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<br />TO: MAYOR AND COUNCIL MEMBERS <br />FROM: SHELLY RUECKERT, FINANCE DIRECTOR <br />SUBJECT: 2023 UTILITY RATES <br />DATE: OCTOBER 25, 2022 <br /> <br /> <br /> <br />The utility rates recommended herein for 2023 builds on the multi-year approach <br />towards rate adjustments that began in 2012. The parameters used for adjusting rates <br />are as follows: <br /> <br /> Align revenue sources with corresponding costs <br /> Provide transparency as to the basis of rates and rate adjustments <br /> Maintain a structural balanced operation <br /> Ensure that rates appropriately support the ability to: <br />o Provide safe drinking water <br />o Properly discharge sanitary sewer flows <br />o Appropriately control and treat stormwater runoff <br /> <br /> <br />Water Rates: <br /> <br />As part of the annual rate adjustment process the water production and distribution <br />costs are categorized as fixed in nature or usage driven. The 2023 budgeted water costs <br />are comprised of $753,974 in fixed costs and $917,483 in usage driven costs, as shown on <br />Exhibit A and as summarized here: <br /> <br /> OPERATING DEPRECIATION OVERALL <br />FIXED 520,167 44% 233,808 49% 753,975 45% <br />USAGE 671,756 56% 245,727 51% 917,483 55% <br /> 1,191,923 100% 479,535 100% 1,671,458 100% <br /> <br /> <br />The Multiyear approach to water rates includes the phase in of the flat fee which began <br />in 2016. The transition process expected the usage rate growth to decelerate as flat fee <br />was phased-in. Based on estimated actual results for 2022 and on 2023 budgeted costs, <br />the proposed rates for 2023 are reflected below. <br />