The goals and objectives of the 2022 Rate Study were to 1) incorporate the funding needed for accelerated infrastructure projects driven by growth; 2) ensure operational costs impacted by inflationary pressures and resiliency improvements were adequately recovered, and 3) further promote water conservation within the rate structure.
The City’s consultant, NewGen Strategies, provided an overview of the key drivers (Capital Plan, debt service, and customer growth) impacting rates to Council and the Water Board in June 2022 as part of the Fiscal Year 2023 budget review. An overall rate increase of 11.5% was recommended and is included in the Fiscal Year 2023 budget.
Summary of Proposed changes
· Base Rate and Volumetric Rate increases of 11.5%
§ Achieve operating cash on hand target of 120 days
§ Maintain a minimum of 50% of annual debt service requirements
§ Ensures revenue adequacy from accelerated capital plan, inflationary pressures, resiliency improvements and further promotes water conservation efforts
· Changes to Multi-Family rate class
§ Modify rate structure to more closely resemble single family residential to reduce current rate subsidy
· Changes to Builder rate class
§ End user designation of the premises would be used throughout the billing process. (For example: if a builder is building a single-family home on the premises, the rate classification for the builder will be Residential)
These rates will become effective October 1, 2022. Water rates were last adjusted in January 2021.