HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/05/2005 - FIRST READING OF ORDINANCE NO. 076, 2005 AMENDING ITEM NUMBER: 31
AGENDA ITEM SUMMARY DATE: July5, 2005
FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith
Terri Bryant
SUBJECT
First Reading of Ordinance No. 076, 2005 Amending Chapter 26, Article III, Division 4 of the
Code of the City of Fort Collins Relating to User Rates and Charges for Water.
RECOMMENDATION
Staff does not recommend approval of the Ordinance. Staff agrees with the Water Board and
Natural Resources Advisory Board recommendations that the existing four-tier rate remain in
effect for the remainder of the year.
FINANCIAL IMPACT
Although the Ordinance does not significantly impact projected revenues in the Water Fund, the
impact on individual single family and duplex customers will vary according to their water use.
The customer impacts are illustrated in the "Single Family Rate Comparison" table below.
EXECUTIVE SUMMARY
At the May 25, 2005 work session, several Councilmembers requested an ordinance to revise the
water rates for single family and duplex customers. As requested, this Ordinance would
eliminate the tiers and return to a flat or uniform rate structure similar to that in place before the
tiered structure was implemented in January 2003.
BACKGROUND
In response to discussion at the Council's May 10, 2005 work session, Michael B. Smith,
Utilities General Manager, provided to City Council a memo discussing the pros and cons of
several water rate options. Upon receiving the memo, several Councilmembers voiced support
at the May 25, 2005, work session to make a change in water rates to be effective this summer.
Staff was requested to prepare an ordinance to return to a flat (uniform) rate structure, similar to
the rate that was in place prior to January 2003. The rate change is shown below:
June 7, 2005 -2- Item No. 31
Single Family Water Rates Existing 4-Tier Rate Proposed Ordinance
g y Structure* Flat Rate
Base charge per month $12.72 $12.72
0-7,000 gallons $1.781 per 1000 gal. $ 2.155 per 1,000 gal.
7,001-13,000 gallons $2.141 per 1000 gal. $ 2.155 per 1,000 gal.
13,001-20,000 gallons $2.5 55 per 1000 gal. $2.155 per 1,000 gal.
Over 20,000 gallons $3.074 per 1000 gal. 1 $ 2.155 per 1,000 gal.
*Note: This includes a six percent Payment-in-Lieu-of Taxes ("PILOT") that will
continue to be collected along with the revised rates set out in the Ordinance, in
accordance with City Charter and existing City Code provisions thatt remain
unchanged..
Although the Ordinance does not significantly impact projected revenues in the Water Fund,
costs will shift between customers. In general, the bills for customers using less than 20,000
gallons per month will increase and the bills for customers using more than 20,000 gallons will
decrease. The following tables and graphs show the costs for a single-family customer:
Single Family Water Rate Comparison
Monthly Proposed
Water Use Existing Ordinance Increase
in Gallons 4-Tier Rate Flat Rate (Decrease)
2,000 $ 16.28 $ 17.03 $ 0.75
3,000 $ 18.06 $ 19.19 $ 1.12
4,000 $ 19.84 $ 21.34 $ 1.50
5,000 $ 21.63 $ 23.50 $ 1.87
6,000 $ 23.41 $ 25.65 $ 2.24
7,000 $ 25.19 $ 27.81 $ 2.62
8,000 $ 27.33 $ 29.96 $ 2.63
9,000 $ 29.47 $ 32.12 $ 2.65
10,000 $ 31.61 $ 34.27 $ 2.66
15,000 $ 43.16 $ 45.05 $ 1.88
20,000 $ 55.99 $ 55.82 $ 0.17
25,000 $ 71.36 $ 66.60 $ 4.76
30,000 $ 86.73 $ 77.37 $ 9.36
40,000 $ 117.47 $ 98.92 $ 18.55
50,000 $ 148.21 $ 120.47 $ 27.74
75,000 $ 225.06 $ 174.35 $ 50.71
100,000 $ 301.91 $ 228.22 $ 73.69
150,000 $ 455.61 $ 335.97 $ 119.64
200,000 609.31 443.72 165.59
June 7, 2005 -3- Item No. 31
Single Family Water Rate Comparison
$275
$250
$225
$200
c $175
f $150
a $125
a $too
V $75
$50
$25
s-
°
YI � r
g e e 0 0
Gallons per Month
—Current 4-Tier Rate +proposed 2005 Flat Rate
