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HomeMy WebLinkAbout12092020 City Council Work Session Laydown - Updated Pesentation for Water Sewer Rates 12_09_2020 LAYDOWN 201209 December 9, 2020 CITY OF SEWARD, ALASKA W151 I AND SEWER RATE STUDY ,.a. DRAFT Preliminary Results GovRates, Inc. PUBLIC WORKS Ileum, llp'i Utility,Financial,Rate,and Management AND FINANCE Consultants for Governments DEPARTMENTS www.cFovrates.com i Why We Are Here City's Last Formal Water and Sewer Rate Study Was Completed in 1993, or 27 Years Ago Evaluated Revenue Sufficiency and Existing Rate Structures Developed a Multi-Year Plan to Fund Replacements of Aging Utility Infrastructure as Well as Other Revenue Requirements and to Modernize Water and Sewer Rate Structures Important Objective: Avoid "Rate Shock" to Various Customer Classes Achieving Rate Equity Will Be a Multi-Year Process — Not Advisable to "Fix Everything at Once" C: 's a4l "tr� i �- ba Jrr S�Yk• q`q ^v v3r ti� ""Yt i`u�ar'atl� �� N, Utility Overview City's Water and Sewer Utilities Provide Essential Service on Continuous Basis Public Health and Safety — Primary Objective Highly-Regulated (Alaska Department of Environmental Conservation / EPA) Permits Issued By Regulatory Agencies Require Satisfactory Operating Performance — Fines or Consent Orders for Non-Compliance or If Infrastructure Failures Cause Pollution Enterprise Funds: Operations Primarily Funded Through Monthly User Rates Capital-Intensive "Businesses" of City n q Major Cost Drivers Affecting Y UtilitY S stems Approximately $7.7 Million in Critical Water and Sewer Capital Needs to Be Funded By Utility Recognized Through Fiscal Year 2029 Primarily Replacements of Assets Reaching the End of Their Service Lives — Many Assets Over 30 Years Old Utility Infrastructure Often "Out of Sight, Out of Mind" Renewal and Replacement Needs Will Not Go Away, But Will Be More Expensive to Address in The Future Pictures Showing Interior of 200K Gallon Lowell Canyon Water Storage Tank That Must Be Replaced: 1 Y Multi-Year Capital Improvement Program Water System Capital Needs DescriptionEstimated Cost Percent of Distribution Piping Upgrades $ 1,200,000 29.7% Replace Lowell Canyon 200K Gallon Tank with a New400K Gallon Tank 875,000 21.7% �' Water Line Replacements 400,000 9.9% Vehicles and Equipment 370,000 9.2% ` New Production Well#8 285,000 7.1% L HypochlorideGenerator-SMIC Pump House 250,000 6.2% y'• i �� + Abandon Wells at Fort Raymond 250,000 6.2% s � Gateway Tank Roof-50%Funded By City 150,000 3.7% "y L,. New Automatic Read Meters 150,000 3.7% Refurbish#4 Production Well 85,000 2.1% { Double Wall Fuel Tanks-SMIC WaterTank 25,000 0.6% Total Water System Multi-Year Capital Program $ 4,040,000 100.0% Picture of Gateway Tank Roof Sewer System Capital Needs That Needs to Be Replaced Estimated Cost Percent of Description Through FY 2029 Total Wastewater Lagoon Sludge Removal(Every 10 Years) $ 2,000,000 54.1% Vehicles and Equipment 330,000 8.9% Collection System Infrastructure 325,000 8.8% SMIC Lower Lift Station 300,000 8.1% Manhole Refurbishment 240,000 6.5% SMIC Piping for Bypass 150,000 4.1% New Automatic Read Meters 150,000 4.1% Other Projects 203,000 5.5% Total Sewer System Multi-Year Capital Program $ 3,698,000 100.0% ➢ Above Amounts Are Utility's Responsibility—Additional Costs Assumed to Be Funded Through Grant Assistance �� now a Major Cost Drivers Affecting