Regular 2.
Regular City Council Meeting
- Meeting Date:
- 10/25/2010
- TITLE
- Public Hearing and Resolution - Lockwood Sewer District Wastewater Rates
- PRESENTED BY:
- David Mumford
- Department:
- Public Works
Presentation:
PROBLEM/ISSUE STATEMENT
As required by the March 24, 2008, Wastewater Service Agreement (Agreement) between the City and the Lockwood Water and Sewer District (District), Red Oak Consulting conducted a rate study to establish user rates and system development fees for wastewater service to the District. The proposed user rates consist of a volume charge of $0.162 per Ccf (748 gallons) plus a fixed monthly charge of $18,506. The fixed monthly charge covers the District's portion of the fixed operation and maintenance costs, depreciation and 15% rate-of-return on rate base. District users will also be subject to payment of a system development fee based on the size of the water meter serving their property, which is the same basis used to determine system development fees for city customers. In addition to these rates, the District will be subject to the City's 4% franchise fee. The Agreement also specifies, in addition to the franchise fee, the assessment of a 6% surcharge fee that will go to the city General Fund.
City staff and the rate consultant met with the District staff to discuss questions and concerns of the study. The District expressed concern with the level of the charges, particularly the fixed monthly charge and system development fee. However, city staff and the consultant believe that the study was conducted in conformance with the provisions of the Agreement, which results in the recommended fees and rates.
Schedule IB included in the attached resolution does not apply to the District. This schedule is denoted as Schedule IA in the City's current rates and is being renumbered to accommodate the new District monthly charge schedule.
Staff has published and mailed all notices in conformance with applicable statutes and recommends that the Council conduct a public hearing and adopt the resolution.
City staff and the rate consultant met with the District staff to discuss questions and concerns of the study. The District expressed concern with the level of the charges, particularly the fixed monthly charge and system development fee. However, city staff and the consultant believe that the study was conducted in conformance with the provisions of the Agreement, which results in the recommended fees and rates.
Schedule IB included in the attached resolution does not apply to the District. This schedule is denoted as Schedule IA in the City's current rates and is being renumbered to accommodate the new District monthly charge schedule.
Staff has published and mailed all notices in conformance with applicable statutes and recommends that the Council conduct a public hearing and adopt the resolution.
ALTERNATIVES ANALYZED
The Council may:
- Adopt the resolution; or
- Not adopt the resolution.
FINANCIAL IMPACT
The study estimates user rate revenue from Lockwood to be approximately $233,000 per year, exclusive of the 4% franchise fee, 6% surcharge, and system development fees.
RECOMMENDATION
Staff recommends that Council conduct a public hearing and approve the resolution adopting the rates and fees for wastewater service to the Lockwood Water and Sewer District.