Title
Single Water Rate for Hudson Water Customers
Brief Description: The City has had a two-tiered water rate system in place for over 20 years. The two-tier approach was a product of the city/township merger in the mid 1990's. This is a discussion of the financial impact of eliminating the two tiers and charging a single rate to all customers.
Body
Legislative History
Ordinance 99-120 established the two-tiered water rate structure. There have been multiple Ordinances adjusting the water rates, but this discussion focuses on the two-tier structure that has remained in place since 1999.
Purpose & Explanation
In 1999, the City passed Ordinance 99-120 that established a two-tiered water rate structure to charge different rates for two different service areas - an "existing service area" and an "expanded service area". The existing service area includes all property owners connected to the City of Hudson water system as of the effective date of the rate ordinance (Nov. 10, 1999) and/or within the boundary of the former Village prior to merger with the Township. The expanded service area includes all property owners connected to the City of Hudson water system after effective date of the rate ordinance, and not within the boundary of the former Village, prior to the merger with the Township. The intent was to comply with the Conditions of Merger. (See attached Conditions of Merger - Sections 3.01, 3.02 and 3.03).
When the rate structure was established, there was no "sunset" provision and therefore this structure remains in place.
As part of an initial rate review, staff was asked to determine the rate/customer impact of a blended rate without materially impacting the annual revenue stream within the Water Fund. The attached spreadsheet shows the estimated monthly impact on the average residential customer bill if we were to blend the two rates.
In summary, the average existing service area customer pays $36.99 per month. The average extended service area c...
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