S B ECTION

S ECTION B RIEF

As with all utility systems, there are times when rate increases are necessary for proper maintenance and operation.

The same is true for other areas of government and industry/business.

This section provides information on the recent history of rate increases and the current rate increase recommendation.

Note: Multiple recommendations are reflected in this material, all of which will be discussed during the presentation on March 10.

R ATE H ISTORY /

C

OUNCIL

A

CTIONS

A CTION 1: O RDINANCE 2010-089

M INUTES

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

6/16/2010: I

TEM

28

28.

Ordinance No.: 2010 ‐ 089 – Amending the 1998 Code of Ordinances of the City of

Columbia, South Carolina, Chapter 23, Utilities and Engineering, Article V,

Water and Sewer Rates, Sec.

23 ‐ 143 Water service rates and Sec.

23 ‐ 149 Sewer service rates, (a) Generally, (b) Consumers using water cooling towers for air conditioning and (f) Contaminated groundwater – Approved on first reading.

Upon a motion made by Ms.

Devine and seconded by Mr.

Rickenmann, Council voted four (4) to one (1) to give first reading approval to Ordinance No.: 2010 ‐ 089 –

Amending the 1998 Code of Ordinances of the City of Columbia, South Carolina,

Chapter 23, Utilities and Engineering, Article V, Water and Sewer Rates, Sec.

23 ‐ 143

Water service rates and Sec.

23 ‐ 149 Sewer service rates, (a) Generally, (b) Consumers using water cooling towers for air conditioning and (f) Contaminated groundwater.

Voting aye were Mr.

Davis, Ms.

Devine, Dr.

Gergel and Mayor Coble.

Mr.

Rickenmann voted nay.

C ITY C OUNCIL A GENDA M INUTES 6/23/2010: I TEM 8

8.





23 ‐ 149 Sewer service rates, (a) Generally, (b) Consumers using water cooling towers for air conditioning and (f) Contaminated groundwater – First reading approval was given on June 16, 2010.

– Approved on second reading.



Davis, Council voted four

(4) to two (2) to give second reading approval to Ordinance No.: 2010 ‐ 089 –



23 ‐ 143

Water service rates and Sec.

23 ‐ 149 Sewer service rates, (a) Generally, (b) Consumers using water cooling towers for air conditioning and (f) Contaminated groundwater.

Voting aye were Mr.

Davis, Ms.

Devine, Dr.

Gergel and Mayor Coble.

Mr.

Rickenmann and Mr.

Finlay voted nay.

O RDINANCE 2010-089


M INUTES

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

05/17/2011: I

TEM

8

8.

Budget Presentation

Ordinance No.: 2011 ‐ 029 – To Raise and Adopt the Budget for the City of Columbia,

South Carolina, for the Fiscal Year ending June 30, 2012





23 ‐ 149 Sewer service rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning

Mr.

Steven A.

Gantt, City Manager presented the proposed budget for fiscal year

2011/2012.

The General Fund budget is $115,201,254, which is a $7.8

million increase over last year to include a transfer ‐ in of $5.3

million in bond proceeds for the capital replacement program; $1 million for emergency or unanticipated expenditures; and an additional $100,000 for fuel and electricity reserve.

There is $1,000,000 for homeless services to include funding the winter shelter operations and support for the Midlands Housing Alliance.

Under the Capital Improvement Program, we will replace 53 vehicles and upgrade technology through the issuance of bonds.

The budget includes $246,433 for general capital projects.

We project revenue collections in the amount of $115,201,254 with property taxes being the largest source of revenue.

Our largest expenditure is for Public Safety.

The Water and Sewer Operating

Fund is $110,400,499, which is a $6.7

million increase from fiscal year 2010/2011.

The

Stormwater Operating Budget is $6,103,280 with a $1 million transfer from the

General Fund and storm drain capital projects at $2,295,542.


27.





23 ‐ 149 Sewer service rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning – Approved on first reading.

Mr.

Steven A.

Gantt, City Manager requested first reading approval of Item 27, which is a 5% increase on water and sewer rates to continue to upgrade, improve and repair our aging water and sewer infrastructure within our system.

On the sewer side, it’s because of the number of sanitary spills we’ve had over the last three years.

We need to make sure that we tighten up and straighten up our sewer system.

This increase also allows me to maintain the coverage ratio for the bonds above 130, which is necessary for us to keep our AA rating within our water and sewer bond rating.

This also sends a very strong and positive message to an agency that has been looking at our operations for the last couple of years, that we are indeed serious about the improvement of our system and making sure that we meet all of the necessary regulations and requirements.

The 5% increase is a nominal amount and it will allow us to continue to move forward with the improvement of our water and sewer system for not only the residents of the City of Columbia, but for the other 60% of our customers that are outside the City.

Councilor Rickenmann made a motion to give first reading approval to Item 27.

Mayor Benjamin opened the discussion period.

Councilor Rickenmann said that nobody wants to raise the rates by 5%; we should be raising it by a smaller percentage every year, because it is a business area and there are costs that are incurred with continued expansion and repairs.

There has been a lot of discussion from folks about misgivings and misspending, but over the last five years, we’ve tried to trim this system and cut out some of the excess fat.

We spent a great deal of time with Black & Veatch to commission a study and we’ve reduced the amount by $2 million in 2 years.

The reality is we are going to have a 5% increase to allow us to bond the capacity to do the maintenance, which is probably going to pay off much more in the long run for the water customer than anything else.

The cost of construction and the ability for us to get more work done for a lesser amount of money will equate to a lesser rate increase.

This system is vast and a great portion of it stretches from Chapin to Lower Richland.

