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HomeMy WebLinkAbout2005-11-07 - Agendas - Final a7-c-�C�vlC WATER/SEWER COMMITTEE AGENDA Meeting Date of November 7 2005 COMMITTEE: Chairman Kyle Cook; Alderman: Lioneld Jordan, Bobby Ferrell, Robert Reynolds COPY TO: Mayor Dan Coody, Sondra Smith, Gary Dumas, t v Davis, Susan Thomas, Tim Conklin, Jeremy Pate, Ron Petrie FROM: David Jurgens, Water and Wastewater Director vel q4^ A meeting of the Fayetteville Water and Sewer Committee is planned for N ember 7 2005, at 5:30 PM, Room 326, Fayetteville City Hall. Proposed topics include: 1. Approval of the Minutes of September 29 and October 1 Water/Sewer Committee Meetings. 2. WSIP Update. a. Results of Hamestring to WWTP Force Main Bid. The City received four bids on this project, as follows: Garvey Const $ 4,582,536.60 Kraus Const 5,617,699.00 W.N. Couch Const 5,633,185.50 T-G Excavating 5,777,777.00 Engineer's Estimate 7,144,276.00 The Engineer is evaluating the bids to ensure there are no apparent errors. If none are found, staff requests approval to forward the bid, as simultaneous actions, to the Department of Natural Resources for review and for full City Council approval in December. We are very pleased with this bid; Gamey is an excellent contractor. They were one of the five that passed the vetting process and was interviewed for the West Side WWTP construction. They constructed the City's 42"water transmission line from the Beaver Water District(BWD)to Fayetteville, and performed several other City projects in the 1990's. They have very recently completed several projects for BWD. b. Construction Cost and Time Line Summary. An update to the tentative construction schedule and cost estimates will be distributed at this meeting. c. Easement Status Update. The updated easement status spreadsheet is attached. d. West Side WWTP Status. The Notice to Proceed has been issued; the preconstruction conference was scheduled to occur at 1:00 p.m. Monday, 7 November, 2005. 3. Designated Management Agency. In order to obtain RLF funding, the City Council is required adopt the resolution designating the City of Fayetteville as a Designated Management Agency for Wastewater Collection and Treatment of Domestic Wastewater for the City of Fayetteville and the areas we serve. This resolution is required pursuant to Section 208 of the Federal Water Pollution Control Act of 1972 as amended. It requires that the Designated Management Agency be formally recognized as such and execute an annual plan update. The W-S committee 7 Nov 05.doc City's Capital Improvement Plan, wastewater system master plan, and annual budget meet the requirements of the annual plan update. Failure to adopt this resolution will result in the City being unable to obtain RLF funding. 4. Capital Improvements Program. Staff will present more project details of the Water/Sewer Capital Improvements Plan. 5. Water Line Cost Share. There is a proposed cost share with the Fayetteville Public Schools to increase the size of a water main from 8"to 12" diameter on Rupple Road south of Persimmon. 6. 24" Water Line, Custer. McGoodwin, Williams and Yates has submitted 90% plans for the 24" water line replacement project on Custer south of 18th Street. Staff is reviewing. Informational item. 7. Elkins Contract Review. Staff will present the final contract with Elkins for consideration by the Sewer Committee. 8. Farmington Contract Update. Staff will present an update on the contract negotiations with Farmington which will include a discussion of growth management strategies for utilization of the West Plant. One of the strategies includes utilizing the Master Facility Plan as amended in July 2001 to serve as a guide. 9. Consideration of Postponement of the Next Sewer Rate Increase. The Mayor has requested Staff to develop rate implementation options for Sewer Committee consideration. 10. Discussion of Implementing a CPI Indexed Water Rate Adjustment. 11. Scheduling the Next Water/Sewer Committee Meeting. Staff recommends the next W/S Committee meeting be scheduled for Thursday, December 1 at 5:30 in room 326. Attachments: Construction Cost and Time Line Summary Easement Status Matrix Elkins Contract WSIP Population Projections Solid Waste CPI Indexed Rate Ordinance W-S committee 7 Nov 05.doc AN wN -+ IO rrr CpWj GG « G D � sam) mam) N„ W . N N � yOriA W Nr O r T f N 07 n F 3 0 N N O O O Q _. O O Q yA (D J Co N CD N N �+ O N _ -• 7 Y1 3 O ry 0) 0 0 0 O V1 K -i 3 'a N W 0 = N m N N 0 C0f O Zn 0 n A O 3. Grtl �, O �1 (D 7 3 <LO C Z 0 W 0 3: , :3 0 O D N 07 0 O 00"0 Z7 l< 3 O O O CL O n m Q (D C)'O. = 3 ¢ O 'U N p_CD 0 QN p 3 N 0 r. O 5 , 3 -� a L (D 0 O N �� J w �► 1 _� Ia OD J CO N. D) (D O :3N A4 j M 21 B N N 3 C @ N a3 `< 000000 ?a 0 N O ,0... 