Utility Committee Agenda and Packet 2019 09 13

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2.5% or to some low rate to some degree and it says this has some equitable utility so we made the decision to do the methodology. Now we are in a good place but we could make changes if you want. Councilmember Maloney stated that what we did 5 years ago was very good as we had the citizens, staff and consultants involved but suggested we run every 5 years because we have different processes and decisions and base it on what we do today which may be different than 5 years ago. Maybe some scenarios can be brought to the next meeting if we change and what the impact would be. If we change the rate this way we would have unintended consequences. Mayor Muckle stated he doesn’t understand what’s broken that we’re trying to fix. This could be a whole bunch of work that was already a bunch of work. Mr. Kowar said there are some residents that think they are paying more than commercial. So if there’s one thing we need to fix is a resident needs to feel they pay the same as commercial. Councilmember Stolzmann says “No” she doesn’t think that’s what we are trying to say. Councilmember Maloney referred to the chart on Page 31 that is an aggregate of all the commercial and Eldorado Springs is paying the highest rate. Well the aggregate with all the other commercial is dragging all those up for the rate they are paying so is the bulk of commercial paying. Councilmember Stolzmann stated we could do some scenarios and run some data. Mr. Kowar said what you are saying is not to look at it as a class but establish some norm. Councilmember Stolzmann said that’s the problem with commercial customer class but I bet it is not a normal distribution. Mr. Ahren asked then do you want a number run off it that will tell you what the group means and how much standard deviation there is. If there’s one out of whack, then it will tell you. It includes peaking people and if there’s one that doesn’t it will tell you. Then he used an example and Councilmember Maloney continued saying it would normalize the number and get rid of those Eldorado Springs users. Then you have Sierra Nevada that uses a small percent so what you have is the aggregate and you’re saying it is equitable because of the aggregate across the classes and I don’t philosophically agree with that. Mr. Kowar continued saying that applies to the resident that uses 3,000 gallons and you have people using half million gallons a year. Councilmember Maloney stated we agree those high volume users should pay the higher rate or what we call the highest incline block structure. Councilmember Stolzmann said we agreed to have this incline block structure that the Mayor laid that out as a principle last month. It is popular in our area and people want us to charge people who use more water a higher amount. So that is a bedrock principle that was laid out that we want to have an incline block structure. Regardless whether it is fair, equitable, related to cost of service or whatever we want to put this on top of it as our signature piece at the end and we agreed to that. Then how do we calculate for that first drop of water. At the end of the day we have to make sure it adds up to the amount we need to run the utility. Cory will make sure whatever we put on this that it will be enough money so that it doesn’t change people’s behavior so much that it throws it out of whack. Committee continued talking about what is reasonable and discussed a few scenarios from the user class charts. 6