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Sponsored by: Hunt
CITY OF SEWARD, ALASKA
RESOLUTION 2018-029
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, RESCINDING RESOLUTION 2017-077 WHICH AMENDED THE
SEWER TARIFF EFFECTIVE JANUARY 1, 2018
WHEREAS, the Seward City Council passed Resolution 2017-077 on November 27, 2017,
amending the Sewer Tariff to provide for a 2.1 % rate adjustment beginning the first billing cycle of
the 2018 calendar year, adding a seasonal tum-on/turn-off fee, clarifying that metered rates apply
only to Class D customers, and other minor housekeeping changes; and
WHEREAS, as a result of implementing the intended 2.1 % rate increase, a number of
historical billing system errors were discovered which, in the past, resulted in under -billing
numerous customers based on incorrect classification of customer accounts or incorrect historical
rates being applied to a rate class, with said errors causing the implementation of the 2018 tariff
rates approved on November 27, 2017, to have a significantly higher impact on some customer rates
than intended by the Seward City Council; and
WHEREAS, to alleviate the rate shock associated with this action, the City Council desires
to rescind Resolution 2017-077 in its entirety, retroactive to January 1, 2018.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. Resolution 2017-077 approved on November 27, 2017 is hereby rescinded
effective retroactively to January 1, 2018.
Section 2. All previous Resolutions in conflict herewith are hereby repealed effective January
1, 2018.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 96, day
of April, 2018.
THE CITY OF SEWARD, ALASKA
40,4-1
Ma anna Keil, Vice Ma or
CITY OF SEWARD, ALASKA
RESOLUTION 2018-029
AYES: Casagranda, McClure, Slater, Horn Towsley, Keil
NOES: None
ABSENT: Squires
ABSTAIN: None
ATTEST:
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Bri'lM
City Clerk
(City Seal) ts'$$$i.,,,°°`
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MeetIng Date,,, A r-1 9. 2018, I
1.
To, C 1* tNr C. o, unc 1
"rhrough", Jim. Hunt,, City Manage�r
From-. i Kr"'st"n, Erchn r inance Director I I I ge� , F*
Agenda ltem, Rlesc lind, and, Rep'laice Water and SeNver T'ar'llt"s, so, Rates lncrease 2. 1, %, lover, 2017-
ij
Rles,clil�iid, 'the Request to, Delay Reclassification of W Cater/S ewer Custotmers and
Ins,tead Authorlize all Except Non-Comin-lercial Rs to Elect. to,
be Metere& and, Reduce LGS Mietyre d Customer Rates to, Equal S,G,S Metered,
Gust"onier Rates,
I p I
SEWER 'TARIFF ISSUE
Upon Further li.nivrel.stigation, ilwas discolveredt'll"a"t staff di'd o,rily increase rates, 'by, 2.11% overthe 20117
I i, ing s'Nilstem. The problemhowevet-., was twofold: thle NI I
1) Prolbleiln, 1���listorlcal rates bei,ng billed to, Lat,-ge, G'e -IolS'er"vke (1, custoniers tntlie billing
system di'd not match, the appIro,�vedI"'a,i-,�'l�fl"s-,,,r,a"tes wiere inik-entered, into the it systern by staff,
Tl,,ius, customers in 1',,.,G,'S'l rate class, were en,-o,,neously under -charged at the l,ower Small General
Service (S,GS) rate f6r ni,,-,iny �,rears. The diff�-,,,rential betweeii what should liave bleen charged
IW 10,
historically, according to the T'ariff, versus, what was charged hi, 'the blilling s,ystem, resulted in
0
customers being under-billied, according to the Sewer 717cariff, by betlAreen, 64111,�',' and 11 50NO.