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N N ;a(D a. q o N CD W A N -� UNi N =•0 O co 3 N 0 N W (wnm S' O- o v m N OOi OO S. 0 O O O Q O O o 0 0 0 3 N N �+ N SEWER CONTRACT This Agreement, made and entered into this _ day of , 2005, by and between the City of Fayetteville, Arkansas, hereinafter referred to as "Fayetteville", and the City of Elkins, Arkansas, hereinafter referred to as "Elkins"; WITNESSETH: WHEREAS, Fayetteville in its governmental capacity own and operates its own complete wastewater collection, treatment and discharge system; and WHEREAS, Elkins in its governmental capacity owns and operates its own wastewater collection system and does not operate a wastewater treatment or discharge system; and WHEREAS, Fayetteville receives wastewater from Elkins and then transports and processes the wastewater in Fayetteville's wastewater treatment facility and discharged treated wastewater effluent under Fayetteville's National Pollution Discharge Elimination System (NPDES) permit; and WHEREAS, at this time it has been determined that the best and most feasible treatment for Elkins' wastewater can be provided by Fayetteville's wastewater treatment facilities; and WHEREAS, Elkins desires to contract with Fayetteville to provide continued transportation and treatment for the wastewater from Elkins; and WHEREAS, Fayetteville must ensure that this role does not place financial burden of Fayetteville's retail customers for which Fayetteville's retail customers receive no benefit; and WHEREAS, Elkins must ensure that this role does not place financial burdens on Elkins' retail customers for which Elkins' retail customers receive no benefit; and WHEREAS, Elkins acknowledges that Fayetteville must add and fund capacity additions from time-to-time. NOW THEREFORE, in consideration of the mutual covenants, promises and conditions hereinafter set forth and other valuable considerations, the receipt of which is hereby acknowledged by Fayetteville and Elkins, it is hereby agreed as follows: A. TREATMENT OF SEWAGE 1. Fayetteville agrees to accept for treatment the sanitary sewage delivered by Elkins to the Fayetteville system and to process such wastes in the same manner as wastes from Fayetteville are treated under the following terns and conditions: 2. Elkins will construct all facilities required to deliver wastewater from Elkins to a "Point of Connection" to Fayetteville's sewer collection system as described below and as Elkins' wastewater is discharged to the environment under Fayetteville's NPDES permit or permits, as well as any other regulatory requirements that apply as a result of said permit or permits. This applies to any and all permits that pertain to any portion of the wastewater conveyance and treatment system through which Elkins wastewater flows. Fayetteville will provide Elkins a current copy of the NPDES permit and any future revisions. Permits which are issued relative to portions of the Fayetteville wastewater conveyance and treatment system through which Elkins wastewater does not flow do not apply. 3. Fayetteville and Elkins agree that Fayetteville shall accept and treat all wastewater flows from Elkins until the bio-loading at the Paul Noland Plant ("Plant") and the hydraulic loading at any point in the collection system from the Point of Connection to and including the"Plant" reaches 75%, and, at that time the Elkins and Fayetteville agree to pro-rate the remaining capacity between all cities and any non-city customers using the "Plant" based on the existing percentage of that "Plant"by each city or non-city customer until additional capacity is provided. Fayetteville will provide Elkins with the average monthly bio-loading for the Noland plant for all of 2005. Going forward, Fayetteville will provide monthly reports to Elkins showing the average bio-loading for each month. B. RATES FOR SEWER SERVICE 1. Elkins and Fayetteville agree that rate-making shall be fair and equitable, be easy to administer and understand and shall be based on policies that result predictable rate adjustments and avoid abrupt rate changes. 2. Elkins agrees that Fayetteville's return on investment on assets employed to provide service to Elkins will be limited to 2% above the average bond coupon outstanding debt at the time of the comprehensive cost of service study noted in paragraph 5 below. 