water rates (utility versus sdcs) information to utility advisory board september 21, 2009
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WestLinn
CITY OF
Water Rates (Utility versus SDCs)Information to Utility Advisory Board
September 21, 2009
Water Rates (SDC versus Utility) - City of West Linn 2
Step 1 – Determine 20-Year Project List
Water Master Plans estimate needed projects for the next 20 years
– 2004 Master Plan estimated $24 million for future projects
• Estimated at $24 million in 2004 dollars
• Estimated at $30 million in 2008 dollars
– 2008 Master Plan estimated $33 million for future projects
• Estimated at $33 million in 2008 dollars
Water Rates (SDC versus Utility) - City of West Linn 3
Step 2 – Divide List between SDC (Growth) and Existing
Split out SDC (i.e., growth-related) projects or portions thereof:
– 2004 Update: Future Projects estimated at $24 million (expressed in 2004 dollars)
• $11 million relate to Growth (i.e., capacity increasing)
• $13 million relate to Existing Infrastructure Needs (i.e., updating existing system)
– 2008 Update: Future Projects estimated at $33 million (expressed in 2008 dollars)
• $12 million relate to Growth (i.e., capacity increasing)
• $21 million relate to Existing Infrastructure Needs (i.e., updating existing system)
Water Rates (SDC versus Utility) - City of West Linn 4
Step 3 – Perform Financial Analysis
Water SDC Fund
– Use “SDC (i.e., growth-related) projects” in financial projections of the Water SDC Fund to determine Water SDC rates necessary to pay for growth-related water projects
Water Fund
– Use “Existing projects” in financial projections of Water Fund to determine water utility rates necessary to pay for existing infrastructure water improvement projects
Water Rates (SDC versus Utility) - City of West Linn 5
Step 4 – Set SDC Rates to pay for Growth Projects and Set Utility Rates to pay for Current Projects
Setting Water SDC Rates
– Refer to FCS Group presentation next
– Recommending 46% base SDC rate increase from $4,628 to $6,747
Setting Water Utility Rates
– Refer to Pioneer Consulting Group presentation next
– Recommending decreasing base rate per month from $14.54 to $9.12
– And increasing usage rate per ccf from $1.67 to $2.32 for every ccf used
WestLinn
CITY OF Water Rates Utility Rates & SDCs
Presentation to the West Linn City Council
October 5, 2009
Water Rates (SDC versus Utility) - City of West Linn 7
Tonight’s presentation
How are utility and SDC rates set?– Step 1: determine 20-year project list
– Step 2: break out existing (utility rate) and growth (SDC) projects
– Step 3: perform financial analysis
– Step 4: set rates
Current utility bill comparison
Average rate increases using 8 CCF comparison
Utility bill comparison using potential rate increases
SDC rate comparison
Next discussion areas
Questions
Water Rates (SDC versus Utility) - City of West Linn 8
Step 1: determine 20-year project list
Adopted Water Master Plan estimates needed projects over a 20 year span– Adopted Plan estimates $33 million for future projects in 2008 dollars
• 2004 Master Plan estimated $24 million for future projects in 2004 dollars• 2004 Master Plan equates to $30 million for future projects in 2008 dollars
– Why the $3 million variance in 2008 dollars?» Inflation» Deferred maintenance
Water Rates (SDC versus Utility) - City of West Linn 9
Step 2: break out existing and growth projects
Adopted Water Master Plan estimates $33 million for future projects:
– $21 million in projects relate to existing infrastructure needs
• Example: updating existing system; water line replacement
– $12 million in projects relate to future needs, or “growth”
• Example: capacity increasing; water line expansion
Water Rates (SDC versus Utility) - City of West Linn 10
Step 3: perform financial analysis
Use cost information and financial projections to determine rates
– Water Fund
• Use “Existing Needs” list to determine water utility rates necessary to pay for projects
– Water SDC Fund
• Use “Future Needs” list to determine water SDC rates necessary to pay for projects
Water Rates (SDC versus Utility) - City of West Linn 11
Growth Paid for by Developer SDCs
SDCs for SDCs forFY09 FY10
Developers(through SDCs)
Water SDC 4,628$ 4,828$ Transportation 5,509 5,745 Sewer SDC 2,632 2,745 Surface SDC 916 956 Parks SDC 8,030 8,376 SFWB SDC 1,363 1,363 Tri-City SDC 2,020 2,020
25,098$ 26,033$
CURRENT SDCs
SDCs for SDCs forFY09 FY10
46% increase 6,747$ 6,747$ 43% increase 7,884 7,884
2,632 2,745 916 956
8,030 8,376 1,363 1,363 2,020 2,020
29,592$ 30,091$
CONSULTANT'S PROPOSALSWATER & TRANSPORTATION SDC
WestLinn
CITY OF
Investment in West Linn’s Water System
June 28, 2010
Water Rates (SDC versus Utility) - City of West Linn 13
Ripped From the Headlines
May 17, 2010 Break on Broadway
Water Rates (SDC versus Utility) - City of West Linn 14
Repairs Completed Last Week
Before
After
Water Rates (SDC versus Utility) - City of West Linn 15
Broadway Fix Was Time Consuming and Costly
Holes
Corrosion
Water Rates (SDC versus Utility) - City of West Linn 16
Aging & Unsafe System
Water Rates (SDC versus Utility) - City of West Linn 17
Feedback from the School District
Chris, Thanks for the update on water rates. This district believes the one tier model is more equitable for all users. My thoughts are that if one took the total acreage and square footage of school district facilities and compared it to a comparable total of housing square footage and acreage, the district’s use would actually be less. So, it seems an unreasonable penalty to charge a premium because of overall size. Additionally, school fields provide a significant public service for youth recreation and the three tier model places an additional burden on the maintenance and care of those facilities. Roger L. Woehl “This district believes the
one tier model is more equitable…”
Water Rates (SDC versus Utility) - City of West Linn 18
Ask the Voters?
RESOLUTION 2010-27WEST LINN, OREGON
A RESOLUTION OF THE WEST LINN CITY COUNCIL CALLING AN ELECTION TO SUBMITTO THE VOTERS A MEASURE TO UPGRADE WATER SYSTEM, INCREASE SAFETY OFDRINKING WATER, AND PROMOTE CONSERVATION BY BASING WATER PRICING ONWATER CONSUMPTION
Water Rates (SDC versus Utility) - City of West Linn 19
Three Tier or One Tier?
ATTACHMENT A
January 1, 2011 January 1, 2012 January 1, 2013Base water rate 15.27 10.06 10.56 11.09
1 to 7 units Included in base 1.56 1.85 2.217 to 10 units 1.75 1.56 1.85 2.21
11 to 30 units 1.75 1.99 2.36 2.81More than 30 units 1.75 3.21 3.81 4.55
January 1, 2011 January 1, 2012 January 1, 2013Base water rate 15.27 10.06 10.56 11.09
1 to 7 units Included in base 1.84 2.29 2.82More than 7 units 1.75 1.84 2.29 2.82
Proposed water rate structure
Proposed water rate structure
Current rate structure
Current rate structure
Water Rates (SDC versus Utility) - City of West Linn 20
Questions?
For more information:
– Richard W. Seals, CPA CMA CFM
– Finance Director
– City of West Linn, Oregon
– rseals@westlinnoregon.gov
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