elk grove wd board meeting water rates habib isaac – principal gregg tobler – task manager
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Elk Grove WD Board Meeting Water Rates Habib Isaac – Principal Gregg Tobler – Task Manager September 10, 2012. Meeting Goals. Review timeline to date Review Rate Design Fixed / Variable Cost components Variable cost allocation Residential usage characteristics - PowerPoint PPT PresentationTRANSCRIPT
Elk Grove WD Board Meeting Water Rates Habib Isaac – PrincipalGregg Tobler – Task ManagerSeptember 10, 2012
Elk Grove Water District - Utility Rate Project | 2
Meeting Goals• Review timeline to date• Review Rate Design
– Fixed / Variable– Cost components– Variable cost allocation– Residential usage characteristics– Customer impact based on usage levels– Accounts affected by percentage change in bill
• What is the preferred rate structure?
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• Willdan and staff held first meeting with CAC on August 7th– Reviewed existing rate structure and fixed / variable options– Implementation options – (January versus July)– Identified next steps and timeline
• Finance Committee Meeting – (August 13th)– Supported CAC recommendation of January adjustments
• Modest adjustments instead of significant adjustments in future years– Directed staff to assemble finance team for debt restructuring – 40% Fixed / 60% Variable: too significant of a change when compared to current split of existing rate
structure• Willdan and staff held second meeting with CAC on September 4th
– Refined Fixed / Variable options– Fire protection allocation– Preliminary rates
• Board Meeting September 10th
– Refined Fixed / Variable options– Fire protection allocation– Preliminary rates
Water Study Summary
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• Fixed / Variable options: 60% / 40% 55% / 45%– 60% fixed / 40% variable: 2 tiered residential structure – 55% fixed / 45% variable: 3 tiered residential structure
• Fixed revenue– Costs either apportioned over accounts or based on meter size
• Variable revenue– Costs are allocated between customer classes based on usage
• Total water units used• Peak demand placed on utility system• Horizontal equity achieved
– Residential • Further allocated between tiers based on usage characteristics
Refined Fixed / Variable Options
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Scenario 1 – 45% Variable / 55% Fixed Rate Revenue
RequiredBase Max Day Customer
AccountMeters & Services Fire Protection
Percent Allocation 100% 22% 23% 24% 25% 6%
Fiscal Year EndingFYE 2013 14,174,558$ 3,095,052$ 3,280,792$ 3,450,306$ 3,487,598$ 860,810$ FYE 2014 14,599,858$ 3,187,917 3,379,231 3,553,831 3,592,242 886,638 FYE 2015 15,037,758$ 3,283,534 3,480,585 3,660,423 3,699,985 913,231 FYE 2016 15,488,958$ 3,382,054 3,585,019 3,770,252 3,811,001 940,632 FYE 2017 15,953,658$ 3,483,523 3,692,576 3,883,367 3,925,339 968,853
45% 55%
• 25% of Debt is allocated to BASE (variable cost)
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Variable Cost Allocation
Category Description 2011/12 Consumption
% of Consumption
Base Variable Cost
3095051.787Non-Residential 477,763 15.2% 471,770 Irrigation 89,597 2.9% 88,473 Residential Metered 1,608,880 51.3% 1,588,697 Residential Flat 958,132 30.6% 946,112
Total 3,095,052$
Category Description Peaking Factor
Weighted Peaking factor
% of Peak Peak Variable Cost
3280792.275Non-Residential 1.90 908,180 14.6% 479,469 Irrigation 2.74 245,238 3.9% 129,472 Residential Metered 1.97 3,173,338 51.1% 1,675,346 Residential Flat 1.97 1,887,520 30.4% 996,506
Total 3,280,792$
Rate Revenue Required
Base Max Day Meters & Services Fire Protection
Percent Allocation 100% 22% 23% 24% 25% 6%
