HomeMy WebLinkAboutStaff Report 251-05CMR:251:05 Page 1 of 2
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
ATTENTION: FINANCE COMMITTEE
DATE: MAY 19, 2005 CMR: 251:05
SUBJECT: UTILITIES ADVISORY COMMISSION RECOMMENDATION TO
APPROVE A RESOLUTION ADOPTING A WASTEWATER
RATE INCREASE
RECOMMENDATION
The Utilities Advisory Commission (UAC) and staff recommend that the City Council adopt the
attached resolution to increase the wastewater base revenue of FY 05-06 by approximately $1.47
million or 12 percent, to be effective July 1, 2005.
DISCUSSION
For both FY 03-04 and 04-05, the Wastewater Rate Stabilization Reserve (WWRSR) has ended
the fiscal year below the minimum reserve guideline approved by the Council. The budget and
rates for FY 05-07 includes increased treatment costs, needed capital improvement projects , and
a projected flat revenue stream. Continuing to fund expenses from the WWRSR will continue to
erode its balance.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
The UAC reviewed the staff recommendation of a 17 percent increase at its May 4, 2005
meeting. Due to the uncertainty of financial risk facing the wastewater collection system, the
UAC felt that the Reserve level balance was sufficient to provide adequate cash flow in the event
of an emergency facing the system. The UAC recommended a 12 percent average system rate
increase for FY 05-06, and a 5 percent increase in FY 06-07 (4-0, Dahlen absent). Staff supports
this revised recommendation, and will draft new risk management and reserve guidelines for the
distribution systems for all commodities.
RESOURCE IMPACT
Approval of this proposed rate increase will rai se the Water Fund sales revenues by
approximately $1.47 million for FY 05-06.
ATTACHMENTS
A: Resolution
BUDGET
‘05 –
CMR:251:05 Page 2 of 2
B. Wastewater Rate Schedules S-1, and S-2
C: Minutes of the UAC meeting of May 4, 2005
PREPARED BY: Lucie Hirmina _____
Utilities Rates Manager
Tom Auzenne _____
Asst. Director, Utilities Administrative Services
DEPARTMENT HEAD: _________________________________
JOHN ULRICH
Director of Utilities
CITY MANAGER APPROVAL: _________________________________
EMILY HARRISON
Assistant City Manager