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Home My WebLink AboutUtility rate overview presentation WESTLAKE UTILITY RATE OVERVI November 81, 2010 4 TO-W WESTLAKE UTILITY RATE OVERVIE Westlake Community Vision ...We are leaders. In education we are known for our innovative partnerships between the Town-Owned Charter School and its corporatE neighbors. we are environmental stewards — exemplifyinc the highest standards. WESTLAKE UTILITY RATE OVERVIE OBJECTIVES {'art 1 — April 19, 2010 Macro level presentation • Fundamental concepts to rate making • Policy level decisions Part 2 — August 30, 2010 wholesale water contract presentation • Rate increase • New fees imposed Part 3 — November 81 2010 Micro level presentation • What makes up Westlake rates? • How do we compare to neighboring cities? • What do our rates need to be to keep our utility fur solvent? WHAT COMPRISES WESTLAKI WATER & SEWER RATES ? Demand for product Price of product Coy uti 40M WHAT COMPRISES WESTLAE WATER & SEWER RATES? Water and Sewer Expendit Total Utility Fund = $2, 793,000 EXPENDITURES % OF BUDGE 70% 61% 60% 58°6 50% 40% 30% 20% 0 19% Expenditures % of Budget 10/ 2% 0% O&M (includes depreciation CIP expense) 23% 16% Debt Admin Westlake AVERAGE Keller, Roanoke, Southlake, Trophy Club WHAT COMPRISES WESTLAKE ' S WATER & SEWER RATES ? Annual Operations & Maintenance Costs Water and Sewer charges from wholesale providers o Water -10% Rate increase from City of Fort Worth — January 1, 2011 o Sewer - 10% Rate increase from TRA — December 2009 Maintenance & repairs - $95,000 Regulatory monitoring and testing - $3,000 Utilities - $ 80,000 Rent - $30,000 * Shared expenditures are allocated 80% water and 20% sewer* WHAT COMPRISES WESTLAKE WATER & SEWER RATES ? Annual CIP Costs (cash financed) Phases I & II - Stagecoach water line improvements - $611,000 • FY 10/11 — PH • FY 11/12 — PH II * N-1 sewer line transfer to TRA - $248,000 s WHAT COMPRISES WESTLAKE ' S WATER & SEWER RATES ? Annual DEBT Costs Water Tower - $120,000 Pump Station and transmission main - $108,000 WHAT COMPRISES WEST.-7 WATER & SEWER RAT Annual ADM I N Costs e Fund transfers - $40,000 r Payroll — $230,000 * Shared expenditures are allocated 80% water and CURRENT RATE STRUCTURI 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 10/11 Adopted budget 11 CURRENT RATE STRUCTUR-- Council 's Financial Policy • Current policy structured toward full recovery for cost of servic, cost of providing service to the utility's customers must be recc from those customers • Does not support cross customer class subsidization • Options to subsidize would require a change in budget policy CURRENT RATE STRUCTURE "COST OF SERVICE" • The cost of providing service to the utility's customers must be recovered from that customer class. • No cross customer class subsidization o Wholesale water and sewer costs are the same regard the demand o Consistent with neighboring cities' rate structure PROPOSED 2011 WATER RATES based on current Council Policy Meter Size 3/4" 1" 1 .5" 211 311 411 Volume 0-20000 20001-400C►0 40001-400000 +400000 Water Base rate increase 8% 7% 8% 8% 8% 8% Water Volume rate increase 9% 9% 9% 9% 14 WATER VOLUME RATES WATER BASE RATES Existing PROPOSED Existing PROPOSED PROPOSED Existing PROPOSED Residential Residential Commercial Commercial $ 39.00 $ 42.00 $ 39.00 $ 42.00 $ 65.13 $ 70.00 $ 65.13 $ 70.00 $ 129.87 $ 140.00 $ 129.87 $ 140.00 $ 207.87 $ 224.00 $ 207.87 $ 224.00 $ 455.13 $ 490.00 $ 455.13 $ 490.00 $ 819.00 $ 882.00 $ 819.00 $ 882.00 Water Base rate increase 8% 7% 8% 8% 8% 8% Water Volume rate increase 9% 9% 9% 9% 14 WATER VOLUME RATES Existing