BEMIDJI -- The Bemidji City Council accepted a financial study on water utilities Monday, including some rate increases for residents and businesses.
The study was compiled by the firm PFM Financial Advisors of Des Moines, Iowa. During the Nov. 30 work session, PFM Senior Managing Consultant Matthew Stoffel gave a presentation on the study, which included proposed rate changes.
According to the study, the following would be changes when it comes to water rates:
- For a residential water user, the average monthly rate is expected to remain at $30.
- Commercial users are expected to have an estimated $4 increase, from $85 to an $89 monthly average amount.
- The largest water users are expected to have an estimated 4.9% change, from $6,081 to $6,380.
For sewer service customers, the proposed changes are:
- An average increase of $55 to $57 for residential users.
- For commercial customers, an increase of $145 to a monthly average of $155.
- For large sewer customers, a 10.4% increase is anticipated, for an increase from $7,386 to an average of $8,155.
Data compiled for the study showed the top five largest water users in the city for 2019 were BSU, Sanford Medical Center, the city's Wastewater Treatment Plant, the Neilson Place nursing home and the Hillcrest Manor mobile home park.
In the presentation, Stoffel said the changes are to ensure the city meets revenue requirements for operations. The increases will allow the city to meet a required revenue amount of $2.15 million for water utilities and $3.45 million for sewer services.
According to Stoffel, the city's rates benefitted from $10 million in bonding money from the state for a plant to treat chemicals in water wells near the Bemidji Regional Airport.
"The state's bonding money really changed things," Stoffel told the council. "If you wouldn't have had that $10 million from the state, we'd probably be looking at double digit rate increases to meet those costs."
"We're in quite good shape," Bemidji Mayor Rita Albrecht said. "Nobody wants to have a rate increase, but public utilities cost money and we're in a better position than we might have expected given that we have to put in a new water plant."
The council approved the study unanimously. However, another decision made Monday came in a 5-1 vote. The other action was to create an ordinance that prohibits, in the future, any drilling of wells for irrigation.
Voting in favor were Albrecht and council members Nancy Erickson, Ron Johnson, Michael Meehlhause and Emelie Rivera. Voting against the measure was Josh Peterson.
During the meeting, reasons for the ordinance included revenue for the city and environment preservation. According to city staff, existing, private irrigation wells will be allowed to continue operating.
City ordinances require three readings, with the second reading needing a public hearing and council vote set for the third reading.