2
�R 018 (--,+J(ANAL 2018 j evised
21, 0 1 Pro, I pose to Rlesdnd Proposed to Relplace,
C"I U, 'lav
a 156
Large GS, Metered las U
Tairiff Filled Tavriff Edled atiff IEilled C"ll"ange Tariff Jmnge
2 %, j nx�, ire ase Equalto 2017
above (a), Sifflod(b) + 2.1%
First 10,K gallotis 23,? T72 1, "woot", 21 1
h 10. 58
Nex t 4O K galtons 2 17
%
�Next 501K, gallotis, 82 7 511 -91. F 1, -1-111-11,,,,/- R.- 2-19,6
.. . ....... . .. 4, 2. 190
IN e, �x t 5 0 0 IK ga 14 o iic> 4 81, 2 218.5 2 'El, 8 5, 1, 21
Next 50"Al(gallotn 4 81, 2.28 51,102, 2 8 5. Ell 1, 2,4 2.� 1, %
1
All adiditional gallons, 4 8. 1, 21.28" l` . 021 2, "Ell; 111R, 51.1, 5 . I S' 2, . V; 21%
Note thla t the 2017 "Toriff" show' ci rnuch fVL),h,,er ratie I Class D than, custotners were beill'I'l) "Bified". Tl?t)f,, when
20 8,rattss wiere iolcrecnied1�7,61 abowe the ry Tor�)f fd rore, the re stilt was asign,�filcont increase above the prior -opprove,
Propo edSolution: Reduce LGS se we turrc�,rle Wr to ivir,rinor S435 sieve er turiff rates, to be,
coils i's rep'? t V0,01 proctict-7s until suchtirne as future structural Tarff , s are
f is, s ul e.
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Propos'ed Solutionto erroneo,u,'s, LGS,ra,te: Rescind Rtsolution 2,017-077', th,1's, wi]lnot, ho",,ekrer
tff -- where
correct tlte probilem with bilitng of higber rates,., sm,ce, rotling back to 2017 appl oved Tar"
C lass D LGS Mete.t,,-ed Rates, are, f,,76,r example, $J 2 , for the first I OK gallons — would result
'mcrease in, 1,,,G,Sl etered, sewer, rates of between 64% and 115%. Therefore staff recomiii,el ds,
M n
rescinding and replacing w, Itfia, Se,\Nrer'Tafflfteat will, make the LG,5'Sewer metered rates,equIvalent,
to the (lower), SGS Sewer metered rates, cores tstent wt,th, past (erroneousl) bil,hing practrces,. 'Thi's
w111, ensurethat LG-S customer's' rates "ncrease, only 2.1 94o olver the 2017bitled rates.
2) Problem #2.,: lb the process, of p,reparing for the rate, change, staff identifited a� 'mers
prev, , ously cha,.rged, fbr tnetered Nvater and sewerl charges, where other customers i , n the saii!le rate class,
wee-.e cons,Idered ell",glil ERLJ This, created, confbsion about whIchcustlomer's were
eligible 15or metered rates., 'To eliminate this problem, staff recoinmends thalt all,'] 1-.GS, customers
tes . . . .... r7li,-,ismrill ens"ure that onl)( w,lshtngto, con,verttio nietered, rates, be allowed, to reqL,iiest m-etereld ra:
L GS, custutn,,,ers who, do not iAr'lsli to obtain, al, meter Nvill be chargeld ERU rates, w,�Ilth all other LGS
custoni.erswilth meter's, being elligible for metered rates. The 2,0118, Original 'ran,ff attempted, to, con*ect
tine 'nequityl between some, I 1 1, custom,,ers ble' g cliarged ERU rates and, some being charged metered, rates,
'by proposing �to ellm,linate the SGS Metered R-ate Class, and allolwilng only LGS MeteredRiates ('*in other
words,. requirl',ing SGS custorrier's to, rerna"In as ERIJ custiomers, not eligible for, metered rates")., The
Council and, public have expressed, al pref&ence insteald, of all-owling SGS metered customers to be
eligible for meteried, rates; the ereft),re, staff reconiniletlids also aflowing SGS custoni,ers who install a.
watertneter. to, request metered rates,,,
Small GS, Metiervd.-
T44 t ii ft
(Ij I lle,(J,
First I K Ft IIVIan s
7 7 A,
7T"
, All
Next goatflotis
f4ext gaflotwt�
Next ,fib %I'o(`4"
4
e x"t All
9 N (DIIS
All,
411 ilidtfiflottall,I y lo)rr'.
