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Home My WebLink About14 Rate Change Agenda Item # Iq TRUCKEE • ublic Utility District Memorandum To: Board of Directors From: Mary Chapman, Administrative Services Manager Date: October 10, 2007 SUBJECT: Discussion of revenue and a rate change,with possible direction or action by the Board 1. WHY THIS ITEM IS BEFORE THE BOARD In trying to balance the budget, staff has worked on projecting electric and water revenues for 2008. Since estimated revenues are a critical part of the budget preparation, we are reviewing them with the Board at this time. 2. HISTORY The District's goals and objectives relating to this item are: 6 Manage the District in an effective, efficient and fiscally responsible manner. Goal 6.1 —District will utilize modern, cost effective work methods and equipment. Goal 6.2—District will employ a qualified and productive workforce. Goal 6.3—District will provide work conditions and procedures that encourage employee growth, productivity and retention. Goal 6.4—District will conduct an active cost control program. Goal 6.5 - Review and implement a Financial Goals policy to achieve a stable financial condition. Goal 6.6—Develop appropriate financial procedures to assure responsible financial management. 3. NEW INFORMATION As of this point in the staff presentations including the presentations made on 10/17/07, we have calculated that the electric department will need an energy sales rate increase of 10.267%. Additionally, customers will need to be charged for the California Solar Initiative charge in the amount of$177,400. How this charge will be allocated to customers has yet to be determined. Since the Board has already approved a water rate increase of 6% (3% general rate increase, 3% unrestricted reserve transfer) Ordinance 2006-06 adopted on 7/13/2006 and attached, we are not proposing any other water rate changes for 2008. Also included are sheets showing the totals for all of the expenses that have been presented so far in this preliminary budget process for both electric and water divisions. Depending on input from the Board, we will be presenting the total budget in one book at the next meeting which will include all of the details that you are used to seeing. RECOMMENDATION: That the Board provide direction to the staff on how you would like us to proceed. Mary Chap n, min Services Manager J Ulrich, I im en ral Manager Truckee Donner Public Utility District Electric Revenues, Contributions & Transfers In 2008 Budget Revenue: 1% growth/10.267% rate increase Residential Sales $11,607, 742 Commercial Sales 9,365,583 Public Authority Sales 157,277 Intedepartmental Sales 11 644,664 Other Misc Revenue 916,262 CA Solar Initiative 177,400 Customer Contributions/Developer Fees 1,625,985 Subtotal $25,494,913 Transfers In From Facilities Fees $2,234,504 From Building Fund 32,494 From Sale of Property 400,000 Total Revenue and Transfers In $28, 161,911 1 Electric Rate Increase Recap Revenue from energy sales before proposed increase $201449,289 Revenue raised by estimated 1 % growth in sales 205,429 Revenue raised by 10.267% rate increase 2, 120,548 Subtotal Revenue from Energy Sales $22, 775,266 Other Misc Revenue 916,262 CA Solar Initiative 177,400 Customer Contributions/Developer Fees 1,625,985 Subtotal $251 494,913 Transfers In From Facilities Fees $ 2,234,504 From Building Fund 32,494 From Sale of Property 400,000 Total Revenue and Transfers In $28, 161,911 2 2008 Budget Operations, Capital and Transfer Out Recap: Electric Board of Directors $ 85,836 General Manager 404,576 Administrative Services 1,647,409 Conservation 11166,911 General Services 394,540 Electric Operations 2,810,511 Power Supply 517,574 Purchased Power 11, 106,410 Debt Service 35 614, 725 Capital Projects & Equipment 5,594, 773 Subtotal $27,343,265 Transfer to 2003 COP Reserve 300,000 Transfer to Rate Reserve 454,217 Transfer to Public Benefits Reserve 64,429 Total $28, 161,911 3 Truckee Donner