WILLMAR -- The Finance Committee will recommend the Willmar City Council hold a public hearing next month to take comments on proposed 2007 utility rate increases.
The committee voted Monday evening to recommend the council hold a hearing on March 19 to take comments and adopt the new rates, effective April 1.
The council will act on the committee's recommendation on March 5.
Consultants' studies recommended the Municipal Utilities Commission adjust the rates in each of the three divisions of Willmar Municipal Utilities.
Overall electric rates -- last adjusted in 2003 -- would increase an average of 5.8 percent.
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Water rates -- last adjusted in 1999 -- would go up 8.5 percent.
District heating rates -- last raised in 1989 -- would go up 10 percent in 2007 and 10 percent in 2008.
In his discussion Monday night with the Finance Committee, Utilities Commission President Bob Bonawitz said the utilities' average cost of power in 2007 is projected to be $39.38 per megawatt, up from $37.41 per megawatt in 2005.
Costs for fuel, transportation and purchased power are up. Bonawitz said the utility is trying to look at all avenues to keeping costs down, "but a lot of that is out of our control.''
The proposed water rate schedule establishes three rate classes, and rates within each class will be level, rather than decline with usage.
Bonawitz attributed the higher water rates to the effect of inflation on operating costs. Also, he said the utilities has had significant capital projects in the last two years, including the new roof on the southwest water reservoir and two new wells at Swansson Field.
The new district heating rate schedule increases the number of rate classes from one to two with residential and small commercial customers in one class, and middle, large and industrial customers in the second class.
Higher heating rates are being attributed to significantly increased costs for natural gas and transportation of coal.
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In an earlier interview, Willmar Municipal Utilities general manager Mike Nitchals said Willmar's rates compare favorably with rates charged in other cities. "In general on electric rates, Willmar is toward the middle of the rate comparisons, not the lowest but not the highest,'' he said.
On water rates, Willmar is very low compared to averages of other cities, he said.
Nitchals said Willmar compared the district heating rate increases over the two-year period with natural gas projections, assuming a 90 percent efficiency of a furnace or boiler, "and even after our second increase, we still compare favorably.''
In other business Monday, the Finance Committee voted to recommend the council hold a public hearing March 19 to take comments on the annual 6.35 percent increase in sewer rates.
The annual increase was recommended by consultants in 2001 to help create a fund for constructing a new wastewater treatment plant. The first increase went into effect in 2002.
Committee Chairman Denis Anderson said the council's intent was to increase the rate every year. However, City Attorney Richard Ronning said a public hearing is required to consider the new rates, explained City Finance Director Steve Okins.
