HomeMy Public PortalAbout2018.04.27 Special MinutesMINUTES
McCall City Council
Special Meeting
McCall City Hall -- Legion Hall
April 27, 2018
Call to Order and Roll Call
Work Session
Adjournment
CALL TO ORDER AND ROLL CALL
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Mayor Aymon called the regular meeting of the McCall City Council to order at 9:00 a.m.
Mayor Aymon, Council Member Giles, Council Member Holmes, Council Member Nielsen,
and Council Member Sowers all answered roll call.
City staff members present were Anette Spickard, City Manager; BessieJo Wagner, City Clerk;
Linda Stokes, City Treasurer; Nathan Stewart, Public Works Director; Phillip Bowman, City
Engineer
Also, in attendance were Keith Larson, Eric Neil, and Greg Loscher of Bowen Collins &
Associates
WORK SESSION
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AB 18-118 Water Rate Study Presentation and Direction to Staff
Public Works Director Nathan Stewart gave a brief overview and made introductions. Greg
Loscher, engineer at Bowen Collins & Associates, presented the water rate study. Council adopted
the McCall Water System Master Plan on December 29, 2017. The City received Idaho DEQ
approval of the Plan on March 19, 2018. The need for water rate adjustments is to ensure the water
system continues to be a sustainable operation and can meet the capital investment needs identified
in the Water Master Plan. A proposed timeline is to present a recommended rate structure at the
June 25th Council meeting, offer a public workshop on July 19th, and hold a public hearing on the
rate structure on August 9, 2018. At that time, the Council can choose to vote to adopt the rate
structure for inclusion in the FY19 budget.
Review the options for water rate adjustments and give direction to staff to return to Council on
June 25th with a rate structure recommendation.
Mr. Loscher went over the City's water rate history. There was a short discussion of the difference
between residential and commercial accounts and base rates. He covered the difference in revenue
when the City went to continuous billing and explained that even though there has been no increase
in rates, there has been an increase in costs. One loss of revenue is the rate of inflation. The average
inflation is calculated at 3% annually and since no inflation rate increases have been made since
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April 27, 2018 Special Meeting
2006, just to catch up would require a rate increase of approximately $20. Another revenue loss
was the annexation of the sewer department to Payette Lakes Recreational Water and Sewer
District last fall. The water and sewer departments shared many of the expenses of staff,
equipment, and facilities and those expenses did not go away with the sewer annexation. The water
department has had to absorb this revenue loss in the way of increased operations and maintenance,
the interfund transfer, and all of the expenses of the staff that worked both water and sewer. Public
Works Director Stewart explained how loss of the sewer department did not mean the staff were
going to be reduced significantly because a certain number of staff have to be available to cover
all shifts and meet mandated requirements. One position was eliminated after the annexation.
The increased costs come from the need for system investment outlined by the Water Master Plan
for items such as water meter, hydrant, and waterline replacements as well as other improvements
along with the total net increase to the annual budget. As it stands, current revenues into the future
are not sufficient to cover needed expenditures of the future. The Department of Environmental
Quality 2003 water bond is also due to retire in the next few years.
Keith Larson, engineer of Bowen Collins & Associates, explained the Loomis Formula going over
the projected revenue and expenditures, and capitalization fees and rates. He covered different
options in how to approach the deficit in funds. Even though one option is to cut operations and
maintenance which equates lower quality and less service, it is not a recommended. Other options
include re-evaluating the capital expenditures, increase rates, and seeking non -rate revenues. Staff
asked for feedback and the Council shared their thoughts.
Mayor Aymon feels the city should not subsidize a new construction. Council Member Nielsen
was concerned for the person who may be able to build and do a lot of the work themselves but
could not afford the buy -in fees. Public Works Director Stewart gave a brief explanation of where
the bulk of the costs for the buy -in fee comes from. Council Member Giles stated that we are
playing catchup and was not surprised by the potential increases. Council Member Sowers would
like to look at a way to balance out the cap fees for the different size houses.
Mr. Larson presented the rate increase approach and how those different approaches affect the
average monthly water rate. There was a brief history given of the non -metered accounts. In
looking at other water providers in Idaho and in neighboring states, it was shown how the current
and the four different increase rate options fall in comparison with those cities. Next, he shared
observations of the current rate structure, and touched briefly on monthly service fees and usage
charges.
Mr. Larson presented the three rate structure options which are Uniform (everyone pays the same),
Seasonal (winter/summer rates), and Block (size of lots, size of meters, residential/commercial,
etc.), and explained how each one addressed the four objectives of equality, simplicity, stability,
and conservation, and the pros and cons. Public Works Director Stewart touched on alternate
watering days and why the need to keep this in place as the summer brings about huge water usage
spikes that tax the current system. Mayor Aymon requested this is communicated effectively. She
also wants to be sensitive to the needs of the businesses if using a block system.
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April 27, 2018 Special Meeting
The Council discussed which rate structures and rate increase options they preferred. The Council
direction to staff was to keep future expenditures in the water system for planning purposes and
use the numbers already figured, calculate the maximum increase capitalization charges and plan
to make a decision once those are figured, use rate option models 1, 2, and 3 figuring in the overall
revenue needs, and create each rate structure (uniform, seasonal, and an increasing block with 3
blocks) for review.
ADJOURNMENT
Without further business, Mayor Aymon adjourned the meeting at 11:03 a.m.
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April 27, 2018 Special Meeting