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Public Information Meeting Proposed New Water & Sewer Rates for Farmington October 29, 2014 - 5:30 p.m. Farmington Civic Center 200W. Arrington Avenue Presented by City of Farmington Staff and Red Oak Consulting Water and Wastewater Rate Increase The City of Farmington has spent the past year studying the financial status and rate structure of the city’s water and wastewater division. The cost of service study confirmed that a rate increase will ensure Farmington has a safe and secure water and wastewater infrastructure. The rate increase also will meet the city’s annual operations and maintenance needs and capital requirements,as well as minimize debt and fund capital projects, including replacing and repairing aging pipes to prevent main breaks. Rate Design Improvements With the rate increase, the city is adjusting the rate design to better align the customer class with the cost of service. The improved rate structure will increase revenue stability and promote water conservation and wise use of water. The rate structure is based on the size of the water meter so that residents’ payments aren’t used for industrial water use. Service Charge The proposed service charge (base charge) varies by water meter size and is the larger of the existing service charge or the cost of service amount. This structure is the same as the existing rate structure. Renewal and Replacement Charge Renewal and Replacement Charge is a charge to the billing. The renewal and replacement charge varies by meter size. The charge is assessed to all classes of customers. This charge is for the upgrade and replacement to the city’s water distribution system or wastewater collection system. Volume Charge The proposed residential volume charge is based upon an increasing block rate structure. This method results in higher unit prices to customers who use more water and lower unit prices to customers who use less. This design feature ensures the higher volume users pay the additional costs they impose on the utility, while residential customers are rewarded for conservation. The proposed rate retains a uniform volume charge for commercial customers. On the wastewater side, residential customers will continue to have their volume charge based upon December through February usage—a time of minimal outdoor water use. Commercial customers will continue to pay a wastewater volume charge based upon actual water usage. Overview of Rate Increase • City of Farmington has not had a water and wastewater rate increase in 3 years. • A cost of service study was conducted to determine the actual cost of our water/wastwwater system including capital improvements.The proposed rate increase matches the rates charges to the true cost of service. • Aging pipes require costly repairs and facility upgrades. The rate increase will provide Farmington with a safe and secure water and wastewater infrastructure. • The rate increase will be implemented over five years. • A typical Farmington residential customer using 10,000 gallons/month of water and 7,000 gallons/ month of wastewater would see a change from $68.40 to $77.04 an increase of $8.64 per month in their bill. • With the rate increase, Farmington residents will still be paying less than customers in Santa Fe, Rio Rancho, Bloomfield, Aztec and Durango. Proposed Proposal Rate Structure Proposed Water Service Charge Proposed Water Volume Rates Senior Citizen class assessed full volume rates Proposed Water Renewal and Replacement Charge Senior Citizen class assessed full R&R Charge Proposed Water Service Charge- Senior Citizen Class Proposed Wastewater Service Charge