Utility Committee Agenda and Packet 2019 07 19

Home Browse Search

City Council Utility Committee Meeting Minutes Friday, April 12, 2019 Page 3 of 6 we are looking at because this is a lot of work to undertake. Mr. Peterson agreed and said that's the discussion we've had. He explained how we did this very high level cost of service which gives us what was done based off the 2014 study where we are still in compliance. Then that would go to what was done in the rate study and what staff has subsequently done this year. Still an acceptable method for cost of service and if so then we can finalize those policies and say this is the way we are doing cost of service and moving forward be done with it. If we want to change how we are doing cost of service then we can go through that process and take as many meetings as needed to develop what those new costs will be and start down that path. Committee was discussing the next agenda item "Cost of Service" so Councilmember Stolzmann suggested moving onto the next agenda item and come back to this one so we can keep our items separate. Committee agreed. IX. Cost of Services Mr. Peterson explained the Cost of Service (COS) was based off the 2014 Study where they used the base capacity methodology supported by the AWWA Rate Manual. He went on to say how he took the 2017 data and re-entered that into the COS spreadsheets that were developed as part of the rate study. The categories on page 11 show the process of COS. Mr. Peterson explained how we start with all our revenue requirements and these get split into functional categories (on page 11). This is consistent with what was in the rate study. He continued describing the CIP's and the O&M components pretty much stayed the same except for the CIP has a storage component. Those all get allocated in, as you can see on page 12. Mr. Peterson went on with describing the tables and the Committee discussed the water usage and demand factors in the tables. Councilmember Maloney asked what the description is between Commercial and Irrigation. Mr. Peterson stated the Commercial is the internal use for commercial class and irrigation is everything outside of that. Everything new requires a separate tap. Mr. Peterson continued talking about the next step, water usage or demand by customer class using standard demand factors. Committee talked about the users being Residential, Single Family, Multi -Family, Commercial and Irrigation. Mr. Peterson explained that the Peak Day and Peak Hour demands won't affect the water supply. Committee continued talking about the usage and taps and how it's being charged. Councilmember Stolzmann suggested a couple scenarios could be given and asked if Mr. Peterson could create a couple different ways of looking at these demand factors. Ex. 1) Verify an average of a couple years and if they still match the demand factors, 2) What if we go to one customer class or is it possible? Mr. Kowar said we could run the math but what makes it hard is there are other factors that are lumped in, like tap sizes. Councilmember Stolzmann stated maybe we could do it on a tap basis. Committee continued talking about the different tap sizes and allocations and that's where we need to define these as the policy. Mr. Kowar went on to say at a high level one thing we are working on and we haven't gotten to the finish line yet but the 2013/2014 model is a monster of a spread sheet. We've started on a dynamic coding model that will run the numbers and be able to see these numbers quarterly. Councilmember Maloney referred to page 12, Table 7 5