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Agenda - 03/05/2001 Workshop
Rate Alternative #3: Cost-of-Service; no usage allowance; SFR 2-block usage rates (27%) SF RESIDENTIAL Volume Block One (ccf) Block Two (ccf) Fixed 0 I to I10 10 I to I Be¥ond 3/4" & Smaller $7.04 $0.67 $1.01 1" 14.37 0.67 1.01 1 ½" 26.59 0.67 1.01 2" 41.25 0.67 1.01 3" 80.33 0.67 1.01 4" 124.31 0.67 1.01 6" 246.46 0.67 1.01 8" 393.04 0.67 1.01 MF RESIDENTIAL & COMMERCIAL Meter Size Fixed 3/4" & Smaller $9.13 1" 19.60 1 ½" 37.04 2" 57.97 3" 113.78 4" 176.57 6" 350.98 8" 560.27 Volume (ccf) $0.71 INDUSTRIAL Meter Size Fixed 3/4" & Smaller $13.11 1" 29.54 1 ½" 56.93 2" 89.79 3" 177.42 4" 276.00 6" 549.85 8" 878.46 Volume (ccf) $0.84 12 FIRE SERVICE Meter Size Fixed 3/4" & Smaller $3.50 1" 3.50 1 ½" 4.17 2" 4.85 3" 6.19 4" 7.54 6" 10.23 8" 12.92 FCS Group, Inc. Sample Bills for SFR Customers Assuming a 27% total increase SF RESIDENTIAL 3/4" METER Alternative 1Alternative 2Alternative 3 Assumed Existing COS Across COS Usage Rates Three Block the Board Two- Block 2 ccf $7.45 $8.34 $9.46 $8.39 4 ccf 7.45 9.63 9.46 9.74 8 ccf 10.25 12.44 13.02 12.43 12 ccf 13.05 15.88 16.57 15.80 18 ccf 17.25 21.05 21.91 21.88 25 ccf 22.15 29.45 28.13 28.98 50 ccf 42.35 59.43 53.78 54.31 100 ccf 84.85 119.41 107.76 104.98 13 FCS Group, Inc. System Development Charge Calculation Reimbursement Fee plus Improvement equals Fee I I System Development Charge Eligible cost of available capacity in existing facilities divided by Growth in system capacity Eligible cost of planned capacity increasing facilities divided by Growth in system capacity 14 per unit of capacity FCS Group, Inc. Proposed SDCs (current basis) REIMBURSEMENT FEE Cost of Net Unused Capacity (1) Growth to 2020 (2) Reimbursement Fee IMPROVEMENT FEE Capacity Expanding CIP (3) Growth to 2020 (2) Improvement Fee TOTAL SYSTEM DEVELOPMENT CHARGE $ 7,113,377 2,040,000 $ 3.49 $8,402,639 2,040,000 $4.12 gpd per gpd gpd per gpd Reimbursement Fee Improvement Fee Subtotal SDC Plus: Administrative Cost Recovery (4) Total SDC NOTES: $ 3.49 $ 4.12 $ 7.61 3.O7% $ 7.84 per gpd per gpd per gpd per gpd (1) Total Unused Capacity of Plant-in-Service for All Customers (2) Average daily use in 2020 minus ADD in 2000 assumes no water conservatic page 4-8 (results in lower SDC) (3) Recommended improvements until 2020 from City Engineers (4) Administrative cost recovery calculated as follows: Annual Cost of Administering SDC & SDC Study Cost $ Projected Annual SDC Revenues $ Percentage Markup 15 Commiffee Recommendofion 15,206 496,071 3.O7% FCS Group, Inc. Proposed SDCs (meter equivalent basis) REIMBURSEMENT FEE Cost of Net Unsused Capacity (1) Growth to 2020 (2) Reimbursement Fee IMPROVEMENT FEE $ 7,113,377 7,669 928 meter equivalents per meter equivalent Capacity Expanding CIP (3) Growth to 2020 (2) Improvement Fee TOTALSYSTEM DEVELOPMENT CHARGE $ 8,402,639 7,669 $ 1,096 meter equivalents per meter equivalent Reimbursement Fee Improvement Fee Subtotal SDC Plus: Administrative Cost Recovery (4) Total SDC NOTES: $ 928 $ 1,096 $ 2,023 3.07% $ 2,085 per meter equivalent per meter