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Elk Grove Water District
Water Rate Update and Connection Fees
Habib Isaac – Principal
April 10, 2013
2013 Water Rate Study
Elk Grove Water District - Utility Rate Project | 3
Water Rate Study Drivers
• First Revenue adjustment pushed back to January 2014– Achieved based on updated reserve balances – Revenue adjustments scheduled for each January, if necessary
• Revenue recovered - 65% fixed / 35% variable• FY 2012-13 consumption is baseline year for analysis
– Projections based on average usage over last two calendar years– Meter conversions accounted for in projections– Consumption for metered accounts increases in first 2 years
Elk Grove Water District - Utility Rate Project | 4
• Between July 2012 – December 2012– Used 2 year average derived from 2011 and 2012– Already accounts for non-metered conversions
• Between January 2013 – June 2013– Average based on 2011 and 2012 existing metered accounts – Non-metered accounts usage determined as follows:
• Expected usage derived on a per month basis using 2011 and 2012 data • Conversion rate equals 125 meters per month
• c
FY 2012-13 Consumption Projection
Water Class J ul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 J an. 2013 Feb. 2013 Mar. 2013 Apr. 2013 May 2013 J un. 2013
Non-Residential 74,355 67,081 76,431 59,088 32,454 18,155 18,295 16,639 17,449 22,122 41,835 49,604
Irrigation 20,175 20,021 17,409 15,844 4,256 929 3,428 1,874 1,857 1,816 8,910 13,294
Residential Metered Water 222,506 273,323 271,202 224,611 142,954 111,737 117,202 103,971 117,773 122,531 175,120 255,133
Total 365,090 406,277 408,691 340,531 218,450 167,404 173,305 154,662 167,053 174,241 251,433 341,396
Elk Grove Water District - Utility Rate Project | 5
Variable Rates Schedule for January 2014
Residential Accounts• Tier 1 = $1.39• Tier 2 = $2.76
Non-Residential Accounts
• $1.57
Irrigation Accounts• $1.70
Existing Structure
• Tier 1 = $1.46• Tier 2 = $1.80
Elk Grove Water District - Utility Rate Project | 6
Fixed Rates Schedule for January 2014
J anuary 1, 2014 Existing Difference
59.23 56.53 2.70$
83.37 73.48 9.89$
112.34 118.71 (6.37)$
179.93 446.56 (266.63)$
276.49 565.29 (288.80)$
517.89 847.93 (330.04)$
807.57 1,170.14 (362.57)$
1,145.53 -
Meter Charge*
6"
8"
4"
10"
1.5"
2"
3"
1"
Elk Grove Water District - Utility Rate Project | 7
56.53 59.23 56.53 59.23 56.53 59.23
17.52 16.68 35.04 33.36
54.60 58.26
Existing$74.05
Proposed FY2014 $75.91
Existing$91.57
Proposed FY2014 $92.59
Existing$111.13
Proposed FY2014 $117.49
Low - 12 HCF Med - 24 HCF High - 36 HCF
Variable
Base
Customer Impact – January 2014
1.86
1.02
6.36
Elk Grove Water District - Utility Rate Project | 8
Five Year Rate ScheduleCommodity Charge J anuary 1, 2014 J anuary 1, 2015 J anuary 1, 2016 J anuary 1, 2017 J anuary 1, 2018
Residential Metered
Tiered
Tier 1 0 - 30 1.39$ 1.44$ 1.48$ 1.53$ 1.60$
Tier 2 + 2.76 2.85 2.93 3.04 3.17
Non-Residential
Uniform 1.57 1.62 1.67 1.73 1.80
Irrigation
Uniform 1.70 1.75 1.80 1.87 1.95
Tier (HCF)
30.01
J anuary 1, 2014 J anuary 1, 2015 J anuary 1, 2016 J anuary 1, 2017 J anuary 1, 2018
59.23 61.01 62.84 65.04 67.98
83.37 85.87 88.45 91.55 95.68
112.34 115.71 119.18 123.36 128.93
179.93 185.33 190.89 197.59 206.50
276.49 284.79 293.33 303.62 317.31
517.89 533.43 549.43 568.70 594.35
807.57 831.80 856.75 886.80 926.80
1,145.53 1,179.90 1,215.29 1,257.92 1,314.65
Meter Charge*
6"
8"
4"
10"
1.5"
2"
3"
1"
Elk Grove Water District - Utility Rate Project | 9
Non-Metered; 5-Year Rate Schedule
• Non-metered accounts are expected to only be charged 2014 rates• Lot sizes > 4,000 SqFt will still be charged a rate per SqFt• Multiple units will be charged the variable component = $11.00
Non-Metered Accounts
70.22 72.00 73.83 76.03 78.96
94.36 96.86 99.44 102.54 106.67
123.33 126.70 130.17 134.35 139.91
190.92 196.32 201.88 208.57 217.48
1"
1.5"
2"
3"
J anuary 1, 2014 J anuary 1, 2015 J anuary 1, 2016 J anuary 1, 2017 J anuary 1, 2018
59.23 61.01 62.84 65.04 67.98
83.37 85.87 88.45 91.55 95.68
112.34 115.71 119.18 123.36 128.93
179.93 185.33 190.89 197.59 206.50
276.49 284.79 293.33 303.62 317.31
517.89 533.43 549.43 568.70 594.35
807.57 831.80 856.75 886.80 926.80
1,145.53 1,179.90 1,215.29 1,257.92 1,314.65
