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5. Resolution 5483 - Calling for Public Hearing - Utility RatesT City of Kalispell Post Office Box 1997 -Kalispell, Montana 59903 Telephone: (406) 758-7701 Fax: (406) 758-7758 TO: Mayor Tammie Fisher and City Council FROM: Jane Howington, City Manager SUBJECT: Resolution Calling for Public Hearing — Utility Rates MEETING DATE: February 22, 2011 BACKGROUND: The purpose of this legislation is to authorize a public hearing on a proposal to modify utility rates over a 5 -year period beginning with the present year (2010/11). The proposed request for a public hearing is a result of recommended rate adjustments presented at a work session held on Monday, February 14, 2011. During this work session, staff provided an analysis of our current waste water rate structure; how the current methodology is not adequate for revenues to meet expenditure, debt, and capital needs; and what staff recommends as a means to resolve these issues. In addition to adjustments to the waste water rates, staff also presented proposed rate adjustments to the water base rate and to the solid waste rate. Council requested a comprehensive 5-year utility rate plan and these recommendations, in addition to the waste water recommendations, respond to this request. PUBLIC HEARING PROCESS: The law requires adoption of rate changes to follow a process whereby the local legislative body passes legislation calling for a public hearing. Public notification is then provided via 3 published notices of the public hearing and a notice sent to all utility customers. These notifications will be provided during the weeks of February 28, March 7, and March 14, 2011. The public hearing is planned for March 21, 2011 with the utility rate recommendation presented for council action on April 4, 2011. ALTERNATIVES: At the work session on February 14, council requested alternative scenarios be provided. Several alternatives were provided in the report provided to council on the 14th, however, staff will be bringing several additional alternatives to council (as requested) prior to council consideration of this matter. RECOMMENDED ACTION: Authorization to proceed with the public hearing on the proposed rate adjustments. Respectively Submitted, Jane Howington City Manager A RESOLUTION SETTING A DATE FORON A PROPOSAL/ CLASSIFICATIONSADOPT INCREASES IN THE FEES, SCHEDULES, RATES, CHARGES, AND # 1 ON UTILITY CUSTOMERSOF THE CITY / WHEREAS, a study of existing fees, schedules, rates, charges and classifications of the City of Kalispell utilities has provided substantial and persuasive evidence that the current structure of utility rates is not adequate to fund the utility enterprise operations; and WHEREAS, the City Council has determined that implementing the terms of the proposed five-- year Utility Rate flan is essential to maintain the necessary utility services to the City of Kalispell customers; and WHEREAS, the City Council, in order to adequately fund the City's utility enterprise operations proposes the following. 5-Yeas Current FY FY FY FY FY Total Rate 10/11 11112 12113 13/14 14115 Increase SEWER Bi-Monthly Administrative Charge (base rate) $3.75 $ T 5.00 $16.88 $13.13 Volume Charge (per Thousand Gallons) $4.19 $4.53 $4.78 $0.59 Ar-,r,E Bi-Monthly Administrative Charge (base rate) $3.75 $15.00 $13.13 Volume Charge (per Thousand Gallons) SOLID WASTE $3.00 $3.00 Charges for all garbage service to increase $.25 per month, a $3.00 annual increase. S ecial Terms and Conditions 1. Out -of -City Water and Sewer Rate 1.25 times the in --City rate. 2. Current Sewer Flat Rate Customers (28 customers) FY 10I11 Bi-Monthly Flat Rate Charge = $72.03 WHEREAS, prior to initiating any increase in the fees, schedules, rates, charges, and classifications, 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 fF RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, AS FOLLOWS .- SECTION L The City Council of the City of Kalispell shall hold a public hearing on the proposed utility increases on the 2 1 st day of March, 2011, at 7:00 p.m., in the Council Chambers, 201 First Avenue East, Kalispell, Montana. SECTION 11. 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. [�ASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, ON THE DAY OF 72011. Tam Fisher Mayor Theresa White City Clerk