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HomeMy WebLinkAbout2.c. Water and Sewer Fixed Rate Phase Out Review EXECUTIVE SUMMARY City Council Work Session: October 2, 2018 AGENDA ITEM: Water and Sewer Fixed Rate Phase Out Review AGENDA SECTION: Discussion PREPARED BY: Christine Watson, Public Works Coordinator Brian Erickson, P.E. Director of Public Works/City Engineer AGENDA NO. 2.c. ATTACHMENTS: Rate Models APPROVED BY: LJM RECOMMENDED ACTION: Review and provide direction regarding a change in water and sewer rate models BACKGROUND The Utility Commission reviews the water, sanitary sewer and stormwater rate models on an annual basis. That review allows for a discussion on the long term plan for the utilities to ensure that the various funds remain solvent into the future. As part of the staff preparation for the 2019 rate model discussion, a review of the current water and sewer rate models established that the revenue from fixed charges is not enough to offset the fixed costs. Thus a proposed model that phases out nearly all fixed charges over a three-year period was created. DISCUSSION Currently, both water and sewer rates include a fixed charge and a usage charge. The current residential rates are shown in the table below. As a comparison, the proposed 2019 Standard Rate and Alternate Rate models are also shown. The standard rate column reflects no changes to the rate structure, and the alternate rate column reflects the phasing out of the fixed rate. As can be seen, every customer currently pays $221.88 for the fixed rate portion of their bill. That cost increases to $227.64 for the 2019 Standard rate model, but decreases to $148.44 for the Alternate model. Also shown is an increase in the usage charges to ensure the revenues remain adequate through the 10 year projections. Quarterly Annual Quarterly Annual Quarterly Annual Water Fixed $13.15 $52.60 $13.55 $54.20 $6.50 $26.00 Usage Tier 1 (0 - 12,000 gal)$1.19 $1.22 $1.40 Tier 2 (13,000 - 24,000 gal)$1.49 $1.53 $1.76 Tier 3 (25,000 - 48,000 gal)$1.86 $1.91 $2.19 Tier 4 (> 48,000 gal)$2.79 $2.87 $3.29 Sewer Fixed $24.50 $98.00 $25.00 $100.00 $12.25 $49.00 Usage (per 1,000 gal)$2.02 $2.14 $2.80 Storm Fixed - Residential $17.82 $71.28 $18.36 $73.44 $18.36 $73.44 TOTAL FIXED CHARGES $221.88 $227.64 $148.44 2018 RatesUtility 2019 Standard Rates 2019 Alternate Rate An additional part of the annual review shows the affect that these rate changes have on a Low User, Average User and High User. A Low User is defined as the average of the lowest 10% of residential customer usage in the city. The Average User is an average all residential customer usage in the city. The High User is the average of the highest 10% of residential customer usage in the city. The following table shows the effect of the Standard model and the Alternate model on these groups of users, as well as on the average business user. By phasing out the fixed charges for sewer and water, the Low User will see a reduction