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Proposed User Rate AdjustmentsMarch 11, 2008
Kathleen Gammell
Director of Public Works
Operations Evaluation
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A Nationwide Reality - Aging/FailingWater and Sewer Infrastructure
“.... utilities are grappling with ….. aconvergence of several factors that translateto higher costs for supplying drinking waterservice:
–Deteriorating infrastructure that needs to be replaced
–Both growing and declining service populations
–Increasing operating costs
–More complex regulatory requirements
–Undervaluation of water supply and service.”
(American Water Works Association, E-Main Stream, 9/12/06, Mary A. Parmelee, Editor)
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A Nationwide Reality - Aging/FailingWater and Sewer Infrastructure
“Communities across North America are at aturning point in financing the replacement ofaging water and wastewater infrastructure…” (American Water Works Association, 3/26/07)
“In the latest State of the Industry report …water professionals talked about not justaging infrastructure, but failinginfrastructure.”
(American Water Works Association, “E-Main Stream,”Terry Rolan, 9/12/06
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City Challenges
System
–Wells have operated far beyond life expectancy and areshowing signs of failing quality
–Aging water and sewer pipes are breaking frequently
–Sewer pipes are experiencing inflow & infiltration (rain waterseeping into the sewer pipe), which increases UOSA costs
–Routine Operation and Maintenance Costs continue to rise(UOSA costs, salaries, fuel, materials, equipment, outsourcing)
New and More Complex Regulations
–Higher wholesale water rates for new treatmentprocesses
–Increased UOSA debt for new treatment processes
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City Challenges (Con’t)
Capacity Needs
–Commercial developments
–Well replacement
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Engineering Evaluation
Whitman Requardt Engineers completed awater and sewer system evaluation inSummer 2007
–Identified areas of near and long termimprovements and associated costs for water andsewer system.
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Water System Capital Needs
$27,695,000 over next ten years
•Water Connection Construction
- Ensure redundancy from wholesale suppliers
•Water Meter Replacement, 2900 remaining
•Well Chlorination – Backup Water Supply
•SCADA – Monitoring / Control of System
•Study for Unaccounted For Water
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Water System Capital Needs (Con’t)
•Water Capacity
- Well Replacement
- Service new commercial developments
•Water Mains / Hydrants
- 13,640 linear feet are urgent
- 43,295 linear feet are badly needed
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Sewer System Capital Needs
$3,640,000 over next ten years
•Sanitary sewer relining
- 16,400 linear feet are urgent
- 14,300 linear feet badly needed
•Rehabilitate 50 manholes including manholeinserts to contain odor
•Install pump station Grinder to prevent pumpstation backups
•I&I Study
•Replace 700 partial service laterals
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Annual Operations and Maintenance
•Water and sewer piperepair
•Hydrant repair
•Capital projectsmanagement
•Constructioninspections
Rising costs for personnel, equipment,materials, fuel, outsourcing
•Water quality sampling
•Meter reading
•Meter replacement
•Water and sewer systemflushing
•Valve testing and repair
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Summary
Regulations are becoming more stringent,resulting in higher consumption andcapacity costs.
The water and sewer system is old andneeds attention now.
Operation and Maintenance costs arerising.
The current rates have been renderedinadequate for needed maintenance,repair and replacement.
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So How Does This Impact Me?