3. Elkins and Fayetteville agree the rate for sewage treatment services provided herein shall be reduced to $2.81 per 1,000 gallons of sewage received by Fayetteville from Elkins for treatment beginning on the date this agreement is approved by both Cities. The Cities acknowledge this rate reduction is partially due to the Elkins sewer meter registering faulty volumes. 4. Fayetteville and Elkins agree to apply and accept a retroactive adjustment reducing the 2005 rate of$5.71/1,000 gallons to $2.81/1,000 gallons based on actual metered volumes, back to March 1, 2005. Both cities acknowledge this is a settlement that resolved all potential claims and released any rights they might have had prior to March 1, 2005 relating to sewer rates, metering, etc. Fayetteville agrees to release its rights for all back billings for volume underreporting that has occurred prior to the effective date of this agreement. 5. Fayetteville will conduct a comprehensive cost-of-service study in the future that will reset these sewer rates based on industry standards. Fayetteville shall cause the rate per 1,000 gallons for wastewater treatment services to be determined by an independent utility rate consulting firm with demonstrable expertise in water and wastewater utilities under a wholesale contractual agreement and in compliance with the rate methodology based in part or whole on the rate making standards promulgated by the American Water Works Association (AWWA), Water Environment Federation (WEE) or other authoritative organization. All of the wastewater flows from Elkins shall flow through a metering device provided at the pump station which pumps to the point of connection of the Elkins system to the Fayetteville system. C. IMPACT FEE IMPLEMENTATION or CONTRACTURALSURCHARGE I. Elkins and Fayetteville further agree that Elkins shall pay an additional $0.25/1,000 gallons of billed sewage,beginning January 1, 2006, to fluid Elkins' portion of future capacity enhancements to the Fayetteville collection and treatment facilities utilized by Elkins. Fayetteville and Elkins agree that this rate per thousand shall be evaluated concurrent with each comprehensive cost-of- service study described in Section E paragraph 5 above as governed by Section H below. Fayetteville and Elkins further agree that Elkins shall assess, collect and remit to Fayetteville the cost of increasing capacity for the sewer lines necessary to serve Elkins as depicted in APPENDIX A and described in Section I. The capacity cost is to be calculated on the volume of contributed wastewater flow caused by the development under review. 2. Fayetteville agrees to fund a wastewater impact fee feasibility analysis in compliance with the Arkansas Development Impact Fees Act. Elkins and Fayetteville agree that this contract may be amended to incorporate wastewater impact fees at the conclusion of the applicable studies required by the Arkansas Development Impact Fees Act. 3. The payment for wastewater treatment shall be based on metered water purchases discounted by the formula described in APPENDIX B. Elkins and Fayetteville agree to use eighty-five per cent(85%) as the initial percentage. This initial percentage shall remain in effect until December 31, 2006 at which time the percentage may be adjusted to reflect adjusted wastewater flows as calculated by a registered engineer contracted by Elkins. Elkins and Fayetteville agree that the volume of wastewater received by Fayetteville at the"Point of Connection" shall be measured by the wastewater meter installed. The Cities agree to base monthly billing on the percentage method unless the metering device readings detect any volume discrepancies greater than 10% for three consecutive months. Elkins and Fayetteville agree to use actual meter readings while the volume discrepancies are investigated. The use of the meter for billing purposes shall cease only upon mutual agreement between Elkins and Fayetteville. 4. Fayetteville shall provide the maintenance and any required replacement of the metering device, and Elkins shall be the right of inspection of the metering device and "Point of Connection" at any reasonable time. Elkins shall have full and complete access to the pump station at all times. The metering device shall be calibrated in compliance with the manufacturer's guidelines for accuracy once per year by Fayetteville. 