of approximately 20% to their overall utility bill, while the High User will see an increase of about 7%. Ultimately, by shifting more of the billing to the usage charges, High Users will have a greater opportunity to reduce their bill through conservation. The following table illustrates the portion of the utility bill that is attributed to usage charges. The Alternate model shows that the High User will have nearly 84% of their bill dependent upon how much water they use. Ultimately, phasing out fixed charges will encourage water conservation and also result in each customer having more control over their utility bill. Finally, staff has analyzed the fund balance for both the water and sewer utility funds through 2028. Both the Standard and Alternate rates result in nearly identical balances at the end of the period for the water utility fund, and slightly higher balances for the sewer utility fund when using the Alternate model. SUMMARY The Standard and Alternate models have been discussed with the Utility Commission. During those discussions the Utility Commission supported the switch to the Alternate model phasing out fixed charges for water and sewer. Staff also recommends that the Alternate model be supported. Should the Council support this change, staff will update these items in the 2019 fee schedule. The 2019 fee schedule will be considered by the City Council at a later date. Total Cost Usage Portion Total Cost Usage Portion Total Cost Usage Portion Low User $325.60 31.9%$334.84 32.0%$272.24 45.5% Average User $515.24 56.9%$533.52 57.3%$519.24 71.4% High User $817.27 72.9%$849.01 73.2%$906.25 83.6% Total Utility Bill Charges 2018 Rates 2019 Standard Rates 2019 Alternate Rates Cost % Low User $325.60 $334.84 2.8%$272.24 -$62.60 -18.7% Average User $515.24 $533.52 3.5%$519.24 -$14.28 -2.7% High User $817.27 $849.01 3.9%$906.25 $57.24 6.7% Com'l/Ind/Inst User $1,490.95 $1,554.56 4.3%$1,788.20 $233.64 15.0% Change from 2019 Standard ModelTotal Utility Bill Charges 2018 Actual 2019 Standard Model % Change 2019 Alternate Model Water Rate Analysis 3.00%18.00%10.00%5.00%4.00%4.00%3.50%3.00%3.00%3.00%3.00% Description 2017 Projected 2017 Actual 2018 Projected 2019 Budgeted 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Water Demand (MG)943.191 923.760 966.582 990.377 1,014.844 1,039.983 1,065.929 1,092.547 1,119.972 1,148.068 1,176.837 1,206.278 1,236.392 1 2 Estimated Growth 2.5%n/a 2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2 3 Residential Accounts (excluding association irrigation)7,210 6,718 6,885 7,055 7,230 7,410 7,595 7,785 7,980 8,180 8,385 8,595 8,810 3 4 Commercial Accounts (excluding irrigation)129 128 131 134 137 140 144 148 152 156 160 164 168 4 5 Institutional / Industrial Accounts (excluding irrigation)44 47 48 49 50 51 52 53 54 55 56 57 58 5 6 Irrigation-only Accounts (excluding single family)144 123 126 129 132 135 138 141 145 149 153 157 161 6 7 Water Fixed Charge ($/account/quarter)12.77$ 12.77$ 