03-06-2017 Council Packet - Laserfiche WebLink

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rates are still competitive. (Please note that we eliminated non-SPRWS cities from the survey because they do not provide as high a level of treatment (softening and granulated charcoal filtration). Therefore, there costs are usually quite a bit less. With the recommend rate increases, we project a loss of $16,655 in the Water Fund for 2017 meaning we have funded depreciation to the tune of about $233,000 or a reasonable margin of safety. Sewer: The 2016 Sewer Utility Fund had a budgeted loss of $3,850. The projected 2016 results yield a slightly larger loss of $7,345. The main factor is our projected revenues were down by about $29,000 from projected amounts. Staff is conducting further analysis into our estimating methodology to determine the reason for this variance. That reduced revenue amount was offset by $12,000 less expense costs and $13,600 of increased interest earnings. As you may recall, last year we reduced our sewer minimum charge for accounts billed for 8,000 gallons or less of sewage flow from $50 per quarter to $43.64. This was because staff believed our minimum sewer charge was too high for lower volume users. (Note: This followed our 2014 reduction from $55 per quarter to $50.) While we held our rate volume rate the same, people using between 8,000 and 15,000 were subjected to increases because the volume rate kicked in at early flow amounts. Without an increase in 2017, we would be projecting a loss of over $66,000. Similar to the Water Fund, we do not need to fully cover that amount given we provide for depreciation of $146,000. That being said, staff is recommending that we increase the consumption rate from 3.58/1000 gallons to 3.80/1000 gallons (6.15% increase). This effectively drops the minimum of $43.64 from 8,000 gallons of usage to 7,000. You will also note when reviewing the attached Sewer Rate Survey information, that our rates are very competitive compared to the other cities on this list. The end result is our projected loss will be $21,928. Summary - Based on the above Staff is recommending that the 2016 utility rates be modified as follows: 2016 2017 % Change Sewer Base Fee (included $15.00 $15.00 0.00 in Minimum for 2016) Sewer Minimum $43.64 $43.64 0.00 (Drops from 8,000 to 7,000) *Sewer Use Rate per 1,000 $3.58 $3.80 6.15 (Based upon water usage) Sewer Only (private wells) $50.00 $50.00 0.00 Sewer Only (on city system $55.00 $55.00 0.00 but no meter reading) Water Winter Rate per 1,000 $3.30 $3.40 3.03 Water Summer Rate per 1,000 $3.41 $3.51 2.93 Water Service Fee $12.60 $13.50 6.98 * Sewer usage for < 8 residential units will be based upon winter quarter water usage. Sewer usage for >8 residential units and all remaining accounts will be based upon each respective quarter’s water usage.