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Water and Sewer

Water and Sewer. City Council Meeting July 18, 2011. City of Brisbane City Council Meeting July 2011 Today’s Goals: Protest Meeting regarding Increase for Water and Sewer. 2011/2012 Budget with increase. Water and Sewer Program

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Water and Sewer

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  1. Water and Sewer City Council Meeting July 18, 2011

  2. City of Brisbane City Council Meeting July 2011 Today’s Goals: Protest Meeting regarding Increase for Water and Sewer 2011/2012 Budget with increase • Water and Sewer Program • Provide a safe and secure water system for personal use and fire protection and an environmentally-friendly wastewater disposal system at a fair rate. • Ensure coverage of bond rate covenants. 2011/2012 Water & Sewer Budget

  3. History • 2000 – City Engaged Consultant to Review Rate Structure and Infrastructure, Consultant began public review process • 2001- Consultant continued public review process, Council had 5 meetings for public hearings, reviewed and adopted ordinance • FCS Group’s Rate Recommendation • 200% - 300% to cover on-going maintenance and capital

  4. History (cont.) • 2002 – Council reviews the rate ordinance, holds meetings concerning criteria for master plans and awards contracts • 2003 – Council reviews water and Sewer Master plans as well as set date for workshop in 2004 • 2004 – Council reviewed master plans.

  5. History (cont’d) • FY 09-10 projected only a cost of living increase in water and sewer rates. Given that the prior year was a 17% increase, it was decided to leave the rates alone. • FY 10-11 staff recommended a 3% increase which the sub-committee sent to the council. Because of the economic climate, the full council declined to raise rates.

  6. Rate increase since 2001/02

  7. Enterprise Funds • Definition: A fund that provides goods or services to the public for a fee that makes the entity self-supporting. It basically follows Generally Accepted Accounting Principles (GAAP), as does a commercial enterprise. An example is a government-owned utility.

  8. What’s behind the Cost? • SFPUC • Infrastructure • Depreciation • Indirect Costs • Community demands/expectations

  9. The water journey

  10. Water Infrastructure • Pipes • Check Valves • Pressure Reducing Valves • Water Mains • Water Tanks • Pump Stations • Meters • Cost of Water Capital Assets $15,500,000

  11. SFPUC Rates • January 13, 2011 expect a 31.0% increase • April 13, 2011 expect a 47.4% increase • May 10, 2011 authority to raise rates by 38.4% effective July 1, 2011 • Every water agency served by SFPUC has the same increase. • Cost of retrofitting Hetch Hetchy pipeline • Conservation led to the increase!

  12. Sewer Infrastructure • Pipes • Lift Stations • Sewer Mains • Force Mains • Manhole covers • Cost of Sewer Capital Assets $5,400,000

  13. Other Capital Assets • Vehicles • Sewer Monitoring camera • Fire Hydrants

  14. Depreciation • The historic cost of the asset (infrastructure) divided by the life expectancy of the asset. • Our water and sewer system has a life expectancy of 65 years. • Current annual depreciation: $632,416. • Unfunded accumulated depreciation through June 2010: $11,681,421.

  15. Capital Improvements Summary

  16. Completed Water Capital Projects

  17. Unfunded Water CIP

  18. Potential Developer Funded Water CIP

  19. Completed Sewer Capital Projects

  20. Unfunded Sewer CIP

  21. Potential Developer Funded Sewer CIP CIP Transferred to Private Property Owners

  22. Indirect Costs • Services from: • City Council • City Manager • City Clerk • Finance • Human Resources • City Attorney • Building and Grounds Based on ratio of budget

  23. Community Expectations • Assistance with high water bills & tracking the source of any leaks • Due date notification on sign boards • Hand delivered late notices • Special envelopes for late notices • Low income assistance (LIRA)

  24. Components of the Utility Bill • Service Readiness charge for water • Water usage • Service Readiness charge for sewer • Sewer processing charge • based on water usage • winter average for residents

  25. Water Readiness Costs Charge • Certain costs are constant. The fewer the number of customers, the higher that price. • Each customer class must pay for itself. • Often referred to as Pipelines and People.

  26. I cut back on my water! • Conservation efforts mean less revenue • Less revenue means higher rates needed to cover fixed costs.

  27. Other considerations • Have Cal-Water take over • Rates set by California Public Utilities Commission • Earns a modest return on the funds it invests in infrastructure • Major costs to operate a water system include purchased electric power, purchased water, treatment costs, groundwater pumping fees, labor and chemicals • Shared service with neighboring cities

  28. Reduced Rate Contracts • GVMID $0.125 per unit up to 12,000 units a month (Turnout #2). Maxed out in summer, managed in winter for best possible results. • Turnout #3 also a reduced rate and always maxed out. Same reduce rate, variable cap depending on month. • Reduced rates are included in our projected water costs.

  29. Bond Covenants • 2002 Bond for $4,450,000 used for financing capital improvement projects • Debt service paid by water and sewer rates • Rate covenant – produce sufficient Gross Revenues that net revenue is at least 1.25 times the installment payment coming due.

  30. Bond Covenants (cont’d) • If insufficient, must notify the Trustee and employ an independent consultant to make recommendations to produce the required revenues • Required to implement recommendations

  31. Our neighbors’ rates

  32. Water Rates History

  33. Sewer Rate History

  34. Increase from S.F. PUC • Increase in water purchase will be 41.2% from S.F. PUC. • Increase in waste water processing will be 5%

  35. SFPUC’S Wholesale Water Rate Proposal Changed Over Time • February—the SFPUC proposed changing the rate structure – That proposal was dropped • February—SFPUC states historical rate structure would require wholesale rate increase between 42 to 60% • April—SFPUC proposed a 47.4% rate increase to $2.80 per Ccf, increased mid-year if sales drop below 130 mgd • May—SFPUC proposed a 38.4% rate increase to $2.63 per Ccf, increase mid-year if sales drop below 135 mgd-- This proposal was adopted BAWSCA

  36. Raising rates this year • Increase from SFPUC is for water usage • Need to capture the 15.2% from prior year • Sewer increase of 5% for next year • Need to capture 6% from prior year

  37. Raising rates this year (cont’d) • Increase water readiness charge 7% • Increase water usage rates by 35% • Increase sewer by 4%

  38. How the Costs Stack Up

  39. FY 2011/2012 $410,112

  40. FY 2011/2012 w/ increase $111,870

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