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Home My WebLink About8 Power Point Public Hearing-Proposed Water Rates December 2, 2020 02-Ordinance 2020Public Hearing on Proposed Water Rates and Adoption of Item #8–Public Hearing •OVERVIEWOVERVIEW Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing -Rates for FY2102 Setting Water -Consideration for Adoption of Ordinance 2020•Conduct Public Hearing•Review of the Draft Water Rate Study 2020•Review the public process for the adoption of water utility rates •Agenda for this item •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing water rates01 setting the current -In 2015 the Board adopted Ordinance 2015 •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing Majority protest provision•Public Hearing •Notification•esigndate rbased -Reasonable, proportional, cost•Procedural requirements•Property related fees or charges•Effective 1997•The Right to Vote on Taxes Act•California Proposition 218 •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing Water Utility Rate Study 2020–HDR Engineering •Improvement Plan (CIP) year Capital -Water Infrastructure 10–Farr West Engineering •two consulting firmsBoard, the District has secured professional services contracts with In preparation for the proposed new water rates and adoption by the •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility RatesPublic Hearing Water Utility RatesPublic Hearing Identified an annual capital improvement budget of $7M•Repair and replacement of aging infrastructure•New water pipelines for system redundancy•Harden emergency power supply reliability•year outlook for capital investments-Provided a 10•Presented to the Board May, 20, 2020•Plan (CIP) year Capital Improvement -Water Infrastructure 10–Farr West Engineering •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing 2020Rates become effective first billing cycle after January 1, –January 2020 •adopt ordinance setting new water utility ratesearing regarding proposed water rates and HHold Public –December 2, 2020 •hearingNotification and advertisement of scheduled public –October to November •and schedule a public hearingReview proposed rate structure, approve new water rates –October 7, 2020 •Workshop to review the water rate study (this evening)–September 2, 2020 •Calendar for adoption of new water utility rates •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility RatesPublic Hearing Water Utility RatesPublic Hearing Evaluate rate structure•expectationsrise in costs exceeding that of inflationary ontinuing C•Concerns with CA unfunded mandates•year CIP-Utilize the updated Water Utility Infrastructure 1•Cost of service analysis•Water Utility Rate Study 2020–HDR Engineering •BACKGROUND / HISTORYBACKGROUND / HISTORY Water Utility Rate Study 2020Water Utility Rate Study 2020 owners of the identified parcels, the fee cannot be imposedIf written protests against the fee or charge presented by a majority of •Consider all protests against the proposed fee or charge•days after the mailingConduct a public hearing on the proposed fee or charge not less than 45 •identified parcel of proposed fee or chargeProvide written notification by mail to the owner of record for each •Board schedule of Public Hearing•Prop 218 requirement to schedule Public Hearing Public Hearing NEW INFORMATIONNEW INFORMATION Water Utility Rates-Public Hearing Water Utility Rates- •NEW INFORMATIONNEW INFORMATION Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing Recommendation to Conduct Public Hearing following presentation•with HDR EngineeringWater Utility Rate Study 2020 update provided by Mr. Shawn Koorn •FISCAL IMPACTFISCAL IMPACT Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing operations and capital improvements over the next 5 years.generated revenues and budgeted expenditures for water utility rates will have a direct impact on annual water utility rate 2025. The Board approved water -and set water rates for FY2021This item includes a recommendation to the Board to approve 1.RECOMMENDATIONRECOMMENDATION Water Utility Rates-Public Hearing Water Utility Rates-Public Hearing FY25-02, Setting Water Rates for FY21-Adopt Ordinance 20203.District 2020 Water Rate StudyAccept and direct staff to file the Truckee Donner Public Utility 2.FY25-Conduct Public Hearing regarding proposed water rates for FY21 Public Hearing NEW INFORMATIONNEW INFORMATION Water Utility Rates-Public Hearing Water Utility Rates- •10yr growth rate 0.4%15yr growth rate 0.9%2019 13,101 to 2019:2009 12,5862004 11,503Number of Customers:201920092004(equity)Net PositionLTDNBV of FA$7,000$6,000$5,000$4,000$3,000$2,000$1,000$0 NEW INFORMATIONNEW INFORMATION per Customer Financial MetricsWater Utility per Customer Financial MetricsWater Utility improvement last 10 years.Good improvement over 15 years, nominal growth 0.8%–10yr Growth Rate •4.4%–Growth Rate 15yr •Net Position (equity)•growth rategrowth rate, however over last 10yrs only by 0.5% Debt Service coverage improved over the 15yrs 3.7% Debt to Equity ratio: 2004 85% 2019 41%The District has paid down debt over last 10 years. (4.8%)–10yr Growth Rate •(0.6%)–15yr Growth Rate •Long Term Debt•declined over the last 10 years.Net Water infrastructure capital investment has (1.0%) <negative–10yr Growth Rate •2.9%–15yr Growth Rate •NBV of Fixed Assets •F2020 43%-40%2019 2009 21%2004 20%as a % of GFA+CWIP:Accumulated Depreciation NBV of FAAccDepGFA+CWIP 12/31/201912/31/200912/31/2004$140,000$120,000$100,000$80,000$60,000$40,000$20,000$0 NEW INFORMATIONNEW INFORMATION Water System Infrastructure ($ thousands)Water System Infrastructure ($ thousands)quality, reliability, and fire suppression.investment is required to sustain water -and reWater Utility system infrastructure is aging •<negative(0.6%) –10yr Growth Rate •3.8%–15yr Growth Rate •(the net of two above)Net Book Value (NBV) of Fixed Assets•9.4%–10yr Growth Rate •10.7%–15yr Growth Rate •Accumulated Depreciation•3.6%–10yr Growth Rate •7.5%–15yr Growth Rate •Construction Work in Progress (CWIP)Gross Fixed Assets (GFA) including •201920092004 DepreciationOperating Expenses$12,000$10,000$8,000$6,000$4,000$2,000$0 NEW INFORMATIONNEW INFORMATION Expenses ($ thousands)Water Utility Expenses ($ thousands)Water Utility \[$3.7m is 3.5% of GFA 1yr average\]per year average$3.7m or $36.9m to 2019) GFA increase of 2009 years (10 $82.6m or $5.5m per year average15 years (2004 to 2019) GFA increase of 4.6%–10yr Growth Rate •6.3%–15yr Growth Rate •Depreciation Expense•of 4.1% and 4.6%, respectivelyReasonable growth rates, below FRED CPIs 3.6%–10yr Growth Rate •3.3%–15yr Growth Rate •Operating Expenses