5. A statement for sewer services shall be rendered by Fayetteville once each month, and shall be paid by Elkins in accordance with Fayetteville Code of Ordinances Chapter 51.141, as amended from time-to-time and incorporated herein as of September 14, 2005: Sewer Billing procedure (A) Bills,for sewer service shall be rendered monthly. Sewer bills are due and payable on or before the 20`x` day following the billing date stated on the sewer bills. Sewer bills not paid on or before the due date shall be considered delinquent and an additional charge of 10%of the total bill shall be added, and if any bill is not paid within 30 days after the bill shall be due, suit may be brought to collect the amount due, together with the expenses of collection and a reasonable attorney's fee. (B) In the case of the sewer customers outside the city limits, if the monthly service charges are not paid within the prescribed time, sewer service to the customer will be discontinued in the same manner and subject to the sane provisions as prescribed.for discontinuance of service under 51.140(B). D. ELKINS RESPONSIBILITY FOR SEWER MAINTENANCE 1. Elkins shall have full responsibility for all maintenance and operations of Elkins' sanitary sewer system, including all parts thereof necessary to deliver the sanitary waste to the point of connection with the Fayetteville system in such a manner to be suitable for the treatment capabilities of the Fayetteville system. hn such regard, Elkins agrees to comply with all reasonable requirements of Fayetteville. 2. Elkins agrees that Fayetteville will have the right to inspect the sanitary sewage system of Elkins at all reasonable times so as to assure Fayetteville that the construction, maintenance and operation of said sanitary sewer system in being carried out in a manner consistent with modern engineering and health practices. Fayetteville may inspect any taps onto the sanitary sewer system of Elkins at the time of installation of said taps, said inspection to be by a designated official of Fayetteville. Fayetteville will notify the Elkins Water and Sewer Department during normal business hours, of Fayetteville's intent to inspect portions of Elkins Wastewater Collection System. Fayetteville agrees to provide Elkins a copy of any written reports that result from the inspection(s). E. ELKINS' ADOPTION OF SEWER CODE REQUIREMENTS 1. Elkins agrees to adopt and enforce with reference to all users of its sanitary sewer system requirements and restrictions which are, at least, as restrictive as those provisions of the ordinances of Fayetteville restricting and controlling discharges into the sanitary sewer system of the City of Fayetteville. The requirement of this subparagraph shall be interpreted as to require the adoption and enforcement of such restrictions by Elkins as are equal to any ordinances or subsequent amendments to such ordinances of Fayetteville. 2. Elkins hereby agrees to exclude from their sewage collection system any industrial process wastewater without prior written approval from Fayetteville. Elkins agrees to provide Fayetteville an official copy of the Elkins adopted guidelines. F. REPORTING DEVELOPMENT APPROVALS 1. Elkins agrees to provide to Fayetteville, on an annual basis, all development approvals grants by the Elkins Planning Commission and/or Elkins City Council. G. TERM OF CONTRACT 1. The tenn of this contract shall be for the life of loan 49206 whose original date is July 23, 1981, with the loan having an initial term of forty (40) years, from Farmers Home Administration to the City of Elkins, which is being made to enable Elkins to build its sewage facilities. H. SEWER RATE SCHEDULE ADJUSTMENT 1. The rate schedule established herein is subject to adjustment by Fayetteville every two (2) years during this contract upon thirty (30) days written notice to Elkins that Fayetteville intends to conduct a comprehensive rate study. 