Utility System Cont. Operating Expenses Projected to Continue Increasing Historical Consumer Price Index Increases About 3% Per Year Due to Regulatory Environment and Commodity Cost Increases (Electricity, Chemicals, Fuel, etc.), Utility Costs Typically Increase at Higher Rate Than General Inflation Increases in Labor Costs and Benefits — Recent Pay Study Permanent Increases in Costs Must Ultimately Be Passed Throuuh to Customers Throuuh User Rates )y ,y C p t1 ul 5 r. %i F^�nf fart(y17 f� hlW7JJ S L.Sm..0 GT1'a INI ' ?o�'s ar'atl� Revenue Requirements Projected Through Fiscal Year1 Include1 1 Operation and Debt Service 1 Maintenance Coverage Expenses Requirements. Annual Revenue CapitalImprovement Administrative Requirements Program Funding Transfers and Through Rates Reserve Allowances • Ongoing i i Meet Useful Service Lives Major—• of i Projected Need for Revenue Adjustments Summary of Proposed Water and Sewer User Rate Revenue Adjustments Fiscal System System Combined Rate Design Year E - - Date Adjustment Adjustment Adjustment 2021 January 1, 2021 10.0% 4.0% 6.9% Determines How 2022 January 1, 2022 10.0% 4.0% 7.1% to Generate 2023 January 1, 2023 10.0% 4.0% 7.2% Additional 2024 January 1, 2024 10.0% 4.0% 7.3% Revenue Needed 2025 January 1, 2025 10.0% 4.0% 7.4% ➢ Best Financial Management Practices: Smaller, Incremental Increases Over Time Help to Avoid Future "Rate Shock" and Higher "Catch Up" Rate Increases Projected Financial Position — Water System Y Summarized Revenue Requirements Analysis-Water System Unrestricted Ending Cash Balances $2,500 $3,000 o $2,000 _____. $2 500 $1,50o Q S2,000 S1,000 _ st,000 550o e S500 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 DW—to l4'rc g Caprtar-.Wdldoual Gpital Finaiug —hm4rvs CaprW Fmtled from hates \4Ik t Senire 4pajvr Renes,Tl avd Repheemevt Fvvd Operating Fspmses prj-M Reem r.dn'Ropvx-0Rates _Op e,a g,a ,1\[aivtmauce FLua(W—g Capk.b Oue YearD -s CssB ou Rana ---projn'rea Re.®aavmer rnsiag R„es — —srx Hpvms na.s case ov xaaa 600i All-In Debt Service Coverage-Net Revenues Onh, Financial Targets Reco2nizeda 500% 40°% Unrestricted Cash: Six Months to One 300% Year Days Cash on Hand 200% All-In Debt Service Coverage: Minimum 100% - - - - - - - - - - - 200% Target (100% Required Per Existing Loan zo19 zozo zou zCM zozs S- zozs zoz6 zoz7 zozs zoz9 6 �Calculated Debt Sn�vice Covn�age Target Debt Service Coverage(200%) Agreements) — —�•Iioimum Debt Sel•vice Covel•age(100%) L�b Projected Financial Position — Sewer System Y v Summarized Revenue Requirements Analysis-Sewer System Unrestricted Ending cash Balances $3,000 s2,s00 $2,500 S2,000 $2,000 a9 Sl,_500 S1,500 — $1,000 c 51,000 5 e $500 a S.;00 61OLWO 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 s.2019 2020 2021 2022 2023 20za 2025 2026 2027 2028 2029 DgiosistotVor gc.ptal-Addidaaal C'a Pi[al Fuadwg (Mher iran3tts nnnnn�Capital Fuode .Rates nnnnn�\�I>ebt Ser,ice Maj or Revenueland Rephremeut FLod aaaaaa�Operating Ery®ses �Proj axed Reamuernder eropoatl Rates �Openi Ng and\[sioteuaote FLaO(\Voatclvg Capftab +—Oee Veer Dars Cash ee Haed ���Projated Rea'®ue Ender Eti4inQ Rates — —Sa NonM.s Dates Cash on Hand A0-In Debt Seivice Coverage-Net Revenues Only 800% - Financial Targets Recognized: 700% 600% Unrestricted Cash: Six Months to One 4O0% Year Days Cash on Hand 300% 200% 100% - - - - - - - r All-In Debt Service Coverage: Minimum °% 200% Target 2019 2020 