HomeMy WebLinkAbout7 and 15, Public Hearing and Ordinance for Adopting Water Rates
Public Hearing #7 and August 19, 2015 2016 through 202001 to Adopt Water Rates for -2015Consideration of Ordinance Public Hearing and 15Action Item #
Water Rates 2016 through 2020 2 If majority of rate payers protest, then rates are rejected–Public hearing –Notice must be mailed to all rate payers–Rates must be based on actual cost
of service––Prop 218 “1997 Right to Vote for Taxes Act”–June 3, 2015•and 3% in 2018, 2019, and 2020Selected proposed rate increases of 6% in 2016; 5% in 2017; –Board accepted 10 Year
Water Rate Study –May 20, 2015•Board hired HDR Engineering to update water rate study–April 2015•Background / History
Background / History Water Rates 2016 through 2020 3 Legal notice of public hearing printed in local newspaper–12, 2015and August 5 •to the BoardWater Department’s Capital Improvement
Program presented –July 15, 2015•Public hearing notices mailed–June 29, 2015•
Background/ History Water Rates 2016 through 2020 4 Requires District to absorb the costs of compliance–Reduce consumption by 28% from 2013 levels––Reduce District’s unaccounted for
water–Approximately $600,000 annually in addition to current levels–Accelerated pipeline replacement needed –Upward pressure on rates•
Background/ History Water Rates 2016 through 2020 5 Summary of the 2013 Financial Plan
Background/ History Water Rates 2016 through 2020 6 term debt was assumed-No additional long–accelerated pipeline replacementCapital plan was developed based on the District’s CIP with
•2.9% annuallyOperating and Maintenance costs increased approximately •Consumption was reduced by 18% for 2015 and 0% (flat) thereafter–Customer growth estimated at 1% annually–escalated
similarly to expensesRate revenues were calculated at present rates and •Escalation factors were used to project the budget over the test period–2024-Test period for the review was
2015–Starting point for the study was the 2015 budget•
Summary of the Financial Plan Water Rates 2016 through 2020 7 3.0%3.0%3.0%3.0%3.0%3.0%3.0%5.0%6.0%0.0%Annual Rate Adjustments$4,397 $4,397 $4,100 $3,305 $3,213 $2,868 $3,037 $2,952 $3,022
$2,653 Annual Capital ($000s)2024202320222021202020192018201720162015
Capital Improvement Plan Water Rates 2016 through 2020 8
NewProposed Residential Rates Water Rates 2016 through 2020 9 0.80 8,000 + Gallons$0.78 $0.76 $0.73 $0.71 $0.68 $0.64 Gallons-0 Consumption Charge83.09 80.67 78.32 76.04 72.42 68.32
1"69.66 67.64 65.67 63.75 60.72 57.28 3/4"$69.66 $67.64 $65.67 $63.75 $60.72 $57.28 5/8" x 3/4"ChargeMeter Present Information
Residential Bill Comparison InformationNew Water Rates 2016 through 2020 10 10,000 gallons in summer*Bill comparison assumes 3/4“ meter and 4,000 gallons in winter and $77.84 $75.57
$73.37 $71.23 $67.84 $64.00 Summer$72.78 $70.66 $68.60 $66.60 $63.43 $59.84 Winter 20202019201820172016Present Monthly Residential Bill*Proposed Average
Proposed Commercial Rates InformationNew Water Rates 2016 through 2020 11$1.91 $1.85 $1.80 $1.75 $1.66 $1.57 Gal)All Consumption ($/1,000Consumption Charge83.09 80.67 78.32 76.04 72.42
68.32 1"$69.66 $67.64 $65.67 $63.75 $60.72 $57.28 3/4"ChargeMeter 20202019201820172016Present
Proposed Zone Charges InformationNew Water Rates 2016 through 2020 12 3.60 3.30 3.00 2.70 2.40 2.10 Zone 73.00 2.75 2.50 2.25 2.00 1.75 Zone 62.40 2.20 2.00 1.80 1.60 1.40 Zone 51.80
1.65 1.50 1.35 1.20 1.05 Zone 41.20 1.10 1.00 0.90 0.80 0.70 Zone 30.60 0.55 0.50 0.45 0.40 0.35 Zone 2$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Zone 1 20202019201820172016Present
•InformationNew Water Rates 2016 through 2020 13 3.0%3.0%3.0%5.0%6.0%20202019201820172016 Rate PlanProposed Focus for rates is on the next 5 years (Prop. 218)–levelsIn year 10 reserve
levels will meet Board target reserve –levels ($5 million) Reserve levels are projected to reach minimum fund –Rate adjustments are necessary to fund the utility–Financial Plan Review:
Projected Reserve Balances Water Rates 2016 through 2020 14
New Information and Set a Public Hearing DateWater Rates 2016 through 2020 15 As of August 19, 2015, seven written protests were received•printed after January 1, of each yearFY16 through
FY20 rates would be implemented the first bill •
Fiscal Impact Water Rates 2016 through 2020 16 increase about $3.70In 2016, a typical monthly residential water bill would •2016, 2017, 2018, 2019 and 2020 respectively$580,000, $370,000
$390,000, and $410,000 in the years over the next five years by approximately $640,000, This rate increase will affect the water department’s revenue •
Recommendation Water Rates 2016 through 2020 17 Accept report and conduct Public Hearing•
Recommendation Water Rates 2016 through 2020 19 increases for FY16 through FY20 01 setting maximum water rate -Adopt Ordinance 2015•
Legal Requirements Water Rates 2016 through 2020 21 and differential between Tier 1 and Tier 2Analysis provides the cost basis of the tier pricing •customersDeveloped an allocation
by tier for residential •Reviewed the cost of providing water service•San Juan Capistrano decision•
Summary of the Financial Plan replacement programThree years with reduced accelerated pipeline •Level rate adjustments–Scenario 2 •replacement programOnly one year with reduced accelerated
pipeline •Initial year larger rate increases–Scenario 1 •:Differences•4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%0.0%Scenario 23.0%3.0%3.0%3.0%3.0%3.0%3.0%5.0%6.0%0.0%Scenario 1 Annual Rate
Adjustments$4,397 $4,397 $4,100 $3,305 $3,213 $2,768 $2,525 $2,659 $3,022 $2,653 Scenario 2$4,397 $4,397 $4,100 $3,305 $3,213 $2,868 $3,037 $2,952 $3,022 $2,653 Scenario 1 Annual Capital
($000s)2024202320222021202020192018201720162015 Scenarios
Changes since the 2013 Study Additional costs for staffing and customer outreach•Results in reduced consumption based revenues and expenses•projections for 2015 to meet conservation
goalAdditional 18% reduction in consumption was built into –Achieved a reduction of 10% in 2014–Need reduce consumption by 28% from 2013 –State mandated conservation•term debt-No new
long•Program is funded through rates–Helps reduce overall production•Driven by need to reduce unaccounted for water–Increased pipeline replacement capital funding needs–Accelerated
pipeline replacement•