WILLMAR -- The Finance Committee will recommend the City Council increases the utility replacement fee to provide money for flood mitigation projects.
The committee voted Monday night to recommend the utility replacement fee be increased from $3 to $4 per month, and that the additional $1 be used to pay for detention ponds, enlarging sewer pipes and other storm water projects.
The council enacted the utility replacement fee, beginning with $2 a month, on May 19, 2003. The fee was increased to $3 per month in 2007 and would rise to $4 per month if the council approves the recommendation.
Every $1 of fee raises about $100,000 in revenue a year. The money is used to replace underground sewer and water utilities during street reconstruction projects and reduces assessments to benefited property owners, according to Steve Okins, city finance director.
The council has been grappling with the storm water issue and possible funding solutions since a home in southwest Willmar was heavily damaged by floodwater last August.
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In early January, the council failed to muster the five votes needed to enact an ordinance to impose a natural gas franchise fee as a way of raising revenue for storm water projects. In late January, the council held a work session to discuss ideas for solving storm water problems.
Monday night, Finance Committee Chairman Denis Anderson said now would be the time to look at the utility replacement fee as a possible funding solution. Anderson had previously supported the natural gas franchise fee.
Committee member Steve Gardner asked if members would be interested in increasing the fee and dedicate part of it for storm water projects. Anderson said that that was why he brought it up and suggested it could be called a utility replace-ment/storm water fee.
Action on the utility replacement fee occurred during discussion of proposed increases in wastewater user rates. The council has been increasing wastewater user rates by 6.35 percent each year since 2002.
The increases were recommended in a study by the city's bond consultant, Springsted Inc. The study recommended the city have funds equal to one year's debt service, which is a bonding requirement, and six months of operating cash as a reserve in the wastewater treatment fund. The city won't know what those amounts will be until the construction of the new treatment plant is completed.
The committee approved a motion to recommend the increase in the utility replacement fee and the increases in the wastewater user rates, and voted to introduce and set a date for a hearing on an ordinance to establish the fees for 2008.
Committee member Jim Dokken asked for clarification on the number of votes needed to approve an ordinance, and was told by city staff members that five votes were needed.
