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Water and Wastewater Rate Study Water and Wastewater Rate Study City Council Work Session City Council Work Session City Council Work Session City Council Work Session May 14, 2009 Pathways to Lasting Solutions © 2008 Malcolm Pirnie, Inc. All Rights Reserved ---PAGE BREAK--- Agenda Agenda Agenda Agenda g 1. Background / Objectives g j 2. Financial Plan Key Issues Facing the Utilities Stakeholder Involvement 3. Cost of Service Analysis 4 Rate Design / Proposed Rates 4. Rate Design / Proposed Rates 5. Impact on Customers 6. Closing Discussion g 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--- Background Background Background Background g Water & Sewer Enterprise Funds are self-sufficient Examine the utilities as separate enterprise operations, and establish the future revenue requirements for each utility requirements for each utility. Develop a projection of cash flow and debt service coverage for the combined utilities over a ten-year study period. Study included three phases Phase I - Prepare Financial Plan Phase II - Cost of Service Analysis Phase III - Design Rates Pathways to Lasting Solutions Phase III - Design Rates ---PAGE BREAK--- Today’s Objectives Today’s Objectives – Guidance from Council Guidance from Council Today’s Objectives Today’s Objectives – Guidance from Council Guidance from Council Guidance from Council Guidance from Council Guidance from Council Guidance from Council Review the rate study fundamentals Review the rate study fundamentals Policy direction on the timing and magnitude of revenue increases of revenue increases Operation & Maintenance Expenses Capital and Financing Plan p g Policy direction on cost of service rates Policy direction on rate design Policy direction on rate design Two or Four Block rates Pathways to Lasting Solutions ---PAGE BREAK--- 10 10 YEAR FINANCIAL PLAN YEAR FINANCIAL PLAN 10 10 YEAR FINANCIAL PLAN YEAR FINANCIAL PLAN 10 10-YEAR FINANCIAL PLAN YEAR FINANCIAL PLAN 10 10-YEAR FINANCIAL PLAN YEAR FINANCIAL PLAN 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 7 ---PAGE BREAK--- Financial Plan Summary Financial Plan Summary Financial Plan Summary Financial Plan Summary Findings summarized in May 5, 2009 Memorandum. g y , 10-year study period Cash flow of revenue and revenue requirements Reserves Operating Fund Capital Fund Capital Fund Annual revenue adjustments Debt service coverage g Pathways to Lasting Solutions ---PAGE BREAK--- Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility Revenue Requirements for Each Utility D l i t f 10 t d Develop revenue requirements for a 10-year study period for water and wastewater operations Identify the level and timing of replacement funding Identify the level and timing of replacement funding options Recognize saving for aging infrastructure needs g g g g Identify loans required - update the cash flow analysis Pathways to Lasting Solutions ---PAGE BREAK--- Assumptions: Beginning Balances Assumptions: Beginning Balances Assumptions: Beginning Balances Assumptions: Beginning Balances p g g p g g p g g p g g Description Water Wastewater p Unrestricted Cash $6,369,268 $3,719,839 Accrued Vacation Pay (99,572) (34,810) One Year Annual Debt Service Payments (1,384,000) (931,000) 90 Days of O&M Expenses (868 000) (470 000) 90 Days of O&M Expenses (868,000) (470,000) Investments (restricted) (393,800) (1,000,000) One Percent of Fixed Assets (720 000) (313 000) One Percent of Fixed Assets (720,000) (313,000) Total Beginning Fund Balances $2,903,869 $971,029 Pathways to Lasting Solutions ---PAGE BREAK--- Assumptions (cont.) Assumptions (cont.) Assumptions (cont.) Assumptions (cont.) p ( ) p ( ) p ( ) p ( ) Growth rate: 0.5% per year I fl ti Inflation O&M