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HomeMy WebLinkAboutUtility rate study presentationWESTLAKE UTILITY RATES 1 March 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. WESTLAKE UTILITY RATE WORKSHOP 2 WESTLAKE UTILITY RATE WORKSHOP 3 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 WESTLAKE UTILITY RATE WORKSHOP 4 •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 WESTLAKE UTILITY RATE WORKSHOP 5 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 WESTLAKE UTILITY RATE WORKSHOP 6 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 WESTLAKE UTILITY RATE WORKSHOP 7 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%. 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? 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 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: 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 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 WHAT COMPRISES WESTLAKE’S WATER & SEWER RATES? Utility system design Demand for product Price of product Cost of utility service 13 WESTLAKE UTILITY RATE WORKSHOP 14 WESTLAKE UTILITY RATE WORKSHOP 15 WESTLAKE UTILITY RATE WORKSHOP 16 $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 WESTLAKE UTILITY RATE WORKSHOP 17 $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 WESTLAKE UTILITY RATE WORKSHOP 18 $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 WESTLAKE UTILITY RATE WORKSHOP 19 $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 21 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 26 $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