City Council Meeting - FINAL

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9.A.

Meeting Date:	09/05/2023
Co-Submitter:	Shannon Jones	From:	Erin Young, Water Resources Manager

Information

TITLE

Introduction of Rate Study Team for the City of Flagstaff Water, Reclaimed Water, and Wastewater Cost-of-Service, Rates and Fees Study

STAFF RECOMMENDED ACTION:

Staff are available for questions and would like input from City Council on the process, outreach plan, and any other related questions.

EXECUTIVE SUMMARY:

City Staff have begun work on the Water, Reclaimed Water, Wastewater Cost of Service, Rates, and Fees Study (herein referred to as the "rate study") with Stantec Consulting Services (Stantec), as authorized by City Council approval of the contract on March 7, 2023. For this meeting, City Staff and Stantec will introduce the components of the rate study and a timeline for its completion.

INFORMATION:

The last rate and fee study for these three funds was executed in 2014 and completed in 2016, with a cost-of-service analysis completed in 2010. This rate study includes both a financial analysis and a cost-of-service study. A financial analysis will determine whether the existing rates are sufficient to recover utility costs and margins, incorporating unmet infrastructure needs to maintain quality, and to address capacity in the face of new environmental challenges. This rate study reviews and recommends any changes to rate classes or fee adjustments since the last cost-of-service study was completed in 2010. A cost-of-service analysis will look at different ways to allocate the utility’s costs to its customer classes proportionally and equitably based on their consumption patterns and demand or impacts on the systems. The process takes approximately 12 months from now. It will involve the Water Commission, City Council, and the public in order to achieve success.

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