PROPOSED Existing PROPOSED Residential Residential Commercial Commercial $ 2.85 $ 3.10 $ 2.85 $ 3.10 $ 3.56 $ 3.88 $ 3.56 $ 3.88 $ 4.45 $ 4.84 $ 4.45 $ 4.84 $ 5.57 $ 6.05 $ 5.57 $ 6.05 Water Base rate increase 8% 7% 8% 8% 8% 8% Water Volume rate increase 9% 9% 9% 9% 14 PROPOSED 2011 SEWER RATES based on current Council Policy Option 1 - 100% of the increase Sewer Base rate increase 17% 18% 19% 18% 19% 19% Sewer Volume rate increase 25% 15 SEWER VOLUME SEWER BASE RATES Existing Residential $ - PROPOSED Residential $ - _ Existing Residential $ 30.00 PROPOSED Residential $ 35.00 Volume Existing Commercial $ 30.00 PROPOSED Commercial $ 35.00 Meter Size 3/4" 1" $ 55.00 $ 65.00 $ $ 55.00 $ 65.00 1 .5" $ 105.00 $ 125.00 $ 105.00 $ 125.00 2" $ 170.00 $ 200.00 $ 170.00 $ 200.00 3" $ 370.00 $ 440.00 $ 370.00 $ 440.00 4" $ 635.00 $ 755.00 $ 635.00 $ 755.00 Sewer Base rate increase 17% 18% 19% 18% 19% 19% Sewer Volume rate increase 25% 15 SEWER VOLUME RATES Existing Residential $ - PROPOSED Residential $ - Existing Commercial $ 3.21 PROPOSED Commercial $ 4.00 Volume 0-20,000 20001-40000 $ 3.21 $ 4.00 $ 3.21 $ 4.00 40001-400000 $ 3.21 $ 4.00 $ 3.21 $ 4.00 +400000 $ 3.21 $ 4.00 $ 3.21 $ 4.00 Sewer Base rate increase 17% 18% 19% 18% 19% 19% Sewer Volume rate increase 25% 15 PROPOSED 2011 SEWER RATES based on current Council Policy Option 2 - 50% of the increase 1St year & 50% of the increase 2nd year Sewer Base rate increase 10% 9% 10% 10% 9% 9% PROPOSED Sewer Volume Commercial rate increase $ 3.60 12% $ 3.60 $ 3.60 $ 3.60 16 SEWER VOLUME RATES SEWER BASE Existing Residential $ - RATES Existing Commercial $ 3.21 Volume_ Existing Residential $ 30.00 PROPOSED Residential $ 33.00 $ Existing Commercial $ 30.00 PROPOSED Commercial $ 33.00 Meter Size 3/4" 1" $ 55.00 $ 60.00 $ 55.00 $ 60.00 1 .5" $ 105.00 $ 115.00 $ 105.00 $ 115.00 2" $ 170.00 $ 187.00 $ 170.00 $ 187.00 3" $ 370.00 $ 405.00 $ 370.00 $ 405.00 4" $ 635.00 $ 693.00 $ 635.00 $ 693.00 Sewer Base rate increase 10% 9% 10% 10% 9% 9% PROPOSED Sewer Volume Commercial rate increase $ 3.60 12% $ 3.60 $ 3.60 $ 3.60 16 SEWER VOLUME RATES Existing Residential $ - PROPOSED Residential $ - Existing Commercial $ 3.21 Volume_ 0-20,000 20001-40000 $ 3.21 $ 3.60 $ 3.21 40001-400000 $ 3.21 $ 3.60 $ 3.21 +400000 $ 3.21 $ 3.60 $ 3.21 Sewer Base rate increase 10% 9% 10% 10% 9% 9% PROPOSED Sewer Volume Commercial rate increase $ 3.60 12% $ 3.60 $ 3.60 $ 3.60 16 $800.00 $700.00 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $0.00 $57.89 $556.52 RATE COMPARISON 12 month Average Vaquero House (115,000 gals water & 15,000 gals sewer) $50.16 $474.71 Keller Southlake Water Sewer Roanoke Trophy Club(includes Westlake Current Westlake Proposed MUD ad valorem tax) (50%) 17 $500.00 $400.00 $57.89 $300.00 q---- $200.00 y $332..07 $100.00 $0.00 Keller RATE COMPARISON 12 month Average Glenwyck Farms House (71,000 gals water & 15,000 gals sewer) $50.16 $359.2 $289.03 $96.73 NOVI $106.80 359.1 Southlake Roanoke Trophy Club(includes Westlake Current Westlake Pr MUD ad valorem tax) (50% RESIDENTIAL VS COMMERICAL Usage and revenue are aligned with Council's financial policy. ,Comercial Residentia. Water and Sewer Use (gals.) Water and Sewer Revenue 69% 31% Comercial Residential 19 30000 25000 20000 15000 Comparison of Westlake and neighboring Cities' Water and Sewer Customers 10000 4M 7139 13865 5000 9277 " 3218 1774 254 3318 434 0 1772 __.. . Keller Roanoke Southlake Trophy Club Westlake S, v WESTLAKE UTILITY RATE OVERVIEW STAFF RECOMMENDATION To maintain adequate fund balance and in keeping with sound fiscal management practices staff recommends adopti and sewer rate structures as pre: