• Purpose of the ' Rate Study
• Rate Study Approach
• Data Reviewed
• Key Assumptions
• Results
• Questions
• Evaluate sufficiency of the existing water
revenue stream to:
- ·Provide funding for future operating I capital
expenses
- Meet minimum reserve level requirements
- Meet legal obligations associated with outstanding
debt
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• Develop rates and charges which will generate
sufficient revenue I meet cost of service
standards (Prop 218)
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evada Irrigation District
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Project Initiation &
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II. .
Data Collection &
Assessment
Confirmation of
Goals and
Objectives
Frequent
Communication
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Rate Setting &
Financial Plan
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Summary
Report
Customer Statistics
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Written
•
System Revenue
Requirements
•
Public Presentations
•
Integration of
Capital
Improvement Plan
•
Multi-year
Financing Analysis
•
Alternatives
Analyses
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Communication _- -_
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~evada Irrigation District Wat~:~ate and Fee Study
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· ., • IDF-aft FY 12 Financial ~epor(
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• Historical and budgeted revenues and expenses
• Capital Improvement Plan
• Outstanding loan agreements
• No growth in customer base
• Unrestricted Reserve Balances in an amount from
between 4 to 6 months of O&M
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Current policy is 6 month reserve
• New debt to fund portion of Capital Improvement Plan
(CIP)
• Inflationary (2-3°/o) cost escalation factor on future
expenses
• Bebt service coverage:
--- Maintain at least 1.25x for existing and new debt ·
$50,000,000
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$45,000,000
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$40,000,000
$35,000,000
- Total Sourc es
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- Total Uses
$30,000,000
$25,000,000
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$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
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FY
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FY
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FY
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FY
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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Projected Vear -End Unrestricted ·o ·p.e rati·n g ·Reserves
Excludes restricted reserves such as impact feesJ etc.
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$$ (5,000,000)
$(10,000,000)
'$( 15 ,000,000)
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2
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• 6°/o annual increase in all water rates for 10 year forecast period
•
No growth in customer base
•
Allow unrestricted reserve balances to decrease to 4 months over
several years and then build back to 6 months
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Necessary as a buffer to avoid rate spikes early in the forecast period to correct cash flow
deficiency
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Current policy is 6 month reserve
•
Capital Improvement Plan (CIP) funded at 70°/o of budgeted amounts
•
New debt to fund portion of CIP
•
Inflationary (2-3°/o) cost escalation factor on future expenses
•
Debt service coverage:
Maintain a.t least 1.25x for existing and new debt
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Nevada Irrigation District Water
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$50,000,000
$45,000,000
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$40,000,000
$35,000,000
$30,000,000
$25,000,000
- Tota l Sources
$20,000,000
- Total Uses
$15,000,000
$10,000,000
$5,000,000
$-
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2013 . 2014 2015 2016 2017 2018 2019 2020 2021 2022
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Nevada Irrigation District Water Rate and Fee Study
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Projected Vear End Unrestricted Operating Reserves
Excludes restricted reserves such as impact fees, etc.
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
F~
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
•
Projected Year End Operating Reserves ,
-11- 6 Month Target