20-Water and Sewer rates on all non-contract customersCITY COUNCIL AGENDA ITEM BRIEFING SHEET
Submittal Date:
Originating Department:
Presented By:
Agenda Item No.:
06-17-2009
Council Date:
Finance
Gene Anderson
20.
06-22-2009
RECOMMENDED MOTION:
Move to approve an ordinance setting the water and sewer rates on all non-contract customers of the
City of Paris per the latest cost of service study.
POLICY ISSUE(S):
Fiscal Management
Contracts with several large industrial customers require a cost of service study to be conducted each
year. Rates for these industries are determined by the study and go into effect automatically per the
contracts. Residential and commercial rates are also examined in the study and are given to the City
Council for approval. The study points out that the City needs to continue to replenish its Water &
Sewer Fund operating reserves which are about $620,000 below the 45 day minimum reserve and
$1,013,400 below the more comfortable 60 day reserve. Adequate reserves are critical for the City since
5 customers provide 45°Io of the utility's rate revenue. A loss or decline in consumption of one these
customers could result in a significant financial strain for the City. Also, the sewer portion of the fund is
not currently self-sufficient and additional funds are also needed for capital improvements. The study
recommends a 1% increase in residential and commercial water rates and a 4% increase in residential
and commercial wastewater rates, for a total increase for the average residential customer of $1.27 and
$1.63 for the average commercial customer.
BOARD/COMMISSION RECOMMENDATION:
NONE
EXHIBITS:
Ordinance; Rate Study Presentation
ACTION:
BUDGET INFO:
❑ Financial Report ❑ Minute Order
Expense
$25,000 estimated
❑ Department Report ❑ Resolution
Budgeted Amt.
$25,000
❑ Presentation ~ Ordinance
y'I'D Actual
$22,025
❑ Public Hearing ❑ Other
Acct. Name
Consultants
Acct. Number
10-0318-81-00
FisCAL NoTES:
None
REVIEWED AND APPROVED BY:
Z Administration ❑ Ciry Clerk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire
❑ Municipal Court E Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities
City of Paris
Revised 2/04/08
w U13V1.9. J
RESIDENTIAL CLASS
BASE COST FOR FIRST
METER SIZE INCREMENT
(/nches) (ln Cubic Feet)
3/4 or less $ 8.90 for first 200
1 and Larger $ 43.39 for first 1,000
SERVICE IN
EXCESS OF BASE
(For Each Additional 100 Cubic Feet)
$ 3.01
$ 3.01
COMMERCIAL/INDUSTRIAL CLASS
BASE COST FOR FIRST
SERVICE IN
METER SIZE
INCREMENT
EXCESS OF BASE
(/nches)
(ln Cubic Feet)
(For Each Additional 100 Cubic Feet)
3/4 or less
$ 10.85 for first 200
$ 3.01
1 through 2
$ 43.39 for first 1,000
$ 2.46
3
$ 155.76 for first 3,000
$ 2.46
4
$ 2,559.00 for first 100,000
$ 2.46
6
$3,838.00 for first 150,000
$ 2.46
8 and larger
$5,118.00 for first 200,000
$ 2.46"
Section 3. That Subsections (a), (b) and (c) of Section 34-23 of the Code of
Ordinances of the Ciry of Paris, Texas, be, and the same are hereby amended to read in its
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
BASE COST FOR FIRST
METER SIZE INCREMENT
(Inches) !n Cubic Feet)
3/4 or less $ 10.22 for first 200
1 and Larger $47.69 for first 1000
Page 2 of 4
SERVICE IN
EXCESS OF BASE
(For Each Additiona1100 Cubic Feet)
$ 4.14
$ 4.14
14b u0 i11:1.";
COMMERCIAL/INDUSTRIAL CLASS
METER SIZE
(lnches)
BASE COST FOR FIRST
INCREMENT
(ln Cubic Feet)
SERVICE IN
EXCESS OF BASE
(For Each Additional 100 Cubic Feet)
3/4 or less
1 through 2
Larger than 2
$ 13.62 for first 200
$ 47.69 for first 1000
$ 96.48 for first 2,000
$ 4.31
$ 4.31
$ 4.31
(b) Monthly residential customers' wastewater volume for purposes 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 600 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 (100) 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 (BOD), 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 ($0.95) per pound of biochemical
oxygen demand (BOD) in excess of the allowable biochemical oxygen
demand (BOD); fifty-one cents ($0.51) per pound of total suspended solids
(TSS) in excess of the allowable total suspended solids (TSS); and forty-four
cents ($0.44) per pound of ammonia (NHs ) 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 the water and sewer rates established in Sections 2 and 3 above
shall be reflected in water and sewer billings beginning July 1, 2009.