13.15$ 6.50$ 3.00$ -$ -$ -$ -$ -$ -$ -$ -$ 7 8 Residential Tier 1 (0 - 12,000 gal)1.15$ 1.15$ 1.19$ 1.40$ 1.54$ 1.62$ 1.69$ 1.75$ 1.82$ 1.87$ 1.93$ 1.98$ 2.04$ 8 9 Residential Tier 2 (13,000 - 24,000 gal)1.44$ 1.44$ 1.49$ 1.76$ 1.93$ 2.03$ 2.11$ 2.19$ 2.27$ 2.34$ 2.41$ 2.48$ 2.55$ 9 10 Residential Tier 3 (25,000 - 48,000 gal)1.80$ 1.80$ 1.86$ 2.19$ 2.41$ 2.53$ 2.64$ 2.74$ 2.84$ 2.92$ 3.01$ 3.10$ 3.19$ 10 11 Residential Tier 4 (> 48,000 gal)2.71$ 2.71$ 2.79$ 3.29$ 3.62$ 3.80$ 3.95$ 4.11$ 4.26$ 4.38$ 4.51$ 4.65$ 4.79$ 11 12 Irrigation Meters (Multi Fam / Comm / Ind / Inst)2.71$ 2.71$ 2.79$ 3.29$ 3.62$ 3.80$ 3.95$ 4.11$ 4.26$ 4.38$ 4.51$ 4.65$ 4.79$ 12 13 Comm / Ind / Inst Tier 1 (0 - 80,000 gal)1.34$ 1.34$ 1.38$ 1.63$ 1.79$ 1.88$ 1.96$ 2.03$ 2.11$ 2.17$ 2.23$ 2.30$ 2.37$ 13 14 Comm / Ind / Inst Tier 2 (81,000 - 160,000 gal)1.68$ 1.68$ 1.73$ 2.04$ 2.24$ 2.35$ 2.45$ 2.54$ 2.63$ 2.71$ 2.79$ 2.88$ 2.96$ 14 15 Comm / Ind / Inst Tier 3 (161,000 - 250,000 gal)2.10$ 2.10$ 2.16$ 2.54$ 2.80$ 2.94$ 3.06$ 3.18$ 3.29$ 3.39$ 3.49$ 3.60$ 3.70$ 15 16 Comm / Ind / Inst Tier 4 ( > 250,000 gal)2.71$ 2.71$ 2.79$ 3.29$ 3.62$ 3.80$ 3.95$ 4.11$ 4.26$ 4.38$ 4.51$ 4.65$ 4.79$ 16 17 Surcharge - Single Family 3/4" ($/account)8.84$ 8.84$ 8.88$ 8.93$ 8.97$ 9.02$ 9.06$ 9.11$ 9.15$ 9.20$ 9.25$ 9.29$ 9.34$ 17 18 Surcharge - Multi Family 3/4" ($/account)6.83$ 6.83$ 6.86$ 6.90$ 6.93$ 6.97$ 7.00$ 7.04$ 7.07$ 7.11$ 7.14$ 7.18$ 7.22$ 18 19 Surcharge - 1" ($/account)13.57$ 13.57$ 13.64$ 13.71$ 13.77$ 13.84$ 13.91$ 13.98$ 14.05$ 14.12$ 14.19$ 14.26$ 14.34$ 19 20 Surcharge - 1.5" ($/account)28.14$ 28.14$ 28.28$ 28.42$ 28.56$ 28.71$ 28.85$ 28.99$ 29.14$ 29.29$ 29.43$ 29.58$ 29.73$ 20 21 Meter Maintenance - 3/4" ($/account/quarter) (2% annual inc)-$ -$ 1.00$ 1.02$ 1.04$ 1.06$ 1.08$ 1.10$ 1.13$ 1.15$ 1.17$ 1.20$ 1.22$ 21 22 Meter Maintenance - 1" ($/account/quarter)6.28$ 6.28$ 6.31$ 6.34$ 6.37$ 6.41$ 6.44$ 6.47$ 6.50$ 6.54$ 6.57$ 6.60$ 6.63$ 22 23 Meter Maintenance - 1.5" ($/account/quarter)11.31$ 11.31$ 11.37$ 11.42$ 11.48$ 11.54$ 11.60$ 11.65$ 11.71$ 11.77$ 11.83$ 11.89$ 11.95$ 23 24 601 49400 Water Utility Fund Beginning Balance 6,790,823.70$ 6,790,823.70$ 7,546,474.50$ 7,431,034.08$ 7,967,764.76$ 8,840,823.92$ 9,681,412.08$ 8,745,458.06$ 7,959,115.75$ 7,138,466.13$ 5,641,396.59$ 5,055,527.38$ 3,698,376.40$ 24 25 Calculated Fixed Charges 384,515.29$ 378,283.16$ 191,542.00$ 90,588.00$ -$ -$ -$ -$ -$ -$ -$ -$ 25 26 Residential Tier 1 (0 - 12,000 gal)106,537.27$ 104,872.32$ 135,998.23$ 153,308.85$ 164,981.95$ 175,864.97$ 187,475.07$ 198,896.96$ 209,998.30$ 221,718.93$ 234,089.97$ 247,143.99$ 26 27 Residential Tier 2 (13,000 - 24,000 gal)243,038.14$ 230,391.38$ 231,864.70$ 261,377.74$ 281,279.32$ 299,833.89$ 319,628.06$ 339,101.35$ 358,028.13$ 378,010.74$ 399,102.26$ 421,358.18$ 27 28 Residential Tier 3 (25,000 - 48,000 gal)136,708.95$ 174,944.24$ 240,533.00$ 271,149.39$ 291,795.00$ 311,043.23$ 331,577.41$ 351,778.71$ 371,413.08$ 392,142.74$ 414,022.76$ 437,110.73$ 28 29 Residential Tier 4 (> 48,000 gal)456,632.88$ 404,547.02$ 489,152.29$ 551,414.34$ 593,399.62$ 632,543.17$ 674,301.85$ 715,383.59$ 755,312.40$ 797,468.62$ 841,964.23$ 888,916.34$ 29 30 Irrigation Meters (Multi Fam / Comm / Ind / Inst)270,562.50$ 278,906.25$ 329,109.38$ 362,020.31$ 380,121.33$ 395,326.18$ 411,139.23$ 425,529.10$ 438,294.97$ 451,443.82$ 464,987.14$ 478,936.75$ 30 31 Comm / Ind / Inst Tier 1 (0 - 80,000 gal)18,196.39$ 16,799.79$ 20,862.83$ 23,450.73$ 25,149.97$ 26,840.68$ 28,626.40$ 30,365.35$ 32,035.45$ 33,778.42$ 35,597.13$ 37,494.57$ 31 32 Comm / Ind / Inst Tier 2 (81,000 - 160,000 gal)21,585.00$ 14,675.11$ 17,345.95$ 19,497.61$ 20,910.40$ 22,316.11$ 23,800.81$ 25,246.62$ 26,635.18$ 26,926.22$ 29,596.47$ 31,174.06$ 32 33 Comm / Ind / Inst Tier 3 (161,000 - 250,000 gal)21,106.30$ 24,118.82$ 23,873.04$ 26,834.34$ 28,778.75$ 30,713.40$ 32,756.78$ 34,746.64$ 36,657.70$ 35,949.89$ 40,733.29$ 42,904.51$ 33 34 Comm / Ind / Inst Tier 4 ( > 250,000 gal)195,052.40$ 217,229.96$ 230,950.13$ 259,598.04$ 278,408.49$ 297,124.54$ 316,892.41$ 336,142.44$ 354,630.28$ 366,124.29$ 394,057.94$ 415,062.48$ 34 35 Meter Maintenance Revenue - 3/4"-$ -$ 27,400.00$ 28,641.60$ 29,942.71$ 31,305.64$ 32,732.75$ 34,226.50$ 35,789.44$ 37,424.18$ 39,133.42$ 40,919.97$ 42,786.70$ 35 36 Meter Maintenance Revenue - 1"20,049.75$ 20,524.67$ 20,830.27$ 21,138.41$ 21,449.11$ 21,762.39$ 22,078.27$ 22,422.77$ 22,770.17$ 23,120.48$ 23,473.73$ 23,829.92$ 36 37 Meter Maintenance Revenue - 1.5"9,813.83$ 9,957.10$ 10,098.27$ 10,240.61$ 10,384.11$ 10,528.80$ 10,674.67$ 10,821.74$ 10,970.01$ 11,119.49$ 11,270.20$ 11,422.13$ 37 38 Meter Maintenance Revenue - All Other Sizes 8,946.51$ 10,109.76$ 10,234.00$ 10,359.23$ 10,485.46$ 10,612.70$ 10,740.94$ 10,870.20$ 11,000.48$ 11,131.80$ 11,264.15$ 11,397.55$ 38 39 Misc Water Revenues (antenna, interest, new meter sales)315,200.00$ 331,500.00$ 341,995.00$ 352,838.85$ 364,039.02$ 375,603.19$ 387,539.28$ 399,855.46$ 412,560.12$ 425,661.93$ 439,269.79$ 453,292.88$ 39 40 Total Usage Revenue (excluding surcharge)2,207,945.20$ 2,248,416.00$ 2,244,259.58$ 2,323,030.68$ 2,443,759.16$ 2,502,488.16$ 2,642,845.98$ 2,791,457.69$ 2,936,950.38$ 3,077,730.46$ 3,213,730.79$ 3,380,349.02$ 3,542,830.81$ 40 41 100's - Salaries & Benefits (4%) (add FTE in 2021, 2022)527,900.00$ 463,400.00$ 534,000.00$ 519,200.00$ 540,000.00$ 601,600.00$ 745,700.00$ 775,600.00$ 806,700.00$ 839,000.00$ 872,600.00$ 907,600.00$ 944,000.00$ 41 42 200's - Office Materials and Supplies 51,300.00$ 33,156.00$ 36,700.00$ 32,600.00$ 33,600.00$ 34,700.00$ 35,800.00$ 36,900.00$ 38,100.00$ 39,300.00$ 40,500.00$ 41,800.00$ 43,100.00$ 42 43 216.00 - Chemicals (subject to growth and price increases)75,000.00$ 55,588.00$ 75,000.00$ 75,000.00$ 78,000.00$ 81,100.00$ 84,300.00$ 87,700.00$ 91,200.00$ 94,800.00$ 98,600.00$ 102,500.00$ 106,600.00$ 43 44 220.01 - Water Meter Purchases (replacements)62,500.00$ 57,467.00$ 65,000.00$ 67,000.00$ 69,100.00$ 71,200.00$ 73,400.00$ 75,700.00$ 78,000.00$ 80,400.00$ 