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Water and Sewer Rate Study Water and Sewer Rate Study Stakeholder Meetings Stakeholder Meetings Stakeholder Meetings Stakeholder Meetings Meeting No. 3 May 7, 2009 Pathways to Lasting Solutions © 2008 Malcolm Pirnie, Inc. All Rights Reserved ---PAGE BREAK--- Agenda Agenda Agenda Agenda g Background / Housekeeping Items Review Prior Meeting Financial Model Demonstration Rate Design Proposed Rates Customer Bill Impacts Customer Bill Impacts Pathways to Lasting Solutions ---PAGE BREAK--- Background: Background: Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Background: Background: Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Rate Study Uses A Sequential Approach Project Orientation Orientation Financial Plan Presentation to City Staff and Stakeholder Workshop 1 Workshop with Staff Cost Analysis Rate Design Finance Committee Stakeholder Workshop 2 Workshop 1 g Draft Report Stakeholder Workshop 3 City R i Final Report Final Presentation Review Pathways to Lasting Solutions ---PAGE BREAK--- Re ie Prior Meeting Re ie Prior Meeting Re ie Prior Meeting Re ie Prior Meeting Review Prior Meeting Review Prior Meeting Review Prior Meeting Review Prior Meeting Pathways to Lasting Solutions ---PAGE BREAK--- Financial Forecast Under Financial Forecast Under Proposed Proposed Revenues (Rates) Revenues (Rates) Financial Forecast Under Financial Forecast Under Proposed Proposed Revenues (Rates) Revenues (Rates) Revenues (Rates) Revenues (Rates) Revenues (Rates) Revenues (Rates) Pathways to Lasting Solutions ---PAGE BREAK--- Annual Annual Revenue Revenue Adjustments Needed to Adjustments Needed to Sustain Financial Health Sustain Financial Health Annual Annual Revenue Revenue Adjustments Needed to Adjustments Needed to Sustain Financial Health Sustain Financial Health Sustain Financial Health Sustain Financial Health Sustain Financial Health Sustain Financial Health Year Water Wastewater 2009 0% 0% 2009 0% 0% 2010 19% 19% 18% 2011 17% 18% 2012 17% 17% 2012 17% 17% 2013 17% 17% 16% Cumulative (5-year) 91% 92% 89% 2014 17% 15% 17% 15% 2015 17% 5% 17% 9% 2016 8% 4% 12% 8% 2017 5% 4% 0% 0% 2018 0% 3% 0% 0% Cumulative (10-year) 196% 156% 195% 156% Pathways to Lasting Solutions (Note: cumulative revenue increase – or rates across all classes) ---PAGE BREAK--- Financial Plan Supports a Water and Financial Plan Supports a Water and W t t CIP f $85 650 000 W t t CIP f $85 650 000 Financial Plan Supports a Water and Financial Plan Supports a Water and W t t CIP f $85 650 000 W t t CIP f $85 650 000 Wastewater CIP of $85,650,000 Wastewater CIP of $85,650,000 (2009 Dollars) (2009 Dollars) Wastewater CIP of $85,650,000 Wastewater CIP of $85,650,000 (2009 Dollars) (2009 Dollars) ( ) ( ) ( ) ( ) Pathways to Lasting Solutions ---PAGE BREAK--- CIP Projects Map CIP Projects Map CIP Projects Map CIP Projects Map Pathways to Lasting Solutions ---PAGE BREAK--- Overview of Overview of Cost Cost ofof Service Service & Rate Design Process & Rate Design Process Overview of Overview of Cost Cost ofof Service Service & Rate Design Process & Rate Design Process Cost Cost-ofof-Service Service & Rate Design Process & Rate Design Process Cost Cost-ofof-Service Service & Rate Design Process & Rate Design Process Pathways to Lasting Solutions 9 ---PAGE BREAK--- Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Financial Model Demonstration Pathways to Lasting Solutions ---PAGE BREAK--- Rate Design Rate Design Rate Design Rate Design Rate Design Rate Design Rate Design Rate Design Pathways to Lasting Solutions ---PAGE BREAK--- Water Rate Making Industry Standards Water Rate Making Industry Standards References References Water Rate Making Industry Standards Water Rate Making Industry Standards References References References References References References Principles of Water Rates and Fees p Manual M1 American Water Works Association, Fifth Edition, 2000 Water Rates, Fees, and the Legal Environment American Water Works Association American Water Works Association, 2005 Developing Rates for Small Systems Manual 54 Systems Manual 54 American Water Works Association, 2004 Pathways to Lasting Solutions ---PAGE BREAK--- Rate Design/Pricing Structure Continuum Rate Design/Pricing Structure Continuum Rate Design/Pricing Structure Continuum Rate Design/Pricing