Title
Approval of an Ordinance Adopting the 2018 Utility Rates and General Facilities Charges
Recommended Action
Committee Recommendation:
The proposed rates and charges reflect recommendations from the City Council and the Utility Advisory Committee. City Council reviewed and discussed the proposed 2018 Utility rates and general facility charges (GFCs) on November 14, 2017, and the City Council held a public hearing on November 21, 2017. The review considered recommendations forwarded to Council by the Utility Advisory Committee.
City Manager Recommendation:
Move to approve the ordinance adopting the 2018 utility rates and general facilities charges on second reading.
Report
Issue:
Whether to approve an ordinance adopting the 2018 utility rates and general facility charges (GFC). Increases in LOTT Clean Water Alliance rates and capacity development charges are also included in the ordinance.
Staff Contact:
Dan Daniels, Director, Public Works Waste ReSources, 360.753.8780
Andy Haub, P.E., Director, Public Works Water Resources, 360.753.8475
Presenter(s):
None - Consent calendar Item.
Background and Analysis:
Background and analysis has not changed from first to second reading.
The proposed 2018 utility rates and general facility charges (GFCs) are consistent with the Council-adopted utility master plans and the City of Olympia's Comprehensive Plan. The Utilities provide key public and environmental health services for our community.
For 2018, rate increases are proposed for the Drinking Water and Waste ReSources utilities. A GFC increase is proposed for the Drinking Water utility. GFCs are charged to new development as a condition of connecting to and using the existing infrastructure system.
Lacey, Olympia, Tumwater, Thurston County (LOTT) Clean Water Alliance Board of Directors has approved increases for both monthly wastewater treatment rates and their capital development charge (CDC). The CDC is similar to the City's GFC. The City collects monthly rates and CDC for LOTT through the utility billing and development permitting processes.
If approved, the overall increase in rates for a typical residential customer in 2018 will be approximately 2.7 percent or a $6.55 increase in their bi-monthly bills. City GFCs and LOTT capacity development charges will increase $484 for a new single family home.
Summaries of proposed rates for each utility and GFCs are as follows:
Drinking Water
4.4 Percent Rate Increase Proposed. Increase GFCs by 6 percent.
The rate proposal is consistent with the 2015-2020 Water System Plan that was adopted by City Council on October 6, 2015. Specifically, the proposed rate increase will cover the payment of recently-incurred debt associated with three major infrastructure improvements. These project are currently under construction.
The proposed rate will result in a typical increase of $1.12/month for an average single family resident. Bi-monthly charges for a typical single family residence will be approximately $53.24. Each customer class (residential, non-residential and irrigation) will see the increase, although actual increases on customer bills vary depending on water usage.
A 6 percent increase in general facility charges for drinking water is also proposed. The new GFC will be $4,433. The increase acknowledges our recent capital costs.
Wastewater
No Rate or GFC Increase Proposed.
The Wastewater utility safely conveys wastewater from our homes and businesses to the LOTT Clean Water Alliance treatment facility in downtown Olympia.
Economic growth in our community is expected to generate adequate new revenue to cover various cost of service increases.
Wastewater Treatment Services - LOTT Clean Water Alliance
LOTT Clean Water Alliance rates and capacity development charges (CDC) are set by the LOTT Board of Directors. Capacity development charges are similar to City GFCs.
Already approved by the Board, LOTT is implementing a 2 percent rate increase in 2018. LOTT will be charging $77.28 bi-monthly. The LOTT CDC is increasing 4.1 percent to $5,808 for a new single family home.
Storm and Surface Water
No Rate or GFC Increase Proposed.
The 2018 Storm and Surface Water utility budget maintains current levels of service for flood mitigation, water quality improvement, and aquatic habitat enhancement.
Waste ReSources
Variable Rate Increases Proposed.
The Waste ReSources utility provides a wide range of waste reduction, recycling and disposal services. It implements programs for residential, commercial, drop box, and organics customers. Policy direction is set by the Towards Zero Waste: Olympia's Waste ReSources Plan 2015-2020.
Proposed rate increases for 2018 include the following:
• Drop box 6 percent
• Residential 6 percent
• Commercial 5 percent
• Organics 0 percent
Approximately 4 percent of the rate increase will be set aside to help fund future Waste ReSources facility needs.
Neighborhood/Community Interests (if known):
City utilities provide vital public health services for Olympia residents. Utility rates are set to ensure reliable, uninterrupted levels of service.
Options:
1. Move to approve the ordinance approving utility rates and general facility charges for 2018.
Implications:
• Supports essential City public and environmental health services.
• Increases rates for customers and charges for new development.
2. Modify or decline the proposed 2018 increases.
Implications:
• Avoids, or lessens, additional customer costs.
• Risk failures in fulfilling City public and environmental health responsibilities.
Financial Impact:
The proposed rate and GFC increases will generate revenue to implement Council-adopted utility master plans and ensure financially responsible management of City Utilities.
Attachment(s):
Ordinance