2021 2022 2023 202d 2025 2026 202'/ 2028 2029 6 —Calculated Debt Service Covtvage —"Target Debt Service Coverage(200%) (100% Required Per Existing Loan — —Required Debt Service Coverage(100%) Agreements) V Financial Risks of Not Adjusting Rates at This Time Inability to Fund All Revenue Requirements, Fund Capital Program, and Meet Financial Targets User Rates Will Be Even Higher in the Future ■ Capital Needs for Systems Will Not Go Away,But Will Be More Expensive to Address in the Future; Inflation and Costs of Construction Continue to Affect System Costs Water System Sewer System Unrestricted Ending Cash Balances with\o Rate Adjustments Unrestricted Ending Cash Balances with No Rate Adjustments 53,000 $2.500 52.000 52.000 eSI,000 —__ _________ 51,500 a � y 51,000 2019 2020 2021 202E 20Zi 3(S(,000) - SO < G 2 (52.000) 0 9 202 Wm21 202E M20. NU SSm) 0) J 51,000) (5453,,00000) rn amo�xmec.9a.o _ sn groom. .m o.x.oa AD-an Debt Selvire Coverage-Net Revenues Only-No Rate Adjustments At InDebt Service Coverage-Net Revenues Only-Na Rate Adjustments '200% 350% .01 J00% 1,50% M% ___________ 200% 50°/0 .50% 2019 2020 2021 202E 202J EAU 20i. 2x26 2028 2029 D� 2019 20m 202t Zm2 Z025 M2G m25 mze M2) 2018 m)9 -150% —Calc0latMDebl Service Cov m1 �iarget Debt Snsiee Coirerage(200%) —Cxlcxlatei Debt Servire.Coverage —Tar get Debt Service Coierage(200%) --Re00ir M Debt Seri ice Cm me(100%) Mfidb m Debt Senior Coverage(100%) ` User Rate Design Objectives Include: Generate Necessary Revenue to Fund Operations, Debt Service, and Capital Needs Keep Rates Affordable and Competitive Avoid "Rate Shock" to Any Customer Class Promote Equity — Each Customer Class Should Pay Its Fair Share of System Costs Modernize Rate Structures Balancing Act — Cannot Always "Fix Everything at Once" rC N, Issues with Current Rates Structures Equivalent Residential Unit (ERU) Relationships for Unmetered Nonresidential Customers Are Unrealistic ERUs Attempt to Relate a Nonresidential Customer's Usage to That of a Single-Family Residential Customer (I ERU) — Examples: Each Hotel Guest Room = 0.3 ERU, Each Barber or Beauty Shop Chair or Tub = 0.75 Commercial Customers Have Recognized Up to 50% Cost Savings in Their Monthly Water and Sewer Bills When Switching from Unmetered Service to Metered Service Recommendation: Switch All Commercial Customers to Metered Service to Promote Rate Equity i:' �s�as��h+��°i .^+�n .i;4'. i`9.dk��a�'t'u�"���4�k1�",�' ��p'`� ��•'�WPr�iG��i i F Issues with Current Rate Structures Cont. Declining Price Blocks for Metered Service Are Not Typical in Water and Sewer Utility Industry at This Time Current Rate Structure: "The More You Use, The Cheaper the Water and Sewer" Current Volumetric Charges for Current Volumetric Metered Water Consumption Charges for Sewer Service f*1 Rate Per Rate Per 000 Gallons 1,000 Gallons 0 to 50,000 gallons $6.17 0 to 10,000 gallons $8.46 50,001 to 550,000 gallons 4.92 10,001 to 50,000 gallons 6.77 550,001 to 1,550,000 gallons 3.76 50,001 to 100,000 gallons 5.61 1,550,001 to 3,550,000 gallons 3.08 100,001 to 200,000 gallons 5.06 Above 3,550,000 gallons 1.57 Above 200,000 gallons 2.50 [*] Based on metered water use. ➢ In Alaska, Single Volumetric Charge for All Metered Usage Is Now the Norm I�� i F Issues with Current Rate Structures Cont. ➢ Substantial Difference in Effective Cost Per 1,000 Gallons Paid By Different Customer Classes Effective Cost Is