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City of Puyallup y y p Rate Schedule Options October 19, 2010 ---PAGE BREAK--- Summary of Rate Schedule Alternatives 1. 1. 1. 1. Proposed rates presented at City Council work Proposed rates presented at City Council work Proposed rates presented at City Council work Proposed rates presented at City Council work session Oct 12 session Oct 12 session Oct 12 session Oct 12th th th th 2. 2. 2. 2. Alternative 1 Alternative 1 Alternative 1 Alternative 1 – Councilmember Malloy’s Councilmember Malloy’s Councilmember Malloy’s Councilmember Malloy’s suggestion to reverse the percent increases suggestion to reverse the percent increases suggestion to reverse the percent increases suggestion to reverse the percent increases – lowest to highest lowest to highest lowest to highest lowest to highest 2 g 3. 3. 3. 3. Alternative 2 Alternative 2 Alternative 2 Alternative 2 – CPI + CPI + CPI + CPI + to gradually move toward replacement cost Projected CPI for 2011 – 2013 from the State Economic Forecast, Sept. 2010 Estimated CPI for 2014 – 2016 provided by City Finance Director Actual CPI will be used for rates; estimated CPI is presented here for informational purposes Year CPI 2011 1.6 2012 1.8 2013 2.2 2014 2.0 2015 2.5 2016 3.0 Year CPI 2011 1.6 2012 1.8 2013 2.2 2014 2.0 2015 2.5 2016 3.0 ---PAGE BREAK--- Trade-offs Between Rate Options Alternative 1 generates less revenue for each Alternative 1 generates less revenue for each Alternative 1 generates less revenue for each Alternative 1 generates less revenue for each utility (than rate study proposed rates) utility (than rate study proposed rates) utility (than rate study proposed rates) utility (than rate study proposed rates) Less funds to meet minimum reserves Less funds to meet minimum reserves Less funds to meet minimum reserves Less funds to meet minimum reserves – all all all all utilities utilities utilities utilities Less funds for capital in Sewer and SSW, Less funds for capital in Sewer and SSW, Less funds for capital in Sewer and SSW, Less funds for capital in Sewer and SSW, 3 especially impacting Sewer especially impacting Sewer especially impacting Sewer especially impacting Sewer Alternative 2 Alternative 2 Alternative 2 Alternative 2 – generates the least revenue for generates the least revenue for generates the least revenue for generates the least revenue for all utilities, except water all utilities, except water all utilities, except water all utilities, except water Sewer and SSW Sewer and SSW Sewer and SSW Sewer and SSW – Less funds to meet minimum Less funds to meet minimum Less funds to meet minimum Less funds to meet minimum reserves reserves reserves reserves Sewer and SSW Sewer and SSW Sewer and SSW Sewer and SSW - Less funds for capital than Less funds for capital than Less funds for capital than Less funds for capital than Alternative 1 and rate