Title
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. The financial plan has been updated with respect to the following significant cost factors:
• Water Purchases
o City of Independence - No increase was approved for FY25, and no increase is anticipated for FY26. Future rate increases were anticipated at 3% for the remaining years of the model.
o Kansas City Water - A 3% was projected to be effective on May 1, 2024, however, the increase was 4.5%. Future rate increases were set at 3% for the remaining years of the model.
• Sewer Treatment
o Middle Big Creek - In FY25 rates increased from $44.00 per connection to $47.00, as of October 2024. In FY26, rates are projected to increase from $47.00 to $49.00. Future rate increases are anticipated to address growth and the subsequent debt that will be issued related to improvements in the district.
o Little Blue Valley Sewer District - Rates are expected to continue to increase as projected by LBVSD’s planning documents to satisfy previously issued debt and continuous improvements necessary for meeting service levels and regulator...
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