If we continue to move forward with the plans that we have, you will be pleasantly surprised.

Councilor Davis said that it’s a hard pill for him to swallow, to support a rate increase.

If we do this incrementally, we won’t catch up.

We asked staff to do a rate comparison over a period of time with similar municipalities and we ranked 2nd or

3rd lowest out of 28 cities.

I understand the comments and I do respect the e ‐ mails I received.

It’s worth it, because we are getting the investment at a better rate, considering where the economy is.

It is important if we want to continue to recruit new businesses and people into areas where infrastructure has to be developed.

I will reluctantly support this with the understanding that this is going to be it for quite some time in terms of our need to ask the taxpayers to participate and accept a rate increase in water and sewer.

Councilor Gergel said that she is also going to reluctantly support this 5% increase.

I have discussed this matter at length with the City Manager, asking him if there were any other options; we don’t have good options and I don’t know how we can do anything but invest in our present and future needs.

The City Manager has expressed to each of us the possibility and the possible consequences of the EPA coming in and taking over our system and that is not something that we want to happen.

The sewage spills are unacceptable.

I’ve heard from numerous residents who’ve expressed to me what impact this increase will have on them.

The bottom line is that

Mr.

Gantt has explained the likelihood of a significant increase occurring if we’re taken over.

I would ask that we take a close look at the monies that we are taking out of the Water and Sewer Fund; each year we are taking out $7 to 8 million.

I would ask

Mr.

Rickenmann, as Chair of the Finance, Audit and Budget Committee to begin looking at what we do with the money that we are not putting back into the system.

Let’s have a healthy discussion about how we continue to invest so that we don’t find ourselves in this predicament again.

Councilor Devine concurred with her colleagues; we have no choice.

She clarified that when she first became a council member, the transfer out of the Water and Sewer

Fund was $10 million, but over the last several years we have cut it a lot.

I want clarity from Mr.

Gantt.

Mr.

Steven A.

Gantt, City Manager explained that approximately $2 million of the transfer is for direct services that we provide to the utility, such as legal services, payroll, accounting and other matters.

If our utility was a separate entity, they would have to pay for those services; they are getting a bargain by receiving those services at a lesser cost.

I don’t see that as a transfer, I see that as a payment for services.

The only other area is the direct transfer of $4.5

million that we feel is a benefit to the taxpayer residents of the City of Columbia; they own the system; and they should be able to get something back for being able to provide that service outside the corporate limits of the City of Columbia.

If we did not have that $4.5

million coming back into the General Fund, we would have a hard time keeping the level of funding for the Fire and Police Department that you presently have, unless you make reductions in the amount of $4.5

million, which is basically a 10 mil increase.

Mayor Benjamin said that is a very important point that you make Mr.

Gantt and I want to make sure that everyone internalizes this.

Almost 70% of our customers are outside the City.

The residents of the City of Columbia own the system and it is important that the taxpayers should see some benefit from all of the rate payers.

That is a very nuance distinction that is often glossed over in coverage of this issue.

No one ever wants to look at a rate increase.

I’m not reticent at all about making an unqualified commitment to water quality in this region.

The three rivers that birthed this City 225 years ago, it will be the most important aspect of this City, 225 years

from now and we need to make sure that we step up and protect the three rivers of this region.

If we don’t do it now, it’s never going to happen.

Councilor Plaugh concurred with her colleagues and the fact that as elected officials they are asked to be good stewards of our dollars and resources and those resources include the water that God has so generously provided our City; all cities aren’t provided water as generously as we are.

In that regard, I will reiterate that all you need to do is go visit the sewer treatment plant to determine that we have not done what we should be doing.

The time has come where we must make these investments.

As difficult as this is, we have to protect our environment and there are no alternatives left as far as I can see.

We need to study the economic development amounts that we put into water and sewer and ways to minimize that.

We need to look at ways of consolidating our economic development efforts to make it more efficient, effective and hopefully the discussions with the County will take us somewhere in that regard.

I support this rate increase and I do it with the understanding that I believe that’s what the people of this City asked us to do; they asked us to make the tough decisions.

Councilor Gergel asked that they remember that next year we need to be looking at the storm water issues that we are going to have to address as well, including a significant part of District Three.

Upon a motion made by Mr.

Rickenmann and seconded by Ms.

Devine, Council voted unanimously to give first reading approval to Ordinance No.: 2011 ‐ 027 – Amending the 1998 Code of Ordinances of the City of Columbia, South Carolina, Chapter 23,

Utilities and Engineering, Article V, Water and Sewer Rates, Sec.


23 ‐ 149 Sewer service rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning.


38.





23 ‐ 149 Sewer service rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning – First reading approval was given on June 7, 2011.


O RDINANCE 2011-027

A CTION 3: O RDINANCE 2012-050, 2012-099

M INUTES

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

06/05/2012: I

TEM

10

10.




23 ‐ 143 Water service rate, Sec.

23 ‐ 146.

Fire

Hydrant, fire protection and sprinkler system charges and Sec.

23 ‐ 149 Sewer services rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning – Approved on first reading by a vote of six (6) to one (1).



Newman, Council voted six

(6) to one (1) to give first reading approval to Ordinance No.: 2012 ‐ 050 – Amending the 1998 Code of Ordinances of the City of Columbia, South Carolina, Chapter 23,



23 ‐ 146.

Fire Hydrant, fire protection and sprinkler system charges and Sec.

23 ‐ 149 Sewer services rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning.

Voting aye were Mr.

Newman, Ms.

Plaugh, Dr.

Gergel, Ms.

Devine, Mr.

Davis and Mayor Benjamin.

Mr.



