11 - 2023 Water & Wastewater Cost of Service Study (2)Item No. 11
TO: Mayor, Mayor Pro -Tem & City Council
Grayson Path, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: 2023 WATER & WASTEWATER COST OF SERVICE STUDY
DATE: June 12, 2023
BACKGROUND:
The City of Paris currently has treated water contracts with four local industries (Campbell Soup,
PGEN (Paris Generation, LP), Lamar County Water Supply District, and Daisy Farms). One of
the requirements of these contracts is for the City to have an independent rate consultant conduct
a cost of service study each year. The study determines 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 wastewater customer 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 (Wastewater) Fund. This annual rate study
and the City's rate maintenance policy are looked upon favorably by Moody's and other credit
rating agencies when the City is attempting to issue bonded indebtedness. Adjusting the rates in
accordance with our 2010 Policy is also critical in attempting to fulfill the basic care and
maintenance to our Water and Wastewater system needed for the citizens and businesses of Paris.
STATUS OF ISSUE:
The 2023 study has been completed. The contract rates determined by the study automatically
became effective June 1St per the contract terms — therefore no action is necessary by the City
Council on those four specific accounts. The current water rates for non -contract customers were
water rates is needed. The current multi-year wastewater rats as adopted ted b system.
City Council in
be sufficient to generate the revenue required the incre i
determined
..—p y n
January 2023 are sufficient to generate the revenue required to operate that portion of the system.
No increase in
the
to schedule is needed. The only rate adjustment needed at
thistime is i the area of treating excess strength sewer. The City tests sewage strength to
determine if a surcharge is warranted on industrial or commercial users. It has been three years
since these rates were increased. A representative from NewGen Strategies & Solutions, LLC has
a brief presentation to make and will answer any questions you may have.
BUDGET:
The rate study budget is $32,000. This is a similar cost to previous years. The funds are budgeted
for this project in the Water Billing Office budget.
RECOMMENDATION:
The staff recommends that the Council adopt the recommendation of the rate study as reflected in
the ordinance provided to the Council.
ORDINANCE NO.
WHEREAS,
Strategiesadopted a new fee schedule for excessive strength sewer as recommended by the city's rate
consultant, NewGen " take into account substantial and
improvementscritical
WHEREAS, d to significant increases in materials and obids for said
improvements were substantially higher than anticipated; and
WHEREAS, on June 12, 2023, the city's rate consultant, NewGen Strategies and
Solutions outlining
revised rate structure for excessive strength sewer to account for same; and
WHEREAS, of the City
of Paris and its citizens to implement the proposed rate increases for excessive strength
sewer treatment recommended by the City's rate consultant NewGen Strategies and
Solutions, LLC by amending
s,'.
portions of Appendix A, Sec. A10.004 (b), "Sewer rates for
customers using city water," of the City of Paris Code of Ordinances;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
P,
Section 1. That the findings set out in the preamble to this ordinance are hereby in
all things approved,
Section ® That Subsection (b) of Appendix , Section A10.004 of the Code of
Ordinances of the City of Paris, Texas, be, and the same is hereby amendedto read in its
entirety as follows:
million"(b) 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 (BOD), two hundred fifty (250) parts per
suspendedof total
(NH3), and which is acceptable under article 12.05 of this code, may do so
upon written permission of the city and by paying a monthly treatmeo,
charge in the amount of one dollar and seventy-two cents ($1.72) per pound
of biochemical oxygen demand (BOD) in excess of the allowable biochemical
oxygen demand (BOD); ninety cents ($0.90) per pound of total suspended
solids (TSS) in excess of the allowable total suspended solids (TSS); and
seventy-four cents ($0.74) 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 3. That excessive strength sewer rates established in Section 2 above shall
be effective beginning with July 1, 2023 consumption.
Section 4. 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 5. 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.
Section 6. 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 7. 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
1.01.009 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 8. Introduced on June 12, 2023, at a regular meeting of the City Council of
the City of Paris
Section 9. That this ordinance shall become effective from and after its passage and
publication as required by law.
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PASSED AND ADOPTED this 12th day of June, 2023.
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
Reginald B. Hughes, Mayor
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