Title
Presentation / Discussion: Consideration of Water and Sewer Rates
Body
Key Issues:
The Utility’s staff has completed an update of the Cost of Service model to meet financial viability goals as defined in the Water Utilities Strategic Plan. The objective of the model is to meet operational expenses, system renewal needs and provide financial policies for stability of the Utility’s next 10 years.
The Water Utility Advisory Board has established a set of rate objectives as the framework to ascertain these financial goals. Rates changes should be predictable, incremental and competitive; should support development of the City of Lee’s Summit; encourage conservation; and maintain compliance with state statutes and city ordinances.
Impact/Analysis:
Several key inputs were reviewed as a part of the annual model update.
Revenue Projections were generated through an evaluation that began with a review of consumption data over the past seven (7) years. The analysis provided an average level of consumption by customer class per account. Consumption was then forecasted including growth factors to produce revenue estimates for the model to determine the revenue requirements necessary to meet the objectives outlined below.
• The Cost of Service model provides a financial plan to meet the ongoing operating and capital needs of the Utility.
• The Cost of Service model identifies increased revenue needs for each of the next 10 years and is consistent with findings of the Strategic Plan.
• The model addresses the infrastructure rehabilitation needs as identified and schedules the projects in accordance with a financial plan.
• The model is in compliance with financial and rate policies specified in the Strategic Plan and presented to the Water Utilities Advisory Board.
• The model generates a cost allocation between customer classes consist...
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