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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 11/07/2000 - ITEMS RELATING TO UTILITY RATES FOR 2001 AGENDA ITEM SUMMARY ITEM NUMBER: 35 A-D DATE: November 7, 2000 FORT COLLINS CITY COUNCIL Michael B. Smith/ FROM: David Agee SUBJECT: Items Relating to Utility Rates for 2001. RECOMMENDATION: Staff, the Water Board and the Electric Board recommend adoption of these Ordinances on Second Reading. EXECUTIVE SUMMARY: A. Second Reading of Ordinance No. 151, 2000, Amending Chapter 26, Article III, Division 4 of the City Code Relating to User Fees and Charges for Water. B. Second Reading of Ordinance No. 152, 2000, Amending Chapter 26, Article IV, Division lip 4 of the City Code Relating to Wastewater Fees and Charges. C. Second Reading of Ordinance No. 153, 2000, Amending Chapter 26, Article VI, Division 4 of the City Code Relating to Electric Rates. D. Second Reading of Ordinance No. 154, 2000, Amending Chapter 26, Article VII, Division 2 of the City Code Relating to Stormwater Fees. As proposed in the 2000-2001 budget adopted by City Council, these ordinances, which were unanimously adopted on First Reading on October 17, 2000, increase the City's utility rates for water by 6%, wastewater by an average of 2%, and electric by an average of 2%. Stormwater will be increased by 9.3%, slightly higher than originally projected. The rate increases for wastewater and electric vary by customer class. All changes will become effective on billings issued on or after January 1, 2001. AGENDA ITEM SUMMARY ITEM NUMBER: 36 A-D DATE: October 17, 2000 FORT COLLINS CITY COUNCIL Michael B. Smith/ STAFF: David Agee ;SUBJECT: Items Relating to Utility Rates for 2001. RECOMMENDATION: Staff, the Water Board and th Electric oard end ad tion of these Ordinances on First Reading. FINANCIAL IMPACT: These Ordinances increase annual Water Fund operating revenues by 6%, Wastewater Fund operating revenues by 2%, and Light and Power Fund operating revenues by 2%. Storm Drainage Fund operating reve s 'l01F sin lieu of taxes paid to the General Fund by the Water astewata o unds will also increase by like percentages. There is no pa entin for the orm Drainage Fund so this rate change will not impact Genera roval o rate ordinances will ensure that the Water, Wastewater and Storm Drainage Funds will meet or exceed debt service coverage requirements. EXECUTIVE SUMMARY: A. First Reading of Ordinan N . 15 2000 mendin Cha ter 26, Article III, Division 4 of the City Code Rela ' to ees d h s ter. B. First Reading of Ordi ce N 2, mending hapter 26, Article IV, Division 4 of the City Code Relating to Wastewater ees and Chazges. C. First Reading of Ordinance No. 153, 2000, Amending Chapter 26, Article VI, Division 4 of the City Code Relating to Electric Rates. D. First Reading of Ordinance No. 154, 2000, Amending Chapter 26, Article VII, Division 2 of the City Code Relating to Stormwater Fees. As proposed in the 2000-2001 budget adopted by City Council, these ordinances increase the City's utility rates for water by 6%, wastewater by an average of 2%, and electric by an average of 2%. Stormwater will be increased by 9.3%, slightly higher than originally projected. The rate increases for wastewater and electric vary by customer class. All proposed changes will become effective on billings issued on or after January 1, 2001. The Water and Electric Boards reviewed DATE: October 17 , 2000 2 ITEM NUMBER: 36 A-D and recommended adoption of the rate changes in conjunction with their discussions on the 2000 and 2001 budgets. The table below shows the impacts of the rate adjustments on a typical single family residential customer's monthly bill. Typical Residential Increase Increase Utility Service 1999 2000 $ % Water $30.35 $32.16 $1.81 6.0% (160,000 gal. per year) Wastewater $0.24 1.5% (5,600 gal./mo. WQC) Electric $31.0 $31.98 $0.89 2.9% (500 kWh per month) Stormwater (8,600 sq. ft. lot, light $ 7.44 $ 8.13 $0.69 9.3% residential runoff Total Utility Bill $84.83 $88.46 $3.63 4.3% BACKGROUND: Water 0 P Y If approved by City Council, water rates for all customer classes inside the city limits will increase by 6%. The increase is necessary to pay debt service for the Water Treatment Facility Master Plan and to fund the operations and maintenance of the City's water system. Customers outside the city limits currently pay higher rates than customers within the city limits. In accordance with Council policy, they will remain frozen until the water rates inside and outside the city limits are the same. The proposed ordinance revises the rate form for customers outside the city to be more consistent with the inside city rates. This will ease rate administration in the new Customer