HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/21/2006 - SECOND READING OF ORDINANCE NO 043, 2006 AMENDING ITEM NUMBER: 27
AGENDA ITEM SUMMARY DATE: March 21, 2006
FORT COLLINS CITY COUNCIL STAFF: Michael Smith
Terri Bryant
SUBJECT
Second Reading of Ordinance No. 043, 2006 Amending Chapter 26, Article III, Division 4 of the
City Code Relating to Water Fees.
RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
EXECUTIVE SUMMARY
Ordinance No. 043,2006 was adopted on First Reading on March 7,2006 with a vote of 5-2(Nays:
Brown, Kastein). It revises single family and duplex water rates effective May 1, 2006. The
Ordinance reduces the fixed monthly fee from $12.72 to $9.54 (including 6% payments in lieu of
taxes) for single family customers. It also enacts a three-tier rate with 15% between the steps, a
change from the current four-tier rate which has 20%increases between tiers. Customers using less
than 8,000 gallons or more than 50,000 gallons per month will have moderate reductions in costs.
Customers using between 8,000 and 50,000 gallons per month will have moderate increases in costs.
ITEM NUMBER: 32
AGENDA ITEM SUMMARY DATE: March 7, 2006
FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith
Terri Bryant
SUBJECT CIPY
JL
First Reading of Ordinance No. 043,2006 Amending Chapter 26,Article III,Division 4 of the City
Code Relating to Water Fees.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT
The proposed water rates are projected to be revenue neutral, that is, total operating revenues will
neither increase nor decrease i Oapf t ate change. Individual single
family and duplex customers 11 seerea their water costs based on their
monthly use.
EXECUTIVE SUMMARY
Based on Council direction at the February 14, 2006, Work Session, this Ordinance revises single
family and duplex water rates effective May 1,2006. The Ordinance reduces the fixed monthly fee
from $12.72 to $9.54(including 6%payments in lieu of taxes) for single family customers. It also
enacts a three-tier rate with 15%between the steps, a change from the current four-tier rate which
has 20% increases between tiers. Customers using less than 8,000 gallons or more than 50,000
gallons per month will have moderate reductions in costs. Customers using between 8,000 and
50,000 gallons per month will have moderate increases in costs.
With the proposed rate,a typical single family residential customer's monthly bill will change from
$21.63 to $20.67 in the winter m eak summer watering season,
a typical bill would increase 9° from 99 t 6 79 a culations are based on a typical
use of 5,000 gallons per mon in the ter gal s per month during the few peak
summer months.
The Ordinance also revises duplex rates by reducing the fixed charge from $15.51 to $11.66 and
changing to a similar three-tier rate structure as described above.
March 7, 2006 -2- Item No. 32
BACKGROUND
Prior to the 2003 drought, the Ci ' esid al raYbeten
iform with a fixed charge of
$15.57. In response to the dro t, cil a t a r rate with a fixed charge of
$12.72 and five tiers that incre d betw n 200 /och tier.The rate was adopted,
along with watering restrictio uc o d pness program to assure that
adequate resources could be maintained. In May 2004, the water rate was modified in response to
the community's reduction in use and to ease the cost for the larger users. The rate adopted in 2004
retained the fixed charge of$12.72 and consisted of four tiers with a 20% increase between tiers.
The 2004 rate remained in place through 2005 and into 2006.
During the 2006-2007 budget discussions,Council requested that staffpresent additional alternatives
to the current four-tier water rate. Staff presented eight rate options at the January 24,2006,Council
Work Session and an additional six water rate options at the February 14, 2006, Council Work
Session. Council reviewed the options based on the four criteria:
• Fair and equitable
• Simple and understandable
• Encourage conservation
• Stable and predCeective
In the course of Council's dis the F 4Y
Session, there appeared to be
general support for modificatioa de 'b in thce. If approved,the Ordinance
would adopt the following rate , for all meter reading on or after May 1, 2006.
Single Family Water Rate:
Fixed charge per month $ 9.54
0-7000 gallons, per 1000 gallons $ 2.226
7001-13000 gallons, per 1000 gallons $ 2.544
Greater than 13000 gallons,per 1000 gallons $ 2.915
Duplex Water Rate:
Fixed charge per month $ 11.66
0-9000 gallons, per 1000 gallons $ 2.226
9001-13000 gallons, per 1000 gallons $ 2.544
Greater than 13000 gallons, per 1000 gallons $ 2.915
All rates include 6% PILOTS.COPY
March 7, 2006 -3- Item No. 32
The following table and graphs compare the proposed single family residential water rate to the
current rate:
Cur os r $ crease %Increase
Gallons Use ate Ra ecrease) (Decrease)
(In ILOTS) (In PI
[ Y st 4fkoiE �'
$ 12.72
t43s3 �9ts l��I9[ B3 ` ISM,
t
$ 14.50
a ipn 7riip j(�`�� t ! s Sisis S` ii if.sy s �h , i 3� 1 s
t dN`Gi�1E°i t $ 16.28 lSlE3 ilt 3!1� 3E{t
k��r[
a sii{i i �'3`s1i GIs $ 18.06 3! °1`j� h �P�i r� y s VI li�si S s t I i N `s€��usoil E
iy,o-` s }i r`E {Eih
$ 19.84 ��� �� �� a` y E r���i'3
+? i`+(' tk n.,,( `II t' ppfl t �61•st t F9t k II E i FE{v),.�ttl(` 3(ry �E
$ 21.63
tts€ �111� ! [ k� t hi� ���9� v t a.
