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6.U. - Page 19 of 47 upgrades, and other capital improvements needed to address current deficiencies and support the continued provision of safe and reliable service. ➢ Ongoing Cost Inflation- In addition to funding specific cost increases, a small portion of the proposed rate increases are needed to keep rates in line with ongoing cost inflation. ES -3 Sewer Rate Recommendations Bartle Wells Associates (BWA) developed updated financial projections to identify future revenue requirements and evaluate rate increases needed to meet the City's future funding needs. The following table shows a schedule of proposed sewer rates for the next three fiscal years. The proposed rate increases are applied on an across-the-board basis and maintain the sewer rate structure developed in the 2016 Water & Sewer Financial Plan & Rate Studies, which is incorporated herein by reference. Based on analysis of projected expenses and recent wastewater flows and loading from each customer class, we have determined that the rates for each customer class remain proportional to their costs of service. Therefore, no changes to the City's sewer rate structure are necessary at this time. With the proposed rate increases, the City's sewer rates are projected to remain in the middle range compared to other regional agencies and remain the lowest of the four SVCW member agencies. Table 1: Proposed Sewer Rates Notes: For Commercial/Non-Residential accounts: Class A includes Industrial accounts. Class B includes institutional and public accounts. Class C includes retail and other standard strength commercial accounts and hospitals. Class D includes sewer customers with moderate -high wastewater strength. Class E includes restaurants and supermarkets. The City reserves the authority to assign customers to the most appropriate customer class based on the wastewater characteristics of each customer. BARTLE WELLS ASSOCIATES 2 Sewer Financial Plan & Rate Update 698 Current Proposed Rates Effective On or After Sewer July 1 July 1 July 1 Rates 2019 2020 2021 Sewer Rate Increases 4.5% 4.5% 4.5% RESIDENTIAL SEWER RATES Fixed Monthly Sewer Service Charges per Residential Dwelling Unit Residential (with 1-9 Dwelling Units) $78.24 $81.76 $85.44 $89.28 Multi -Family (with 10+ Dwelling Units) 70.42 73.59 76.90 80.36 COMMERCIAL/NON-RESIDENTIAL SEWER RATES Volumetric Sewer Rates per Hundred Cubic Feet of Water Use Subject to a Minimum Monthly Charge Class A - Standard Strength, Low Flow $5.99 $6.26 $6.54 $6.83 Class B - Low Strength 6.97 7.28 7.61 7.95 Class C - Standard Strength 7.37 7.70 8.05 8.41 Class D - Mod -High Strength 11.74 12.27 12.82 13.40 Class E - High Strength 17.66 18.45 19.28 20.15 Minimum Monthly Charge 70.42 73.59 76.90 80.36 Notes: For Commercial/Non-Residential accounts: Class A includes Industrial accounts. Class B includes institutional and public accounts. Class C includes retail and other standard strength commercial accounts and hospitals. Class D includes sewer customers with moderate -high wastewater strength. Class E includes restaurants and supermarkets. The City reserves the authority to assign customers to the most appropriate customer class based on the wastewater characteristics of each customer. BARTLE WELLS ASSOCIATES 2 Sewer Financial Plan & Rate Update 698