2. Fayetteville agrees that Elkins may participate in the selection of the independent rate consultant I. POINT OF CONNECTION 1. The"Point of Connection" shall be at the end of Fayetteville's 10-inch gravity sewer line in Lewis Woods Lane in the Baldwin Community as depicted in APPENDIX A. J. HOLD HARMLESS 1. Elkins covenants and agrees that it will defend and hold harmless against and indemnify said City of Fayetteville, Arkansas, for any judgment which might be obtained against them by reason of any negligent act on the part of Elkins in the operations,maintenance and construction of Elkins' sewage collection facilities within Elkins' service area. This provision does not waive either City's statutory sovereign immunity. Fayetteville shall not be responsible for damages resulting from acts of God, acts of war, insurrections, or rebellions, acts of public enemy, acts of any unauthorized persons, firms, or corporations, or acts of Elkins', its agents or employees. K. CONTRACT BINDING ON SUCCESSORS I. This contract shall be binding upon the parties hereto, their successors and assigns. In the event of any occurrence rendering Elkins incapable of performing under this contract, any successor of Elkins, whether by result of legal process, assignment, or otherwise shall succeed to the rights of Elkins under this contract. L. NO FRANCHISE OR OTHER FEE OR TAX TO BE LEVIED 1. Elkins will not during the period of this contract or any renewal thereof, levy any franchise tax, occupation tax, or any other tax or fee of any form whatsoever, by whatever name it may be called, upon Fayetteville, or the services rendered by Fayetteville pursuant to this contract without consent of all the parties. M. TERMINATION I. This agreement may be terminated by either party upon a material or substantial breach by the other of any of the covenants or agreements contained herein, and the failure of the party in breach to remedy such breach within six (6) months after receipt of written notice of the existence of such breach. Either party will have the right to utilize a mediation process if they disagree with a proposed breach. Elkins reserves the right to re-negotiate or terminate this contract if it is advantageous for the Elkins to pursue a different type of sewage treatment process, subject to advance notification of at least two years. N. NOTICES I. The written notices provided for herein shall be sufficient if sent by certified mail, return receipt requested, postage prepaid, to the Mayor of the City of Fayetteville, 113 West Mountain Street, Fayetteville, Arkansas, 72701, or the Mayor of the City of Elkins, 348B North Center Street, Elkins, Arkansas, 72727, but not limited thereto. IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE AND IN WITNESS WHEREOF, The Mayor and City Clerk of the City of Fayetteville, Arkansas, by authority of a Resolution adopted by the City Council of the City of Fayetteville, and the Mayor and City Recorder of the City of Elkins, Arkansas, by authority of a Resolution adopted by the City Council of the City of Elkins, have hereunto set their hand and caused the corporation seal to be affixed and dated this day of 2005. CITY OF FAYETTEVILLE CITY OF ELKINS By: By: DAN COODY JACK LADYMAN Mayor of Fayetteville, AR Mayor of Elkins, AR Attest: Attest: Sondra Smith, City Clerk Meg Smith, Recorder +'L ♦ Appendix A Fayetteville - Elkins Wastewater Agreement 2005 � a4 y t � IN _ 'k n'=I6i941Qt"�i'�C7fiN +.el1t) )y ,��E.tCil, r s q . y .. _ tY.Lf ^i CW 7 h KVr� . ! �] ""^{n'xr ��.� .^...' q`4•���. . .ice 3r� �}��� i y Fayetteville - Elkins Wastewater Agreement APPENDIX B Wastewater Volume Based On Metered Water FORMULA ACTIONS Example Water Meter Reading Volume - September, 2005 4,431,900 Wastewater Volume as a % of Water 85% 3,767,115 Facility Plan Amendment & Appendix A m EID Wastewater System Improvement Project City of Fayetteville, Arkansas RLF Project No. CS-050803-03 August 2001 McGoodwin,Williams and Yates, Inc. Consulting Engineers ©2001 McGoodwin,Williams&Yates, Inc. 1EXISTINGCONDITIONSt1 101. Project Identification This project is formally identified as Wastewater System Improvement Project; City of Fayetteville,Arkansas; RLF Project No. CS-050803-03. 102. Planning Area The City of Fayetteville,the County Seat of Washington County,is located in the northwest corner of Arkansas. It is approximately 30 miles east of the Arkansas/Oklahoma border and approximately 50 miles south of the Arkansas/Missouri border. Fayetteville comprises a total area of approximately 44 square miles and ranges in elevation from 1,100 to 1,720 feet above sea level. Fayetteville is a part of the Fayetteville-Springdale-Rogers MSA(Metropolitan Statistical Area), which is comprised of Washington and Benton Counties. Fayetteville's population as recorded in the 2000 Census is 58,047. It is bordered generally by Springdale on the north,Elkins and Goshen on the east,Farmington on the west and Greenland on the south.The 2000 populations for cities within the seven service areas are as follows: Fayetteville 58,047 Springdale 45,798 Elkins 1,251 Goshen 752 Farmington 3,605 Greenland 907 A map of Fayetteville's Planning Area is shown in Appendix A,Figure 2.2. 