12 15 92 0 500 1000 1500 2000 2500 3000 To To To To To To To To To To To To To To To To To To To To To To To To To To To Residential Single Family Water Accounts Fall Quarter, 2019 Data TIER 1 0-26,00083% TIER 226,001-49,00012% TIER 3 Over 49,0005% Current structure DOES NOT promote water conservation. 6 Proposed Conservation Tier Breaks 722 1972 2592 2115 1397 957 632 435 316 242 221 158 116 97 79 67 41 52 47 26 38 15 13 15 12 15 92 0 500 1000 1500 2000 2500 3000 To To To To To To To To To To To To To To To To To To To To To To To To To To To Residential Single Family Water AccountsFall Quarter, 2019 Data TIER 10-12,00042% TIER 212,001-24,00036%TIER 3 Over 24,000 22% 7 Proposed Residential Water Rates 8 Single Family Residential Water Bill Impacts Low Volume Customer (10,000 gals) Medium Customer (24,000 gals) High Volume Customer (95,000 gals) 2022 Quarterly Water Bill $51.82 $98.76 $445.96 Proposed 2023 Water Bill $49.36 $108.38 $539.94 $ Difference -$2.46 $9.62 $93.98 % Difference -5%10%21% 9 Water Conservation: Commercial Water Rates 154 70 25 24 23 14 11 10 10 11 5 5 3 3 4 5 1 6 2 3 1 2 1 2 0 2 1 0 22 0 20 40 60 80 100 120 140 160 180 To To To To To To To To To To To To To To To To To To To To To To To To To To To To To Commercial Water UsageFall 2019New Tier Breaks 10 Proposed Commercial Water Rates Annual Increase Beginning in 2024 Tier 1 Up to 26,000 gallons 2.71$ Up to 50,000 gallons 2.42$ 5.0% Tier 2 Over 26,000 gallons 3.60$ 50,001 to 200,000 gallons 3.02$ 5.0% Tier 3 N/A Over 200,000 gallons 3.77$ 5.0% Comm/Ind WATER 2022 Proposed 2023 11 Water Use: Residential Irrigation 26 18 13 10 5 6 3 5 4 0 0 3 1 0 1 2 1 1 9 0 5 10 15 20 25 30 Residential Irrigation Water Usage Fall 2019New Tier Break •Irrigation for townhomes, multifamily, and assisted living •Irrigation meters billed at 2 highest rates •First tier provides equity with singly family residences 12 Water Use: Commercial Irrigation 22 21 15 17 13 17 15 12 9 8 8 2 4 1 5 4 3 7 0 5 10 15 20 25 Commercial Irrigation UsageFall 2019New Tier Break 13 Proposed 2023 Irrigation Rates Annual Increase Beginning in 2024 Irrigation Tier 1 Up to 26,000 gallons 3.60$ Up to 12,000 gallons 3.68$ 5.0% Tier 2 Over 26,000 gallons 5.63$ Over 12,000 gallons 6.08$ 5.0% WATER 2022 Proposed 2023 Tiers match new residential tiers 14 Water and Sewer Rate Changes 15 AQ & 16 Utilities: Capital Intensive Operating 41% Debt 30% Capital29% Water Expenditures 2021 $13.9 Million Operating 8% Debt 13% Capital 21% MCES58% Sewer Expenditures 2021 $10.2 Million Operating 22% Debt25% Capital 53% Storm Water Expenditures 2021 $7.35 Million 17 Sewer Rates: Structural Issues Issue: Sewer Minimum Does Not Promote Conservation •Currently, all residential accounts billed minimum of 12,000 gallons or $75.60/quarter per residential unit Post-Review Conclusion: •Maintain sewer minimum charge for revenue stability •Reduce minimum to 8,000 gallons or $54.88/quarter •Reduces quarterly bills for low volume customers Analysis: 26% of customers will pay minimum in winter quarter. 