East Grand Forks' Water and Light Department has several big-ticket items planned for 2010; some are routine maintenance and replacement work and others larger upgrades to the system.
Dan Boyce, department general manager, discussed next year's budget with City Council members Wednesday as part of the city's special budget meetings. He said the major planned project is relocating the sludge lagoon, which will cost $1.5 million or more.
The project could be paid entirely with the department's reserve fund if that's the best option, he said.
Some ongoing maintenance work also is planned:
- $800,000 for electric system rebuild, which is part of the department's overhead to underground power line conversion that happens every year.
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- $260,000 to replace water mains. Boyce said that amount is usually enough to cover about two or three blocks each year.
New items include:
- $100,000, split evenly between the electric and water funds, to replace a backhoe.
- $100,000 for streetlights. The majority of this money will be used at 23rd Street Northwest, Boyce said.
- In February, the department will pay back an outstanding water revenue bond for more than $1.1 million. Doing so will save taxpayers about $337,000 in interest charges, officials said.
Rate increases
Council member Craig Buckalew pointed out the department's 2010 budget as presented calls for about $2.1 million in revenue, while it has budgeted expenses of $2.6 million -- putting it in the red by more than $489,000.
But one figure built into expenses is depreciation of equipment, and that is budgeted for more than $622,000, so that will be more than enough to cover the shortfall. One Water and Light commissioner pointed out the budgeted revenue is conservative, and usually they collect more than budgeted each year.
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Still, Buckalew said it's important to build up reserves so future generations don't have to pay everything for big projects.
That likely could require increasing the city's water rates, which haven't gone up since 2003, Boyce said. Increasing the rate by 10 cents per 1,000 gallons would cause the average residential customer to see a monthly increase from 45 cents to 50 cents he said.
Complicating that possible increase is a Minnesota law that will require cities to implement a conservation rate in January 2013 -- meaning the amount paid per gallon of water will depend on how much water is used by the customer.
Johnson covers East Grand Forks city government. Reach him at (701) 780-1105; (800) 477-6572, ext. 105; or send e-mail to rjohnson@gfherald.com .
