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City of Puyallup

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AI- 4193   8.    
City Council Agenda
Meeting Date: 02/04/2014  
Subject:    Second reading of an ordinance pertaining to utility rates
Presenter: Bill McDonald
Department: City Manager's Office  

Information
Recommended Action
Conduct second reading of an ordinance providing for indexed annual adjustments to the water, wastewater, and stormwater utility rates and charges, and further providing for an additional four percent annual increase in the water utilty rates in 2014, 2015, 2016 and 2017.
Background
At Council's study session on January 14th, staff summarized the considerable amount of information which has been developed over the last few years on the condition of the water utilities. The City Manager recommended implementing indexing  again in 2014 and providing for an additional 4% annual increase in water rates for four years. Following Council discussion, three rate options were provided to Council at its January 21st regular meeting, as follows:
 
  • Option 1:  Automatic annual rate increase tied to the Engineering News Record Construction Cost Index;
  • Option 2:  Automatic annual rate increase tied to the Construction Cost Index, plus an additional 4% increase for four years to the water utility only; or
  • Option 3:  Automatic annual rate increase tied to the Constructio Cost Index, plus an additional one-time 15% increase to the water utility only.
Previous Actions (Discussions/Presentations)
At its regular meeting of January 21st, Council was provided additional information on the effect of various rate designs for the water, sewer and stormwater utilities. At that time, Council unanimously approved first reading of this ordinance which provides for indexed annual adjustments to the rates and charges for the three utilities (the amount of the adjustment being determined by the Construction Cost Index), and also provides for an additional four percent annual increase in the water utility rates for 2014, 2015, 2016 and 2017.
Summary of Proposal
Approve indexed annual adjustments for utility rates as determined by the Construction Cost Index, and further approve an additional four percent annual increase to water utilty rates in 2014, 2015, 2016 and 2017.
Alternatives/Options
Various alternatives and options have been presented for Council's review and consideration, as recently as January 21, 2014.

Fiscal Impact
Attachments
Ordinance
Exhibit A

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