10/01/2007 Council Packet - Laserfiche WebLink

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WS — Item 2 WORK SESSION STAFF REPORT Work Session Item 2 DATE: October 1, 2007 TO: City Council FROM: Al Rolek RE: Update on Utility Rate Study — Review of Draft Study Background In June, 2007 the City Council authorized Springsted, Inc. to perform a utility rate study for the City. Springsted has coordinated their efforts on this project with other projects that have an impact on the study, including the Water Management and Conservation Plan and the Water Treatment Plant Feasibility Study. Patty Kettles and Nick Dragasich will be present at the work session with a Power Point presentation summarizing the findings presented in the draft study. Pages 1 through 3 are comprised of an Executive Summary that provides an overview of the methodologies used in doing the study, considers historical data and projected future growth of the utility systems, considers initiatives such as conservation of water resources and potential water treatment facilities, and, finally, makes recommendations for adjustments of the city's water and sewer rates and water and sewer availability charges (WAC and SAC) over the next 5 -10 years bases upon the results of their analysis. Additional detail and supporting data is available throughout the remainder of the document that support the conclusions presented by the report. The Study recommends a 5 -tier water rate structure that encourages conservation of water as recommended in the Water Management and Conservation Plan, with the first two tiers beginning at a lower rate than our present structure. Those residents who are in low use households and those employing conservation measures and staying within these first tiers will potentially have lower water bills than they do currently. High end users will pay for consumption at the higher tiered rates, again encouraging conservation. Sewer rates are recommended to remain flat through the next five years, with modest increases of 2.75% each year thereafter. A small increase in the WAC charge is recommended, and no increase in the city's SAC charge is needed at this time.