26.





23 ‐ 146.

Fire

Hydrant, fire protection and sprinkler system charges and Sec.

23 ‐ 149 Sewer services rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning – First reading approval was given on June 5, 2012 .

– Approved on second reading by a vote of six (6) to one (1).


Davis and seconded by Mr.

Newman, Council voted six

(6) to one (1) to give second reading approval to Ordinance No.: 2012 ‐ 050 –



23 ‐ 143

Water service rate, Sec.

23 ‐ 146.

Fire Hydrant, fire protection and sprinkler system charges and Sec.

23 ‐ 149 Sewer services rates, (a) Generally and (b) Consumers using water cooling towers for air conditioning.

Voting aye were Mr.

Newman, Ms.

Plaugh,

Dr.

Gergel, Ms.

Devine, Mr.

Davis and Mayor Benjamin.

Mr.


C

ITY

C

OUNCIL

A

GENDA

M

INUTES

08/07/2012: I

TEM

31

31.

Ordinance No.: 2012 ‐ 069 (Revised) – An Ordinance to Authorize the Renewal and

Extension of the Letter of Credit Securing the $81,860,000 Original Principal amount City of Columbia, South Carolina, Waterworks and Sewer System

Revenue Bonds Series 2009, and to Approve the Form and Terms of, and

Authorize the Execution of, Supplements or Amendments to the Letter of

Credit and Reimbursement Agreement, the Remarketing Agreement and the

Tender Agent Agreement, and other Agreements as necessary or desirable; and other matters related thereto – First reading approval was given on July 10,

2012 – Approved on second reading.

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

08/07/2012: I

TEM

46

46.




23 ‐ 149 Sewer service rates (d) Apartments and roominghouses and (e) Hotels, motels, dormitories and roominghouses ‐

Approved on first reading.

Upon a motion made by Mayor Benjamin and seconded by Mr.

Newman, Council voted unanimously to give first reading approval to Ordinance No.: 2012 ‐ 077 –



23 ‐ 149

Sewer service rates (d) Apartments and roominghouses and (e) Hotels, motels, dormitories and roominghouses.

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

08/21/2012: I

TEM

22

22.




23 ‐ 149 Sewer service rates (d) Apartments and roominghouses and (e) Hotels, motels, dormitories and roominghouses – First reading approval was given on August 7, 2012.



19.

Ordinance No.: 2012 ‐ 084 – Amending the 1998 Code of Ordinance of the City of



23 ‐ 152 Sewer plant expansion fee (b) – Approved on first reading .


Baddourah and seconded by Ms.

Devine, Council voted unanimously to give first reading approval to Ordinance No.: 2012 ‐ 084 – Amending

the 1998 Code of Ordinance of the City of Columbia, South Carolina, Chapter 23,


23 ‐ 152 Sewer plant expansion fee (b).


20.




23 ‐ 149 Sewer service rates (a) Generally –

Approved on first reading .


Baddourah and seconded by Ms.

Devine, council voted unanimously to give first reading approval to Ordinance No.: 2012 ‐ 099 – Amending the 1998 Code of Ordinances of the City of Columbia, South Carolina, Chapter 23,


23 ‐ 149 Sewer service rates (a) Generally.

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

10/16/2012: I

TEM

36

36.




23 ‐ 149 Sewer service rates (a) Generally – First reading approval was given on October 2, 2012 ‐ Approved on second reading.

O RDINANCE 2012-050

O RDINANCE 2012-099


M INUTES

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

03/19/2013: I

TEM

1

1.




23 ‐ 143 Water service rate, and Sec.

23 ‐ 149 Sewer service rates, (a) Generally ‐ Approved on first reading by a vote of five (5) to one (1).

Water and Sewer Rate Presentation

Ms.

Melissa Gentry, P.E., Assistant City Manager outlined the following water and sewer rate options to be implemented and made effective on May 1, 2013: Modify base rate by a factor of 50% for meters 1” and larger; dual meter customers only, will pay the base rate for the large meter in lieu of both meters; dual meter customers only, will pay the sewer base rate based on the small meter size in lieu of the larger meter size; and a volumetric increase of 7.96% consistent with the increase originally identified in the rate study for fiscal year 2013/2014, for all 142,017 customers.

She presented a chart of the city’s current customer base, which identified 126,828 customers with 5/8” meters; the base rate that existed prior to July 1, 2012; the current base rates; the proposed base rates; and the rates for customers inside and outside the city limits, along with the cost savings for all customers by meter size.

Mr.

Joey Jaco, Director of Utilities and Engineering Department reported that recent infrastructure improvements include improving the reliability and efficiency of our water intake and replacing older pumps at the Columbia Canal Water Works; installing new headworks at the Metro Wastewater Plant to improve reliability and flow control; and rehabilitating our five largest wastewater pump stations.

He outlined a few of the future projects to include elevated drinking water tank improvements to help with localized pressure and storage and annual sanitary sewer rehabilitation projects.

He announced that sanitary sewer overflows have been reduced by 50% since fiscal year 2008 and over the past three years we were consistently in the top three for the best tasting water.

He cited other awards received by the city and individual employees.

The city is making great efforts to reach out to the public through public service announcements, water bill inserts, scheduling plant tours, online at www.cocwatersewer.com

and through workshops and/or one ‐ on ‐ one sessions.

Mr.

Jaco recommended that City Council implement the proposed rates, proceed with the volumetric increase, secure a consultant for customer audit services, continue Automated Meter Reading pilot to implement additional meters, and update the rate study annually.

Council opened the Public Hearing at 6:37 p.m.

No one appeared in support of or in opposition to Item 1.

