Title
An Ordinance to Amend Section 2:63 of Chapter 29 (Water Rates) of Title II of the Code of the City of Ann Arbor
Memorandum
Your approval is requested to amend Section 2:63 of Chapter 29 of Title II of the Code of the City of Ann Arbor to increase water fees for upcoming operating and capital needs consistent with the City's Cost of Service Study, Capital Improvement Plan, and Water Asset Management Plan.
The City manages an extensive water system consisting of approximately 500 miles of pipe, 3,700 fire hydrants, 2 co-located water plants, 3 belowground water storage facilities, 2 elevated storage facilities, 1 on ground storage facility totaling 19 million gallons, 4 water pump stations, one well field, and one dam. The City's water system provides essential services within the community by providing safe and reliable drinking water.
The proposed water rate increase ordinance is the result of the City's annual budget process including an updated analysis of the water system's annual and projected multi-year revenue requirements to ensure sufficient funds for operations, maintenance, repairs, and replacements and to meet capital investment plans and other financial requirements. The revenue requirements incorporate a detailed analysis of operations and maintenance costs, enhanced State and Federal regulatory requirements, level of services expectations, required levels of operating and debt service reserves, capital funding sources, earnings on invested funds, and planned and required escalation of rates for operating costs. In short, the proposed water rate increase will generate additional funds needed to meet the system's annual multi-year revenue requirements for operations and capital improvements.
The City has identified more than $300 Million in potential projects to improve the City's water system in the coming years. The City's five-year capital improvement plan contains $226.2 Million in projects for the water system with an estimated annual...
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