103. Project Need Due to an unprecedented amount of growth and a subsequent increase in wastewater production, the City of Fayetteville has found the existing wastewater collection system and the Noland Wastewater Treatment Plant on the east side of Fayetteville nearing,and on occasion exceeding its capacity. As a result of the shortfalls in capacity at the existing Noland Wastewater Treatment Plant and in the collection system,the City of Fayetteville initiated a study in September of 1995. The engineering firm of CH2MHILL was hired by the City to conduct the necessary facility planning studies in order to find the most cost effective and environmentally acceptable alternative to solve the problem. hi February of 1997, CH2MHILL in association with McClelland Consulting Engineers and RJN Group Inc.prepared the Fayetteville Wastewater Facility Plan. The facilities plan indicated the need for improvements to the City of Fayetteville's wastewater facilities and recommendations were made regarding the required improvements. As a result of a number of sanitary sewer overflows(SSO) in the City of Fayetteville,the U.S Environmental Protection Agency(USEPA)placed the City under an Administrative Order(AO) in July of 1989 to improve the wastewater collection system and eliminate rainfall related overflows. In order to mitigate these SSO's,the city initiated a Sanitary Sewer Evaluation Study (SSES)and subsequent rehabilitation program to address problematic areas related to wet weather. Several sanitary sewer improvement projects were constructed in order to remove infiltration and inflow from the collection system. These rehabilitation programs resulted in a 90 percent reduction of rainfall related overflows throughout the system. Due to this reduction in Facility Plan Amendment EXISTING CONDITIONS 100-t O . 11 201. Projected Population The City of Fayetteville provides sewer services to the cities of Farmington, Greenland and Elkins. Fayetteville and these neighboring bedroom communities have experienced tremendous growth over the last 20 years. Beginning in 1980, growth rates in Fayetteville have averaged 3.26% compounded annually. For the combined population,the growth rate is 3.58%. In the May 2001 report entitled Preliminary Design Report Noland Wastewater Treatment Plant Improvement, which can be found in Appendix PDR-1,Black and Veatch reported the projected population of Fayetteville for the year 2020 to be 85,000. The report also projects the total population of the service area to be 93,186 in the year 2020. The Noland WWTP is projected to serve 31,849 of the 2020 population,while the Westside WWTP is projected to serve the remaining 61,337 of the 2020 service area population. Table 201 is provided to summarize the population projections for the City of Fayetteville Sewer Service Area. Table 201 Projected Population Growth in the Fayetteville Service Area Noland WWTP Westside WWTP City of Fayetteville Service Area Service Area Service Area Design Year 2000 2020 2000 2020 2000 2020 Fayetteville(') 18,583 28,663 37,817 56,337 56,400 85,000 Elkins/Greenland('� 2,196 3,186 - - 2,196 3,186 Farmington') - - 3,200 5,000 3,200 5,000 Total Population 20,779 31,849 41,017 61,337 61,796 93,186 of Developed By RJN 202. Future Flows and Loadings The selected alternative for Fayetteville is to upgrade the existing Noland WWTP in the White River Watershed and build a new WWTP in the Illinois River,treating the wastewater generated in each watershed without diversion. After separation of the flow streams into their respective watersheds,the anticipated design flows and loadings to their facilities for the year 2020 are shown in Table 202. Facility Plan Amendment fUTURE CONDITIONS 200 -1 ORDINANCE NO.4765 AN ORDINANCE AMENDING CHAPTER 50: GARBAGE AND TRASH, OF THE CODE OF FAYETTEVILLE, TO ALLOW FOR ANNUAL RATE ADJUSTMENTS FOR RESIDENTIAL SERVICE, BASED UPON THE CONSUMER PRICE INDEX (CPI) AS PUBLISHED BY THE U.S. DEPARTMENT OF LABOR. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section 1. That §50.40(A) Code of Fayetteville is hereby amended by inserting the following after subsection(3): (4) The Garbage/Trash User Fee shall be adjusted annually based upon the Consumer Price Index (CPI) as published by the U.S. Department of Labor . PASSED and APPROVED this 201 day of September, 2005. �.urnnutrrn e'ci :p B ;FAYETTEVILLE; y - � a D COODY,Mayor 5 • ATTE T: a nnwuu+o By: SONDRA SMITH,City Clerk ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 51, WATER AND SEWERS, OF THE CODE OF FAYETTEVILLE, TO ALLOW FOR ANNUAL RATE ADJUSTMENTS FOR WATER BASED ON THE CONSUMER PRICE INDEX (CPI) AS PUBLISHED BY THE DEPARTMENT OF LABOR. