Title
Preliminary Discussion - Water and Sewer Rate Adjustments
Recommended Action
N/A - Discussion item only
Staff Recommendation
N/A - Discussion item only
Body
The ten-year forecast for the water and sewer utilities presented with the FY2020 budget included a series of incremental rate increases to generate revenues needed for current operations and to build cash reserves necessary for future infrastructure needs. In 2016 (sewer) and 2018 (water) several alternative long-term scenarios for both systems were prepared by staff and presented for Board consideration. After discussion, scenarios were selected that represent the most reasonable balance between increased rates and necessary system expenditures and have been the foundation upon which the ten-year budgetary projections have been based.
For this preliminary discussion of proposed FY20 rate ordinances, both sewer and water rate adjustments are being presented together. When considered for adoption, the ordinances will be presented separately. Both proposed ordinances are attached herewith for discussion.
As noted previously, the long-range plan for both systems incorporates a series of modest rate increases over several fiscal years. This approach helps consumers adjust to increasing costs over time but provides adequate funding for planned initiatives in each year. The rate trajectory was considered in the long-range proposals discussed in 2016 and 2018, and has been reviewed each year since. There have been some opportunities taken advantage of, such as the refinancing of existing debt in the sewer utility and the one-time transfer of excess funds from the gas utility to the sewer utility. The long-range projections have been adjusted as appropriate to account for these actions, and to reflect actual operational experience since first implemented. In the presentation attached and presented this evening we show those adjusted long-range plans and highlight the rate trajec...
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