2025.03.03 CC Packet - Laserfiche WebLink

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2025 Water and Sewer Rates Memo Page 2 of 4 WATER RATES AVERAGE QUARTERLY USAGE LEVELS AND PRICE POINTS Water rates have been crafted around the quarterly residential usage levels from 2022 and 2023. The proposed usage levels and usage rates are as follows: Average Winter Usage: 11,871 gallons First 11,000 gallons billed at $1.15 per thousand gallons Average Spring Usage: 20,994 gallons Next 9,000 gallons billed at $2.30 per thousand gallons Average Summer Usage: 28,638 gallons Next 9,000 gallons billed at $3.45 per thousand gallons Average Fall Usage: 12,730 gallons Over 29,000 gallons billed at $6.45 per thousand gallons Water pumped in 2024 decreased compared to 2023 and 2022, highlighting the need for an effective rate schedule that produces a stable revenue stream. To meet our water budget needs, staff is recommending a 15% increase to both the water base charge and volume rate usage fees for all customers. This revenue will offset annual depreciation and a portion of operating expenses. TRUE CONSERVATION RATES Water service rates are established using a conservation rate schedule, which seeks to reward low‐end users with the lowest rate while encouraging everyone to use water efficiently. All separately metered irrigation will be charged $8.40 per thousand gallons, up from $6.45 per thousand gallons. This revenue will offset a portion of operating expenses to help allow us to keep lower usage rates for low‐end water users. With the recommended rate schedule, all 4,000 residential accounts will experience an annual increase of $22.00 in their water bills due to the increase in the quarterly base charge. Of course, their quarterly bills will fluctuate based on water usage. For an average single‐family residential water user that means the proposed water rates would result in a yearly water bill of $297.00, versus $258.00 at the previous rates. MULTI‐FAMILY RESIDENTIAL RATES The city has 195 multi‐family accounts that contain 1,433 dwelling units. Prior to 2018 these accounts were billed the same as single‐family residential accounts. Analysis showed that these accounts used 45% less water since their irrigation is metered separately (and billed at the highest rate). Staff is recommending retaining just one rate level ‐ $2.30 per thousand gallons, which would be the volume rate usage tier for average residential water usage. Billing in this manner also ensures the city complies with State Statute 103G.291, Subdivision 4, which mandates that if a conservation rate is applied to multi‐family dwellings, the rate structure must consider each residential unit as an individual user. With the recommended rate schedule, multi‐family accounts will see an annual increase of $22.00 in their water bills due to the increase in the quarterly base charge. Of course, their quarterly bills will fluctuate based on water usage.