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Amending Fiscal Year 2026 Water Rates under City of Dubuque Code of OrdinancesCity of Dubuque City Council ACTION ITEMS # 6. Copyrighted June 16, 2025 ITEM TITLE: Amending Fiscal Year 2026 Water Rates under City of Dubuque Code of Ordinances SUMMARY: City Manager recommending City Council approval to amend ordinances that reduces the Fiscal Year 2026 Water Rate increase from 9% to 8%. ORDINANCE Establishing The City Of Dubuque Code Of Ordinances Title 13 Public Utilities Chapter 1 Water Use And Service, Article C Rates Section 13-1 C-2 Fixing Water Rates For Fire Sprinkler Service ORDINANCE Establishing City Of Dubuque Code Of Ordinances Title 13 Public Utilities, Chapter 1 Water Use And Service, Article C Rates, Section 13-1 C-1(A) Fixing Water Rates For Residential, Commercial, Industrial, And All Other Uses SUGGUESTED Receive and File; Motion B; Motion A DISPOSITION: ATTACHMENTS: 1. MVM Memo 2. Amending FY26 Water Rate Increase 3. Revised FY26 Water Rate Increase 20250610 4. FY26 Sprinkler Service Ordinance - FINAL 5. FY26 Ordinance Water Use and Service Rates - FINAL 6. Water Utility Fiscal Year Rate Comparison FY2025 to FY2026- FINAL - Copy 7. Water Fire Sprinkler Rate Comparison FY 2025 to FY2026 - FINAL Page 920 of 1053 Dubuque THE CITY OF uFA�a9a av DuBE 13 Masterpiece on the Mississippi zoo�•*o rP PP 2017202019 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Amending Fiscal Year 2026 Water Rates under City of Dubuque Code of Ordinances Section Title 13 Public Utilities Chapter 1 Article C — Rates, Section 13-1 C-1(a) Residential, Commercial, Industrial, and other uses; and Section 13-1 C-2 Fire Sprinkler Service DATE: June 11, 2025 Chief Financial Officer Jennifer Larson is recommending City Council approval to amend ordinances that reduces the Fiscal Year 2026 Water Rate increase from 9% to 8%. City Attorney Crenna Brumwell has led the City of Dubuque effort to be a part of national Products Liability Litigation Public Water System Settlements related to PFAS. After Fiscal Year 2026 budget adoption, City Attorney Crenna Brumwell had worked with a national law firm to secure a settlement with the share for Dubuque totaling $3.4 million through Fiscal Year 2033, with most of the settlement received by December 2025. In addition, Fiscal Year 2025 Water operating expenses are under budget by an estimated $800,000. It is recommended that the Water rate increase for Fiscal Year 2026 be reduced to 8%. It is also recommended that the Minimum Monthly Water Charge be reduced to $9.61, which reflects an 8% rate increase. Proposed and approved rate structures of comparable Iowa communities with lime softening treatment similar to Dubuque, are compared in the following table. The calculation is based on the average residential usage of 6,000 gallons per month. Rank, Highest to Lowest City Proposed FY26 Water Cost for 6,000 Gallons 7 Des Moines $46.00 6 West Des Moines $45.41 5 Cedar Rapids $44.02 4 Dubuque $42.18 3 Iowa City $38.59 2 Ames $37.77 1 Council Bluffs $37.13 Page 921 of 1053 The proposed rate increase of 8% would place Dubuque as having the fourth lowest water rate. The highest rate (Des Moines) is 9.06% higher than Dubuque's rate. The average without Dubuque is 1.64% lower than Dubuque's proposed rate. I concur with the recommendation and respectfully request Mayor and City Council approval. S4-zn,- MicKael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Jennifer