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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Finance Director
Chris Kukulski, City Manager
SUBJECT: Resolution No. 3929 – Water Rates
MEETING DATE: July 17, 2006
BACKGROUND: Facility Plans: The City Commission was recently presented with the
results of the Water Facility Plan, conducted by Allied Engineering and Robert Peccia &
Associates. Although the plan is not expected to be adopted until August, the consultants have
strongly advised as our top priority the planning, design, and construction of a new Water
Treatment Plant, estimated $25.4M (today’s dollars). Such plant would need to be online in 5-8
years. They have also outlined an additional water storage, supply, and distribution projects that
should be undertaken over the next 20 years.
Rate Study: The City is currently under contract for a Water Rate and Impact Fee Study with
HDR Engineering, Inc. HDR will be analyzing the revenue requirements, costs of service, and
rate design for implementation of financing of the proposed Facility Plan improvements,
including determining what portions would likely be funded with impact fees.
Written Notice Charge: We are proposing a new billing procedure that charges a $25.00 fee on
all accounts that must be hand delivered a written shut-off notice for non-payment of
water/sewer bills. This procedure is an incredibly time-intensive process, requiring an estimated
40 hours of employee time per month to prepare, deliver and answer questions from these
delinquent customers. We have found that nearly 85% of the customers on the monthly shut-off
lists are “repeat offenders”. We believe that charging a fee at this point in the delinquent account
collection will provide a disincentive for repeat delinquencies, where none exists today. It will
also more accurately charge these customers for the employee time and resources they consume.
RECOMMENDATION: Adopt Resolution No. 3929 which includes a 10% increase in
water rates for all users, to be reserved for capital improvements related to the facility plan
recommendations. We also recommend implementation of the written notice shut-off charge.
FISCAL EFFECTS: This increase is estimated to generate approximately $420,000 in
FY2007 for the water fund. For the average residential customer, monthly bills will increase by
$2.94, to a monthly total of $32.34.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
_________________________________ ____________________________
Anna Rosenberry, Finance Director Chris A. Kukulski, City Manager
Report compiled on July 12, 2006
Attachments: none
NOTICE
HEARING ON THE ADOPTION OF COMMISSION RESOLUTION NO. 3929
ESTABLISHING RATES FOR WATER CHARGES FOR THE CITY OF BOZEMAN.
NOTICE IS HEREBY GIVEN, That said Commission Resolution No. 3929 is now on
file in the office of the Clerk of the Commission of the City of Bozeman, subject to
inspection of all persons interested, for a period of six (6) days from the date of first
publication; that Monday, July 17, 2006, at 6:00 p.m. at a regular session of the
Commission of the City of Bozeman, in the Community Room, County Courthouse, 311
W Main Street, Bozeman, has been designated as the time and place when and where the
Commission will hear and pass upon any and all objections that may be made to the final
passage and adoption of Commission Resolution No. 3929; and that said Resolution will
be finally passed and adopted at said regular session of said Commission, subject to such
corrections and amendments that may be made upon objections made and filed with the
City Clerk as provided by law.
Under Commission Resolution No. 3929, a 10% increase in water rates is proposed. For
an average residential customer, water service will increase from $29.40 per month to
$32.34 per month. Dated this 26th day of June, 2006.
___________________________
Brit Fontenot
City Clerk
Legal Ad
Publish: Sunday, July 2, 2006
Sunday, July 9, 2006
COMMISSION RESOLUTION NO. 3929
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, ESTABLISHING RATES FOR WATER 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 Water 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 2006 as follows, to wit:
Section 1 – Metered Water Rates
Effective on the September 2006 billing
Customer Class/Service Rate
A. Monthly Billing and
Customer Charges.
For all metered customers
based on meter size.
Meter Size: ¾ Inch $12.60
1 Inch $16.07
1 ¼ Inch $20.00
1 ½ Inch $24.00
2 Inch $34.04
3 Inch $57.42
4 Inch $90.95
6 Inch $165.45
8 Inch $260.45
B. Water Included in the
Minimum Charge (up to
200 cubic feet)
Residential, Single family* $4.52
Residential, Multi-family $3.15
Commercial $2.56
Government $2.68
MSU $3.55
C. Commodity Charge
per HCF of Water
Consumed beyond the
Minimum.
Residential, Single family* $2.27
Residential, Multi-family $1.57
Commercial $1.29
Government $1.34
MSU $1.78
* Metered Single-Family only
Explanatory note: Each customer shall pay a minimum monthly bill which includes
applicable amount according to meter size (A) plus the minimum water charge (B). For
water consumed in excess of 200 cubic feet, a customer shall pay the additional
commodity charge (C).
Section 2 – Flat Rate Customers
Effective on the September 2006 billing
Customer Class Amount Application
Single Family, Unmetered $ 55.05 Per month
City Park Irrigation $ 1,444.25 Per Acre Per Year
Fire Protection $ 123,745.98 Annual Hydrant Charge
Bulk, non-potable for construction use $ 2.86 Per 1,000 gallons;
Available at City Shop
Complex only.
Section 3 – Low Income Rate Assistance
Effective on the September 2006 billing
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 water service charge of $12.60.
Section 4 – Billing Procedures
Charges for water 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 5 – ACH Incentive
For those customers who choose the automatic clearing house (ACH) payment option, a
one dollar ($1.00) discount will be taken from the total utility bill (total of water, sewer,
garbage). Bills will be mailed by the first working day of the month; with the automatic
payment being deducted on the 15th of the following month.
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 water service charges under this schedule are claimed to be unfair,
unreasonable, or not in proportion to charges made to other water 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 water charges as is deemed necessary,
fair and equitable.
PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana,
at a regular session thereof held on the 17th day of July, 2006; and effective beginning
with that billing period which will first appear on the September 2006 water billing.
________________________________________
Jeffrey K. Krauss, Mayor
ATTEST:
____________________________________
Brit Fontenot, City Clerk
APPROVED AS TO FORM:
____________________________________
Paul J. Luwe, City Attorney