82,900.00$ 85,400.00$ 88,000.00$ 44 45 220.02 - Water Meter Purchases (new homes)45,000.00$ 42,572.00$ 55,000.00$ 57,200.00$ 59,500.00$ 61,900.00$ 64,400.00$ 67,000.00$ 69,700.00$ 72,500.00$ 75,400.00$ 78,500.00$ 81,700.00$ 45 46 300's - GIS, Legal, Office, Computer, Eng, Prof Svcs 213,700.00$ 163,775.00$ 210,600.00$ 205,600.00$ 211,800.00$ 218,200.00$ 224,800.00$ 231,600.00$ 238,600.00$ 245,800.00$ 253,200.00$ 260,800.00$ 268,700.00$ 46 47 400's - Training, Conferences, Contracted Repair 81,300.00$ 42,575.00$ 101,600.00$ 86,300.00$ 88,900.00$ 91,600.00$ 94,400.00$ 97,300.00$ 100,300.00$ 103,400.00$ 106,600.00$ 109,800.00$ 113,100.00$ 47 48 500's - Buildings, Office Equip, Furniture, Misc Improvements 16,100.00$ 75,280.00$ 161,100.00$ 81,100.00$ 83,600.00$ 86,200.00$ 88,800.00$ 91,500.00$ 94,300.00$ 97,200.00$ 100,200.00$ 103,300.00$ 106,400.00$ 48 49 530.03 - CRP of Water Main 150,000.00$ -$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 50,000.00$ 49 50 530.04 - Well and Tower Maintenance (long-term schedule)65,000.00$ 85,845.00$ 715,000.00$ 145,000.00$ 40,000.00$ 40,000.00$ 45,000.00$ 45,000.00$ 155,000.00$ 900,000.00$ 50,000.00$ 910,000.00$ 135,000.00$ 50 51 540, 550, 580 - Equipment Purchases and Leases (from CIP)11,000.00$ 11,436.00$ 68,600.00$ 70,500.00$ 10,500.00$ 10,500.00$ 82,900.00$ 14,500.00$ 14,500.00$ 14,500.00$ 14,500.00$ 15,000.00$ 17,000.00$ 51 52 611.00 - Interest -$ 930.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 52 53 710.00 - Transfers for Other Improvements -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 53 54 Well and Tower Expenses (combined)348,600.00$ 307,976.00$ 287,100.00$ 396,800.00$ 305,700.00$ 314,900.00$ 324,300.00$ 334,000.00$ 344,000.00$ 354,300.00$ 364,900.00$ 375,800.00$ 387,100.00$ 54 55 WTP Operating Expenses -$ -$ -$ -$ -$ 200,000.00$ 206,000.00$ 212,200.00$ 218,600.00$ 225,200.00$ 232,000.00$ 239,000.00$ 55 56 WTP Debt $22M 15 years @ 4.0% (75% share of $1,953,000)-$ -$ -$ -$ -$ 1,465,000.00$ 1,465,000.00$ 1,465,000.00$ 1,465,000.00$ 1,465,000.00$ 1,465,000.00$ 1,465,000.00$ 56 57 Total Expenses 1,647,400.00$ 1,340,000.00$ 2,359,700.00$ 1,786,300.00$ 1,570,700.00$ 1,661,900.00$ 3,578,800.00$ 3,577,800.00$ 3,757,600.00$ 4,574,800.00$ 3,799,600.00$ 4,737,500.00$ 4,044,700.00$ 57 58 Year End Balance (before debt service)7,351,368.90$ 7,699,239.70$ 7,431,034.08$ 7,967,764.76$ 8,840,823.92$ 9,681,412.08$ 8,745,458.06$ 7,959,115.75$ 7,138,466.13$ 5,641,396.59$ 5,055,527.38$ 3,698,376.40$ 3,196,507.21$ 58 59 Balance change amount 560,545.20$ 908,416.00$ (115,440.42)$ 536,730.68$ 873,059.16$ 840,588.16$ (935,954.02)$ (786,342.31)$ (820,649.62)$ (1,497,069.54)$ (585,869.21)$ (1,357,150.98)$ (501,869.19)$ 59 60 Balance change %8.25%13.38%-1.53%7.22%10.96%9.51%-9.67%-8.99%-10.31%-20.97%-10.39%-26.84%-13.57%60 Revenue Projected Demands and Connections Proposed Rates and Fixed Charges Expenses G:\Utilities\RATE MODELS\Water Rates 20180801 - Phase Out Fixed Charge Debt Service Impact Description 