Orono residents likely saw the city’s water rate increase on their recent utility bill. The water rate increase took effect on Jan. 1, after the city council approved the 2020 Budget and Fee Schedule during their December 9, 2019 meeting.
Residents saw tiered water rates increase by 35 percent, the sewer rate spike by 20 percent and a stormwater rate increase by 90 percent. The tiered water rates will increase by 20 percent in 2021, the sewer rate will increase by 15 percent in 2021 and the stormwater rate will increase 1 percent in 2021.
According to the city, the council considered the following factors: creating a working capital and operations reserve, a capital reserve for infrastructure needs, inflation and creating a stable long-term plan.
With the increase, the city will implement a 25 percent operating reserve and a 25 percent capital reserve.
“This is an identified best practice for financial stability” and “best practice to maintain infrastructure” the city states.
The sewer fund increase is due to a 57 percent charge increase from the Metropolitan Council over the past four years. According to city finance director Ron Olson, Orono sewers are treated by the Met Council, who has an operating budget. The budget is divided based on the flow of a city’s pipes.
“The flow from Orono into their sewer system has increased significantly and the reason is because we’ve had some very wet summers,” Olson said. “Divide Met Council operating budget based on the flow of your pipes and we end up having a lot of rain water and ground water into the sewer system flow is up, the share of the budget goes up.”
The explanation also states the water fund has been operating at a loss and an increase is needed for operating costs and long term stability. The storm water increase is to maintain projects, rehabilitate the road infrastructure, and “brings the fund into a long-term stable rate structure with minimal rate increases in the future.”
The recycling increase is due to the 62 percent charge increase the city pays for recycling services.
Olson said he received many calls asking about the rates and why they were implemented. The city held public meetings; however, Olson said the city could have had more communication with residents about the increase. Since then, the city has put policies into place to communicate with customers better.
The rate increase explanation is available on the City of Orono’s website.