expenses: 3.5% Routine capital, including vehicles: 4.0% CIP 10% CIP: 10% Proposed bonds: 20 year, 5.0% Proposed state loans: 20 year, 4.0% Investment income: 0.5% Targeted Reserves Operating Fund: 90 days of O&M expenses p g y p Capital Fund: 1% of fixed assets Pathways to Lasting Solutions ---PAGE BREAK--- Financial Planning Financial Planning – Revenue Sufficiency Revenue Sufficiency Financial Planning Financial Planning – Revenue Sufficiency Revenue Sufficiency g y g y Revenue must be sufficient: To meet O&M, debt service, and capital requirements q To meet established cash reserve or fund balance targets balance targets To meet debt service coverage requirements year, over a 10-year period Pathways to Lasting Solutions ---PAGE BREAK--- Capital Funding Capital Funding Capital Funding Capital Funding p g p g p g p g Types of capital needs: Types of capital needs: Growth Needs: New demand System expansion Renewal and Replacement Needs: Provide for greater efficiency or system redundancy Provide for greater efficiency or system redundancy Replace assets that become obsolete, wear out or otherwise exceed their useful life Pathways to Lasting Solutions ---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--- Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing Sources of Capital Financing U f User fees Federal, State grants and loans Specific Purpose Tax Specific Purpose Tax Bonding Plant investment fees Business Council, or other sources Pathways to Lasting Solutions ---PAGE BREAK--- Financial Forecast With Existing Financial Forecast With Existing Revenues (Rates) Revenues (Rates) Financial Forecast With Existing Financial Forecast With Existing 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% 2011 17% 18% 2012 17% 17% 2012 17% 17% 2013 17% 17% Cumulative (5-year) 91% 92% 2014 17% 17% 2015 17% 17% 2016 8% 12% 2017 5% 0% 2018 0% 0% Cumulative (10-year) 196% 195% Pathways to Lasting Solutions (Note: cumulative revenue increase – or rates as if applied across all classes) ---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--- KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND INCLUDED IN THE FINANCIAL PLAN INCLUDED IN THE FINANCIAL PLAN KEY ISSUES FACING THE UTILITIES AND KEY ISSUES FACING THE UTILITIES AND INCLUDED IN THE FINANCIAL PLAN INCLUDED IN THE FINANCIAL PLAN Pathways to Lasting Solutions ---PAGE BREAK--- Key Issues Key Issues Key Issues Key Issues y Indirect Cost Reimbursement to the General Fund the General Fund Monolith Ranch Expenses Communications Communications Renewal and Replacement of Infrastructure Infrastructure Number of utility personnel (or “Employee Efficiency”) ( p y y ) Pathways to Lasting Solutions ---PAGE BREAK--- Indirect Cost Reimbursement Indirect Cost Reimbursement Indirect Cost Reimbursement Indirect Cost Reimbursement Enterprise Fund Indirect Expenses Indirect Expenses Enterprise Fund (City) (Red Oak) Water – Indirects Water – Usage Water Net $187,100 $450,347 (365,226) $85 121 Water - Net $85,121 Wastewater $102,700 $255,126 Total $289,800 $340,247 Similar utilities typically pay between 8 and 15 percent of the general fund internal services budget Pathways to Lasting Solutions ---PAGE BREAK--- Monolith Ranch Monolith Ranch Monolith Ranch Monolith Ranch The purpose of the ranch is to secure a long-term reliable water supply water supply Available water from the ranch (various rights, approximate): 30 cfs (21,700 AFA) agricultural 15 cfs (10,800 AFA) municipal (50% conversion) Based on water rights valuations in comparable western states, water rights value between $10,000 and $40,000 per f ll (AFA) acre foot annually (AFA) Comparable value of $100,800,000 (at $10,000 per AFA) Red Oak included $275,000 in FY2009 and increasing to $546,000 over the