Water Rates (Utility versus SDCs)

WestLinnCITY OF

Water Rates (Utility versus SDCs)Information to Utility Advisory Board

September 21, 2009

Water Rates (SDC versus Utility) - City of West Linn 2

Step 1 – Determine 20-Year Project List

Water Master Plans estimate needed projects for the next 20 years

– 2004 Master Plan estimated $24 million for future projects

• Estimated at $24 million in 2004 dollars


– 2008 Master Plan estimated $33 million for future projects



Step 2 – Divide List between SDC (Growth) and Existing

Split out SDC (i.e., growth-related) projects or portions thereof:

– 2004 Update: Future Projects estimated at $24 million (expressed in 2004 dollars)

• $11 million relate to Growth (i.e., capacity increasing)

• $13 million relate to Existing Infrastructure Needs (i.e., updating existing system)

– 2008 Update: Future Projects estimated at $33 million (expressed in 2008 dollars)

• $12 million relate to Growth (i.e., capacity increasing)

• $21 million relate to Existing Infrastructure Needs (i.e., updating existing system)


Step 3 – Perform Financial Analysis

Water SDC Fund

– Use “SDC (i.e., growth-related) projects” in financial projections of the Water SDC Fund to determine Water SDC rates necessary to pay for growth-related water projects

Water Fund

– Use “Existing projects” in financial projections of Water Fund to determine water utility rates necessary to pay for existing infrastructure water improvement projects


Step 4 – Set SDC Rates to pay for Growth Projects and Set Utility Rates to pay for Current Projects

Setting Water SDC Rates

– Refer to FCS Group presentation next

– Recommending 46% base SDC rate increase from $4,628 to $6,747

Setting Water Utility Rates

– Refer to Pioneer Consulting Group presentation next

– Recommending decreasing base rate per month from $14.54 to $9.12

– And increasing usage rate per ccf from $1.67 to $2.32 for every ccf used

WestLinnCITY OF Water Rates

Utility Rates & SDCs

Presentation to the West Linn City Council

October 5, 2009


Tonight’s presentation

How are utility and SDC rates set?– Step 1: determine 20-year project list

– Step 2: break out existing (utility rate) and growth (SDC) projects

– Step 3: perform financial analysis

– Step 4: set rates

Current utility bill comparison

Average rate increases using 8 CCF comparison

Utility bill comparison using potential rate increases

SDC rate comparison

Next discussion areas

Questions


Step 1: determine 20-year project list

Adopted Water Master Plan estimates needed projects over a 20 year span– Adopted Plan estimates $33 million for future projects in 2008 dollars

• 2004 Master Plan estimated $24 million for future projects in 2004 dollars

• 2004 Master Plan equates to $30 million for future projects in 2008 dollars– Why the $3 million variance in 2008 dollars?

» Inflation» Deferred maintenance


Step 2: break out existing and growth projects

Adopted Water Master Plan estimates $33 million for future projects:

– $21 million in projects relate to existing infrastructure needs

• Example: updating existing system; water line replacement

– $12 million in projects relate to future needs, or “growth”

• Example: capacity increasing; water line expansion


Step 3: perform financial analysis

Use cost information and financial projections to determine rates

– Water Fund

• Use “Existing Needs” list to determine water utility rates necessary to pay for projects

– Water SDC Fund

• Use “Future Needs” list to determine water SDC rates necessary to pay for projects


Growth Paid for by Developer SDCs

SDCs for SDCs forFY09 FY10

Developers(through SDCs)

Water SDC 4,628$ 4,828$ Transportation 5,509 5,745 Sewer SDC 2,632 2,745 Surface SDC 916 956 Parks SDC 8,030 8,376 SFWB SDC 1,363 1,363 Tri-City SDC 2,020 2,020

25,098$ 26,033$

CURRENT SDCs

SDCs for SDCs forFY09 FY10

46% increase 6,747$ 6,747$ 43% increase 7,884 7,884

2,632 2,745 916 956

8,030 8,376 1,363 1,363 2,020 2,020

29,592$ 30,091$

CONSULTANT'S PROPOSALSWATER & TRANSPORTATION SDC

WestLinnCITY OF

Investment in West Linn’s Water SystemJune 28, 2010


Ripped From the Headlines

May 17, 2010 Break on Broadway


Repairs Completed Last Week

Before

After


Broadway Fix Was Time Consuming and Costly

Holes

Corrosion


Aging & Unsafe System


Feedback from the School District

Chris, Thanks for the update on water rates. This district believes the one tier model is more equitable for all users. My thoughts are that if one took the total acreage and square footage of school district facilities and compared it to a comparable total of housing square footage and acreage, the district’s use would actually be less. So, it seems an unreasonable penalty to charge a premium because of overall size. Additionally, school fields provide a significant public service for youth recreation and the three tier model places an additional burden on the maintenance and care of those facilities. Roger L. Woehl “This district believes the

one tier model is more equitable…”


Ask the Voters?

RESOLUTION 2010-27WEST LINN, OREGON

A RESOLUTION OF THE WEST LINN CITY COUNCIL CALLING AN ELECTION TO SUBMITTO THE VOTERS A MEASURE TO UPGRADE WATER SYSTEM, INCREASE SAFETY OFDRINKING WATER, AND PROMOTE CONSERVATION BY BASING WATER PRICING ONWATER CONSUMPTION


Three Tier or One Tier?

ATTACHMENT A

January 1, 2011 January 1, 2012 January 1, 2013Base water rate 15.27 10.06 10.56 11.09

1 to 7 units Included in base 1.56 1.85 2.217 to 10 units 1.75 1.56 1.85 2.21

11 to 30 units 1.75 1.99 2.36 2.81More than 30 units 1.75 3.21 3.81 4.55

January 1, 2011 January 1, 2012 January 1, 2013Base water rate 15.27 10.06 10.56 11.09

1 to 7 units Included in base 1.84 2.29 2.82More than 7 units 1.75 1.84 2.29 2.82

Proposed water rate structure

Proposed water rate structure

Current rate structure

Current rate structure


Questions?

For more information:

– Richard W. Seals, CPA CMA CFM

– Finance Director

– City of West Linn, Oregon

– [email protected]

mailto:[email protected]

Documents

Water Rates (Utility versus SDCs)