Councilor Baddourah asked if the Public Hearing was properly advertised.

Ms.

Melissa Gentry, P.E., Assistant City Manager stated that the Public Hearing was properly advertised.

Ms.

Teresa Wilson, City Manager stated that it has to be advertised in the State

Newspaper .


Plaugh and seconded by Ms.

Devine, Council voted unanimously to close the Public Hearing at 6:39 p.m.

Councilor Baddourah said that his biggest issue with the rate increase and how many people it affected.

He said that the average senior citizen can’t afford this and will be affected the most.

He reiterated his concern about transferring funds from water and sewer operations to the general fund to support other programs; it is not in the best interest of the water rate increase.

Councilor Plaugh said that we have overflows and we have to address those.

She said that a lot of the overflows come from grease build up and we’ve launched programs to address that, both with restaurants and apartment complexes.

She stated that we have a large water system and it is much like a utility.

She recalled discussing on numerous occasions that a proper transfer is appropriate, because it’s like a transfer fee.

She expressed concerns about economic development activities that are funded from water and sewer, but they don’t directly generate water and sewer customers; those kinds of expenditures don’t belong in the Water and Sewer Fund; they belong in the General Fund.

She acknowledged that a reasonable transfer is appropriate and could appear in the general fund to fund those economic development activities.

She noted that the rate change is an increase for residential customers and a downward adjustment for a lot of commercial customers; not everyone will get a 7.9% increase, because it is a percentage of volume.

She supports the motion, because she doesn’t think we have an alternative.

Councilor Devine stated that we are decreasing the rates that we voted on in the fall and this covers the next fiscal year as well.

She noted that a lot of work has to be done to the system and staff has already presented a budget that works to decrease the transfer from the Water and Sewer Fund over the next few years.

She echoed Ms.

Plaugh’s suggestion about looking at a reasonable transfer fee instead of grasping at straws.

She said that customer bills will go down.

Councilor Baddourah said that we went up on the rate and are coming down on the fee.

He noted that his bill will not go down.

Councilor Davis said that staff’s recommendations did not come easy; it took a lot of thought, time and analysis.

He hopes this process is maintained as part of the process going forward.

He recalled that a comparison of cities similar to Columbia showed that Columbia was on the low side and with these adjustments Columbia remains on the low side.

He stated that Council understands that the infrastructure must be maintained.

He noted that Columbia’s water quality has always been rated high.

He urged everyone to continue to follow this issue as Council moves toward second reading.

He stated that it’s not easy to vote for a rate increase; however, it has been justified and he is certain that there will be an overall appreciation for what we’re going to do.

He acknowledged that there are some things that we can do more efficiently with the system.

He supports his colleagues in voting for the rate decrease.

Ms.

Melissa Gentry, P.E., Assistant City Manager asked Council to implement the following changes:



Change 1: Modify Bases rate by factor of 50% for meters 1” and larger;



Change 2: Dual meter customers only pay base rate for large meter in lieu of both meters;



Change 3: Dual meter customers pay sewer base rate based on small meter size in lieu of large meter size; and



Change 4: Volumetric Increase of 7.96%, consistent with increase originally identified in the rate study for Fiscal Year 2013/2014.



Davis, Council voted five (5) to one (1) to give first reading approval to Ordinance No.: 2013 ‐ 013 – Amending the

1998 Code of Ordinances of the City of Columbia, South Carolina, Chapter 23, Utilities and Engineering, Article V, Water and Sewer Rates, Sec.


23 ‐ 149 Sewer service rates, (a) Generally.

Voting aye were Mr.

Davis, Ms.

Devine, Ms.

Plaugh, Mr.

Newman and Mr.

Runyan.

Mr.

Baddourah voted nay.

C

ITY

C

OUNCIL

A

GENDA

M

INUTES

03/26/2013: I

TEM

9

9.





23 ‐ 149 Sewer service rates, (a) Generally ‐ First reading approval was given on March 19,

2013 by a vote of five (5) to one (1).

Councilor Devine asked Ms.

Gentry to outline the public awareness efforts and workshops that have been scheduled.

Ms.

Missy Gentry, P.E., Assistant City Manager said that if we obtain approval tonight, we will send press releases tomorrow to notify citizens that we are having workshops in the evenings and on Saturdays; we will invite people in to let us help them understand their bills; and we will show how the calculations would be different with the new rates.

Councilor Davis asked if they would be flexible enough to do the workshops on a regional basis.

Ms.

Missy Gentry, P.E., Assistant City Manager said absolutely, if the demand is there.

Councilor Devine suggested that an alternative would be to address specific concerns.

Councilor Newman said there is still a great deal of confusion.

He clarified that it is a decrease and our bills are less than the main areas we compete with such as

Greenville, Charlotte, Rock Hill, Florence, Raleigh, Lexington, Augusta and the

Charleston Water System.

He further clarified that although the changes we’re making are significant, we are still paying less than the municipalities in the surrounding area.

Councilor Davis concurred with Mr.

Newman, adding that this action does reflect decreases and it positions us to do the necessary repairs to infrastructure; it’s a process that all municipalities must go through and we’re doing it at a lower rate.

He applauded his colleagues for moving in this direction, which is in the best interest of the taxpayers; the return on investment will be very extensive; and it puts the city in a position to maintain the quality that has been expected.

Councilor Runyan thanked staff for their hard work and for working to build consensus among Council.

Councilor Devine reported that in today’s Environment and Infrastructure Committee meeting they discussed a sewer issue with a larger rate payer that said they would rather be serviced by the city, because our rates are better than their alternative.

She stated that no one likes an increase, but relatively speaking we do know that customers prefer our rates.