Structure Continuum Existing Uniform Rate Structure Inclining Block Rate Structure (residential) CONSERVATION ORIENTATION Pathways to Lasting Solutions Less More CONSERVATION ORIENTATION AND COMPLEXITY ---PAGE BREAK--- How Many Blocks? How Many Blocks? How Many Blocks? How Many Blocks? y • The American Water Works Association M1 Manual of Water Supply Practices “Principles of Water Rates Water Supply Practices Principles of Water Rates, Fees, and Charges” acknowledges that “no standard number or size of the blocks exists, nor is there a standard for how steeply the unit charges for each of the blocks increase.” • Generally increasing block consumption thresholds Generally, increasing block consumption thresholds change in proportion to the customer’s meter capacity, expected consumption, or other verifiable t d d standard. Pathways to Lasting Solutions ---PAGE BREAK--- Current and Proposed Current and Proposed Customer Classes Customer Classes Water Water Current and Proposed Current and Proposed Customer Classes Customer Classes Water Water Customer Classes Customer Classes – Water Water Customer Classes Customer Classes – Water Water Current Structure Uniform Water Rate Inside City / Outside City Differential Proposed Structure Proposed Structure Residential Increasing Block (either 2 block or 4 block) Commercial (uniform for class) Commercial (uniform for class) Irrigation (uniform for class) Wholesale (uniform for class) Inside City / Outside City Differentials Pathways to Lasting Solutions ---PAGE BREAK--- Current Customer Classes Current Customer Classes – Sewer Sewer No Rate No Rate Structure Structure Change Proposed Change Proposed Current Customer Classes Current Customer Classes – Sewer Sewer No Rate No Rate Structure Structure Change Proposed Change Proposed No Rate No Rate Structure Structure Change Proposed Change Proposed No Rate No Rate Structure Structure Change Proposed Change Proposed Residential Commercial & University CA - Restaurants CB - Bars & Taverns CC E i & S i UC U i i F d S i CC - Entertainment & Service ; UC – University Food Service CD - Laundries, Schools & Stores CE - Office Buildings; UE – University School Buildings CF - Hotels & Motels CF Hotels & Motels CG - Hospitals, Athletic Clubs, Apt, Daycares; UG – University Dorms, Residences Wholesale Pathways to Lasting Solutions ---PAGE BREAK--- Example: Water Tier Design Example: Water Tier Design Example: Water Tier Design Example: Water Tier Design p g p g p g p g Cheyenne Example Tier Widths Reflect Customer Class & Size Pathways to Lasting Solutions Tier Widths Reflect Customer Class & Size ---PAGE BREAK--- Proposed Rates Proposed Rates Proposed Rates Proposed Rates Proposed Rates Proposed Rates Proposed Rates Proposed Rates Pathways to Lasting Solutions ---PAGE BREAK--- Who Pays? Who Pays? Who Pays? Who Pays? y City staff expressed a preference for “cost of service” rates for each enterprise. Red Oak designed tiered water conservation Red Oak designed tiered water conservation rates Two-block Four-block Customer impact increases as consumption increases All of the rates presented today are DRAFT and subject to change following internal quality Pathways to Lasting Solutions subject to change following internal quality control review. ---PAGE BREAK--- Current and Proposed Water Base Fees Current and Proposed Water Base Fees Test Year 2010 Test Year 2010 Current and Proposed Water Base Fees Current and Proposed Water Base Fees Test Year 2010 Test Year 2010 Test Year 2010 Test Year 2010 Test Year 2010 Test Year 2010 Meter Size Current Proposed FY 2010 FY 2010 ¾” $ 13.67 $ 17.91 1” $ 22.97 $ 28.11 1 ½” $ 45.22 $ 51.20 2” $ 73.21 $ 80.01 3” $ 136.39 $ 153.47 4” $ 227.53 $ 253.58 $ 455 14 $ 493 29 6” $ 455.14 $ 493.29 8” $ 727.94 $ 761.39 * Waterline replacement program charge of $4.24 is assessed to Pathways to Lasting Solutions a e e ep ace e p og a o y c a ge o $ s assessed o each meter in addition to the base charge under the current fee. ---PAGE BREAK--- Current and Alternative 1: Four Current and Alternative 1: Four-Tier Tier Proposed Water Metered Fees Proposed Water Metered Fees Current and Alternative 1: Four Current and Alternative 1: Four-Tier Tier Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Meter Size Current Proposed FY 2010 FY 2010 Residential First 3,000 gallons $ 2.30 $ 