18 Single Family Residential Sewer Bill Impacts Quarterly Bill Low Volume Customer (8,000 gals) Medium Customer (12,000 gals) High Volume Customer (40,000 gals) 2022 Quarterly Sewer Bill $75.60 $75.60 $252.00 Proposed 2023 Sewer Bill $54.88 $82.32 $274.40 $ Difference $ (20.72)$6.72 $22.60 % Difference -27%9%9% 19 Maintains Healthy Sewer Fund 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Sewer FundProjected Cash Balances Target Cash Ending Cash Lift Stations paid for with cash 20 •2023 rates moved from a tiered structure to a flat rate $3.62 per 1,000 gallons for all usage •Increases equity Multifamily customer class pays for their share of water used Multifamily Water Rates 21 •Morningside neighborhood uses water purchased from Minneapolis •Evaluated Morningside rates to ensure they cover all allocable costs Road reconstruction, water distribution, billing & admin •Proposed rates for 2023: Morningside pays Edina meter charge Rate = $1.17 per 1,000 gallons plus Minneapolis cost of water “Surcharge” increases 5% annually Morningside Water Rates 22 2023 Rates Maintain Healthy Water Fund 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Water Fund Projected Cash Balances Target Cash Ending Cash 23 •Current ordinance charges quarterly •Extensive review of parcel data in 2021 confirmed existing Residential Equivalency Factors (REF) •Existing Single Family Residential Rate = $43.85 per quarter Storm Water Rates: No Structural Changes REF x Acreage x Storm Water Rate 24 •Annual 8% rate increases allow: Completion of scheduled projects in CIP Additional $10M for flooding mitigation (2024-2032) Covering all operations & maintenance Maintaining adequate cash balances Funding Flood Mitigation Projects 25 Single Family Storm Water Rates 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 8% Increase $43.85 $47.36 $51.15 $55.24 $59.66 $63.43 $69.58 $75.15 $81.16 $87.66 26 •2023 Sewer & Water Rate changes designed to: Maintain revenue stability and adequate reserves Give customers more control over their quarterly bills Enhance water conservation Equitably assign costs of peak demand infrastructure to peak users Increase equity between customer classes •2023 Storm Water Rate increase of 8% needed to fund planned flood mitigation projects Customer Impacts 27 •Sewer Only customers (large industries) are not paying a meter charge, but City is metering sewer use •Institute a meter charge for Sewer Only customers Sewer Only Customers 28 Proposed 2023 Sewer Rates Annual Increase Beginning in 2024 All Usage 6.30$ All Usage 6.86$ 5.50% Minimum of 12,000 gallons Minimum of 8,000 gallons Winter Quarter Averaging Lesser of Winter Quarter or Actual, but no less than 8,000 gallons All Usage 6.30$ All Usage 6.86$ 5.50% Minimum of $68.05 for each Minimum of 8,000 gallons unit over 4 units All Usage 6.30$ All Usage 6.86$ 5.50% Minimum of 12,000 gallons Minimum of 8,000 gallons Plus Meter Charges (for Sewer Only customers) 2"211.00$ 5.50% 3"422.00$ 5.50% 4"527.50$ 5.50% 6"633.00$ 5.50% Residential (including Morningside) Multifamily Comm/Ind and Sewer Only SEWER 2022 Proposed 2023 29 Low-Volume, Single-Family Customer Actual 2022 2023 2024 2025 2026 Quarterly Residential Bill 10,000 gallons water and 8,000 gallons sewer and 3/4" meter Water 51.82$ 49.36$ 51.83$ 54.42$ 57.14$ Usage 27.10$ 24.15$ 25.36$ 26.63$ 