Meter Charge*
Elk Grove Water District - Utility Rate Project | 10
Next Steps – Water Rate Study
• Approval of rate study on April 24, 2013• Prop. 218 notices mailed May 2, 2013• Public workshop may be scheduled: May?• Public Hearing scheduled for June 26, 2013• New rates implemented on January 1, 2014
Elk Grove Water District - Utility Rate Project | 11
Questions and Answers
2013 Water Connection Fee Study
Elk Grove Water District - Utility Rate Project | 13
• Meter and Installation Charges– Recovers cost of new meter and installation
• Capacity Charges– Applicable to Service Area 1– Based on cost of CIP in 2003 – Total CIP cost allocated to existing and new
equivalent dwelling units (EDU)– Cost per EDU converted into fee schedule based
on meter size
Existing Fee Methodology
Elk Grove Water District - Utility Rate Project | 14
Existing Fee Schedule
Meter Size EDUMeter Charge
Capacity Charge Total
1” 1.0 $580 $3,895 $4,475
1-1/2” 2.3 866 8,959 9,825
2” 4.0 1,102 15,580 16,682
3” 9.0 2,645 35,055 37,700
4” 16.0 4,470 62,320 66,790
6” 36.0 8,452 140,220 148,672
Elk Grove Water District - Utility Rate Project | 15
• Buildout projections refined based on District discussions with the City– Expected buildout reduced down from UWMP
projections– Additional water well not necessary; removed
from future CIP costs– New development represents approximately 6.1%
of total water demand at buildout
Updates to Capacity Charge
Elk Grove Water District - Utility Rate Project | 16
• Three components:1. Plan-Based: Share of Future CIP2. Buy-In: Share of 2003 CIP
• Funded through existing bond issues• 2002A and B, 2003A, 2005A
3. Buy-In: Share of cost of issuance and interest paid
What Does the Capacity Charge Cover?
Elk Grove Water District - Utility Rate Project | 17
• A proportional share (6.1%) of four projects is allocated to new development– Railroad Corridor Water Line– Hampton Road WTP Refurbishment– VFDs - Booster Pumps Railroad Street WTF�– Unforeseen Capital Projects
• Total value of improvements allocated to new development: $74,300
Component #1: Future CIP
Elk Grove Water District - Utility Rate Project | 18
• Improvements in the 2003 Capacity Fee were funded through debt service– Amount of CIP equals $20.5 million
• Share of program costs is included in this fee update• Approximately $1.3 million of $20.5 million
attributed to new development
Component #2: 2003 CIP
Elk Grove Water District - Utility Rate Project | 19
• Proportional share of the cost of issuance is allocated to new development– Additional costs incurred when issuing debt– Approximately $58,500 allocated to new development
• Proportional share of interest paid to date is allocated to new development– Reimbursement to rate payers
• Total debt paid through 2014 = $30.3 million– Approximately $668,600 allocated to new development– Based on share of 2003 CIP and COI
Component #3: Share of Debt Service
Elk Grove Water District - Utility Rate Project | 20
Proposed Capacity Fee Schedule
Meter SizeExisting
Capacity FeeProposed
Capacity FeeDifference
1” $3,895 $ 3,206 $ (689)
1-1/2” 8,959 6,413 (2,546)
2” 15,580 10,260 (5,320)
3” 35,055 19,238 (15,817)
4” 62,320 32,063 (30,257)
6” 140,220 64,125 (76,095)
Elk Grove Water District - Utility Rate Project | 21
Proposed Meter Charge
Meter Size
Existing Meter Charge
Proposed Meter Charge
Difference
1” $580 $926 $346
Elk Grove Water District - Utility Rate Project | 22
Proposed Combined Fee Schedule
Meter SizeProposed
Meter ChargeProposed
Capacity Fee Total
1” $926 $3,206 $4,132
1-1/2” 926 + TBD 6,413 7,339+
2” 926 +TBD 10,260 11,186+
3” 926 +TBD 19,238 20,164+
4” 926 +TBD 32,063 32,989+
6” 926 +TBD 64,125 65,051+
Elk Grove Water District - Utility Rate Project | 23
Private Fire Line Capacity Charges
Meter SizeProposed Capacity Fee
(Private Fire Lines)
2” $162
3” 470
4” 1,001
6” 2,908
8” 6,197
10” 11,145
Elk Grove Water District - Utility Rate Project | 24
Next Steps – Connection Fee Study
• Approval of Connection Fee Study on April 24, 2013• 30-day notice prior to Public Hearing: May 26, 2013• Public Hearing scheduled for June 26, 2013• New connection fees implemented on Sep. 1, 2013
Elk Grove Water District - Utility Rate Project | 25
Questions and Answers