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Item # 4.

Council Meeting

Meeting Date:	07/12/2022
Department:	Finance
Pillars:	Gold Standard in Financial Health
Milestones:	Continuously improve processes and policies to include the voice of the customer and ensure the policies are easily accessible

AGENDA CAPTION:

Consider Action on a Resolution for the Financial Plan and Rate Model for Water and Sewer Utility Rates.

BACKGROUND:

This resolution will approve a policy to adopt utility rates as set forth in the financial plan and utility rate model created by Raftelis Financial Consultants, Inc. (Raftelis) and presented at the June 14, 2022 Council meeting.

The Town's current utility rate model extends through Fiscal Year 2023. The Town hired Raftelis to update and extend the rate model through Fiscal Year 2028. The rate model update was conducted according to the policy adopted by Council in 2018 to include a mix of cash and bond funded capital projects, to maintain a fund balance of at least 25%, and provide systematic rate increases.

The Council gave direction at the June 14, 2022 Council meeting to continue the policy and adopt utility rates to provide a mix of cash and bond funding for capital improvement projects and maintain a minimum fund balance of 25% of operating expenses by utilizing cost of service adjustments. The new adjustments, which will take effect beginning October 1, 2023, will include the following proposed increases to water and sewer rates:

Fiscal Year 2024: 5.5%
Fiscal Year 2025: 5.5%
Fiscal Year 2026: 5.5%
Fiscal Year 2027: 4%
Fiscal Year 2028: 3.5%

Staff will review this utility rate model on an annual basis to ensure the rate adjustments are appropriate.

RECOMMENDATION:

Administration recommends approval.

Attachments
Presentation - Utility Rate Model Update
Resolution - Utility Rate Model