22 - 2018 Water & Wastewater Cost of Service Study - Water & Sewer RatesItem No. 22
TO: City Council
John Godwin, City Manager
FROM, Gene Anderson, Finance Director
SUBJECT: 2018 WATER & WASTEWATER COST OF SERVICE STUDY
DATE: June 7, 2018
BACKGROUND: The City of Paris currently has treated water contracts with four local
industries (Campbell Soup, PEEN (Paris Generation, LP), Lamar County Water Supply District,
and Daisy Farins). One of the requirements of these contracts is that the City has an independent
rate consultant conduct a cost of service study each year. The study deten-nines what the contract
customer water• rates should be according to the contract terms. A by-product of the study is that
water and wastewater rates are also determined for all other water and sewer custorner classes
(residential, commercial, and industrial customers). This study is the basis for any non -contract
rate changes recommended to the City Council. The study is an important financial tool enabling
the City to maintain the financial integrity of the Water & Sewer Fund. The fact that the study is
performed annually is looked upon favorably by Moody's and other credit rating agencies when
the City is attempting to issue bond debt.
STATUS OF ISSUE: The 2018 study has been completed. The contract rates determined by the
study automatically becorne effective June I" per the contract terms. The current water and
sewer rates for non -contract customers (adopted October 1, 2014) were determined to be
insufficient to generate the revenue required to operate the system. The last water rate increase
previous to the 2014 increase was in June 2011 and the last sewer rate increase previous to the
2014 increase was in June 2012. A representative frorn NewGen Strategies & Solutions, LLC
has a brief presentation to make and will answer any questions you may have.
BUDGET' The rate study cost is $27,500. This is a similar cost to previous years. The funds are
budgeted for this project in the Water Billing Office budget,
RECOMMENDATION: Motion to approve an ordinance amending Sections 34-22(b) and 34-23
(a)(b)(c) to reflect the recommended residential and commercial water and sewer rates as
presented in the 2018 rate study.
ORDINANCE NO, 2018 -
AN ORDINANCE OF THE CITY COUNCIL, OF THE CITY OF PARIS, TEXAS,
AMENDING SECTIONS 34-22(b), "WATER RATES," AND SECTION 34-
23(a)i, (b) AND (c), "SEWER RATES—FOR CUSTOMERS USING CITY
WATER,"' OF CHAPTER 34 OF THE CODE OF ORDINANCES OF THE CITY
OF PARIS, TEXAS TO REFLECT CHANGES RECOMMENDED BY THE 2018
WATER AND SEWER RATE STUDY; PROVIDING A REPEALER CLAUSE, A
SEVERABILITY CLAUSE, A SAVINGS CLAUSE, A PENALTY CLAUSE; AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, on the 11th day of June, 2018, the City Council of the City of Paris, Texas,
was presented a water and sewer rate study prepared by NewGen Strategies and Solutions
LLC, with certain findings and recommendations for proposed water and sewer rate
increases (a copy of which is on file with City Finance Department); and,
WHEREAS, on June 11, 2018, the City Council has determined that it is in the best
interest of the City of Paris and its citizens to implement the proposed rates for, water and
sewer services recommended by the 2018 Water and Sewer Study by amending portions of
Article 11, "Service Charges," Chapter 34, "Water, Sewer, and Sewage Disposal," of the City of
Paris Code of Ordinances;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. That the findings set out in the preamble to this ordinance are hereby in
all things approved.
Section 2. That Subsection (b) of Section 34-22 of the Code of Ordinances of the
City of Paris, Texas, be, and the same is hereby amended to read in its entirety as follows:
"Sec. 34-22. Water rates.
"(b) Charges for water furnished by the City, measured in cubic feet, are
established as follows based upon customer class and meter size and
incorporate a base monthly Cost which includes the cost for the first
increment of water, and a cost per one hundred (100) cubic feet or portion of
one hundred (100) cubic feet used above the first increment:
BASE COST FOR FIRST SERVICE IN
METER „SIZE INCREMENT EXCESS OF BASE
(Orches) (l11 Cubic Peet) (For Foch Additional 100 Cubic Feet)
3/4 or less $ for first 200 $
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1 and Larger for first 1,000
-COMMERCIAL,,/'INDUSTRIAL CLASS
BASE COST FOR FIRST SERVICE IN
METER S17E INCREMENT EXCESS OF BASE
(Inches) (In Cubic Feet) (For Each Additional 100 Cubic Feet)
3/4 or less $ for first 200 $
1 through 2 $ for first 1,000 $
3 $ for first 3,000 $
4 $ for, first 100,000 $
6 $ for first 150,000 $
8 and larger $ for first 200,000 $
Section 3. That Subsections (a), (b) and (c) of Section 34-23 of the Code of
Ordinances of the City of Paris, Texas, be, and the same are hereby amended to read in their
entirety as follows:
"Sec. 34-23. Sewer rates - For customers using City water.
