TO: Mayor Thomas J. Weisner
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: July 29, 2013
SUBJECT: title
An Ordinance Amending Article II of Chapter 48 of the City of Aurora Code of Ordinances Entitled Municipal Utility Service (Water and Sewer Rates)
body
PURPOSE:
To obtain the City Council's approval of a proposed ordinance that would adjust the city's rates for water and sewer service on September 1, 2013 and July 1, 2014.
BACKGROUND:
For the past several years, the city has adhered to the practice of adjusting its rates for water and sewer service moderately each year rather than imposing larger increases at irregular intervals. A history of the city's Class 1 water and sewer service rates per 100 cubic feet of water consumed (i.e., the consumption charge rate) since July 1, 1997 is shown below.
Amount of Percentage
Effective Date Rate Increase Increase
July 1, 1997 $2.80 $0.20 7.69%
July 1, 1998 $2.92 $0.12 4.29%
July 1, 1999 $3.01 $0.09 3.08%
July 1, 2000 $3.10 $0.09 2.99%
July 1, 2001 $3.19 $0.09 2.90%
July 1, 2002 $3.29 $0.10 3.13%
July 1, 2003 $3.35 $0.06 1.82%
July 1, 2004 $3.43 $0.08 2.39%
December 1, 2005 $3.50 $0.07 2.04%
July 1, 2006 $3.60 $0.10 2.86%
July 1, 2007 $3.68 $0.08 2.22%
July 1, 2008 $3.75 $0.07 1.90%
October 1, 2009 $3.86 $0.11 2.93%
July 1, 2010 $3.98 $0.12 3.11%
July 1, 2011* $4.17 $0.19 4.77%
July 1, 2012* $4.37 $0.20 4.80%
*Applicable to residential customers.
DISCUSSION:
In order to address the anticipated operating and capital needs of the water and sewer system, the Water & Sewer Fund requires a revenue increase of about 5% in each of the next two years. The current water rate structure includes a basic fixed fee (availability charge) and a water use/consumption rate (volume rate). The national and local general use trends of decreasing per-person water use place downward pressure on volume-rate revenues. Thus, the city should migrate to a rate structure that relies on revenues that separately cover the cost of service for basic water availability expenses (i.e., fixed costs such as billing and meter services) and consumption/volume-related expenses (i.e., variable water collection, treatment, and distribution costs). To implement this rate methodology, the current rates and proposed rates as of September 1, 2013 and July 1, 2014 for the availability and volume charges are as follows:
A typical household water customer consumes approximates 14 ccf per bi-monthly billing period. Currently, this equates to a bill, on average, of about $69.28. With the proposed rates, this will increase to an estimated $72.90 effective September 1, 2013 and $76.75 effective July 1, 2014.
The proposed rates would raise an estimated $1.8 million and $2.3 million of additional revenue for the 2013-2014 and 2014-2015 rate periods, respectively.
To mitigate the impact of the rate increases on our senior citizens, the proposed ordinance would provide for a $2.20 (or 10.0%) increase in the maximum allowable senior billing credit effective September 1, 2013. This billing credit adjustment would serve to address the rate increases on both September 1, 2013 and July 1, 2014.
IMPACT STATEMENT:
Not applicable
RECOMMENDATIONS:
That the City Council approve the proposed, attached ordinance providing for adjustments to the city's rates for water and sewer service on September 1, 2013 and July 1, 2014.
attachment
cc: Alderman O'Connor, Chairman
Alderman Schuler
Alderman Mervine
Alderman Peters, Alternate