2, ltiiYal
44
4 "K
OL
A-
,'4(FANAIL,
Propuset,lo Rescirtld
IA s A. E,
Tt"Wj i, t Pdlvd
I 21'1'1111,� 2 1 11",
'7 7
0000
21018 Revised
Proposed 'to Replace
lass A. iU
Tarit"t
Equal to, 2017
8414d (d) + 2'. 1%
4
4,
1
4
1
fry
4:
l 4,
1",
N'll, 41t, �,,ro r it:'on� i�, rt") r7 olriirh 111"t inlr�t:,"o Ffu-
7irt,",
C, s ir YO i''n, ell"e, v/ bl�,` 3 rhmf"", I r, -7AIC)",
he efl, � Ot- v r i it i i
Ito axrre�,,,,�r rhi� prtiibleni l 21C),18 rhe 95,5 Rrcrrt'r (`,fas�� Wait fercrvin,co (�,mly Olne,
g'
ICIC1` 5 f) Awfir", rrel�t ed )Ri:irie Ch.-�s, s,, Thun,,� 2t �18' Me, tereci Rirre f, vvle lll irwre 2, r^ q,;bov,e rftel
q Iti�lrr e, 1"I i t a, fco !"", ic,) C, ic? r t ;"flic oa nr "t, 1, t", ("t 5 e a� b l V C t e r ii f 11 1711C IfC) r1r el C i) i I il e d, r a t e I u, t 11"Jel refclinint,
tie ne d r clttie arid re, l I a, )f e Cl la t rl o E P", I., t"I r z" W u t (Ir le 4 t'r , Ic turaf, T, cxt
7 '' rf"I PT r$ 511del 5 (Ire, cjddre-!f,;
Pro olittion to erroneous SGS rate: Rlescii,nd Ressolution, 201.7-077- thifs will, not 'however, ,,lsed S
correct the problem with biltl lo,�If higher, rates, relateld to Misclassilication of'customer a,CCO111,11ts.
'n, in all classes
`Fheref'ore staff relcoil j,,-nej,,id,s aeniding the Sewer J'Ariff to, clarit"y that all customers I
otherthan conim,ercml resideilla].,, NvIll, be eligible ft)r metered ra,tes. Nilie "it can, ble expected that, a
number ofcustom,ers wfll convertto meters, because they ex,plect to, pa� Y �, less un.der, a metered sch-edule,
Council has, expriessed support, fbr aClasslification and, Rate Study 1"br WaterSul d SeNve],- iii,,tlie new
'ter Thould l iilit.suffinnieoresearchet as"fitof* autiornad, wr lre. Is shpOide uty ciemhNy teate, r
fTe, i I recorld acclffate water, thl ough
meterm& and ways to more efficlie'littly and el ct'veY
autortiati.on, similar towhat Is being done in the electric tlaility. 'Thus, staff'recommends, piassage of'
Resolution 2018--Q�,cwhich wiII delay implementing further corrections to the
c lassficatn of certain wale I 1 1, I i I , r aii,d sewer custiorn-er accouilit's (Class A, B, C),,atid. "nsteald rlesolvie the
inequities between ERU ai,,W metered custoniers by a1low.,ing most customers to convert to, nietered
"rates., Staff t"urther recon.i.mends plassa,ge of Resolution 201 8-,,06'Z,,w'h.J"ch will restore the metered, block
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P * I
i�,ons, wih I
rate structu,ille for custorners, vi 'th tneters', iti, all classificat"' t' t'he excepflon of non-comiiierctal
r "dent"al. The end result wil"I be that aft"ected, ctlStoniers'ln, all c1,as.,se,s,,c,a,,n expect 'to, see a rate increase
esi, I
'I c 7 e rec I of onl)r 2. 1 %, o,Nrer the 0 1, 7 H I ed rates, and 'be assured "t at theN "ill, not b jured, to revert, to ERU
'rates.
