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Kelliher Council hears about utility rate study

The Kelliher City Council met in the council chambers at city hall for its regular meeting Aug. 3.

Mayor Darrin Latterell called the meeting to order with all but one council member present. Staff present included City Clerk Dianna Thurlow, Assitant Clerk Peggy Vollhaber and Public Works Superintendent Chuck Schultz.

As there was no one was present to address the council during the public forum part of the meeting, the following consent agenda items were presented for approval:

• Minutes of the regular July 20 meeting

• Minutes of the Special July 8 meeting

• Receipts list from July 2-31 totaling $16,659.29

• Claims list for approval in the amount of $14,815.03

• Employee Overtime Report

The water and sewer report was then given.

Jordan Vandal, Resource Development Advisor from the Midwest Assistance Program, presented the council with Kelliher's Minnesota Utility Rate Study. Vandal reviewed the rate study with the council and a lengthy discussion was held regarding expenditures versus the revenue for utility services. The council reviewed the System Expense Summary in 2007 and 2008 expenditures for Kelliher.

It was shown that the city has very little fixed expenditures in the form of debt service on construction loans and financial reserves. Conversely, approximately 91.5 percent of system expenditures come in the form of variable costs. Most of the costs associated with fixed expenditures are insurance, monthly and annual tests, and annual maintenance of pumps. The table further depicts the 2007 and 2008 average monthly expenditures costing approximately $3,240.03.

Additionally, as calculated from the 2008 variable expenditures, it costs the city $4.57 (monthly variable charges/total water units sold, 1,000 gallons = 1 unit) to treat 1,000 gallons of water. During this time, the city charged users $1.15 per 1,000 gallons used. This equates to a net loss of $3.42 for every 1000 gallons of water the city produces. In 2008, the total average water sold to customers was 611,348 gallons. Simple arithmetic will show that the system cost the city approximately $2,090.

The council also was provided with examples of rate structures including uniform flat, single block, decreasing block, and increasing block rates, along with different types of scenarios.

A full report on the Utility Rate Study can be obtained at city hall.

Public Works Superintendent Schultz approached the council regarding the minimum wage increase to $7.25 there is a staff member that needs to have their wage earnings adjusted. After a short discussion, the council determined that due to theh increase in the minimum wage, they reviewd the staff wages and increases were adjusted accordingly.

The Liquor Store Committee meeting minutes were then presented to the council for reviewal.

The council then reviewed the June liquor store income statement. A short discussion was held regarding events that took place in June, revenue versus expenditures. It was the conclusion of the council to scale back or discontinue Summer Hummer for next year.

Mayor Latterell and the Thurlow, updated the council regarding the meeting with the City Engineer Brian Grund, regarding the lift station/sanitary control structure between the ponds.

Freeburg and Grund completed the surveying for the new location of the main lift station and the sanitary control structure between the ponds last week. They will be completing a bid proposal sometime this week and will be attending the Aug. 17 council meeting.

Discussion was held regarding contacting Kelliher's Legislators to meet with them regarding funding needs and struggles for infrastructure, housing, and community development of small communities such as Kelliher. The council will compile their discussion items at the next council meeting.

Diane Mostad submitted a building permit application for the council to review and approve. The council reviewed the application and a short discussion was held prior to approving the permit.

The clerk updated the council on the county recorder's requirements for putting a stipulation on city lots that the city deems unbuildable. It would require a covenant to be attached to the parcel number and recorded at the Beltrami County Recorder's office.

The council then approved the new Liquor License Ordinance.

The council reviewed the correspondence from the city's attorney, Carl Drahos.