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I3. ROI 6137, Water Rates and Regulation Public HearingCiTy OF Vo KALISPELL MEMORANDUM To: Doug Russell, City Manager Cc: Johnna Preble, City Attorney From: Susie Turner, Public Works Director Subject: Resolution No. 6137 - Resolution of Intent and Call for Public Hearing on Amendments to the Water Rate Schedules Meeting Date: June 19, 2023 The Resolution of Intent to adjust the Water Rate Schedules and Regulations has been placed on the City Council Agenda for the June 19, 2023 regular meeting. This matter came before the City Council at the June 12, 2023 Work Session after an internal review of the Water Fund's budget indicated insufficient revenue to support inflationary costs for routine maintenance and operational services, planned capital improvement projects, and debt service coverage. The proposed rate schedule incorporates revenue requirements to generate adequate funds through fiscal year 2027 in order to: • Maintain the same quality of service • Fund limited capital projects • Fund an equipment replacement plan • Maintain financial policy targets, i.e. reserve and operating balances, debt service coverage Pursuant to the statutory requirements, the Council must make all evidence to be relied upon in its determination available to the public and set the matter for a public hearing. The hearing, pursuant to MCA 69-7-111 must be set no earlier than 28 days after the first publication. Therefore, the date of the hearing set by this resolution of intent is July 17, 2023. This resolution is limited to advising Council's intent to act upon the proposed water schedules and regulation amendments, making the material available to the public, and seeking public comment at the hearing. Action by the Council shall take place thereafter at a subsequent council meeting. Rate schedule amendment material and communication will be made available to the public through the following avenues: • Legal Notice in the Newspaper • Mailed Notices to all water customers • July 61h Open House at City Hall • City Website (www.kalisl2ell.com) • Contacting Public Works at 406-758-7720 201 1' Avenue E IPhone (406)758-7720 PO Box 1997 Public Works Department Fax (406)758-7831 Kalispell, MT 59903 1 www.kalispell.com RECOMMENDATION: It is recommended that Council approve Resolution 6137, a resolution of intent setting a date for a public hearing on a proposal to adopt increases in the fees, schedules, rates, charges, and classifications imposed on the customers of the City of Kalispell water utility and to adopt amendments to the regulations of the city water utility. ALTERNATIVES: Council can elect to amend or reject the resolution. ATTACHMENTS: Resolution No. 6137 - Resolution of Intent Water Rate Adjustment Legal Notice Water Regulation Amendments RESOLUTION NO. 6137 A RESOLUTION SETTING A DATE FOR PUBLIC HEARING ON A PROPOSAL TO ADOPT INCREASES IN THE FEES, SCHEDULES, RATES, AND CHARGES IMPOSED ON THE CUSTOMERS OF THE CITY OF KALISPELL WATER UTILITY AND TO ADOPT CERTAIN AMENDMENTS TO THE REGULATIONS OF THE CITY WATER UTILITY. WHEREAS, a City of Kalispell Water Utility budget review has determined the current structure of water utility rates is not adequate to fund necessary water enterprise operations as well as the financial obligations incurred for replacements and capacity increases to the system; and WHEREAS, the City Council has determined that amending the terms of the current Water Utility Rate Plan and amending