07-13-21 CCM Workshop (Water/Sewer Rate Study)HUTCHINSON CITY COUNCIL
SPECIAL WORKSHOP
MEETING MINUTES
TUESDAY, JULY 13, 2021, AT 4:00 PM
CITY CENTER — COUNCIL CHAMBERS
Call to Order
Mayor Forcier called the meeting to order. Members present were Brandon Begnaud, Chad
Czmowski and Dave Sebesta. Member absent was Mary Christensen. Others present were Matt
Jaunich, City Administrator and Kent Exner, City Engineer.
DISCUSSION/REVIEW ITEMS
1. Review of Water and Sewer Rate Study
Kent Exner, City Engineer, presented before the Council and explained the purpose of today's
workshop. Mr. Exner introduced Karen Cavett of SEH Engineering.
Ms. Cavett reviewed the agenda for today's workshop which includes background information,
goals, existing water rate structure, water conservation rate structures, existing sewer rate
structure and recommendations. Ms. Cavett explained that the items reviewed as part of the study
included historical water demand (gallons/day), projected population growth, projected
commercial & industrial growth and water use from all users (single family, multi -family,
commercial and industrial). Ms. Cavett reviewed the historical water demand by month from the
years 2015-2017. The goals of the review/study are to promote water conservation, comply with
state mandated requirements, provide fair and equitable rates and generate sufficient revenue
stability. Ms. Cavett reviewed the current water rate structure which consists of a base charge + a
usage charge ($/1000 gallon). Upon review, Ms. Cavett proposed a rate structure for water which
consists of base (availability) charge, commodity charges — increasing block (tiered) for
residential, commodity charges — flat rate for non-residential. The proposed rate structure for
sewer consists of base (availability) charge, commodity charge (flat) based on monthly water use,
loading charges. The water/sewer base charges for residential users is centered around residential
equivalent unit (REU); normalizes water use by comparing customer use to atypical single-family
residential customer; fair and equitable; one REU = 4000gallons/month. Single Family
Residential is the same as the current rate structure and one single family customer = one REU.
For multi -family residential users the proposed rate structure assigns one REU to each unit served
by a connection; applies a reduction multiplier to the account for multi -family customers using
less water (one multi -family REU = 2600 gallon/month; 65% of the average single-family water
use); one multi -family residential unit = 0.65 REU; this is a change from the current rate structure
which bills by the connection. For commercial/industrial users a multiplier is assigned based on
the meter size, water meter equivalent factor. Commercial/industrial users may use less than the
capacity of the meter, but the City is required to provide the capacity for that meter size
regardless of how much water is used; encourages the right sizing of the meters and improving
the capacity of the system; change from current rate structure which bills by the connection.
Ms. Cavett reviewed the commodity charges for each group. For residential accounts, the
proposal is to increase the blocks/tiers based on water use, once volumes used reach the next
block/tier, a higher rate is applied to that use. The blocks would be as follows: 0 to 5999 gallons;
6000 to 11,999 gallons and greater than 12,000 gallons. There is a 25% rate increase between the
blocks. This proposal encourages conservation by starting the second block at the greatest
difference between warm weather use and the base flow; fair and equitable by including about
90% of the single-family customers in the first block; multi -family rates will be determined based
on the average water use per customer (REU); change from the current rate structure which is a
decreasing block. The proposed water commodity charge for commercial/industrial users is a flat
rate structure with no change with volume of water used; fair and equitable by recognizing the
water use by commercial industrial is essential; change from current rate structure which is a
decreasing block. Ms. Cavett spoke about irrigation meters which will be available and will not
be charged sanitary sewer base or commodity charges; 25% increase to the commodity rates
because it is a non -essential water use; annual administrative fee of $25.00 and a deduction will
be applied May I through September 30. It is proposed for the sanitary sewer commodity charge
be a flat rate per volume of water applied to all customers; billing based on each month's water
consumption and is a change from current rate structure which is a flat rate billed on the January
and February average. Ms. Cavett proposed a sanitary sewer loading charge which changes
account for update to unique loading -related treatment requirements over the years; addresses
both treatment costs and the effect of proposed changes to sanitary sewer commodity charges and
applies to significant industrial users. Ms. Cavett provided sanitary sewer rate tables and
examples, water rate tables and examples and water and sewer rate examples and examples.
Kent Exner, City Engineer, presented before the Council. Mr. Exner explained that staff will
bring forward a rate structure based on the study to members of the public. Based on feedback
from the public, new rate structures will be incorporated into the Public Works budget for 2022
and presented to the Council in the form of the proposed budget.
Various staff members spoke about the benefits of the proposed rate structure.
Mr. Exner noted at the next Council meeting staff will present to the Council what they propose
to present to the public.
Motion by Czmowski, second by Sebesta, to adjourn at 4:40 p.m. Motion carried unanimously.
ATTEST:
Gary T. Forcier Matthew Jaunich
Mayor City Administrator