Committee discusses reversing readiness-to-serve charges after vacancy complaints; staff asked to draft ordinance

The Infrastructure Committee on July 15 discussed reversing a 2024 change that applied a “readiness-to-serve” charge to all metered properties — including vacant or inactive accounts — and asked staff to draft ordinance language to return to a model where owners who take service offline are not billed the base charge.

Director Davis, utilities director, said the city began applying the readiness-to-serve charge in 2024 to fulfill an ordinance that historically existed but had not been consistently charged. Staff told the committee that charging readiness-to-serve to inactive accounts generates approximately $500,000 in additional revenue for water and about $500,000 for wastewater in the city’s forecasts; staff also said 97–98% of customers are active users and thus already pay the readiness-to-serve charge.

Committee members and staff outlined impacts and mitigation: reversing the application to inactive accounts would shift roughly $1 million in revenue onto active users unless the council offsets it with a modest per-account increase; staff estimated that making up the revenue gap would mean roughly a $0.90 monthly increase for an average residential water customer and a similar amount for wastewater in a future rate year. Director Davis said loss of the readiness-to-serve revenue would force cuts to planned operating and capital projects in 2026 and beyond unless the council identifies replacement revenue.

Council members also discussed the city’s $500,000 water-assistance program created with part of the rate changes. Nicole Milot and the city manager said the program was funded as part of the rate structure; the city has allocated just over $100,000 of that amount to date and $87,000 had been approved the prior year for assistance. Members said they want the assistance program preserved and suggested spreading necessary revenue adjustments across all rates in 2026 rather than keeping readiness-to-serve on inactive accounts.

Committee members directed staff to draft ordinance language that would (1) change the readiness-to-serve terminology back to “base charge,” (2) eliminate application of that base charge to non‑using properties, and (3) return to the committee for consideration. Staff also said the city has paused placing liens related to unpaid readiness-to-serve balances while the council considers the policy change; unpaid balances for vacant properties from 2024 and 2025 total about $645,000, staff said.

Public commenters raised concerns: a property owner asked how the city will collect charges on inactive meters and whether unpaid balances will be placed on property tax bills; a church representative asked to have stormwater charges removed because the commenter said runoff did not connect to the city storm-drain system; other commenters said meters were removed to avoid the charge, questioned the legality of charging inactive properties, and described high bills for minimal water use. Staff said they will follow up with individual account questions and that staff will return ordinance language to the committee for review.