HomeMy WebLinkAbout10/27/2009 Council Presentation - 2010 Water Rate Plan Process Overview
2010 Water Rate Plan
Process Overview
Discussion Objectives
• Review of Enterprise Operation
• Review of current status
- Rate review
- Proposed schedule
Why the Town transitioned to a self-
sufficient water utility enterprise
• Water is important for economic development
and sustainability
• Consistent with best practices of municipal
utilities
• Provides future bonding capability in water fund
• Financial transparency (distinct and separate
from the General Fund; fee for service)
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Industry Standard for aSelf-Sufficient
Water Enterprise Utility:
• Costs of providing services are apportioned and
recovered from those who use the system
• Enterprise borrows money based on its own
revenue
• Rates ensure sufficient "debt-coverage" for
borrowing
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Goals of a Water Rate Plan
Fund all costs of providing water
service
- Operating costs -Personnel,
Repair, Chemicals, etc.
- Central Arizona Groundwater
Replenishment Costs
- Debt Payments
- Administration and Indirect
Costs
- Required Operating Margins
and Debt Coverage
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Goals of a Water Rate Plan
Ensure that the Town's water utility is a
self-sufficient enterprise
- Ensures that there are minimal
subsidies from the General Fund
- Ensures that costs of providing
service are recovered from those who
use the system
- Consistent with best practice of
municipal utilities
- Provides additional future bonding
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Annual Rate Review
• Review of assumptions
• Update budget information
• Update water usage
• Capital Improvement Plan review and
update
• Vehicle replacement costs
• System repair and replacement costs
Proposed Schedule
• Tonight -Overview of rate process
• December 1, 2009 -Notice of Intention to
increase rates & file rate review report with
Town Clerk
• January 5, 2010 -Public hearing
• February 5, 2010 -Implement rate
increase schedule for 2010 and 2011
Questions