Sum of Base Charge and Volumetric Charges Divided By Number of Gallons of Usage Effective Cost Per 1.000 Gallons Under Existing Rates Residential User of 6,000 Gallons [11 $8.16 $11.24 Metered Commercial Customers 7.47 9.65 Industrial 2.76 N/A Metered SMIC Customers [21 5.21 4.56 Ship Water 9.66 N/A [11 Seward residential customers are unmetered; based on Alaska statewide per capita water usage of 90 gallons per day applied to 2.1 persons per household in Seward. [21 SMIC = Seward Marine Industrial Center An i F Issues with Current Rate Structures Cont. City Has Separately Allocated Costs for Seward Marine Industrial Center (SMIC) for a Long Time, and Revenue Collections from SMIC Customers Are Much Lower Than Allocated Costs Other Customer Classes Have Been Subsidizing SMIC Customers for Decades — Subsidization Acknowledged in 1993 Rate Study Report SMIC Operating Deficiencies - Budgeted Fiscal Year 2020 [*] Budgeted SMIC Revenue $54,000 $28,000 Budgeted SMIC Operating Expenses 94,675 140,288 Difference-Amount ($40,675) ($112,288) Difference- Percent -75% -401% [*] Does not include SMIC capital needs. ` d. W • y 10 r r" � '� i F Issues with Current Rate Structures Cont. SMIC Revenue Deficiencies (coat.) ■ Not Feasible to Charge Full Cost of Service to SMIC at This Time — State Has Occasionally Discussed Closing Spring Creek Correctional Center During Budget Discussions — If Customers Lost, Many of Allocated Costs Would Then Need to Be Paid By Remaining City Utility Customers ■ However, There Is Potential for Additional Growth in Area — More Customers Over Which to Spread Cost Recovery Recommendation: Continue Charging SMIC the Same Rates as Other Classes; If Development Materializes, Consider Separate Rates for SMIC Customers (i.e., Treat as Separate Service Area) A Proposed Monthly Water User Rates Residential Customers: Monthly Charge Per Month Per Living Unit ■ 1 ERU per Living Unit Is Common in Alaska and the Utility Industry More Than 3 Residential Living Units Requires Metered Service ➢ Commercial Customers: Base Charge Based on Meter Size and Constant Volumetric Charge Per 1,000 Gallons for All Usage All Commercial Customers Must Have Metered Service Large Customers Using More Than 5 Million Gallons Per Year: Treated Same as Commercial Customers, But More Gradual Increases. Large Commercial Customers Are Affected the Most By Proposed Water Rate Structure Changes Ship Water: Rates Raised Uniformly /Across-the-Board Currently Paying Highest Effective Cost Per 1,000 Gallons A Proposed Monthly Water User Rates cont. Proposed Schedule of Monthly Water User Rates - Base Infrastructure Charges Fiscal Year Ending December 3 1, Existing Proposed Proposed Proposed Proposed Proposed Effective Effective Effective Effective Effe ctive Effective January 1, As Soon January 1, January 1, January 1, January 1, IDescitiption 2020 As Practical 2022i i2025 UNMETERED SERVICE: [*] Monthly Charge Per Living Unit $48.96 $48.96 $53.86 $59.25 $65.17 $71.69 Difference 0.00 4.90 5.39 5.92 6.52 METERED SERVICE: Base Infrastructure Charge: Up to 1"Water Service $24.36 $24.48 $26.93 $29.63 $32.59 $35.85 Greater Than 1"Up to 2"Water Service 48.18 48.96 53.86 59.25 65.17 71.69 Greater Than 2"Up to 4"Water Service 242.93 244.80 269.30 296.25 325.85 358.45 Greater Than 4"Up to 6"Water Service 1,228.54 489.60 538.60 592.50 651.70 716.90 Greater Than 6"Up to 8"Water Service 1,228.54 783.36 