study proposed rates Alternative 1 and rate study proposed rates Alternative 1 and rate study proposed rates Alternative 1 and rate study proposed rates ---PAGE BREAK--- Summary of the Water, Sewer, SSW Rate Study Proposed Rate Adjustments Present Bill 2011 2012 2013 2014 2015 2016 AVERAGE RESIDENTIAL BILLING Water (5/8" meter; 8 ccf) $20.85 $21.68 $22.55 $23.90 $25.33 $26.47 $27.66 Sewer (8 ccf) 53.77 57.53 61.56 65.69 68.97 71.73 74.60 Storm and Surface Water 10.45 11.07 11.79 12.68 13.63 14.65 15.38 Total Ave. Res. Bill $85.06 $90.28 $95.90 $102.26 $107.93 $112.85 $117.64 REVENUE REQUIREMENT RESULTS 4 Presented October 12th at Council work session AVERAGE RESIDENTIAL CHANGE Water $0.00 $0.83 $0.87 $1.35 $1.43 $1.14 $1.19 Sewer 0.00 3.76 4.03 4.12 3.28 2.76 2.87 Storm and Surface Water 0.00 0.63 0.72 0.88 0.95 1.02 0.73 Total $ Change per Month $0.00 $5.22 $5.61 $6.36 $5.67 $4.92 $4.79 BILL Water (5/8" meter; 16 ccf) $41.69 $43.36 $45.09 $47.80 $50.67 $52.95 $55.33 Sewer (16 ccf) 107.54 115.07 123.12 131.37 137.94 143.46 149.20 Storm and Surface Water 20.89 22.14 23.58 25.35 27.25 29.30 30.76 Total Ave. Res. Bill $170.12 $180.57 $191.80 $204.52 $215.86 $225.70 $235.29 ---PAGE BREAK--- Alternative 1 Rates– Lower to Higher Percentage Increases Present Bill 2011 2012 2013 2014 2015 2016 AVERAGE RESIDENTIAL BILLING Water (5/8" meter; 8 ccf) $20.85 $21.68 $22.55 $23.56 $24.62 $26.10 $27.66 Sewer (8 ccf) 53.77 55.92 58.16 61.07 65.16 69.72 74.60 Storm and Surface Water 10.45 10.97 11.63 12.38 13.31 14.31 15.38 Total Ave. Res. Bill $85.06 $88.57 $92.33 $97.01 $103.09 $110.12 $117.64 ALTERNATIVE 1 - REVERSE % INCREASES 5 Less funds available for CIP in sewer and storm (SSW) AVERAGE RESIDENTIAL CHANGE Water $0.00 $0.83 $0.87 $1.01 $1.06 $1.48 $1.57 Sewer 0.00 2.15 2.24 2.91 4.09 4.56 4.88 Storm and Surface Water 0.00 0.52 0.66 0.76 0.93 1.00 1.07 Total $ Change per Month $0.00 $3.51 $3.76 $4.68 $6.08 $7.04 $7.52 BILL Water (5/8" meter; 16 ccf) $41.69 $43.36 $45.09 $47.12 $49.24 $52.20 $55.33 Sewer (16 ccf) 107.54 111.84 116.32 122.13 130.31 139.44 149.20 Storm and Surface Water 20.89 21.93 23.25 24.76 26.62 28.62 30.76 Total Ave. Res. Bill $170.12 $177.13 $184.66 $194.01 $206.17 $220.25 $235.29 ---PAGE BREAK--- Alternative 2 Rates– CPI + 3% Present Bill 2011 2012 2013 2014 2015 2016 AVERAGE RESIDENTIAL BILLING Water (5/8" meter; 8 ccf) $20.85 $21.80 $22.85 $24.04 $25.24 $26.63 $28.23 Sewer (8 ccf) 53.77 56.24 58.94 62.01 65.11 68.69 72.81 Storm and Surface Water 10.45 10.93 11.45 12.05 12.65 13.34 14.14 Total Ave. Res. Bill $85.06 $88.97 $93.24 $98.09 $103.00 $108.66 $115.18 AVERAGE RESIDENTIAL CHANGE ALTERNATIVE 2 - CPI (ESTIMATED)+ 3% 6 AVERAGE RESIDENTIAL CHANGE Water $0.00 $0.96 $1.05 $1.19 $1.20 $1.39 $1.60 Sewer 0.00 2.47 2.70 3.07 3.10 3.58 4.12 Storm and Surace Water 0.00 0.48 0.52 0.60 0.60 0.70 0.80 Total $ Change per Month $0.00 $3.91 $4.27 $4.85 $4.90 $5.66 $6.52 BILL Water (5/8" meter; 16 ccf) $41.69 $43.61 $45.70 $48.08 $50.48 $53.26 $56.45 Sewer (16 ccf) 107.54 112.49 117.89 124.02 130.22 137.38 145.62 Storm and Surface Water 20.89 21.85 22.90 24.09 25.30 26.69 28.29 Total Ave. Res. Bill $170.12 $177.95 $186.49 $196.18 $205.99 $217.32 $230.36 Less funds available for CIP in sewer and stormwater (SSW) CPI is estimated to provide estimated rates; actual CPI will be applied each year for the following year’s rates. ---PAGE BREAK--- Summary of Rate Option Adjustments By Percentage 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustments from Rate Study Water 4.0% 4.0% 6.0% 6.0% 4.5% 4.5% Sewer 7.0% 7.0% 6.7% 5.0% 4.0% 4.0% Storm and Surface Water 6.0% 6.5% 7.5% 7.5% 7.5% 5.0% Alternative 1 - Lower to Higher Percentage Adjustments Water 4.0% 4.0% 4.5% 4.5% 6.0% 6.0% 7 These percentages applied to existing rate structure for all rate options Sewer 4.0% 4.0% 5.0% 6.7% 7.0% 7.0% Storm and Surface Water 5.0% 6.0% 6.5% 7.5% 7.5% 7.5% Alternative 2 - CPI (Estimated) plus 3% Water 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% Sewer 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% Storm and Surface Water 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% ---PAGE BREAK--- Water Rate Design – Rate Study Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.0% 4.0% 6.0% 6.0% 4.5% 4.5% Service Charge 5/8" Meter $13.97 $14.53 $15.11 $16.02 $16.98 $17.74 $18.54 3/4" Meter 15.08 15.68 16.31 17.29 18.33 19.15 20.01 1" Meter 19.31 20.08 20.89 22.14 23.47 24.52 25.63 1 1/2" Meter 24.84 25.83 26.87 28.48 30.19 31.55 32.97 2" Meter 40.29 41.90 43.58 46.19 48.96 51.17 53.47 3" Meter 105.71 109.94 114.34 121.20 128.47 134.25 140.29 4" M t 192 60 200 30 208 32 220 82 234 06 244 60 255 60 8 4" Meter 192.60 200.30 208.32 220.82 234.06 244.60 255.60 6" Meter 288.88 300.44 312.45 331.20 351.07 366.87 383.38 8" Meter 398.82 414.77 431.36 457.25 484.68 506.49 529.28 10" Meter 519.40 540.18 561.78 595.49 631.22 659.62 689.31 Disability/Low-Income Senior Discount $10.31 $10.72 $11.15 $11.82 $12.53 $13.09 $13.68 Service Charge (Multi-Family) Per Unit $10.48 $10.90 $11.34 $12.02 $12.74 $13.31 $13.91 Consumption - $/CCF Residential 0 - 10 ccf. $1.53 $1.59 $1.65 $1.75 $1.86 $1.94 $2.03 11 - 24 ccf 2.07 2.15 2.24 2.37 2.52 2.63 2.75 Over 24 ccf 2.77 2.88 3.00 3.18 3.37 3.52 3.68 Multi-Family 1.80 1.87 1.95 2.06 2.19 2.29 2.39 Commercial 2.15 2.24 2.33 2.46 2.61 2.73 2.85 Irrigation 2.15 2.24 2.33 2.46 2.61 2.73 2.85 ***Outside rates are subject to a 1 1/2 rate differential ---PAGE BREAK--- Water Alternative 1 Rates– Reverse % Increases Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.0% 4.0% 4.5% 4.5% 6.0% 6.0% Service Charge 5/8" Meter $13.97 $14.53 $15.11 $15.79 $16.50 $17.49 $18.54 3/4" Meter 15.08 15.68 16.31 17.04 17.81 18.88 20.01 1" Meter 19.31 20.08 20.89 21.83 22.81 24.18 25.63 1 1/2" Meter 24.84 25.83 26.87 28.08 29.34 