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04. Resolution 4706 - Calling for Public Hearing on Proposal to Increase Water FeesCity of Kalispell Public Works Department Post Office Box 1997, Kalispell, Montana 59903-1997 - Telephone (406)758-7720, Fax (406)758-7831 REPORT TO: Mayor and City Council FROM: James C. Hansz, P.E., Director of Public Works SUBJECT: Call for Pubiic Hearing - Water Rate Increase MEETING DATE: June 3, 2002 BACKGROUND: The budget for FY 2002/2003 includes significant capital outlays for replacements of water infrastructure to enhance service and pressures, fire hydrants to improve public safety and meter replacements to continue the program begun last year. These improvements were identified and recommended in the recently completed Facility Plan and recent Fire Department hydrant survey. The improvements are estimated to cost $1,025,000.00 and will be funded with bonds. Current funds and rates are not adequate for these improvements. In addition, funding of future replacements is proposed to be accomplished via rates. In order to meet these needs rate increases of $.15/1,000 gallons for improvements and $.10/1,000 gallons for future replacements are required. The proposed total increase in water rates is $.25/1,000 gallons. Also proposed is to eliminate the current $.30/1,000 gallons price discount for large volume users. The City Attorney has prepared Resolution 4706 calling for a public hearing to increase fees, schedules, rates charges and classifications for City water customers. RECOMMENDATION: Staff recommends approval of Resolution 4706 calling for a public hearing to increase water rates for the City of Kalispell. ACTION REQUESTED: AT CTPV COUNCIL MEETING OF JUNE 3 - MOTION APPROVING RESOLUTION 4706. FISCAL EFFECTS: Revenue increases in the water utility of approximately $250,000.00 per year to fund debt service and future replacements. ALTERNATIVES: As recommended by the City Council. JQJ CA0'9--sue .Hans :E. Chris A. Kukulski Director of Public WkIskity Engineer City Manager Report compiled May 30, 2002 RESOLUTION NO. 4706 A RESOLUTION SETTING A DATE FOR 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. WHEREAS, the City of Kalispell's Water Utility needs to replace and improve certain significant capital elements within its infrastructure, primarily the first phase of residential meter replacements for $385,000, fire hydrant installation necessary for fire safety for $100,000, and water main extensions for $540,000, and WHEREAS, the costs of said projects are anticipated to be funded through revenue bonds requiring a rate increase for the debt service, an increase of $.15 per thousand gallons, and WHEREAS, an increase of ten cents ($.10) in the water rate for future replacement will generate approximately $100,000 per year, and WHEREAS, the City, in order to fund the additional cost of improvements and replacements through an increase in fees and rates requires a total of $.25 per thousand gallons charged to customers of the City water utility, and additionally the rate structure will eliminate the price break at 30,000 gallons as shown on schedule A of the Water Utility Rates, and WHEREAS, a $.25 increase in water rates will generate approximately $250,000 in revenue per year, and WHEREAS, prior to initiating any increase in the fees, schedules, rates, charges, and classifications, the City is required, pursuant to Section 69-7-111, Montana Code Annotated, to 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 I. That there is hereby set a Public Hearing on the 1st day of July, 2002, at 7:00 o'clock P.M. M.S.T. in the Council Chambers, City Hall, Kalispell, Montana, to discuss a \res\4706 waterrate02.wpd proposal to increase total revenues to finance a portion of the cost of replacing capital items and the implementation of a meter charge. SECTION II. 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 3RD DAY OF JUNE, 2002. Pamela B. Kennedy Mayor Attest: Theresa White City Clerk \res\4706 waterrate02.wpd CITY OF KALISPELL KALISPELL, MONTANA UTILITY SCHEDULE FOR WATER EXHIBIT "A" EFFECTIVE July 1, 2002 PAGE NO. 1 SCHEDULE A RESIDENTIAL AND COMMERCIAL SERVICE Available for: User premises located within the City Limits Charge: $2.65 administrative cost per meter Meter charge: Meter Size Fee per Billing Cycle 5/8" and 3/4" residential $ 1.00 1" 1.67 1 1/2" 3.33 2" 4.67 3" 17.50 4" 24.67 > 4" determined at time of connection based upon 15 year replacement life Rate: $1.64 per thousand gallons/no minimum (Note: $ .10 of the rate is designated for replacement reserves) (Note: 30,000 gallon price break is eliminated) MULTIPLE USERS Number of units will not be a factor in the rate formula. Special Terms and Conditions 1. See Sheet 2 Schedule B for Sprinkling Terms, etc. 2. Out of City rate 1.25 times the in -City rate. CITY OF KALISPELL KALISPELL, MONTANA UTILITY SCHEDULE FOR WATER EXHIBIT "A" EFFECTIVE July 1, 2002 PAGE NO. 2 SCHEDULE B RESIDENTIAL SPRINKLING SERVICE Available for: Residential Users only Rate: Special summer rate -- Water used for sprinkling purposes. All residential users who do