Utility Rate Study underway
The City of Tonganoxie 2025 Adopted Budget included funding allocated towards provision of an in- depth review and analysis of the City’s water & sanitary sewer utilities’ respective rate structure. The City's most recent water and sewer utility rate structure report was the result of a comprehensive rate analysis completed in 2019 by Carl Brown, President of GettingGreatRates.com. The analysis completed in 2019 was procured and prepared under the oversight of the Kansas Rural Water Association (KRWA) RATES Program, which offers an industry-standard, discounted approach to completing complex rate analysis in a fashion designed for smaller to medium-sized communities in Kansas. The report format was designed to provide the City Council with the information necessary to operate under a cost-of-service model, which is an approach designed to assign costs (service charges) to different utility users (customers) at the respective levels of service demanded by each user. The report was completed in early May 2019, presented to the City Council, and has been utilized in the preparation of the City’s annual budget each year since 2020. City staff reached out to Carl Brown and staff with KRWA to confirm if his company continues to offer discounted cost analyses under the oversight of the Kansas Rural Water Association (KRWA) RATES Program and received affirmative responses. Because the City’s current utility rate model is developed under the methodology established as a result of the in-depth analysis completed in 2019 and the provision of a reduced cost proposal was provided under the KRWA RATES program City staff recommend that the City Council move forward with a proposal by Carl Brown. A utility rate study is a comprehensive financial planning process that analyzes a utility's future expenses and revenue needs to set fair and sustainable rates for its services, ensuring long-term financial viability and covering the costs of operations, maintenance, and infrastructure. The study involves projecting costs, calculating the cost of service for different customer classes, and designing a rate structure that reflects these costs while also considering community values like affordability and conservation.
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