31.10 32.97 2" Meter 40.29 41.90 43.58 45.54 47.59 50.44 53.47 3" Meter 105.71 109.94 114.34 119.48 124.86 132.35 140.29 4" Meter 192.60 200.30 208.32 217.69 227.49 241.14 255.60 9 4 Meter 192.60 200.30 208.32 217.69 227.49 241.14 255.60 6" Meter 288.88 300.44 312.45 326.51 341.21 361.68 383.38 8" Meter 398.82 414.77 431.36 450.78 471.06 499.32 529.28 10" Meter 519.40 540.18 561.78 587.06 613.48 650.29 689.31 Disability/Low-Income Senior Discount $10.31 $10.72 $11.15 $11.65 $12.18 $12.91 $13.68 Service Charge (Multi-Family) Per Unit $10.48 $10.90 $11.34 $11.85 $12.38 $13.12 $13.91 Consumption - $/CCF Residential 0 - 10 ccf. $1.53 $1.59 $1.65 $1.73 $1.81 $1.92 $2.03 11 - 24 ccf 2.07 2.15 2.24 2.34 2.44 2.59 2.75 Over 24 ccf 2.77 2.88 3.00 3.13 3.27 3.47 3.68 Multi-Family 1.80 1.87 1.95 2.03 2.13 2.25 2.39 Commercial 2.15 2.24 2.33 2.43 2.54 2.69 2.85 Irrigation 2.15 2.24 2.33 2.43 2.54 2.69 2.85 ***Outside rates are subject to a 1 1/2 rate differential ---PAGE BREAK--- Water Alternative 2 Rates– CPI + 3% Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% Service Charge 5/8" Meter $13.97 $14.61 $15.31 $16.11 $16.92 $17.85 $18.92 3/4" Meter 15.08 15.77 16.53 17.39 18.26 19.26 20.42 1" Meter 19.31 20.20 21.17 22.27 23.38 24.67 26.15 1 1/2" Meter 24.84 25.98 27.23 28.65 30.08 31.73 33.64 2" Meter 40.29 42.14 44.17 46.46 48.79 51.47 54.56 3" Meter 105.71 110.57 115.88 121.91 128.00 135.04 143.14 4" Meter 192.60 201.46 211.13 222.11 233.21 246.04 260.80 10 4 Meter 192.60 201.46 211.13 222.11 233.21 246.04 260.80 6" Meter 288.88 302.17 316.67 333.14 349.80 369.04 391.18 8" Meter 398.82 417.17 437.19 459.92 482.92 509.48 540.05 10" Meter 519.40 543.29 569.37 598.98 628.93 663.52 703.33 Disability/Low-Income Senior Discount $10.31 $10.78 $11.30 $11.89 $12.48 $13.17 $13.96 Service Charge (Multi-Family) Per Unit $10.48 $10.96 $11.49 $12.09 $12.69 $13.39 $14.19 Consumption - $/CCF Residential 0 - 10 ccf. $1.53 $1.60 $1.68 $1.76 $1.85 $1.95 $2.07 11 - 24 ccf 2.07 2.17 2.27 2.39 2.51 2.64 2.80 Over 24 ccf 2.77 2.90 3.04 3.19 3.35 3.54 3.75 Multi-Family 1.80 1.88 1.97 2.08 2.18 2.30 2.44 Commercial 2.15 2.25 2.36 2.48 2.60 2.75 2.91 Irrigation 2.15 2.25 2.36 2.48 2.60 2.75 2.91 ***Outside rates are subject to a 1 1/2 rate differential ---PAGE BREAK--- Sewer Rate Design – Rate Study Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 7.0% 7.0% 6.7% 5.0% 4.0% 4.0% Service Charge Residential $31.38 $33.58 $35.93 $38.33 $40.25 $41.86 $43.54 Multi-Family (Per Unit) * 23.54 25.19 26.95 28.76 30.19 31.40 32.66 Commercial 31.38 33.58 35.93 38.33 40.25 41.86 43.54 Disability/Low-income Senior Discount $13.56 $14.51 $15.52 $16.57 $17.39 $18.09 $18.81 11 No winter water averaging for commercial y Consumption - $/CCF Residential $4.76 $5.09 $5.45 $5.81 $6.11 $6.35 $6.60 Disability/Senior $4.76 5.09 5.45 5.81 6.11 6.35 6.60 Multi-Family $4.76 5.09 5.45 5.81 6.11 6.35 6.60 Commercial