2017 Projected 2017 Actual 2018 Projected 2019 Budgeted 2020 2021 2022 2023 2024 2025 2026 2027 2028 61 Water Core Fund Beginning Balance 610,518.94$ 870,965.55$ 993,165.55$ 1,459,215.55$ 1,492,165.55$ 1,992,265.55$ 1,966,565.55$ 1,958,515.55$ 1,978,465.55$ 2,016,615.55$ 2,133,215.55$ 2,408,515.55$ 61 62 Revenue - Developer Agreements ($6500/ac)385,000.00$ 215,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 175,000.00$ 62 63 Revenue - New Connections (3/4-inch and 1-inch included)404,800.00$ 400,800.00$ 491,050.00$ 507,950.00$ 525,100.00$ 542,500.00$ 560,150.00$ 588,150.00$ 606,350.00$ 624,800.00$ 643,500.00$ 662,450.00$ 63 64 Capital Investment Fund Beginning Balance 971,394.15$ 640,821.52$ 922,153.77$ 1,210,372.40$ 1,507,332.69$ 1,813,293.13$ 1,992,715.50$ 2,181,664.85$ 2,380,465.79$ 2,589,390.62$ 2,823,715.04$ 3,103,718.17$ 64 65 Surcharge Revenue 3/4" - Single Family (98%)247,409.13$ 239,777.45$ 246,926.37$ 254,316.66$ 261,951.44$ 269,833.84$ 277,967.05$ 286,354.26$ 294,998.72$ 303,903.68$ 313,072.43$ 322,508.32$ 65 66 Surcharge Revenue 3/4" - Multi Family (2%)5,912.78$ 3,780.77$ 3,893.50$ 4,010.03$ 4,130.41$ 4,254.70$ 4,382.94$ 4,515.19$ 4,651.49$ 4,791.91$ 4,936.48$ 5,085.26$ 66 67 Surcharge Revenue - 1"43,307.46$ 44,350.29$ 45,010.63$ 45,676.47$ 46,347.84$ 47,024.79$ 47,707.34$ 48,451.76$ 49,202.42$ 49,959.38$ 50,722.68$ 51,492.37$ 67 68 Surcharge Revenue - 1.5"24,425.52$ 24,773.89$ 25,125.14$ 25,479.28$ 25,836.33$ 26,196.32$ 26,559.26$ 26,925.17$ 27,294.08$ 27,666.01$ 28,040.97$ 28,418.99$ 68 69 Surcharge Revenue - All Other Sizes 15,424.74$ 17,049.85$ 17,262.99$ 17,477.85$ 17,694.42$ 17,912.72$ 18,132.76$ 18,354.55$ 18,578.11$ 18,803.44$ 19,030.57$ 19,259.49$ 69 70 Total Water Surcharge Revenue 336,479.63$ 329,732.25$ 338,218.63$ 346,960.29$ 355,960.44$ 365,222.37$ 374,749.35$ 384,600.94$ 394,724.83$ 405,124.42$ 415,803.13$ 426,764.43$ 70 71 Estimated Debt Service *405,000.00$ 242,000.00$ 250,000.00$ 250,000.00$ 250,000.00$ 929,000.00$ 929,000.00$ 929,000.00$ 929,000.00$ 854,000.00$ 679,000.00$ 679,000.00$ 71 72 CIF Contribution to Debt or Other Projects (20% in 2018+)657,127.25$ 48,400.00$ 50,000.00$ 50,000.00$ 50,000.00$ 185,800.00$ 185,800.00$ 185,800.00$ 185,800.00$ 170,800.00$ 135,800.00$ 135,800.00$ 72 73 Core Contribution to Debt or Other Projects (80% in 2018+)405,000.00$ 493,600.00$ 200,000.00$ 650,000.00$ 200,000.00$ 743,200.00$ 743,200.00$ 743,200.00$ 743,200.00$ 683,200.00$ 543,200.00$ 543,200.00$ 73 74 Capital Investment Fund Year End Balance 650,746.53$ 640,821.52$ 922,153.77$ 1,210,372.40$ 1,507,332.69$ 1,813,293.13$ 1,992,715.50$ 2,181,664.85$ 2,380,465.79$ 2,589,390.62$ 2,823,715.04$ 3,103,718.17$ 3,394,682.60$ 74 75 Water Core Fund Year End Balance 995,318.94$ 870,965.55$ 993,165.55$ 1,459,215.55$ 1,492,165.55$ 1,992,265.55$ 1,966,565.55$ 1,958,515.55$ 1,978,465.55$ 2,016,615.55$ 2,133,215.55$ 2,408,515.55$ 2,702,765.55$ 75 76 Water Utility Fund Year End Balance 7,351,368.90$ 7,546,474.50$ 7,431,034.08$ 