HomeMy WebLinkAboutRes2011-079 Sponsored by: Administration
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -079
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEWARD, ALASKA, AMENDING THE WASTEWATER TARIFF
AND PROVIDING FOR A 6% INCREASE IN CALENDAR YEAR
2012 AND A 6% INCREASE IN CALENDAR YEAR 2013 AND
PROVIDING FOR AN AUTOMATIC ANNUAL ADJUSTMENT
THEREAFTER TO ALL RATES AND FEES BY AN AMOUNT
EQUAL TO THE FIVE PREVIOUS FULL YEARS' AVERAGE
INCREASE IN THE ANCHORAGE CONSUMER PRICE INDEX
FOR ALL URBAN CONSUMERS
WHEREAS, the most recent external comprehensive study of the City of
Seward's utility rates was conducted sixteen years ago (in 1993) by R.W. Beck, resulting
in several amendments to the City's wastewater tariff; and
WHEREAS, from 1993 through 2008 the consumer price index has risen in
excess of 40 %, while rate increases associated with operating and maintenance costs have
risen only 29.9 %; and
WHEREAS, the City of Seward's enterprise funds are operated in a manner
,., similar to private business entities, in that they establish charges intended to cover the full
cost of providing services (including direct and indirect costs) including operations and
maintenance, overhead, system expansion and charges for the use of capital facilities; and
WHEREAS, in order to qualify for low- interest loans and bond financing for
capital infrastructure, the City must be able to demonstrate the adequacy of utility rates as
well as the financial capacity for debt repayment; and
WHEREAS, the result of the 2010/2011 Budget process was a decision to
increase wastewater rates by 4.8% (equals five -year average CPI of 2.8% plus 2 %)
effective January 1, 2010 and 5.1% (equals five -year average CPI of 3.1% plus 2 %)
effective January 1, 2011, in addition to automatic rate increases annually thereafter,
equal to the five -year average CPI each year effective the first billing cycle of each year,
in order to (at a minimum) keep pace with cost increases; and
WHEREAS, the Seward City Council conducted a reassessment of enterprise
fund capital infrastructure and rate review in work sessions in preparation for the
2012/2013 Biennial Budget, the outcome of which identified the need to raise rates above
the CPI in order to cover the cost of capital infrastructure repairs and replacement, as well
as operational shortfalls; and
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -079
WHEREAS, a result of the 2012/2013 Budget process was a proposed increase in
wastewater rates of 6% effective January 1, 2012, and 6% effective January 1, 2013,
followed by automatic rate increases annually thereafter, equal to the five -year average
CPI each year effective the first billing cycle of each year (in order to) at a minimum,
keep pace with cost increases; and
WHEREAS, a 6% rate increase in calendar year 2012 and 2013 will provide
necessary, critical relief from rising operation costs and the cost of critical capital
infrastructure repairs and replacement; and
WHEREAS, limiting rate increases only by the CPI will not sufficiently cover
the cost of operations, critical capital infrastructure repairs and replacement or
demonstrate adequate financial health that is needed to qualify for low interest loans; and
WHEREAS, the rate and fee schedule will resume the automatic annual
adjustment by the previous published five years' annual increases in the Consumer Price
Index beginning January 1, 2014; and
WHEREAS, annual rate adjustments will assist in demonstrating the City's
commitment to maintaining a financially sound utility, and will serve to mitigate
potential `rate shock' associated with infrequent rate hikes.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF SEWARD, ALASKA THAT:
Section 1. The Wastewater Tariff is hereby amended to establish a new initial
paragraph prior to "Group A- Residential" on Page 4 -1, to read as follows:
ANNUAL RATE ADJUSTMENT: The rates and fees herein provided are
adjusted 6% beginning the first billing cycle of the 2012 and 2013 calendar
year. The rates thereafter will be adjusted annually beginning the first billing of
each calendar year to reflect an average of the five previous published years'
annual increase in the Consumer Price Index, All Items, 1982 -84 =100 for all
Urban Consumers, Anchorage, Alaska Area ( "CPI') as published by the United
States Department of Labor, Bureau of Labor Statistics. (For example, 2011
rates reflected an increase based on the average CPI for 2004 - 2008.)
Section 2. All previous Resolutions in conflict herewith are hereby repealed
effective December 31, 2011.
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -079
L
Section 3. The rates, fees, and charges incorporated herein by reference and
attached hereto as "Sewer Rates and Charges — 2012" are effective January 1, 2012 and
as "Sewer Rates and Charges — 2013" are effective January 1, 2013, and are hereby
ADOPTED.
