Call To Order:
Robert Sexton, Chairman, called to order the regular meeting of the Utility Board at 7:05 p.m. in the Farside Room at City Hall, 9611 S.E. 36th St., Mercer Island, WA.
Board Members Robert Sexton, Chairman, David Laub, Vice Chairman, John Ewald, Joel Massmann, Callie Ridolfi, and Glynda Steiner were present. Council Liaison Bruce Bassett and Board Member Ben Levie were absent.
Staff Members Francie Lake, Chip Corder, Anne Tonella-Howe, Rona Lin and Terry Winkel were present.
The Minutes of the July 14, 2009 meeting were approved.
Sean Senescall, FCS Group
Water Rate Analysis – Preliminary Findings
Presentation by Sean Senescall, FCS Group, Exhibit A. The revenue requirement analysis shows the need for an overall increase of 10% in 2009. The cost of service analysis indicates a 10.25% increase is needed in residential water rates in 2010, a 35.7% increase in multi-family rates and no increase in commercial/public or irrigation water rates.
The Board expressed concern that the proposed rate increase may not be sufficient to match the needed capital projects and O&M expenditures. Discussion followed. The Board asked that staff investigate the sensitivity of rates to the usage assumption, specifically, if water sales increase to about 1,000,000 ccf. The Board recommended that staff 1) continue rate study work assuming an average water rate increase of 10%, 2) condense the block structure for multi-family during the water rate design with the goal of increasing the overall multi-family rate by 20% for 2010, as part of a 2-year phase-in of the needed 35.7% increase, 3) not increase the commercial/public rates for 2010 and 4) not increase the irrigation rates for 2010. Staff to complete and report back to Board at their October 13th meeting.
Storm Water Rate Review
David Laub made a motion to approve the proposed decrease in the storm water rate from 8.5%, as recommended in 2009, to 5.5% for 2010. John Ewald seconded the motion. The motion passed unanimously.
David Laub made a motion to approve the proposed increase in the EMS rates of 0.54% overall for 2010. Glynda Steiner seconded the motion. The motion passed unanimously.
Anne advised that the Sewer Lake Line Project is proceeding on schedule. Francie advised that the City received $10.4M in LTGO Bonds ($9.25M of which is for the Sewer Lake Line project) at a true interest cost of 3.75% over the 20 year term.
Francie advised that a 2-year loan was obtained for the Emergency Well Project with the sale of the First Hill property planned for 2011 to repay the loan.
The Board thanked John Ewald, David Laub and Ben Levie for their diligence in assisting staff with the solid waste contract.
The next regularly scheduled meeting is Tuesday, October 13, 2009.
Adjournment: 9:05 p.m.