|
CITY COMMISSION AGENDA ITEM |
|
|
Department: |
Utilities |
Commission Meeting Date: Nov. 8, 2016 |
||
|
Staff Contact: |
Dave Wagner/Mike Lawless/Bryan Kidney |
|||
|
Recommendations/Options/Action Requested: |
|
|||
|
Discuss and provide direction to staff on options for water and wastewater rate structure for 2018 and beyond. Receive and discuss a preview of the 2018 to 2022 Utilities Capital Improvement Program (CIP). |
|
|||
|
Executive Summary: |
Previously the Commission asked staff to explore alternatives to the current rate structure that uses uniform rates for various customer classes. These alternatives include a structure that could encourage conservation and possibly provide additional reduced rates for low income/elderly customers.
The Lawrence Finance and Utilities Departments have been working for the last 18 months to develop a new water and wastewater rate model with Raftelis Financial Consultants. The new rate model provides the ability to look at three different rate structures; one is the current uniform rate by customer class and two are variations of rates intended to promote conservation and/or reallocate costs of high demands to those who peak the system. The model also has the capability to have a separate water rate for irrigation meters.
Staff is seeking direction on changes to the rate structure, if any, that the Commission would like to consider further. Those options would be developed and finalized as part of the Commission's future 2018 budget considerations and that will include adoption of future rates for 2018 and the Utilities CIP plan.
The model provides a dashboard of key parameters and forecasts the revenue requirements and the resulting rates for the next 10 years. Actual rates needed will vary dependent upon decisions related to the adopted scope of the capital plan, regulatory drivers, operational costs, and financial considerations.
One of the key inputs to the model is financing of capital projects. In preparing the CIP, the Utilities Department looks at a 15-year planning horizon that is divided into three (3) 5-year periods. The CIP is developed to address deferred maintenance, rehabilitation, and replacement of department infrastructure, regulatory requirements, and community growth.
The regulatory requirements consist of the implementation of nutrient removal at the Kansas River WWTP, inflow and infiltration control, water quality considerations for lead, algal toxins, and unregulated contaminants, and complying with our integrated plan with Kansas Department of Health & Environment.
The recommended 2018 to 2022 CIP is currently projected to cost $130 million. It continues current programs that address aging infrastructure and prior deferred maintenance of water distribution, sewer collection, and treatment systems. It includes projects such as Advanced Metering Infrastructure, the design of the Kansas River WWTP for nutrient removal, a field operations building, and Bowersock Dam repairs.
The water and sewer rates are preliminary as a preferred rate structure has yet to be determined. Once a preferred rate structure is selected, final water and sewer rates will be presented with the preparation of the 2018 budget.
|
|||
|
Strategic Goal Area: |
Infrastructure |
|||
|
Fiscal Impact (Amount/Source): |
Water and sewer rates going forward from 2018 |
|||
|
Attachments: |
||||