In this year's submission to council, the base fee identifier of "Compound" and "Turbine" was removed for the Water Base Fees and all of the "Compound" base rates were hidden.

This removal was done to clean up what the City currently offers in terms of meters. When we changed to the current meter types, there were no Compound and Turbine variants offered anymore. They were just 2" or 3" etc. However, those rates were left on the schedule.

What went to council, showed the higher Turbine rate which only 12 customers are assigned. This means if left uncorrected, we'd have to substantially raise all other commercial account fees to match the approved schedule. The reasoning behind removing the "Compound" meter rates and leaving the higher "Turbine" was that the new meters have a flow that is closer to the capacity of the Turbine, the higher rate, and then should be charged a higher rate. One option then, is to re-evaluate all but the 12 commercial accounts that were previously designated as Turbines and see if they could use a smaller meter and swap that out to better align their flow potential and fees to the approved schedule.

Our proposal is to lower the base fees down to the Compound rate for the 2, 3, and 4" meter sizes and do away with the higher Turbine rate. 9 customers are in this category that would see lower rates starting after the fee schedule change. It amounts to $9,600 loss in fees annually for the City but we believe will better serve the community this year.

At the 6, 8,10, and 12" rates, staff proposes to keep the fees the same. There are no "Compound" rates being charged to form an inequality between same size meter customers, the rates match what they are already paying, and the flow potential closely matches this meter type.

Going forward we can evaluate base fees in our next rate study and if a higher rate for that meter size is necessary we can slowly ease in to the higher rate for the majority of our commercial customers.

Summary of changes are outlined below:

Water Rates	FY 2023-24	FY 2024-25 Original	FY 2024-25 Proposed
Base Monthly Fee
2"	$210.75	$268.7	$214.97
3"	$421.49	$644.90	$429.92
4"	$658.59	$1,128.55	$671.76

 

To provide a clearer water base rate per meter size offering and promote equity between commercial clients in the same meter size class.

To promote equality between water customers.

Staff recommends approving the resolution and updating the fee schedule to rates more in line with actual usage.

This change to a single fee per size of meter would result in a loss of $9,600 annually. Staff believes this is acceptable to better serve the community by keeping fees more in line with the majority of customers currently on these size meters. Further, staff will review these base fees specifically in the next rate study to determine if the base rates are in line with the water usage potential of the customers. 

Staff recommends approval of Resolution 24-R-142