AGENDA CAPTION:
Title
Receive a Staff Presentation and hold a Public Hearing to receive comments for or against Ordinance 2023-63, amending the rates for Electric Utility Services in accordance with Section 86.177 of the San Marcos Code of Ordinances; including procedural provisions; and declaring an effective date; and consider approval of Ordinance 2023-63, on the first of two readings.
Body
Meeting date: September 5, 2023
Department: Utilities and Finance
Amount & Source of Funding
Funds Required: N/A
Account Number: N/A
Funds Available: N/A
Account Name: N/A
Fiscal Note:
Prior Council Action: N/A
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Background Information:
The City conducts an annual electric rate study and the results are reviewed by staff and the Citizens Utility Advisory Board (CUAB). The CUAB held a meeting on July 27, 2023, and received a presentation on the estimated revenues and major cost drivers of the electric system. During the meeting, the CUAB voted to recommend a minimum 5% adjustment to electric base rates for fiscal year 2024. The 5% adjustment works out to be a roughly 2% increase to the average residential user that will pay an estimated $1.71 more per month.
There are several cost drivers that necessitate the rate adjustment, including replacing two bucket trucks with a three-year lead time at a cost of $715 thousand, an increase of $640 thousand in debt service from the fiscal year 2023 certificates of obligation issuance, and an estimated $504 thousand to implement the compensation study that will make employee compensation more competitive with the market.
Council Committee, Board/Commission Action:
On July 27, 2023, the Citizen Utility Advisory Board held a meeting and voted to recommend a minimum 5% rate adjustment for electric base rates.
Alternatives:
N/A
Recommendation:
City Council approve the ordinance amending electric rates as recommended by the Citizen Utility Advisory Board.