Item B: Update on Street and Lighting Fee Development

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The subcommittee suggested a rate structure recognizing both the broad benefit of arterial, collector and bike path lighting and differing levels of service for local area street lighting. Under this approach, all customers would share in the costs of arterial and collector street lighting and bicycle and pedestrian path lighting while local street lighting costs would vary by the level of lighting service in an area. At a minimum this would require establishing a rate structure with two levels: one for those residences and nonresidential customers served only by the overall arterial/collector/bike path lighting system and another for those customers served by both the overall arterial/collector/bike path lighting and local area street lighting systems. Criteria for defining when a customer is served by the local street lighting system would need to be developed. Staff recommends allowing for at least two methods of accounting for differing levels of service of local area street lighting in the draft ordinance, allowing either a system-wide flat fee or a multi- level rate structure recognizing differing levels of service. A two-level fee recognizing the system- wide benefit of arterial, collector and bike path lighting and the existence or lack of local area street lighting is initially recommended. Depending on administrative and billing cost implications, options for a system-wide flat fee may also be considered. In either case, residential customers would pay the fee on a per dwelling unit basis. For non- residential customers the fee could be imposed on either a per account or per address flat fee or another nonresidential unit accounting for the size of a non-residential site. Given the relatively small amount of the proposed fee and the administrative complexity and higher cost of accounting for site characteristics, staff recommends a flat fee per premise address, varying only based on level of local street lighting service. “Opt Out” Program Options Despite the benefits of street lighting, some residents in an area currently served by local street lights may desire the option of having less nighttime lighting and would prefer darker skies in their neighborhood area. While the rate structure described above would provide for a rate differential should lights in an area be turned off, the City does not currently have a program or mechanism in place to process such requests. Staff recommends developing a draft ordinance that allows for the potential for such a program, returning to council at a future date to evaluate policy options, potential criteria and costs for an administrative program allowing neighborhood areas to request differing levels of service or to “opt out” of local street lighting service. A general assumption is that customers in such areas would continue to share in the costs of arterial/collector/path lighting. Billing and Administrative Issues Billing and administrative issues for the street and bicycle path lighting fee are similar to those described for the street utility fee. Please refer to Attachment B to the AIS for additional background on general administrative and billing issues. Given the relatively small amount of the proposed street and bicycle path lighting fee, concerns with administrative cost overhead are potentially more significant. Any significant complexity which causes costs of billing and account management to increase could result in a disproportionate share of revenues being committed to overhead. Keeping the rates relatively simple and inexpensive to bill and administer will be necessary for cost-effective implementation. C,S&PLF P35 ATTACHMENT TREET ATH IGHTING EE AGE OF