equivalent per meter equivalent per meter equivalent (1) Total Unused' Capacity of Plant-in-Service for All Customers (2) Average daily use in 2020 minus ADD in 2000 assumes no water conservation page 4-8 (results in lower SDC) (assumed ERU= 266 gpd per meter equivalent) (3) Recommended improvements until 2020 from City Engineers (4) Administrative cost recovery calculated as follows: Annual Cost of Administering SDC & SDC Study Cost $ 15,206 Projected Annual SDC Revenues $ 496,071 Percentage Markup 3.07% 16 FCS Group, Inc. Proposed SDCs by Meter Size Meter Size 3/4" & Smaller 2" 3" 4" 6" Flow Factor SDC 1 $ 2,085 2.5 5,213 5 10,426 8 16,681 16 33,363 25 52,130 50 104,259 8O 166,815 17 FCS Group, Inc. Residential Water Rate Com arison NOTE: Woodburn Minimum Charge: $7.45/400cf Above minimum: $0.70 per 100cf above 3,200 cf: $0.85 per 100cf Monthly Charge % City Population (10 ccf) + or - Hubbard 2,300 $33.16 184.6% Oregon City 22,600 28.41 143.9% Si Ive rton 6,800 22.88 96.4% Lake Oswego 34,300 21.01 80.3% Canby 12,500 20.00 71.7% Gervais 1,400 18.00 54.5 % N ewberg 17,400 16.77 43.9% i H il Isbo ro 65,200 15.79 35.5 % West Linn 21,500 15.29 31.2% Woodburn (proposed) 16, 600 14.80 27. 0 % Forest Grove 16,200 14.27 22.5% Salem 127,000 13.95 19.7% Keizer 29,300 12.98 11.4% Woodburn (existing) 16,600 11.65 0.0% McMinnville 24,300 10.63 -8.8% 18 FCS Group, Inc. Woodburn's existing rates are approximately 56.2% lower than the average of all 13 Cities. Water SDC Comparison Jurisdiction West Linn (Annex) Wilsonville (Int. 5) Woodburn (Update) Lake Oswego Oregon City Forest Grove Average * (high) Averaqe * (Iow) $3,119 $2,794 $2,085 $2,015 $2,657 $1,000 $2,666 $2,179 Jurisdiction West Linn (City) Wilsonville (non-Int. 5) Woodburn (current) Silverton Newberg Canby *based on highest and lowest for Woodburn, West Linn, and Wilsonville $2,290 $2,794 $1,452 $1,720 $3,415 $ ,8oo 19 FCS Group, Inc. Rate Alternative #la: Cost-of-Service; no usage allowance; SFR 3-block usage rates SF RESIDENTIAL Block One(ccf) Block Two(ccf) Block Three(ccf) 3/4" & Smaller $ 10.40 $ 0.98 $ 1.24 $ 1.72 1" 21.23 $ 0.98 $ 1.24 $ 1.72 1 ½" 39.27 $ 0.98 $ 1.24 $ 1.72 2" 60.91 $ 0.98 $ 1.24 $ 1.72 3" 118.64 $ 0.98 $ 1.24 $ 1.72 4" 183.59 $ 0.98 $ 1.24 $ 1.72 6" 363.99 $ 0.98 $ 1.24 $ 1.72 8" 580.47 $ 0.98 $ 1.24 $ 1.72 MF RESIDENTIAL & COMMERCIAL INDUSTRIAL FIRE SER~ - ............. I I1~.[-- ~J[..l~Vil,.~l- Block One(ccf) Block One(ccf) Total Fixed Total Fixed 0 I ccfto I Beyond 'Total Fixed 0 I ccfto I Beyond 3/4"& Smaller $ 5.17 3/4" & Smaller $ 13.49 $ 1.05 3/4" & Smaller $ 19.36 $ 1.24 1" 5.1 7 1" 28.94 $ 1.05 1" 43.63 $ 1.24 1 ¼" 6.17 1 ½" 54.70 $ 1.05 1 ½" 84.07 $ 1.24 2" 2" 85.61 $ 1.05 2" 7.16 3" 168.04 $ 1.05 3" 132.60 $ 1.24 3" 262.02 $ 1.24 9.14 4" 4" 260.76 $ 1.05 4" 407.61 $ 1.24 11.13 6" 518.34 $ 1.05 6" 812.04 $ 1.24 6" 15.10 .8" 827.44 $ 1.05 8" 1,297.36 $ 1.24 8" 19.08 20 FCS Group, Inc. Rate Alternative #2a: Across-the-Board Increase (1 t0%) Monthly Basic Minimum Monthly Meter Size Quantity Charge 3/4" 4 ccf $15.65 1" 6 ccf $20.48 1 ½" 18 ccf $42.84 2" 32 ccf $69.51 3" 75 ccf $145.74 4" 150 ccf $290.96 6" 320 ccf $599.66 8" 570 ccf $1,043.49 Multi-family ('per DU)4 ccf $15.65 Quantity over basic (up to 32 ccf) $1.47 Quantity over 32 ccf $1.79 )er ccf ~er ccf 21 FCS Group, Inc. Rate Alternative #3a: · Cost-of-Service; no usage allowance; SFR 2-block usage rates SF RESIDENTIAL Block One(ccf) Block Two(ccf) Total Fixed 0 I ccfto I 10 10 ccfto IBey°nd 3/4" & Smaller $ 10.40 $ 0.99 $ 1.50 1" 21.23 $ 0.99 $ 1.50 1 ½" 39.27 $ 0.99 $ 1.50 2" 60.91 $ 0.99 $ 1.50 3" 118.64 $ 0.99 $ 1.50 4" 183.59 $ 0.99 $ 1.50 6" 363.99 $ 0.99 $ 1.50 8" 580.47 $ 0.99 $ 1.50 MF RESIDENTIAL & COMMERCIAL Block One(ccf) Total Fixed 0 I ocfto IBeyond !3/4" & Smaller $ 13.49 $ 1.05 1" 28.94 $ 1.05 1 ½" 54.70 $ 1.05 2" 85.61 $ 1.05 3" 168.04 $ 1.05 4" 260.76 $ 1.05 6" 518.34 $ 1.05 8" 827.44 $ 1.05 INDUSTRIAL I Total Fixed 3/4" & Smaller /S 19.36 1" J 43.6 1 y," / 84.0 2" 3" / 132.60 262.02 4" 407.61 6" 812.04 8" 1,297.36 FIRE SERVICE Block One(ccf) 0 I ccfto IBeyon( $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 $ 1.24 3/4" & Smaller 1½" 2" 3" 4" 6" 8" r Total Fixed $ 5.17 5.17 6.17 7.16 9.14 11.13 15.10 19.08 22 FCS Group, Inc. A(i£NDA fOl~ WOI~K~HOP WOODBUI~N CITY COUNCIL WAT£1~ MAST£1~ PLAN COMMITT££ MONDAY MAI~Cfl 5, 200! ~ 6:00 PM COUNCIL CflAMB£1~, WOODBUI~N CITY IIALL !. CALL TO OI~D£1~ . ~. I~OLL CALL n n WAT£1~ MAST£1~ PLAN COMM1¥~££ INTI~ODUCTION$ DISCUSSION 01: WAT£1~ SY~T£M IMPI~OVEMENT$ flandy I~ohman - Public Works DISCUSSION 01: rUNDINO I$$U£$ John Ohilarducci - rCS Oroup OUESTION$ AND COMMENTS NEXT STEP8 Public Hearing/Open House Master Plan Adoption Hate Increase/SDC Modification Adoption 8. ADJOUI~NM£NT City of Woodburn Water Rate & System DeVelopment Charge Study City Council Work Session March 5, 2001 Financial Consulting Solutions Group, Inc. 8642 154th Ave. NE, Redmond, WA 98052 (425) 867-1802 Background · Standard Water System Revenue Sources - Water rates - System development charges · Additional Revenue Requirements - Projected revenue shortfall for operating expenses · last rate increase July 1992 - Revenue for planned system upgrades & expansion · iron & manganese removal · construction of additional storage 2 FCS Group, Inc. Key Policy Issues · Treatment Plant scheduled for 2002-2005 - How best to schedule rate increases? · Cost of Service Allocation & Rate Equity - Charging municipal customers for water use · Conservation Incentives & Rate Design - Eliminating the usage allowance - Steepening the increase for high usage (SFR only) · System Development Charge Basis - Meter equivalents or estimated demand? FCS Group, Inc. Rate Study Process Overview CaPital Revenue ~ ~ Ope:rating ReVenue I ~ Requirement ._ Requirement J ~._. Total Revenue Requirement ~ Cost of service AllocatiOn I-------"------------I I .... --------'--I I----------~--------I I~------ ...... I ~ ~ '~ Fire Customer ~ ~ ~ Base ~ EXtra I I : I I '--- ~""--"--------" '""'-- ---- ~---- ~"-' '- I" Rate DeSign/Rate Calcu'ati°n ~ 4 FCS Group, Inc. Revenue Requirement Scenario #1: Rate Increases Smoothed Over Time Year Ending Sources of Cash June 3O. 2000 2001 Begin~no Cash BalatT¢_~ Capital Fund $478.587 $495,887 $520.681 $546,715 $6.045.232 $0 $0 Maintenance Fund $257,245 $234.582 $190.366 $273.852 $252.965 $499.216 $298.826 System Development Trusl - improvement $251.450 $623.450 $502.335 $720.028 $904.975 $868.033 $350.489 System Development Trusl- Reimbursement $1.630.660 $1.712.193 $1.888.610 $1.556.806 $320.994 $267.471 $273.343 Replacement Fund $0 $0 $0 $0 $0 $0 $0 Rate Stabilization $0 $0 $0 $0 $0 $0 Sn Total Beginning Cash Balance - All Funds $2.617.942 $3,066.112 $3.101,992 $3.097.402 $7,524.166 $1.634.720 $922.658 O ra~R~venue_~s . ~ 77 7~ Water Rate Revenues (after increases) $1.144.678 $1.156.125 $1,329.280 $1.917.291 $2.332.960 $2.838.746 Interest Earnings Applicable to Coverage $160.033 $128.511 $129.066 $161,835 $108.248 $160.13o All Other Interest Earnings $17.300 $24.794 $26.034 $27.336 $302.262 $0 Other Operating Revenues $131.007 $125.500 $128.551 Subtotal $131.707 $134.972 $138.351 $1,453.018 $1,434.931 $1.612,931 $2.238.170 $2,878.442 $3.137,235 System Developmenl Trust - Improvement $300.000 $268.646 $277.780 $287.224 $296.990 $307.087 $317.528 System Development Trust - Reimbursement $0 $227.426 $235.158 $243.154 All Debt Proceeds $251.421 $259.969 $268.808 $0 $0 $0 $6,300.000 $0 $8,100,000 $0 Subtotal $300,000 $496,071 $512,938 $6,830,378 $548,411 $8,667,057 $586,336 Total Cash Available -- $4,370,960 $4,997,114 $5,227,860 $12,165,949 $10,951,018 $13,439,012 ;~,4,885,56, 5_ Uses of Cash 2000 2001 2002 2003 2004 2005 200~, Total Operating Expenditures $1,304,848 $1,415,700 $1,464,337 $1,514,749 $1.667,004 $1,721,175 $1,777,336 Revenue Bond Debt Service All Other Debt Syslem Improvement & Replacement Expenditures Less: Contingency Funding Total Expenditures Interfund Transfer Ending Cash Balance REVENUE BOND COVERAGE ATTAINED AFTER iNCREASE October 1, 2001 Implementation $3,; Cornmiffee Recommendafion $0 $0 $0 $686.019 $686.019 $1.568.043 $1.568.043 $0 $0 $0 $0 $0 $0 $0 $0 $557.553 $746.595 $2,523.904 $7.048.650 $9.315.071 $0 $0 ($78.130) ($80.474) ($82.888) ($85.375) ($87.936) ($90.574) $1,304.848 $1.895.123 $2.130.458 $4.641,783 $9.316.298 $12.516.353 $3.254.805 $0 $0 $0 $0 $0 $0 $0 $3,066,112 $3,101,992 $3,097,402 $7 524 166 $1 634 720 $922,658 $1 630 760 0.00 0.00 0.0o 1.79 2.12 1.26 1.39 FCS Group, Inc. Revenue Requirement Scenario #2' One-time Rate Increase Good Through 2005 Year Ending Sources of Cash June 30, 2000 2001 2002 2003 2004 2005 2006 B~eqinnin(7 Cash Balance Capital Fund $478,587 Maintenance Fund $257,245 System Development Trust - Improvement $251,450 System Developmenl Trusl - Reimbursement $1,630,660 Replacement Fund $0 Rate Slabilization $0 Total Beginning Cash Balance -All Funds $2,617,942 Maintenance Fund Minimum .~ ~30. ,~;~5 _ODerati~no Revenue_.