HomeMy WebLinkAbout2851 Amending Water Service and Sewer Service Rates
ORDINANCE NO. 2851
AN ORDINANCE AMENDING RATES FOR WATER SERVICE AND SEWER
SERVICE SET FORTH IN TITLE 13. SECTIONS 13.05.030 AND 13.05.040
OF THE PORT TOWNSEND MUNICIPAL CODE, AND ESTABLISHING
AN EFFECTIVE DATE
FINDINGS AND RECITALS
1. The City has made periodic water and sewer rate adjustments in recent years
relying on internally generated estimates of annual budget requirements to be collected from
service rates. The City of Port Townsend last revised water and sewer rates in 1997 (Ordinance
2579). In 2003, the City Council eliminated a planned rate decrease of2% of 2004.
2. In 2003, the City determined that it would be appropriate and prudent to retain a
qualified independent economic financial consulting firm that specializes in water and sewer rate
studies to study the City's revenue needs for the years 2004 through 2009 in some detail. The
time for an independent study seemed appropriate because the City is facing the need to finance
significant utility capital improvements over the next six years, and it now has a smaller
customer base to recover all operating and capital costs from given the sale of the outside service
area referred to as the Tri Area to the Jefferson County PUD #1.
3. In August, 2003, the City after a competitive consultant selection process retained
Financial Consulting Solutions Group, Inc ("FCSG"), Redmond, W A to perform a water and
sewer rate study. FSCG produced a report entitled "City of Port Townsend Water and Sewer
Rate Study - Revenue Requirements Report (December 2003)" ("FCSG Revenue Report").
4. Among other factors, FSCG reviewed cost drivers from capital projects that were
not anticipated when the current utility rates were set:
. Morgan Hill Pump Station: $1,220,000 (water)
. Jacob Miller road Water Improvements: $396,000 (water)
. F Street Reconstruction: $580,000 ($500,000 water $80,000 sewer)
. San Juan Avenue Rehabilitation: $135,000 ($95,000 water $40,000 sewer)
Total: $2,331,000
FCSG also reviewed that current rates assumed projected interest earnings of 5%. The actual
average earnings yields are listed below. City staff estimated the lost interest revenue impact at
more than $400,000.
. 2000:
. 2001:
. 2002:
. 2003:
6.18%
4.19%
1.79%
1.18%
5. The FCSG Revenue Report documents rate revenue requirements needed for the
study period for capital financing, debt financing and cash funding, and makes certain
recommendations:
Ordinance 2851
6.
7.
.
Given the anticipated shortfalls in both utilities, do not implement the planned
rate reduction of 2 percent in 2004.
Implement the proposed fiscal policies presented in the Study and implement a
schedule of rates sufficient to recover the indicated 10 percent water and 3 percent
sewer rate revenue shortfalls beginning in 2004.
Update the System Development Charge calculation to include a future facilities
cost component and consider implementation of the updated water and sewer
SDC's at that time.
Complete cost-of-service analysis and cost-of-service based rate design in 2004
for implementation before fiscal year-end 2004 to determine ifthere is a
justifiable shift of cost recovery between one or more classes of customers.
Update the model analyses on a regular basis (annual or biennial), to ensure that
the most recent financial, operational, and customer data is used. In time, City
staff should be able to do the revenue requirement update, perhaps with some
guidance from FCS Group.
That the City initiate funding of depreciation for the eventual repair and
replacement of the existing water and sewer infrastructure. While there are
advantages to fully funding depreciation, FCSG proposes starting funding at 10%.
.
.
.
.
.
FCSG recommended two alternative schedules of rates:
a. Incremental rate increases over six years.
2004 2005 2006 2007
Water: 9.9% 2.32% 1.93% 12.93%
Sewer: 2.53% 13.92% 5.93% 0%
2008 2009
8.12% 3.12%
0.45% 2.10%
b. Normalized rate increases over six years.
2004 2005 2006 2007
Water: 10% 10% 5% 5%
Sewer: 10% 6% 3% 2.5%
2008
5%
2.5%
2009
3.07%
0.58%
The City Manager, and Finance Director, recommend:
a. Adopt the recommendations of FCSG partially for two years:
. Water rate increases for 2004 amounting to 10%, and 2005 amounting to
10%
. Sewer rate increases for 2004 amounting to 10%, and 2005 amounting to
6%
. Adopt a prospective rate increase, not retroactive to the first of the year
. Complete the cost of service analysis (COSA) portion of the utility rate
study for further recommendations to the city council for implementing in
the third year (2006)
. Consider implementing a wholesale water rate
. Seek grants-in-aid to reduce the debt burden of the utilities
This appears to be the most practical and sound business case option.
Doing nothing will jeopardize the solvency of the utilities.
b.
c.
2
Ordinance 2851
d.
The FCSG recommendation for rate increases over 6 years should not be
implemented until the COSA portion of the rate study is completed. The
COSA work will determine the fairness issues related to all utility
ratepayer classes, which could then be recommended to the city council
for implementing in 2006.
8. Based on the FCSG recommendation, and the recommendation of the City
Manager and Finance Director, the City Council determines to implement water rate increases
for 2004 (effective on the adoption of this ordinance) amounting to 10%, and 2005 amounting to
10%, and sewer rate increases for 2004 (effective on the adoption of this ordinance) amounting
to 10%, and 2005, amounting to 6%, as set forth in this ordinance.
NOW THEREFORE, the City Council of the City of Port Townsend ordains as follows:
Section 1. Revision to Rates. To implement the following revisions to rates:
.
Water rates, both base meter, and volume, for all customer bases, are
increased for 2004 (commencing on March 1,2004) by 10%; commencing
January 1,2005, and effective thereafter, rates are increased by 10%,
Sewer rates, both base meter, and volume, for all customer bases, are
increased for 2004 (commencing on March 1, 2004) by 1 0%; commencing
January 1,2005, and effective thereafter, rates are increased by 6%,
.
Title 13, Water and Sewers, Sections 13.05.030 and 13.05.040 are hereby amended as shown in
attached as Exhibit A (underline is added, strike is deleted). Revised rates shall be rounded
downward to the nearest $0.01.
Section 2. Severability. If any provision of this ordinance or its application to any person or
circumstance is held invalid, the remainder of the ordinance, or the application of the provision
to other persons or circumstances is not affected.
Section 3. Effective Date. This ordinance shall take effect upon its passage, approval and
publication in the form and manner provided by law.
Adopted by the City Council of the City of Port Townsend, Washington, at a regular
meeting thereof, held this seventeenth day of February, 2004.
/1 ~. '..~j'
, ",' r.
L [6. " , ~-,-' '" "- 4-...._--
Catharine Robinson, Mayor
Attest:
e~,~
Approved as to Form:
~D
John P. Watts, City Attorney
3
Ordinance 2851
EXHIBIT A TO ORDINANCE 2851
13.05.030 Monthly water rates.
The following monthly rates shall be charged by the city and collected by the finance director for
the use and furnishing of water service, all such rates and charges to be made and paid on a
monthly basis. These rates will be for water usage starting on March 1, 2004, and billed in
subsequent months:
A. Meter Charge. All water used, except for closed connection for fire protection, shall be
metered. Monthly service charges and standby fees shall be based on meter size and the quantity
of water provided to the customer and shall be paid regardless of whether the service is on or off.
The meter charge shall be based on the following schedule:
Meter Size Inside City
(Per Month) 2003* 2004**
5/8 - 3/4" meter $13.92 $15.31
1" meter 32.21 35.43
1-1/4" meter 48.32 53.15
1-1/2" meter 64.42 70.86
1-3/4" meter 83.72 92.09
2" meter 103.07 113.37
3" meter 194.34 213.77
4" meter 323.19 355.50
6" meter 647.45 712.19
8" meter 1,035.08 1,138.58
* Current rates effective January 1,2003
** Effective March 1,2004
*** Effective January 1,2005, and continuing thereafter.
Meter Size
(Per Month)
Outside City
2003* 2004**
2005***
$16.84
38.97
58.46
77.94
101.29
124.70
235.14
391.05
783.40
1,252.43
2005***
5/8 - 3/4" meter $15.29 $16.81
1" meter 35.40 38.94
1-1/4" meter 53.13 58.44
1-1/2" meter 70.85 77.93
1-3/4" meter 92.08 101.28
2" meter 113.35 124.68
3" meter 213.79 235.16
4" meter 355.51 391.06
6" meter 712.18 783.39
8" meter 1,138.61 1,252.47
* Current rates effective January 1,2003
** Effective March 1, 2004
*** Effective January 1,2005, and continuing thereafter.
$18.49
42.83
64.28
85.72
111.40
137.14
258.67
430.16
861.72
1,377.71
Exhibit A to
Ordinance 2851
A manifold meter installed for irrigation purposes only shall not be subject to a meter charge in
addition to the charge for the main service meter.
B. Where meters for residential customers larger than five-eighths inch by three-quarter inch
have been installed for the convenience ofthe city, the customer shall be assessed a meter charge
only for the three-quarter inch rate.
C. Volume Charges. All water use for customers within the city shall be charged a volume rate
of $2.06 per 1,000 gallons or portions thereof; effective January 1, 2005, the volume rate is
$2.26; customers outside the city corporate limits will be charged a volume rate of $2.22 per
1,000 gallons or portions thereof; effective January 1,2005, the volume rate is $2.44.
1. For irrigation meters inside the city, the meter charge shall be based on meter size with a
volume charge of$2.06 per 1,000 gallons or portions thereof; effective January 1,2005, the
volume rate is $2.26. For irrigation meters outside the city, the meter charge shall be based on
meter size with a volume charge of $2.22 per 1,000 gallons or portions thereof; effective January
1,2005, the volume rate is $2.44.