j ( . „ s V EsE tsiMt siit6l tyyy���... ist I 11 i{
$ 23.41 [l�E�(3 t t t E�...� g�i�s iih�s ! ?t t kR�I) 4 � �tS ES i�i ry kt� s
s yti s. sts�!1 3 s
$ 25.19 p SE.�. ' Lu c$.�_`
10,000 $ 31.61 $ 32.75 $ 1.14 4%
13,000 $ 38.03 $ 40.39 $ 2.35 6%
16,000 $ 45.73 $ 49.13 $ 3.40 7%
20,000 $ 55.99 $ 60.79 $ 4.80 9%
25,000 $ 71.36 $ 75.37 $ 4.01 6%
30,000 $ 86.73 $ 89.94 $ 3.21 4%
35,000 $ 102.10 $ 104.52 $ 2.42 2%
40,000 $ 117.47 $ 119.09 $ 1.62 1%
50,000 $ J 48 ' $ 70 03 0%
ir{
a,.$ 225.06
$ I $
301.91 �
sr, s�6,s s"
i`t`h{ 6a $ 455.61 ,t a11li
I3 t��. s 9 { t. s'
it s s,s, :: 609.31 s[R ?'� a�a i, r ix.[G. ( ��' aP�,ai:XV lEi.`!=3... . 3!•
Note: Shaded cells reflect a decrease from current 4-tier rate.
March 7, 2006 -4- Item No. 32
Single Family Water Rate Comparison
Current: 4-Tier($12.72 Fixed;20%Between Steps)
Proposed:3-Tier($9.54 Fixed;15%Between Steps)
Seale:0-20,000 Gallons
$70
$50
$50
S $40
a
8 $30
$20
$10
S-
f wf a Of
Gallons per Month
Current 4-Tler Rate Proposed 3-Tier Rate
March 7, 2006 -5- Item No. 32
Single Family Water Rate Comparison
Current: 4-Tler($12.72 Fixed;20%Between Steps)
Proposed:3-Tier($9.54 Fixed;15%Between Steps)
Seale:0-100,000 Gallons
$350
$300
$250
$200
0
i
$150
a
0
U
$10o
$50
s-
N c I N N 1'! rNl O O Y) N N N A r O al N T
Gallons per Month
—Current 4-Tler Rate �Proposed 3-Tier Rate
March 7, 2006 -6- Item No. 32
ATTACHMENTS
t. Powetpoint slides COPY
ORDINANCE NO. 043, 2006
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 many alternative rate options for residential and
duplex customers at its January 24, 2006, and February 14, 2006, study sessions; and
WHEREAS, the City Councilmembers reviewed each rate option using four criteria: l)
whether it is fair and equitable,2)whether it would encourage conservation,3)whether it is simple
and understandable, and 4) whether it is stable and predictable; and
WHEREAS, on February 14, 2006 based on these criteria, Councilmembers expressed
support for a three-tier water rate with a$9.00 fixed charge; and
WHEREAS, at that time City Council requested that the City Manager develop a rate
ordinance for Council consideration at its meeting on March 7, 2006; and
WHEREAS,the City Manager has recommended the following rate modifications for single
family and duplex customers and that the modifications go into effect for billings based on meter
readings taken on or after May 1, 2006.
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 (I) dwelling unit.
a. Base Charge. Residential customers with one(1)dwelling unit shall
pay a base monthly charge of nine dollars ($9).
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 two dollars and ten cents($2.10)per one thousand(1,000)gallons.
For the next six thousand(6,000)gallons used per month,a charge of
two dollars and forty cents($2.40)per one thousand(1,000)gallons.
For all additional gallons used per month, a charge of two dollars and
seventy-five cents ($2.75) 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 eleven dollars ($11.00).
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 two
dollars and ten cents ($2.10) per one thousand (1,000) gallons.
For the next four thousand(4,000)gallons used per month,a charge of two
dollars and forty cents ($2.40) per one thousand (1,000) gallons.
For all additional gallons used per month, a charge of two dollars and
seventy-five cents ($2.75) 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, 2006 and will be effective on all utility bills based on meter readings made
on or after May 1, 2006.
Introduced and considered favorably on first reading ordered published this 7th day of
March, A.D. 2006, and to be presented for final passa e t 21 a f Marc D . 00 .
Ma r ,
A EST:
City Clerk
Passed and adopted on final reading this 21st day of March, A.D. 2006.
Mayor
ATTEST:
City Clerk