HomeMy WebLinkAboutUtility rate study presentationWESTLAKE UTILITY RATE WORKSHOP
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February 25, 2013
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 12/13 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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Current Water and Sewer Revenues are underperforming
(revenues<expenditures) by approximately 3% and 23% respectively. The
proposed changes will increase water revenues to 9% above expenditures.
Sewer revenues will increase; however, revenue would still be
underperforming by 9%.
The Town’s wholesale wastewater provider, Trinity River Authority, increased
treatment costs approximately 23%, from $3.902/1,000 gallons to
$4.788/1,000 gallons.
POSITION PAPER
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UTILITY RATE WORKSHOP
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Town staff recommends the proposed restructuring of
the water and sewer rates and having a 10%
differentiation between residential and commercial
customers to reflect financial and user realities and
equities between these two customer classes.
POSITION PAPER
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UTILITY RATE WORKSHOP
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POSITION PAPER
•The average residential water charge (45,000 gallons) will be
reduced by approximately 2%.
•The average residential sewer charge (20,000 gallons) will increase
by approximately 12%.
•The average commercial water charge (251,000 gallons) will be
increased by approximately 5%.
•The average commercial sewer charge (33,000 gallons) will be
increased by approximately 30%.
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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
WHAT COMPRISES WESTLAKE’S
WATER & SEWER RATES?
Utility
system
design
Demand
for
product
Price
of
product
Cost of
utility
service
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UTILITY RATE WORKSHOP
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UTILITY RATE WORKSHOP
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UTILITY RATE WORKSHOP
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$210.32 $197.74
$258.45 $238.66 $248.93 $220.57
$346.15
$241.45 $236.65
$0
$50
$100
$150
$200
$250
$300
$350
$400
Keller Southlake Roanoke Trophy Club
(includes MUD
tax)
Argyle Bartonville AquaSource Westlake
Current
Westlake
Proposed
WATER
Westlake Residential Average
(45,000 gallons/month - 1" meter)
2013 Rate Study
- $4.80
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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 $1,506.81
$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)
2013 Rate Study
+ $79.30
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UTILITY RATE WORKSHOP
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$77.54
$50.16 $54.75
$125.71 $132.00
$147.30
$0
$20
$40
$60
$80
$100
$120
$140
$160
Keller (20,000
gal cap)
Southlake (10,000 gal
cap)
Roanoke (10,000
gal cap)
Trophy Club (includes
MUD tax)
Westlake - Current Westlake - Proposed
SEWER
Westlake Residential Average
(20,000 gallons/month - 1" meter)
2013 Rate Study
+ $15.30
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UTILITY RATE WORKSHOP
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$124.95 $125.16
$324.55
$114.86
$319.00
$416.06
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Keller Southlake Roanoke Trophy Club (MUD tax =
$11,000)
Westlake - Current Westlake - Proposed
SEWER
Westlake Commercial Average
(33,000 gallons/month - 2" meter)
2013 Rate Study
+ $97.06
20
13865
1772
9277
3318 434
11424
1774
7139
3218
254
0
5000
10000
15000
20000
25000
30000
Keller Roanoke Southlake Trophy Club Westlake
Comparison of Westlake
and neighboring Cities' Water and Sewer Customers
Sewer Customers
Water Customers
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22
$589.72 $522.54
$716.25
$483.16
$722.76
$1,227.72
$752.15
$592.15 $520.15
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Keller Southlake Roanoke Trophy Club Argyle Bartonville AquaSource Westlake -
Current
Westlake -
Proposed
WATER
Vaquero Average
(115,000 gallons/month - 1" meter)
2013 Rate Study
- $72.00
23
$351.24 $318.38
$428.49
$329.16
$408.16 $433.52
$496.95 $497.26
$341.95
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
Keller Southlake Roanoke Trophy Club Argyle Bartonville AquaSource Westlake Westlake -
Proposed
WATER
Glenwyck Average
(71,000 gallons/month - 1" meter)
2013 Rate Study
- $155.31
24
$324.14 $295.18
$395.79
$311.66
$372.41 $370.27
$467.95 $467.20
$321.70
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
Keller Southlake Roanoke Trophy Club Argyle Bartonville AquaSource Westlake Westlake -
Proposed
WATER
Wyck Hill Average
(66,000 gallons/month - 1" meter)
2013 Rate Study
- $145.50
25
$71.72 $78.09 $76.32
$141.21
$111.97 $107.43
$184.95
$122.32 $122.32
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Keller Southlake Roanoke Trophy Club Argyle Bartonville Aquasource Westlake Westlake -
Proposed
2013 Rate Study
- $4.80
2013 Rate Study
- $4.80
WATER
Stagecoach Hills Average
(16,000 gallons/month - 1" meter)
2013 Rate Study
- $No Change
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$57.92 $58.84 $52.97
$125.96
$95.97 $93.38
$164.70
$105.97 $105.97
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
Keller Southlake Roanoke Trophy Club Argyle Bartonville Aquasource Westlake Westlake -
Proposed
2013 Rate Study
- $4.80
2013 Rate Study
- $4.80
WATER
Mahotea Boone Average
(11,000 gallons/month - 1" meter)
2013 Rate Study
No Change