Spicer may need to consider sewer/water rate increase

SPICER -- Spicer might need to re-evaluate its water and sewer rates, accountant Paul Harvego told the City Council on Wednesday during the city's audit report.

SPICER -- Spicer might need to re-evaluate its water and sewer rates, accountant Paul Harvego told the City Council on Wednesday during the city's audit report.

The water and sewer funds both had net losses at the end of 2005. Part of those losses include depreciation, but excluding that there were losses of about $25,000 in the sewer fund and $12,500 in the water fund.

Those losses will be made up with cash on hand in both of those funds, city administrator Kimberly Wothe said.

Harvego had concerns about the cash on hand in each fund. He said the council will need to decide whether it should raise rates to build up that cash in case it's needed for system repairs or replacements.

Wothe said the council usually bonds for water and sewer projects, but said if there were a sewer line break, for example, it would probably be paid for through the sewer fund.


The council may consider raising water or sewer rates to increase cash in each fund, she said.

The cash in the sewer fund actually increased $6,145 to be at $171,357 at the end of last year. However, a December bill from the Green Lake Sanitary Sewer and Water District was not paid until January, so the cash on hand would actually be about $25,000 less, Wothe said.

The cash in the water fund decreased $4,063 to be at $306,737 at the end of 2005.

Spicer's fund balance in the general fund increased 3 percent from 2004 and was at $648,436 at the end of 2005.

Spicer's net assets increased almost 14 percent from 2004 to be at $8,564,998.

Overall, Harvego said the city had a good audit and he complimented the city staff members on their work in managing the city's finances.

"The city staff does a tremendous job here," he said.

Also at the meeting, the council approved bids for the 2006 street improvement project. The project includes work on Second and Third avenues, Harriet and Frances streets, Summit Avenue and Progress Circle.


The city had two bidders for the project: Duininck Bros. Construction and Quam Construction. Duininck has the lowest bid at $1,303,581. The engineer's estimate had been $1,364,702, said Randy Sabart, engineer with Short Elliot Hendrickson.

The council approved the bids in two separate resolutions, one for Progress Circle and one for the rest of the streets, called the "interior street project."

The council voted 4-1 on the interior street project bid, with Councilwoman Marlys Larsen voting against it.

"It scares the heebie jeebies out of me," Larsen said.

She also voted against the Progress Circle resolution.

After the meeting, Larsen said she thinks the city is taking on too many street projects at one time and said the dollar amount "overwhelms" her.

She said the homes abutting the streets involved in the projects do not have high values and the people living in them do not have high incomes. She's concerned how the assessments will affect residents there.

Larsen also owns some rental properties on the streets that will be reconstructed. She said she did not know how much assessments are estimated to be on her property.


Final assessments will be determined after the project is completed this fall.

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