Proposed Wastewater Volume Rates Proposed Wastewater Renewal and Replacement Charge Senior Citizen class assessed full R&R Charge Proposed Wastewater Service Charge- Senior Citizen Class Comparison with Other New Mexico Cities 2015 Typical Combined Bill 1,2,3,4,5,6 Residential 5/8-inch Meter Customer Water and Wastewater $8.64 Increase 1. Based on 10,000 gallons water usage 2. Based on 7,000 gallons wastewater usage 3. Excludes 5% Gross Receipts Tax 4. Excludes $0.04/Kgal State Conservation Fee 5. Rate as of 6/26/2014 6. Las Cruces is served by water wells requiring minimal treatment Contact Us City of Farmington 800 Municipal Drive Farmington, NM 87401 www.fmtn.org or www.facebook.com/cityoffarmingtonnm $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8" 13.90 15.70 17.66 19.83 22.21 24.83 3/4" 13.90 15.70 17.66 19.83 22.21 24.83 1" 15.64 18.26 21.13 24.29 27.76 31.58 1 1/2" 23.49 29.05 35.17 41.89 49.29 57.42 2" 27.42 34.96 43.26 52.38 62.42 73.45 3" 62.97 82.73 104.47 128.38 154.68 183.60 4" 96.31 127.96 162.77 201.06 243.18 289.51 6" 140.66 186.26 236.42 291.59 352.29 419.04 8" 140.66 213.07 292.71 380.31 476.67 582.67 10" 140.66 246.56 363.04 491.17 632.12 787.15 12" 140.66 311.40 499.21 705.80 933.05 1,183.02 Proposed Rates Threshold Kgal Existing 2015 2016 2017 2018 2019 0 - 7 $2.09 $2.30 $2.35 $2.46 $2.54 $2.65 8 - 20 2.61 2.88 2.94 3.08 3.18 3.31 20 - 40 3.26 3.60 3.68 3.85 3.98 4.14 > 40 4.90 5.42 5.54 5.79 5.99 6.23 Nonresidential 2.34 2.83 3.20 3.48 3.93 4.43 Water Right Fee 0.03 0.03 0.03 0.03 0.03 0.03 $ per 1000 Gallons Proposed Rates $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8 6.60 8.10 9.60 11.10 12.60 14.10 3/4 9.90 12.15 14.40 16.65 18.90 21.15 1 16.50 20.25 24.00 27.75 31.50 35.25 1-1/2 33.00 40.50 48.00 55.50 63.00 70.50 2 52.80 64.80 76.80 88.80 100.80 112.80 3 105.60 129.60 153.60 177.60 201.60 225.60 4 165.00 202.50 240.00 277.50 315.00 352.50 6 330.00 405.00 480.00 555.00 630.00 705.00 8 330.00 648.00 768.00 888.00 1,008.00 1,128.00 10 330.00 931.50 1,104.00 1,276.50 1,449.00 1,621.50 12 330.00 1,741.50 2,064.00 2,386.50 2,709.00 3,031.50 Proposed Rates $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8" 7.64 8.63 9.72 10.91 12.22 13.66 3/4" 7.64 8.63 9.72 10.91 12.22 13.66 1" 8.60 10.04 11.62 13.36 15.27 17.37 1 1/2" 12.92 15.98 19.34 23.04 27.11 31.58 Proposed Rates $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8" 7.47 9.25 11.30 13.65 16.35 19.46 3/4" 7.47 9.25 11.30 13.65 16.35 19.46 1" 12.35 14.03 15.97 18.19 20.74 23.67 1 1/2" 20.48 23.80 27.61 31.99 37.02 42.81 2" 30.24 33.38 37.00 41.15 45.92 51.41 3" 56.26 68.54 82.65 98.88 117.54 139.00 4" 85.53 105.52 128.50 154.93 185.32 220.26 6" 166.85 184.83 205.51 229.28 256.63 288.07 8" 166.85 198.06 233.96 275.23 322.70 377.28 Proposed Rates Threshold Kgal Existing 2015 2016 2017 2018 2019 Senior Citizens 1.76 1.80 2.02 2.30 2.64 3.05 $1.76 $1.80 $2.02 $2.30 $2.64 $3.05 Septic Haulers $39.78 $42.56 $45.54 $48.73 $52.14 $55.79 $ per 1000 Gallons Proposed Rates All Other Classes $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8 5.65 6.65 7.65 8.65 9.65 10.65 3/4 8.48 9.98 11.48 12.98 14.48 15.98 1 14.13 16.63 19.13 21.63 24.13 26.63 1-1/2 28.25 33.25 38.25 43.25 48.25 53.25 2 45.20 53.20 61.20 69.20 77.20 85.20 3 90.40 106.40 122.40 138.40 154.40 170.40 4 141.25 166.25 191.25 216.25 241.25 266.25 6 282.50 332.50 382.50 432.50 482.50 532.50 8 282.50 532.00 612.00 692.00 772.00 852.00 Proposed Rates $ per Bill Meter Size Existing 2015 2016 2017 2018 2019 5/8" 4.08 5.06 6.19 7.49 8.99 10.70 3/4" 4.08 5.06 6.19 7.49 8.99 10.70 1" 5.14 6.31 7.66 9.20 10.98 13.02 1 1/2" 9.95 11.97 14.29 16.96 20.02 23.55 Proposed Rates