HomeMy WebLinkAboutStaff Report 217-06CMR:217:06 Page 1 of 2
TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: MAY 9, 2006 CMR: 217:06
SUBJECT: UTILITIES ADVISORY COMMISSION RECOMMENDATION TO
APPROVE A RESOLUTION ADOPTING A WASTEWATER
RATE INCREASE
RECOMMENDATION
Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt the
attached resolution to increase wastewater revenue by approximately $650,000 or 5%, to be
effective July 1, 2006.
DISCUSSION
In the FY 2005-06 budget process, staff originally proposed a 17% wastewater collection rate
increase. This increase was necessary because of rising treatment costs, increased CIP
expenditures, and reduced revenue due to declining water consumption (upon which wastewater
collection rates are based). The Utilities Advisory Commission (UAC), in dissent, recommended
a 12% rate increase for FY 2005-06 and a 5% for FY 2006-07.
For FY 2005-06, the City Council approved a 12% Wastewater Collection rate increase, with an
adopted-in-concept additional 5% increase to follow in FY 2006-07. Similar financial and
environmental conditions have continued through FY 2005-06. Evaluation of the Wastewater
Utility’s financial condition indicates that the additional 5% rate increase is still necessary to
increase the Rate Stabilization Reserve (RSR) balance to an adequate level.
BOARD/COMMISSION REVIEW AND RECOMMENDATIONS
The UAC reviewed this recommendation and approved it unanimously at the May 3, 2006
meeting.
RESOURCE IMPACT
Approval of this proposed rate increase will increase the Wastewater Fund revenues by
approximately $650,000 for FY 2006-07. This 5% revenue increase will result in a projected
end-of-year balance for FY 2006-07 of $5.0 million in the Wastewater Rate Stabilization
Reserve (above the minimum guideline level of $4.4 million).
CMR:217:06 Page 2 of 2
PREPARED BY: Lucie Hirmina, Utilities, Rates Manager
Tom Auzenne, Assistant Director, Customer Support Services
DEPARTMENT HEAD:
CARL YEATS
Director of Administrative Services
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager
ATTACHMENTS
A: Resolution
B. Wastewater Rate Schedules S-1, and S-2
C: Minutes of the UAC meeting of May 3, 2006