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18 <br /> THE CITY OF <br /> M F.M731 TON CITY COUNCIL AGENDA REPORT <br /> PLEASAN <br /> July 18, 2023 <br /> Operations Services <br /> TITLE: RECEIVE OVERVIEW OF WATER AND SEWER RATES AND AUTHORIZE <br /> MAILING OF PROPOSITION 218 NOTICE OF PUBLIC HEARING TO BE <br /> HELD SEPTEMBER 19, 2023 REGARDING PROPOSED RATE INCREASES <br /> SUMMARY <br /> Completing a comprehensive analysis of water and sewer rates is a priority that has <br /> been set by the City Council and is consistent with the City's water and sewer policies. <br /> The City's water and sewer utilities are operated as enterprise funds. An enterprise fund <br /> is a self-supporting government fund that provides goods and services to the public for <br /> a fee. Enterprise funds are operated separate from the City's operations that are funded <br /> by the General Fund. <br /> In March 2023, the City contracted with Raftelis to complete a water and sewer rate <br /> study with a scope of work focused on providing sufficient funding to address immediate <br /> infrastructure improvements to the water distribution system to ensure continued safe <br /> and reliable water supply and quality. Water rate revenues are proposed to increase 30 <br /> percent effective November 1, 2023, then 20 percent effective January 1, 2025, and <br /> then 12 percent for the third year effective January 1 , 2026. This results in an increase <br /> of $33.17 per bi-monthly (60-day) period based on the average single family residential <br /> customer's usage of 20 100 cubic feet (CcF) of water in the first year. As proposed are <br /> sewer rate increases based on inflation as defined by the Consumer Price Index, <br /> effective November 1, 2023. The proposed increase incorporates the inflation of <br /> operations and maintenance costs, and additional costs based on the resources <br /> necessary to implement critical near-term system infrastructure improvements and to <br /> advance the selected water supply alternative and other prioritized water projects. To <br /> inform the ratepayers of the proposed rate changes, a public hearing notice will be <br /> mailed to every City water customer in compliance with the State's Proposition 218 <br /> requirements. <br /> RECOMMENDATION <br /> Authorize staff to mail a notice to the ratepayers regarding the proposed changes to the <br /> water and sewer rates and set the public hearing date for consideration of this matter by <br /> the City Council on September 19, 2023. <br /> FINANCIAL STATEMENT <br /> The City's water and sewer utility funds are enterprise funds; as such, the cost of <br /> operation of these utilities are fully paid by the users (100 percent fee based). The <br /> proposed rate increases address the operating and capital needs of the water, recycled <br /> Page ' of <br />