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Regular Council Meeting June 9, 2014 Page 5 10. Discuss and act on AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AMENDING SECTION 34- 22(b), WATER RATES, SECTION 34- 23(a), (b) and (c), SEWER RATE STUDY; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A SAVINGS CLAUSE, A PENALTY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. Finance Director Gene Anderson informed the City Council that the independent rate consultant conducted a cost of service study each year as required due to the fact the City had treated water contracts with four local industries. He said the study had been completed and was an important financial tool enabling the City to maintain the financial integrity of the Water & Sewer Fund. Mr. Anderson introduced Chris Ekrut of NewGen Strategies & Solutions, who presented results of the study to the Council. Mr. Ekrut said it was important for the City to abide by and provide funding in accordance with the policy. Mr. Ekrut said the findings reflect that the current retail water and wastewater rates were insufficient to fund the rate maintenance policy. He recommended rate increases, which would raise the average residential customer's water bill by $5.69 per month, and raise the average commercial user by $4.96 per month. He also said some of the industries were using less water. Council Member Hashmi inquired as to why the City was selling water at a lower rate to Lamar County and Mr. Anderson said they were under contract. Mayor Pro -Tern Grossnickle asked why the City gave the industries a better deal on rates than the residents. Mr. Anderson said that several industries were under contract and that when industry looked at coming to Paris, they look at water costs compared to other cities. Council Member Plata asked if Skinner had a contract with the City and Mr. Anderson answered that there was no contract with Skinner. Council Member Pickle inquired if Daisy Dairy was at full capacity and Mr. Anderson said they were not at their peak yet. Mayor Pro -Tem Grossnickle allowed input from Citizen Ray Banks, at which time Mr. Banks said he got his water from the distribution point. He said the slide showed there would be a rate increase due to the consumption decrease of contract customers. He said the City had to build facilities and were still paying for the facilities. Mr. Banks said contract customer rates were based on actual expenditures, while residential customer rates were based on the budget and the staff puts the budget together. Council Member Pickle said the City had a number they have to hit through commercial or retail and they already had a contract with industries. He also said that other commercial rates would be increased. Council Member Plata asked if Toco was still paying a lower sewer rate and Mr. Anderson said they were not. Council Member Pickle said he would like to start up discussions with Reno, because they have a water treatment plant which might help the City with infrastructure at the airport. Council Member Hashmi expressed concern that if Reno had a problem it would result in a problem for the City. Council Member Plata added that sufficient revenue would need to be taken in. Council Member Lancaster said they may not need a station, as they were exploring septic systems. Council Member Plata said he would like to review this further and suggested tabling the item. A Motion to table this item was made by Council Member Plata and seconded by Council Member Pickle. Motion carried, 6 ayes — 0 nays.