Strength Category 1 $4.76 $5.09 $5.45 $5.81 $6.11 $6.35 $6.60 Strength Category II $6.26 6.70 7.17 7.65 8.03 8.35 8.68 Strength Category III $7.38 7.90 8.45 9.02 9.47 9.84 10.24 Strength Category III w/Discount $6.72 7.19 7.69 8.21 8.62 8.96 9.32 *Multi-Family is 75% of residential rate. **Commercial customer consumption will not be averaged. ***Outside rates are subject to a 1 1/2 rate differential. ---PAGE BREAK--- Sewer Alternative 1 Rates– Reverse % Increases Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.0% 4.0% 5.0% 6.7% 7.0% 7.0% Service Charge Residential $31.38 $32.64 $33.94 $35.64 $38.03 $40.69 $43.54 Multi-Family (Per Unit) * 23.54 24.48 25.46 26.73 28.52 30.52 32.66 Commercial 31.38 32.64 33.94 35.64 38.03 40.69 43.54 Disability/Low-income Senior Discount $13.56 $14.10 $14.67 $15.40 $16.43 $17.58 $18.81 12 Consumption - $/CCF Residential $4.76 $4.95 $5.15 $5.41 $5.77 $6.17 $6.60 Disability/Senior $4.76 4.95 5.15 5.41 5.77 6.17 6.60 Multi-Family $4.76 4.95 5.15 5.41 5.77 6.17 6.60 Commercial Strength Category 1 $4.76 $4.95 $5.15 $5.41 $5.77 $6.17 $6.60 Strength Category II $6.26 6.51 6.77 7.11 7.59 8.12 8.68 Strength Category III $7.38 7.68 7.98 8.38 8.94 9.57 10.24 Strength Category III w/Discount $6.72 6.99 7.27 7.63 8.14 8.71 9.32 *Multi-Family is 75% of residential rate. **Commercial customer consumption will not be averaged. ***Outside rates are subject to a 1 1/2 rate differential. No winter water averaging for commercial Less CIP and reserve funding ---PAGE BREAK--- Sewer Alternative 2 Rates– CPI + 3% Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% Service Charge Residential $31.38 $32.82 $34.40 $36.19 $38.00 $40.09 $42.49 Multi-Family (Per Unit) * 23.54 24.62 25.80 27.15 28.50 30.07 31.87 Commercial 31.38 32.82 34.40 36.19 38.00 40.09 42.49 Disability/Low-income Senior Discount $13.56 $14.18 $14.86 $15.64 $16.42 $17.32 $18.36 ALTERNATIVE 2 13 No winter water averaging for commercial Less CIP and reserve funding Consumption - $/CCF Residential $4.76 $4.98 $5.22 $5.49 $5.76 $6.08 $6.45 Disability/Senior $4.76 4.98 5.22 5.49 5.76 6.08 6.45 Multi-Family $4.76 4.98 5.22 5.49 5.76 6.08 6.45 Commercial Strength Category 1 $4.76 $4.98 $5.22 $5.49 $5.76 $6.08 $6.45 Strength Category II $6.26 6.55 6.86 7.22 7.58 8.00 8.48 Strength Category III $7.38 7.72 8.09 8.51 8.94 9.43 9.99 Strength Category III w/Discount $6.72 7.03 7.37 7.75 8.14 8.58 9.10 *Multi-Family is 75% of residential rate. **Commercial customer consumption will not be averaged. ***Outside rates are subject to a 1 1/2 rate differential. ---PAGE BREAK--- Storm and Surface Water Utility Rate Study Proposed Rates Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 6.0% 6.5% 7.5% 7.5% 7.5% 5.0% Service Charge Per E.S.U. Residential $20.89 $22.14 $23.58 $25.35 $27.25 $29.30 $30.76 14 Presented Oct. 12th ESU = Equivalent Service Unit; 2,800 square feet of impervious area Multi-Family 