Title
Resolution Regarding Water Rate Structure
Body
Whereas, Effective July 1, 2018, Ann Arbor's water rates were re-structured including establishing a new multi-family customer class, adding a fourth volume-based tier to single-family residential rates and eliminating the sub-classifications in the Non-Residential customer class; and
Whereas, The decision in 2018 to re-structure water rates was not unanimous and there continues to be strong concern regarding the re-structuring both among Council Members and in the community; and
Whereas, The re-structuring was revenue-neutral in total, but shifted approximately $1.7M annually in cost to single-family residential customers and substantially increased the cost premiums paid by higher volume single-family residential water users including customers with large families; and
Whereas, The primary beneficiaries of the cost shifting to single-family residential customers were landlords, commercial customers, and the University of Michigan, and it is not clear whether the lower rates to landlords have been passed on to tenants; and
Whereas, Within the residential customer class, the per gallon rate is now 8 times higher for Tier 4 usage than Tier 1 usage, and prior to the July 2018 re-structuring, the range from high to low was 3.8 times. In FY19, after the re-structuring was implemented, Tier 4 accounted for 25% of the residential revenue collected, but only 6% of the usage; and
Whereas, In December 2018, council adopted a resolution to obtain a "second opinion" on the restructuring, and in March 2019, Arcadis Inc. presented to council feasible and legal water rate structure tiering alternatives for residential (four alternatives) and non-residential customers (two alternatives) that were revenue neutral to the city; and
Whereas, Arcadis concurred with the addition of the multi-family customer class, but indicated that Ann Arbor's high to low range of rates within the residential customer class were much ...
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