HomeMy WebLinkAbout7 Construction Water Rate Agenda Item #
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Memorandum
To: Board of Directors
From: Peer Holzmeister
Date: December 27, 2002
Subject: Construction water rate
1. WHY THIS ITEM IS BEFORE THE BOARD
During the last board meeting we had a discussion of a proposed water rate ordinance
that included a provision to charge a flat rate of twenty dollars per month for water
service during construction of a home. The board removed that provision from the draft
ordinance and asked that it be placed on a future agenda for further discussion.
2. HISTORY
Our current practice is to initiate water service billing at the time a new home receives its
occupancy permit from the Town or County. However, water service is actually available
at an earlier date. Water service is actually available once the service connection is
made, which usually occurs early in the process of constructing a home.
We have received comments from contractors t the effect that very little water is used
during construction, so a full monthly water service charge during construction is
unwarranted. No one is doing laundry, or showering, or washing dishes and so on.
However, contractors admit that they use some water for dust control, to begin
landscaping, and they receive fire protection for the home under construction.
I believe we should receive some compensation for water service during construction of
a home. I proposed a flat rate of twenty dollars per month beginning with actual service
connection. Full water service charge would begin when the Town or County issue the
occupancy permit. The board pointed out the difference between temporary or
conditional occupancy permit and "normal" occupancy permit. I believe full water service
charge should begin at the time of temporary or permanent occupancy permit, whichever
occurs first.
4. NEW INFORMATION
You have a variety of options available to you:
1. Keep doing what we are doing now
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2. Charge a full monthly water service charge at the time service connection is made.
This would cover the costs to provide fire protection to the home, plus compensation for
the small amount of water that is used during construction. There are approximately two
hundred homes under construction at any time in Truckee. If the average rate is $45 per
month we would realize a revenue gain of$108,000 per year to cover our costs.
3. We could charge the flat rate without the pumping zone charge. The flat rate is
currently $39.93. This charge would collect the fixed costs of the system, including the
fire protection portion, but would recognize that very little water is being used. This fee
would raise $95,832 per year.
4. We could charge the $20 per month that I proposed. This is an arbitrary number. It
raises $48,000 per year.
There are certainly variations on these options.
5. RECOMMENDATION
I recommend the board discuss the options and give guidance to me on how to proceed.
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