the existing water regulations to reflect the changes in the fees, schedules, rates, and charges is necessary to collect sufficient revenue to cover the planned operating needs of the City's Water System, and to maintain the same quality of service, fund rehabilitation, replacement, and new growth projects, maintain target reserve balances of the City's Water System, and meet required debt coverage; and WHEREAS, the City Council, in order to adequately fund the City's water utility enterprise operations, is evaluating the present and proposed new rates, as shown on the attached Exhibit "A"; and WHEREAS, prior to initiating any increase in the fees, schedules, rates, charges, and classifications, and prior to any changes in water regulations, the City shall, as required pursuant to Section 69-7-111, Montana Code Annotated, hold a public hearing on the matter after giving due and proper notice of said hearing. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, AS FOLLOWS: SECTION 1. The City Council of the City of Kalispell shall hold a public hearing on the proposed water utility increases and the proposed changes to the water regulations, on the 17th day of July, 2023, at 7:00 p.m., in the Council Chambers, 201 First Avenue East, Kalispell, Montana. SECTION 2. The City Clerk and City Attorney are hereby authorized and directed to make, publish, and distribute notices of said Public Hearing in conformity with Section 69-7-111, MCA. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, ON THE 19TH DAY OF JUNE, 2023. Mark Johnson Mayor ATTEST: Aimee Brunckhorst, CMC City Clerk EXHIBIT A Present and Proposed Monthlv Water Rates Proposed FY 2024 FY 2025 FY 2026 FY 2027 15.0% 15.0% 10.0% 3.0% Current (Effective Rates Proposed Rate Adjustment (July 1, 2023) Sept 1, 2023) Residential & Commercial Fixed Charge (per account) $10.99 $12.64 $14.54 $15.99 $16.47 Meter Size (Rate/Cycle) 3/4" $1.45 $1.67 $1.92 $2.11 $2.17 1" 2.23 2.56 2.94 3.23 3.33 11/2" 4.07 4.68 5.38 5.92 6.10 2" 5.88 6.76 7.77 8.55 8.81 3" 13.58 15.62 17.96 19.76 20.35 4" 18.78 21.60 24.84 27.32 28.14 6" 29.86 34.34 39.49 43.44 44.74 Hosting Fee (per metering system) 0.89 0.89 0.89 0.89 0.89 Consumption Charge ($/1,000 Gal.) $3.27 $3.76 $4.32 $4.75 $4.89 Sprinkling Consumption Charge ($/1,000 Gal.) $3.27 $3.76 $4.32 $4.75 $4.89 Private Fire Protection Monthly Service Connection 2" $32.71 $37.62 $43.26 $47.59 $49.02 3" 38.59 $44.38 $51.04 $56.14 $57.82 4" 42.87 $49.30 $56.70 $62.37 $64.24 6" 52.89 $60.82 $69.94 $76.93 $79.24 8" 67.27 $77.36 $88.96 $97.86 $100.80 10" 92.79 $106.71 $122.72 $134.99 $139.04 Water Sold from Hydrants Consumption Charge ($/1,000 Gal.) $6.06 $6.97 $8.02 $8.82 $9.08 Present and Proposed Monthly Water Rate Bill Comparisons Proposed Current FY 2024 FY 2025 FY 2026 FY 2027 (7-1-23) (Effective 9-1-23) Residential & Commercial 0 gals $12.44 $14.31 $16.46 $18.10 $18.64 2,000 gals 18.98 21.83 25.10 27.60 28.42 4,000 gals 25.52 29.35 33.74 37.10 38.20 6,000 gals 32.06 36.87 42.38 46.60 47.98 10,000 gals 45.14 51.91 59.66 65.60 67.54 Irrigation 0 gals $12.44 $14.31 $16.46 $18.10 $18.64 2,000 gals 18.98 21.83 25.10 27.60 28.42 4,000 gals 25.52 29.35 33.74 37.10 38.20 6,000 gals 32.06 36.87 42.38 46.60 47.98 10,000 gals 45.14 51.91 59.66 65.60 67.54 * Per Metering Sytem Charge; Meter Hosting fee would be added after installation of a cellular meter. *Out of City rate 1.25 times the in -City rate. CITY OF KALISPELL NOTICE OF PROPOSED WATER RATE INCREASE A proposal to increase