By Patrick Tepoorten

In the long run, the Rush City Council expects it to save taxpayers "millions," but in the short term, water and sewer rate hikes, coupled with an Inflow and Infiltration (I and I) surcharge, will mean increases of $8 a month for the average homeowner.

At the Dec. 10 City Council meeting, on a night when Mayor Jim Ertz lamented Governor Tim Pawlenty's "no new tax pledge" and the council lightheartedly mocked the practice of increasing fees to keep taxes down, Rush City kept its taxes down, but increased its fees. Long billed as a way to avoid the proposed 50 percent increase to the 2008 levy, needed to produce funds necessary to make an annual public facilities authority (PFA) payment of $400,000, the city did just that.

The 2008 tax levy represents only a 30 percent increase which, coupled with an increased tax base due to retired Tax Increment Finance (TIF) districts, will mean minimal increases to this year's property tax bills.

Instead, the city will generate the necessary funds through 25 and 20 percent increases to water and sewer bills, respectively, phased in over two years. Starting with January 2008 usage, water rates will be increased 15 percent, and sewer 10 percent, with 10 percent increases to each to follow in 2009.

In real dollars, the average single family residential property, with an average bill of around $31, will see just shy of a $4 increase monthly in 2008. In 2009, that same bill will increase by roughly another $4.

The average property uses between four and five units of water and sewer a month (one unit equals 1,000 gallons). For properties that use more, the increases will be more. For instance, for a property that uses eight units of each, the monthly increase will be over $6 in 2008, with another $6 added in 2009.

The council was quick to point out that the increases are the first in almost a decade. "For not having increases in seven, eight years, this is like nothing," said Mayor Ertz. Councilor Mick Louzek stated that the increase for the average household bill will amount to roughly 13 cents a day in 2008. "It's not a significant amount," he added.

But increases to water and sewer rates have been characterized as merely getting the city "caught up," and are not designed to produce funds for future projects. One such major project the city wants to undertake is getting "clean" water out of the sewer system.

According to the council, there is enough clean water, generated through leaks in the sewer line and sump pumps and roof drains hooked into the sewer system, that were it removed it could potentially increase the life span of the sewer treatment facility by 40 to 50 years. Not having to build a new facility, and reduced wear and tear on current equipment could save taxpayers "millions of dollars," said Louzek.

Fixing leaks, and getting homeowners to participate in inspections designed to remove that clean water though, costs money. To generate those funds, the council also approved an I and I surcharge, which will also take effect with 2008 usage.

Single family residential property will be charged $4 monthly, .13 percent of the average bill. All other types of properties, with the exception of mobile homes, which will also be charged $4, will be charged .06 percent of the average monthly bill. Unlike water and sewer rate hikes though, which will increase with usage, I and I surcharges are fixed.

Multi-family residential properties will pay $5.04 a month, "institutions" such as schools, clinics, nursing homes, etc. will pay $5.43 a month, commercial properties will pay $4.01 a month, and industrial properties will pay $13.07 a month.

The surcharge is expected to generate approximately $64,000 in 2008, funds the city will use to purchase equipment and create incentives for properties to take part in voluntary I and I inspections. The council also talked about the possibility of offering grants or low interest loans to properties that are in need of repairs, but no programs are set in stone at this time. A committee comprised of Councilor Jamie Amundson and Ertz is expected to analyze and create a program starting in January.

Between rate hikes and surcharges, Ertz expressed concern about the Minnesota correctional facility in Rush City, which will see monthly increases in the neighborhood of $7,000. "I'm not sure how they are going to react," he said, but added that the state has more money than the city.

In other city news:

• Upon request by Chisago County HRA-EDA Director Chris Eng, the city forgave a $300,000 loan for construction of infrastructure at Southfield Estates. In return, the HRA-EDA does not expect to collect a $300,000 contribution from the city, approved in 2005, as part of a Small Cities Development Program with the HRA-EDA.
"It doesn't make any sense for you to pay us back $300,000, and we turn around and give you back $300,000," said Louzek.

• A preliminary plat for Brookside Estates was denied, due to the developer's failure to address planning commission concerns in a timely manner. Preliminary plats are automatically approved after 120 days, a deadline that was approaching.

• It was decided that city offices will be closed all day both Christmas and New Year's Eve.

• With improvements to land on Field Ave. for purposes of flooding an ice rink not having been completed before frost, approval was given to plow and flood an area at the north end of the city park along Dana Ave.

• The city approved a second request in as many meetings for a township resident to hook up to the city sewer system. It is expected the city will be increasing fees for township residents on the system.

• Due to the holiday, the next regular meeting of the city council will be Thurs., Dec. 20, at 6:30 p.m.