study period to operate the ranch. “Insurance” or the cost of ownership - between 0.2% and 0.5% of the value. Pathways to Lasting Solutions ---PAGE BREAK--- Communication Communication Communication Communication City is developing a i ti communication strategy. City and Red Oak will City and Red Oak will prepare a City website to communicate findings findings. Other communication programs. p g Pathways to Lasting Solutions ---PAGE BREAK--- UTILITY PERFORMANCE UTILITY PERFORMANCE – UTILITY PERFORMANCE UTILITY PERFORMANCE – BENCHMARKS BENCHMARKS BENCHMARKS BENCHMARKS Pathways to Lasting Solutions ---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--- Renewal and Replacement Renewal and Replacement - Water Water Renewal and Replacement Renewal and Replacement - Water Water p $14,000,000 $8,000,000 $10,000,000 $12,000,000 $ $4,000,000 $6,000,000 $2,000,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Median Benchmark Median - Benchmark City of Laramie, Distribution System Investment Minimum - Benchmark Pathways to Lasting Solutions ---PAGE BREAK--- Renewal and Replacement Renewal and Replacement - Wastewater Wastewater Renewal and Replacement Renewal and Replacement - Wastewater Wastewater p $4 500 000 $5,000,000 C1 Line Re nolds 30th McConnell $3,000,000 $3,500,000 $4,000,000 $4,500,000 C1-Line Reynolds 30th - McConnell C-Line 15 Kearney N. Canby West Laramie Outfall $1,000,000 $1,500,000 $2,000,000 $2,500,000 $500,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 City of Laramie Collection System Investment City of Laramie, Collection System Investment Minimum - Benchmark Median - Benchmark Pathways to Lasting Solutions ---PAGE BREAK--- Renewal and Replacement Renewal and Replacement - Overview Overview Renewal and Replacement Renewal and Replacement - Overview Overview p Current Renewal and Replacement Charge: $4.24 per account Generates approximately $400,000 annually Not based on cost of service Insufficient to fund renewal and replacement needs needs. Equivalent to fund approximately $5 million in new debt issuance. Pathways to Lasting Solutions ---PAGE BREAK--- Financial Plan Supports Financial Plan Supports 11 Additional Employees 11 Additional Employees Financial Plan Supports Financial Plan Supports 11 Additional Employees 11 Additional Employees 11 Additional Employees 11 Additional Employees 11 Additional Employees 11 Additional Employees Year Water Utility Additi l FTE Wastewater Utility Additi l FTE ea Additional FTEs Additional FTEs 2009-10 1.0 1.0 2010-11 0 0 1 0 2010-11 0.0 1.0 2011-12 0.0 1.0 2012-13 1.0 1.0 2013-14 0 0 1 0 2013 14 0.0 1.0 2014-15 0.0 1.0 2015-16 1.0 1.0 2016-17 0.0 0.0 0 6 7 0.0 0.0 2017-18 1.0 0.0 2018-19 0.0 0.0 Total 4.0 7.0 Pathways to Lasting Solutions ---PAGE BREAK--- Employee Efficiency Employee Efficiency – Water Water Customer Accounts per Employee Customer Accounts per Employee Employee Efficiency Employee Efficiency – Water Water Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee 500 400 450 350 [PHONE REDACTED] 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Median Accounts - Benchmark City Customer Accounts per Water Employee Pathways to Lasting Solutions Minimum Accounts - Benchmark ---PAGE BREAK--- Employee Efficiency Employee Efficiency – Sewer Sewer Customer Accounts per Employee Customer Accounts per Employee Employee Efficiency Employee Efficiency – Sewer Sewer Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee Customer Accounts per Employee 650 700 500 550 600 350 400 450 [PHONE REDACTED] 2010 2011 2012 2013 2014 2015 2016 2017 2018 Median Benchmark Median - Benchmark City Customer Accounts per Employee Minimum - Benchmark Pathways to Lasting Solutions ---PAGE BREAK--- Levels of Service Levels of Service Levels of Service Levels