03-01-2021 Council Work Session Packet

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WS – Item 7 WORK SESSION STAFF REPORT Work Session Item No. 7 Date: March 1, 2021 To: City Council From: Hannah Lynch, Finance Director Re: Utility Rate Overview Background On February 22, 2021, the City Council approved Baker Tilly to complete a Utility Rate Study. Many policies, procedures, statutes, and history are involved in utility rates and utility billing. This staff report is intended to give an overview for informational purposes throughout the Utility Rate Study process. Utility Billing Residential and commercial customers receive quarterly utility bills. The City is split into three cycles. Each month one cycle’s meter reads are obtained and bills are generated. With 5,175 current accounts, roughly 1,500 to 2,000 accounts are included in each cycle. Meter reads are obtained by a utility employee driving by and electronically obtaining the reads from the smart meters. In order to read more frequently, the City would need to invest in another employee to get the drive-by reads, or infrastructure that could sit on top of a water tower and electronically obtain the reads from the properties in its radius. Customers can elect e-statements by accessing their account online and selecting that option. If an e-statement has not been elected, bills are printed and mailed by the Utility Billing Clerk. Current Utility Fees and Charges Attached are the current utility rates and fees. Ordinance No. 11-13 shows the City’s current rates and rate structure. Connection fees are outlined in the City’s Fee Schedule. The rates and fees are deposited into the following funds:  Water Fund (#601) accounts for the operations of supplying municipal water and for the ongoing maintenance and replacement of existing infrastructure. o Funding is provided by water usage rates