03-25-13 Regular Meeting of La Porte City Council

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average of the 30 communities (30,000 – 50,000 population) surveyed across the state; 9% (10,000 gallons/month) – 7% (5,000 gallons/month) below the average of the 12 local communities surveyed. The potential cost increase to the large-volume water consumers (some of the polymer/chemical plants, La Porte ISD, city) will be a consideration. Staff will run a report of the potential impact to these customers. A $1.50/1000/gallon fee would elevate the commercial rates from slightly below average currently to 6% - 11% above the average of the 12 local communities surveyed. The city’s utility-related bond debt payments will decrease by approximately $300,000 in 2016 and another $600,000 (city share of $690,000 La Porte Area Water Authority annual debt service) in 2017. Staff anticipates that a portion of the $900,000 per year may be applied toward a bond project to construct the large diameter sanitary sewer designed to eliminate several Lomax-area lift stations that was described earlier in this report. Summary: The city’s utility system is in very good condition thanks to the commitment and effort of current and previous city council and city staff. The La Porte residents and business owners benefit now from nearly $34-million in system improvements (2013 $) completed between 2002 – 2011 including over $12-million of improvements to the wastewatertreatment plant and a utility capital improvement program averaging $2.15-million per yearduring that 10-year (2002-2011 period). The projected utility budget for next fiscal year is less than $400,000 assuming that the current rate structure remains the same. Public Works staff is recommending that City Council consider the need for a 10-year program moving forward very much resembling the program completed from 2002 –2011 with a CIP program of $2-million/year and the potential for a $7- million to $10-million bond project to extend a large diameter sanitary sewer designed to eliminate up to six existing lift stations constructed in the late-1960’s/ mid-1970’s. One option to consider for generating additional revenue necessary for a $2-million/year utility CIP program would be a $1.50 per 1000 gallon “Capital Improvement Reserve Fee” that would provide an average of $1.95-million in annual revenue for utility CIP projects. Action Required by Council: Staff is requesting council consideration and comments at the March 25, 2013 council meeting with perhaps further discussion at the upcoming council/staff budget retreat if desired by the council members. Approved for City CouncilAgenda Corby D. Alexander, City Manager Date