Section 4. This resolution shall take effect ten days following approval.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska,
this 24 day of October, 2011.
THE CITY OF SEWARD, ALASKA
`r.
ice
David Seawa : ayor
AYES: Valdatta, Bardarson, Keil, Shafer, Casagranda, Terry, Seaward
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
Johanna Kin CMC
jity Clerk
(City g4,•,*it
0.
0
q
le
C s
• .. v
• �� • r! 9' •
�� •14 , 7 OF,A:P`.
Council Agenda Statement
Meeting Date: October 24, 2011
44 0 stif
From: W.C. Casey, Public Works Director
Agenda Item: Amending the Wastewater Tariff and Providing 4 460
Automatic Annual Adjustments to All Rates
The Seward City Council has held two work sessions to discuss the past, current and future
financial and mechanical performance of the wastewater enterprise fund in regards to the 2012
and 2013 Wastewater Capital Budget. Staff was given the opportunity to highlight the critical
needs of the department and offered some recommendations in addressing these critical needs.
Customer rates and charges in the Wastewater Enterprise Fund, have been amended four times
(5% in 2004, 15% in 2005, 4.8 % in 2010 and 5.1% in 2011) since the early 1990's. The
cumulative consumer price index between 1993 and 2008 is in excess of 39 %. Due to the
manner in which the wastewater fund is operated (similar to private business entities), expenses
and operating costs have gradually begun to exceed revenues. Generating revenues in a manner
that will allow for the funding of critical needs, depreciation, capital projects, repair and
replacement of infrastructure has become unachievable. Compounding the issue of revenue
shortfalls is the ADEC requirement that the Wastewater Fund show proof for the financial
capacity to incur debt. ADEC has sustained its ability to make funds available through very
competitive grants and loans, and it is absolutely necessary for the City to maintain the leverage
to take advantage of these funding mechanisms (70 % -30% Municipal Matching Grants and 1.5%
Municipal Loans). Forward thinking in regards to Project Development and Project Funding is
crucial in order to make the City eligible for these opportunities.
The 6% rate increase in calendar year 2012 and 2013 will provide necessary critical relief from rising
operation costs and the cost of critical capital infrastructure repairs and replacement. The proposed
rate increase will help the Wastewater Enterprise Fund catch -up to the cost of doing business in
2008, but will still leave the fund 3.3% behind 2008 CPI prices. The rate and fee schedule will
resume the automatic annual adjustment by the previous published five years' annual increases in the
Consumer Price Index beginning January 1, 2014. This will assist in demonstrating the City's
commitment to maintaining a financially sound utility, and will serve to mitigate potential `rate
shock' associated with infrequent rate hikes.
This proposed tariff does NOT include a fee for the purpose of recovering costs associated with
individuals who elect to turn off utilities seasonally. However, if the City Council desires to
amend the tariff at this time to recover the lost revenue associated with the monthly customer
charge fee for those customers who stop service seasonally, we would propose the following
amendment:
Sewer seasonal vacancy fee: A turn -off vacancy fee is assessed when the water service is
disconnected for seasonal purposes = $166.18. A separate turn -on vacancy fee is assessed when
the water service is reconnected after being turned off for seasonal purposes = $166.18. The
basis for this recommendation is to charge the custo r the monthly non - metered service fee of
$48.48 multiplied by seven months (and then divt d 4 VI half; one -half assessed at the time of
water turn -off and the other half assessed at the time of water turn -on). This methodology
follows that used in the water tariff and electric tariffs (as proposed) to address the adverse
impact of seasonal turn -offs to the utilities.
INTENT:
The adoption of the proposed amendments to the Wastewater Tariff and resuming the automatic
annual adjustments to all rates will improve the financial condition of the Wastewater Enterprise
Fund. This will also improve the utilities' ability to address critical infrastructure needs, fund
depreciation, fund operations and maintain crucial leverage to take advantage of the ADEC grant and
loan programs.
FISCAL NOTE:
Rates and fees are adjusted 6% beginning the first billing cycle of the 2012 and 2013 calendar year.