Larson, Chief Financial Officer Christopher Lester, Water Department Director Randy Gehl, Public Information Officer 2 Page 922 of 1053 THE CITY OF DUB E Masterpiece on the Mississippi TO: Michael C. Van Milligen, City Manager FROM: Jennifer Larson, Chief Financial Officer Dubuque All -America City II 2007 • 2012 • 2013 SUBJECT: Amending Fiscal Year 2026 Water Rates under City of Dubuque Code of Ordinances Section Title 13 Public Utilities Chapter 1 Article C — Rates, Section 13-1 C-1(a) Residential, Commercial, Industrial, and other uses; and Section 13-1 C-2 Fire Sprinkler Service DATE: June 11, 2025 INTRODUCTION The purpose of this memorandum is to provide amended ordinances for review and approval, which reduces the Fiscal Year 2026 Water Rate increase from 9% to 8%. The ordinances that are requested to be amended include FY26 City of Dubuque Code of Ordinances Title 13 Public Utilities Chapter 1 Article C, Section 13-1 C-1(a) Fixing Water Rates for Residential and Industrial Use and all other uses; and Section 13-1C Fixing Water Rates for Fire Sprinkler Service. BACKGROUND The adopted Fiscal Year 2026 budget included a 9% water rate increase. Since budget adoption, additional revenue and expense information has become available and the City has re-evaluated the rate increase. DISCUSSION The City is part of the Aqueous Film -Forming Foam (AFFF) Products Liability Litigation (MDL2873) Public Water System Settlements (PFAS). After Fiscal Year 2026 budget adoption, the City learned its share of the settlement totals $3.4 million through Fiscal Year 2033, with most of the settlement received by December 2025. In addition, Fiscal Year 2025 Water operating expenses are under budget by an estimated $800,000. Updated water cash flow analysis was completed by Financial Advisor Tionna Pooler (Attachment 1). In the near term, the City's water rate increases are largely driven by a minimum cash balance target. Prior to the estimated operating expense reduction in Fiscal Page 923 of 1053 Year 2025, cash balances in Fiscal Year 2026 were expected to be less than 20%. The reduction of actual expenses compared to budget in Fiscal Year 2025 results in an overall increase in cash. The minimum cash target in the Water fund in Fiscal Year 2026 can now be accomplished with an 8% increase instead of a 9% increase. PFAS settlement revenue is likely to reduce future debt service, improving revenue coverage. It is recommended that the Water rate increase for Fiscal Year 2026 be reduced to 8%. It is also recommended that the Minimum Monthly Water Charge be reduced to $9.61, which reflects an 8% rate increase. Proposed and approved rate structures of comparable Iowa communities with lime softening treatment similar to Dubuque, are compared in the following table. The calculation is based on the average residential usage of 6,000 gallons per month. Rank, Highest to Lowest City Proposed FY26 Water Cost for 6,000 Gallons 7 Des Moines $46.00 6 West Des Moines $45.41 5 Cedar Rapids $44.02 4 Dubuque $42.18 3 Iowa City $38.59 2 Ames $37.77 1 Council Bluffs $37.13 The proposed rate increase of 8% would place Dubuque as having the fourth lowest water rate. The highest rate (Des Moines) is 9.06% higher than Dubuque's rate. The average without Dubuque is 1.64% lower than Dubuque's proposed rate. ACTION TO BE TAKEN It is recommended that the attached proposed ordinance be approved with an effective date of