HomeMy WebLinkAbout#26 Water rates
MAYOR & COUNCIL COMMUNICATION
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DATE: December 20, 2016
REGULAR
ITEM #26
MOTION
AGENDA ITEM: Water Rates
SUBMITTED BY: Cathy Bendel, Finance Director
THROUGH: Cathy Bendel, Finance Director
REVIEWED BY: Kristina Handt, City Administrator
SUGGESTED ORDER OF BUSINESS:
- Introduction of Item .............................................................. City Administrator
- Report/Presentation…………………………………………City Administrator
- Questions from Council to Staff ............................................. Mayor Facilitates
- Call for Motion ............................................................... Mayor & City Council
- Discussion ....................................................................... Mayor & City Council
- Action on Motion .................................................................... Mayor Facilitates
FISCAL IMPACT: Estimated impact to the Water fund of $25,000 - $75,000 per year;
impacted by new connections and water usage
BACKGROUND INFORMATION: At the December 13, 2016 Finance Committee meeting a
recommendation was brought forward to further reduce the water rate tiers. At the December 15,
2015 CC meeting a water rate reduction was passed to decrease each tier increment from 33% to
30%. It is now being recommended to reduce this increment to 20%.
STAFF REPORT:
After review of the current position of the existing water fund balance and future funding
requirements of the fund, a further water rate reduction for the residential water rates was
reviewed by the Finance Committee. There was not agreement on the proposed changes and as a
result this is not a recommendation from the Finance Committee. One member was absent, one
member wanted to reduce the rates and one member did not.
City Council Meeting [Consent Agenda Item #26]
December 20, 2016
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The specific modifications to the tiered rates that were proposed and reviewed by the Finance
Committee for residential water rates are listed below:
Previous Current % Proposed % Cumulative
2010-2015 2016 Chg 2017 Chg Chg
Base fee $25.00 $20.00 $20.00
0 – 15,000 gallons $2.14 per 1,000 $2.00 per 1,000 -6.5 $2.00 per 1,000 0.0 -6.5
15,001-30,000 gallons $2.86 per 1,000 $2.60 per 1,000 -9.1 $2.40 per 1,000 -7.7 -16.1
30,001-50,000 gallons $3.77 per 1,000 $3.38 per 1,000 -10.3 $2.88 per 1,000 -14.7 -23.6
50,001-80,000 gallons $5.00 per 1,000 $4.39 per 1,000 -12.2 $3.46 per 1,000 -21.1 -30.8
80,001 + $6.63 per 1,000 $5.71 per 1,000 -13.9 $4.15 per 1,000 -27.3 -37.4
RECOMMENDATION: It has been proposed by the Finance Committee Chair to reduce the
water rates effective 1/1/2017. Staff does not support this recommendation as they do not
believe this represents a fair and equitable reduction and does not support the water conservation
initiatives the tiered structure was set up to encourage.
Should the City Council decide to approve the proposed rate reduction the following motion
should be made:
“Move to approve the reduction of the tiered water rates effective 1/1/2017 as proposed”
ATTACHMENTS:
1. Rate comparison worksheet
2. Northland water fund cash balance comparison
3. Sample water bills in each tier and impact
4. Email and attachment from Finance Committee Member Terry Forrest