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City„ <br />Louisville <br />COLORADO • SINCE 1878 <br />CITY COUNCIL COMMUNICATION <br />AGENDA ITEM 2 <br />SUBJECT: <br />DATE: <br />UTILITY FUNDS FINANCIAL PLAN UPDATE <br />MARCH 10, 2015 <br />PRESENTED BY: KURT KOWAR, PUBLIC WORKS DIRECTOR <br />SUMMARY: <br />Staff recommends increasing and revising the structure of the City's water, wastewater <br />and stormwater rates to (1) fund significant improvements at the City's wastewater <br />treatment plant needed to satisfy new mandatory Federal and State wastewater <br />standards, (2) provide sufficient revenue to properly operate and maintain the City's <br />water, wastewater and stormwater utility systems, (3) more equitably distribute the cost <br />of providing service to different customers based on the contribution of those customers <br />to overall system costs, and (4) fund stormwater system improvements required to <br />reduce the area of Downtown Louisville that is within the 100 -year floodplain. Table 1 <br />below shows the impact the increases and revised structure would have on an average <br />residential utility bill. The remainder of this Council Communication provides more <br />details on these proposed changes to help Council understand staffs proposal prior to <br />asking Council to adopt the rate increases on March 17, 2015 and have them go into <br />effect May 1, 2015. <br />Table 1 <br />Average Monthly Bill and Rate Increase Impact <br />For Residential Customer <br />2014 2015 2016 2017 2018 2019 <br />Water $12.32 $16.31 $18.10 $20.10 $20.10 $20.10 <br />Sewer $20.69 $22.00 $26.40 $27.45 $27.45 $27.54 <br />Storm $4.23 $4.23 $4.74 $4.78 $4.78 $4.78 <br />Total Bill $37.24 $42.54 $49.24 $52.33 $52.33 $52.42 <br />$ Change - $5.30 $6.70 $3.09 $0.00 $0.09 <br />% Change - 14.2 <br />15.7% 6.3% 0.0% 0.2% <br />Background <br />Anticipating the need to make significant improvements to the City's wastewater <br />treatment plant to comply with new Federal and State standards, in 2013 staff and <br />Raftelis Financial Consultants (RFC) conducted a utility rate study. This study <br />calculated tap fees and utility rates the City's enterprise funds should be charging to <br />fund utility operations, maintenance, and anticipated capital improvements. On March <br />18, 2014 the City Council approved the initial rate increases staff recommended as a <br />result of the study, and in May of 2014 those initial rate increases became effective. <br />CITY COUNCIL COMMUNICATION <br />2 <br />