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Staff says proposed MBD contract term increase would lower projected rate hike from 22% to about 7%
Summary
During open discussion a city staffer said the main change to the MBD contract is extending the term from 20 to 35 years; that change would reduce an otherwise projected 22% rate increase to an estimated 7% increase under the new contract, according to the staff comment.
During open discussion at the council meeting a staff member identified as Chris reported on changes under consideration for the MBD contract and described the expected effect on rates.
“The main change in the contract is gonna be the timing. The the length, the term of it from 20 years to a 35 year contract, which allows them for financing of the new generation they wanna put in,” Chris said. “They’re gonna do a 25 or 30 year bond on those.”
Chris told the council that under the existing contract the city would experience roughly a 22% increase in rates, but that with the new contract term the projected increase would be about 7%: “the current contract will be at 22% increase in rates. We go for the new contract, we’ll be about 7% increase in rates.”
Chris characterized the 7% figure as lower in absolute terms relative to a larger percentage applied to a small per-unit price: “So 7% on a few cents is not very much.” The comments were presented as an informational update during the open-discussion portion of the meeting; no formal motion, vote or final action on the contract was recorded in the meeting transcript provided.
The transcript does not include detailed financial schedules, the baseline rate used to calculate the percentage changes, or the identity of the MBD contractor beyond the label used in the discussion. Council members did not vote or issue direction tied to a procurement action during the excerpted conversation.
