I'd like to call the April 20th City Council meeting budget workshop to order.

Item two on the agenda is presentation discussion consideration of water and wastewater rates, including presentation discussion of the water and wastewater rate study, discussion and consideration of setting water and wastewater rates for the purposes for the purposes of the fiscal year 2026-2027 budget and discussion and consideration of directing city staff to prepare necessary documents to formalize water and wastewater rates at a future regular meeting.

Mr.

Knifing.

Thank you, Mayor and Council.

Chris Neifing, Director of Water Resources.

Sorry.

I'll review it with you.

And then also talk about the rate assistance and programs and what uh what we're doing for water conservation outreach, and then proposed next steps.

So on the low-income rate assistance, uh, we're looking at discounts on rates for those that already qualify for an existing electric program to also be eligible on the water and wastewater side for rate assistance or a rate decrease on their base rate.

Uh looking at tagging on to that program, we want to make sure we get the methodology right.

Um we had looked at the ten dollar and forty-two cents, but we'll we'll make sure that we get that uh tightened up before we bring back a rate, I guess the final rate structure.

And then bill assistance.

Currently, we use utilize uh Hope Center.

Um they help families in need.

So our customer service division uh will refer them to Hope Center if they're having a one-time issue or you know, a couple months where they're on hard times.

Um Edmund Electric and Water fund this at 170,000 per year.

They're not utilizing all the funds right now.

Uh, but we'll continue to work with them and make sure that they're adequately funded to help the people in need.

And then also customer service refers not only to Hope Center but the 211 program so that you know other community nonprofits can help customers in need, so it's not just the city or the hope center, it it's churches, it's other nonprofits that can help with customers in need.

Um so trying to utilize all resources to make sure that we can cover and and help those that are on hard times.

So any questions on that okay.

Just a little bit about our water conservation.

Um I know you all have been to our uh water resources admin building at the wastewater plant or water resource recovery facility.

Um we do a lot of tours out there with not only professional groups but young groups like Girl Scouts, um, even home school groups, just uh anybody that's interested in learning about their water and what happens, or even sometimes individuals that ask us where all the rate funds are going.

We want to show them and highlight what is going on in the system.

So gives us a chance to talk about all these things, whether it's conservation or their bills, you know, whatever we can do to help community outreach and talk about long-term planning for droughts and resilient water supplies, those kind of things.

Um of the classes held are also on you know drought tolerant plants and irrigation best practices.

Whatever we can do to help people understand how to save money on their bills so that you know if they move in and uh find out that you know water may be a little little more than the last community they lived in.

How can they better control their bill?

So any questions on that before I jump ahead.

Okay.

Okay, so we were asked to look at option one and then option one.

We're calling this one D.

Looking at the same as option one, but splitting it over a two-year two-year time frame.

And this would just be on base rate charges, not on volumetric rates for the five-year period.

So two years we would increase uh base charge only, and then no volumetric increases.

The planned reserve fund drawdown essentially gets us to the same point.

That's what that looks like.

Okay, so what what that essentially gets us to is a four for an average user, 8,000 gallons of water and 5,000 gallons of wastewater.

Uh 1495 increase to the base rate for a 5.8 meter, which is where most of our customers land.

Uh and this says November.

Um we'll talk about our request or recommendation for July.

Um, and then 1497 in 27, and then no base rate increase in 28 or 29, and then no volumetric rates increases throughout that same period.

So and then the um wastewater still the same under all scenarios.

Questions on this?

This is the whole Chris.

Yes.

So the only difference between option two and one D is uh in two there's a small amount of volumetric charge, and in one there's not one D.

Yeah, option two has less base rate increase.

It eventually gets closer to the this level, but over a longer period of time, and requires volumetric increases every year as well.

Okay, thanks.

So this is the rate sheet over the same time period.

It affects everybody a little different, and I'll show that on the next slide.

So for the 8,000 gallon, the middle line up top, it's basically you know boils down to about a 13% increase, 12% increase or the $18 roughly in the first two years, and then goes down to about a $3.50 increase in the outer outer two years.

So a lot smaller, a lot more stable, and that's that's what we say about the base rates is creating the rate stability is not getting into this constant cycle of large impacts, but you know, the the project at hand that we're getting ready to bid out is just a large project and has the uncertainty that is creating the impacts, but the stability and what you see with the trend line is this does get us to a better spot in a quicker fashion, just not as quick as the all-in-one year uh approach.

Chris?

Yes, sir.

So I mean, bottom line here is for the average customer, right around 8,000 gallons.

You're talking about a 13.7% increase in year one and 12.2% in year two, and then it drops dramatically in year three and four, which is just wastewater increases, right?