CouncilWorkshop(5-13-18)v2Water Rate & SDC Update
Council Presentation
May 13, 2018
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Agenda
Background & Context
SDC Update
Financial Plan Process
Comparisons
Recommendations
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Background
Current SDCs adopted in 2001
Single family dwelling = $2,085
SDCs not increased since 2001
Current rates adopted in 2003
Phased in rate increases over 4-year period
Rates not increased since 2006
Water Master Plan updated in 2018
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Financial Analysis Context
Operation & Maintenance Costs & Existing Debt
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SDC Components
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Updated SDC Calculations
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Proposed SDC Schedule
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SDC Comparison*
*2017 Building Officials Survey (Single Family Dwelling)
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Financial Plan Development
Annual cash flow projections over 10-year period
Sources
of Funds
Operating
Expenses
Capital
Financing
Other
Requirements
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Key Assumptions
Customer Growth & Usage
Growth in accounts = 0.9% per year
Water sales = 0.25% annual decline/account
Cost/Revenue Escalation
O&M Costs = 2%-10% per year
SDC Revenue = ($400K)
Policies
10% operating contingency
Equipment replacement funding
Debt service reserve & coverage requirements
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Capital Funding Strategy
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Preliminary Rate Scenarios
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National Rate Increases vs. Inflation*
Recommended Funding Plan
Documentation Presentations
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Projected Monthly Bill Comparison*
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*Typical Single Family Customer (800 cubic feet)
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Current Bill Comparison*
Recommended Funding Plan
Documentation Presentations
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*Source: City of Newberg Rate Study
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SDC Update Requirements
Methodology update notification period
90 days notice of public hearing (done)
60 days for methodology review (underway)
60 day limit to challenge adopted methodology
Inflationary adjustments included in methodology
Future project list updates
30-day notice for changes to list (if increases fee)
Hold public hearing if requested
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Recommendations
Annual revenue increase = 9%-12.5% first year
Adopt updated SDCs
Adjust annually for inflation
Review costs and revenues every 1-2 years
Revise rate strategy as needed to meet financial performance goals
Debt coverage
Capital funding sufficiency
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Further Discussion and Questions
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