Mayor Benjamin stated that we are reducing the base rate for most businesses and churches.

Ms.

Missy Gentry, P.E., Assistant City Manager clarified that we are reducing the base rate for all 1” meters and above by 50%.

Mayor Benjamin said even with the increase in consumption, the City of Columbia will still be 20% below the market rate; we will have water and sewer rates below

Anderson, Greenville, Charlotte, Rock Hill, Florence, Raleigh, Greenwood, Lexington,

Augusta, Beaufort, way below Lexington County and well below the Charleston Water

System.

He said we will continue the significant investment that allows us to grow economic development in this community and allow us to continue being the great stewards of the environment.

We’ve seen a significant decrease in sanitary sewer overflows over the last several years; the Canal and Lake Murray Waterworks treatment facilities produce an average of 65 million gallons of water every day; the wastewater plant is ready to treat up to 60 million gallons of wastewater every day; we have 3,600 miles of water and sewer mains serving over 142,000 households and businesses throughout the Greater Columbia Metropolitan Area and we are still keeping rates $6 less a month than Greenville; $17 less a month than Lexington; and

$35 less a month than Charleston.

He said that you all are doing a great job and because of that you got a unanimous vote last month.

Councilor Plaugh echoed the compliments to staff.

She clarified that this is a volumetric increase on our residential, smaller line customers, which are the bulk of our customers.

She agreed that we have to do this, but any increase is a challenge for someone on a fixed income.

She acknowledged that our costs keep going up and we have a lot of work to do.

She has concerns about some of the charges being made in the water and sewer budget.

She would like to see a pure water and sewer budget with a transfer, i.e.

a franchise fee that can be transferred into the General Fund.

Mayor Benjamin asked that staff insert in the next round of water bills a comparison of this increase to other municipalities for customers inside and outside the City of

Columbia.

Councilor Baddourah said that we have 135,000 regular household customers whose water bill is going up.

Mayor Benjamin said with all due respect Mr.

Baddourah, that was the presentation that staff made to Council last week and we voted unanimously in support of it.


Newman and seconded by Ms.

Devine, Council voted six

(6) to one (1) to give second reading approval to Ordinance No.: 2013 ‐ 013 –



23 ‐ 143

Water service rate, and Sec.

23 ‐ 149 Sewer service rates, (a) Generally.

Voting aye were Mr.

Davis, Ms.

Devine, Ms.

Plaugh, Mr.

Newman, Mr.

Runyan and Mayor

Benjamin.

Mr.

Baddourah voted nay.

O RDINANCE 2013-013

R ATE I NCREASE S TRUCTURE &

P

ROPOSED

R

ATE

I

NCREASE

STUDY PROGRESS AND APPROACH

Pricing : How should the revenue be collected from the customer classes?

Rate Design

• study approach

Cost Allocation : Who should pay and how much should each customer class pay?

Cost of

Service

We Are Here

Financial Planning:

What are the annual revenue requirements of the utility?

Revenue Requirements Forecast

Operating &

Capital Costs

Objectives, Policies &

Rate Setting Principles

Rate Revenues &

Miscellaneous

Revenues

1

REVENUE REQUIREMENTS – 5 YEAR PROJECTION

• O&M: FY 2016 Budget as Starting Point = $79 Million

• Annual Increase in O&M of 3% thereafter for modeling purposes, reviewed and adjusted annually.

• Recognition of general market inflation and Clean Water 2020 efforts

• Outstanding Debt Service = $29 Million Annually

• New Money Revenue Bond Issuances Annually from

2016 Ͳ 2020.

• Annual Capital Spending of $120 million

2

SCENARIO: 2.0

DEBT

SERVICE COVERAGE

TARGET FROM 2016

Ͳ

2020

COMBINED UTILITY 2016 REVENUE REQUIREMENTS

Scenario: 2.0

Debt Service Coverage

Line

No.

7

8

5

6

9

Description

Statement of Net Revenue Requirements (Cash Basis)

Revenue Requirements

1

2

O&M

Debt

Expenses

Service

3

4

Other Expenditures & Transfers:

Transfer to Internal Services

Direct Transfer

Indirect Cost Allocation

Operating/Working Capital

Transfer to Water and Sewer Improvements

Funding to/(from) Operating Reserve

10 Subtotal

Less Revenue Requirements Met from Other Sources

11 Other Revenues and Adjustments

12 Interest Earned

13 Subtotal

14 Net Revenue Requirements to be Recovered by Rates

15 Revenue Under Existing Rates

16 Required Increase

Operating

Expense

78,749,646

0

954,733

4,000,000

2,270,000

0

0

0

85,974,379

6,106,472

576,996

6,683,468

79,290,911

Capital

Cost

0

29,006,859

0

2,385,188

26,500,000

0

0

(7,103,062)

50,788,985

0

50,788,985

Total

Cost

78,749,646

29,006,859

0

954,733

4,000,000

2,270,000

2,385,188

26,500,000

(7,103,062)

136,763,364

6,106,472

576,996

6,683,468

130,079,896

116,040,618

12.1%

4

3

CAPITAL FINANCING PLAN

Scenario: 2.0


• 2016 Ͳ 2020 CIP = $120 million annually

• $205 million Water and $395 million Wastewater

• Annual Revenue Bond Issuances, $’s for Projects ($448.7

million from FY 2016 Ͳ 2020)

• 2016 Ͳ $83.0

million

• 2017 Ͳ $97.7

million

• 2018 Ͳ $94.0

million

• 2019 Ͳ $89.4

million

• 2020 Ͳ $84.6

million

• “Pay Ͳ go” from cash reserves and rate revenue reinvested back into the system (to be adjusted annually based on actuals) ($137.1


