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TO: Mayor Richard C. Irvin
FROM: Christopher A Minick
DATE: May 19, 2023
SUBJECT:
An Ordinance Amending Article II of Chapter 48 of the City of Aurora Code of Ordinances Entitled "Municipal Utility Service" (Water and Sewer Rates) and establishing rates for said services.
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 July 1, 2023 and 2024.
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. The City has a history of making rate adjustment decisions taking into account prevailing economic conditions. The City froze utility rates during 2020 and implemented a modest rate adjustment in 2021 to respect the financial hardships experienced by our residents and businesses during the COVID pandemic.
Operating and capital maintenance needs did not decline during that period, and in fact the City experienced significant cost increases in certain areas such as chemicals, electricity, and system maintenance. The cost of chemicals has increased by 90% since 2021 and budget adjustments are frequently necessary to account for these increases. The City needs to adjust rates to keep pace with the cost increases that have occurred since the pandemic when rates were frozen and adjustments kept to a very low level.
Staff is proposing modest rate adjustments that address operating needs of the system and provide for implementation of 70% of the Capital Improvement Plan. This rate structure allows for a prudent level of funding for system operations and maintenance while simultaneously respecting and acknowledging the recent inflationary trends that our residents have been experiencing. This structure is based on a cost of service model as described in the attached narrative. The cost of service model was provided by a ...
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