The cost of work on water and wastewater services are on the rise.
The city of Hutchinson has for several years had in place a policy to address water service repairs between the main and curb stop, with a maximum coverage of $4,000, balanced against a charge of 50 cents per month. That monthly fee could be on the rise to $2, but with a much higher return, and include wastewater as well.
"In the past, it was common for us to more than cover the cost of a repair at that $4,000, including restoration of pavements," said Public Works Manager John Olson told the City Council. "In recent years, however, it’s no longer unusual for those repairs to exceed $4,000.”
Earlier this year, after the city heard from residents concerned about the issue, staff reviewed several options.
One route would be to make property owners entirety responsible for both water and sewer service repair costs. Another would be to leave the program as it is. The city could also keep the same program but increase the amount of coverage. Also considered was private insurance — the city could encourage property owners to gain insurance, or partner with a company. The city could even self-insure a program. Olson said it was highly likely the city could offer coverage at a lower cost than private insurance.
Or the city could expand the program to include both water and sewer service, and increase coverage to cover within a reasonable distance from the building with an agreement.
“One city in southern Minnesota recently implemented this type of coverage and the cost to property owners was $5.50 a month," Olson said. "That would cover a maximum of $8,500 per either the water service or the sewer service … per event.”
The same fee would generate $336,000 a year in Hutchinson, which would cover 39 repair events at a cost at that $8,500 point.
"As public works staff, we believe we can offer the same level of coverage at $2 a month, and that would be more in line with the amount of service repairs that we typically encounter," Olson said. “So, if we do a $2 premium, that would generate $122,00, about 42 repairs, more in-line with what we typically experience.”
Olson said if a property owner tried to tackle similar projects privately, they could expect to spend $3000-$9,000, or more depending on conditions.
"In my opinion, when I look at this, $2 a month is a good value for what could happen," said Council Member Mary Christensen. "A lot of homes in Hutchinson, they're older."
The issue was reviewed for decision at the Dec. 28 City Council meeting, after deadline.