Information System. The change for customers outside the city limits is revenue neutral for the Utilities. It is "Clto a to r tes ill increase an average of 6% per year for the next 5 years. Wastewater This Ordinance will increase wastewater rates for customers inside the city limits by an average of 2% in 2001. The increase will vary by customer class based on the results of a cost of service study conducted by staff. The increase is needed to fund the operations and maintenance of the City's wastewater system and to finance capital improvements. The wastewater rates will increase for only those customers inside the city limits. Customers outside the city limits currently pay higher rates than inside rates. In accordance with Council policy, the rates outside the city limits will remain frozen (with the exception of wastewater strength surcharges) until the wastewater rates inside and outside the city limits are equivalent. A revenue neutral change is being made for multi-family users outside the city limits in order to ease rate administration in the new Customer Information System. Based on the cost of service study, rates for customers within the city limits will increase as follows: Residential Single Family Metered 1.5% DATE: October 17 , 2000 3 ITEM NUMBER: 36 A-D Residential Single Family Flat 0.0% Residential Duplex Metered 0.0% Residential Duplex Flat 0.0% Residential Multi-Family 2.2% Commercial 4.9% Wastewater Surcharges 2.0% Current projections indicate an annual 4% increase will be necessary in the years 2002-2004. Electric A 2% electric rate increase is d f 1 n e originally planned for 1998 but was deferred until 2001. is w Ce he rPlec t increase since 1993. After the 2001 increase, electric rates 1be jus % in 83. The increase is the result of accumulative inflationary incr s ' nn maintenance, customer services and general operations costs over the last eight years. The increase does not apply to the energy and demand components of the rates since purchase power costs have not increased. This increase will vary by rate class and will be slightly larger for residential and small commercial customers than for large commercial and industrial customers. Increases by rate class are as follows: Residential Energy Service 2.6% Residential Demand Service 2.3% General Service (SmaCustria r ' General Service (Larg al) 1. General Service 750 ( . % Traffic Signals .9% Flood Lights 2.2% Based on current projections, no further electric rate increases are proposed until 2005. The Ordinance will also change the service charge for new residential and small commercial accounts from $14.59 to $15.65. The after-hours service charge is increased from $40.64 to $55.45. The service charge for floodlights will increase from $6.20 to $9.65. The service charges are based on the current costs of initiating the new accounts. In addition to the increases few seke in ge a proposed in the electric rate ordinance: 1. Multi-family Metering: The current code requires all new and remodeled multi-residential accounts to be individually metered. Occasionally there are special circumstances when this requirement may not be in the City's and a customer's best interests. A recent example involves a historic building being renovated for senior housing. The federal financing requires that all utilities be paid by the landlord so bills will not be issued to individual tenants. In addition, the large group of meters can not be placed on the outside of the historic building and space is not available for the meters within the building. In this and other rare cases, a single master meter seems most practical for all concerned. The proposed revision would permit the Utilities General Manager to authorize exceptions to the individual metering requirement. DATE: October 17 , 2000 4 ITEM NUMBER: 36 A-D 2. Parallel Generation: The ordinance permits the Utilities General Manager to authorize parallel generation on the Residential Energy Service rate and revises the charges for standby service in all other rate schedules. The proposed ordinance also stipulates that parallel generation in excess on one megawatt is to be provided under the terms of Platte River Power Authorities Tariff-- Schedule 10: Back-up Service. 3. General Service Rate: The ordinance eliminates the seasonal rate option and the billing demand ratchet in the General Service rate schedule. Stormwater The proposed Ordinance incCseswater y3'ZorsalIrmcustomers. The increase is necessary to fund the operatto ce f thewater system, to pay debt service for the accelerated capital improvements program and to institute an illicit discharge stormwater monitoring program. Current projections indicate an annual`6% increase will be necessary in the years 2002-2004.