Water Rate Study February 2009 Water Rate Study

Water Rate Study February 2009 Water Rate Study

Agenda Current Financial Situation Current Water Rates Water Rate Study I. III. Ø Ø Ø IV. Rate Study Process Financial Plan Methodology Results Impacts Discussion February 2009 Water Rate Study 2

I. Current Financial Situation February 2009 Water Rate Study 3

Current Financial Situation n. Water rates last updated n. Water revenues under existing rates n. Annual n. Total 1995 $1. 1 M O&M $1. 78 M CIP (FY 2010 – 2014) n. Existing $11. 6 M debt service $77 K n. New debt service ($4. 2 M in 2011, $3. 5 M in 2013) by FY 2013 n. Water $501 K Enterprise Fund deficit (end FY 2009) February 2009 Water Rate Study $1. 15 M 4

Cash flows – Large Deficit Under Existing Rates Assuming no rate adjustments made February 2009 Water Rate Study 5

Reserves – Huge Deficit Under Existing Rates Assuming no rate adjustments made February 2009 Water Rate Study 6

Projected Capital Improvement Plan (CIP) February 2009 Water Rate Study 7

II. February 2009 Current Water Rates Water Rate Study 8

Current Water Rate Structure February 2009 Water Rate Study 9

Current Water Rate Structure February 2009 Water Rate Study 10

Monthly Bills Comparison Chart February 2009 Water Rate Study 11

III. Water Rate Study n n n February 2009 Process Financial Plan Methodology Results Impacts Water Rate Study 12

Rate Study Process February 2009 Water Rate Study 13

Water Usage Characteristics February 2009 Water Rate Study 14

Proposed Rate Adjustments February 2009 Water Rate Study 15

Operating Financial Plan February 2009 Water Rate Study 16

Debt Service Coverage Summary February 2009 Water Rate Study 17

Operations Reserves Ending Balances February 2009 Water Rate Study 18

Combined Reserves Ending Balances February 2009 Water Rate Study 19

Cost of Service Methodology n AWWA – Base Extra Capacity Method: q q q Base costs – Costs of serving water under average conditions Peaking costs – Maximum day and maximum hour costs Service charge – Customer service costs + Meter capacity costs February 2009 Water Rate Study 20

Peaking Factors February 2009 Water Rate Study 21

Proposed Rates Service Charges in FY 2010 February 2009 Water Rate Study 22

Single Family Residential Bill Frequency Analysis February 2009 Water Rate Study 23

Proposed Rates Water Usage Rates in FY 2010 February 2009 Water Rate Study 24

Proposed Rates – Scenario 1 February 2009 Water Rate Study 25

Proposed Rates – Scenario 2 February 2009 Water Rate Study 26

Proposed Rates – Scenario 3 February 2009 Water Rate Study 27

Customer Impacts Test year FY 2010 February 2009 Water Rate Study 28

Rate Survey Results February 2009 Water Rate Study 29

Comparison of 3 Scenarios Scenario 1 Scenario 2 Scenario 3 Rate Adjustments 200%, 3%, 3% 125%, 40%, 6%, 6% 72%, 50%, 3% PROS n. High n. Smallest CONS n. Greatest debt coverage ratio n. Positive reserves by FY 2011 n. Smallest long-term customer impacts debt coverage ratio n. Medium customer impacts n. Positive reserves by FY 2011 initial customer impacts (in FY 2010) February 2009 initial customer impacts (in FY 2010) n. Largest long-term customer impacts (by FY 2014) n. Low initial debt coverage ratio n. Deficit continues until end FY 2011 Water Rate Study 30

IV. Discussion February 2009 Water Rate Study 31

Cash flows – Large Deficit Under Existing Rates February 2009 Water Rate Study 32

Reserves – Huge Deficit Under Existing Rates February 2009 Water Rate Study 33

Projected Capital Improvement Program (CIP) February 2009 Water Rate Study 34

Revenues from Existing Rates February 2009 Water Rate Study 35

Projected Cash Outflows February 2009 Water Rate Study 36