(a) The Town Manager shall analyze the operating and financial records of the water/sewer fund during each calendar year and recommend to the Town Council user rates, fees, charges and other costs for the following year. The recommendation shall be based on the cost of providing water and sewer services, including the costs of acquisition, treatment, distribution, administration, maintenance, capital improvements, accumulation of reserve for improvements and obligations of such magnitude that they cannot be acquired from the surplus revenues in a single year, and debt service, including that reasonably required for anticipated growth. Recommended user rates may also include a conservation gallonage charge or other rate component that creates an economic incentive to conserve water.

(b) Rates and connection charges may vary according to demand and volume. A rate differential may occur to meet obligations which relate to a specific group of customers or properties. Out-of-town users may be charged a higher rate than in-town users.

(c) The Town Council shall adopt fees, charges and water and sewer service rates by ordinance. (Prior code 13.08.010; Ord. 1288 §1, 2008)