The City Council met in special session on January 23, 2020 at 5:00 P.M. in the Council Chambers of City Hall.
Mayor Lester presided
City employees present were Public Works Director Mager and City Administrator Kennedy.
David Watkins with J-U-B Engineers was present.
Mayor Lester called the meeting to order to discuss water and sewer billing and rates.
EQUITY BUY IN COLLECTIONS: Administrator Kennedy provided a handout with water and sewer equity buy in fees collected over the years. The spreadsheet did not reflect interest earned. The City has collected $133,876.60 in sewer buy in and $45,045.00 in water buy in.
BUY IN FEES VS PROPERTY TAXES: Mayor Lester received information from the county on our levy rate; the City receives $653.61 for every $100,000 in accessed value. Up for discussion, was to have the City change how the buy in is collected. One proposal would be to charge one buy in for a house or one buy in for an apartment and not base it off an equivalent residence calculation. Then everyone would pay one buy in. The citizen could build the structure they want and then the City would start collecting property taxes based on the value and the user would be paying water and sewer fees based on usage.
JUB PRESENTATION FOR DISCUSSION: David Watkins explained how the City currently bills for water and sewer, including a charge for base rates and then a volume charge for overage over the allowed base consumption. Points to consider were listed out as follows:
• Every account currently pays one bond payment, even multi-dwelling units. A change could be to have each dwelling unity pay a bond which would make some account pay multiple bonds.
• Currently everyone pays a water base rate and then volume; however the volume is discounted for large users. A proposal would be to increase the volume charge or increase base volume and base rate to what a standard home uses in the winter. Overage currently pays $2.00 for every 100 CF over 260 CF but if figured on the base rate on 260 CF it divides out to $7.20/100CF.
• Currently apartments pay one sewer rate plus an additional 2/3 base rate for extra units. A proposal would be to make all dwellings pay a full base rate.
• Multi-unit commercial sewers are challenging to track and it’s difficult to confirm information. A proposal would be to switch to one base plus volume set at 722 CF. Overage currently pays $.0475/CF after 722 CF but if figured on the base rate on 722 CF it divides out to $.0613/CF.
Different examples were discussed and how the above changes could affect different users.
SEWER UNITS: During discussion, it was suggested each residential dwelling should be considered a unit. A duplex would be considered two units while a quadplex would be four units. Multi-facility units are hard to determine the number of units. Sometimes, it is based off the number of businesses the City knows is located in the structure. Other times, it is the honor system from the property owner of how many businesses are in the structure. It is very difficult to determine if it is accurate.
David explained the sewer for commercial or industrial units can be determined by the average usage during the winter months, which then sets the Equivalent Residence (ER) for these accounts. An ER is determined by calculating the average winter consumption and then dividing by the standard residential design unit. This standard residential design unit is determined in the master plan. By using this calculation, the number of units on an account are determined by the water usage and are not self-reported. The Council felt establishing the ER to determine the units for billing would be the best option for the commercial/industrial accounts.
EQUITY BUY IN: The Council chose to move forward with one buy in per structure. In drafting the ordinance, an ER will need to be defined as per structure; however additional discussion may need to occur to determine how one structure is counted. In the ordinance, structure may need to be defined as connected by a roofline and may include other criteria. This will continue to be discussed.
FUTURE BONDS: After discussion, the Council would like to have bonds figured on dwelling units for residential. For commercial/industrial accounts it would be based on the ER determined for sewer units as discussed above.
BASE RATES WHEN WATER IS OFF: Kennedy explained currently when a user turns off their water, the only charge they pay is the water bond. For rentals, when the property is vacant 30 days, the owner can certify to the City the vacancy and then get a credit for half the sewer rate. The Council felt all users should pay the base rates (water, sewer, street light, bonds) when the water is off. Because the base would always be charged, the credit for vacancies on rentals would be eliminated.
Additional discussion occurred on utility accounts that have the water turned off, sometimes for years. Under the current policy, if the water was never turned on since the water bond was adopted, the account is not paying the bond fee. Once the water is turned on, then the account is charged the bond fee and it cannot be removed. The Council felt everyone that has water and sewer to their property has it available and they should be paying the bond and the minimum base rates for each fund. The Council felt when a new ordinance is adopted it should state everyone needs to pay the base rates, even accounts with the water turned off. If the property owner does not want to pay the base rates, they can choose to disconnect all services by completing a disconnect form. If they ever want services to the property, they would need to pay an equity buy in fee. Those that have had the services off for years would be sent letters explaining the new policy and provided with a timeline for compliance.
The meeting adjourned at 7:10 P.M.
Wes Lester – Mayor
Tonya Kennedy – Clerk