Water Rates Utility Rates SDCs Presentation to the

Water Rates Utility Rates & SDCs Presentation to the West Linn City Council October 5, 2009 Utility & SDC Water Rates - City of West Linn

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 10/29/2021 2

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 10/29/2021 3

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 Master Plan $33 million Existing Needs $21 million 10/29/2021 Future Needs $12 million 4

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 Master Plan $33 million Existing Needs $21 million Future Needs $12 million What is required rate to pay for $21 million in projects? What is required rate to pay for $12 million in projects? 10/29/2021 5

Step 4: set rates Setting Water Utility Rates – Pioneer Consulting Group assistance – Next presentation will show some options for policy makers to consider Setting Water SDC Rates – FCS Group assistance – Recommend 46 percent base SDC rate increase from $4, 628 to $6, 747 10/29/2021 6

Current Utility Bill Comparison – Residential Customers 10/29/2021 7

Average Resident Monthly Utility Bill Residential Rates Comparison for an 8 CCF Monthly Usage Home (Median West Linn City Councilor Monthly Usage is 7 CCF) Existing Rates & Structure 5 Percent Increase Current Rate Water $ 16 Tiered Water Rate Proposals $ 17 1 Rate For All Usage $ 28 2 Tier Rates 3 Tier Rates 7 Tier Rates $ $ $ 23 22 19 Sewer 25 26 26 26 Surface 4 4 4 Street 5 5 5 Parks 10 11 10 10 Total $ 60 $ % increase from current utility total 63 5% $ 73 22% $ 68 13% $ 67 $ 12% 64 7% Remember: City’s total revenue yield is the same in every proposal – the impact on various user groups is different! 10/29/2021 8

Current Utility Bill Comparison – Residential Customers 1 rate 10/29/2021 2 rate 3 rate 7 rate 9

SDC Comparison for New Development 10/29/2021 10

Next discussion areas Rate options, explanations & impacts Pioneer Consulting Group – tiered rate impacts FCS Group – water SDC rates 10/29/2021 11

Questions? For more information: – Richard W. Seals, CPA CMA CFM – Finance Director – City of West Linn, Oregon – rseals@westlinnoregon. gov 10/29/2021 12