861.76 948.00 1,042.72 1,147.04 Greater Than 8"Up to 10"Water Service 1,228.54 1,126.08 1,238.78 1,362.75 1,498.91 1,648.87 Greater Than 10"Up to 12"Water Service 1,228.54 2,105.28 2,315.98 2,547.75 2,802.31 3,082.67 Ship Water: During Regular Business Hours $101.54 $111.69 $122.86 $135.15 $148.66 $163.53 Outside Regular Business Hours 203.07 223.38 254.73 270.29 297.31 327.05 [*]Unmetered nonresidential customers are proposed to be charged the following rates per ERU until switched over to metered service: Unmetered Nonresidential per ERU $53.86 $59.24 $65.17 $71.68 $78.85 A , e � Proposed Monthly Water User Rates cont. Proposed Schedule of Monthly Water User Rates - Volumetric Charges r Fiscal Year Ending December 31, 7w Existing Proposed Proposed Proposed Proposed Proposed Effective Effective Effective Effective Effe ctive Effective January 1, As Soon January 1, January 1, January 1, January 1, Description 2020 i22 2023 2024i METERED SERVICE: Charge for Consumption Per 1,000 Gallons-Usage Less Than or Equal to 5 Million Gallons Per Calendar Year 0 to 50,000 gallons $6.17 $6.29 $7.27 $7.50 $7.76 $8.54 50,001 to 550,000 gallons 4.92 6.29 7.27 7.50 7.76 8.54 550,001 to 1,550,000 gallons 3.76 6.29 7.27 7.50 7.76 8.54 1,550,001 to 3,550,000 gallons 3.08 6.29 7.27 7.50 7.76 8.54 Above 3,550,000 gallons 1.57 6.29 7.27 7.50 7.76 8.54 Large User Charge for Consumption Per 1,000 Gallons(Large User=Greater Than 5 Million Gallons Per Calendar Year) All Usage Per 1,000 Gallons $3.77 $4.36 $5.25 $6.21 $6.83 Ship Water Ship Water Per 1,000 Gallons $9.45 $10.40 $11.43 $12.58 $13.84 $15.22 A L�' 90 M Effective Cost Per 1,000 Gallons Under � Proposed Water Rates Projected Effective Cost Per 1,000 Gallons Under Proposed Monthly Water User Rates Description Existing 2021 2022i i2025 Residential User of 6,000 Gallons $8.16 $8.16 $8.98 $9.88 $10.86 $11.95 Metered Commercial Customers (<=5 M Gallons Per Year) 7.47 8.08 9.24 9.67 10.14 11.16 Metered Commercial Customers (>5 M Gallons Per Year) 2.76 3.86 4.45 5.35 6.32 6.95 Metered SMIC Customers 5.21 6.82 7.85 8.14 8.46 9.31 Ship Water 9.66 10.64 11.70 12.86 14.15 15.56 ➢ Multi-Year Plan to Make Rates More Equitable ➢ Over Time, City Should Monitor Customer Responses to Implementation of Proposed Monthly User Rates and Determine If Adjustments to the Rate Structure Are Appropriate Recommend Reviewing Rate Structure Again After Full Year of Customer Billing Statistics Under New Rates Is Available May Observe Some Water Conservation i F Proposed Monthly Sewer Rates Residential Customers: Monthly Charge Per Month Per Living Unit 1 ERU per Living Unit Is Common in Alaska and the Utility Industry More Than 3 Residential Living Units Requires Metered Service Commercial Customers: Base Charge Based on Meter Size and Constant Volumetric Charge Per 1,000 Gallons for All Usage All Commercial Customers Must Have Metered Service u, x0. R� ,1 4^ �t. �► ' '1l.,yti 1 � Proposed Monthly Sewer Rates (cont.)p Y Proposed Schedule of Monthly Sewer Rates Fiscal Year Ending December 31, Existing Proposed Proposed Proposed Proposed Proposed Effective Effective Effective Effective Effective Effective January 1, As Soon January 1, January 1, January 1, January 1, Fesc-iPtion 2i i & As Practical 2022i i2025 UNMETERED SERVICE:[*] Monthly Charge Per living Unit $67.46 $67.46 $70.16 $72.97 $75.89 $78.92 Difference 0.00 2.70 2.81 2.92 3.03 METERED SERVICE: