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Home My WebLink About09-10-18 City Commission Packet Materials - A4. Res. 4928, Establishing Rates for Wastewater Service Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Kristin Donald, Finance Director SUBJECT: Commission Resolution No. 4928 – Establishing rates for wastewater service for the City of Bozeman MEETING DATE: September 10, 2018 AGENDA ITEM: Action RECOMMENDATION: Approve Resolution No. 4928 – increasing Wastewater service charges by 3% and consumption charges by 4% by effective September 1, 2018. BACKGROUND: The City is currently in a rate study process. On August 20, 2018, the Consultant, AE2S, presented a recommendation for this year and discussion points for the future rate setting. The recommendation is for an inflationary rate increase with some elements and pricing for capital needs. We are proposing increasing Wastewater service charges by 3% and consumption charges by 4% for all users with the exception of industrial. Industrial customers we are proposing a service charge decrease of 23.3%, a consumption charge decrease of 29.9%, and a strength surcharge increase of 70% to charge according to their impact on the system. Rates can be found in section 1 and 2 of the attached resolution. The rate increases are needed to support the operating, capital, and debt service budgets for the Wastewater Fund, as well as provide adequate cash flow and reserves for our wastewater utility. ALTERNATIVES: As suggested by the Commission 261 FISCAL EFFECTS: All of the Wastewater services charges would be increased by 3% and consumption charges by 5%, effective on the September 1, 2017 bills. The Industrial changes will be neutral and be more reflective of their impact on the system. The average customer will see $1.48 increase in their monthly bill, to summarize the rate change effect on Average Residential Customers see below (Created by AE2S, rate study consultants): Attachment: Resolution No. 4928 Report compiled on August 26, 2018 3.3% 3.5%3.6% 3.7% 3.0% 3.2% 3.4% 3.6% 3.8% 3 CCF 6 CCF 8 CCF 15 CCF Residential Monthly Bill % Increase Based on Annual Average 3.2% 3.6%3.7%3.9% 2.5% 3.0% 3.5% 4.0% 2 CCF (50th Percentile) 11 CCF (75th Percentile) 18 CCF (80th Percentile) 52 CCF (90th Percentile) Commercial Monthly Bill % Increase Based on Annual Average 262 Page 1 of 5 COMMISSION RESOLUTION NO. 4928 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, ESTABLISHING RATES FOR WASTEWATER SERVICE FOR THE CITY OF BOZEMAN. WHEREAS, the City Commission of the City of Bozeman, following notice and public hearing established a new Rate Schedule for the City of Bozeman’s Wastewater Fund. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that the new rates for water services, based on a 30-day month, shall become effective beginning with the bills due in September 2018 as follows, to wit: Section 1 – Metered Customers Service Charge Current Rate Effective 9/1/18 Residential $19.01 $19.58 Multi-Family $19.49 $20.07 Commercial $19.49 $20.07 Government $19.49 $20.07 MSU $19.49 $20.07 Industrial $50.82 $38.98 Volume Charge Current Rate Effective 9/1/18 Residential $3.15 $3.28 Low-Income $3.15 $3.36 Multi-Family $3.23 $3.36 Commercial $3.23 $3.36 Government $3.23 $3.36 MSU $3.23 $3.36 Industrial $7.75 $5.50 263 Resolution 4928, Establishing Rates for Wastewater Service Page 2 of 5 * For service dates of May through November, based on average of December through April metered usage. Explanatory note: Each customer shall pay a minimum monthly bill, which includes the monthly charge (A) plus an additional charge (B). For extra strength waste, a customer shall additionally pay the extra strength charges (C). Section 2 – Unmetered Customers Effective on the September 2018 billing Section 3 – Special Charges In certain cases, subdivisions and/or annexations have been approved on the condition that the associated properties fund the operation of specific capital