The rates thereafter, will resume the automatic annual adjustment beginning the first billing of each
calendar year to reflect an average of the five previous published years' annual increases in the
Consumer Price Index
Approved by Finance Department: 1,4
ATTORNEY REVIEW: Yes No X
RECOMMENDATION:
Council approves Resolution 2011 - 011 amending the Wastewater Tariff and resuming the
automatic annual adjustments to all rates and fees by an amount equal to the five previous full year's
average increase in the Anchorage consumer price index for all urban consumers beginning January
1, 2014.
l ` 3
Sewer Rates and Charges - 2012
Rates for Sewer by Class of Service
ANNUAL RATE ADJUSTMENT:
The rates and fees herein provided are adjusted 6% beginning the first billing cycle
of the 2012 and 2013 calendar year. The rates thereafter will be adjusted annually beginning the first billing of each
calendar year to reflect an average of the five previous published years’ annual increase in the Consumer Price Index, All
Items, 1982-84=100 for all Urban Consumers, Anchorage, Alaska Area ("CPI") as published by the United States
Department of Labor, Bureau of Labor Statistics. (For example, 2011 rates reflected an increase based on the average
CPI for 2004-2008.)
GROUP A - RESIDENTIAL
Group A includes all residential customers living in single family or multiple family living units. Multiple family
units includes multi-plexes, apartments and townhouses, but excludes hotels, motels and similar transient
accommodations.
GROUP B - SMALL GENERAL SERVICE
Group B includes commercial enterprises where the use of water is incidental to the commercial activity and is
primarily limited to domestic and janitorial use. This class of service includes such businesses as hotels, motels,
professional office buildings, barber shops, warehouses, libraries, public offices, churches and theaters, etc.
GROUP C - LARGE GENERAL SERVICE
Group C includes commercial enterprises where water usage is greater than in Small General services and/or
water is used for food preparation or other activities, but not for industrial processing.
GROUP D - METERED COMMERCIAL & INDUSTRIAL SERVICE
Group D includes commercial and industrial enterprises where water usage is greater than for small businesses
and/or water is used for food preparation, other activities and industrial processing as well as general domestic users.
BASIS FOR MONTHLY FEES AND CHARGES
GROUPS A - D
NON-METERED SERVICES
Groups A, B and C
Non-metered sewer users in shall be charged at the rate of $50.33per ERU per month,
not including tax, when the water service and sewer service serve the same activities. If the activities serviced by
the sewer services are different than those served by the water service, a water charge shall be computed based on
the activities served by the sewer. The sewer rate shall then be computed at 1.2 times the established water charge.
METERED SERVICES
- Revised 10/03/2011, Effective January 1, 2012
City of Seward Sewer Tariff Page 4-1
Group D
Users with metered service () shall be charged for sewer service according to the rates listed below. The
charge shall be based upon the quantity of metered water, except that those users having a sewer meter shall be
charged for the quantity of sewage actually metered. The quantity of sewage will be adjusted if a significant amount
of wastewater is not discharged into the city sewer system.
Minimum Charge for Each Metered Service
Service Size Minimum Monthly Charge
3/4" - 1" water service $42.93
1-1/2" - 2" water service $71.05
2-1/4" - 4" water service $179.12
Over 4" water service $895.58
Charge for Consumption
Charge per 1,000 Gallons
Gallons of Sewage Discharged per Month
Groups A, B & CGroup D
First 10,000 Gallons $6.30 $10.12
Next 40,000 Gallons $5.05 $8.10
Next 50,000 Gallons $4.19 $6.76
$3.77
Next 100,000 Gallons $6.10
Next 500,000 Gallons $1.87 $3.92
Next 500,000 Gallons $1.87 $3.92
All Additional Gallons $1.87 $3.92
GROUP E - SPECIAL RATES AND FEES
Group E includes charges for other categories of service not included in Groups A through D.
- Revised 10/03/2011, Effective January 1, 2012
City of Seward Sewer Tariff Page 4-2
Users generating sewage with a BOD and times
1.Specified rate in rate tables a factor of the
SS loading in excess of mg/1
(upon a deter-plus
actual BOD and SS loading divided by 250, the
mination by the utility manager that the
cost of testing
concentration and characteristics of the
sewage will not cause a detrimental effect
upon the sewer system and/or treatment
plant [BOD = Biological Oxygen
A
Demand and SS = Suspended Solids]
@A@
Tank Truck Operators Per thousand gallons
2. : Fresh sewage, or : $48.86
waste from portable or chemical toilets,
provided the utility manager determines the
waste will not be detrimental to the sewer
system and/or treatment plant.
NOTE:
It is prohibited
to discharge into the citys
=
sewer system, septic tank waste or any waste
containing toxic or other materials that could
cause the citys discharge to violate the EPA
=
or DEC discharge permit.
