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City Council <br />Special Meeting Minutes <br />March 11, 2014 <br />Page 4 of 11 <br />COUNCIL QUESTIONS <br />Why in the immediate self- sufficiency there is almost no increase in the water rate, but <br />in the transition smoothing there is 2% to 2'h% increases, if the objective is to have <br />each fund be self- sufficient? Rick Giardina explained it is due to the amount of time it <br />would take to have each fund be self- sufficient. Self- sufficiency in each fund would not <br />be reached in the five -year period and the water fund would still be subsidizing the <br />wastewater and storm water funds for several years under the smoothing scenario. <br />Are charts available to illustrate when the funds converge to zero -more required? Mr. <br />Giardina explained going forward there will always be a need for revenue increases <br />because of aging facilities. Under the smoothing plan within eight years all three funds <br />would be self- sufficient. <br />Did this situation occur because the City did not collect enough depreciation and <br />renewal replacement funds investments? A Councilor responded that the situation is <br />largely a result of new EPA regulations, which require upgrades to wastewater <br />treatment facilities. <br />Drew Beckwith, 101 S. Buchanan Court, Louisville, CO. Task Force member and Water <br />Policy Manager at Western Resources Advocates in Boulder, noted one of the benefits <br />about water budgeting is it provides the customer an idea of how much water <br />represents efficient use. Xcel Energy bills list the efficiency of energy used by other <br />customers in the neighborhood. Water budgeting allows more educational opportunities <br />for the customers. <br />Mr. Giardina addressed a five -block approach, where the blocks are fluid and tailored to <br />each customer. Many communities have one unit cost for indoor use and a higher rate <br />reflective of outdoor water budget use and then increasing pricing as more water is <br />used above and beyond your budget. He stated there is a variety of ways to strike a <br />balance between equity and ease of administration. He noted there is not a perfect rate <br />structure, but balances and accommodations are made along the way. <br />How would business users be affected? Mr. Giardina explained for non - residential <br />users, the approach is to look at historic use and set some factor of that use as their <br />budget. He explained it is difficult to determine the usage of each individual non- <br />residential water user. <br />COUNCIL COMMENTS /QUESTIONS <br />There was concern over the determination of historic water use. Council wanted <br />businesses to succeed and not be required to change their water budget anytime they <br />make an investment in their business. The block structure works well for businesses. <br />There was opposition to imposing another level of government control over businesses. <br />Mr. Giardina explained individual water budgets will be different per user, but is based <br />