HomeMy WebLinkAboutA001 - Council Action Form dated April 26, 2022 G
5 � ITEM # 42
DATE 04-26-22
COUNCIL ACTION FORM
SUBJECT: SANITARY SEWER RATE ADJUSTMENT
BACKGROUND:
Chapter 28, Division III of the Ames Municipal Code contains the following passages
related to sewer rates.
Sec. 28.301. SEWER RATE POLICY.
It is determined and declared to be necessary and conducive to the protection of the public
health, safety, welfare, and convenience of the City of Ames to collect charges from all
users who contribute wastewater to the City's treatment works. The proceeds of such
charges so derived will be used for the purpose of operating, maintaining, and retiring the
debt for such public wastewater treatment works.
Sec. 28.303. USE OF RATE REVENUE.
The user charge system shall generate adequate annual revenues to pay costs of annual
operation and maintenance, including replacement, and costs associated with debt
retirement of bonded capital associated with financing the treatment works which the City
may by ordinance designate to be paid by the user charge system.
Sec. 28.304. SEWER RATES ESTABLISHED
(7) The City will review the user charge system at least every three years and revise user
charge rates as necessary to ensure that the system generates adequate revenues to
pay the costs of operation and maintenance including replacement and that the system
continues to provide for the proportional distribution of operation and maintenance
including replacement costs among users.
Each year as a part of the annual budget process, staff updates a spreadsheet model
for the Water and Sewer Funds that reflects current and projected operating and capital
expenses for the utilities over the next ten years, and the resulting annual ending fund
balance in each of the funds. This model is used to establish a long-range pattern of
rate increases that will fully finance these self-funded enterprise utilities, including a
25% operating reserve.
During the development of the FY 2022/23 budget, staff determined that a five percent
(5%) increase to sewer rates would be needed, effective July 1, 2022.
1
ALTERNATIVES:
1 . Approve on first reading an ordinance that increases sanitary sewer rates by five
percent (5%) effective for bills mailed on or after July 1, 2022.
2. Direct staff to modify the rate ordinance to enact some alternate rate adjustment.
3. Do not take any action to adjust sewer rates and give staff direction on
expenditure reductions in order to maintain a positive Sewer Fund balance.
CITY MANAGER'S RECOMMENDED ACTION:
The proposed rate increases are necessary to fund the on-going operations and
maintenance budget plus the anticipated capital improvements projects. The
recommendation is part of a consistent, predictable pattern of rate increases projected
over the next ten years.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1, as described above.
2
ORDINANCE NO.
AN ORDINANCE TO AMEND THE MUNICIPAL CODE OF
THE CITY OF AMES, IOWA, BY AMENDING SECTION
28.304(3)THEREOF, FOR THE PURPOSE OF ESTABLISHING
SEWER RATES REPEALING ANY AND ALL ORDINANCES
OR PARTS OF ORDINANCES IN CONFLICT TO THE
EXTENT OF SUCH CONFLICT; AND ESTABLISHING AN
EFFECTIVE DATE.
BE IT ENACTED,by the City Council for the City of Ames,Iowa,that:
Section One. The Municipal Code of the City of Ames, Iowa shall be and the same is hereby
amended by amending Section 28.304(3)as follows:
"Sec.28.304.SEWER RATES ESTABLISHED.
(3) For each monthly billing on or after July 1, 2022, each customer shall be charged a
minimum monthly charge.The minimum charge for each location shall be twelve dollars and sixteen cents
($12.16). The minimum monthly charge may be prorated, based on a 30-day billing period, for the
customer's initial and/or final bills, provided that in no case shall the prorated minimum monthly charge be
less than four dollars and sixty-seven cents ($4.67). In addition, for all water metered beginning with the
first cubic foot each month,each user shall pay three dollars and eleven cents($3.11)per 100 cubic feet.
(Ord.No. 3168,Sec. 1,4-28-92;Ord.No.3326,Sec.2, 5-9-95;Ord.No. 3834,5-24-05;Ord.No.3956,
06-10-08; Ord. No. 4037, 5-11-10; Ord.No. 4144, 5-14-13; Ord.No. 4814, 5-27-14; Ord. No. 4215, 5-12-
15;Ord.No. 4351,5-8-18;Ord.4408,4-14-2020)."
Section Two. All ordinances, or parts of ordinances,in conflict herewith are hereby repealed to
the extent of such conflict,if any.
Section Three. This ordinance shall be in full force and effect from and after its passage and
publication as required by law.
Passed this day of
Diane R.Voss,City Clerk John A.Haila,Mayor