27.96$ Meter 24.72$ 25.21$ 26.47$ 27.80$ 29.19$ Sewer 75.60$ 54.86$ 57.88$ 61.06$ 64.42$ Base 75.60$ 54.86$ 57.88$ 61.06$ 64.42 Storm 43.85$ 48.89$ 54.51$ 60.78$ 67.77$ Total 171.27$ 153.11$ 164.22$ 176.26$ 189.33$ Percent Increase 5.8%-10.6%7.3%7.3%7.4% Amount Increase- per quarter $9.33 ($18.16)$11.11 $12.04 $13.07 Proposed 30 Typical Spring/Fall Single-Family Customer Actual Proposed 2022 2023 2024 2025 2026 Quarterly Residential Bill 24,000 gallons water and 12,000 gallons sewer and 1" meter Water 98.76$ 108.38$ 113.80$ 119.49$ 125.46$ Usage 65.04$ 73.08$ 76.73$ 80.57$ 84.60$ Meter 33.72$ 35.30$ 37.07$ 38.92$ 40.86$ Sewer 75.60$ 82.29$ 86.82$ 91.59$ 96.63$ Usage 75.60 82.29 86.82 91.59 96.63 Base - Storm 43.85$ 48.89$ 54.51$ 60.78$ 67.77$ Total 218.21$ 239.56$ 255.13$ 271.86$ 289.86$ Percent Increase 5.6%9.8%6.5%6.6%6.6% Amount Increase- per quarter $11.58 $21.35 $15.57 $16.73 $18.00 31 High-Volume, Single-Family Customer Actual 2022 2023 2024 2025 2026 Quarterly Residential Bill 95,000 gallons water and 40,000 gallons sewer and 1" meter Water 445.96$ 539.94$ 566.93$ 595.28$ 625.04$ Usage 412.24$ 504.64$ 529.87$ 556.36$ 584.18$ Meter 33.72$ 35.30$ 37.07$ 38.92$ 40.86$ Sewer 252.00$ 274.30$ 289.39$ 305.30$ 322.09$ Usage 252.00 274.30 289.39 305.30 322.09 Base - Storm 43.85$ 48.89$ 54.51$ 60.78$ 67.77$ Total 741.81$ 863.13$ 910.83$ 961.36$ 1,014.91$ Percent Increase 20.3%16.4%5.5%5.5%5.6% Amount Increase- per quarter $125.35 $121.32 $47.71 $50.53 $53.55 Proposed 32 Multifamily Property Actual 2022 2023 2024 2025 2026 Quarterly Multifamily Bill Water 1,623.07$ 2,190.92$ 2,300.46$ 2,415.49$ 2,536.26$ Usage 1,358.66$ 1,905.44$ 2,000.71$ 2,100.74$ 2,205.78$ Meter 264.41$ 285.48$ 299.76$ 314.74$ 330.48$ Irrigation Meter - 687,000 gallons 3,815.03$ 4,113.27$ 4,318.93$ 4,534.88$ 4,761.62$ Sewer 5,375.95$ 3,607.05$ 3,787.40$ 3,976.77$ 4,175.61$ Usage 3,607.05 3,787.40 3,976.77 4,175.61$ Base 5,375.95 Storm 4,711.02$ 5,252.79$ 5,856.86$ 6,530.40$ 7,281.40$ Total 15,525.07$ 15,164.02$ 16,263.65$ 17,457.53$ 18,754.88$ Percent Increase 5.9%-2.3%7.3%7.3%7.4% Amount Increase- per quarter $868.47 ($361.05)$1,099.63 $1,193.88 $1,297.35 83 Condo Units: 526,000 gallons of water and sewer and a 3" meter Proposed 33 Small Business Actual 2022 2023 2024 2025 2026 Quarterly Small Commercial Bill 50th and France shop: 10,000 gallons water and sewer and 3/4" meter Water 51.82$ 49.36$ 51.83$ 54.42$ 57.14$ Usage 27.10$ 24.15$ 25.36$ 26.63$ 27.96$ Meter 24.72$ 25.21$ 26.47$ 27.80$ 29.19$ Sewer 75.60$ 68.58$ 72.35$ 76.33$ 80.52$ Usage 68.58 72.35 76.33 80.52$ Base 75.60 Storm 76.95$ 85.80$ 95.67$ 106.67$ 118.93$ Total 204.37$ 203.74$ 219.84$ 237.41$ 256.60$ Percent Increase 6.1%-0.3%7.9%8.0%8.1% Amount Increase- per quarter $11.78 ($0.63)$16.11 $17.57 $19.19 Proposed 34 Large Commercial Customer Actual 2022 2023 2024 2025 2026 Quarterly Large Commercial Bill Large Commercial: 502,000 gallons water and sewer and 1" meter Water 1,817.78$ 1,748.44$ 1,835.86$ 1,927.66$ 2,024.04$ Usage 1,784.06$ 1,713.14$ 1,798.80$ 1,888.74$ 1,983.17$ Meter 33.72$ 35.30$ 37.07$ 38.92$ 40.86$ Sewer 3,162.60$ 3,442.47$ 3,631.80$ 3,831.55$ 4,042.28$ Usage 3,162.60 3,442.47 3,631.80 3,831.55 