Enclosed is an Ordinance, First Reading, to increase water and sewer rates and establish a process for the abandonment and reactivation of old water and sewer service lines.

Based on the Pro-Forma presented to the City Council during their January 28, 2020 work session, City Staff estimates the need to generate an additional $187,000 from our water (distribution) rates and $800,000 from our sewer rates for FY 20/21.  City Staff recommends utility rate increases to generate this additional revenue as described within the attached memo.

The typical residential utility customer in the City of Gillette will see an average increase of 2.8% on their utility bill, or $5.14 per month increase from $183.08 per month (existing) to $188.22 per month (proposed).  The effective date of the proposed rate increases will be May 1, 2020, pending approval of the enclosed Ordinance by the City Council.

During the past six months, City Staff has received requests from property owners and contractors to utilize old water and sewer service lines that were previously abandoned. For these situations, the property owner and contractor believed the old service lines were active and operational.  As the contractors moved forward with the construction of new buildings on older City lots, it was discovered that several of these service lines had been deactivated and abandoned for many years.  In order to complete their building projects, the contractor was required to install new services lines to provide water and sewer service to the new buildings on the old lots resulting in additional work and significant costs that exceeded their project budget.  Depending on the location and complexity, installation of new services lines can exceed $10,000 per instance.

To avoid situations like this in the future, City Staff requests a provision within Chapter 17 of the City Code to establish a process for the formal abandonment of old water and sewer service lines, and reactivation of water and sewer services if the old service line is intended to be reused.