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That Chapter 51: Water and Sewers, Code of Fayetteville is hereby amended by inserting the following after subsection § 51.136 (F): (G) The Monthly Water Rates, Monthly Water Meter Service Charge,",a�d Monthly Standby Fire Protection Service Charge shall be adjusted annually each April based on the CPI published the previous June 30. A comprehensive cost ofervic s study shall be conducted every three years with the cost-of-ser 'study following the Operations Study. ' PASSED and APPROVED this_day of December, 2005 t ?120VED: x la 9 4 $ i By DAN"DV, Mayor ATTEST: B �v Y SONDR "SMITH,Cif} Clerk a ri�y,z City Council Water&Sewer Meeting Minutes July 21,2005 Page 8 of 8 Rate Development Policy. Steve Davis talked about the background of this issue and how the need for discussion came about. He distributed some information regarding possible financial policies for rate development for consideration. The Committee talked about current processes used by the City. Steve reviewed the information presented to the Committee and explained some of the financial implications. He said the City will use cost allocation methodology that is generally accepted by either the American Waterworks Association, Water Environment Federation or some other recognized policy group. We are required by bond documents to do an operations study every three years. This independent view of our rate structure and operations study is a check and balance for the staff, preventing the building up of too much deferred maintenance or too much cash. Steve Davis explained rate-of-return calculation. He talked about the difference in Fayetteville rates compared to rates for Elkins, Farmington, Greenland and Johnson and how that comes back to what is included in the rate-of-return calculation. Alderman Cook asked how sales tax from residents in each jurisdiction can be determined. Steve Davis said there is no document or study available to tell us, predictably, what that number is. The UA, over a two or three month time period, surveyed shoppers and got zip codes in various locations around the city. Based on their report, they determined percentages of shoppers from outlying areas. These results could be added to other standard reports on per capita income or disposable income and you could then interpolate some contributions. The alternate plan as outlined in the information distributed is a much easier calculation. It was generally agreed that the Committee was most comfortable with the alternate calculation method. The Committee continued to review and discuss the information about the possible financial policies presented for consideration. Alderman Reynolds asked if Steve could fill in the dollars and percentages so the Committee could move forward with this. Steve Davis said he would get some comparisons drawn up and some numbers put together. There was some general discussion about the bids for the Westside Treatment Plant and the expectations for future bids. The next meeting of the Water& Sewer Committee was set for Monday, August 1, 2005. Approved Date Kyle Cook, Chairman 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org Financial Policy No. 4 Global Policy Rates should be stable over time Assures financial stability Assures System credibility from the customer's perspective General Policy 4.1 Rates should be stable in their ability to generate sufficient revenues, but also in the perception of the customer from rate changes from year to year. Specific Policies 4.1.1 Rates should be reviewed by management, on an annual basis, to assure that they provide sufficient revenues. 4.1.2 Annual rate review and rate adjustments implemented to reflect the utility's revenue needs. The rate adjustments shall consider a minimum of a three-year projected period to attempt to stabilize and minimize rates over time. 4.1.3 Needed rate adjustments will attempt to minimize impacts to customers by phasing-in large rate adjustments over a three-year time period or more, if practical. 4.1.4 Any rate adjustments shall consider the "competitiveness" of the utility's rates to surrounding communities. J:\Water&SewerlRate Alternatives and Rate Policy\Financial Policy Revised as of July 2005.doc 9