1. Goal: Identify Overriding Principles and Provide Guidance to a Consultant for the Development of an Improved Rate Structure

2. Previous Plan of Action Identify and prioritize individual concerns of Council regarding current billing structure. Recommend principals and general rate structure to address concerns of Council. Receive feedback. Recommend principals and general rate structure to be approved by Council. URAC will work with consultant to finalize the rate structure to be presented before Council for approval.

3. Targeted Problems Sewer Rates / Structure 1:1 water to sewer ratio High Usage Surcharge Exceeding winter quarter by 35% Winter Base Winter to summer threshold Fixed Rates Too low; contributing to variable revenue

4. Fundamentals Tiered rate structure. Derive an alternative to 1:1 Water/Sewage fee. Fixed rate should represent a higher percentage of the revenue. Preprogrammed increases shall be dispersed in both fixed and usage rates. Steady/planned rate increases. High usage pricing shall be driven by conservation principles, capacity utilization, and capital expenditures.

5. Acceptable Outcomes Tiered rate structure. Higher fixed rate. Highest tier rate may be higher than the current rate. Lowest tier rate may be lower than the current rate. Minimized bill increase for low volume users.

6. Unacceptable Outcomes Operating revenue does not cover operating expenses. Excessive increases to low income. Penalization for Winter Bird’s low usage. Increase to the current out of town rate differential.

7. Other Considerations Should commercial/apartment users rate structures change?

8. Next Steps Receive Feedback. Incorporate Feedback. Adopt principles. Engage a consultant. Charge URAC with providing advice and input to consultant (as appropriate).