City of Petersburg Water and Sewer Rates April

City of Petersburg Water and Sewer Rates April 26, 2011

Background • Water and sewer rates were last revised in July 2007. • In 2007, the rate structure was revised and simplified. • Analysis of FY 2011 revenue and expenses and FY 2012 budget indicates rate increase is needed.

Overview of FY 2012 - 2016 Projections (using Current Rates) FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 WATER Projected Operating Revenue $ 2, 737, 915 Projected Operating Expense (including debt service) 2, 837, 036 Net Income (Deficit) % Increase in Revenue Needed to Eliminate Deficit $ (99, 121) 4. 2% $ 2, 745, 601 $ 2, 762, 287 $ 2, 778, 973 $ 2, 795, 659 2, 939, 847 2, 989, 036 $ (194, 246) $ (226, 749) 8. 2% 9. 5% 3, 044, 976 3, 076, 915 $ (266, 003) $ (281, 256) 11. 1% 11. 6% SEWER Projected Operating Revenue $ 4, 489, 628 Projected Operating Expense (including debt service) $ 4, 784, 337 $ 4, 907, 005 $ 4, 975, 341 $ 5, 087, 441 $ 5, 096, 614 Net Income (Deficit) % Increase in Revenue Needed to Eliminate Deficit $ 4, 518, 581 $ 4, 550, 285 $ 4, 581, 988 $ 4, 613, 692 $ (294, 709) $ (388, 424) $ (425, 056) $ (505, 453) $ (482, 923) 7. 0% 9. 2% 10. 0% 11. 8% 11. 2%

0 Annual Average Monthly Average 11/1/2010 9/1/2010 7/1/2010 5/1/2010 3/1/2010 11/1/2009 9/1/2009 7/1/2009 5/1/2009 3/1/2009 11/1/2008 9/1/2008 7/1/2008 5/1/2008 3/1/2008 200, 000 1/1/2008 11/1/2007 9/1/2007 7/1/2007 5/1/2007 3/1/2007 11/1/2006 Water Purchases – 2006 - 2010 Water Purchased from ARWA 180, 000 160, 000 140, 000 120, 000 100, 000 80, 000 60, 000 40, 000 20, 000

Factors Influencing Rate Increase • Rates adopted in 2007 • Overall, operating costs have increased over past four years – Cost to purchase water, distribute water – Cost of wastewater collection and treatment • Operating deficits in both water and sewer operations in FY 2011 • Proposed rates will likely need to be adjusted upward in subsequent years

Proposed Increases for FY 2012 Water Rate Increase – 5. 0% Sewer Rate Increase - 7. 25% Proposed Increases Provide Revenues that Cover Projected Expenses

Current and Proposed Water / Sewer Rates and Fees (Bi-Monthly) Current Rates and Fees Proposed Rates and Fees Commodity Charges Water ($ / CCF) Sewer ($ / CCF) Water ($ / CCF) Sewer ( % /CCF) 0 to 6 CCF $0. 300 $0. 570 0 to 6 CCF $0. 320 $0. 610 7 – 250 CCF $1. 290 $2. 451 7 – 250 CCF $1. 350 $2. 630 Over 250 CCF $0. 825 $1. 5675 Over 250 CCF $0. 870 $1. 6800 Capacity Charges Meter Size Residential Non-Residential 5/8 1. 50 2 3 4 6 8 10 12 Water $9. 00 $22. 50 $39. 40 $72. 00 $144. 00 $225. 00 $450. 00 $900. 00 $1, 395. 00 $1, 800. 00 Capacity Charges Sewer $17. 10 $42. 75 $74. 85 $136. 80 $277. 60 $427. 50 $855. 00 $1, 710. 00 $2, 650. 50 $3, 420. 00 Meter Size Residential Non-Residential 5/8 1. 50 2 3 4 6 8 10 12 Water $9. 45 $23. 65 $41. 35 $75. 60 $151. 20 $236. 25 $472. 50 $945. 00 $1, 464. 75 $1, 890. 00 Sewer $18. 34 $18. 35 $45. 85 $80. 30 $146. 70 $297. 75 $458. 50 $917. 00 $1, 834. 00 $2, 842. 70 $3, 667. 95

Impacts on Bi-Monthly Bill – Residential Consumption (CCF) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Current Water $9. 00 $9. 30 $9. 60 $9. 90 $10. 20 $10. 50 $10. 80 $12. 09 $13. 38 $14. 67 $15. 96 $17. 25 $18. 54 $19. 83 $21. 12 $22. 41 $23. 70 $24. 99 $26. 28 $27. 57 $28. 86 Total Current Bi-Monthly Current Sewer Bill $17. 10 $26. 10 $17. 67 $26. 97 $18. 24 $27. 84 $18. 81 $28. 71 $19. 38 $29. 58 $19. 95 $30. 45 $20. 52 $31. 32 $22. 97 $35. 06 $25. 42 $38. 80 $27. 87 $42. 54 $30. 32 $46. 28 $32. 78 $50. 03 $35. 23 $53. 77 $37. 68 $57. 51 $40. 13 $61. 25 $42. 58 $64. 99 $45. 03 $68. 73 $47. 48 $72. 47 $49. 93 $76. 21 $52. 38 $79. 95 $54. 83 $83. 69 Total Proposed Bi. Water Sewer Monthly Bill $ Increase % Increase $9. 45 $18. 34 $27. 79 $1. 69 6. 47% $9. 77 $18. 95 $28. 72 $1. 75 6. 49% $10. 09 $19. 56 $29. 65 $1. 81 6. 50% $10. 41 $20. 17 $30. 58 $1. 87 6. 51% $10. 73 $20. 78 $31. 51 $1. 93 6. 52% $11. 05 $21. 39 $32. 44 $1. 99 6. 53% $11. 37 $22. 00 $33. 37 $2. 05 6. 54% $12. 72 $24. 63 $37. 35 $2. 29 6. 53% $14. 07 $27. 26 $41. 33 $2. 53 6. 51% $15. 42 $29. 89 $45. 31 $2. 77 6. 50% $16. 77 $32. 52 $49. 29 $3. 01 6. 49% $18. 12 $35. 15 $53. 27 $3. 24 6. 49% $19. 47 $37. 78 $57. 25 $3. 48 6. 48% $20. 82 $40. 41 $61. 23 $3. 72 6. 47% $22. 17 $43. 04 $65. 21 $3. 96 6. 47% $23. 52 $45. 67 $69. 19 $4. 20 6. 46% $24. 87 $48. 30 $73. 17 $4. 44 6. 46% $26. 22 $50. 93 $77. 15 $4. 68 6. 46% $27. 57 $53. 56 $81. 13 $4. 92 6. 45% $28. 92 $56. 19 $85. 11 $5. 16 6. 45% $30. 27 $58. 82 $89. 09 $5. 40 6. 45%

Comparison to Neighbors Bi-Monthly Water and Sewer Charges - Residential Users Based on Consumption of 12 CCF over 2 months Locality Water Charge Sewer Charge Total Petersburg - Existing Rates $ 18. 54 $ 35. 23 $ 53. 77 Petersburg - Proposed Rates $ 19. 47 $ 37. 78 $ 57. 25 Chesterfield County $ 30. 52 $ 43. 64 $ 74. 16 Chesterfield County - Proposed $ 32. 02 $ 45. 52 $ 77. 53 Henrico County $ 38. 62 $ 50. 70 $ 89. 32 City of Richmond $ 55. 50 $ 83. 69 $ 139. 19 City of Richmond - Proposed $ 56. 74 $ 87. 34 $ 144. 08 Prince George $ 39. 90 $ 55. 95 $ 95. 86 Colonial Heights $ 19. 31 $ 44. 52 $ 63. 83 Average in Virginia $ 49. 57 $ 60. 12 $ 109. 69 12 ccf = 8, 976 US Gallons

Future Increases • Incremental increases will likely be needed over next 5 years • Consider frequent, but small, rate adjustments • Improvements to wastewater treatment plant will impact sewer budget in next few years – exact impact not known • Assumption is that connection fees will generate revenue for much of CIP

Summary Comments • Proposed increases are moderate • All customers receive the same % increase • Proposed rates are very reasonable when compared to neighbors’ rates • Very reasonable compared to rates in other areas of Virginia