11-23-2020 Council Work Session Packet

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Water Rates: The Water Fund has the most significant funding issues. In 2019 and 2020, the water rates were increased by 35% each year. The currently analysis suggests rates should increase from 10% to 15% in 2021. Future increases could be held in the 2% to 3% range. Staff is recommending an updated tier structure be instituted due to switching to monthly billing to round tiers to the nearest hundredth gallons as shown below for residential: The same rounding would be applied to multi-family and commercial tiers. This will not have a significant impact on revenue. Stormwater The Stormwater Fund saw a 90% increase in 2020 in order to meet the requirements needed. This significant rate increase allows future rates to be as low as 1%. Sewer Based on the 2019 rate study, sewer rates were increased 20% in 2020. With updated 2020 year-end cash balance projections, staff is providing 2 two options: a 10% increase in 2021, followed by a 3% increase in future years; the other option would be to increase 15% in 2021 followed by 2% increases in future years. Recycling As discussed when the recycling RFP was approved in 2020, recycling rates needed a significant (60%) increase this year. This is due to an increase from 3.07 per month in 2018 to the new rate of 5.05 per month per household. 2021 needs to follow with a 10% increase and 4% increases thereafter. Cable The Cable Fund is funded through a franchise fee on Cable bills. No rate adjustment is needed. Cable franchises are currently trying to apply the value of the free service provided to municipalities to the amount required under the franchise agreement. If this happens, revenues to the fund would decrease. Current Proposed Current Proposed Current Proposed Tier 1 0 - 3,333 0 - 3,300 0 - 5,000 5,000 0 - 2,666 0 - 2,600 Tier 2 3,333 - 8,333 3,300 - 8,300 5,000 - 8,333 5,000 - 8,300 2,666 - 7,333 2,600 - 7,300 Tier 3 8,333 + 8,300 + 8,333 + 8,300 + 7,333 + 7,300 + Chevy Chase AreaNavarre Area Long Lake Area