2.30 Next 3,000 gallons $ 2.30 $ 2.88 Next 9,000 gallons $ 2.30 $ 3.60 $ 2 30 $ 4 50 Over 15,000 gallons $ 2.30 $ 4.50 Commercial $ 2.30 $ 2.81 University $ 2 30 $ 3 08 University $ 2.30 $ 3.08 Wholesale $ 2.30 $ 2.70 Irrigation $ 2.30 $ 5.14 Pathways to Lasting Solutions gat o * Outside city customers metered fees are 1.25 times greater than inside city customer metered fees. ---PAGE BREAK--- Current and Alternative 2: Two Current and Alternative 2: Two-Tier Tier Proposed Water Metered Fees Proposed Water Metered Fees Current and Alternative 2: Two Current and Alternative 2: Two-Tier Tier Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Proposed Water Metered Fees Meter Size Current Proposed FY 2010 FY 2010 Residential First 6,000 gallons $ 2.30 $ 2.85 Over 6,000 gallons $ 2.30 $ 3.56 Commercial $ 2.30 $ 2.81 $ $ University $ 2.30 $ 3.08 Wholesale $ 2.30 $ 2.70 Irrigation $ 2 30 $ 5 14 Irrigation $ 2.30 $ 5.14 * Outside city customers metered fees are 1.25 times greater than inside city customer metered fees Pathways to Lasting Solutions city customer metered fees. ---PAGE BREAK--- Current and Proposed Residential Current and Proposed Residential Wastewater Rates Wastewater Rates Current and Proposed Residential Current and Proposed Residential Wastewater Rates Wastewater Rates Wastewater Rates Wastewater Rates Wastewater Rates Wastewater Rates Charge Current Amount Proposed FY 2010 Charge Current Amount Proposed FY 2010 Base Fee – All Meter Sizes $ 9.83 $12.97 Consumption $2 22 per 1 000 $2 61 per 1 000 Consumption Charge* $2.22 per 1,000 gallons $2.61 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. Pathways to Lasting Solutions ---PAGE BREAK--- Current and Proposed FY 2010 Current and Proposed FY 2010 Commercial Wastewater Rates Commercial Wastewater Rates Current and Proposed FY 2010 Current and Proposed FY 2010 Commercial Wastewater Rates Commercial Wastewater Rates Commercial Wastewater Rates Commercial Wastewater Rates Commercial Wastewater Rates Commercial Wastewater Rates Charge Description Current Proposed Base Rate $9.83 $12.97 Base Rate $9.83 $12.97 Consumption Rate CA Restaurants $ 3.73 $ 4.50 CB B & T $ 4 75 $ 5 20 CB Bars & Taverns $ 4.75 $ 5.20 CC Entertainment & Service $ 3.55 $ 3.65 CD Laundries, Schools & $3.23 $ 3.50 Stores CE Office Buildings $ 2.98 $ 3.07 CF Hotels & Motels $ 2.59 $ 3.20 CG Hospitals, Athletic Clubs, Apt, Daycares, Dorms, Residences $2.21 $ 2.59 Pathways to Lasting Solutions ---PAGE BREAK--- C stomer Bill Impacts C stomer Bill Impacts C stomer Bill Impacts C stomer Bill Impacts Customer Bill Impacts Customer Bill Impacts Customer Bill Impacts Customer Bill Impacts Pathways to Lasting Solutions ---PAGE BREAK--- Residential Bill Impact Residential Bill Impact Water and Sewer Combined Water and Sewer Combined 2010 2010 Residential Bill Impact Residential Bill Impact Water and Sewer Combined Water and Sewer Combined 2010 2010 Water and Sewer Combined Water and Sewer Combined - 2010 2010 Water and Sewer Combined Water and Sewer Combined - 2010 2010 Pathways to Lasting Solutions 1,000 gallons ---PAGE BREAK--- Residential Bill Impact Residential Bill Impact Water and Sewer Combined Water and Sewer Combined 2010 2010 Residential Bill Impact Residential Bill Impact Water and Sewer Combined Water and Sewer Combined 2010 2010 Water and Sewer Combined Water and Sewer Combined - 2010 2010 Water and Sewer Combined Water and Sewer Combined - 2010 2010 Pathways to Lasting Solutions 1,000 gallons ---PAGE BREAK--- Committee Disc ssion and G idance Committee Disc ssion and G idance Committee Disc ssion and G idance Committee Disc ssion and G idance Committee Discussion and Guidance Committee Discussion and Guidance Committee Discussion and Guidance Committee Discussion and Guidance Pathways to Lasting Solutions ---PAGE BREAK--- For Additional Information Contact For Additional Information Contact For Additional Information Contact For Additional Information Contact Dennis Jackson Dennis Jackson Project Manager [EMAIL REDACTED] Isalah Rounds Red Oak Consulting - Denver 100 Fillmore Street Suite 200 Isalah Rounds Analyst [EMAIL REDACTED] John Gallagher 100 Fillmore Street, Suite 200 Denver, CO 80206 Phone: (303) 316-6500 F (303) 316 6599 John Gallagher Principal, Quality Assurance [EMAIL REDACTED] Fax: (303) 316-6599 Pathways to Lasting Solutions