On October 8, 2018 Community Services staff hosted a workshop with the Sparks City Council and presented the results of the 2018 Utility Rate Study.  During the presentation, staff provided the Sparks City Council with background information on:

• An overview of sanitary sewer treatment capacity at the Truckee Meadows Water Reclamation Facility (TMWRF) including Sparks current flow rate, committed capacity for future development and remaining capacity.
• The need to plan, finance and construct advanced nutrient treatment processes at TMWRF to remove dissolved organic nitrogen (DON) to reduce the amount of total nitrogen discharged to the Truckee River and thereby increase the treatment capacity at TMWRF.
• A comparison of the average domestic winter time water use rates for the multi-family and single family customer classes.  Review of the comparison indicates that, over the last 5 years, the average domestic winter time water use rates for the multi family customer class is equal to or higher than the single family customer class.
•  The 5- year capital improvements plan for the Truckee Meadows Water Reclamation Facility, Sanitary Sewer collection system and the Storm Drain Collection System.
• The estimated growth rate of each customer class and estimated rate of inflation for operational expenses of the Truckee Meadows Water Reclamation Facility, sanitary sewer collection system and storm drain collection system used as inputs for the rate study cash flow model.

After presenting the back ground data used for the 2018 Utility Rate study, staff provided the Sparks City Council with five (5) cash flow modeling scenarios for setting future user and connection fees to fund the operational and capital improvement needs for the Sanitary Sewer and Storm Drain Enterprise funds through Fiscal year 2023.

Upon consideration and discussion, the City Council voted to direct the City Manager to bring forth amendments to the Sparks Municipal Code based on Scenario 3 modified to include an annual increase to utility user rates of 5%  beginning July 1, 2019 through July 1, 2022, and to increase connection fees by 30% on January 1, 2019.

Adoption of the proposed bill will amend, by ordinance, Title 13 of the Sparks Municipal Code (SMC) to increase sewer and storm drain user rates annually by 5% beginning July 1, 2019 through July 1, 2022; to increase sewer connection fees by 30% and storm drain connection fees by 2.96% on January 1, 2019; to adjust sewer and storm connection fees by the November to November Engineering News and Review Construction Cost Index percentage change annually beginning January 1, 2020; and to set Multi-Family Residential Sewer User Rate equal to Single Family Residential on July 1, 2019.  Specifically, the proposed bill will amend the following Section of the Sparks Municipal Code:

• Section 13.09.020 – Dwelling or residential Unit:  Section 13.09.020 defines the sewer and storm drain service charge for each type of residential unit as a flat quarterly rate.  The proposed amendment will increase the sewer user and storm drain user rate portions of the quarterly user fee by 5% annually from July 1, 2019 through July 1, 2022 for Single Family Residential, Multiple-Family Residential and Mobile Home, and Roominghouse.  The quarterly rates for the Multiple-Family Residential and Mobile Home will be set to match Single Family Residential on July 1, 2019.  See Exhibit 4 for a breakdown of the proposed fees and rates.
• Section 13.09.025 – Sewer rebate program:  Section 13.09.025 describes the applicable criteria and value of the sewer rebate program for the City of Sparks.  This program is intended to provide relief to low-income customers of the Sparks Utility.  Qualifying programs were updated to represent those currently available and the rebate was set at one (1) quarter’s utility billing per year per account.
• Section 13.09.030 – Industrial/commercial discharger:  Section 13.09.030 defines the sewer and storm drain service user charge for industrial and commercial dischargers.  Sewer and storm drain service user charges will be increase by 5% annually from July 1, 2019 through July 1, 2022 for industrial and commercial dischargers.
• Section 13.09.033 – Industrial/Commercial, Federal, State, County and School District dischargers without sewer meters:  Section 13.09.033 defines the weighted fixture unit charge for those users without water meter data.  Unit charges were increased 5% annually from July 1, 2019 through July 1, 2022.
• Section 13.24.020 – Dwelling or Residential Unit: Section 13.24.020 defines the sewer connection fee for Single-family residential, Multiple-family residential and mobile home, Interval residential, Roominghouse.  Fees were adjusted for these units by 30% for sewer and 2.96% for storm drain on January 1, 2019.  Annual storm and sewer Connection fee indexing utilizing the Engineering News Record Construction Cost Index will commence January 1, 2020.

Section 13.24.030 – Industrial/commercial discharger Section 13.24.030 defines the sewer connection fee for industrial and commercial dischargers.  Fees were adjusted for these dischargers by 30% for sewer and 2.96% for storm drain on January 1, 2019.  Annual storm and sewer Connection fee indexing utilizing the Engineering News Record Construction Cost Index will commence January 1, 2020.

The City Council may choose to reject the Bill and provide direction to the City Manager.

This is a First Reading only; no motion is required.