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City presents alternatives for water and wastewater rate restructuring; council discusses equity and tiers
Summary
City staff and consultants presented three water‑rate alternatives and wastewater proposals, including options for inside/joint customers and deduct meters; council members debated tier structures, residential vs. nonresidential treatment and protections for multifamily tenants.
City finance and utilities staff with consultants from NewGen/Municipal Financial Services briefed the Mayor and City Council Oct. 21 on progress toward revised water and wastewater rate designs and potential alternatives aimed at making enterprise funds self‑supporting and preserving system reserves.
On wastewater the staff recommended maintaining the current design as a baseline while proposing an “inside joint” customer class for flow that originates inside city limits but initially routes through county infrastructure; staff estimated a modest revenue path (roughly a 2–4% annual increase baseline in the scenarios shown) and recommended maintaining a minimum operating reserve target of about 180 days. Staff noted options such as submetering, direct sewer‑flow metering and irrigation meters to account for water that does not return to the wastewater system.
On water staff outlined three alternatives: 1) average the commercial declining block into a single unit rate for nonresidential (eliminate declining block); 2) average nonresidential and average the residential two‑tier structure (reduce complexity); and 3) fully blend residential and nonresidential into a single unit rate. All alternatives were modeled to deliver similar total revenue; they would, however, shift cost responsibility across customer classes. The staff emphasized the city must maintain reserves and planned capital investment while keeping rates stable over time.
Council members pressed for equity considerations. Several members argued for inclining (increasing) tier structures to send conservation and system‑cost signals and to avoid larger nonresidential users being subsidized by smaller households. Members raised concerns about multifamily properties being classified as nonresidential in the billing system (current practice) and urged staff to consider unit‑level or allocation approaches so small rental units are not disproportionately charged. Staff said some multifamily and mixed‑use properties are master‑metered and currently billed as nonresidential, and that allocation policy and metering decisions would need further work.
Staff said they will return with more detailed sample bills and proposed code changes and aim for a formal decision timeline allowing new rates to take effect July 1, 2026. No vote was taken on any rate alternative at the Oct. 21 meeting; staff requested direction and will continue stakeholder outreach.