• 2016 Ͳ $26.5

million

• 2017 Ͳ $20.5

million

• 2018 Ͳ $25 million

• 2019 Ͳ $29.7

million

• 2020 Ͳ $35.4

million

• Anticipated Capital Contributions from West Columbia over next 5 years included

5


Scenario: 2.0


6

COMBINED UTILITY CASH FLOW STATEMENT

Scenario: 2.0


Description 2015 2016

Water Service Ͳ Existing Rates

Wastewater Service Ͳ Existing Rates

$ 71,834

42,838

$ 72,541

43,500

$

2017

73,255

43,903

$

2018

73,977

44,311

$

2019

74,705

44,722

$

2020

75,441

45,138

120,579 Total Service Revenue Ͳ Existing Rates

Additional Revenue Required

Fiscal Year

2015

2016

% Increase

0.0%

12.1%

2017

2018

2019

2020

7.4%

7.8%

6.9%

7.9%

$

$

Total Additional Revenue Required

Other Revenue and Adjustments

Total Revenues

$

$

$

114,671 $

Ͳ $

Ͳ

6,975

121,646

$

$

$

116,041 $

Ͳ

14,039

$

14,039

6,683

136,763

$

$

$

117,158 $

Ͳ

14,169

9,671

$

23,841

6,530

147,529

$

$

$

118,287 $

Ͳ

14,301

9,761

11,139

$

35,201

6,350

159,838

$

$

$

119,427 $

Ͳ

14,434

9,852

11,242

10,638

$

46,166

6,240

171,833

$

$

$

Ͳ

14,568

9,943

11,347

10,739

13,257

59,854

6,107

186,540

Operating Expense

Net Revenues after Operations

Outstanding Debt Service

Projected Future Debt Service

Total Debt Service

$

$

$

70,345

51,302

$

$

29,008

Ͳ

29,008

$

$ $

Cash Funded CIP

Transfers and Other Expenditures

Operating/Working Capital

$

$

$

11,518

7,225

2,178

$

$

$

Annual Operating Balance

Debt Service Coverage Ratio

Unrestricted Operating Fund Ending Balance

Target Operating Balance (% of O&M) 138%

$ 1,373

1.77

116,086

97,076

$

78,750

58,014

29,007

Ͳ

29,007

$

$

$

$

81,112

66,417

29,006

4,203

33,208

$

$

$

$

83,545

76,293

29,009

9,137

38,146

$

$

$

$

86,052

85,781

29,005

13,886

42,891

$

$

$

$

88,633

97,907

29,008

19,945

48,953

26,500

7,225

2,385

$

$

$

20,500

7,225

2,457

$

$

$

25,000

7,225

2,530

$

$

$

29,700

7,225

2,606

$

$

$

35,400

7,225

2,685

(7,103)

