Agenda

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Item # 16.

Work Session and Regular Meeting

Meeting Date:	09/10/2019
Department:	Finance
Pillars:	Gold Standard in Customer Service Gold Standard in Financial Health

AGENDA CAPTION:

Present, Discuss, and Consider Action on an Ordinance Amending Chapter 82 (Utilities), Section 82-76 and Section 82-77 of the Code of Ordinances of the Town by Amending Sewer Rates and Water Rates for All Customer Classifications; Providing that the Changes to the Sewer Rates and Water Rates Made Herein Shall be Applied to Monthly Customer Bills Beginning with the November 2019 Billing Cycle.

BACKGROUND:

On January 23, 2018, Council approved a resolution to approve a policy to adopt utility rates as set forth in the financial plan and utility rate model created by Raftelis Financial Consultants, Inc. (RFC) which was presented at the January 9, 2018, Council meeting.

Council gave staff direction to move forward with a policy to adopt utility rates to fully fund the short-term staffing plan and provide a mix of cash and bond funding for capital improvement projects by utilizing cost of service adjustments. The new adjustments, which will be effective October 1, 2019, consist of the following proposed increases to water and sewer rates over a five year period:

2018: 8%
2019: 6.5%
2020: 6%
2021: 2.5%
2022: 5%

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

The Town purchases water and sewage treatment from Dallas Water Utility (DWU) as well as sewage treatment services from theTrinity River Authority (TRA). Charges from both entities are included in the financial plan and rate model created by RFC. Sec. 82-78 of the Town’s code of ordinances provides that the pass-through of wholesale cost increases for water purchases and sewer treatment services be included in water and sewer rates, which shall reflect changes in the costs of water purchases, sewer treatment and transportation services which are paid by the Town to other governmental entities. This means that the cost increases from these two entities are directly passed to the Town of Addison customers.

Below are examples of the increase in a water and sewer bill for a single family:

Consumption	Existing	New Rate (10/1/19)	% Increase
5,000 gallons	$52.91	$56.33	6.5%
8,000 gallons	$77.79	$82.82	6.5%
10,000 gallons	$94.38	$100.48	6.5%

The specific rates for each customer class are listed in the attached ordinance.

RECOMMENDATION:

Administration recommends approval.

Attachments
Ordinance - Fiscal Year 2020 Water and Sewer Rates Increase
Presentation - Fiscal Year 2020 Utility Rate Model Update & Rate Increases