Presentation

Council Chambers
Thursday, April 28, 2022 | 6:00 p.m.
Utility Rate Public Hearing
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Visit chandleraz.gov/ProposedUtilityRates for more information

Utilities Revenue Requirements
History of Rate Information Presented
Cost of Service Findings
• Water
• Wastewater
• Reclaimed
• Solid Waste
Proposed Ordinance and Resolution 
Agenda
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Utility Revenue 
Requirement
• Annual ten-year analysis shows overall rate increase needed of:
• 2% Water 
• 4% Wastewater (initially 8%)
• 8% Reclaimed Water 
• 6% Solid Waste 
• Increased revenues needed to support:
• Water treatment and production plant improvements
• Water reclamation facility improvements
• Focused replacements of:
• Main replacements
• Well construction and rehabilitation
• Sewer assessments and rehabilitation
• Advanced wastewater treatment
• Operations and maintenance costs (O&M)
• Water purchase cost increases
• Utility & chemical increases
• Solid waste contract costs and recycling considerations
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Cost of Service 
Study Benefits
• Fair and equitable, approach most commonly 
utilized in Water and Wastewater industry
• More accurately reflects actual cost of 
providing service to each customer class
• Distributes revenue requirements to customer 
classes based on their portion of system costs
• Customers in each class are assumed to have 
similar usage characteristics or impact to system
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Rate Change Process
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• Anticipated FY 2021-22 rate increases 
discussed in work sessions and identified 
in Adopted Budget
• Many HOAs and businesses contact the 
City starting in September to gather rate 
change information for their budget 
process
• Increases shown for FY 2021-22 were 2% 
Water, 8% Wastewater,   8% Reclaimed 
and 6% Solid Waste
Rate change 
information
• If rate adjustments needed, 
implemented every-other year
• Anticipated FY 2021-22 rates were to 
take effect January 2022
• Cost of Service (COS) Studies done every 
4-5 years
• Due to delays in the COS process with 
COVID impacts and consultant personnel 
turn-over, planned rate increases 
delayed 6 month at lower overall rates 
and COS adjustments.
Rate change 
timing

History of Rate Information presented
Cost of Service Implementation Steps
Time Frame
Worked with Raftelis Consulting on Cost of Service (COS) computations.
Jun. 2020 - Oct. 2021
Published FY 2021-22 proposed & adopted budget indicating anticipated utility rate changes for Water (2%), Wastewater 
(8%), Reclaimed Water (8%), and Solid Waste (6%) for implementation January 2022.
May 2021 & Jul. 2021
Revised implementation timeline from January 2022 to July 2022, based on A.R.S. time requirements.
Aug. 2021
Initial presentation with Mayor & Council on Solid Waste. Direction received to come back with detail on options 
changing to two free Recycling Solid Waste Collection Center (RSWCC) visits, increasing bulk requests to two, and charging 
for alley rather than eliminating alley service.
Oct. 14, 2021
Initial presentation with Mayor & Council on Water, Wastewater, Reclaimed Water. Direction received to move forward 
with 100% alignment over 5-years for Water and bring back options for recommended 50% COS alignment in Wastewater 
going up to 75% or 100% over 5-years.
Nov. 1, 2021
Additional options presentation with Mayor & Council on Solid Waste fees and the effect on rates, and Wastewater at 75% 
vs. 100%. Direction received to move forward on alley fees, keep the two free bulk and RSWCC visits, and move forward 
with 75% COS alignment on Wastewater over 5-years.
Dec. 9, 2021
Began customer outreach and education campaign. Robust website information, video, social media posts, three public 
meetings on the fee changes, presentation with community partners including Chamber, feedback gathering via online, 
in person and telephone comments.
Jan-Feb 2022
Feedback  presented to Mayor & Council indicating public desire to keep alley services (359 of 389 or 92% comments 
related to alleys), other comments (30) related to rate/fee changes and/or questions.
Feb. 16, 2022
Notice of Intention to increase Water, Wastewater, Reclaimed Water, Adopted setting public hearing for April 28, 2022
Feb. 24, 2022
Public hearing, Ordinance and Resolution presented to Mayor & Council for initial action.
Apr. 28, 2022
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Rate Change Outreach
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Public Outreach: Website
Public meeting schedule, Council action 
schedule, process timeline 
Rate changes by classification, example bills, 
FAQs 
History or rate changes, and 5-year anticipated 
rate alignment
Cost of Service (COS) presentations, COS report
Video presentation
Public Outreach: Meetings
Residential focused public meeting 1/31/22
Residential with alley solid waste collection 
focused meeting 2/3/22
Non-residential focused meeting 2/8/22
Chamber allowed us to present at their public 
policy meeting 2/4/22 
Met with individual stakeholders as needed
Information was also communicated in CityScope, Utility bill messaging, Message board at
RSWCC, Social media posts, media release, and data and interviews provided for news articles