Staff has identified the following pros and cons of adopting the proposed flat rate:
Pros:
• Perceived as more equitable (large lots versus small lots)
• Simple rate structure
• Greater revenue stability
Cons:
• Not perceived as a rigorous conservation rate
• Less likely to result in lower overall water consumption
• Federal permitting for the Halligan Project could be in jeopardy due to the
reduced emphasis on conservation indicated by the change back to a flat
rate structure
ORDINANCE NO. 076, 2005
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 , due to drought conditions and the need to reduce water consumption, on
November 19, 2002 , the City Council approved Ordinance No . 166, 2002 (effective January 1 ,
2003 ) which adopted a five tier water rate structure for single family and duplex customers; and
WHEREAS , on March 16, 2004, the five tier rate was modified to a four tier rate by
Ordinance No . 045 , 2004 (effective May 1 , 2005 ) to reduce the severity of the financial impacts
of the rate on large single family and duplex users; and
WHEREAS , the City ' s per capita water demands have been reduced through a
combination of the tiered water rates, education, 2003 water restrictions, incentives, and
voluntary conservation efforts ; and
WHEREAS , the severe conditions resulting from low rainfall and snowpack during
recent years have improved and the City ' s supplies are adequate to meet projected water
demands this year; and
WHEREAS , at the City Council work session on May 25 , 2005 , several Council
members requested that staff prepare a non-tiered rate option for residential and duplex water
customers similar to the rates in effect prior to the adoption of the tiered rates for consideration
at the June 7, 20051 City Council meeting; and
WHEREAS , accordingly, the Utilities General Manager has developed the following flat
or uniform water rate for single family and duplex customers that eliminates the tiers and would
be effective for all billings based on meter readings taken on or after August 1 , 2005 .
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 . of $2 . 033 per
one thousand ( 1 , 000) gallons .
For the first seven thousand (7 , 000) gallons used per month, a charge--af
otic dollar and - .
gallons .for the next six thovsand (6 , 000) gallons nsed per month, a chargc of two
dollars and two cents ($2 . 0-2 ) per one thousand ( f , 000)
forty-twoFor the iiext seven thousand (7 ,000) gallons used per month, a charge--af
two dollars and
.
gallons .1111MLy Cents ($2 . 90) per one thousand ( 1 , 000)
(2) Residential customers with two (2) dwelling units.
a. Base Charge. Residential customers with two (2) dwelling units
shall pay a base monthly charge of fourteen dollars and sixty-three
cents ($ 14 . 63) .
b . Quantity Charge. Residential customers with two (2) dwelling
units shall pay a monthly quantity charge as follows . of $2 . 033 per
one thousand ( 1 , 000) gallons .
For the first nine thottsand (9 , 000) gallons ttsed per month, a charge of o=
dollar and - .
gallons .for the next fotir thousand (4 , 000) gaflons used per month, a cfiargc-of
two dollars and two cents ($2 . 0-2) per one thousand ( 1 , 000)
forty-twotwo dollars and
.
gallons ,For all additional gallons ttsed per month, a charge of two dollars and
Section 2 . That the amendments to Chapter 26 of the City Code contained herein
shall go into effect for all utility bills based on a water meter reading made on or after August 1 ,
2005 .
Introduced and considered favorably on first reading, and ordered published this 5th day
of July, A.D . 2005 , and to be presented for final passage on the 19th day of July, A.D . 2005 .
Mayor
ATTEST :
City Clerk
Passed and adopted on final reading this 19th day of July, A.D . 2005 .
Mayor
ATTEST :
City Clerk