MEMORANDUM

To:     Mike Wildgen

          City Manager

From: Debbie Van Saun

          Asst. City Manager

Re:     agenda item

Date:  December 15, 2004

Please place the following item on the City Commission agenda for consideration at their December 21, 2004 meeting;

Project Description.  Adopt water and wastewater rates for 2005, including excess strength wastewater rates.

Project History.  2004 marks the final year for the rates projected in the 1999 rate study.  Black & Veatch was retained by the City Commission to complete a new rate study based on the recent completion of the water and wastewater master plans, which laid out capital improvement projects through 2025.  During the 2005 budget process, several sessions were held with the consultant and City Commission to gain direction regarding rate structure, debt financing, and other issues.  In August, 2004, Black & Veatch presented to the governing body a “Report on Revenue Requirements, Costs of Service, and Rates for Water and Wastewater Service”. 

Project Details.  In the ensuing months, discussion continued regarding the type of rate structure that was to be used.  To that end, the Commission reviewed an inclining block rate, a declining block rate, a modified declining block rate, and a uniform volume charge by customer class rate.  At the December 14, 2004 meeting, the City Commission gave direction to proceed with the uniform volume charge by customer class water rate and the wastewater rate originally proposed in the August, 2004 rate study.

Action Request.  Following commission direction, staff is requesting the adoption on first reading of water and sewer rate ordinance #7808, with excess strength sewer charges, to take effect on January 1, 2005.

c:       Roger Coffey, Utilities Director

          Ed Mullins, Finance Director

          Dave Corliss, Asst. City Manager