To: David Corliss, ACM, Administrative Services
From: Michael Tubbs, Management Analyst
Re: Agenda Item
Date: August 5, 2004
Please include the following item on the City Commission agenda for consideration at their August 10, 2004 meeting:
Master plans for the water and wastewater systems were completed in 2003 and included capital improvement plans (CIPs) for both systems. Subsequent to the completion of the master plans, the City contracted with Black & Veatch to complete a rate study that would explore the revenue requirements that would be necessary to fund the various projects identified in the aforementioned CIPs. The recently completed 2004 Black & Veatch Report on Revenue Requirements, Costs of Service, and Rates for Water and Wastewater Service provides “a financing plan which will provide sufficient revenues to meet annual revenue requirements for the five year study period of 2005 through 2009”.
Summary of Significant Issues:
As noted in the Executive Summary of the Report, and following previous direction from the city Commission, adjustments have been made to the rate structures for both water and wastewater. A significant change involves the elimination of a minimum charge (the charge for 2,000 gallons of water/wastewater) to be replaced by service charges, which will recover the costs of meter reading, billing, collection and other customer related costs but do not include any costs related to a minimum usage requirement. Further, the residential volume charge will become an inverted two-step block beginning in 2007 in an effort to encourage conservation of the water resource. The Report includes information (Table D) showing typical bills for water and wastewater service under rates recommended to become effective January 1, 2005. For the year 2005, a 9% increase in revenue requirements for wastewater and a 4% increase in revenue requirements for water are recommended in the Report. Additionally, the Report recommends $2.25 per 1,000 gallons for rural water districts and wholesale customers in 2005.
For the year 2005, the septic tank discharge fees are proposed to increase per the Report from the current charge of $137.41 to $183.20 per 1,000 gallons. The chemical waste discharge fees are proposed to increase from the current charge of $119.51 to $171.71 per 1,000 gallons.
For the year 2005, the Report recommends an increase in system development charges for water (from $420 to $1,250 for a typical residential service) and wastewater (from $550 to $770 for the same type of residential service).
Action Request.
We request that the City Commission increase water and wastewater rates for 2005 per the recommendations presented in the 2004 Black & Veatch Report on Revenue Requirements, Costs of Service, and Rates for Water and Wastewater Service.
Thank you for your assistance. Please advise if you have any questions.
C: Roger Coffey
Mike Wildgen