- Revised 10/03/2011, Effective January 1, 2012
City of Seward Sewer Tariff Page 4-3
Recreational Vehicles No fee
3. : Individual RV
owners utilizing city-owned or approved
dump sites
$0.82 per day Per RV, camper or trailer permit, not
including tent campers.
Public and private campground operators
[Operators must maintain sufficient records
to compute a monthly payment, and such
records shall be made available to the city
upon request.]
Not accepted
Ship’s Sewage
4. :
Installed at property owners expense. Any work
Sewer Service Connection Fee
5. :
=
performed by the city will be charged at total cost,
including labor, overhead, administration, materials
and equipment PLUS a $125.00 connection fee.
$222.06
Sewer Service Inspection Fee
6. : This fee
shall be charged for services installed by
anyone other than the city.
Per Occurrence
$740.15
Unauthorized Connection or Discharge
7.
PLUS
Cost of repair, restoration or cleanup by city
into the City Sewer System
:
PLUS Actual cost
State and/or federal penalties & charges , including city overhead, administration,
levied against the city or individual8.labor, materials and equipment
Restoration of Sewer Service and
Repair of Damage by Owner or Contrac-
tor to City Facilities:
Locate Sewer Main First Locate: No Charge
9. :
Each Additional Locate:
$74.01
Large projects requiring several locates will be
under a special contract and may require a fee.
Security Deposit Domestic:
10. : If a water security deposit $37.00
was paid, no additional deposit will be (Single family & duplex)
required. If no water deposit was paid, the Commercial:
$111.01
following deposits will be charged.
Multi-Family:
$ 111.01
- Revised 10/03/2011, Effective January 1, 2012
City of Seward Sewer Tariff Page 4-4
Contractor Work Bond
11. : Any contractor tapping $5000.00or equivalent cash guarantee
into a city sewer main, or otherwise working payable to the city
on a city sewer main, must be properly
licensed to perform the work and must
provide:
Sewage Meter Computed from the quantity of metered water
12. :
delivered to the same activity unless a sewage meter
has been installed. Sewage meters approved by the
city may be installed at the users expense.
=
Interest rate: 10.5% per annum
Delinquent Account Charges
13. : Monthly late fee:
$5.51
- Revised 10/03/2011, Effective January 1, 2012
City of Seward Sewer Tariff Page 4-5
Sewer Rates and Charges - 2013
Rates for Sewer by Class of Service
ANNUAL RATE ADJUSTMENT:
The rates and fees herein provided are adjusted 6% beginning the first billing cycle
of the 2013 calendar year. The rates thereafter will be adjusted annually beginning the first billing of each calendar year
to reflect an average of the five previous published years’ annual increase in the Consumer Price Index, All Items, 1982-
84=100 for all Urban Consumers, Anchorage, Alaska Area ("CPI") as published by the United States Department of
Labor, Bureau of Labor Statistics. (For example, 2011 rates reflected an increase based on the average CPI for 2004-
2008.)
GROUP A - RESIDENTIAL
Group A includes all residential customers living in single family or multiple family living units. Multiple family
units includes multi-plexes, apartments and townhouses, but excludes hotels, motels and similar transient
accommodations.
GROUP B - SMALL GENERAL SERVICE
Group B includes commercial enterprises where the use of water is incidental to the commercial activity and is
primarily limited to domestic and janitorial use. This class of service includes such businesses as hotels, motels,
professional office buildings, barber shops, warehouses, libraries, public offices, churches and theaters, etc.
GROUP C - LARGE GENERAL SERVICE
Group C includes commercial enterprises where water usage is greater than in Small General services and/or
water is used for food preparation or other activities, but not for industrial processing.
GROUP D - METERED COMMERCIAL & INDUSTRIAL SERVICE
Group D includes commercial and industrial enterprises where water usage is greater than for small businesses
and/or water is used for food preparation, other activities and industrial processing as well as general domestic users.
BASIS FOR MONTHLY FEES AND CHARGES
GROUPS A - D
NON-METERED SERVICES
Groups A, B and C
Non-metered sewer users in shall be charged at the rate of $53.35per ERU per month,
not including tax, when the water service and sewer service serve the same activities. If the activities serviced by
the sewer services are different than those served by the water service, a water charge shall be computed based on
the activities served by the sewer. The sewer rate shall then be computed at 1.2 times the established water charge.
- Revised 10/03/2011, Effective January 1, 2013
City of Seward Sewer Tariff Page 4-1
METERED SERVICES
Group D
Users with metered service () shall be charged for sewer service according to the rates listed below.
The charge shall be based upon the quantity of metered water, except that those users having a sewer meter shall be
charged for the quantity of sewage actually metered. The quantity of sewage will be adjusted if a significant amount
of wastewater is not discharged into the city sewer system.
Minimum Charge for Each Metered Service
Service Size Minimum Monthly Charge
3/4" - 1" water service $45.51
1-1/2" - 2" water service $71.31
2-1/4" - 4" water service $189.87
Over 4" water service $949.31
Charge for Consumption
Gallons of Sewage Discharged per MonthCharge per 1,000 Gallons
Groups A, B & CGroup D
First 10,000 Gallons $6.68 $10.73
Next 40,000 Gallons $5.35 $8.59
Next 50,000 Gallons $4.44 $7.17
Next 100,000 Gallons $6.47
$4.00
Next 500,000 Gallons $1.98 $4.16
Next 500,000 Gallons $1.98 $4.16
All Additional Gallons $1.98 $4.16
GROUP E - SPECIAL RATES AND FEES
Group E includes charges for other categories of service not included in Groups A through D.
- Revised 10/03/2011, Effective January 1, 2013
City of Seward Sewer Tariff Page 4-2
Users generating sewage with a BOD and times
1.Specified rate in rate tables a factor of the
SS loading in excess of mg/1
(upon a deter-plus
actual BOD and SS loading divided by 250, the
mination by the utility manager that the
cost of testing
concentration and characteristics of the
sewage will not cause a detrimental effect
upon the sewer system and/or treatment
plant [BOD = Biological Oxygen
A
Demand and SS = Suspended Solids]
@A@
Tank Truck Operators Per thousand gallons
2. : Fresh sewage, or : $51.79
waste from portable or chemical toilets,
provided the utility manager determines the
waste will not be detrimental to the sewer
system and/or treatment plant.
NOTE:
It is prohibited
to discharge into the citys
=
sewer system, septic tank waste or any waste
containing toxic or other materials that could
cause the citys discharge to violate the EPA
=
or DEC discharge permit.
Recreational Vehicles No fee
3. : Individual RV
owners utilizing city-owned or approved
dump sites
$0.87 per day Per RV, camper or trailer permit, not
including tent campers.
Public and private campground operators
[Operators must maintain sufficient records
to compute a monthly payment, and such
records shall be made available to the city
upon request.]
Not accepted
Ship’s Sewage
4. :
Installed at property owners expense. Any work
Sewer Service Connection Fee
5. :
=
performed by the city will be charged at total cost,
including labor, overhead, administration, materials
PLUS
and equipment a $125.00 connection fee.
Sewer Service Inspection Fee$100.00
6. : This fee
shall be charged for services installed by
anyone other than the city.
Per Occurrence
Unauthorized Connection or Discharge $784.56
7.
PLUS
into the City Sewer SystemCost of repair, restoration or cleanup by city
:
- Revised 10/03/2011, Effective January 1, 2013
City of Seward Sewer Tariff Page 4-3
PLUS Actual cost
State and/or federal penalties & charges , including city overhead, administration,
levied against the city or individual8.labor, materials and equipment
Restoration of Sewer Service and
Repair of Damage by Owner or Contrac-
tor to City Facilities:
Locate Sewer Main First Locate: No Charge
9. :
Each Additional Locate:
$78.45
Large projects requiring several locates will be
under a special contract and may require a fee.
Security Deposit Domestic:
10. : If a water security deposit $39.22
was paid, no additional deposit will be (Single family & duplex)
required. If no water deposit was paid, the Commercial:
$117.67
following deposits will be charged.
Multi-Family:
$117.67
Contractor Work Bond
11. : Any contractor tapping $5000.00or equivalent cash guarantee
into a city sewer main, or otherwise working payable to the city
on a city sewer main, must be properly
licensed to perform the work and must
provide:
Sewage Meter Computed from the quantity of metered water
12. :
delivered to the same activity unless a sewage meter
has been installed. Sewage meters approved by the
city may be installed at the users expense.
=
Delinquent Account Charges
13. : Interest rate: 10.5% per annum
Monthly late fee:
$5.84
- Revised 10/03/2011, Effective January 1, 2013
City of Seward Sewer Tariff Page 4-4