Base Infrastructure Charge: Up to 1"Water Service $57.56 $57.34 $59.64 $62.02 $64.51 $67.08 Greater Than 1"Up to 2"Water Service 95.23 107.94 112.26 116.75 121.42 126.27 Greater Than 2"Up to 4"Water Service 240.11 337.30 350.80 364.85 379.45 394.60 Greater Than 4"Up to 6"Water Service 1,200.47 674.60 701.60 729.70 758.90 789.20 Greater Than 6"Up to 8"Water Service 1,200.47 1,079.36 1,122.56 1,167.52 1,214.24 1,262.72 Greater Than 8"Up to 10"Water Service 1,200.47 1,551.58 1,613.68 1,678.31 1,745.47 1,815.16 Greater Than 10"Up to 12"Water Service 1,200.47 2,900.78 3,016.88 3,137.71 3,263.27 3,393.56 Charge for Consumption Per 1,000 Gallons 0 to 10,000 gallons $8.46 $6.77 $7.33 $7.62 $7.93 $8.24 10,001 to 50,000 gallons 6.77 6.77 7.33 7.62 7.93 8.24 50,001 to 100,000 gallons 5.61 6.77 7.33 7.62 7.93 8.24 100,001 to 200,000 gallons 5.06 6.77 7.33 7.62 7.93 8.24 Above 200,000 gallons 2.50 6.77 7.33 7.62 7.93 8.24 [*]Any unmetered nonresidential customers are proposed to be charged the following rates per ERU until switched overto metered service: Unmetered Nonresidential per ERU $70.16 $72.97 $75.89 $78.93 $82.09 L�' 90 M Effective Cost Per 1,000 Gallons Under Proposed Sewer Rates Projected Effective Cost Per 1,000 Gallons Under Proposed Monthly Sewer Rates . . Residential User of 6,000 Gallons $11.24 $11.24 $11.69 $12.16 $12.65 $13.15 Metered Commercial Customers 9.65 10.41 11.12 11.56 12.02 12.50 Metered SMIC Customers 4.56 7.52 8.11 8.43 8.77 9.12 ➢ Multi-Year Plan to Make Rates More Equitable Over Time, City Should Monitor Customer Responses to Implementation of Proposed User Rates and Determine If Adjustments to the Rate Structure Are Appropriate Recommend Reviewing Rate Structure Again After Full Year of Customer Billing Statistics Under New Rates Is Available t 777, r, Comparison of Monthly Charges For Combined Water and Sewer Service - Monthly Usage of 6,000 Gallons $1so.00 Other Utilities Water Seward Water Other Utilities Wastewater Seward Wastewater S160.00 Rates effective October 2020 S140.00 $116.42 S116A2 S120.00 S100.00 S80.00 S60.00 S40.00 - $20.00 SO.00 o 01 `a. ,`moo o`149 G-ie1 �5'D a�tie` �O Quo o`�g t��aca o �2°a l o Gqc� —GPX `� i Rate Comparison Not a "Report Card" on How Well Utility Is Performing Some Reasons Why User Rates Differ Among Utilities ■ Size of Existing Customer Base/Available System Growth ■ Demographics (e.g., Customers Spread Out vs. Close Together, Types of Customers Served) ■ Level of Capital Improvements to Meet Service Area Growth ■ Amount of Needed Renewals and Replacements /Remaining Service Life of Assets Differences in Bond Covenants Source of Water Supply and Treatment Process Costs Plant Capacity Utilization and Assistance in Funding of Such Capacity (e.g., Grants, System Development Fees) Time of Last Rate Review Amount of General Fund and Administrative Fee Transfers A i Proposed Residential Monthly User Rates Considered Affordable B Utility Industry Standards Y Y Y Environmental Protection Agency: Monthly Water and Wastewater Bill Less Than 4.5% of Median Household Income Considered Affordable Description Monthly Water and Sewer Bill for Single Family Residential Customer $116.42 Median Monthly Household Income Per U.S. Census Bureau [*] 6,368 Percent of Tota 1 1.83% [*] $76,410 annual median household income for Seward / 12 months. Rates Projected to Remain Affordable Throughout Forecast Period ➢ $116.42 / 6,000 