Fiscal Year EndingFYE 2013 14,174,558$ 3,095,052$ 3,280,792$ 3,450,306$ 3,487,598$ 860,810$ FYE 2014 14,599,858$ 3,187,917 3,379,231 3,553,831 3,592,242 886,638
45%
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Total Variable
Cost
% of Variable
Cost
951,238 15%217,945 3%
3,264,043 51%1,942,618 30%
6,375,844$ 100%
Category Description
Non-Residential IrrigationResidential Metered Residential Flat
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• 3 Tiered Rate Structure
• Residential usage characteristics
Residential Usage Characteristics
Winter Accounts
% of Accounts
Water Usage
% of Total Water
Tier 1 5,791 83% 44,144 58%Tier 2 949 14% 19,559 26%Tier 3 243 3% 12,435 16%
Summer Accounts
% of Accounts
Water Usage
% of Total Water
Tier 1 2,001 28% 20,839 12%Tier 2 3,273 46% 72,898 41%Tier 3 1,794 25% 86,146 48%
Winter Avg Use = 11 HCF Summer Avg Use = 25 HCF
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Scenario 1 – Preliminary Rates
Residential Accounts• Tier 1 = $1.51• Tier 2 = $2.50• Tier 3 = $4.53Non-Residential
Accounts• $1.99Irrigation Accounts• $2.43
Existing Structure
• Tier 1 = $1.46• Tier 2 = $1.80
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Scenario 1 – Fixed Charges
J uly 1, 201335.19$ 40.84 52.14 80.39
114.30 193.40 306.41 588.93 927.95
Meter Charge*
3/4"
6"8"
4"
1.5"2"3"
5/8"
1"
Existing56.53$ 56.53 56.53 73.48
118.71 446.56 565.29 847.93
1,170.14
Difference(21.34)$ (15.69)$ (4.39)$ 6.91$
(4.41)$ (253.16)$ (258.88)$ (259.00)$ (242.19)$
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Customer Impact – Scenario 1
56.53 52.14 56.53 52.14 56.53 52.14
17.52 18.10 37.76 45.16
54.60 87.33
Existing$74.05
Proposed FY2013 $70.24
Existing$94.29
Proposed FY2013 $97.30
Existing$111.13
Proposed FY2013 $139.47
Low - 12 HCF Med - 24 HCF High - 36 HCF
Variable
Base
28.34
3.01
(3.81)
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Scenario 2 – 40% Variable / 60% FixedRate Revenue
RequiredBase Max Day Customer
AccountMeters & Services Fire Protection
Percent Allocation 100% 16% 23% 30% 24% 6%
Fiscal Year EndingFYE 2013 14,174,558$ 2,331,776$ 3,280,792$ 4,301,593$ 3,399,587$ 860,810$ FYE 2014 14,599,858$ 2,401,739 3,379,231 4,430,660 3,501,590 886,638 FYE 2015 15,037,758$ 2,473,776 3,480,585 4,563,551 3,606,614 913,231 FYE 2016 15,488,958$ 2,548,000 3,585,019 4,700,478 3,714,829 940,632 FYE 2017 15,953,658$ 2,624,445 3,692,576 4,841,502 3,826,281 968,853
40% 60%
• Entire Debt obligation is under Fixed
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Scenario 2 – Preliminary Rates
Residential Accounts• Tier 1 = $1.55• Tier 2 = $3.79
Non-Residential Accounts
• $1.75
Irrigation Accounts• $2.19
Existing Structure
• Tier 1 = $1.46• Tier 2 = $1.80
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Scenario 2 – Fixed Charges
Existing56.53$ 56.53 56.53 73.48
118.71 446.56 565.29 847.93
1,170.14
J anuary 1, 201337.23$ 43.91 57.25 90.61
130.64 224.05 357.49 691.09
1,091.42
Meter Charge*
3/4"
6"8"
4"
1.5"2"3"
5/8"
1"
Difference(19.30)$ (12.62)$
0.72$ 17.13$ 11.93$
(222.51)$ (207.80)$ (156.84)$ (78.72)$
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Customer Impact – Scenario 2
56.53 57.25 56.53 57.25 56.53 57.25
17.52 18.58 37.76 37.16
54.60 69.22
Existing$74.05
Proposed FY2013 $75.83
Existing$94.29
Proposed FY2013 $94.41
Existing$111.13
Proposed FY2013 $126.47
Low - 12 HCF Med - 24 HCF High - 36 HCF
Variable
Base
15.34
0.12
1.78
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Proposed Financial Plan / Rate Structure• January implementation date• Debt restructured to achieve future level payments• Annual revenue adjustments limited to 3%• Selection of fixed / variable percentage split
− 55% / 45%− 60% / 40%
• Fixed cost spread over accounts and meter size• Variable cost allocated to customer classes based on usage and
peaking factors• Residential tiered rate structure tied to fixed / variable split