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councilmember. He did not support it and did not like where housing was being placed, but the City was forced into this by the RHNA process and a court order and have only approved 8 units this year and it is being recommended that this residential development be metered out over 3 years. Therefore, he will support the project and thinks it is a much better outcome than placing public and institutional uses on it. Councilmember Narum clarified that her motion included 3 of the 25 homes in 2018 so it was not spread out, as well as the fact that it is a moot point if the City moved to stage 4 in the drought. Councilmember Pentin recognized this and said if they move to a stage 4, he will vote for a moratorium for any building in the City. Mr. Fialho said the growth management agreement will reflect the metering over a 3 year period as described, but if the City moves to Stage 4, it will include a provision that allows them to pull back the growth management until such time the City is out of Stage 4. Vice-Mayor Brown clarified her comment about 5 feet, stating it is 5 feet setback on this project between the fence and the side of the house, or a 3 foot setback if there is an accessory structure. Motion carried by the following vote: Ayes: Councilmembers Olson, Narum, Pentin, Mayor Thorne Noes: Councilmember Brown Absent: None Absent: None 21. Public Hearing: Consider resolution adopting Water and Sewer Rates and amending the Master Fee Schedule effective October 15, 2015 Finance Director Emily Wagner presented the staff report and described the scope, layout, and key elements of the request for the Council to adopt a resolution adopting the water and sewer rates and amending the master fee schedule, effective October 15, 2015. She presented the proposed increases as recommended by staff that seeks to recover costs for providing service. She noted the City is in Stage 3 drought, and unless the City moves to Stage 4, the Council will be asked in the future to adopt drought rates, which she briefly explained. Councilmember Pentin referred to the chart and top list of 4 categories under drought rates and percentages of stages and penalties. Ms. Wager explained that if the City is requiring a 5% reduction Stage 1 and the ratepayer does not comply, their bill would go to $68.86. However, if they do comply, the bill increases approximately 70 cents. Councilmember Pentin confirmed that the penalties allow the City to force a customer who is not conserving to conserve. However, by law, penalties must be used for new mechanisms in order to conserve water, i.e., recycled water. Councilmember Narum said she struggles with the idea that when including a drought rate surcharge, the City ends up collecting more money than if they were under normal conditions. If people get to Stage 4, their bill is increased and she likened it to taking advantage of the drought. Ms. Wagner said analysis is done and staff hones in on the correct numbers. She said the City has 26,000 customers and they are asked to conserve. Those ratepayers that conserve save the most, and while it is a balancing act, it has funded the utility becoming fiscally solvent and has allowed them to not implement rate increases going forward. City Council Minutes Page 19 of 28 October 6,2015