Title
AN ORDINANCE AMENDING SECTION 48-28 AND ADDING NEW SECTION 48-28.1 TO THE DULUTH CITY CODE [REPLACEMENT].
Body
CITY PROPOSAL:
That the City does ordain
Section 1. That Chapter 48, Article I, Section 28 of the Duluth City Code is hereby amended as follows:
Sec. 48-28. Disposition of money collected under chapter.
(a) Except as provided for in subsections (b), and (c)-(e) below, all money collected or recovered under the provisions of this Chapter shall be paid into the water and gas fund for the benefit and use of the department or by resolution of the city council for the benefit and use of the city;
(b) For the purposes of this Section, the following terms shall have the meanings hereinafter ascribed to them:
(1) PILOT shall mean those funds authorized to be transferred out of the gas division account in any year pursuant to the authority of Laws, 1951, Chapter 507, Section 1, as amended by Laws 1993, Chapter 148, Section 1;
(2) Base PILOT shall mean $3,600,000 beginning in 2014 and increased annually thereafter by the preceding year change in consumer price index for all consumers (CPI-U), for U.S. city average issued by the bureau of labor statistics of the U.S. department of labor or its successor index;
(3) Current PILOT shall mean the PILOT for the year then current; and
(4) Incremental PILOT shall mean the difference between the base PILOT and the current PILOT in any year.
(c) The base PILOT shall be deposited in the general fund;
(d) The incremental PILOT shall be deposited in the street system utility fund; and
(e) The water infrastructure surcharge shall be deposited in the water infrastructure fund.
Section 2. That Chapter 48, Article I, Section 28 of the Duluth City Code is hereby amended by adding a new section 48-28.1 as follows:
Sec. 48-28.1. Water Infrastructure Surcharge.
(a) In order to continue to provide safe, potable water, the city, under order from the United States Environmental Protection Agency must make improvements to its water treatment, storage, and distribution system. Therefore, upon the effective date of this ordinance, the Duluth public utilities commission shall be authorized to create a water infrastructure surcharge upon each water service customer. There is also created in the city accounting system a fund known as the water infrastructure fund. Into the fund shall be deposited the following amounts:
(1) The amounts collected as the water infrastructure surcharge under this section;
(2) Any amount allocated to it by action of the city council or city administration; and
(3) Any loans, loan payments or grants received by the city for the purposes set out in paragraph (b), below.
(b) The money in the water infrastructure fund shall be spent only for the purpose of designing, constructing, repairing, maintaining, or replacing structures, equipment or facilities, used for water treatment, storage, and water distribution; for repayment of loans for the purpose of attaining compliance with any enforcement actions relating to the city’s water treatment, storage, and distribution system that are binding on the city; and for any other purpose necessary to maintain the city’s water treatment, storage, and distribution system. The requirements of this Chapter shall continue in force after the termination of the water infrastructure surcharge;
(c) On an annual basis, the Commission must calculate and update the surcharge required to cover expenses and payments for the activities described in paragraph (b), above. Surcharges assessed to other municipalities and political subdivisions outside the corporate limits of the city of Duluth supplied under contract with the department must be proportionate to the municipality’s or political subdivision’s share of water usage from the city’s overall water supply; and
(d) The surcharge arising under this section shall be considered part of the water service rate established under Section 2-186 of this Code and payable in the same manner and time as normal charges for consumption of water on the served property.
(e) Effective January 1, 2025, through December 31, 2025, the amount of $3,000,000 is hereby appropriated to the Water Infrastructure Fund. Future appropriations to the Fund will be determined and set forth in the annual budget appropriations ordinance.
Section 3. That this ordinance shall take effect and be in force 30 days from and after its passage and publication.
Statement of Purpose
STATEMENT OF PURPOSE: This ordinance amends Chapter 48, Article I, section 28 of the Duluth City Code and adding Chapter 48, Article I, Section 28.1 to the Duluth City Code creating a Water Infrastructure Surcharge. The Duluth Public Utilities Commission will impose a Water Infrastructure Surcharge to finance the maintenance of the city’s water treatment, storage, and distribution system. The goal of this Water Infrastructure Surcharge is to ensure that the city continue to provide safe, potable water under order of the United States Environmental Protection Agency.