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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 03/16/2004 - SECOND READING OF ORDINANCE NO. 045, 2004 AMENDING ITEM NUMBER: 28 AGENDA ITEM SUMMARY DATE: March 16, 2004 FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith SUBJECT Second Reading of Ordinance No. 045, 2004, Amending Chapter 26, Article III, Division 4 of the City Code Relating to User Rates and Charges for Water. RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. EXECUTIVE SUMMARY The previous water rate for single family and duplex customers was the 5-tiered rate implemented in January 2003 during the drought. The rate sent a very strong price signal to customers to conserve water since the more a customer used, the higher the cost per gallon. Since it was implemented customers have had many concerns about the high price per gallon in the upper tiers. In response to these concerns Council reviewed alternative rate structures at its December 9, 2003 study session. Rate options considered included modifications to the tiered rate and the water budget rate. Council continued to address water rate options at the February 3, 2004 Council meeting and after lengthy discussion adopted Resolution 2004-018. After the February 3, 2004, Council meeting, the City Manager was directed to prepare a modified tiered water rate ordinance for single family and duplex customers for the March 2, 2004 Council meeting. This Ordinance, which was adopted 4-3 (Councilmembers Kastein, Martinez and Weitkunat opposed) on First Reading on March 2, 2004, amends Chapter 26, Article III, Division 4 of the City Code. ORDINANCE NO. 045, 2004 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 26, ARTICLE III,DIVISION 4 OF THE CODE OF THE CITY OF FORT COLLINS RELATING TO USER RATES AND CHARGES FOR WATER WHEREAS, the City Council is empowered and directed by Article XII, Section 6, of the Charter of the City of Fort Collins, Colorado, to by ordinance from time to time fix, establish, maintain and provide for the collection of such rates, fees or charges for utility services furnished by the City as will produce revenues sufficient to pay the costs, expenses and other obligations of the water utility, as set forth therein; and WHEREAS, the City Council studied alternative rate options for residential and duplex customers at their December 9, 2003 study session; and WHEREAS, on February 3, 2004 the City Council adopted Resolution 2004-018 which directed the City Manager to develop a rate ordinance for Council consideration at its meeting on March 2; and WHEREAS, Resolution 2004-018 further directed that a modified tiered rate be proposed; and WHEREAS, the City Manager has recommended the following rate modifications for single family and duplex customers to go into effect for billings based on meter readings taken on or after May 1, 2004. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That Subsections (a) (1) and (a) (2) of Section 26-127 of the Code of the City of Fort Collins are hereby amended to read as follows: Sec. 26-127. Schedule B, meter rates. (a) Residential Rates. (1) Residential customers with one (1) dwelling unit. a. Base Charge. Residential customers with one (1) dwelling unit shall pay a base monthly charge of twelve dollars ($12.). b. Quantity Charge. Residential customers with one (1) dwelling unit shall pay a monthly quantity charge as follows: For the first seven thousand (7,000) gallons used per month, a charge of one dollar and sixty-eight cents ($1.68) per one thousand (1,000) gallons. For the next six thousand (6,000) gallons used per month, a charge of two dollars and two cents ($2.02) per one thousand (1,000) gallons. For the next seven thousand (7,000) gallons used per month, a charge of two dollars and forty-two cents ($2.42) per one thousand (1,000) gallons. For all additional gallons used per month, a charge of two dollars and ninety cents ($2.90) per one thousand (1,000) gallons. (2) Residential customers with two(2)dwelling units. a. Base Charge. Residential customers with two (2) dwelling units shall pay a base monthly charge of fourteen dollars and sixty-three cents ($14.63). b. Quantity Charge. Residential customers with two (2) dwelling units shall pay a monthly quantity charge as follows: For the first nine thousand (9,000) gallons used per month, a charge of one dollar and sixty-eight cents ($1.68) per one thousand (1,000) gallons. For the next four thousand (4,000) gallons used per month, a charge of two dollars and two cents ($2.02) per one thousand (1,000) gallons. For the next seven thousand (7,000) gallons used per month, a charge of two dollars and forty-two cents ($2.42) per one