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Q SEW Pp�T <br />CITY OF <br />z NEWPORT BEACH <br />c�<,FORN'P City Council Staff Report <br />August 13, 2019 <br />Study Session Item No. SS3 <br />TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL <br />FROM: Mark Vukojevic, Utilities Director - 949-644-3011, <br /> <br />PREPARED BY: Mark Vukojevic, Utilities Director, <br />PHONE: 949-644-3011 <br />TITLE: 2019 Water Rate Study <br />/_1 16"t I:7_T91 6 <br />The Utilities Department is leading the effort to review the rates associated with the Water <br />Enterprise Fund. On March 12, 2019, City Council approved an agreement to retain the <br />consulting services of Raftelis Financial Consultants Inc. to prepare the 2019 Water Rate <br />Study. The previous water rate study was completed in 2009 and the last rate increase <br />for water users was in 2014. The purpose of this presentation is to present a PowerPoint <br />summary of the financial analysis, the draft water rates, receive input, and seek the City <br />Council's direction to bring back the item as a formal City Council agenda item. <br />RECOMMENDATION: <br />Receive presentation, consider public comments, and provide direction to staff. <br />FUNDING REQUIREMENTS: <br />There is no fiscal impact related to this study session. However, the 2019 Water Rate <br />Study is proposing changes to water rates and will be formally presented for future City <br />Council consideration. <br />DISCUSSION: <br />Staff and the City's consultant will make a presentation that highlights the proposed water <br />rates based on the draft results of the 2019 Water Rate Study. In general, the costs of the <br />Water System Capital Improvement program, wholesale water purchases, and operations <br />have all increased over the years. Coupled with no inflationary rate adjustments over the <br />last five years, increases to the rate are recommended in order to maintain the system <br />needs and for the Enterprise Fund to remain financially sound and debt -free. If acceptable <br />to City Council, staff would bring the 2019 Water Rate Study for formal approval on <br />September 10, 2019, prepare the public notice and public information outreach and conduct <br />a series of steps and actions in order to implement rate changes by January of 2020. <br />SS3-1 <br />