Title
Approving a CPI adjustment for Windermere Utility Company water and wastewater rates.
Summary
In March of 2014 a Water and Sewer Rate Stabilization Agreement was approved by the City of Pflugerville and the Windermere Utility Company, Inc. A copy of the agreement is attached to this agenda item. Section 1 of the agreement, Limitation on Rate Increases, defined the procedure for rate adjustments for Windermere. Annual rate adjustments are equal to the annual percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) for the South Region as published by the Bureau of Labor Statistics over the prior calendar year as of June. Information showing the CPI-U of 2.3 percent and a letter requesting the rate adjustment from Windermere are also attached to this agenda item. Staff has reviewed the information provided and concurs with it. The rate adjustment will become effective on October 1, 2014.
Section 6 of the Stabilization Agreement extends the terms and conditions of the Wholesale Contract for the same term and allows an annual wholesale water rate increase commensurate with the CPI based annual increase described above. As of October 1, 2014, the cost of wholesale water from the City of Pflugerville to Windermere will increase 2.3 percent from $3.25 per 1000 gallons to $3.32 per 1000 gallons.
Deadline for City Council Action
Staff requests consideration of this item at this meeting.
Fiscal Impact
Per Windermere's take or pay wholesale water contract, they are required to purchase 100,000,000 gallons of water each year. The City of Pflugerville will see an increase in annual revenue of $7,000 - $332,000 with the new rate as opposed to $325,000 in revenue under the existing rate.
Staff Recommendation
Approve Windermere's request for a CPI adjustment for 2014.
Drafter
Lauri Gillam
Assistant City Manager