thousand (1,000) gallons. For all additional gallons used per month, a charge of two dollars and ninety cents ($2.90)per one thousand(1,000) gallons. Section 2. That the amendments to Chapter 26 of the City Code contained herein shall go into effect on May 1, 2004 and will be effective on all utility bills where the meter reading is made on or after May 1, 2004. Introduced and considered favorably on first reading, and ordered published this 2nd day of March, A.D. 2004, and to be presented for final passage on the 16th day_gf March, A.D2004. Mayor ATTEST: City Clerk Passed and adopted on final reading this 16th day of March, A.D. 2004. Mayor ATTEST: City Clerk ITEM NUMBER: 31 AGENDA ITEM SUMMARY DATE: March 2, 2004 FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith SUBJECT First Reading of Ordinance No. 045, 2004, Amending Chapter 26, Article 111, Division 4 of the City Code Relating to User Rates and Charges for Water. RECOMMENDATION -1 P Staff recommends adoption of the Ordinance on First Reading. EXECUTIVE SUMMARY The current water rate for single family and duplex customers is the 5-tiered rate implemented in January 2003 during the drought. The rate sent a ve stron price signal to customers to conserve water since the mo a cu o r u e th cost per gallon. Since it was implemented customers hav ad ma conc s the h price per gallon in the upper tiers. In response to these co ms o cil le d alterna a rate structures at its December 9, 2003 study session. Rate opts s con red inc uded mo i lcations to the tiered rate and the water budget rate. Council continued to address water rate options at the February 3, 2004 Council meeting and after lengthy discussion adopted Resolution 2004-018. It directed the City Manager to prepare a modified tiered water rate ordinance for single family and duplex customers for consideration on March 2, 2004. The Resolution further directed that the new rate ordinance retain the current fixed charge and first tier price and that it eliminate the fifth tier pricing level. The proposed rate complies with that Council dire riAnd ' wn- T Existi ng sed, t=�' Single Char eFamil Chary a9�65is.Tier 1 1.78 Tier 2 7,001-13,000 gallons $2.37 Tier 3 13,001-20,000 gallons $2.97 $2;" : °00 -20 000 gallons Tier 4 20,001-33,000 gallons Tier 5 Over 33,000 gallons $4.45 Note: All rates include the 6%PILOT March 2, 2004 -2- Item No. 31 The single family rate proposed in this Ordinance is the same rate as Option B presented at the February 3, 2004 Council meeting but with the fifth step deleted. Staff originally believed that the elimination of the fifth tier would require a small increase in the second, third and/or fourth tiers. It has since been determined that dropping the fifth step will create no material impact on water revenues so that the fifth tier can be eliminated without an increase to any of the remaining tiers. Despite the proposed reduction in rates, the recommended change is anticipated to be revenue neutral. This is because staff does not anticipate a water supply shortage for 2004, so water restrictions will not be impose ' ho r o it i rojected that customer water use will increase in 2004 (but, but t retu 200 a is As shown in the table below, po ie Conti to send a strong price signal to reduce water use, does not increase monthly rates for any customer, and provides a reduction in costs for customers using more than 7,000 gallons. Comparison of Existing 5-Tier Rate and Proposed 4-Tier Rate (Single Famil ) Water Monthl M thly % Use Bill III u n Reduction (Gallons) Cur nt ropo on in Monthly 5 - 4 - r Bill Bill 7,000 $25.18 $2 . 8 $0.00 0.0% 10,000 $32.29 $31.68 $0.61 1.9% 20,000 $60.19 $55.94 $4.25 7.1% 30,000 $95.79 $86.74 $9.05 9.4% 40,000 $137.62 $117.54 $20.08 14.6% 50,000 $182.12 $148.34 $33.78 18.5% 60,000 $226.62 $179.14 $47.48 21.0% 70,000 $271.12 $209.94 $61.18 22.6% 80,000J$36 C25271.1 23.7% 90,00058 24.6% 100,000302. $102.28 25.3% March 2, 2004 -3- Item No. 31 The proposed ordinance also changes the duplex rate. The duplex rate is similar to the single family rate but with a larger fixed fee and an additional 2,000 gallons in the first tier. The proposed duplex water rate is shown below. Existing 5-Tier Water Rate ro r Water Rate Fixed Charge $15.51 $15.51 e Duplex 6Charge per Charge per 0 1,000 ns pg Tier 1 0-9,000 s8 0-9,000' aOffiis. Tier 2 9,001-13, allo s 9001-13,000 allons Tier 3 13,001-20,0 allons 13,001-20,000 allonTier 4 20,001-33,00 s '=, � ter 20,000 allons Tier 5 Over 33,000 allons5 Now: All rates include the 6%PILOT If approved, the proposed rate changes will be effective for billings with meter readings on or after May 1, 2004. ATTACHMENTS l Agenda Item Summary#34, k2j��3,"004 COPY