Public Utility District Water Revenues & Transfers In 2008 Budget Revenue: 2% growth/3% rate increase/3% transfer to unrestricted reserve Residential Sales $ 8, 106,070 Commercial Sales 1,041,201 Fire Protection 131,027 Intedepartmental Sales 1,414 Other Misc Revenue 424, 103 Customer Contributions/Developer Fees 701,599 Subtotal $10,405,414 Transfers In From Loan Proceeds $ 3,411,379 From Facilities Fees for Projects 2,504, 104 From Facilities Fees for Debt 504,958 From Donner Lake Assessment District 800,852 From Donner Lake Billing Surcharge 100,258 From Glenshire Billing Surcharge 166, 786 From Meter Reserve Fund 265,823 Total Revenue and Transfers In $18, 159,574 4 2008 Budget Operations, Capital and Transfer Out Recap: Water Board of Directors $ 82,836 General Manager 348, 792 Administrative Services 1,069, 156 Conservation 51,902 General Services 79,328 Water Operations 4,4 79,511 Power Supply (including GIS) 202,881 Debt Service 3,535,950 Interdepartmental Rent 274,053 Capital Projects & Equipment 7,248,835 Subtotal $17,373,244 Transfer to DWR SRF Reserve 80,086 Transfer to Unrestricted Reserve 519,919 Transfer to Capital Reserve 186,325 Total $18, 159,574 5 Public Utility District r4___ -A I Ordinance No. 2006 - 06 AMENDING THE WATER MONTHLY RETAIL RATES WHEREAS the District is engaged in construction of various water system capital projects during the next five years; and WHEREAS to provide funds for this water capital program the District intends to secure long- term financing through issuance of Certificates of Participation; and WHEREAS a analyses of the District's financial status demonstrates that it does not have an adequate cash reserve; and WHEREAS the financial markets look for financial strength in a water utility as a condition for lending money; and WHEREAS the Board has been advised that a six percent water rate increase implemented on January 1, 2007 and again on January 1, 2008 would provide a revenue stream to establish a cash reserve and cover increasing operating costs: and WHEREAS, on July 5, 2006 and July 13, 2006 public hearings were held to receive comments from the public concerning a proposal to adopt such rate increases; and NOW, THEREFORE, BE IT ENACTED by the Board of Directors of the Truckee Donner Public Utility District as follows: Section 1. Effective January 1, 2007 following monthly water rates shall be effective. Residential Water Rates - The Domestic Water Rates for single family homes, individual condominium units and townhouse units shall relate to the pressure zone in which said service is located. The Domestic Flat Rate Base for all zones shall be the fixed monthly rate of $48.57. The appropriate zonal pumping costs shall be added to the base monthly rate yielding the appropriate flat zonal rates as follows: Zone Charge Zone 1 51.38 Zone 2 53.85 Zone 3 54.99 Zone 4 56.23 Zone 5 56.96 Zone 6 57.43 Zone 7 60.28 Zone 8 62.09 Zone 9 62.80 Zone 10 66.69 Zone 11 70.42 Ordinance 2006-06 1 Commercial Water Rates - The following Commercial Rates shall apply to all duplex and -` other multiple dwelling units, trailer parks, and other commercial establishments: Size Gallons Per Month Water Rate Service Allowance 3/4" 6,000 42.43 1" 11,000 50.61 1 1/4" 17,000 60.91 1 1/2" 24,000 71.14 2" 43,000 97.79 3" 96,000 163.71 4" 171,000 234.24 Water used in any month above the allowance will be charged as follows: Gallons Charge 0 to 16,000 gallons 1.89/1,000 16,000 - 56,000 gallons 1.49/1,000 56,000 - 96,000 gallons 1.19/1,000 96,000 and above .97/1,000 The following Zone Charge per 1,000 gallons shall be added for all water used: Zone Charge Zone 1 $ .33 Zone 2 .61 Zone 3 .76 Zone 4 .91 Zone 5 .98 Zone 6 1.06 Zone 7 1.40 Zone 8 1.59 Zone 9 1.67 Zone 10 2.13 Zone 11 2.58 Until meters are installed, the Commercial Flat Rate shall be based on the foregoing allowance, and the Zone Charge shall be levied against the maximum number of gallons in said allowance. Ordinance 2006-06 2 " Small Residential Unit