HomeMy WebLinkAboutCouncil Provided Information - 1/13/2026CITY COUNCIL OF SALT LAKE CITY
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COUNCIL STAFF MEMO
CITY COUNCIL of SALT LAKE CITY
TO:City Council Members
FROM: Austin Kimmel
DATE:January 13, 2026
RE: CONSOLIDATED FEE SCHEDULE (CFS) CORRECTION - MISSING TITLE AND
DESCRIPTION
NEW INFORMATION – JANUARY 13, 2026
NEW INFORMATION – DECEMBER 2, 2025
Compliance with State Law for fee setting – the lack of proper labeling on the CFS means that the
fee should not have been charged as of July 1. Staff recommendation: credit customers who paid the
increased fee between July 1 and present. (Please note: financial impact info below.)
UPDATED Item Schedule:
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2.Steepness of the increase – the steep one-step increase caused surprise to customers, especially
when combined with other rate changes. If the Council does not wish to approve the one-time FY26
increase, it could consider a two- or three-step schedule to phase in the increase. (Please note: financial
impact info below.)
3.Proper Labeling – the CFS missed key words to indicate the fee is charged per inch. Staff
recommendation: accept the proposed edits to ensure proper labeling on the CFS.
The following is a summary of new information discussed during the briefing.
Fee Compliance Issue (#1): Council staff learned that the missing “Per Inch” description from the
Consolidated Fee Schedule (CFS), which prompted the administration’s initial correction request, represents a
more significant issue than originally understood. Utah Code Section 10-8-22 requires municipal water rates to
be set legislatively by ordinance with uniform notice and opportunity for public participation.
Because the per-inch multiplier was not clearly described in the published CFS, it is recommended that the
Council adopt corrected CFS language before Public Utilities charges the fee and that Public Utilities provide
credits for fees paid by customers from the beginning of FY26 up to the adoption date. The increased fire line
fees have been charged to 3,453 customer accounts with fire service lines since July 1, 2025.
Corrected Financial Impact (Related to #1 and #2): During the November 25 briefing, Public Utilities
corrected an earlier revenue estimate. Rather than a $740,237 annual shortfall if the fire line fee increase is not
implemented, the actual shortfall would be approximately $1.7 million annually. If the Council approves the
corrected CFS language and requests credited fees for the six-month period from July 1 through December 2025
(the soonest the Council could adopt the corrected CFS language at this time), it is assumed that approximately
$850,000 would be credited to customers.
Phase-In Options (#2): As requested by Council Members, Public Utilities has analyzed two phase-in
implementation scenarios to mitigate immediate customer impacts:
Two-Year Phase-In: Public Utilities would charge 75% of the FY26 rate in year one, then increase by
56% in year two to reach the full rate.
Three-Year Phase-In: Public Utilities would charge 50% of the FY26 rate in year one, then increase by
80% in year two, and by 95% in year three to reach the full rate.
Both phase-in options carry significant budget implications. Fire line fees fund maintenance and operational
costs required to provide existing service levels. Postponing maintenance could create substantial system risks
that may be more costly to repair than to maintain. As explained by the administration, revenue shortfalls
during phase-in periods would be covered through bonds or loans, requiring repayment with interest through
future rates.
The administration provided the table below showing the expected revenue and shortfall over three years for
both the two-year phase-in (Phase 1) and the three-year phase-in (Phase 2) scenarios compared to the current
FY26 rate.
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Council Direction Requested: In summary, Staff is seeking Council direction on two items:
1. Does the Council approve requesting Public Utilities to develop a process for crediting fees paid by
customers since July 1, 2025, until the adoption of corrected CFS language?
2. Which fee scenario does the Council favor upon adoption of the corrected CFS language?
a. The full FY26 rates, as is currently being collected,
b. The two-year phase-in, or
c. The three-year phase-in.
NEW INFORMATION – NOVEMBER 25, 2025
Following the October 14 work session briefing, Council Members requested a follow-up briefing to discuss a
potential phased implementation of the fire line fee increase, which was mentioned during the discussion.
Based on the phase-in scenarios and financial analysis presented by Public Utilities, the Council has postponed
action on the Consolidated Fee Schedule (CFS) correction to a future meeting, allowing additional time for
review and consideration of options and fiscal impacts.
Lastly, in additional correspondence with the Administration, it was confirmed that the fire line fee, established
in City Ordinance 17.16.520 (below) and in place for at least 64 years, had never been included in the published
CFS before this fiscal year. This does not affect the City's authority to charge the fee, but does impact the
transparency of the fees charged on accounts.
17.16.520: UNMETERED FIRE PROTECTION PIPES PERMITTED WHEN:
Pipes to be used only in case of fire will be allowed within buildings on the following conditions:
A. Applicant must petition the city in writing for permission to install any unmetered or metered
fire protection pipe system, and all installation and connection costs and charges in connection
therewith shall be paid by the applicant.
B. Except for the water source connection, such fire pipes must be entirely unconnected with any
other system and must not serve any other function.
C. Fire hose connections must contain adequate seals or other measures acceptable to the director
of public utilities, so that they can only be used for fighting fires.
D. All nonmetered fire system connections to the city water system shall be subject to a charge as
determined by the public utilities director. (Prior code § 49-6-41)
NEW INFORMATION – OCTOBER 14, 2025
Following the Council's September 16 written briefing, questions about the fire line fees were raised by Council
Members and members of the public. As a result of these questions, it was determined that a public briefing
should be scheduled to provide additional information about the fees.
A fire service line is a dedicated water line that supplies water to fire sprinklers or private fire hydrants, separate
from regular water service. Fire service lines are common in multi-family residential properties or townhomes
with shared infrastructure.
According to Public Utilities, the fees it charges for fire lines have not increased in at least 64 years. As part of
the Public Utilities FY26 budget, the fee for fire lines increased to match the actual cost of service associated
with the lines based on an analysis conducted during Public Utilities' 2024 Comprehensive Water, Wastewater,
and Stormwater Rate Study. As a correction to the BACKGROUND section below, Public Utilities staff have
recently become aware of records indicating fire line fees have been in place since at least 1961, rather than the
1981 date referenced.
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During the budget process, Public Utilities' engagement materials focused on principal fees and rates that apply
to most customers, rather than its miscellaneous fees, such as fire line charges, which affect a limited number of
properties. While the fire line fees were noticed in the FY26 Consolidated Fee Schedule (CFS), they were not
specifically highlighted in public outreach materials due to their narrow applicability. The Council's October 14
briefing provides an opportunity to learn more about the specific fee for fire lines.
ISSUE AT-A-GLANCE
BACKGROUND
FINANCIAL IMPACT
REDLINED CFS SCHEDULE