HomeMy WebLinkAbout2017.12.18CITY OF HUGO 2018 Water & Sewer Rates
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Unique Water Expenses
$ 50,000 Water Additives
$ 75,000 Radio Read Water Meters
$ 79,600 Water Main Breaks, Pump
Repairs
$120,000 Electricity
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Pro Forma (Budget) for Water Operations
Wages
Fringe & Payroll Taxes
Supplies
Repairs and Maintenance
Professional Services
Communications
Insurance
Utilities
Other (includes PW Facility DS)
$780,341 Total Water Operating
Budget
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Wages & Benefits
1/3 of PW Director Salary
1/2 Maintenance Worker
1/2 Billing Clerk
1/4 of City Administrator Salary
Wages are the same for water & sewer
Added the equivalent of another maintenance
worker but may be redirected to a clerical position at PW
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Water Depreciation
$ 2,388,018 5 Well houses
1,220,995 5 Wells
2,043,508 2 Towers
9,282,659 Water Mains
365,966 Vehicles & Equipment
-----------------
$15,301,146
Depreciable Assets
==========
Annual Depreciation = 377,155
All Other Expenses = 780,341
Total Revenue to Raise = $1,157,496
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Recapture Depreciation
Quarterly Base Charge = $17 Residential
$ 8 Comm./Ind.
It takes the entire depreciable water system to provide water to ANY customer
at ANY place in the system. Does not fluctuate with usage.
$377,155 / 3,405 Accounts / 4 Quarters
= $28.00 Base Charge
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Rainfall (Forest Lake)
2012 Rainfall (June thru Sept) = 10.36”
Gallons Sold = 425 million gallons
Water Sales = $1,050,000
Net Profit = $354,000
2016 Rainfall (June thru Sept) = 24.38”
Gallons Sold = 359
million gallons
Water Sales = $ 858,000
Net Loss = $38,000
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So What?
Average quarterly usage for residential accounts in 2016 based on usage other than irrigation
Thru Sept, 2017 water use has not varied much from 2016
We will have a net operating loss
in 2017
It’s time to adjust rates – last adjusted in 2010
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2016 & 2017
Average Residential Usage by Quarter
Usage Rates
Winter 11,648 First 11,000 @ $1.00
Spring 20,635 Next 9,000 @ $2.00
Summer 29,438
Next 9,000 @ $3.00
Fall 12,101 Over 29,000 @ $4.88
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Multi-Family
184 Accounts with 1,241 Dwelling Units
45% less water than single-family
Irrigation is metered separately
Billed at the highest rate
Change to rate of $2.00/1,000 gallons
No increase
in annual revenue
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Commercial/Industrial
No Change in Usage Rates
Base Charge from $8 to $28
Each account will pay $80 more annually
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Irrigation
Irrigation Accounts Metered Separately
All Usage @ $4.88/m (up from $2.65/m)
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Revenue by Category
$ 823,929 Single Family Residential
121,616 Multi-Family Residential
249,694 Irrigation (net of Waters Edge Reuse)
49,929 Com./Ind./Educational
37,175
Penalties & Meter Sales
=========
$ 1,282,343 Total Revenue
$ 1,157,496 Total Expenses
=========
$ 125,847 Cushion (50% of Irrigation Revenue)
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Judge’s Order
Enforce a residential irrigation ban when the level of WBL is below 923.5 feet, to continue until the lake has reached 924 feet.
10% of irrigation is commercial/industrial
90% of irrigation
is residential
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Judge’s Order
Require all existing permits include an enforceable plan to phase down per capita residential water use to 75 gallons per day and total per capita water use to 90 gallons per day.
Based
on estimated gallons sold in the pro forma and estimated number of people per household these per capita numbers are 66 and 85 respectively.
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Water Bill for Average Usage
Usage Current Proposed
11,000 $ 33.50 $ 39.00
20,000 $ 47.75 $ 57.00
29,000 $ 62.60 $ 84.00
40,000 $ 89.25 $137.68
60,000 $143.75 $235.28
100,000 $249.75 $430.48
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Average Changes
Residential: $69.20 per year or $17.30/quarter
Multi-Family: Overall revenue will stay the same
This will vary based on number of
dwelling
units per building
All Other: $80.00 per year or $20.00/quarter
Irrigation: Rate increase from $2.65 to $4.88
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Pro Forma (Budget) for Sewer Operations
Wages
Fringe & Payroll Taxes
Supplies
Repairs and Maintenance
Professional Services
Communications
Insurance
Utilities
Other (includes PW Facility DS)
$1,024,407 Total Sewer Operating
Budget
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Sewage Treatment
MCES Treatment Charges
$633,000
$441,000 Lowered Rates
2018 $528,000
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Sewer Depreciation
$ 2,325,350 9 Lift Stations
7,650,179 Sewer Mains
245,751 Vehicles & Equipment
-----------------
$10,221,280 Depreciable Assets
==========
Annual
Depreciation = 229,424
All Other Expenses = 1,024,407
Total Revenue to Raise = $1,253,831
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Other Major Equipment Sewer Vactor Up to $200,000 Used
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Sewer Charges
Charge $47 per Residential SAC Unit
Flow Charge Based on Winter Quarter
$1.85/thousand gallons over 9,000
Comm./Ind./Edu.
Charge $14 per SAC Unit
Flow Charge Calculated Every Quarter
$1.85/thousand
gallons over 3,000
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Sewer Charges
Charge $55 per Residential SAC Unit
Flow Charge Based on Winter Quarter
$1.85/thousand gallons over 9,000
Comm./Ind./Edu.
Charge $16 per SAC Unit
Flow Charge Calculated Every Quarter
$1.85/thousand
gallons over 3,000
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Revenue by Category
$ 874,606 Single Family Residential
327,534 Multi-Family Residential
40,271 Com./Ind./Educational
11,420 Penalties & Meter Sales
=========
$ 1,253,831 Total
Revenue
$ 1,253,831 Total Expenses
=========
$ 0 Break Even
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Conclusions
Budget includes 1 additional maintenance worker (half water, half sewer)
Budgets reflect true and actual expenses
Water Rates are true conservation rates intended to charge low-end users
the lowest rate and high-end users the highest rate
Water & Sewer revenues match expenses with a cushion built in for decreased irrigation usage.
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Recommendations
Consider Adoption of Resolution:
Approves the Pro Forma Financial Guide for Water & Sewer Operations
Approves the recommended service rates
Directs staff to notify customers of the new
rates and directs Finance Department to prepare a Pro Forma and rate schedules on an annual basis going forward.
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