Utility Committee Agenda and Packet 2019 07 19

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City Council Utility Committee Meeting Minutes Friday, April 12, 2019 Page 4 of 6 saying we could do what if's with this table. Mr. Kowar agreed. Mr. Peterson said on this table Multi -family is underpaying on their cost of service. It's not adding of Multi -family but they are paying in their equity. Councilmember Stolzmann asked if everyone was on the same page as far as scenarios on this table. Mr. Kowar confirmed we will create scenarios that include multiple years that validate demand factor, as is a single class and then possibly at a tap level, then we will break out commercial indoor and commercial irrigation and include total MGDs. Committee moved on to the 2017 water COS and Mr. Peterson explained the breakdown between the accounts. Mayor Muckle asked if the 2017 numbers are correct. Mr. Peterson said they will go back and do the process but there will be some movement. Mr. Kowar continued saying we'll run some bookend math on the different classes then we'll know. The Committee agreed with that. Utility Financial Review and Rate Setting Plan Steps 1 a) Review COS Customer Classes — Councilmember Stolzmann asked what kind of time frame you need to be able to be prepared but give you enough time to set rates. Mr. Kowar said we won't be able to have anything until the July meeting and we would have to set the 2021 rates off of this ruff cost of service. If we got done with our deep dive then plug in the model at the last minute. We are willing to do this if you are. Councilmember Stolzmann summarized what Mr. Kowar said by saying if we finish the COS Policy setting and Rate Policy Setting in enough time to have an impact for the 2020 Rates but if it doesn't, we will have to set our 2020 Rates and we'll use our status quo. She asked if everyone is okay with this and all agreed. Councilmember Maloney asked if we could add "and policies" to Item #2 Rate Design. Councilmember Stolzmann confirmed we are to add "and Policies" to item 1 a) and item 2 of the steps listed. She asked if there is anything more on item la before we move onto the Rate Design. Are there topics that we want to air about rate design that we need more background on before we bring it to July meeting. Councilmember Maloney asked beyond what Mr. Peterson has already written down to do? Councilmember Stolzmann explained we talked about COS but within the Rate Design if you could just say we have a flat rate you could say that we have a water budget. Mr. Peterson said to backup Rate Design your choices are Flat Rate, Uniform Block Structure, Decrease Block (like they do back east) or Water Budget. Councilmember Stolzmann stated it's like a bulk discount. Committee discussed the scenarios of commercial, residential, etc. Mayor Muckle said he has no interest in changing from an Increasing Block Structure but is okay with tweaking the structure but is concerned about what the cost is between customer class and the rates we are actually charging but the basic structure we are charging the lowest price but giving more water. Staff continued talking about structure and blocks and concluded with Mr. Kowar saying we will run the scenarios. Proposed Rate Adjustment — Mr. Kowar asked if everyone wanted benchmark information on rates. Ashely said yes and moved to the next agenda item. 6