of Service No single right answer These are “level of service” These are level of service questions What level of service is best for the City? Pressure, Fire flow Unplanned outages (reactive) Unplanned outages (reactive) Line breaks Regulatory compliance Does one benchmark (capital investment) allow for some offset of other benchmarks Pathways to Lasting Solutions (employees)? ---PAGE BREAK--- E R L k E R L k E R L k E R L k Emergency Response Leaks Emergency Response Leaks Emergency Response Leaks Emergency Response Leaks 140 160 180 80 100 120 140 20 40 60 80 Water Leaks/Year 0 20 2004 2005 2006 2007 2008 2009 * Pathways to Lasting Solutions ---PAGE BREAK--- STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT STAKEHOLDER INVOLVEMENT Pathways to Lasting Solutions ---PAGE BREAK--- Stakeholder Meeting Schedule Stakeholder Meeting Schedule Stakeholder Meeting Schedule Stakeholder Meeting Schedule g Meeting Financial Plan – April 9, 2009 Meeting Cost of Service – April 30, 2009 Meeting Rate Design May 7 2009 Meeting Rate Design – May 7, 2009 Pathways to Lasting Solutions ---PAGE BREAK--- Stakeholder Discussions Stakeholder Discussions Stakeholder Discussions Stakeholder Discussions Monolith Ranch – cost of water “insurance”? Maintain the renewal and replacement charge? Maintain the renewal and replacement charge? Are the level of service goals appropriate? How should service levels be communicated? How should service levels be communicated? “true cost of service” rates for each enterprise? Prepared to charge University accounts more? p g y Should the City have an irrigation class? Maintain sewer rate classes? How do we handle multi-family accounts? Pathways to Lasting Solutions ---PAGE BREAK--- Cost of Ser ice Anal sis Cost of Ser ice Anal sis Cost of Ser ice Anal sis Cost of Ser ice Anal sis Cost of Service Analysis Cost of Service Analysis Cost of Service Analysis Cost of Service Analysis 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 39 ---PAGE BREAK--- Rate Making Industry Standards Rate Making Industry Standards References References Rate Making Industry Standards 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--- Customer Customer Characteristics Characteristics - Water Water Customer Customer Characteristics Characteristics - Water Water Pipe schematic - Rachel Pipe schematic Rachel Pathways to Lasting Solutions ---PAGE BREAK--- Customer Characteristics Customer Characteristics - Sewer Sewer Customer Characteristics Customer Characteristics - Sewer Sewer Volume IPP Strength Test Year 2010 Customer Volume O&M Capital Debt Service Pathways to Lasting Solutions Other ---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 rates Red Oak designed tiered water conservation rates Two-block Four-block Four block Customer impact increases as consumption increases All of the rates presented today are DRAFT and subject to change following policy direction from Council Pathways to Lasting Solutions Council. ---PAGE BREAK--- PROPOSED RATES PROPOSED RATES PROPOSED RATES PROPOSED RATES PROPOSED RATES PROPOSED RATES PROPOSED RATES PROPOSED RATES 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) L CONSERVATION ORIENTATION Pathways to Lasting Solutions Less More CONSERVATION ORIENTATION AND COMPLEXITY ---PAGE BREAK--- Example: Water Block Rate Design Example: Water Block Rate Design Example: Water Block Rate Design Example: Water Block Rate Design p g p g p g p g Cheyenne Example Volume in Each Block Reflects Customer Class Characteristics Pathways to Lasting Solutions ---PAGE BREAK--- How Many Blocks or Tiers? How Many Blocks or Tiers? How Many Blocks or Tiers? How Many Blocks or Tiers? 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.” 