7,967,764.76$ 8,840,823.92$ 9,681,412.08$ 8,745,458.06$ 7,959,115.75$ 7,138,466.13$ 5,641,396.59$ 5,055,527.38$ 3,698,376.40$ 3,196,507.21$ 76 8,997,434.37$ 9,058,261.57$ 9,346,353.40$ 10,637,352.72$ 11,840,322.16$ 13,486,970.76$ 12,704,739.12$ 12,099,296.15$ 11,497,397.47$ 10,247,402.76$ 10,012,457.97$ 9,210,610.12$ 9,293,955.36$ Well 16 debt begins in 2017 (avg $176,000 per year for 10 years) WTP debt begins in 2022 ($488,000 per year for 15 years) (25% share here, 75% share in Water Utility) Well 17 debt begins in 2022 ($191,000 per year for 10 years) ($1.5M @ 5% over 10 years) * Line 71 Details Year End Fund Balances Capital Investment Fund Revenue Debt Service Core Fund Revenue G:\Utilities\RATE MODELS\Water Rates 20180801 - Phase Out Fixed Charge Sanitary Sewer Rate Analysis Description 2017 Projected 2017 Actual 2018 Projected 2019 Budgeted 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Water Demand (MG)943.191 923.760 966.748 990.933 1,015.744 1,041.181 1,067.370 1,094.186 1,121.629 1,149.698 1,178.393 1,207.715 1,207.715 1 2 Q1 Water Demand (MG) (~15% of total demand)141.479 142.090 145.012 148.640 152.362 156.177 160.106 164.128 168.244 172.455 176.759 181.157 181.157 2 3 Sanitary Sewer Flows (MG) *554.062 536.900 550.219 563.772 577.715 592.047 606.846 622.034 637.613 653.580 669.937 686.684 703.820 3 4 Estimated Growth (from water spreadsheet)2.5%n/a 2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%2.5%4 5 Residential Accounts (includes multi-family)7,210 6,718 6,885 7,055 7,230 7,410 7,595 7,785 7,980 8,180 8,385 8,595 8,810 5 6 Commercial / Ind / Inst Accounts 173 175 179 183 187 191 196 201 206 211 216 221 226 6 7 Sanitary Sewer Fixed Charge ($/account/quarter)24.00$ 24.00$ 24.50$ 12.25$ 6.00$ -$ -$ -$ -$ -$ -$ -$ -$ 7 8 Rate per 1000 gallons (6% annually thru 2020, 2% therafter)1.91$ 1.91$ 2.02$ 2.80$ 3.40$ 3.52$ 3.56$ 3.59$ 3.63$ 3.66$ 3.70$ 3.74$ 3.77$ 8 10 Sewer Utility Fund Beginning Balance 1,910,495.76$ 1,910,495.76$ 1,756,314.80$ 1,579,499.12$ 1,713,758.79$ 2,300,119.88$ 2,736,421.43$ 3,097,707.26$ 3,525,715.03$ 3,949,064.00$ 4,366,253.73$ 4,775,568.34$ 5,174,980.96$ 10 11 Fixed Charges 708,768.00$ 692,272.00$ 354,662.00$ 178,008.00$ -$ -$ -$ -$ -$ -$ -$ -$ 11 12 Sewer Use Charges (~78% of total water demand is billed)1,439,686.74$ 1,523,208.15$ 2,164,197.67$ 2,693,753.09$ 2,858,666.55$ 2,959,876.78$ 3,064,581.44$ 3,172,857.86$ 3,284,781.89$ 3,400,433.52$ 3,519,897.11$ 3,555,096.08$ 12 13 Miscellaneous Revenue (~6% of usage revenue)150,391.83$ 132,928.81$ 150,000.00$ 154,500.00$ 159,135.00$ 163,909.05$ 168,826.32$ 173,891.11$ 179,107.84$ 184,481.08$ 190,015.51$ 195,715.98$ 13 14 Total Revenue 2,298,846.57$ 1,952,256.00$ 2,348,408.96$ 2,668,859.67$ 3,026,261.09$ 3,017,801.55$ 3,123,785.83$ 3,233,407.76$ 3,346,748.97$ 3,463,889.73$ 3,584,914.60$ 3,709,912.63$ 3,750,812.06$ 14 21 100's - Salaries & Benefits (4%) (add 1 shared pos. in 2021)521,400.00$ 464,961.00$ 527,300.00$ 513,400.00$ 534,000.00$ 595,400.00$ 