Report Prepared by: Leah Brown, Water Conservation Specialist, Public Works
Title
SUBJECT: Report on Water Rate Study by Stantec Consulting Services, Inc.
REPORT IN BRIEF
Presentation of the Water Rate Study results and recommended changes to water service charges, water connection charges, and related services.
RECOMMENDATION
City Council - Provide direction to staff on options and recommendations presented by Stantec Consulting Services, Inc., for preparation of the draft report.
Body
ALTERNATIVES
1. Provide direction to staff on preparation of the final written report; or,
2. Refer to staff for reconsideration of specific items; or,
3. Continue to a future meeting.
AUTHORITY
City of Merced Charter, Section 200.
CITY COUNCIL PRIORITIES
As provided for in the 2018-2019 Adopted Budget.
DISCUSSION
Stantec Consulting Services, Inc., (Stantec) was awarded a professional services agreement in December 2017 to prepare a comprehensive water rate study. The City's water utility is accounted for as a self-supporting enterprise fund. Revenue is derived primarily from water service charges and must be adequate to fund the City's operating and capital programs. The City last revised its water service charges in 2012 and has built in no increases through the year 2017.
The rate setting process requires the analysis of revenue requirements and cost to provide service while meeting the policy and revenue requirements of the City. Factors taken into consideration to develop the financial forecast include a 1% growth rate, cost inflation over the 5 year projection period, historical water consumption, existing and projected rates, and capital spending.
Stantec has completed the initial phase of the water rate study with the assistance of staff and input from members of the City Council's Utility Rate Review Ad Hoc Committee, Matt Serratto, Josh Pedrozo, and Jill McLeod. Stantec will present to Council the study results, along with recommendations for updat...
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