City Council Minutes 2014 05 06 - Laserfiche WebLink

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City Council Meeting Minutes May 6, 2014 Page 18 of 27 1. Rate Study Overview 2. Financial Plan 3. Cost of Service 4. Water Rate Structures 5. Wastewater Rate Structure 6. Stormwater Rate Structure He reviewed the pricing objectives rankings recommended by the Louisville Rate Study Task Force. He noted the rate study overview was initiated by the Data supplied by the City staff; the Financial Plan, Cost of Service and Rate Design. The Rate Study Committee Recommendation is as follows: Financial Planning • Pursue "Smoothing" scenario — phase -in impacts of rate increases • Move each utility toward financial self- sufficiency Adopted Financial Plan Approach - "Smoothing" Revenue Increases from Rate Adjustments of Water, Wastewater, Stormwater and all three combined from 2016 through 2018. Cost of Service (COS) Analysis — The Rate Study Committee Recommendations: Cost of Service: Implement rates to equitably recover customer class cost of service. Alternative Water Rate Structures: Develop equitable rates using an increasing block and /or uniform rate structure. Rate Structure Observations: • Highest Ranked Pricing Objective: Cost of service equity • Single Family Residential — pricing has been shown to be the single most effective tool to encourage conservation: leads to inverted block rate forms: fixed, AWC (Average winter consumption) Water Budget. • Non - residential a very heterogeneous group of customers; makes inverted block pricing difficult/inequitable pricing not as effective; these accounts have a "profit" incentive that drives them to be efficient Alternative Water Rate Structures 1. Status Quo — existing structure • Service charge based on meter size with monthly volume allowance for single family customers • Volume rate with increasing block structure with same rates for all customers