HOUSTON PUBLIC WORKS RATE INCREASE FY 2020 RATE

HOUSTON PUBLIC WORKS RATE INCREASE & FY 2020 RATE STUDY Samir Solanki Director of Financial Management Services

ANNUAL STANDARD INCREASES TYPE WATER & WASTEWATER DEVELOPER IMPACT PERMIT & OTHER ORDINANCE 2010 -305 HOUSTON CODE 47 -316, 384 ORDINANCE 2011 -1168 CONSUMER’S PRICE INDEX HOUSTON POPULATION or PRODUCER’S PRICE INDEX CONSUMER’S PRICE INDEX PRODUCER’S PRICE INDEX CURRENT INCREASE 2. 8% 4. 3% 2. 4%, 4. 3% EFFECTIVE DATE APRIL 1 ST JULY 1 ST JANUARY 1 ST ORDINANCE BASIS 2

Millions WATER & WASTEWATER ANNUAL STANDARD INCREASE VS. EXPENSE INCREASE $35 $34, 3 $34 $33 $32 $31 $30 Rate Increase $29, 4 Expense Increase $29 $28 $27 $26 2. 80% 2. 88% 3

RATE STUDY PURPOSE 1 provides fair, justifiable rates and fees for services 2 ensures adequate revenue to cover cost of services 3 complies with laws and financial agreements 4 maintains credit rating and low interest rates 4

RATES & FEES WATER & WASTEWATER RATES DEVELOPER IMPACT FEE PERMIT, LICENSE FEES & OTHER COMBINED UTILITY SYSTEM HOUSTON PERMITTING CENTER best practice every 5 years required every 10 years (Texas Local Government Code, Chapter 395) as needed last study in 2013 5

PROCUREMENT PROCESS 1 request for qualification process 2 two contractors submitted acceptable proposals 3 selection based on qualifications, work plan, key personnel & experience 6

CONSULTANT SELECTION Carollo Engineers Other Submittal experience with rate studies for other large cities no experience with rate studies for large cities detailed and comprehensive workplan lack of clear and detailed workplan experience and knowledge of key personnel limited experience of key personnel reasonable timeline for project completion intuitive design of model and dashboard design of model not intuitive or user friendly 7

TIMELINE MAR 2019 APR 2020 JUL 2020 council action to begin rate study council action to increase rates new rates become effective 8

THANK YOU council action to begin rate study March 20, 2019