Page 3 of 4
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.
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 8. 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 first reading on June 8, 2009, at a regular
meeting of the City Council of the City of Paris and read and passed on second reading on
June 22, 2009, at a regular meeting of the City Council of the City of Paris; the same being
two (2) separate regular meetings of the City Council of the City of Paris.
Section 10. That this ordinance shall become effective from and after its passage of
the second reading and publication as required by law.
PASSED AND ADOPTED on second and final reading this 22nd day of June, 2009.
Jesse James Freelen, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Kent McIlyar, City Attorney
Page 4 of 4
6/19/2009
City of Paris, Texas
Water a n d Wa stewate r
Rate Study
June 8, 2009
J. Stowe & Co.
a ~
. . .
~ , . ~ .
Rate Study
Overview
• Per agreements with the City's contract water
customers, the City must perform an annual cost of
service study
• Campbell's Soup
• Direct Energy
• Lamar County Water Supply District
• Retail revenue requirement based on the City's FY
2008-09 water and wastewater budget
2
1~~. 1
~ ~0 0
6/19/2009
'
Rate Study
Overview (cont'd)
• Water Utility retail revenue requirement forecast
increased 6.3% over prior fiscal year
• Chemical Costs
• Wastewater Utility retail revenue requirement
forecast decreased 4.5% over prior fiscal year
• Equipment Expenditures
3
Rate Study
Overview (cont'd)
• Current water and wastewater retail rates forecasted
to incur a deficit of $27,733 over budgeted
expenditures
• Residential water use below historical annual average
• Residential average wastewater billed volumes
continue to decline (625 ccf to 600 ccf)
4
g~0 (;l~ i". 2
6/19/2009
Rate Study
Overview (cont'd)
• Previously recommended at least $200,000 annually
be set aside to restore operating reserves
• Approximately 45% of Water Utility revenue generated by
five (5) customers
• Fluctuations in revenue stream due to weather influences
• At a minimum an additional $227,733 ($200,000 +
$27,733) of revenue will be needed to meet the
$200,000 target
s
Rate Study
Overview (cont'd)
• Recommended increase of 1.0% in retail water rates
to assist in meeting the operating reserve
requirement
• Recommended increase of 4.0% in retail wastewater
rates that will allow the Wastewater Utility to be self-
sufficient
6
3
6/19/2009
Rate Study
Proposed Rates
CURRENT RESIDENTIAL WATER RATES
Base Charge
Excess of Base
Meter Size (Inches) (Cubic Feet)
(Per CCF)
5/8 through 3/4 $8.81 for first 200
$2.98 for each add. 100
1 and larger $42.96 for first 1,000
$2.98 for each add. 100
PROPOSED RESIDENTIAL WATER RATES
Base Charge Excess of Base
Meter Size (Inches) (Cubic Feet) (Per CCF)
5/8 through 3/4 $8.90 for first 200 $3.01 for each add. 100
1 and larger $43.39 for first 1,000 $3.01 for each add. 100
7
Rate Study
Proposed Rates
CURRENT RESIDENTIAL WASTEW
ATER RATES
Base Charge
Excess of Base
Meter Size (Inches)
(Cubic Feet)
(Per CCF)
5/8 through 3/4
$9.83 for first 200
$3.98 for each add. 100
1 and larger
$45.86 for first 1,000
$3.98 for each add. 100
PROPOSED RESIDENTIAL WASTEWATER RATES
Base Charge
Excess of Base
Meter Size (Inches) (Cubic Feet)
(Per CCF)
5/8 through 3/4 $10.22 for first 200
$4.14 for each add. 100
1 and larger $47.69 for first 1,000
$4.14 for each add. 100
8
A ul()t~l~'il 4
6/19/2009
~ . ,
F.
