At this Work Session, Stantec will present three options for updating water rates and the water rate structure. The current proposal for reclaimed water is to maintain the current percentage of the potable rate in all options. The following options will be presented:

1. Option 1 Revenue Recovery through Base Charge: Reducing the monthly base charge to 25% and charging a volumetric rate to the current set of customer classes with a cost-of-service adjustment
2. Option 2 Option 1 + Change in Residential Tier Rates: Same as option 1 with an adjustment to the single-family residential tier rates to recover peak demand costs and signal outdoor water conservation in tiers 3 & 4.  
3. Option 3 Option 2 + Class Combination: Same as option 2 with a consolidation of the commercial and institutional customer classes’ costs of service and charging an average volumetric rate per 1,000 gallons for the commercial/schools combined class

Stantec will also review the three options for updating wastewater rates and the wastewater rate structure presented to City Council and the Water Commission on March 4th. Those options were:

1. Option 1 Cost of Service (COS) Results: Adjusting the current rate structure such that each of the customer class of revenues targets the cost of service
2. Option 2 Fixed + Individualized: Establishing a monthly base charge for wastewater and charging a volumetric rate to the current set of customer classes
3. Option 3 Fixed + Consolidated: Establishing a monthly base charge for wastewater and charging a volumetric rate to a condensed set of customer classes

Direction from this Work Session will be presented as a final set of changes to rates and rate structures to City Council on April 16, 2024. The user fee portion that addresses the cost-of-service to complete miscellaneous services is currently being worked on and those results will be presented at the same meeting.

See attached PowerPoint for information.