2. Should there be a period during which meter readings cannot be obtained under a normal
reading schedule, the volume charge shall be calculated by averaging the prior consumption for
the two months immediately preceding the period for which a meter reading cannot be obtained.
Charges for the next month during which actual meter readings are taken shall be adjusted for the
difference between the average and the actual metered volume for the two-month period
involved together with the appropriate meter rate. Where there is a circumstance which, in the
reasonable judgment of the finance director, would make the volume charge calculation
erroneous, the volume charge shall be established under such other method as the finance
director deems reasonable and fair.
D. Water Charge Method. Meter reading shall be done on a monthly basis.
E. Private Fire Protection. Monthly service charges for private fire protection systems shall be as
follows:
Inside City
2003 2004 2005
2" $10.50 $11.55 $12.70
4" 18.00 19.80 21.78
6" 36.00 39.60 43.56
Rates for customers outside the city corporate limits shall be the same as inside city (per month)
rate.
F. Commercial and Contract Customers. The monthly meter charges for commercial and contract
customers inside the city shall be the same as provided in subsection A ofthis section with an
additional volume charge of $2.06 per 1,000 gallons or portions thereof; effective January 1,
2005, the volume rate is $2.26; unless a current contract specifically provides for an alternative
rate schedule. Commercial and contract customers located outside the city corporate limits will
be charged a volume rate of $2.22 per 1,000 gallons or portions thereof; effective January 1,
2005, the volume rate is $2.44, unless a current contract specifically provides for an alternative
rate schedule.
2
Exhibit A to
Ordinance 2851
13.05.040 Monthly sewer rates.
The following monthly rates shall be charged by the city and collected by the finance director for
the use and furnishing of sewerage service, all such rates and charges to be made and paid on a
monthly basis:
A. Single-Unit Residential and Duplex Customers. The monthly rate for each single-unit
residence or duplex sha1l be $45.46 per 1,000 gallons or portions thereof; effective January 1,
2005, the volume rate is $48.19 per month if monthly water consumption exceeds 3,000 gallons.
The monthly rate for each single-unit residence or duplex whose monthly water consumption is
3,000 gallons or less shall be $40.72 per 1,000 gallons or portions thereof; effective January 1,
2005, the volume rate is $43.17 per month.
B. Multifamily Customers.
I. Base Charges. For multifamily residences with three or more units, the base monthly charge
shall be based on the water meter size. The base charge shall be:
W astewater ~ Wastewater - In City Only
In City Only 2003* 2004** 2005***
5/8 - 3/4" meter $27.90 $30.69 $32.53
1" meter 38.64 42.50 45.05
1-1/4" meter 45.07 49.58 52.55
1-1/2" meter 50.44 55.48 58.81
1-3/4" meter 65.19 71.71 76.01
2" meter 80.53 88.58 93.90
3" meter 307.09 337.80 358.07
4" meter 390.81 429.89 455.68
6" meter 586.27 644.90 683.59
8" meter 809.58 890.54 943.97
* Current rates effective January 1,2003
** Effective March 1, 2004
*** Effective January 1, 2005, and continuing thereafter.
2. Total Charges. The total monthly multifamily charges shall be the base charge plus a charge of
$3.17 per 1,000 gallons or portions thereof; effective January 1,2005, the volume rate is $3.36
per 1,000 gallons of water actually used, rounded to the nearest hundred gallon amount, with the
maximum per gallon charge capped at 4,000 gallons per unit.
C. Commercial Customers. Commercial accounts shall be charged the same base rate, based
upon meter size, as multifamily customers. However, commercial customers shall be charged an
additional amount of $3.17 per 1,000 gallons or portions thereof; effective January 1, 2005, the
volume rate is $3.36 per 1,000 gallons of water used, rounded to the nearest hundred gallons,
with no maximum cap on additional charges, or if a commercial customer generates high-
strength waste or waste with high variability in loadings, charges shall be on a commodity basis
and provided in Chapter 13.24 PTMC.
D. Industrial and Contract Customers. The city may establish rates and charges for industrial and
large user customers that have unique or special use characteristics. The rates and charges shall
be based on existing contract conditions, costs of service, including waste volume and strength,
and such other factors deemed relevant in establishing reasonable rates and services in the
judgment of the director of public works.
3
Exhibit A to
Ordinance 2851
E. For all classes of users subject to metered rates, should there be a period during which meter
readings cannot be obtained under a normal reading schedule, the volume charge shall be
calculated by averaging the prior consumption for the two months immediately preceding the
period for which a meter reading cannot be obtained. Charges for the next month during which
the actual meter reading is taken shall be adjusted for the difference between the average and the
actual metered volume for the two-month period involved together with the appropriate meter
rate. Where there is a circumstance which, in the reasonable judgment ofthe finance director,
would make the volume charge calculation erroneous, the volume charge shall be established
under such other method as the finance director deems reasonable and fair.
4
Exhibit A to
Ordinance 2851