619,300.00$ 644,100.00$ 669,900.00$ 696,700.00$ 724,600.00$ 753,600.00$ 783,800.00$ 21 22 200's - Materials and Equipment 19,000.00$ 13,364.00$ 19,300.00$ 16,400.00$ 16,900.00$ 17,500.00$ 18,100.00$ 18,700.00$ 19,300.00$ 19,900.00$ 20,500.00$ 21,200.00$ 21,900.00$ 22 23 300's - Communications, Computer, Eng, Prof Svcs 96,700.00$ 85,035.00$ 149,600.00$ 147,600.00$ 152,100.00$ 156,700.00$ 161,500.00$ 166,400.00$ 171,400.00$ 176,600.00$ 181,900.00$ 187,400.00$ 193,100.00$ 23 24 400's - Training, Conferences, Contracted Repair, Misc 36,800.00$ 31,220.00$ 36,800.00$ 77,000.00$ 79,400.00$ 81,800.00$ 84,300.00$ 86,900.00$ 89,600.00$ 92,300.00$ 95,100.00$ 98,000.00$ 101,000.00$ 24 25 500's - Buildings, Machinery, Furniture, Equipment 32,000.00$ -$ 21,000.00$ 71,000.00$ 73,200.00$ 75,400.00$ 77,700.00$ 80,100.00$ 82,600.00$ 85,100.00$ 87,700.00$ 90,400.00$ 93,200.00$ 25 26 530.03 - CRP of Sewer Main 150,000.00$ -$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,000.00$ 150,001.00$ 26 27 602 - Sewer Service Charges (5% annual increase)1,284,600.00$ 1,284,544.00$ 1,300,124.64$ 1,304,000.00$ 1,369,200.00$ 1,437,700.00$ 1,509,600.00$ 1,585,100.00$ 1,664,400.00$ 1,747,700.00$ 1,835,100.00$ 1,926,900.00$ 2,023,300.00$ 27 28 611 - Interest on Lease Payments -$ 930.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 28 29 710.00 - Transfers for Other Improvements -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 29 30 Utility Equipment Purchases and Leases (from CIP)11,000.00$ 11,436.00$ 41,700.00$ 194,000.00$ 2,000.00$ 2,000.00$ 75,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 30 31 Lift Station Expenses (9 facilities)54,500.00$ 85,274.00$ 279,400.00$ 61,200.00$ 63,100.00$ 65,000.00$ 67,000.00$ 69,100.00$ 71,200.00$ 73,400.00$ 75,700.00$ 78,000.00$ 80,400.00$ 31 32 Total Expenses 2,206,000.00$ 1,976,764.00$ 2,525,224.64$ 2,534,600.00$ 2,439,900.00$ 2,581,500.00$ 2,762,500.00$ 2,805,400.00$ 2,923,400.00$ 3,046,700.00$ 3,175,600.00$ 3,310,500.00$ 3,451,701.00$ 32 33 Year End Balance 2,003,342.33$ 1,756,314.80$ 1,579,499.12$ 1,713,758.79$ 2,300,119.88$ 2,736,421.43$ 3,097,707.26$ 3,525,715.03$ 3,949,064.00$ 4,366,253.73$ 4,775,568.34$ 5,174,980.96$ 5,474,092.02$ 33 34 Balance change 92,846.57$ (154,180.96)$ (176,815.68)$ 134,259.67$ 586,361.09$ 436,301.55$ 361,285.83$ 428,007.76$ 423,348.97$ 417,189.73$ 409,314.60$ 399,412.63$ 299,111.06$ 34 35 % change 4.86%-8.07%-10.07%8.50%34.21%18.97%13.20%13.82%12.01%10.56%9.37%8.36%5.78%35 * New for 2017: Sewer Service Charges (line 27) are sent to us from the MCES in August for the following budget year. The charge is based on the flows from the prior calendar year. For example: flows from Jan 1 - Dec 31, 2016 are used to determine our 2018 rates. MCES charges per 1,000 gallons $2.31851 $2.39252 $2.36292 Percent change from previous year 1.12%3.19%-1.24% Projected Demands and Connections Expenses Scenario 1 Proposed Rates Revenue G:\Utilities\RATE MODELS\Sewer Rates 20180801 - Phase Out Fixed Charge Model