~ Water Rate Revenues (after increases) $1,144.678 Interest Earnings Applicable to Coverage $160,033 All Other Interest Earnings $17,300 Other Operating Revenues $131,007 Subtotal $1,453,018 Ca~)ital Revet!l!p,~ System Development Trust - Improvement $300,000 $268,646 System Development Trust - Reimbursement $0 $227,426 All Debl Proceeds $0 $0 Subtotal $300,000 $496,071 _Total Cash Available $4,370,960 $4,997,114 Uses of Cash $495,887 $520,681 $546,715 $5,145,232 $0 $0 $234,582 $190,366 $907,720 $1,590,656 $1,250,201 $191.179 $623,450 $502,335 $720,028 $904,975 $868,033 $350,489 $I,712,193 $1,888,610 $1,556.806 $320,994 $267,471 $273,343 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,066,112 $3,101,992 $3,731,270 $7,961,857 $2,385,705 $815,011 $1.156,125 $1,963.148 $2,496,319 $2.531.267 $2.566,705 $2,939,711 $128.511 $129.066 $188.629 $170,232 $188.432 $109.897 $24,?94 $26,034 $27,336 $257,262 $0 $0 $125,500 $128,551 $131,707 $134,972 $138,351 $141.847 $1,434,931 $2,246,799 $2,843,990 $3,093,733 $2,893,487 $3,191,454 $277,780 $287,224 $296,990 $307,087 $317,528 $235,158 $243,154 $251,421 $259,969 $268,808 $0 $5,400,000 $0 $7,300,000 SU $512,938 $5,930,378 $548,411 $7,867,057 $586,336 $5,861~728 $12,505~637 $11,604~000 $13,146,248 $4,592~802 2000 2001 2002 2003 2004 2005 200~, October 1, 2001 Implementation Tolal Operating Expenditures Revenue Bond Debt Service All Other Debt Syslem Improvement & Replacemenl Expenditures Less: Contingency Funding Total Expenditures fnterfund Transfer Ending Cash Balance REVENUE BOND COVERAGE ATTAINED AFTER INCREASE $1,304,848 $1,415,700 $1,464.337 $1,514,749 $1,667,004 $1,721,175 $1,777,336 $0 $0 $0 $588,016 $588,016 $1,382,927 $1,382,927 $0 $0 $0 $0 $0 $0 $0 $0 $557.553 $746,595 $2,523,904 $7,048,650 $9,315.071 $0 $0 ($78,130) ($80,474) ($82,888) ($85,375) ($87,936) ($90,574) $1,304,848 $1,895,123 $2,130,458 $4,543,780 $9,218,296 $12,331,237 $3,069,689 $0 $0 $0 $0 $0 $0 $0 $3,066,112 $3,101,992 $3,731,270 $7,961,857 $2,385,705 $815,011 $1,523,113 0.00 0.00 0.00 3.12 2.92 1.26 1.45 FCS Group, Inc. Cost Allocation Summary 14.67% 10.93% 30.17% 44.22% Customer B Base ~ Peak- ~ Fire 7 FCS Group, Inc. Cost-of-Service Ratemaking fixed Base: charges all in the volume charges 8 FCS Group, Inc. Existing Rates Monthly Basic Minimum Monthly Meter Size Quantity Charge 3/4" 4 ccf $7.45 1" 6 ccf $9.75 1 ½" 18 ccf $20.40 2" 32 ccf $33.10 3" 75 ccf $69.40 4" 150 ccf $138.55 ,6" 320 ccf $285.55 8" 570 ccf $496.90 Multi-family (per DU) 4 ccf $7.45 Quantity over basic (up to 32 ccf) $0.70 Quantity over 32 ccf $0.85 }er ccf )er ccf Note: one ccf = 100 cubic feet FCS Group, Inc. Rate Alternative #1: Cost-of-Service; no usage allowance; SFR 3-block usage rates (27%) SF RESIDENTIAL Volume Block One (cci:) Block Two (ccf) Block Three (ccf) Fixed 0 I to17 7I to 118 181 to IBeyond 3/4"& Smaller $7.04 $0.65 $0.86 $1.20 1" 14.37 0.65 0.86 1.20 1 ½" 26.59 0.65 0.86 1.20 , 2" 41.25 0.65 0.86 1.20 3" 80.33 0.65 0.86 1.20 Rt 4" 124.31 0.65 0.86 1.20 6" 246.46 0.65 0.86 1.20 8" 393.04 0.65 0.86 1.20 Committee Recommendation MF RESIDENTIAL & COMMERCIAL INDUSTRIAL FIRE SERVICE Meter Size Fixed 3/4" & Smaller $9.13 1" 19.60' 1 ½" 37.O4 2" 57.97 3" 113.78 4" 176.57 6" 350.98, 8" 560.27 Volume (ccf) $0.71 Meter Size Fixed 13/4" & Smaller $13.11 1" 29.54 1 ½" 56.93 2" 89.79 3" 177.42 4" 276.00 6" 549.85 8" 878.46 Volume (ccf) $0.84 10 Meter Size Fixed 3/4" & Smaller $3.50 1" 3.50 1 ½" 4.17 '2" 4.85 3" 6.19 4" 7.54 6" 10.23 8" 12.92 FCS Group, Inc.