Kathleen Von Atchen, fiscal support manager for the Municipal Services & Operations department, described the city’s technical process for setting utility rates and the timeline for finalizing new rates.

Von Atchen said the city uses an independent consultant to build a financial model that incorporates audited prior‑year actuals, the operating budget, fixed assets, customer and consumption data, and capital improvement program (CIP) cash flows. She said the modeling typically covers a long horizon (staff said it "goes out about 10 years") while the multiyear rate proposals the commission sets are most often three years.

Speaking about policy goals, Von Atchen said rate setting balances capital attraction (to secure favorable bond rates), reasonable pricing and incentives for conservation. She described the role of debt metrics and liquidity targets in rate decisions: staff cited a days‑cash target used for operations and debt service (minimum 220 days, a commonly recommended target about 250 days) and a debt‑service coverage ratio with a minimum of 1.25 and a preferred target near 1.7.

Von Atchen and other staff described the steps: consultant data requests (financials, fixed assets, volumetric and billing data), consultant modeling and scenario development, internal team meetings to agree growth and inflation assumptions, and then presentations to the commission. She said the city has two separate consulting teams (one handling water/wastewater/storm and another for solid waste) and expects a finalized rate model from the consultants the week after the meeting; staff scheduled two extended meetings the following Monday to review the model.

Von Atchen said water and wastewater currently use multiyear rates and are the primary revenue sources for revenue bonds; stormwater and solid waste are still transitioning toward multiyear approaches. She said the city is aiming to bring recommended rates to the commission for the Sept. 16 budget adoption meeting but cautioned some items (notably stormwater) may miss that calendar.

On affordability, staff said the consultant prepares an affordability report using median household income data from federal sources (American Community Survey) and models bill impacts across income brackets. Staff also said low‑income assistance in practice is limited: an MSO staffer explained that existing assistance programs typically target seniors and that low‑income support often comes through nonprofits or the general fund because bond covenants limit the utility fund’s ability to subsidize customer bills. The staffer said the goal is to avoid rate spikes by maintaining consistent investment and asset management practices.

Von Atchen described additional model features the city has added recently, including rate sensitivity analyses that test impacts across socioeconomic groups; staff said that analysis began two years ago to better measure affordability and rate fatigue.

Staff said recent historical rate changes have varied by utility and customer class and that solid waste rates in particular are likely to rise in future years as the new solid waste facility (phase 2 of the MSO campus) is built. The next steps are finalizing the consultant’s model, internal review meetings and presenting the recommendation to the commission ahead of the budget adoption meeting.

Direct quote examples from the meeting: "It goes out about 10 years. The actual rates are... multiyear rates... for 3 years," Von Atchen said of the modeling horizon and the multiyear rate term. On assistance, an MSO staffer said, "If there is any assistance... my understanding is that it either comes from... the general fund. It can't come from the utility fund making up that difference."