WATER TARIFF ISSUE
The Water "I'las always had on,l,y one metered rate ScIiedulel thus, f�,wer problems, result ftom the
arifl,�' iiii,i,�n,,ten.,t'i�o,�,na,',Ily elim.�,nated the wot-d ongtnal 2018 "Fariff. '.I"h,e 2018, TU s �"�uwow elered", �Iioii
metered"' t'rom, the Group C (Large General Service) Classification, (this, Class, primarily aft,*ect'snon-
I ds w 11 ensure metered schools', nan-metered, hos,pftalsa,nd, nan-metered, la,und-romats). Restoring those wor I
affected custorner's whol are, metered., that they, will not rev-ert to ERU rates,as the verbiage changes will
sl,iow, that Class �C rates (ERU rates) do, nat at."I'ect, cu,stom,.Crsin, Class C who are metered. Tli,is, will resolve
the concerns expressed "by, the laundromat al,.�,nd Alaska Seall'f`� Center,, mnon,g athers. In addition, the
On glinal, 2018 17ari ffrecommended, higher than 2. 1 0/,,�, rate increases ft),r the M, 1-111MUM 111onthly cliarge for
s i between 1/"' to F" service, and, between 1 1/2" �to, 2" serviice. Staff recomniends reduciing
ervice Sizes, 4
tli,os,e tncreases, to be equal, to, 2 . 10/1,6.
FLITURE 1 "ITE STUDY AND, TARIFF STRUCTURE,' CHANGES
in -her''recommends, a conni, re,,,iens*ve, Water and Sewer, c assffication, and jr,ate study,
Tl,ie administrat'lo I t�,*urt P I I I
almed, at ensur,ing that rates, areproper"ly distribluted among the rate classes and tak,esin'to account the ffict
thcat the publlic desit*es that customersiin tn,ost i,,*ate classesbe aflowed, �to be, metered. 'rhe obvious bene'rits
o f 'his approach "nelude, NT essing 'en't i ling customers, based on their actual 'usage, and addr " S 'the curr
tn.equi , ties associated with seasonal. bustriess, customer's s'u,ch as beds,- and-breakfd, s,t a�nd hotels, that may be
r
charged, ERT.J t-Zite'S despile using lift leto no wate i.nthe ofl`-'s,eason. Giveti. thatthii,s appi-oach,represetits
a fairly significant, deplarture from past, practicie, the long-terni impacts of, this mam, o ange shoI .1 �r cht Id 'be
'm
adequately reflected, in the rates, to, ensu.re that the revej,,iue requirements of the utility are met, thus
neces,sitatiti.g at the very least, a, 'rate strudy. 'rhe Clqr's last coni,prehensive, water and sewerrate study
took plaice In 1,993, ".2.5 yelars ago.
INTENT.
The intent of the combilnied. five res,o1utions, ts to, ensure that all, ct:tstomer class,wi ], ficati ons see 22.1111,/(� water
rate n,creiases ov er, , �`211)1_7 b illed rates,, as, ori g hial I y, expeCo unel 1, 1, staff and pub 1, 1", c . F Urther,, that,
W -commerc"a'] resident'al, be gliNen thecholice t,olbe metered, and
CLISIO',Mers wins rate, classes other thann,oni I J �, �11 I
billeld''baased on actual consumption. Furfli,er, these, actlons \Nrifl elitn"inate, the neled to discuss,whetheror
not to reclasslf�r clustorners, s,i..,nce most customers will be it make the choice whelifled,
E. or imetered rates.
..................
CONS,1'151ENCY CHECKLIST. Yes No N/A
1.7 Comprehensive Plan, (cljoctinwnl' source hiere
. . . . ..........
2. Strategic Plan (iii-xument smirce here,).-, x
3 Other(71`51,t). Res,lo,lut,.,"i,o,ns,2,(,)118,-008,.2,01,7-07'7.20"171-0178 x
FISCALNOTE,.
Im n 'lie magni"Aude f othese, problems was not known whe- i,�i,, ,fbi , ulatiIg the 2018/2019 Budget. Since the
Proposed, "fix" Nvill return, all customer classes to a 2.1% rate 'increase, above 2017'bi'lled, rates, and si,nce
that, Is what was anticipateld by staff when �dev c-lopi-tig the 21018 Tari' ff,§ and the ,,,).0, 11,8/20 19, Budget, there
are no budget pacts, expected .from the rate chan.gie except to tlit, extent th,,at wehaveno way ofkmowing
how niany, customer's wi'll elect to convetl to, meter edraties. In sucl,-,l cases,, the budget, i's expected, tio, be
29
adversely impacted to sonie, degree,.,, as metered rates NVOIlld be, expected, to, resultiin cost sa,N,rings f6r most
custo,tners.
Approved by Finance Deparo'nent:
X
ATTORNEY R,E,'VIEW'-',,, Yes 'No
2), aS
03
(k -e' Sctll
IRI
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