20.89 22.14 23.58 25.35 27.25 29.30 30.76 Commercial 20.89 22.14 23.58 25.35 27.25 29.30 30.76 Disability/Low-income Senior Discount $7.41 $7.85 $8.37 $8.99 $9.67 $10.39 $10.91 ---PAGE BREAK--- Storm and Surface Water Alternatives 1 and 2 Rates Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 5.0% 6.0% 6.5% 7.5% 7.5% 7.5% Service Charge Per E.S.U. Residential $20.89 $21.93 $23.25 $24.76 $26.62 $28.62 $30.76 Multi-Family 20.89 21.93 23.25 24.76 26.62 28.62 30.76 Commercial 20.89 21.93 23.25 24.76 26.62 28.62 30.76 Disability/Low-income Senior Discount $7.41 $7.78 $8.25 $8.78 $9.44 $10.15 $10.91 15 ESU = Equivalent Service Unit; 2,800 sq. ft. impervious area Less CIP and reserve funding under both alternatives Alternative 1 – Reverse order of percent increases Alternative 2 – CPI + 3% Present 1/1/2009 2011 2012 2013 2014 2015 2016 Proposed Rate Adjustment 4.6% 4.8% 5.2% 5.0% 5.5% 6.0% Service Charge Per E.S.U. Residential $20.89 $21.85 $22.90 $24.09 $25.30 $26.69 $28.29 Multi-Family 20.89 21.85 22.90 24.09 25.30 26.69 28.29 Commercial 20.89 21.85 22.90 24.09 25.30 26.69 28.29 Disability/Low-income Senior Discount $7.41 $7.75 $8.12 $8.55 $8.97 $9.47 $10.03 ALTERNATIVE 2 ---PAGE BREAK--- Summary of Alternatives Impact on Average Residential Bills 2010 2011 2012 2013 2014 2015 2016 AVERAGE RESIDENTIAL CHANGE PROPOSED - RATE STUDY ANALYSIS Water $0.00 $0.83 $0.87 $1.35 $1.43 $1.14 $1.19 Sewer 0.00 3.76 4.03 4.12 3.28 2.76 2.87 Sanitation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Storm and Surface Water 0.00 0.63 0.72 0.88 0.95 1.02 0.73 SUMMARY OF RATE SCHEDULE ALTERNATIVES 16 Total $ Change per Month $0.00 $5.22 $5.61 $6.36 $5.67 $4.92 $4.79 ALTERNATIVE 1 - REVERSE % INCREASES Water $0.00 $0.83 $0.87 $1.01 $1.06 $1.48 $1.57 Sewer 0.00 2.15 2.24 2.91 4.09 4.56 4.88 Sanitation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Storm and Surface Water 0.00 0.52 0.66 0.76 0.93 1.00 1.07 Total $ Change per Month $0.00 $3.51 $3.76 $4.68 $6.08 $7.04 $7.52 ALTERNATIVE 2 - CPI (ESTIMATED) + 3% Water $0.00 $0.96 $1.05 $1.19 $1.20 $1.39 $1.60 Sewer 0.00 2.47 2.70 3.07 3.10 3.58 4.12 Sanitation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Storm and Surface Water 0.00 0.48 0.52 0.60 0.60 0.70 0.80 Total $ Change per Month $0.00 $3.91 $4.27 $4.85 $4.90 $5.66 $6.52 ---PAGE BREAK--- Summary of System Development Charges Purposes: Growth pays for growth Provide equity between existing and new customers Generate revenue for growth related 17 Ge e ate e e ue o g o t e ated facilities Utility Utility Utility Utility Current SDCs Existing Assets Future CIP Coordina- tion CIP New SDC New SDC New SDC New SDC Variance Water $3,130 $3,110 $290 $130 $ 3,530 $ 3,530 $ 3,530 $ 3,530 $ 400 Sewer 4,520 4,020 520 340 4,880 4,880 4,880 4,880 360 Storm (SSW) 1,760 1,260 990 700 2,950 2,950 2,950 2,950 1,190 Total $9,410 $8,390 $1,170 $1,710 $11,360 $11,360 $11,360 $11,360 $1,950