2.00

108,983

108,675

$ 3,027

2.00

112,009

111,935

$ 3,391

2.00

115,401

115,293

$ 3,359

2.00

118,760

118,752

$ 3,644

2.00

122,404

122,314

7

WATER SYSTEM CASH FLOW STATEMENT

Scenario: 2.0


Description 2015 2016 2017 2018 2019 2020



$ 71,834

Ͳ

$ 72,541

Ͳ

$ 73,255

Ͳ

$ 73,977

Ͳ

$ 74,705

Ͳ

$ 75,441

Ͳ

Total Service Revenue Ͳ Existing Rates


Fiscal Year

2015

% Increase

0.0%

2016

2017

2018

2019

2020

0.0%

0.0%

4.2%

4.7%

5.6%

$

$

71,834

Ͳ



Total Revenues

$

$

$

Ͳ

2,873

74,706

$

$

$

$

$

72,541

Ͳ

Ͳ

Ͳ

2,875

75,415

$ 73,255

$

$

$

$

Ͳ

Ͳ

Ͳ

Ͳ

2,890

76,145

$ 73,977 $ 74,705 $ 75,441

$

Ͳ

Ͳ

Ͳ

3,137

$

$

3,137

2,878

$ 79,991

$

Ͳ

Ͳ

Ͳ

3,168

3,695

$

$

6,863

2,876

$ 84,444

$

Ͳ

Ͳ

Ͳ

3,199

3,731

4,651

$ 11,581

$ 2,866

$ 89,888



$ 34,526

$ 40,180

$ 40,079

$ 35,337

$ 41,281

$ 34,864

$ 42,519

$ 37,472

$ 43,795

$ 40,649

$ 45,109

$ 44,779




Cash Funded CIP




$ 17,841

Ͳ

$ 17,841

$ 17,840

Ͳ

$ 17,840

$ 17,840

1,535

$ 19,374

$ 17,842

3,205

$ 21,046

$ 17,839

4,801

$ 22,640

$ 17,841

6,881

$ 24,722

$

$

$

4,450

4,565

1,029

$

$

$

9,676

4,565

1,116

$

$

$

6,938

4,565

1,149

$

$

$

8,405

4,565

1,184

$

$

$

9,976

4,565

1,219

$ 11,800

$ 4,565

$ 1,256

$ 12,294 $ 2,140 $ 2,838 $ 2,272 $ 2,250 $ 2,437

8

WASTEWATER SYSTEM CASH FLOW STATEMENT

Scenario: 2.0


Description 2015 2016 2017 2018 2019 2020



$ Ͳ

42,838

$ Ͳ

43,500

$ Ͳ

43,903

$ Ͳ

44,311

$ Ͳ

44,722

$ Ͳ

45,138



Fiscal Year

2015

2016

2017

% Increase

0.0%

32.3%

16.7%

2018

2019

2020

11.7%

9.0%

10.2%

$

$

42,838

Ͳ



$

$

Ͳ

4,103

Total Revenues $ 46,940

$ 43,500 $ 43,903

$

$

$

$

Ͳ

14,039

14,039

3,809

61,348

$ Ͳ

14,169

9,671

$

$

$

23,841

3,640

71,384

$

$

44,311

Ͳ

14,301

9,761

7,969

$ 32,032

$ 3,505

$ 79,847

$ 44,722 $ 45,138

$ Ͳ

14,434

9,852

8,043

6,938

$

$

$

39,267

3,400

87,389

$ Ͳ

14,568

9,943

8,118

7,003

8,622

$

$

48,253

3,261

$ 96,652






$ 35,818

$ 11,122

$ 38,671

$ 22,677

$ 39,831

$ 31,553

$ 41,026

$ 38,821

$ 42,257

$ 45,132

$ 43,525

$ 53,127

$ 11,167

Ͳ

$ 11,167

$ 11,167

Ͳ

$ 11,167

$ 11,166

2,668

$ 13,834

$ 11,168

5,932

$ 17,100

$ 11,166

9,084

$ 20,250

$ 11,167

13,064

$ 24,231

Cash Funded CIP




$

$

$

7,068

2,660

1,148

$

$

$ 16,824

2,660

1,270

$ 13,562

$

$

2,660

1,308

$

$

$ 16,595

2,660

1,347

$

$

$ 19,724

2,660

1,387

$ 23,600

$

$

2,660

1,429

$ (10,922) $ (9,243) $ 189 $ 1,119 $ 1,110 $ 1,207

9

SCENARIO: 1.75

DEBT

SERVICE COVERAGE

TARGET FROM 2016

Ͳ

2020

10

COMBINED UTILITY 2016 REVENUE REQUIREMENTS

Scenario: 1.75


7

8

9

5

6

Line

No.

Description

Statement of Net Revenue Requirements (Cash Basis)

Revenue Requirements

3

4

1

2

O&M

Debt

Other

Expenses

Service

Expenditures

Transfer to

&

Internal

Transfers:

Services

Direct Transfer

Indirect Cost Allocation

Operating/Working Capital

Transfer to Water and Sewer Improvements

Funding to/(from) Operating Reserve

10 Subtotal

Less Revenue Requirements Met from Other Sources

11 Other Revenues and Adjustments

12 Interest Earned

13 Subtotal

14 Net Revenue Requirements to be Recovered by Rates

15 Revenue Under Existing Rates

16 Required Increase

Operating

Expense

78,749,646

0

954,733

4,000,000

2,270,000

0

0

0

85,974,379

6,254,231

576,996

6,831,227

79,143,152

Capital

Cost

0

29,006,859

2,385,188

19,500,000

(7,312,632)

0

0

0

43,579,415

0

43,579,415

Total

Cost

78,749,646

29,006,859

0

954,733

4,000,000

2,270,000

2,385,188

19,500,000

(7,312,632)

129,553,794

6,254,231

576,996

6,831,227

122,722,567

116,040,618

5.8%

11


Scenario: 1.75


• 2016 Ͳ 2020 CIP = $120 million annually

• $205 million Water and $395 million Wastewater

• Annual Revenue Bond Issuances, $’s for Projects ($493.6


• 2016 Ͳ $90.0

million

• 2017 Ͳ $106.0

million

• 2018 Ͳ $102.9

million

• 2019 Ͳ $99.3

million

• 2020 Ͳ $95.4

million

• “Pay Ͳ go” from cash reserves and rate revenue reinvested back into the system (to be adjusted annually based on actuals) ($92.2


• 2016 Ͳ $19.5

million

• 2017 Ͳ $12.2

million

• 2018 Ͳ $16.1

million

• 2019 Ͳ $19.8

million

• 2020 Ͳ $24.6

million

• Anticipated Capital Contributions from West Columbia over next 5 years included

12


Scenario: 1.75


13

COMBINED UTILITY CASH FLOW STATEMENT

Scenario: 1.75


Description 2015 2016



$ 71,834

42,838

$ 72,541

43,500

$

2017

73,255

43,903

$

2018

73,977

44,311

$

2019

74,705

44,722

$

2020

75,441

45,138

114,671 $ 117,158 $ 120,579 Total Service Revenue Ͳ Existing Rates


Fiscal Year

2015

2016

% Increase

0.0%

5.8%

2017

2018

2019

2020

7.5%

8.0%

7.0%

8.1%

$

$



Total Revenues

$

$

$

Ͳ

Ͳ

6,975

121,646

$

$

$

$

116,041 $

Ͳ

6,682

$

6,682

6,831

129,554

$

$

$

Ͳ

6,744

9,251

$

15,995

6,686

139,839

$

$

$

118,287 $

Ͳ

6,806

9,337

10,693

$

26,836

6,517

151,640

$

$

$

119,427 $

Ͳ

6,870

9,423

10,792

10,300

$

37,385

6,416

163,228

$

$

$

Ͳ

6,934

9,511

10,893

10,397

12,900

50,634

6,291

177,504






$

$

$

70,345

51,302

$

$

29,008

Ͳ

29,008

$

$

78,750

50,804

$

$

29,007

Ͳ

29,007

$

$

81,112

58,727

$

$

29,006

4,553

33,558

$

$

83,545

68,095

$

$

29,009

9,902

38,911

$

$

86,052

77,176

$

$

29,005

15,096

44,101

$

$

88,633

88,871

29,008

21,775

50,783 $

Cash Funded CIP



$

$

$

11,518

7,225

2,178

$

$

$

19,500

7,225

2,385

$

$

$

12,200

7,225

2,457

$

$

$

16,100

7,225

2,530

$

$

$

19,800

7,225

2,606

$

$

$

24,600

7,225

2,685


Debt Service Coverage Ratio

Unrestricted Operating Fund Ending Balance

Target Operating Balance (% of O&M) 138%

$ 1,373

1.77

116,086

97,076

$ (7,313)

