County of Los Alamos - File #: CO0648-22-a

• File #: CO0648-22-a
• Version: 1
• Type: Code Ordinance
• Status: Introduction of Ordinance
• File created: 6/9/2022
• In control: Board of Public Utilities
• On agenda: 7/20/2022
• Final action: 7/20/2022
• Title: Introduction of Incorporated County of Los Alamos Code Ordinance No. 02-328; An Ordinance Amending Chapter 40, Article III, Sections 40-171, 40-173 and 40-175 of the Code of the Incorporated County of Los Alamos Pertaining to Potable and Non-Potable Water Rates and Bulk Delivery Rates
• Presenters: Heather Garcia
• Indexes (Council Goals): * 2022 Council Goal - Investing in Infrastructure, DPU FY2022 - 1.0 Provide Safe and Reliable Utility Services, DPU FY2022 - 2.0 Achieve and Maintain Excellence in Financial Performance, DPU FY2022 - 3.0 Be a Customer Service Oriented Organization that is Communicative, Efficient, and Transparent
• Related files: CO0648-22b, CO0660-23-a, CO0648-22-b, CO0648-22

Title

Introduction of Incorporated County of Los Alamos Code Ordinance No. 02-328; An Ordinance Amending Chapter 40, Article III, Sections 40-171, 40-173 and 40-175 of the Code of the Incorporated County of Los Alamos Pertaining to Potable and Non-Potable Water Rates and Bulk Delivery Rates

Recommended Action

I introduce, without prejudice, Incorporated County of Los Alamos Code Ordinance No. 02-328; An Ordinance Amending Chapter 40, Article III, Sections 40-171, 40-173 and 40-175 of the Code of the Incorporated County of Los Alamos Pertaining to Potable and Non-Potable Water Rates and Bulk Delivery Rates.

Utilities Manager Recommendation

The Utilities Manager recommends that the Board of Public Utilities introduce this Ordinance.

Body

The ten-year forecast for the water utility presented with the FY2023 budget included a series of rate increases to generate revenues needed for current operations, increased costs due to inflation and supply chain shortages, and building cash reserves necessary for future infrastructure needs. Detailed in the Water fund 10-year forecasts were four consecutive years of increases of five percent for bulk, potable, and non-potable rates. This was presented to board in June of 2022 as four-year rate ordinance. Staff was directed to make a presentation to the policy committee, which consists of 3 council members and 2 BPU members, to discuss different scenarios, review details about the customer base, and review the tiered rate structure currently in place. The meeting was held June 17th, 2022, and staff presented a “cost of service” rate adjustment along with the flat five percent proposed adjustment. The policy committee and staff concluded that the “cost of service” approach was more effective in building cash flows and is more fair to consumers.

Staff used three years of actual data to calculate an average cost per thousand gallons (kGal) for production and distribution of water. The cost of production was $4...