City Council Minutes 2014 03 11 SP

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City Council Special Meeting Minutes March 11, 2014 Page 5 of 11 on efficient water usage. He stated it was not uncommon for communities to have different rate structures for different types of customers. Public Works Director Kowar noted the budget approach allows the business owners to be charged equitably. ConocoPhillips is currently not using any water. Public Works Director Kowar stated the study did not include utility revenue generated by the ConocoPhillips site. A Council member felt it is part of the disparity in the customer classes if a very large user is not using any water. It affects the customer classes and percentages are misleading. Could this be accomplished through the current system? Public Works Director Kowar explained with the winter consumption, the budget will be the right size for each annual cycle and the budget will adjust to the new process. Currently the blocks are fixed. Mr. Giardina stated the experience with the water budget approach is the commercial customers embrace it and are not concerned about rate changes. It was noted by a Council member in some business communities it is not. Mr. Giardina explained the recommendation of the Task Force would end up yielding the values budgeting in future years to keep up with utility maintenance. The decision was based on historic data and on knowledge of the staff. He noted billing under a new system is probably one year away. Would more people be needed to implement the system? Mr. Giardina stated some communities hire temporary staff. Finance Director Watson noted Highlands Ranch uses the same software as the City and they implemented a similar approach with lots of default values, so the current billing software appears to be adequate. He stated currently the City outsources the City's utility billing position. His major concern was administering procedures to address appeals on AWC's. He felt the program could be implemented within a year, if there are sufficient resources. COUNCIL COMMENTS There was some Council support for the residential component to utilize the water budget process due to water conservation and an educational component for the public. One Council member felt it was important that the cost of water is tied to what it costs to provide the service. The plan was not elastic enough to reflect what is happening in the community. There was concern over the equity of the winter water budget. Mr. Giardina stated equity is best attained by knowing the number of persons per household, but noted AWC can be used instead; however, it does not reflect efficient water use. A Council member felt government works best when it's simple with equity in taxes and fees on the citizens. Most citizens would be happy with the block rate system similar to what is now in place. Public Works Director Kowar stated the current system is not equitable for commercial businesses, especially during drought situations. A water budget system for commercial users will provide better water management.