Water Cost of 
Service Findings
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Water Percentage Increase
to Reach 100% COS Alignment
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Revenue Requirement is a 2%, 2.5%, and 2.5% overall increase
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Water Average Bill Example
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Revenue Requirement is a 2%, 2.5%, and 2.5% overall increase
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Wastewater Cost of 
Service Findings
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Wastewater Percentage Increase
to Reach 75% COS Alignment
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Revenue Requirement is a 4%, 6%, and 6% overall increase
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Wastewater Average Bill Example
All Customer Classes need COS realignment
Transition to COS alignment typically achieved over a 3-5 year period
Revenue Requirement is a 4%, 6%, and 6% overall increase
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Reclaimed Water Findings
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Reclaimed Percentage Increase and 
Average Bill Example
Revenue Requirement is an 8%, 7%, and 7% overall increase
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Solid Waste Findings
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Solid Waste COS Analysis
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Rate increase needed to cover increased O&M
costs: 6%
• Recycling market depressed since 2018 reducing recycling 
revenues
• New contract for collection provides predictability on future 
costs
• Additional Recycling Solid Waste Collection Center (RSWCC) 
data available for analysis
Options to align COS and reduce required 
overall rate increase:
• Charge recipients for cost of services:
• Alleys / RSWCC / Bulk
These COS alignments reduce overall revenue 
requirement to 3.4%
• Additional $1.61 for alley customers
• Bulk collection: 2 free per calendar year then $30 
accommodates 98% of households
• RSWCC visits: 2 free per calendar year then $10 per visit (up 
to 400lbs) pay for all weight over 400lbs. accommodates 
95% of households

Solid Waste Percentage Increase and 
Average Bill Example
Revenue Requirement is a 3.4%, 5%, and 5% overall increase
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Combined Percentage Increase
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Utility
Residential
Multi-Family
Non-Residential
Landscape
Industrial
Water
1.27%
1.83%
3.79%
5.88%
4.33%
Wastewater
1.21%
8.30%
6.88%
N/A
6.88%
Solid Waste
3.40%
Reclaimed Water
(only applies to certain 
customers)
8.00%
8.00%
8.00%
8.00%
Combined Average Monthly Bill Increase
Utility
Residential
Multi-Family
Non-Residential
Landscape
Water
$29.23 to $29.68
$1,231 to $1,253
$431 to $468
$523 to $553
Wastewater
$27.32 to 27.65
$1,464 to $1,585
$706 to $754
N/A
Solid Waste
$17.95 to $18.56
Solid Waste Alley Serv.
$0 to $1.61
Combined (Non-Alley)
$74.50 to $75.89
$2,695 to $2,838
$1,137 to $1,222
$523 to $553
Combined (Alley Serv.)
$74.50 to $77.50

Residential Total Average Bill Comparison
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• Ordinance #5007 allows for changes to 
City code chapters 44 and 50 to make 
the needed rate and fee policy 
adjustments
• Resolution #5558 allows for changes to 
the fee schedule which is where solid 
waste fees are presented
For changes to be effective an 
Ordinance and Resolution are both 
needed

Strategy/Timeline
Implementation Steps
Time Frame
Work Sessions with Mayor and Council
Complete
Public  Outreach – Single Family, Multi Family, Landscape, Non-
Residential & Industrial
Complete
Feedback to City Manager/Council on Results of Outreach
Complete
Adopt Notice of Intention to Increase Rates
Complete
Conduct Public Hearing for Water, Reclaimed Water, Wastewater, and 
Solid Waste Rate Increases
Tonight
Introduce Ordinance and Adopt Resolution to Increase Water, 
Reclaimed Water, Wastewater and Solid Waste Rates
Tonight
Final adoption of Ordinance to Increase Water, Reclaimed Water, 
Wastewater, and Solid Waste Rates
May 12, 2022
Implement COS Utility Rates
July 1, 2022
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Questions?
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Visit chandleraz.gov/ProposedUtilityRates for more information