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VIII-A-1 MEMO To: From: Subject: Date: Honorable Mayor and City Council Members Tom Montgomery Annual Utility Rate Review February 13, 2001 WATER RATES- CURRENT RATE: RECOMMENDED $1.30/1,000 GALLONS $1.35/1,000 GALLONS I am recommending increasing water rates,to $1.35/1,000 gallons. Ifapproved, this will be the first water rate increase since 1996: Assuming 2% annual growth and water usage based on a five year average, estimated waterrevelll"~s for 2001 are $1,034,000. Excluding capital expenditures which are funded from WAC' funas or replacements which are funded from Water Fund balances (annual depreciation accumulation), and setting aside $250,000 for depreciation, 2001 expenses are estimated at $1,088,000. By increasing the water rate to $1.35/1 ,000 gallons, estimated water revenues increase to $1,068,000, which still results in an estimated $20,000 shortfall. This shortfall will be reviewed as part of next year's annual utility rate study. WASTEWATER RATES - CURRENT RATE: $2.25/1,000 GALLONS No CHANGE RECOMMENDED Wastewater rates are recommended to stay at $2.25/1,000 gallons. Assuming 2% annual growth and wastewater usage based ona five year average, estimated wastewater revenues for 2001 are $1,252,000. Excluding capital expendit1ires for replacements and rehabilitation which are funded from Wastewater Fund balances (annuai'depreciation accumlation), and setting aside $100,000 for depreciation, 2001 expenses are estimatMat $!,268,000. While expenses are estimated to be $16,000 more than revenues, the estimated shortfall is small enough that rates do not need to be raised. WAC~ SAC. & INTERCEPTOR SEWER CHARGES Charaes Current Rate Recommended Rate WAC SAC , $1,140 .$605\ ,c futerceptor Sewer $305 ' $1,160 $615 $310