July 1, 2025. Attachments cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Christopher Lester, Water Department Director Randy Gehl, Public Information Officer Page 924 of 1053 16'LIndependent ]Pubhc Advisors, LLC TO: JENNIFER LARSON, CHIEF FINANCIAL OFFICER, CITY OF DUBUQUE SUBJECT: FY26 WATER RATE INCREASE DATE: JUNE 10, 2025 FROM: TIONNA POOLER, PRESIDENT, IPA, LLC The City is re-evaluating the FY26 rate increase in consideration of PFAS revenue and decreased FY25 operating expenses. The FY26 rate increase can be reduced to 8% from 9%. • PFAS revenue will total $3.4 million through FY33. • Operating expenses are under budget by an estimated $800,000. In the near term, the City's water rate increases are largely driven by a minimum cash balance target (see line 19 below). Prior to the estimated expense reduction, cash balances in FY26 were expected to be less than 20%. The reduction of actual expenses compared to budget in FY25 results in an overall increase in cash. Now, the estimated balance in FY26 of 26% (line 19) can be accomplished with an 8% increase. PFAS revenue is likely to reduce future debt service, improving already strong revenue coverage (line 11). While a reduction in debt service will mean the accumulation of additional cash over time, this will not have a meaningful impact on cash balances in the near term. Revised Budget Projected Projected Projected Projected 1 Fiscal Year End: 06/30/25 06/30/26 06/30/27 06/30/28 06/30/29 06/30/30 z Rate Increase: 12.00% 8.00% 8.50% 8.50% 8.50% 8.00% 3 Operating Revenues: $ 12,841,487 $ 13,304,968 $ 14,378,752 $ 15,543,806 $ 16,807,891 $ 18,098,744 4 Operating Expenses: 9,374,653 10,632,530 10,825,961 11,195,027 11,582,796 11,951,371 5 Net Operating Revenue: $ 3,466,834 $ 2,672,438 $ 3,552,790 $ 4,348,780 $ 5,225,095 $ 6,147,374 6 Interest Earnings: 432,233 350,000 200,000 200,000 200,000 200,000 7 Net Revenue For Debt $ 3,899,067 $ 3,022,438 $ 3,752,790 $ 4,548,780 $ 5,425,095 $ 6,347,374 8 Existing Revenue Debt: $ 1,703,280 $ 1,708,380 $ 1,711,820 $ 1,715,620 $ 1,655,760 $ 1,662,500 9 Planned CIP Issuances: - 137,236 327,487 719,737 974,603 1,390,273 10 Total Revenue Debt: $ 1,703,280 $ 1,845,616 $ 2,039,307 $ 2,435,357 $ 2,630,363 $ 3,052,773 11 Net Revenues/Revenue Debt: 2.289 1.638 1.840 1.868 2.062 2.079 12 Existing GO Debt: $ 1,020,066 $ 1,033,350 $ 1,029,760 $ 987,738 $ 982,451 $ 976,083 13 Net Revenues/ All Debt 1.432 1.050 1.223 1.329 1.502 1.575 14 Cash After All Debt: $ 1,175,721 $ 143,473 $ 683,723 $ 1,125,685 $ 1,812,281 $ 2,318,517 15 Operating Transfer to Capital: (9,500,000) (1,616,500) (750,000) (1,900,000) (2,750,000) (1,826,369) 16 Other Operating (+/-): 651,045 582,968 951,878 1,061,350 1,181,770 1,314,231 17 Beginning Cash: $ 11,368,213 $ 3,694,979 $ 2,804,920 $ 3,690,521 $ 3,977,556 $ 4,221,607 18 Ending Cash: $ 3,694,979 $ 2,804,920 $ 3,690,521 $ 3,977,556 $ 4,221,607 $ 6,027,986 19 Cash Balance as % O&M: 39.4% 26.4% 34.1% 35.5% 36.4% 50.4% Page 925 of 1053 Prepared by: Christopher Lester Water Department 901 Hawthorn St., Dubuque IA 52001 (563) 589-4290 Return to Adrienne N. Breitfelder, City Clerk, 50 W. 1V St., Dubuque, IA 52001, (563) 589-4100 ORDINANCE NO. 24-25 ESTABLISHING THE CITY OF DUBUQUE CODE OF ORDINANCES TITLE 13 PUBLIC UTILITIES CHAPTER 1 WATER USE AND SERVICE, ARTICLE C RATES SECTION 13-1C-2 FIXING WATER RATES FOR FIRE SPRINKLER SERVICE NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Section 13-1 