CCP 10-25-2004 - Laserfiche WebLink

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. . . Memo Utility Rate Study 2 Overall, if the City accepts the consultant's recommendation, an average resident that uses 15,000 gallons of water per quarter in winter will see an increase of about $18 on their quarterly bill. A commercial account with an average usage of 120,000 gallons of water per month will notice a rate increase of about $146 per month. The rate change is to be implemented the first quarter of 2005. The proposed rate structure recommends an increase ofthis magnitude in the first year, however, in subsequent years, the increases are significantly lower. The study details the rate structure. The Utility Rate Study is a "cash flow" model. Anticipated revenues and expenditures have a direct impact on the fund balance or cash on hand at a given point in time. There is a direct correlation between revenues and expenditures. For example, if expenditures are adjusted while not adjusting the revenue side will result in an increase or decrease in fund balance. Similarly, adjusting the revenue side and not adjusting the expenditure side will also have an impact on the fund balance. The Council may want to consider establishing a target cash balance amount in the utility funds. (Please refer to thc attached Utility Rate Study). It should be noted that the proposed rates by the consultant can be modified if the City decides to modify the list of future CIPIPMP projects by either adding to or deleting from the list of proposed projects. The results of the study and the determination ofthe rate structure are based on a list of anticipated CIPIPMP projects. Staff has summarized the changes to the utility rates that are proposed in this document as a cover sheet to the Utility Rate Study document. The consultant's report/study is very comprehensive and is attached with this memorandum. The consultant will provide the "cash flow" model - spreadsheet based, to the City for its records. Moving forward, the City staff should be able to maintain it, and if necessary, modify it. RECOMMENDED ACTION: Staff recommends that the Council accept the Utility Rate Study and direct staff to implement the new rate structure effective the first complete billing cycle of 2005.