HomeMy WebLinkAboutUtility rate study presentationWESTLAKE UTILITY RATES
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November 17, 2014
1/6/2015
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UTILITY RATE WORKSHOP
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Current Water and Sewer Revenues are underperforming
(revenues<expenditures) by approximately 24% and 23% respectively.
The proposed changes will increase water revenues; however, revenue would
still be underperforming by 10% (due to CIP and FW increase) The Town’s
wholesale water provider, Fort Worth, increased treatment costs approximately
14%, from $1.8505/1,000 gallons to $2.1020/1,000 gallons.
Sewer revenues will increase; however, revenue would still be underperforming
by 21% (due to CIP and TRA increase) The Town’s wholesale wastewater
provider, Trinity River Authority, increased treatment costs approximately
42%, from $4.788/1,000 gallons to $6.805/1,000 gallons.
Water and Sewer Fund Status
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UTILITY RATE WORKSHOP
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PROPOSED RATE IMPACT
•The average residential water charge will be increased by approximately 10%.
•The average residential sewer charge will increase by approximately 15%.
•The average commercial water charge will be increased by approximately 14%.
•The average commercial sewer charge will be increased by approximately 15%.
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Westlake Community Values
CAPITAL INVESTMENT – Ensure the infrastructure and capital
investments of the Town are maintained to sustain the
community’s quality of life.
FISCAL STEWARDSHIP AND ORGANIZATIONAL
EFFECTIVENESS — Maintain a balanced approach to revenue
forecasting and expenditure allocation to ensure the necessary
resources for long-term sustainability.
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UTILITY RATE WORKSHOP
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UTILITY RATE WORKSHOP
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Council’s Financial Policy
Utility rates and rate structures for water and sewer services will be
constructed to target full cost of service recovery. Annually the Town will
review and adopt water and sewer utility rates and a rate structure that
generates revenue sufficient to fully cover operating expenses, meet the
legal restrictions of all applicable bond covenants, provide for an adequate
level of working capital, and recover applicable general/administrative
costs.
FY 14/15 Adopted budget
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UTILITY RATE WORKSHOP
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•The rate study should address both current
and future system needs.
•The Council should have a clear
understanding of the rate study.
•There should plan for informing the public
of any rate study and subsequent
adjustments.
POLICY GOALS FOR RATE STUDY
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UTILITY RATE WORKSHOP
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•Ratemaking is the process of
allocating revenue requirements to
customers via the price of water
•Water systems, regulators, courts,
and policy analysts follow several
accepted ratemaking principles
(AWWA)
What is Ratemaking?
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UTILITY RATE WORKSHOP
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AWWA Policy
1. Every water utility should receive sufficient
revenues from water service and user charges to
enable it to finance all operating and
maintenance expenses and all capital costs.
2. Water utilities should maintain their funds in
separate accounts. Such funds should not be
diverted to uses unrelated to water utilities…
3. Every water utility should adopt a uniform system of
accounts …
4. Water rate schedules should distribute the cost of
water service equitably…
Source: AWWA
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UTILITY RATE WORKSHOP
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•Revenue Requirement Projections
–How much money is needed?
•Cost of Service Analysis
–From whom should the money be
collected?
•Design of recommended rates
–How should services be priced?
Key Issues When Evaluating Rates:
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UTILITY RATE WORKSHOP
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• Does the rate meet revenue requirements?
• Is the rate sound for planning and management
purposes?
• Is the process in accordance with accepted industry
standards?
Utility’s Perspective of Rates
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UTILITY RATE WORKSHOP
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•Are the existing or proposed rates fair and
equitable?
•Are the existing or proposed rates affordable?
•Are the existing or proposed rates easy to
understand?
•Are they competitive with neighboring
communities?
Customer’s Perspective of Rates
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UTILITY RATE WORKSHOP
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UTILITY RATE WORKSHOP
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$308.04 $310.50
$406.47
$252.17
$305.50 $327.90
$364.64
$326.41
$540.50
$0
$100
$200
$300
$400
$500
$600
Keller Southlake Roanoke Trophy Club Westlake Current Westlake
Proposed
Argyle Bartonville Aquasource
Average Westlake House
(62,000 gallons/month - 1" meter)
2014 Water rate study
+ $22.40
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UTILITY RATE WORKSHOP
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77.54
50.16
60.47 59.58
147.30
170.30
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
Keller (20,000 gal cap)Southlake (10,000 gal cap)Roanoke Trophy Club (18,000 gal cap)Westlake - Current Westlake - Proposed
Wastewater
Westlake Residential Average
(20,000 gallons/month - 1" meter)
2015 Sewer rate study
+ $23.00
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UTILITY RATE WORKSHOP
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$1,358.82
$1,153.58
$1,743.69
$876.16
$1,933.65 $1,805.28
$1,427.51
$1,635.26
$0
$400
$800
$1,200
$1,600
$2,000
Keller Southlake Roanoke Trophy Club
(MUD tax =
$11,000)
Argyle AquaSource Westlake Current Westlake
Proposed
WATER
Westlake Commercial Average
(251,000 gallons/month - 2" meter)
2014 Rate Study
+ $207.75
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UTILITY RATE WORKSHOP
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$619.95 $620.16
$1,373.62
$509.58
$1,339.36
$1,543.30
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Keller Southlake Roanoke Trophy Club Westlake - Current Westlake - Proposed
Wastewater
Westlake Commercial Average
(187,000 gallons/month - 2" meter)
2015 Sewer rate study
+ $203.94
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