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Sponsored by: Oates <br /> CITY OF SEWARD, ALASKA <br /> - RESOLUTION 2009 -117 <br /> A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, <br /> ALASKA, AMENDING THE WATER TARIFF AND PROVIDING FOR <br /> AUTOMATIC ANNUAL ADJUSTMENTS TO ALL RATES AND FEES BY <br /> AN AMOUNT EQUAL TO THE FIVE PREVIOUS FULL YEARS' <br /> AVERAGE INCREASE IN THE ANCHORAGE CONSUMER PRICE <br /> INDEX FOR ALL URBAN CONSUMERS <br /> WHEREAS, the most recent external comprehensive study of the City of Seward's <br /> utility rates was conducted sixteen years ago (in 1993) by R.W. Beck, resulting in several <br /> amendments to the City's water tariff; and <br /> WHEREAS, since 1993 water rates have been amended three times: to adjust charges for <br /> ship's water; a 5% across - the -board increase to all water rates effective January 1, 2004; and a <br /> 35% increase in all water rates effective January 1, 2005 implemented solely for the purpose of <br /> covering a portion (78 %) of the cost of new debt service payments attributed to the replacement <br /> of the Third Avenue Water Main; and <br /> WHEREAS, from 1993 through 2008 the consumer price index has risen 39.62 %, while <br /> rate increases associated with operating and maintenance costs have risen only 5 %; and <br /> VININNO <br /> WHEREAS, the City of Seward's enterprise funds are operated in a manner similar to <br /> private business entities, in that they establish charges intended to cover the full cost of providing <br /> services (including direct and indirect costs) including operations and maintenance, overhead, <br /> system expansion, and charges for the use of capital facilities; and <br /> WHEREAS, the Seward City Council conducted five enterprise fund capital <br /> infrastructure and rate review work sessions in preparation for the 2010/2011 Biennial Budget, <br /> the outcome of which identified the need to raise rates in order to cover the cost of capital <br /> infrastructure repairs and replacement, as well as operational shortfalls; and <br /> WHEREAS, in order to qualify for lcw- interest loans and bond financing for capital <br /> infrastructure, the City must be able to demonstrate the adequacy of utility rates as well as the <br /> financial capacity for debt repayment; and <br /> WHEREAS, the result of the 2010/2011 Budget process was a decision to increase water <br /> rates by 4.8% (equals five -year average CPI of 2.8% plus 2 %) effective January 1, 2010, and <br /> 5.1% (equals five -year average CPI of 3.1% plus 2 %) effective January 1, 2011, in addition to <br /> automatic rate increases annually thereafter, equal to the five -year average CPI effective the first <br /> billing cycle of each year, in order to, at a minimum, keep pace with increased cost increases; <br /> and <br />