Rate - Domestic water rates for single family homes, individual condominium units and townhouses units under 300 square feet with no provisions for washer/dryer, dishwasher or outside hose bib, no improved landscaping needing water other than that provided by nature, no leaking plumbing fixtures as determined by District staff. The Domestic Flat Rate Base for all zones shall be the fixed amount of $34.57. The appropriate zonal pumping costs shall be added to the base monthly rate yielding the appropriate flat zonal rates as follows: Zone Rate Zone 1 $37.37 Zone 2 39.85 Zone 3 40.99 Zone 4 42.24 Zone 5 42.96 Zone 6 43.43 Zone 7 46.28 Zone 8 46.92 Zone 9 48.79 Zone 10 52.69 Zone 11 58.76 Section 2. Effective January 1, 2008 following monthly water rates shall be effective. Residential Water Rates - The Domestic Water Rates for single family homes, individual condominium units and townhouse units shall relate to the pressure zone in which said service is located. The Domestic Flat Rate Base for all zones shall be the fixed monthly rate of $51.48. The appropriate zonal pumping costs shall be added to the base monthly rate yielding the appropriate flat zonal rates as follows: Zone Charge Zone 1 54.46 Zone 2 57.08 Zone 3 58.29 Zone 4 59.60 Zone 5 60.38 Zone 6 60.88 Zone 7 63.90 Zone 8 65.82 Zone 9 66.56 Zone 10 70.69 Zone 11 74.64 Ordinance 2006-06 3 Commercial Water Rates - The following Commercial Rates shall apply to all duplex and other multiple dwelling units, trailer parks, and other commercial establishments: Size Gallons Per Service Month Water Rate Allowance 3/4" 6,000 44.97 1 it 11,000 53.64 1 1/4" 17,000 64.57 1 1/2" 24,000 75.41 2" 43,000 103.66 3" 96,000 173.53 4" 171,000 248.30 Water used in any month above the allowance will be charged as follows: Gallons Charge 0 to 16,000 gallons 2.01/1,000 16,000 - 56,000 gallons 1.58/1,000 56,000 - 96,000 gallons 1.26/1,000 96,000 and above 1.03/1,000 The following Zone Charge per 1,000 gallons shall be added for all water used: Zone Charge Zone 1 $ .35 Zone 2 .64 Zone 3 .80 Zone 4 .97 Zone 5 1.04 Zone 6 1.13 Zone 7 1.49 Zone 8 1.69 Zone 9 1.77 Zone 10 2.26 Zone 11 2.73 Until meters are installed, the Commercial Flat Rate shall be based on the foregoing allowance, and the Zone Charge shall be levied against the maximum number of gallons in said allowance. Ordinance 2006-06 4 Small Residential Unit Rate - Domestic water rates for single family homes, individual condominium units and townhouses units under 300 square feet with no provisions for washerldryer, dishwasher or outside hose bib, no improved landscaping needing water other than that provided by nature, no leaking plumbing fixtures as determined by District staff. The Domestic Flat Rate Base for all zones shall be the fixed amount of $36.64. The appropriate zonal pumping costs shall be added to the base monthly rate yielding the appropriate flat zonal rates as follows: Zone Rate Zone 1 $39.62 Zone 2 42.24 Zone 3 43.45 Zone 4 44.77 Zone 5 45.54 Zone 6 46.04 Zone 7 49.06 Zone 8 46.74 Zone 9 51.72 Zone 10 55.85 Zone 11 62.28 Section 3. If no protest is made pursuant to Public Utilities Code Section 16078, then the terms of this ordinance shall be effective thirty days after adoption by the board of directors of the R. District. Section 4. The Clerk of the District shall immediately cause a copy of this ordinance to be published in a newspaper of general circulation and posted in three places within the District. Section 5. The provisions of other Ordinances shall remain in effect to the extent that they do not conflict with this ordinance. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a meeting duly called and held within the District on the 13th day of July 2006 by the following roll call vote: AYES: Directors Aguera, Hemig and Taylor NOES: Directors Sutton and Thomason ABSENT: None TRUCKI DO R PUBLIC UTILITY DISTRICT By IV A.� J emi resident of the Board ATTEST: Peter L. Holzmeister, Clerk of the Board Ordinance 2006-06 5