C-2 of the City of Dubuque Code of Ordinances is hereby unchanged, and shall read as follows: Section 13-1 C-2: Fire Sprinkler Service. Customers who have fire sprinkler service shall be billed for this service on a monthly basis. The monthly charge shall be as follows: CURRENT MONTHLY NUMBER OF HEADS CHARGES Up to 200 (minimum) ..................... $32.24 200-299.................................... $38.70 300-399.................................... $45.06 400-599.................................... $51.58 600-799.................................... $57.96 800 -999.................................... $64.45 1,000 - 1,199.................................. $70.92 1,200 - 1,399.................................. $77.30 1,400 - 1,599.................................. $83.75 1,600 - 1,799.................................. $90.21 1,800 - 1,999.................................. $96.60 2,000 - 2,199.................................. $103.08 2,200 - 2,399.................................. $109.51 2,400 - 2,599.................................. $115.98 2,600 - 2,799.................................. $122.41 2,800 - 2,900.................................. $129.02 3,000 - 3,499.................................. $135.28 Over 3,500*.................................... $6.43 *(for each additional 500 heads or fraction thereof) Section 2. This Ordinance shall take effect July 1, 2025. Passed, approved and adopted this 1611 day of June, 2025. Attest: Adrienne N. Breitfelder, tityylerk Prepared by: Christopher Lester, Water Department 901 Hawthorn St., Dubuque IA 52001 (563) 589-4290 Return to Adrienne N. Breitfelder, City Clerk, 50 W. 131h St., Dubuque, IA 52001, (563) 589-4100 ORDINANCE NO. 25-25 ESTABLISHING CITY OF DUBUQUE CODE OF ORDINANCES TITLE 13 PUBLIC UTILITIES, CHAPTER 1 WATER USE AND SERVICE, ARTICLE C RATES, SECTION 13-1C-1(A) FIXING WATER RATES FOR RESIDENTIAL, COMMERCIAL, INDUSTRIAL, AND ALL OTHER USES NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Section 13-1 C-1(A) of the City of Dubuque Code of Ordinances, is hereby unchanged, and shall read as follows: Section 13-1C-1A: Residential, Commercial, Industrial and All Other Uses, A. Rates Established: The rates to be charged for water for residential, commercial, industrial and all other uses and purposes by any person, firm or corporation within the city shall be based on units of one hundred cubic feet (748 gallons) or per gallon as follows: Monthly Consumption in Hundreds of Cubic Feet First 30 Next 120 Next 350 Next 500 Over 1,000 Monthly Consumption (in Gallons) First 22,440 Next 89,760 Next 261,800 Next 374,000 Over 748,000 Charge per Hundred Cubic Feet $5.30 $4.31 $4.01 $3.53 $3.13 Charge per Gallon $0.00703 $0.00577 $0.00537 $0.00474 $0.00415 Rates shall be subject to the following minimum monthly charge according to the size of the meter: Meter Size Inches 5/8 3/4 1 1 1/2 2 3 4 6 8 Attest: Monthly Consumption Monthly Consumption (In Hundreds of Cubic Feet) (In Gallons) 2 1,496 5 3,740 8 5,984 26 19,448 46 34,408 106 79,288 168 125,664 368 275,264 625 467,500 Minimum Charae $10.52 $26.31 $42.08 $127.69 $226.79 $485.62 $747.71 $1,550.70 $2,523.97 A property owner shall pay a $50.00 disconnect fee for water service that is disconnected by the city for a meter not in service. When a tenant account is subject to disconnection due to delinquency, the tenant shall pay the $50.00 disconnect fee. A $50.00 service call fee shall be changed to property