rates of the water utility and amend the water regulations to reflect the changes has been presented to Kalispell City Council. It is the intent of the City Council to consider the adjustment of the water utility rates to support inflationary costs for routine maintenance and operational services, planned capital improvement projects, and debt service coverage. A Public Hearing on the proposed rate increase and regulation amendments will be held Monday, July 17, 2023 in the Council Chambers of City Hall, 201 1st Avenue East, Kalispell, Montana, at 7:00 P.M. The increase in water rates and the amended water regulations will be effective August 17, 2023 (applied to the September 2023 billing cycle). Any person wishing to address the proposed water rate increase may appear at this hearing and make oral statements or present same in writing. The proposed documents can be viewed on the City's website at www.kalispell.com/679/Council-Public-Hearings or in the office of the City Clerk at 201 First Avenue East, Kalispell. Written comments may also be submitted for council consideration by delivering the same to the City Clerk at 201 First Avenue East, Kalispell, MT 59901, or by email to publi ccomment2kali spell. com prior to the hearing. The City will also be hosting an Open House to answer any questions on the proposed rate increases on Thursday, July 6, 2023 from 4:30 p.m. — 6:30 p.m. in the Council Chambers at City Hall, or you may call (406) 758-7720. Dated this 19th day of June, 2023. Aimee Brunckhorst, CMC City Clerk Publish: June 25, 2023 July 2, 2023 July 9, 2023 The following table provides the proposed increase to the water rates, and example bill comparisons. Present and Proposed Monthly Water Rates Proposed FY 2024 FY 2025 FY 2026 FY 2027 15.0% 15.0% 10.0% 3.0% Current Rates (Effective Proposed Rate Adjustment (July 1, 2023) Sept 1, 2023) Residential & Commercial Fixed Charge (per account) $10.99 $12.64 $14.54 $15.99 $16.47 Meter Size (Rate/Cycle) 3/4" $1.45 $1.67 $1.92 $2.11 $2.17 1" 2.23 2.56 2.94 3.23 3.33 11/2" 4.07 4.68 5.38 5.92 6.10 2" 5.88 6.76 7.77 8.55 8.81 3" 13.58 15.62 17.96 19.76 20.35 4" 18.78 21.60 24.84 27.32 28.14 6" 29.86 34.34 39.49 43.44 44.74 Hosting Fee (per metering system) 0.89 0.89 0.89 0.89 0.89 Consumption Charge ($/1,000 Gal.) $3.27 $3.76 $4.32 $4.75 $4.89 Sprinkling Consumption Charge ($/1,000 Gal.) $3.27 $3.76 $4.32 $4.75 $4.89 Private Fire Protection Monthly Service Connection 2" $32.71 $37.62 $43.26 $47.59 $49.02 3" 38.59 $44.38 $51.04 $56.14 $57.82 4" 42.87 $49.30 $56.70 $62.37 $64.24 6" 52.89 $60.82 $69.94 $76.93 $79.24 8" 67.27 $77.36 $88.96 $97.86 $100.80 10" 92.79 $106.71 $122.72 $134.99 $139.04 Water Sold from Hydrants Consumption Charge ($/1,000 Gal.) $6.06 $6.97 $8.02 $8.82 $9.08 Present and Proposed Monthly Water Rate Bill Comparisons Proposed Current FY 2024 FY 2025 FY 2026 FY 2027 (7-1-23) (Effective 9-1-23) Residential & Commercial 0 gals $12.44 $14.31 $16.46 $18.10 $18.64 2,000 gals 18.98 21.83 25.10 27.60 28.42 4,000 gals 25.52 29.35 33.74 37.10 38.20 6,000 gals 32.06 36.87 42.38 46.60 47.98 10,000 gals 45.14 51.91 59.66 65.60 67.54 Irrigation 0 gals $12.44 $14.31 $16.46 $18.10 $18.64 2,000 gals 18.98 21.83 25.10 27.60 28.42 4,000 gals 25.52 29.35 33.74 37.10 38.20 6,000 gals 32.06 36.87 42.38 46.60 47.98 10,000 gals 45.14 51.91 59.66 65.60 67.54 * Per Metering Sytem Charge; Meter Hosting fee would be added after installation of a cellular meter. *Out of City rate 1.25 times the in -City rate.