1B - 2008 Utility Rate Study - Laserfiche WebLink

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The proposed rate for Option I is shown in greater detail on Appendix F. Residelltial Rate Option II As with Option II for Water, the sewer charges would be based on water usage and the first 10,000 gallons would be included in a proposed meter charge of $70.50 for residential and senior residential users. Usage over 10,000 gallons would be charged at $3.75 per thousand gallons. Commercial user would be charged $3 per thousand gallons. Given our concerns regarding the existing and future cash balances of this fund, rate increases were intentionally shifted from water to sewer charges by offsetting the faster pace of sewer charge increases for the average residential user and the senior user with a slower water charge increase. The utility user views their water and sewer bill in total and we attempted to control the overall increase in the combined bill by shifting the majority of the increases to the Sewer Fund. Option II provides $1,453,900 in total revenues. In some cases, a user would see a decrease in the water portion of their bill, but an increase in the sewer portion of the bill. The proposed rate for Option II is shown in greater detail on Appendix F. Residential Rate Optioll III Rate tier option 1II would impose a charge for all usage. The base charge would then be decreased from the current base charge of $67.83 for residential and $45.20 for seniors to $50 for residential and $25 for seniors. All usage would be charged at $3.50 per thousand gallons. Commercial users would be charged $3.50 per gallon. Option 1II provides $1,432,300 in total revenues. The proposed rate for Option 1II is shown in greater detail on Appendix F. Sanitary Sewer City Connection Fees The City currently has not instituted a SAC fee. We would recommend that the City study and determine the costs associated with the TCAAP area and adopt applicable rates. As with WAC fees, some cities have chosen to make it a policy decision to recover a targeted percentage of construction costs through SAC fees, which may be paid at the time the permit is pulled or the plat approved. There are differing levels of risk regarding the timing. Collecting WAC and SAC fees when the plat is approved insulates the City against market downturns and places the carrying costs on the developer. We are also recommending that the City adopt a SAC fee to future in-fill development and business expansion. Cash Balances Operating Reserve We recommend the sewer fund carry a minimum cash balance for operations of aJ) amount equal to 50% of operating expenses, excluding depreciation, plus annual debl 12