owners or tenant account for those service calls that are determined to be related to customer negligence. A $9.61 minimum monthly charge shall be assessed for meters not in service. Section 2. This Ordinance shall take effect July 1, 2025. Passed, approved and adopted this 16th day of June, 2025. Adrienne N. Breitfelder; City Clerk ��rad��anagh, Mayor City of Dubuque Water Utility Fiscal Year Rate Comparison FY2025 to FY2026 Rates based on units of one -hundred cubic feet (748 gallons) Actual Proposed Monthly FY25 FY26 Consumption (CCF) 12.00% 8.00% First 30 $4.91 $ 5.30 Next 120 $3.99 $ 4.31 Next 350 $3.71 $ 4.01 Next 500 $3.27 $ 3.53 Over 1,000 $2.90 $ 3.13 Monthly FY25 FY26 Consumption (Gals) 12.00% 8.00% First 22,440 $0.00651 $ 0.00703 Next 89,760 $0.00534 $ 0.00577 Next 261,800 $0.00497 $ 0.00537 Next 374,000 $0.00439 $ 0.00474 Over 748,000 $0.00384 $ 0.00415 Rates shall be subject to the following minimum monthly charge according to the size of the meter: Actual Proposed Meter Cubic FY25 FY26 Size Feet Gallons 12.00% 8.00% 5/8 2 1,496 $9.74 $ 10.52 3/4 5 3,740 $24.36 $ 26.31 1 8 5,984 $38.96 $ 42.08 11/2 26 19,448 $126.61 $ 127.69 2 46 34,408 $209.99 $ 226.79 3 106 79,288 $449.65 $ 485.62 4 168 125,664 $692.32 $ 747.71 6 368 275,264 $1,435.83 $ 1,550.70 8 625 467,500 $2,337.01 $ 2,523.97 Page 929 of 1053 a) For users outside the city limits, an additional charge equal to 50% of the above rates will be made b) A $9.61 minimum monthly charge shall be assessed for meters not in service, this reflects the 8% rate increase. Page 930 of 1053 City of Dubuque Fire Sprinkler Rate Comparison FY2025 to FY2026 Up to 200 (minimum) $ 200-299 $ 300-399 $ 400-599 $ 600-799 $ 800-999 $ 1,000 - 1,199 $ 1,200 - 1,399 $ 1,400 - 1,599 $ 1,600 - 1,799 $ 1,800 - 1,999 $ 2,000 - 2,199 $ 2,200 - 2,399 $ 2,400 - 2,599 $ 2,600 - 2,799 $ 2,800 - 2,900 $ 3,000 - 3,499 $ Over 3,500* $ *(for each additional 500 heads or fraction thereof) Actual Proposed FY25 FY26 12.00% 8.00% 29.85 $ 32.24 35.83 $ 38.70 41.72 $ 45.06 47.76 $ 51.58 53.67 $ 57.96 59.68 $ 64.45 65.67 $ 70.92 71.57 $ 77.30 77.55 $ 83.75 83.53 $ 90.21 89.44 $ 96.60 95.44 $ 103.08 101.40 $ 109.51 107.39 $ 115.98 113.34 $ 122.41 119.46 $ 129.02 125.26 $ 135.28 5.95 $ 6.43 Page 931 of 1053 STATE OF IOWA SS: DUBUQUE COUNTY CERTIFICATE OF PUBLICATION I, Kathy Goetzinger, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald, a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: 06/20/2025 and for which the charge is 25.68 Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this 23rd day of June, 2025 Notary is in and for Dubuque County, Iowa. JANET K. PAPE y Commission Number 199659 • My Commission Expires 12/11/2025 Ad text : CITY OF DUBUQUE OFFICIAL PUBLICATION ORDINANCE NO. 24-25 ESTABLISHING THE CITY OF DUBUQUE CODE OF ORDINANCES TITLE 13 PUBLIC UTILITIES CHAPTER 1 WATER USE AND SERVICE, ARTICLE C RATES SECTION 13-1C-2 FIXING WATER RATES FOR FIRE SPRINKLER SERVICE NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Section 13-1C-2 of the City of Dubuque Code of Ordinances is hereby unchanged, and shall read as follows: Section 13-1C-2: Fire Sprinkler Service. Customers who have fire sprinkler service shall be billed for this service on a monthly basis. The monthly charge shall be as follows: CURRENT NUMBER OF HEADS; MONTHLY CHARGES Up to 200 (minimum); $32.24 200-299; $38.70 300-399; $45.06 400-599; $51.58 600-799; $57.96 800 -999; $64.45 1,000 - 1,199; $70.92 