Transcript No Slide Title

Water and Wastewater Rate Study
City Council Work Session – No. 2
June 9, 2009
© 2008 Malcolm Pirnie, Inc. All Rights Reserved
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Agenda
1.
2.
3.
4.
5.
Review Prior Meeting
Objectives
Rate Alternatives
Impact on Median Customer
Closing Discussion / Guidance
from Council
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Review Prior Meeting
 Reviewed the rate study fundamentals
 Council provided policy direction on:
 Support for timing and magnitude of revenue increases
to fund operations, maintenance, capital and financing
plans (91% water, 92% wastewater over next 5 years)
 Cost of service rates by class
 Rate design – four block rates
 Waterline replacement program monthly charge of
$4.24 will eliminated included in the base charge,
consistent with cost of service analysis
 Effective date for new rates – January 2010
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Today’s Objectives – Guidance from
Council on Rate Alternatives
 Review water rate alternatives




Original Proposed Rates
Alt 1: Residential 1st Block Lower
Alt 2: Residential Subsidy
Alt 3: Larger Residential Rate Blocks
 Review wastewater rates
 Adopt 1-year or 5-year rate plan
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Rate Making Industry Standards
 Principles of Water Rates and Fees Manual M1
American Water Works Association, Fifth Edition,
2000
 Water Rates, Fees, and the Legal Environment
American Water Works Association, 2005
 Developing Rates for Small Systems Manual 54
American Water Works Association, 2004
 Financing and Charges for Wastewater Systems
Water Environment Federation, 2004
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Rate Structure Characteristics Common
to All Alternatives
 Consistent with industry standards
 Achieve same revenue increase required
(across all classes)
 Provide identical monthly service charges
(base fees) by meter size
 Outside-City volume charges 25% higher than
inside-City
 Wastewater rate structure remains unchanged
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Current and Proposed Water Base Fees
Test Year 2010
Current
Proposed
FY 2010
¾”
$ 13.67
$ 19.10
1”
$ 22.97
$ 30.10
1 ½”
$ 45.22
$ 55.10
2”
$ 73.21
$ 86.20
3”
$ 136.39
$ 167.00
4”
$ 227.53
$ 276.60
6”
$ 455.14
$ 539.50
8”
$ 727.94
$ 827.60
Meter Size
* Waterline replacement program monthly charge of $4.24 is assessed to
each meter in addition to the base charge under the current fee.
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Original Proposed Residential Rates
Percent
of Bills
$
34%
$3.03
Autonomous
66%
90%
$3.23
$3.45
Domestic
Outdoor
Tier 1
Tier 2
Tier 3
0-3,000 3,000-6,000 6,000-15,000
100%
$3.71
Excess
Tier 4
15,000+
 15% tier differential
 Cost of service by
class by 2013
 Tier 1 rate higher than
multifamily, commercial
and university uniform
rate
 Irrigation rate equal to
residential Tier 4 rate
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Alt. 1: Residential 1st Block Lower
Percent
of Bills
34%
66%
90%
$4.16
$$$$
$3.57
$$$
$$
$
100%
$3.12
$2.78
Excess
Outdoor
Domestic
Autonomous
Tier 1
Tier 2
Tier 3
0-3,000 3,000-6,000 6,000-15,000
Tier 4
15,000+
 32% tier differential
 Cost of service by
class by 2013
 Tier 1 rate equal to the
lowest (multifamily)
uniform rate
 Irrigation rate at cost of
service, between
residential Tier 3 and 4
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Alt. 2: Phase In Cost of Service
Percent
of Bills
$
34%
$2.86
Autonomous
66%
90%
$3.03
$3.22
Domestic
Outdoor
Tier 1
Tier 2
Tier 3
0-3,000 3,000-6,000 6,000-15,000
100%
$3.45
Excess
Tier 4
15,000+
 15% tier differential
 Residential cost of
service subsidy of 8%
in 2013
 Tier 1 rate equal to the
lowest (multifamily)
uniform rate
 Irrigation rate equal to
residential Tier 4 rate
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Alt. 3: Larger Residential Rate Blocks
Percent
of Bills
66%
95%
99%
$$$$
$4.88
$$$
$$
$
$3.54
$2.77
Outdoor
Autonomous Domestic
Tier 1
0-6,000
Tier 2
6,000-20,000
Tier 3
20,000-39,000
 74% tier differential
100%
 Cost of service by
7.22
2013
 Tier 1 rate equal to the
Excess
lowest (multifamily)
uniform rate
Tier 4  Irrigation rate equal to
39,000+
residential Tier 2 rate
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Current and Proposed Residential
Wastewater Rates
Charge
Base Fee – All Meter
Sizes
Consumption
Charge*
Current Amount
Proposed FY 2010
$ 9.83
$11.80
$2.22
per 1,000 gallons
$2.87
per 1,000 gallons
* Based on January, February and March water consumption from the
previous year usage for the residence. The average of the three months is
the consumption used each month for the entire year.
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Current and Proposed FY 2010
Commercial Wastewater Rates
Charge
Description
Current
Base Rate
Proposed
$9.83
$11.80
Consumption Rate
CA
Restaurants
$ 3.73
$ 5.03
CB
Bars & Taverns
$ 4.75
$ 5.79
CC
Entertainment & Service
$ 3.55
$ 3.87
CD
Laundries, Schools &
Stores
$3.23
$ 3.77
CE
Office Buildings
$ 2.98
$ 3.12
CF
Hotels & Motels
$ 2.59
$ 3.66
CG
Hospitals, Athletic Clubs,
Apt, Daycares, Dorms,
Residences
$2.21
$ 2.68
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Customer Bill Impacts
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Residential Monthly Bill Impact (%)
Water and Sewer Combined - 2010
1,000 gallons
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Residential Monthly Bill Impact (%)
Water and Sewer Combined - 2010
1,000 gallons
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Residential Monthly Bill Impact (%)
Water and Sewer Combined - 2010
1,000 gallons
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Residential Monthly Bill Impact (%)
Water and Sewer Combined - 2010
1,000 gallons
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Residential
Median Monthly Bills - 2010*
$51.83
$50.97
$51.12
$51.36
$43.60
* ¾ inch meter – water bill based on 4,000 gals.
Sewer bill based on 3,000 gals.
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Residential
Average Monthly Bills - 2010*
$67.48
$66.52
$66.14
$65.41
$55.67
* ¾ inch meter – water bill based on 7,000 gals.
Sewer bill based on 5,000 gals.
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Multifamily and Commercial Classes
Based on Average Consumption
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Multifamily
Average Monthly Bills - 2010*
$154.70
$154.90 $156.50
$154.70
$127.44
* 1-inch meter – water and sewer bill based on
20,000 gals.
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Commercial
Average Monthly Bills - 2010*
$254.58
$254.58 $260.70
$254.58
$212.63
* 1.5 inch meter – water and sewer bill based on
34,000 gals.
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Discussion and Guidance
 Choose a water rate alternative




Original Proposed Rates
Alt 1: Residential 1st Block Lower
Alt 2: Residential Subsidy
Alt 3: Larger Residential Rate Blocks
 Adopt 1-year or 5-year rate plan?
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For Additional Information Contact
Dennis Jackson
Project Manager
[email protected]
Isalah Rounds
Analyst
[email protected]
John Gallagher
Principal, Quality Assurance
[email protected]
Red Oak Consulting - Denver
100 Fillmore Street, Suite 200
Denver, CO 80206
Phone: (303) 316-6500
Fax: (303) 316-6599
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