not have separately metered sprinkling services will be charged during the months of May, June, July, August, September and October S 1.08 per thousand gallons on the amount of water used in excess of the average consumption for the preceding four months. Usage below the minimum in that base period will be computed at minimum to obtain the average. In as much as water bills are rendered bimonthly with the service area divided into two sections billed in alternate periods, this special sprinkling rate will be applied as follows: Section A (West Side) meters read in odd numbered months: Excess usage, defined above in the period after the March reading to the November reading, will be accorded Sprinkling Rate consideration. Section B (East Side) meters read in even numbered months: Excess usage, defined above in the period after the April reading to the December reading, will be accorded Sprinkling Rate consideration. CITY OF KALISPELL KALISPELL, MONTANA EXHIBIT "A" UTILITY SCHEDULE FOR WATER EFFECTIVE July 1, 2002 PAGE NO. 3 SCHEDULE B-1 SEPARATELY METERED SPRINKLING SERVICE Available for: All users within the City limits Rate: $1.08/per thousand gallons All water users supplied through a separately metered sprinkling service as provided in the Rules and Regulations, will be billed during the Sprinkling Season as defined herein for all water used during the Sprinkling Season. No fee will be assessed against these separate sprinkling services except during the Sprinkling Season. No Sewer fees will be assessed against these separate sprinkling services unless water is used for other purposes (which is prohibited in the Rules and Regulations.) Where usage other than during the Sprinkling Season is indicated, this separate service may be cut off and charged per Schedule A rendered for that usage. Separately metered Sprinkling Services are permitted only in conjunction with usage through a service to a dwelling or commercial account and will not be provided for irrigation purposes. Special Terms and Conditions Separate Sprinkling Services will not be granted OUTSIDE THE CITY LIMITS. CITY OF KALISPELL KALISPELL, MONTANA UTILITY SCHEDULE FOR WATER SCHEDULE C SPECIAL SUMMER SPRINKLING Available for: COMMERCIAL USERS AND SCHOOLS Rate: EXHIBIT "A" EFFECTIVE July 1, 2002 PAGE NO. 4 Commercial users, including schools, will be granted Sprinkling Rates ONLY if Separately Metered Services are installed for that purpose. Such services may be entirely separate from the main to the property or separated ahead of the principal meter serving the property. Users served in this manner for this purpose will be billed $1.08 per thousand gallons on all water used for this purpose during the Sprinkling Season outlined under Residential Meters. No Sewer Fees will be assessed against these Separate Sprinkling Services unless water is used for other purposes, which is prohibited in the Rules and Regulations. The Utility will provide 5/8" meters for these Separately Metered Services. If larger meters are needed, the cost of said larger meter will be paid by the user. Special Terms and Conditions Separate Sprinkling Services will not be permitted OUTSIDE THE CITY LIMITS. CITY OF KALISPELL KALISPELL, MONTANA EXHIBIT "A" UTILITY SCHEDULE FOR WATER EFFECTIVE July 1, 2002 PAGE NO. 5 SCHEDULE D WATER ASSOCIATIONS SERVICE Available for: SERVICE TO WATER ASSOCIATIONS, OTHER WATER UTILITIES FOR RESALE Rate: Service supplied for Water Associations or their Water Utilities will not be provided under Schedule A rates, but will be based on the service to be supplied and Rates Negotiated at the time agreement is made to provide the services. MISCELLANEOUS SALES OF WATER Water sold from Hydrants to trucks by the load: $2.59 per thousand gallons, Minimum charge $22.00 per load. CITY OF KALISPELL KALISPELL, MONTANA UTILITY SCHEDULE FOR WATER EXHIBIT "A" EFFECTIVE July 1, 2002 PAGE NO. 6 SCHEDULE E Available for: COMMERCIAL FIRE PROTECTION — NOT METERED Rate: SIZE OF SIZE OF SERVICE PER MONTH SERVICE PER MONTH 2Inches $15.40 6Inches $24.92 3Inches 18.20 8Inches 31.64 4 Inches 20.16 10 Inches 43.68 CITY OF KALISPELL KALISPELL, MONTANA UTILITY SCHEDULE FOR WATER SCHEDULE F FEES FOR SPECIAL SERVICES Turn On EXHIBIT "A" EFFECTIVE July 1, 2002 PAGE NO. 7 Rate: When applicable as provided in Rules and Regulations each occurrence when made during regular working hours shall be billed at 1.5 times the current hourly rate. When required other than regular working hours will be billed at overtime rate for hours involved with a minimum of two hours. Meter Testing at Customer Request Deposits required as outlined in Rules and Regulations and refundable under conditions outlined herein. Meters up to 2" $ 40.00 Deposit Larger than 2" 100.00 Deposit CITY OF KALISPELL KALISPELL, MONTANA EXHIBIT "A" UTILITY SCHEDULE FOR WATER EFFECTIVE July 1, 2002 PAGE NO. 8 SCHEDULE H OUT OF CITY SERVICES Available for: Residential and Commercial services located outside the City limits, available only by contract approved by the City Council. Rate: Rates per all Schedules where service is allocated, PLUS SURCHARGE OF 25%.