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File #: 19-0724    Version: Name: 4/15/19 - Water Rate resolution
Type: Resolution Status: Defeated
File created: 4/15/2019 In control: City Council
On agenda: 4/15/2019 Final action: 4/15/2019
Enactment date: 4/15/2019 Enactment #:
Title: Resolution to Revise the City of Ann Arbor's Water Rate Structure Adopted in July 2018
Sponsors: Jane Lumm, Jack Eaton, Kathy Griswold
Resolution to Revise the City of Ann Arbor's Water Rate Structure Adopted in July 2018
Whereas, On June 18, 2018, Ann Arbor City Council adopted on a contested (7-4) vote a proposal from city staff that significantly re-structured Ann Arbor's water rates effective July 1, 2018 including (1) establishing a new multi-family customer class (2) adding a fourth volume-based tier to single-family residential rates and (3) eliminating the tier structure in the commercial customer class; and

Whereas, The effects of the re-structuring were to shift approximately $2M annually in cost from multi-family customers to single-family residential customers and to substantially increase the cost penalties charged to higher volume single-family residential water users including customers with large families; and

Whereas, Prior to the July 2018 re-structuring, the City had three volume-based residential pricing tiers where the highest (Tier 3) rate was $5.89 per CCF (1 CCF = 748 gallons) or 3.8 times the lowest (Tier 1) rate of $1.55 per CCF and residential customers understood and generally accepted the range and rationale for it; and

Whereas, The July 2018 re-structuring dramatically increased - more than doubled - both the top residential volume-based rate as well as the range of residential rates from low to high. The new Tier 4 rate of $14.08 per CCF is 2.4 times the previous highest rate ($5.89 per CCF in Tier 3) and the range of rates is now almost 8 times (low of $1.77 per CCF to high of $14.08 per CCF) - compared with the previous range of 3.8 times: and

Whereas, A fundamental premise underlying the re-structuring proposal was that volume peaking drives costs, yet the re-structuring proposal was internally inconsistent in its application of that logic - the re-structuring expanded volume-based price tiering for single-family residential, but eliminated the tiers in the commercial customer class where the peaking impact on the system (on both a percentage an...

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