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HomeMy WebLinkAboutUtility rate study presentationWESTLAKE UTILITY RATES 1 November 17, 2014 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 2 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 1/6/2015 3 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 4 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%. 1/6/2015 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. WESTLAKE UTILITY RATE WORKSHOP 5 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 6 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 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 7 •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 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 8 •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? 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 9 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 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 10 •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: 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 11 • 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 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 12 •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 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 13 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 14 1/6/2015 WESTLAKE UTILITY RATE WORKSHOP 15 1/6/2015 $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 WESTLAKE UTILITY RATE WORKSHOP 16 1/6/2015 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 WESTLAKE UTILITY RATE WORKSHOP 17 1/6/2015 $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 WESTLAKE UTILITY RATE WORKSHOP 18 1/6/2015 $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 19 1/6/2015