City Council Regular Meeting


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  9.       
Meeting Date: 03/11/2020  
Submitted By: Luis Pedroza, Management Services Director
Focus Area: Advance Infrastructure Development & Improvements
Advance Infrastructure Dev/Improvements Strategy : Offer basic essential services
Advance Infrastructure Dev & Improvements Goal: Improve infrastructure systems

SUBJECT:
DISCUSSION/DECISION on approval of Ordinance No. 20-1117, an Ordinance of the Mayor and Council of the City of Douglas, Cochise County, Arizona, DEFINING MISCELLANEOUS TITLE 13 FEES FOR UTILITY USERS, and ESTABLISHING MONTHLY SEWER SERVICE FEES for users of the USDA Bay Acres Sewer Project and amending Ordinances No. 602, 755, 794, 06-904, and 09-973.
EXECUTIVE SUMMARY:
The City accepted a $6.8 million grant from USDA to install sanitary sewer to the Bay Acres Colonia area.  USDA required a financial analysis for the future feasibility of this project and recommended monthly user fees to the Bay Acres Area residents.
 
BACKGROUND:
The Bay Acres sewer connection project is underway as of January 2020 which set out to connect approximately 350 homes located in the Bay Acres Colonia area.  The project is part of a grant awarded by USDA in the amount of $6.8 million and in conjunction afforded the City an opportunity to upgrade its Wastewater Treatment Plant, expanding its capacity.  In order to qualify for the USDA grant, the City had to perform a financial analysis showing the financial feasibility of this project and the fees that could be charged to the residents of the area.  These would need to be higher than City of Douglas residents and enough to meet the financial demand of maintaining the system.

Working with USDA, the City calculated a $32.02 monthly service charge for a residential single-family residence or dwelling unit and $52.03 for a commercial service.  There are other fees on commercial, industrial and school designations that vary based on water consumption that are recommended to be adopted in the same amounts as the fees for those properties located outside of the City limits. The special fees that will be charged are applicable only to those residents who signed the contract with the City of Douglas to receive the USDA funded sewer connection to their homes. 
 
MONTHLY SEWER SERVICE FEE (INCLUDES $5.00 CIP SURCHARGE PER ACCOUNT), BAY ACRES COLONIA/USDA GRANT  
CUSTOMER CLASS June 12, 2020
Residential, per single family residence/dwelling unit $             32.02
Commercial 1 (0-199,999 Gal.) $             52.03
Commercial 2 (200,000 to 399,999 Gal.) $             95.00
Commercial 3 (400,000 to 599,999 Gal.) $           130.00
Commercial 4 (600,000 to 799,999 Gal.) $           160.00
a) Commercial 5 (over 800,000 Gal.) $           195.00
a-1) plus the monthly surcharge fee per 100,000 gal. over 1,000,000 gal/yr. $               8.65
b) Industrial $           105.00
b-1) plus the monthly surcharge fee, per 100,000 gal. over 300,000 gal/yr. $               8.65
c) School, per site + monthly service fee per student $             13.75
c-1) Monthly service fee per student $               0.55
     
 
The City is also recommending clarifying language in the code in order to charge a turn-off fee on the turn-off day.  Currently, the language is unclear in stating that we can assess the turn-off fee at the day of shutoffs.  It can be interpreted as saying:
(1) fee will be assessed when the actual turn-off happens, leaving a window of opportunity for homes to pay that day without getting assessed the fee;  or
(2) homes may illegally open their water after the City has turned them off and claim that water was never turned off and therefore the fee should not apply to their account..  

Language also is inserted to clearly align the fee to be issued on the day of turn-offs and the day is established depending on day of the week and availability of resources.  The date of turn-offs is always communicated to the customers on their regular and delinquent bills. 

Finally, making a correction in the code to reflect that the fee for illegally turning on their water should be $20.00 and not $10.00.  This fee was passed in 1997 under ordinance 755.
 
DISCUSSION:
The new Bay Acres fees will comply with the USDA grant agreement and uphold the contracts signed by the Bay Acres residents.  The recommended language changes allows for better accountability with water use as well as efficiency in our financial systems to automate the penalty process to be assessed the day of the turn-offs instead of applying them manually as turn-offs happen through a period of two days.

"...that the Mayor and Council approve the placement of Ordinance No. 20-1117 on its first reading by number and title only."

"...that the Mayor and Council approve the first reading of Ordinance No. 20-1117 and to place it on second reading by number and title only."

Fiscal Impact
Fiscal Year: 2020/2021
Amount Requested:
Budgeted Y/N: Yes
Account (s): 420-30000-346.0200
FISCAL IMPACT:
Approximately $11,207.00 per month for residential and $156.09 per month for commercial collected for the Sewer fund.
 
Attachments
Ord. 20-1117 Bay Acres Sewer Project
Title 13 Fee Revisions
PER Amendment
USDA Memo
Response USDA
Bay Acres Public Hearing
Notice of Public Hearing
Bay Acres Flyer


    

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