HomeMy WebLinkAboutA001 - Council Action Form dated April 13, 2010 ITEM # 38
DATE: 04-13-10
COUNCIL ACTION FORM
SUBJECT: WATER AND SEWER RATE ADJUSTMENTS
BACKGROUND:
On March 23, staff presented Council with an overview of the water and sewer funds.
At the end of the presentation, Council directed staff to prepare a rate increase
ordinance that would increase water rates by ten percent and sewer rates by nine
percent. Both rate increases were directed to be "across-the-board" increases and
were to be effective for utility bills mailed on and after July 1 , 2010. The attached
ordinance accomplishes the Council's direction and is ready for Council approval.
Staff is proposing an additional modification to the water rate ordinance at this time.
The existing water rate structure includes a customer classification that allows for a
"non-peaking industrial rate." This classification is for large non-residential customers
whose winter usage is greater than 100,000 cubic feet per month and who have a
summer vs. winter peaking ratio of 120 percent or less. Customers meeting these
criteria are exempt from the commercial summer rate and are charged the winter rate
year-round.
The current language requires a customer to re-apply annually for this non-peaking
industrial rate. Staff is proposing to eliminate the need for the customer to apply for the
rate structure. The proposal would shift the responsibility for verifying eligibility to Utility
Customer Service Division staff, who will automatically enroll eligible customers into the
rate class. This improvement eliminates the need for a customer to re-apply for this rate
every year and is in keeping with the Council's goal to streamline government
processes. This modification is included in the attached draft rate ordinance.
ALTERNATIVES:
1 . Approve the attached rate ordinance on first reading, thereby increasing water rates
by ten percent and sewer rates by nine percent effective July 1 , 2010 and
eliminating the need for customers to apply for the "non-peaking industrial rate."
2. Direct staff to make modifications to the rate ordinance.
3. Do not take any action to adjust water and sewer rates at this time.
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MANAGER'S RECOMMENDED ACTION:
The proposed rate increases are necessary to fund the on-going operations and
maintenance budget plus the scheduled capital improvement projects. While Council is
taking no action at this time on future year rate increases, it is important to note that
additional increases in future years will also be necessary to fully fund the Capital
Improvement Plan for these two utilities.
The modification to the non-peaking industrial rate simplifies the process for eligible
customers by eliminating the need for them to apply for the rate. Eligible customers will
be automatically enrolled in the rate without the need to take any action. This is in
accordance with the City Council goal to revisit policies and procedures to streamline
processes.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1, thereby approving the attached rate ordinance, increasing water rates
by ten percent and sewer rates by nine percent effective July 1 , 2010, and modifying the
non-peaking industrial rate to eliminate the need for a customer to apply annually for the
rate.
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