A. General. The city council shall establish rates for water service and consumption; such rates are in addition to connection charges and fees for specific services. The utility may establish classifications of customers or service, using any method or methods authorized by law.

B. Rate Basis. Water rates shall be based on revenue requirements necessary to cover all costs of the utility, as authorized by the city council by the adoption of the biennial budget and subsequent amendments, and shall be guided by adopted financial policies and bond covenants.

C. Rate Adjustments. Rates shall be evaluated periodically as part of the review and adoption of the biennial budget. Rate adjustments shall be recommended as needed to meet revenue requirements. The recommendation shall consider equity, adequacy, costs and other factors allowed by law.

D. Billing and Collection. The utility shall develop and implement procedures and systems pertaining to the billing and collection of water service charges and fees in accordance with state law.

E. Rate Relief. The city council may establish water rate relief measures for specific customer classes as authorized by state law.

F. Rate Surcharge. Upon the city manager’s declaration of a water shortage emergency pursuant to the city’s adopted water shortage contingency plan, the utility may impose a rate surcharge of 10 percent without further city council action. (Ord. 5963 § 1, 2010.)