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Elk Grove Water District Water Rate Update and Connection Fees Habib Isaac – Principal

Elk Grove Water District Water Rate Update and Connection Fees Habib Isaac – Principal April 10, 2013. 2013 Water Rate Study. Water Rate Study Drivers. First Revenue adjustment pushed back to January 2014 Achieved based on updated reserve balances

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Elk Grove Water District Water Rate Update and Connection Fees Habib Isaac – Principal

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  1. Elk Grove Water District Water Rate Update and Connection Fees Habib Isaac – Principal April 10, 2013

  2. 2013 Water Rate Study

  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

  4. FY 2012-13 Consumption Projection • 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

  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

  6. Fixed Rates Schedule for January 2014

  7. Customer Impact – January 2014 6.36 1.02 1.86

  8. Five Year Rate Schedule

  9. Non-Metered Accounts 70.22 72.00 73.83 76.03 78.96 1" 94.36 96.86 99.44 102.54 106.67 1.5" 123.33 126.70 130.17 134.35 139.91 2" 190.92 196.32 201.88 208.57 217.48 3" 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

  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 forJune 26, 2013 • New rates implemented on January 1, 2014

  11. Questions and Answers

  12. 2013 Water Connection Fee Study

  13. Existing Fee Methodology • 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

  14. Existing Fee Schedule

  15. Updates to Capacity Charge • 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

  16. What Does the Capacity Charge Cover? • Three components: • Plan-Based: Share of Future CIP • Buy-In: Share of 2003 CIP • Funded through existing bond issues • 2002A and B, 2003A, 2005A • Buy-In: Share of cost of issuance and interest paid

  17. Component #1: Future CIP • 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

  18. Component #2: 2003 CIP • 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

  19. Component #3: Share of Debt Service • 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

  20. Proposed Capacity Fee Schedule

  21. Proposed Meter Charge

  22. Proposed Combined Fee Schedule

  23. Private Fire Line Capacity Charges

  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 forJune 26, 2013 • New connection fees implemented on Sep. 1, 2013

  25. Questions and Answers

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