City mulls utility rate increases

By Seth Schmidt

Increased sewer and water rates are likely on the horizon for Tracy utility customers.

Tracy City Council members agreed Monday night to have Administrator Kris Ambuehl present three options for increasing monthly utility rates at the council’s August 27 meeting.

City leaders feel that increased rates are needed to help pay for planned infrastructure improvements.

Councilman Tony Peterson said he’d like to have rates increased “gently.”

Unfortunately, he said, rate increases implemented in 2017 were the first in many years without increases, meaning the city will need to play “catch-up” in setting rates.

However, Peterson said he’s been encouraged that the city’s water and sewer rates would not become unmanageable, based on the projections recently presented by Rural Development.

“I’m not happy (about the increases). But it isn’t as horrible as I envisioned,” Peterson said.

The council discussed whether the planned rate changes should include “tiered” rates that charge more per  unit of water as usage increases.  The state is encouraging tiered rates as a way to encourage water conservation.

Ambuehl shared information about new software that he’d received from the Minnesota Rural Water Association, that can be used to calculate revenue and expense projections, and the impact of specific rate increases.