within the wastewater system, usually lift stations. These charges are made on an annual cost-recovery basis, and are charged in addition to all other account charges. Extra Strength Waste Current Rate Effective 9/1/18 Pounds of BOD up to 830 lbs p $0.31 $0.31 Pounds of BOD in excess of 830 $0.44 $0.45 Peak BOD Demand Charge for $0.39 $0.33 of 830 lbs per day, highest monthly peak day. Pounds of SS in excess of 350 m $0.30 $0.51 Pounds of Phosphorus in excess $5.05 $5.55 Pounds of Nitrogen in excess of $0.46 $0.46 Unmetered Customers Current Rate Effective 9/1/18 All unmetered customers $39.94 $41.14 264 Resolution 4928, Establishing Rates for Wastewater Service Page 3 of 5 Section 4 – Low Income Rate Assistance Customers who apply for and qualify under the State’s Low Income Property Tax Assistance Program, as set forth in Section 15-6-134 MCA, will receive a credit equal to their monthly wastewater service charge listed above. Lift Stations Current Rate Effective 9/1/18 Users of the Baxter Meadows Lift Station 5/8"$3.73 $3.84 1"$5.58 $5.75 1.5"$18.60 $19.16 2"$29.76 $30.65 3"$59.51 $61.30 Users of the Laurel Glen Lift Station 5/8"$0.89 $0.92 1"$1.33 $1.37 1.5"$4.42 $4.55 2"$7.07 $7.28 3"$14.14 $14.56 Users of Cattail Creek Lift Station 5/8"$1.11 $1.14 1"$1.67 $1.72 1.5"$5.53 $5.70 2"$8.85 $9.12 3"$17.68 $18.21 Lift Stations Current Rate Effective 9/1/18 Users of Loyal Gardens Lift Station 5/8"$1.57 $1.62 1"$2.37 $2.44 1.5"$7.88 $8.12 2"$12.61 $12.99 3"$25.21 $25.97 Users of Norton Ranch Lift Station 5/8"$1.04 $1.07 1"$1.56 $1.61 1.5"$5.21 $5.37 2"$8.33 $8.58 3"$16.66 $17.16 265 Resolution 4928, Establishing Rates for Wastewater Service Page 4 of 5 Section 5 – Billing Procedures Charges for wastewater services under this schedule shall be made a part of the current monthly water bill, to be shown by separate item on such bill. Separate payment of either the charge for the water or the charge for the wastewater will not be accepted with prior approval of the Director of Finance. Both charges must be paid at the same time; partial payments will be applied to the wastewater charge first, with any remainder being applied to the water charge. Charges for water used and wastewater service charges become due and payable upon receipt of the bill. If any bill is not paid on or before the fifteenth day of that month, it will then become delinquent; and if not paid in full by the fifteenth day of the following month, water service to the premises involved may be discontinued (shut-off), after a ten-day written notice. A charge of twenty five dollars ($25.00) shall be made for any account requiring written shut-off notice. An additional charge of twenty-five dollars ($25.00) during regular business hours or seventy-five dollars ($75.00) during non-business hours shall be made for reinstating a water service, which has been discontinued for non-payment of water and/or wastewater service charges. Section 6 – Late Fee For those accounts that become delinquent, a 1.5 percent (1.5%) late fee will be assessed on the next bill. The minimum late fee shall be $1.00. Section 7 – Protests In cases where wastewater service charges under this schedule are claimed to be unfair, unreasonable, or not in proportion to charges made to other wastewater customers, the person or persons against whom such charges are made may apply to the City Manager for an adjustment, stating the circumstances. The City Manager, or his designated representative, may make such adjustment of the wastewater charges as is deemed necessary, fair and equitable. 266 Resolution 4928, Establishing Rates for Wastewater Service Page 5 of 5 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 10th day of September 2018; and effective beginning with that billing period which will first appear on the September 2018 water billing. ___________________________________ CYNTHIA L. ANDRUS Mayor ATTEST: _____________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 267