1.75

108,773

108,675

$ 3,287

1.75

112,060

111,935

$ 3,328

1.75

115,389

115,293

$ 3,444

1.75

118,833

118,752

$ 3,578

1.75

122,411

122,314

14

WATER SYSTEM CASH FLOW STATEMENT

Scenario: 1.75


Description 2015 2016 2017 2018 2019 2020



$ 71,834

Ͳ

$ 72,541

Ͳ

$ 73,255

Ͳ

$ 73,977

Ͳ

$ 74,705

Ͳ

$ 75,441

Ͳ



Fiscal Year % Increase

2015

2016

2017

0.0%

0.0%

0.0%

2018

2019

2020

0.0%

5.3%

5.7%

$ 71,834

$ Ͳ



Total Revenues

$

$

$

Ͳ

2,873

74,706

$

$

$

$

$

72,541

Ͳ

Ͳ

Ͳ

2,875

75,415

$ 73,255

$

$

$

$

Ͳ

Ͳ

Ͳ

Ͳ

2,890

76,145

$ 73,977 $ 74,705 $ 75,441

$

Ͳ

Ͳ

Ͳ

Ͳ

$

$

Ͳ

2,909

$ 76,885

$

Ͳ

Ͳ

Ͳ

Ͳ

3,985

$

$

3,985

2,905

$ 81,595

$

Ͳ

Ͳ

Ͳ

Ͳ

4,024

4,516

$

$

8,540

2,896

$ 86,877






Cash Funded CIP




$ 34,526

$ 40,180

$ 40,079

$ 35,337

$ 41,281

$ 34,864

$ 42,519

$ 34,366

$ 43,795

$ 37,800

$ 45,109

$ 41,769

$ 17,841

Ͳ

$ 17,841

$ 17,840

Ͳ

$ 17,840

$ 17,840

1,662

$ 19,502

$ 17,842

3,473

$ 21,315

$ 17,839

5,219

$ 23,058

$ 17,841

7,511

$ 25,352

$

$

$

4,450

4,565

1,029

$

$

$

7,120

4,565

1,116

$

$

$

4,129

4,565

1,149

$

$

$

5,413

4,565

1,184

$

$

$

6,651

4,565

1,219

$

$

$

8,200

4,565

1,256

$ 12,294 $ 4,696 $ 5,519 $ 1,890 $ 2,308 $ 2,396

WASTEWATER SYSTEM CASH FLOW STATEMENT

Scenario: 1.75


Description 2015 2016 2017 2018 2019 2020



$ Ͳ

42,838

$ Ͳ

43,500

$ Ͳ

43,903

$ Ͳ

44,311

$ Ͳ

44,722

$ Ͳ

45,138



Fiscal Year % Increase

$

2015

2016

2017

2018

2019

2020

0.0%

15.4%

18.3%

17.7%

8.8%

10.7%

$

42,838

Ͳ



Total Revenues

$

$

$

Ͳ

4,103

46,940

$ 43,500

$

$

$

$

Ͳ

6,682

6,682

3,957

54,138

$

$

43,903

Ͳ

6,744

9,251

$ 15,995

$ 3,797

$ 63,695

$ 44,311

$

$

$

$

Ͳ

6,806

9,337

10,693

26,836

3,609

74,755

$

$

$

$

44,722

$ Ͳ

6,870

9,423

10,792

6,308

33,394

3,517

81,633

$ 45,138

$ Ͳ

6,934

9,511

10,893

6,367

8,402

$ 42,106

$ 3,383

$ 90,627






Cash Funded CIP




$ 35,818

$ 11,122

$ 38,671

$ 15,467

$ 39,831

$ 23,864

$ 41,026

$ 33,729

$ 42,257

$ 39,376

$ 43,525

$ 47,102

$ 11,167

Ͳ

$ 11,167

$ 11,167

Ͳ

$ 11,167

$ 11,166

2,890

$ 14,057

$ 11,168

6,429

$ 17,597

$ 11,166

9,877

$ 21,043

$ 11,167

14,264

$ 25,431

$

$

$

7,068

2,660

1,148

$

$

$

12,380

2,660

1,270

$

$

$

8,071

2,660

1,308

$

$

$ 10,687

2,660

1,347

$

$

$ 13,149

2,660

1,387

$

$

$ 16,400

2,660

1,429

$ (10,922) $ (12,009) $ (2,232) $ 1,438 $ 1,136 $ 1,182

16

15

S AMPLE B ILLS

Sample Bills

Under Development

S B ECTION

STUDY PROGRESS AND APPROACH

SCENARIO: 2.0

DEBT

SERVICE COVERAGE

TARGET FROM 2016

2020

SCENARIO: 1.75

DEBT

SERVICE COVERAGE

TARGET FROM 2016

2020

Related documents

Products

Support

S B ECTION

STUDY PROGRESS AND APPROACH

SCENARIO: 2.0

DEBT

SERVICE COVERAGE

TARGET FROM 2016

2020

SCENARIO: 1.75

DEBT

SERVICE COVERAGE

TARGET FROM 2016

2020

Related documents

Add this document to collection(s)

Add this document to saved

Suggest us how to improve StudyLib