Rate Study
Proposed Rates
COMMERCIAL W
ATER RATES
i Current
Proposed
Base Volume
Cucrent
Proposed
Excess of Base Excess of Base
Meter Size (Inches)
(Cubic Feet)
Base Charge
Base Charge
(Per CCF)
(Per CCF)
5/8through 3/4
200
$10J4
$10.851
$2.98
$3.01
lthrough2
1,000
$42.96
$43391
$2.44
$2.46
Larger than 2
3,000
$154.22
$155.76 1
$2.44
$2.46
4
100,000
$2,534.00
$2,559.00 1
$2.44
$2.461
'
6
150,000
$3,800.00
$3,838.00 II
$2.44
$2.461
8 and larger
200,000
$5,067.00
$5,118.00 I
$2.44
$2.46
9
~
Rate Study
Proposed Rates
CURRENT COMMERCIAL WASTEWATER RATES
Base Chazge
Excess of Base
Meter Size (Inches)
(Cubic Feet)
(Per CCF)
5/8 tlvough 3/4
$13.10 for first 200
$4.14 for each add. 100
1 through 2
545.86 for first 1,000
$4.14 for each add. 100
Lazger than 2
$92.77 for first 2,000
$4.14 for each add. 100
PROPOSED COMMERCIAL WASTEWATER RATES
Base Chazge
Excess of Base
Meter Size (Inches)
(Cubic Feet)
(Per CCF)
5/8 through 3/4
$13.62 for first 200
$431 for each add. 100
1 tlvough 2
$47.69 for first 1,000
$4.31 for each add. 100
Larger than 2
$96.48 for first 2,000
$431 for each add. 100
10
5
6/19/2009
~
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777
asd
Rate Study
Proposed Rates
• The following table presents the impact the proposed rate
increases will have on average customers'
monthly bills
RESIDENTIAL
Current Proposed
Meter Size Monthly Bill Monthly Bill
Increase
5/8" and 3/4" $49.46 $50.73
$127
COMMERCIAL
Current Proposed
Meter Size Monthly Bill Monthly Bi11
Increase
5/8" and 3/4" $59.44 $61.07
$1.63
11
q, . : rli`~
ate Study
Water and Wastewater Monthly Bill Comparisons
Reside
ntial Customers
Assuming 5.000 Gallons
rotal
MonthlvWater
MonthlvSewer
Monthly
PRY
Pooulation
Charae
Chame
Charae
Bonham
10,661
3420
Gainesville
32.49
Gainesville
6522
Ganesville
16,569
32.73
Waxahachie
31.18
Bonham
63.35
Corsicana
26.463
28.76
Parls
29.81
Corsicana
5528
Denison
24,103
27.70
Bonham
29.15
Waxahachie
54.50
Commerce
9,700
27.85
PanS
28.47
Commerce
54.22
Shertnan
37,710
27.31
Marshall
27.75
Denison
53.50
Terrell
18,952
25.46
Terrell
26.97
Paris
52.61
Waxahachie
29,900
23.32
Commerce
26.57
TeRell
52.43
MOfshall
24,006
23.21
Corsicana
26.52
Par7
5122
Paris
26,539
23.00
Denison
25.80
Marshall
50.96
paus
=5.5"s9
22.77
Greenville
23.43
Greenville
4471
Greenville
26,600
2128
Sulphur Springs
20.51
Shertnan
43.61
Sulphur Springs
15,387
21.15
Sherman
16.30
Sulphur Springs
41.66
Nbunt Pleasant
15,202
19.70
Nbunt Pleasant
15.75
Nbunt Pleasant
35.45
Source: 2009 Texas Munici al Lea ue Water and Wastewater Survey
r,, 7
6