1,200 - 1,399; $77.30 1,400 - 1,599; $83.75 1,600 - 1,799; $90.21 1,800 - 1,999; $96.60 2,000 - 2,199; $103.08 2,200 - 2,399; $109.51 2,400 - 2,599; $115.98 2,600 - 2,799; $122.41 2,800 - 2,900; $129.02 3,000 - 3,499; $135.28 Over 3,500*; $6.43 *(for each additional 500 heads or fraction thereof) Section 2. This Ordinance shall take effect July 1, 2025. Passed, approved and adopted this 16th day of June, 2025. /s/Brad M. Cavanagh, Mayor Attest: /s/Adrienne N. Breitfelder, City Clerk Published officially in the Telegraph Herald newspaper on the 20th day of June, 2025. /s/Adrienne N. Breitfelder, City Clerk 1 t 6/20 STATE OF IOWA SS: DUBUQUE COUNTY CERTIFICATE OF PUBLICATION I, Kathy Goetzinger, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald, a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: 06/20/2025 and for which the charge is 38.95 Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this 23rd day of June, 2025 c`'f-2l._ Not. blic in and for Dubuque County, Iowa. L JANET K. PAPE o� p 7 Commission Number 199659 My Commission Expires tp�:ii` 12/11/2025 Ad text : CITY OF DUBUQUE OFFICIAL PUBLICATION ORDINANCE NO. 25-25 ESTABLISHING CITY OF DUBUQUE CODE OF ORDINANCES TITLE 13 PUBLIC UTILITIES, CHAPTER 1 WATER USE AND SERVICE, ARTICLE C RATES, SECTION 13-1C-1(A) FIXING WATER RATES FOR RESIDENTIAL, COMMERCIAL, INDUSTRIAL, AND ALL OTHER USES NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. Section 13-1C-1(A) of the City of Dubuque Code of Ordinances, is hereby unchanged, and shall read as follows: Section 13-1C-1A: Residential, Commercial, Industrial and All Other Uses. A. "Rates Established: The rates to be charged for water for residential, commercial, industrial and all other uses and purposes by any person, firm or corporation within the city shall be based on units of one hundred cubic feet (748 gallons) or per gallon as follows: Monthly Consumption (in Hundreds of Cubic Feet); Charge per Hundred Cubic Feet First 30; $5.30 Next 120; $4.31 Next 350; $4.01 Next 500; $3.53 Over 1,000; $3.13 Monthly Consumption (in Gallons); Charge per Gallon; First 22,440; $0.00703 Next 89,760; $0.00577 Next 261,800; $0.00537 Next 374,000; $0.00474 Over 748,000; $0.00415 Rates shall be subject to the following minimum monthly charge according to the size of the meter: Meter Size Inches; Monthly Consumption (In Hundreds of Cubic Feet); Monthly Consumption (In Gallons); Minimum Charge 5/8; 2; 1,496; $10.52; 3/4; 5; 3,740; $26.31; 1; 8; 5,984; $42.08; 1 1/2; 26; 19,448; $127.69; 2; 46; 34,408; $226.79; 3; 106; 79,288; $485.62; 4; 168; 125,664; $747.71; 6; 368; 275,264; $1,550.70; 8; 625; 467,500; $2,523.97; A property owner shall pay a $50.00 disconnect fee for water service that is disconnected by the city for a meter not in service. When a tenant account is subject to disconnection due to delinquency, the tenant shall pay the $50.00 disconnect fee. A $50.00 service call fee shall be changed to property owners or tenant account for those service calls that are determined to be related to customer negligence. A $9.61 minimum monthly charge shall be assessed for meters not in service. Section 2. This Ordinance shall take effect July 1, 2025. Passed, approved and adopted this 16th day of June, 2025. /s✓Brad M. Cavanagh, Mayor Attest: /s/Adrienne N. Breitfelder, City Clerk Published officially in the Telegraph Herald newspaper on the 20th day of June, 2025. /s/Adrienne N. Breitfelder, City Clerk It 6/20