HomeMy WebLinkAbout02/18/2014 Council Presentation - Wastewater and Water2/20/2014
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Water/Wastewater Rate Analysis
Proposed Rate Plan
Public Hearing
February 2014
Facts about Water and WW
Rates in the 21st Century
•Average utility has been increasing rates 5-6% per
year; trend expected to continue
•AWWA expects Water and WW rates across the
nation to triple in the next 15 years
•30-40% of utilities have rates in place that do not
cover their costs
•Many reasons for rate increases are beyond a
Town’s ability to influence
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Goals of a Water and WW
Rate Plan
Fund all Utility Operating Costs
Fund Capital Repairs and Replacements
Meet Required Debt Service Payments
Ensure Continued High Quality of Service
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Current Monthly Residential Charge
7,500 Gal Water and 5,000 Gal WW
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$‐
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
Wastewater Water
2/20/2014
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Water Utility
Primary Forecast Assumptions
Water Account Growth increases from 340 to 803
annually over the next ten years
Most Operating Expenses increase 3-5% per year
Town issues debt to repair and expand water system:
–$2,000,000 – 2015
–$5,000,000 – 2020 depending on growth needs
Water Resource Development Fees used to fund
water portion of wastewater acquisition debt
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Historic and Forecast Water
Accounts
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Forecast New Water Accounts 2014 – 2023 = 5,719
4,599
6,099
11,568
1,500
3,500
5,500
7,500
9,500
11,500
13,500
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Water
Forecast Cost of Service
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$‐
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Debt Service Opera ng/Cap Outlays
Proposed
Water Rate Plan
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Effective Effective Effective Effective
Current Apr-14 Jan-15 Jan-16 Jan-17
Groundwater Resource/Acq. Fee
Per 1,000 Gal 0.40 0.43 0.46 0.48 0.50
Minimum Charge
5/8 x 3/4" 15.12 16.18 17.31 18.18 19.09
Vol Chg Per 1,000 Gal
Residential
- 10,000 2.46 2.63 2.82 2.96 3.11
10,001 20,000 3.43 3.67 3.93 4.12 4.33
20,001 30,000 4.46 4.77 5.11 5.36 5.63
30,001 40,000 5.50 5.89 6.30 6.61 6.94
40,001 Above 7.90 8.45 9.04 9.50 9.97
Multi Family 3.03 3.24 3.47 3.64 3.82
Commercial 3.03 3.24 3.47 3.64 3.82
Government 3.03 3.24 3.47 3.64 3.82
Standpipe 3.43 3.67 3.93 4.12 4.33
2/20/2014
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Proposed
Water Rate Plan Impact
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Effective Effective Effective Effective
Current Apr-14 Jan-15 Jan-16 Jan-17
Residential Monthly Charges -- 5/8 x 3/4"
Gallons
5,000 29.42$ 31.49$ 33.69$ 35.36$ 37.11$
Increase 2.07 2.20 1.67 1.75
7,500 36.57$ 39.14$ 41.88$ 43.96$ 46.12$
Increase 2.57 2.74 2.07 2.17
10,000 43.72 46.80 50.08 52.55 55.14
Increase 3.08 3.28 2.47 2.59
Commercial Monthly Charges -- 2"
50,000 217.94 233.30 249.62 261.95 274.85
Increase 15.36 16.33 12.33 12.90
Wastewater Utility
Primary Assumptions
Account Growth similar to water utility
Most Operating Expenses increase 3-5% per year
In 2015 Town begins payments on $16,550,000 bond issued
in 2013 to fund new WWTP
Town issues an additional $14,000,000 in wastewater debt
between 2014 and 2017
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Forecast Wastewater Accounts
Forecast New Wastewater Accounts 2014 ‐2023 = 4,880
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2,255 2,455 2,735
3,095
3,535
4,055
4,655
5,335
6,095
6,935
1,500
2,500
3,500
4,500
5,500
6,500
7,500
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Wastewater
Forecast Cost of Service
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2/20/2014
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Proposed Wastewater
Rate Plan and Impact
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Current Effective
Rate Apr-14
ResidentialCommercial Monthly WW Rates
Monthly Charge 11.86$ 12.63$
Vol Chg/1,000 Gal 4.28 4.71
Residential/Commercial Monthly WW Charge
5,000 33.26$ 36.18$
2.92
10,000 54.66$ 59.73$
5.07
Overall Rate Plan Impact
Water/WW Monthly Charges
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Effective
Water WW Current Apr-14
5,000 5,000 62.68$ 67.67$
Increase 4.99
7,500 5,000 69.83 75.32
Increase 5.49
10,000 5,000 76.98 82.98
Increase 6.00
Gallons/Month
Presentation Summary
Notes on Rate Proposal
Forecasts are not guarantees, they are predictions
based on a series of reasonable assumptions
Town’s forecast depends heavily on future impact
fees and growth. If growth does not meet
expectations, Town would have following
alternatives:
–Scale back growth-related debt issues
–Subsidize Water/Wastewater fund from other
funding sources
–Further increase Water/Wastewater rates 15
Presentation Summary
Why is Rate Plan Beneficial?
Will ensure continued financial health of utility
Will enable Town to make the repairs and
investments necessary to ensure a continued high
quality of service
Will assist in economic development opportunities
Will maintain rates at a level comparable to other
nearby communities
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