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 by Block (either 2 block or 4 block) Multifamily (uniform for class) Multifamily (uniform for class) Commercial (uniform for class) Irrigation (uniform for class) Wholesale (uniform for class) Inside City / Outside City Differential 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--- 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 $ 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 $ 455 14 $ 539 50 6” $ 455.14 $ 539.50 8” $ 727.94 $ 827.60 * Waterline replacement program charge of $4.24 is assessed to h t i dditi t th b h d th t f Pathways to Lasting Solutions 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 Residential First 3,000 gallons $ 2.30 $ 3.03 Next 3 000 gallons $ 2 30 $ 3 23 Next 3,000 gallons $ 2.30 $ 3.23 Next 9,000 gallons $ 2.30 $ 3.45 Over 15,000 gallons $ 2.30 $ 3.71 Multifamily $ 2.30 $ 2.77 Commercial $ 2.30 $ 2.84 University $ 2.30 $ 2.92 Wholesale $ 2.30 $ 3.62 Irrigation $ 2.30 $ 3.71 Pathways to Lasting Solutions * 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 $ 3.23 Over 6,000 gallons $ 2.30 $ 3.45 Multifamily $ 2.30 $ 2.77 $ $ Commercial $ 2.30 $ 2.84 University $ 2.30 $ 2.92 Wh l l $ 2 30 $ 3 62 Wholesale $ 2.30 $ 3.62 Irrigation $ 2.30 $ 3.45 * Outside city customers metered fees are 1 25 times greater than inside Pathways to Lasting Solutions * Outside city customers metered fees are 1.25 times greater than inside 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 $11.80 Consumption $2 22 per 1 000 $2 87 per 1 000 Consumption Charge* $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. 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 $11.80 Base Rate $9.83 $11.80 Consumption Rate CA Restaurants $ 3.73 $ 5.03 CB B & T $ 4 75 $ 5 79 CB Bars & Taverns $ 4.75 $ 5.79 CC Entertainment & Service $ 3.55 $ 3.87 CD Laundries, Schools & $3.23 $ 3.77 Stores 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 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 EXAMPLE EXAMPLE 2010 2010 Residential Bill Impact Residential Bill Impact EXAMPLE EXAMPLE 2010 2010 EXAMPLE EXAMPLE - 2010 2010 EXAMPLE EXAMPLE - 2010 2010 Pathways to Lasting Solutions 1,000 gallons ---PAGE BREAK--- Residential Bill Impact Residential Bill Impact EXAMPLE EXAMPLE 2010 2010 Residential Bill Impact Residential Bill Impact EXAMPLE EXAMPLE 2010 2010 EXAMPLE EXAMPLE - 2010 2010 EXAMPLE EXAMPLE - 2010 2010 Pathways to Lasting Solutions 1,000 gallons ---PAGE BREAK--- Comparison of Median Residential Comparison of Median Residential M hl Bill M hl Bill Bl k* Bl k* Comparison of Median Residential Comparison of Median Residential M hl Bill M hl Bill Bl k* Bl k* Bills Bills – 4 Block* 4 Block* Bills Bills – 4 Block* 4 Block* $43.60 $51.83 Pathways to Lasting Solutions * ¾ inch meter – water bill based on 4,000 gals. Sewer bill based on 3,000 gals. ---PAGE BREAK--- Comparison of Median Residential Comparison of Median Residential M hl Bill M hl Bill 2 Bl k* 2 Bl k* Comparison of Median Residential Comparison of Median Residential M hl Bill M hl Bill 2 Bl k* 2 Bl k* Bills Bills – 2 Block* 2 Block* Bills Bills – 2 Block* 2 Block* $43.60 $52.43 Pathways to Lasting Solutions * ¾ inch meter – water bill based on 4,000 gals. Sewer bill based on 3,000 gals. ---PAGE BREAK--- Discussion and Guidance Discussion and Guidance Discussion and Guidance Discussion and Guidance Policy direction on the timing and magnitude of revenue increases Operation & Maintenance Expenses Capital and Financing Plan Capital and Financing Plan Policy direction on cost of service rates Policy direction on rate design Two Block or Four Block rates 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 John Gallagher Principal, Quality Assurance [EMAIL REDACTED] ( ) Fax: (303) 316-6599 Pathways to Lasting Solutions