4,042.28$ Base - Storm 828.73$ 924.03$ 1,030.29$ 1,148.78$ 1,280.89$ Total 5,809.11$ 6,114.94$ 6,497.96$ 6,907.98$ 7,347.21$ Percent Increase 5.4%5.3%6.3%6.3%6.4% Amount Increase- per quarter $297.90 $305.83 $383.02 $410.03 $439.23 Proposed 35 •Recommend increases to pay for capacity expansion projects Sewer Connection Fees Project Area Estimated Cost Estimated New SAC Units per Year Southdale Area $11.4 Million 175 Cahill Area*$13.1 Million 119 *Cahill Area growth assumed to begin in 2027 Cahill expansion projects constructed in 2023-2024 36 Proposed Sewer Connection Fees Without Cahill Expansion With Cahill Expansion Year % Increase Connection Fee % Increase Connection Fee 2022 6.00%$ 1,810 6.00%$ 1,810 2023 28.00%$ 2,317 50.00%$ 2,715 2024 22.00%$ 2,826 37.00%$ 3,720 2025 5.00%$ 2,968 27.00%$ 4,724 2026 5.00%$ 3,116 5.00%$ 4,960 2027 5.00%$ 3,272 5.00%$ 5,208 2028 5.00%$ 3,436 5.00%$ 5,468 2029 5.00%$ 3,607 5.00%$ 5,742 2030 5.00%$ 3,788 5.00%$ 6,029 2031 5.00%$ 3,977 5.00%$ 6,330 2032 5.00%$ 4,176 5.00%$ 6,647 2033 5.00%$ 4,385 5.00%$ 6,979 37 Connection Fee Comparison $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 Infrastructure Development Fees for Sample Multifamily Project(Assumes 150 units on 2 developable acres) Storm Water Total Sanitary Sewer Total Water 38 •3% annual rate increases Water Connection Fees Year Annual Rate Increase Connection Fee 2022 $ 2,960 2023 3.00%$ 3,049 2024 3.00%$ 3,140 2025 3.00%$ 3,234 2026 3.00%$ 3,332 2027 3.00%$ 3,431 2028 3.00%$ 3,534 2029 3.00%$ 3,640 2030 3.00%$ 3,750 2031 3.00%$ 3,862 39 Utility Bill Comparison: Low Volume Resident $0.00 $25.00 $50.00 $75.00 $100.00 $125.00 $150.00 $175.00 $200.00 Edina - 2023Proposed Edina - 2022 Eden Prairie Hopkins Minnetonka St. Louis Park Bloomington 2022 Quarterly Residential Bill for Water, Sewer & Storm Water Assumes 10,000 gallons water and 8,000 gallons sewer and 1" meter Storm Water Charges Sewer Charges Water Charges Average 2022 Quarterly Bill 40 Utility Bill Comparison: Typical Resident $0.00 $25.00 $50.00 $75.00 $100.00 $125.00 $150.00 $175.00 $200.00 $225.00 $250.00 Edina - 2023Proposed Edina - 2022 Eden Prairie Hopkins Minnetonka St. Louis Park Bloomington 2022 Quarterly Residential Bill for Water, Sewer & Storm Water Assumes 24,000 gallons water and 12,000 gallons sewer and 1" meter Storm Water Charges Sewer Charges Water Charges Average 2022 Quarterly Bill 41 •Accommodate latest capital projects needs and increased costs •Reduce customer complaints about sewer billing •Evaluate options for funding flood mitigation projects •Enhance water conservation •Conform rates to capabilities of new accounting software Specific Goals of the 2022 Rate Study 42 •Issue: Winter Quarter Averaging Residential sewer billed on water use in winter quarter For some: winter quarter water use sometimes higher than other quarters •Post-Review Conclusion: Billing changed to lesser of winter quarter or actual water consumption, but not less than 8,000 gallons Sewer Rates: Structural Issues 43 2022: •$6.30 per 1,000 gallons* 2023: •$6.86 per 1,000 gallons* 2024 & beyond: •5.5% annual increase Proposed Sewer Rates *2023 Minimum reduced to 8,000 from 12,000 gallons.