"(a) Charges for sewer service furnished by the City to residential,
commercial and industrial customers shall be based upon customer class and
meter size, incorporating a base monthly cost for the first increment of usage
and a cost for each additional one hundred (100) cubic feet or portion of one
hundred (100) cubic feet above the first increment, as follows:
"RESIDENTIAL CLASS
RASE' COST FOR FIRST SERVICE IN
METER SIZE INCREMENT EXCESS CSF BASE
(laches) In Cubic Feet) (For Each Additional 100 Cubic Feet)
3/4 or less $ for first 200 $
1 and Larger $ — for first 1.000 $
"COMMERCIAL/INDUSTRIAL CLASS
BASE COST FOR FIRST SERVICE IN
METER SIZE INCREMENT EXCESS OF BASE'
(Inches) (In Cubic Feet) (For Each Additional 100 Cubic Feet)
3/4 or less $ for first 200 $
1 through 2 $ for first 1.000 $
Larger than 2 $ 11.5.99 for first 2,000 $
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"(b) Monthly residential customers" wastewater volume for put -poses of
assessing the sewer charge shall be based upon one hundred percent (100%)
of the actual metered potable water consumption averaged for the preceding
November, January, and February consumption, which shall be known as the
"flat winter average." Customers that do not have recorded water usage for
each of the winter average months will have their winter average calculated
based on the residential class average of 640 cubic feet.
"Monthly commercial and industrial customers" wastewater volume shall
be based upon one hundred (100) percent of the actual metered potable
water consumption, except those customers whose wastewater is metered,
and their volume shall be based upon one hundred (100) percent of the
metered wastewater. The former shall be billed for one hundred (100)
percent of the metered potable water and the latter shall be billed for one
hundred (1.00) percent of the metered wastewater.
"(c) Users desiring to discharge sewage into the City's sewerage system, the
strength of'which sewage exceeds two hundred fifty (250) parts per million
biochemical oxygen demand (1301)), two hundred fifty (250) parts per million
of total suspended solids, (TSS),, or thirty (30) parts per million of ammonia
(NH3), and which is acceptable under article III of this chapter, may do so
upon written permission of the city and by paying a monthly treatment
charge in the amount of ninety-five cents ($0.97) per pound of biochemical
oxygen demand (BOD) in excess of the allowable biochemical oxygen
demand (BOD); fifty cents ($0.50) per pound of total suspended solids (TSS)
in excess of the allowable total suspended solids (TSS); and thirty-eight cents
($0.34.) per pound of ammonia (NH3 ) in excess of the allowable ammonia
strength. The city shall make the necessary tests of the user's sewage
strength to determine this charge. The charge prescribed by this subsection
shall be in addition to the charges prescribed in subsection (a) hereof.""
Section 4. That water and sewer rates established in Sections 2 and 3 above shall
be effective beginning with July 1, 2018 consumption.
Section 5. All provisions of the ordinances of the City of Paris, Texas, in conflict with the
provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of
the City of Paris not in conflict with the provisions of this ordinance shall remain in full force
and effect.
Section 6. The repeal of any ordinance or part of ordinances affected by the enactment
of this ordinance shall not be construed as abandoning any action now pending under or by
virtue of such ordinance or as discontinuing, abating, modifying, or altering any penalty
accruing or to accrue, or as affecting any rights of the municipality under any section or
provisions of'any ordinance at the time of passage of this ordinance,,
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Section 7. It is the intention of the City Council of the City of Paris that this ordinance,
and every provision hereof, shall be considered severable, and the invalidity or partial
invalidity of any section, clause, or provisions of this ordinance shall not affect the validity of
any other portion of this ordinance.
Section B., Any person violating any of the provisions of this ordinance shall be
guilty of a Misdemeanor and, upon conviction, shall be fined in accordance with Section 1-6
of the Code of Ordinances and each and every day's continuance of any violation of the
above -enumerated section(s) shall constitute and be deemed a separate offense.
Section 9. Introduced and read on June 11, 2018, at a regular meeting of the City
Council of the City of Paris
Section 10. That this ordinance shall become effective from and after its passage and
publication as required by law.
PASSED AND ADOPTED this 25th day of June, 201.8.
ATTEST:
Janice Ellis, City Clerk
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L
,Stephanie H. Harris, City Attorney
Steven J. Clifford, M.D., Mayor
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