gallons = 1.9¢ per Gallon for Water and Sewer Service �- Other Charges Considerations for Determining Proposed Other Charges: Current Utility Costs to Provide Service Comparison with Similar Charges of Other Alaska Utilities City Policies To the Extent Charges Do Not Recover Cost of Providing Services, Cost Difference Must Be Paid Through Monthly User Rates 0Infrastructure Charges Proposed to Be Separate from Turn-On and Turn-Off Fees ➢ Charged Monthly to Inactive Accounts City Has Built Utility Infrastructure to Provide Service and Utility Continues to Incur Fixed Costs to Maintain "Ready- to-Serve" Condition Billing Inactive or "Vacant" Accounts Reduces Overall Costs to Year-Round Customers and Helps Keep User Rates Lower Cr Infrastructure Char a (cont.)g ➢ Proposed Schedule of Monthly Infrastructure Charges Fiscal Year Encling December 31 FDescd 2021 2022i i2025 Water Infrastructure Charge Group A Per Living Unit $24.48 $26.93 $29.63 $32.59 $35.85 Unmetered Group B Per ERU 24.48 26.93 29.63 32.59 35.85 Group B Up to 1"Water Service 24.48 26.93 29.63 32.59 35.85 Group B Greater Than 1"Up to 2"Water Service 48.96 53.86 59.25 65.17 71.69 Group B Greater Than 2"Up to 4"Water Service 244.80 269.30 296.25 325.85 358.45 Group B Greater Than 4"Up to 6"Water Service 489.60 538.60 592.50 651.70 716.90 Group B Greater Than 6"Up to 8"Water Service 783.36 861.76 948.00 1,042.72 1,147.04 Group B Greater Than 8"Up to 10"Water Service 1,126.08 1,238.78 1,362.75 1,498.91 1,648.87 Group B Greater Than 10"Up to 12"Water Service 2,105.28 2,315.98 2,547.75 2,802.31 3,082.67 Sewer Infrastructure Charge Group A Per Living Unit $33.73 $35.08 $36.49 $37.95 $39.46 Unmetered Group B Per ERU 33.73 35.08 36.49 37.95 39.46 Group B Up to 1"Water Service 33.73 35.08 36.49 37.95 39.46 Group B Greater Than 1"Up to 2"Water Service 63.49 66.03 68.69 71.44 74.28 Group B Greater Than 2"Up to 4"Water Service 198.41 206.35 214.65 223.24 232.12 Group B Greater Than 4"Up to 6"Water Service 396.82 412.71 429.29 446.47 464.24 Group B Greater Than 6"Up to 8"Water Service 634.92 660.33 686.87 714.35 742.78 Group B Greater Than 8"Up to 10"Water Service 912.69 949.22 987.38 1,026.88 1,067.74 Group B Greater Than 10"Up to 12"Water Service 1,706.34 1,774.64 1,845.96 1,919.82 1,996.21 A i Additional Proposed Changes to Other Charges Elimination of Cents on Fees Due to Historical Rounding Removal of Fees Not Currently Charged or Services Not Provided "Right-Sizing" of Fees Based on Current Cost Estimates Seasonal Locate Service Fees Adjusted to "Call 811" (Call Before You Dig) Policy of No Charge for First Locate Regardless of Season Charge for Additional Locate on Same Property Added $10 Per Dump Fee to Be Charged at City-Owned or Approved Dump Sites i Requested Council Action Recommendation to Adopt Proposed User Rates for Fiscal Years 2021 Through 2025 Help Ensure Full Cost Recovery and Address Capital Needs Rates Affordable and Competitive ➢ Recommendation to Adopt Proposed Special / Other / Miscellaneous Charges ➢ Recommendation for Continued Automatic Rate Indexing in Absence of Rate Study Recommendation Requested Council Action (cont.) Monitor Actual Vs. Projected Financial Results Changes in Economic Conditions, Customer Usage Trends, Regulatory Environment, Customer Responses to Rate Adjustments, Etc. Update Financial and Rate Plan as Needed, Possibly After One Year Under Revised Rate Structure C: