Correcting Top Tier Commercial Water Utility Rates

Issue

This is a technical correction to top tier rate for commercial utility customers.

Summary

The rates were developed in the City's annual rate study during the budget process for 2021.  In previous years, the City's rate structure was the same for both residential and commercial properties with the exception of the top tier which only applied to residential to encourage water conservation. The 2021 utility rate study created separate rate structure tiers for residential and commercial water utility rates and rates were adjusted with the goal to increase total revenues to the water fund by 5% on average. 

The 2021 rate structure unintentionally included the conservation top tier for commercial.  Because this rate was not previously charged to commercial customers, this created an unintended disproportionately large increase in revenues from the City's largest commercial users. The total revenue projection did not anticipate this increase so removal of the rate does not negatively impact budgeted revenues.

This revision removes the top tier from the commercial rate table and retroactively applies the rates to water usage for the year 2021. 

Water:

Residential/Irrigation

Fixed charge (minimum water charge per quarter)

$15.06 per quarter

0 to 15,000 gallons per quarter

$2.20 per 1,000 gallons

15,001 to 30,000 gallons per quarter

$3.40 per 1,000 gallons

30,001 to 60,000 gallons per quarter

$4.04 per 1,000 gallons

60,001 to 90,000 gallons per quarter

$4.50 per 1,000 gallons

90,001+ gallons per quarter

$5.50 per 1,000 gallons

Commercial

Fixed charge (minimum water charge per quarter)

$15.06 per quarter

0 to 51,000 gallons per quarter

$2.20 per 1,000 gallons

51,001 to 99,000 gallons per quarter

$3.40 per 1,000 gallons

99,001 to 150,000 gallons per quarter

$4.04 per 1,000 gallons

150,001+ to 201,000 gallons per quarter

$4.50 per 1,000 gallons

201,001+ gallons per quarter

$5.50 per 1,000 gallons

Multi-family properties - uniform water rate

$2.92 per 1,000 gallons

Bulk sales to contractors, landscapers, etc. at City fill stations or other designated locations

$7.47 per 1,000 gallons

Sewage:

Residential based on winter quarter usage

$5.67 per 1,000 gallons

Commercial based on actual quarterly usage

$5.67 per 1,000 gallons

Minimum sewage charge per quarter (for amounts up to 6,000 gallons per quarter)

$34.86 per quarter

The following section of the Chanhassen City Code is subject to changes:

Get More Information 

Click on the meeting date link in the schedule below to view the agenda and packet items for that meeting.

Schedule

Date Meeting Type Action
7/26/2021 City Council TBD