11-25-2013 Council Work Session Packet

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Current Rate Structure: Water Fees There are three primary components to the City's water utility revenues: • Fixed Charges � Usage Fees 1) Fixed Charges are a fixed quarterly fee based on the property location. The fixed charge is established to recover certain fixed expenses, such as the billing system, that the City must incur for a customer regardless of the amount of water consumed. The Navarre area is charged $30.11 per quarter, the Highway 12 and the Chevy Chase areas are charged $10.92 per quarter. The fee does not include any water usage. 2) Usage Fees are based on the metered use of water. Currently the billing structure is a fixed flat rate depending on property location. The Navarre area is charged$2.54 per thousand gallons, the Highway 12 is charged $3.54 per thousand gallons and the Chevy Chase area is charged $2.64 per thousand gallons. Pro-Forma Analysis Assumptions Following is a chart that summarizes the significant assumptions in the rate study. Water Utilit Growth and Utility No new residential connections. The estimated usage for existing residents Usage is anticipated to be at slightly belo�v the 2008 usage levels in order to be conservative. O eratin EX enses Increase 3%annually Capital Expenses Costs of improvements are inflated 5%per year. Future total capital improvements from 2010 to 2016 are estimated at an inflated value of$2.9M. Rate Structure Current billing structure is described above and is dependent on property location. Usage is charged a flat per thousand gallons rate per quarter plus a fixed quarterly charge depending on property location. The proposed rate structures on Appendix H moves to a three-tiered rate system for all end users within the City. Water users are treated the same in the Navarre and the Che Chase areas. A summary of the CIP can be found in Appendix E. Uriliry Rure Stu�iv PuBe� Cih�ojUror�o,bliiu�esotu Deeember, J009