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The following provisions shall strictly govern the establishment and review of PUE rates for all ratepayers.
(A) Setting rates.
(1) Council and the Board shall not consider the revenue needs of the city in establishing the utility system rates, fees, charges and reserves. Revenues derived from PUE rates shall not be used to subsidize the City General Fund.
(2) Rates for utilities supplied through the utility system to the PUE ratepayers shall be reasonable and just and shall be sufficient to cover costs of operation, maintenance of the system, and a proper and necessary allowance for depreciation and reserves. Rates shall be uniform for each class of customer without regard to whether a ratepayer is located within or without the city municipal limits. PUE rates shall be established with due consideration accorded to the terms, covenants and conditions contained in any contract related to PUE and any ordinance authorizing the issuance of utility revenue bonds. Costs of operations, maintenance and depreciation shall be determined using generally accepted accounting principles appropriate for utilities.
(B) PUE reserves. That portion of PUE rates collected for the establishment of a reserve fund shall be separately identified in the rates and shall be included as a separate line item on PUE customer invoices.
(C) City user fee.
(1) Council may set a separate user fee (“city user fee” or “franchise fee”) assessable against each ratepayer of PUE. The city user fee shall be established on a uniform basis according to class of customer without regard to whether a ratepayer is located within or without the city municipal limits. The city user fee may be established on either a flat fee or a demand basis.
(2) Upon request of Council, the Board shall prepare a city user fee or franchise fee proposal and report to Council at the earliest practicable opportunity as to the projected revenue from the proposed fee and the impact on a typical ratepayer’s annual utility bills. The Board may propose an alternative fee or method of fee calculation. The Council shall give great weight to the Board’s report in making its determination of an appropriate city user fee. The city user fee shall be indicated as a separate line item on PUE invoices, labeled “city user fee” or “city franchise fee”.
(3) City user fee funds shall be collected by PUE and transferred at least monthly to the City General Fund. PUE may, with Council approval, prepay to the city, in whole or in part, the aggregate projected city user fee for any period of time, in which event such prepayment shall be made from the PUE Reserve Account; PUE shall collect and deposit into the PUE Reserve Account monies collected from the city user fee until all prepaid amounts are reimbursed in full, plus interest at a rate determined at the time of prepayment by a joint motion of the Board and Council and recorded in the minutes of each body. Revenues derived from the city user fee may be used for general revenue purposes of the city and shall be considered unrestricted funds. City user fee monies reimbursed to the PUE Reserve Account pursuant to this section shall be restricted funds as provided in § 31.59(B).
(D) Annual rate review/rate change. The Board shall, at a hearing held at least annually, review the rates, fees and charges, except the city user fee, of services rendered by PUE.
(1) The Utilities General Manager shall cause a notice of such hearing to be published in a newspaper of general circulation within the city at least 30 days prior to the hearing and again at least 15 days prior to the hearing. Notices shall state in bold letters and in clear and comprehensible language whether the Board will consider a rate change at such hearing and whether the change is an increase or decrease. In the event that a rate change is proposed, the Board shall prepare a brief summary of the proposed change, estimate monthly and annual increases for the average ratepayer in each class, and both publish and mail the summary to each ratepayer at least 15 days prior to the hearing.
(2) The aforementioned notice and summary shall provide in bold face and in clear and comprehensible language that any ratepayer may be heard at the hearing (as an “intervenor”) by providing PUE with notice at least two business days prior to the hearing. The ratepayer’s notice shall include the name of legal counsel that will appear, if any, and shall include eight copies of any document to be presented to the Board. The Board may have legal counsel present at the hearing.
(3) Councilors shall receive separate copies of the notice of Board hearing and may attend the hearing as non-participating members. The Mayor or designee, as ex officio member of the Board, shall make best efforts to attend the hearing in order to provide a report to Council. A court reporter shall be present at the hearing if an intervenor will appear or there is a proposed rate change.
(4) At the hearing, the Chairperson of the Board shall swear witnesses, take testimony and receive evidence. The Utilities General Manager and designees shall present to the Board the basis and justification for current rates or the proposed rate change including, but not limited to, reserves. At the conclusion of the hearing, the Board shall vote to maintain or change the rates. The Board shall submit to Council a report of its recommendation, including the public comments received at the public hearing, accompanied by a written request for approval and adoption of the rates by resolution of the Council. If the Board recommends a rate change, a separate notice with summary shall be prepared and mailed to ratepayers.
(5) If the Board does not recommend a rate change, Council may at its next regular meeting consider the Board recommendation and by resolution continue the current rates. If the Board recommends a rate change, Council shall set a public hearing. Intervenors who appeared before the Board shall receive notice of the public hearing and may appear before Council. If Council approves the rate adjustment recommended by the Board, Council shall adopt a resolution placing such rates and fees in effect.
(6) If Council does not accept the recommendation, the matter shall be referred back to the Board with a written explanation and specific recommendations for modification of the original Board recommendation. If the Board fails to file a subsequent report with the Council within 30 days from the date of receipt of the recommended changes, Council may proceed to set the rates by resolution. In the event the Board disagrees with the recommendation of Council, the Board shall inform the Council in writing together with a written explanation. Within 45 days of the written notification, Council shall hold a joint public hearing with the Board. Intervenors who appeared before the Board shall receive notice of the public hearing and may appear before the joint public hearing. The Council shall make the final determination of PUE rates.
(1976 Code, § 2-8-6) (Ord. 588-12, passed 5-9-2012)