Ensures delivery of water and collectionof wastewater in the future
Minimizes outages due to pipeline breaks
Need User rate adjustment to cover costs
Proposed areas of adjustment:
–Base (minimum) fee is zero
–Fees for usage will go up in line with surrounding jurisdictions
–Water / Sewer Customers using 4,000 or less will have alower monthly bill
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Proposed User Rate AdjustmentsMarch 11, 2008
Karen Spence
Budget Manager
Finance Evaluation
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Customer Base
–Average Total Number of Residential Accounts - 3,690
–Average Total Number of Commercial Accounts - 295
Average Monthly Consumption:
–Residential Accounts - 5,600 gallons/month
–Commercial Accounts - 17,900 gallons/month
Average Monthly Bill
–Residential Accounts - $57.40
–Commercial Accounts - $194.11
Last assessment and adjustment towater and sewer rates
–April 18, 1995
Current Status
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Current Water / Sewer FundRevenue vs. Expenditures
Projected
(Includes $3.5 M for UnspentCapacity Purchase)
With Tiered-
Rate Adjustment
Actual
Actual
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Analysis Highlights
10 year projection of revenue, operational &debt needs keeping fund self-sufficient
Part 2 of a 2-part solution
–Tap fees reserved for water & sewer capital fund
–Water & Sewer consumption fee adjustment
Implements a water conservation or tieredapproach
A four-tiered approach is used for residential &commercial accounts
Recommend rates be re-evaluatedevery other year
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Manassas Park Water and SewerTiered Rates
Gallons
Used
Current Charge
$35 base,
$4.00/1,000
Utility Bill
Adjust Rates to
$0 base, Tiered Rates
Utility Bill
Increase /(Decrease)since 4/95
1,000
$39.00
$11.75
(69.87%)
2,000
$43.00
$23.50
(45.35%)
3,000
$47.00
$35.25
(25.00%)
4,000
$51.00
$47.00
(7.84%)
5,000
$55.00
$58.75
6.82%
6,000
$59.00
$70.50
19.49%
7,000
$63.00
$82.50
30.95%
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Manassas Park Water and SewerTiered Rates
Gallons
Used
Current Charge
$35 base,
$4.00/1,000
Utility Bill
Adjust Rates to
$0 base, Tiered Rates
Utility Bill
Increase /(Decrease)since 4/95
8,000
$67.00
$94.50
41.04%
9,000
$71.00
$106.50
50.00%
10,000
$75.00
$118.50
58.00%
11,000
$79.00
$131.50
66.46%
12,000
$83.00
$144.50
74.10%
13,000
$87.00
$157.50
81.03%
14,000
$91.00
$170.50
87.36%
15,000
$95.00
$184.75
94.47%
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Residential Tiers Commercial Tiers
Tier 1: 63% of accounts Tier 1: 53% of accounts
0 – 6,000 gals 0 – 10,000 gals
Tier 2: 27% of accounts Tier 2: 13% of accounts
6,001 – 10,000 gals 10,001 – 20,000 gals
plus $0.25 / 1000 gal plus $0.25 / 1000 gal
Tier 3: 7% of accounts Tier 3: 13% of accounts
10,001 – 14,000 gals 20,001 – 40,000 gals
plus $1.00 / 1000 gal plus $1.00 / 1000 gal
Tier 4: 3% of accounts Tier 4: 21% of accounts
14,001 and above 40,001 and above
plus $1.25 / 1000 gal plus $1.25 / 1000 gal
Water and Sewer Tiered Rates
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Annual Residential Rate Adjustments10 year Projection
Fiscal
Year
Manassas Park
Tiered Rate – Zero Base
Base Rate
$/1,000 gals
2009
$0
$11.75
2011
$0
$11.85
2013
$0
$12.00
2015
$0
$12.30
2017
$0
$12.60
2019
$0
$12.80
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Annual Commercial Rate Adjustments10 year Projection
Fiscal
Year
Manassas Park
Tiered Rate – Zero Base
Base Rate
$/1,000 gals
2009
0.00 + EU*
$12.25
2011
0.00 + EU
$12.35
2013
0.00 + EU
$12.50
2015
0.00 + EU
$12.80
2017
0.00 + EU
$13.10
2019
0.00 + EU
$13.30
*EU – “equivalent units” – flat monthly rate charged to commercial customers based onindustry standards and AWWA.
Commercial average bill currently - $194.11
New average commercial bill – tiered rate $0 base - $221.25+EU increase 14%
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Monthly Utility Bill Comparison
Average 5,600 gal usage
Current Residential Bill
Base Fee $35.00
Consumption 22.40
Total $57.40
New Residential Bill – tiered $0 base
Base Fee $0.00
Consumption 65.80
Total $65.80
Increase – $8.40 or 15%
Low 1,500 gal usage
Current Residential Bill
Base Fee $19.00
Consumption 6.00
Total $25.00
New Residential Bill – tiered $0 base
Base Fee $0.00
Consumption 11.75
Total $11.75
Decrease – ($13.25) or (53%)
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Proposed User Rate Adjustments
QUESTIONS?