Title
Consider an ordinance amending the Code of Ordinances Chapter 30, Water, Sewers, and Sewage Disposal, to amend commercial water rates.
Summary
DATE: September 6, 2022
TO: Kent Cagle, City Manager
FROM: Jeffery Reynolds, Executive Director of Public Works
SUBJECT: Ordinance amending commercial water rates
BACKGROUND AND FINDINGS:
On July 7, 2020, City Council received the results of the 2020 Water and Sewer Rate Study. The study found that the City’s water revenues were insufficient to fully fund the projected expenses over the next five years. It also found that sewer revenues could sufficiently fund the projected five-year sewer expenses. City Council deferred a rate adjustment at the time due to the pandemic.
On September 14, 2021, Council approved a water rate increase which included adjusting the base meter charge and volumetric rate. These approved changes included a three-tier volumetric charge for residential customers to encourage water conservation, a 6.6% increase in water rates for residential and commercial customers, and an amendment for customers outside the city limits from 100% above inside city rates to 50% above inside city rates.
In the recent Water & Sewer five-year rate analysis it was also recommended to implement a phased approach to adjusting the base rate paid on different meter sizes by commercial customers to be in line with the American Water Works Association (AWWA) recommendation. The first phase of the adjustment is included in the proposed FY 2023 Budget which is estimated to generate an additional $158,000 in annual revenue.
THE ALTERNATIVES CONSIDERED:
(1) Do not amend water and sewer commercial rates and continue using current rates.
(2) Amend water rates for commercial customers.
Which alternative is recommended? Why?
Alternative two (2) is recommended as it provides the needed revenue to adequately maintain the water and sewer system and offset significant increases from WCID and operating costs.
CONFORMITY TO CITY POLICY:
The proposed ordinance conforms to applicable City policy.
FINANCIAL IMPACT:
What is the amount of the expenditure in the current fiscal year? For future years?
N/A
Is this a one-time or recurring expenditure?
N/A
Is this expenditure budgeted?
N/A
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this expenditure?
N/A
RECOMMENDATION:
City Council approve the ordinance amending Chapter 30, Water, Sewers, and Sewage Disposal, of the Code of Ordinances, to amend commercial water rates.
DEPARTMENTAL CLEARANCES:
Public Works
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Ordinance