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<br />. <br /> <br />. <br /> <br />. <br /> <br />~ <br />/]'\~ILLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />Agenda Item 2.A <br /> <br />September l5, 2004 <br /> <br />TO: Honorable Mayor and City Council <br /> <br />FROM: Murtuza Siddiqui, Finance Director/Treasurer ""'-' <br /> <br />SUBJECT: Utility Rate Study <br /> <br />BACKGROUND: <br />In July 2004, the COlillcil approved hiring Abdo, Eick, and Meyers (consultant) to perform a <br />Utility Rate Study. The City had not reviewed or adjustcd its water rates since 1999, and sewer <br />and storm water rates since 2001. Currently, the enterprise funds are breaking even from a <br />routine operational perspective. This does not take into account major maintcnance projects. The <br />existing ratc structure does not appear to be adequate and is not able to accommodate <br />maintenance of the sewer, storm water, and water infrastructure in the long-term. <br /> <br />DISCUSSION: <br />The consultant has completed the Utility Rates Study. The study not only reviewcd thc City's <br />rates and analyzed the cash flow requirements, but it has also compared rates with eleven other <br />cities from the surrounding communities. The attached report is very comprehensive with <br />summary recommendations on page nine. It should be noted that this study does not assume <br />debt issuance and has used the most recent 5 year CIP data. <br /> <br />Overall, if the City accepts the consultant's recommendation, an average resident that uses <br />15,000 gallons of water per quarter will see an increase of $22.74 on their quarterly bill. A <br />commercial account with an average usage of l20,000 gallons of water pcr month will noticc a <br />rate increase of $182.20 per month. <br /> <br />Please note that thc proposed rates by the consultant can bc modified if the City dccidcs to <br />modify the list of future CIP/PMP projects by either adding to or deleting from the list of <br />proposed projects. A list of anticipated CIP/PMP projccts was given to the consultants in early <br />August to compile the data and perform an analysis. This is not a list that has been formally <br />approved by the Council. Once tile Council formalizes the CIP/PMP projects, the consultant's <br />spreadsheet model can be adjusted accordingly. <br /> <br />The consultant's report is very comprehensive and is attached for your review. Steve McDonald <br />(consultant) will be presenting the report at the mccting. <br />