Elk Grove Water District – Finance

Meeting

Water Rate Update and Connection Fees

Habib Isaac – PrincipalGregg Tobler – Task Manager

January 30, 2013

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Topics of Discussion• Adjustments to Rate Analysis

– Consumption adjustments– Revenue check– Residential non-metered accounts– FY 2012-13 consumption projection– Revised proposed rates for each scenario (fix/variable split)– Customer impact based on usage levels

• Connection Fees– Background– Methodology

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Consumption Adjustments• Received additional usage records

– 2011 through 2012 – Usage slightly higher in 2012 versus 2011– Incorporated average of 2 years into analysis– Result: slightly more units of water to spread cost

• Rate per unit of water reduces

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• Applied current rates and proposed rates to FY 2011-2012 consumption figures– Revenue test confirmed model is generating appropriate amount of revenue

– Difference less than 1%

Revenue Check

Current Proposed Current Proposed

13,386,479.02$ 13,478,866.51$ 13,779,591.84$ 13,894,275.00$

Total RevenueCost of Service Fire Protection Reallocation

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• Reduced average usage to equal metered customers– Flat rate reduced

• Projected conversion rate of non-metered accounts– All non-metered accounts converted by April 2014– Consumption for metered accounts increases in first 2 years– New baseline consumption calculated for FY 2012-13

Residential Non-Metered Accounts

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• Between July 2012 – December 2012– Used 2 year average derived from 2011 and 2012– Already accounts for non-metered conversions

• Between January 2013 – June 2013– Used 2 year average derived from 2011 and 2012 for existing

metered accounts– Projected usage of non-metered account conversions

• Conversion rate equals 125 meters per month • Expected usage derived on a per month basis using 2011 and 2012 data

• c

FY 2012-13 Consumption Projection

Water Class J ul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 J an. 2013 Feb. 2013 Mar. 2013 Apr. 2013 May 2013 J un. 2013

Non-Residential 74,355 67,081 76,431 59,088 32,454 18,155 18,295 16,639 17,449 22,122 41,835 49,604

Irrigation 20,175 20,021 17,409 15,844 4,256 929 3,428 1,874 1,857 1,816 8,910 13,294

Residential Metered Water 222,506 273,323 271,202 224,611 142,954 111,737 117,202 103,971 117,773 122,531 175,120 255,133

Total 365,090 406,277 408,691 340,531 218,450 167,404 173,305 154,662 167,053 174,241 251,433 341,396

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Step Up Rates: Scenario 1 – ~(60% / 40%)

Residential Accounts• Tier 1 = $1.60• Tier 2 = $1.92• Tier 3 = $3.11Non-Residential

Accounts• $1.87Irrigation Accounts• $2.00

Existing Structure

• Tier 1 = $1.46• Tier 2 = $1.80

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Step Up Rates: Scenario 1 - ~(60% / 40%)

J uly 1, 2013 Existing Difference

53.75 56.53 (2.78)$

83.39 73.48 9.91$

118.96 118.71 0.25$

201.95 446.56 (244.61)$

320.51 565.29 (244.78)$

616.91 847.93 (231.02)$

972.58 1,170.14 (197.56)$

1,387.54 -

Meter Charge*

6"

8"

4"

10"

1.5"

2"

3"

1"

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Customer Impact – Scenario 1: Step Up ~(60%/40%)

56.53 53.75 56.53 53.75 56.53 53.75

17.52 19.20

35.04 41.28

54.60 71.46

Existing$74.05

Proposed FY2014 $72.95

Existing$91.57

Proposed FY2014 $95.03

Existing$111.13

Proposed FY2014 $125.21

Low - 12 HCF Med - 24 HCF High - 36 HCF

Variable

Base

(1.10)

3.46

14.08

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Step Up Rates: Scenario 2 - ~(65% / 35%)

Residential Accounts• Tier 1 = $1.41• Tier 2 = $2.81

Non-Residential Accounts

• $1.60

Irrigation Accounts• $1.72

Existing Structure

• Tier 1 = $1.46• Tier 2 = $1.80

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Step Up Rates: Scenario 2 - ~(65% / 35%)

J uly 1, 2013 Existing Difference

60.11 56.53 3.58$

84.61 73.48 11.13$

114.00 118.71 (4.71)$

182.59 446.56 (263.97)$

280.58 565.29 (284.71)$

525.55 847.93 (322.38)$

819.51 1,170.14 (350.63)$

1,162.46 -

Meter Charge*

6"

8"

4"

10"

1.5"

2"

3"

1"

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Customer Impact – Scenario 2: Step Up (35%/65%)

56.53 60.11 56.53 60.11 56.53 60.11

17.52 16.92 35.04 33.84

54.60 59.16

Existing$74.05

Proposed FY2014 $77.03

Existing$91.57

Proposed FY2014 $93.95

Existing$111.13

Proposed FY2014 $119.27

Low - 12 HCF Med - 24 HCF High - 36 HCF

Variable

Base

2.98

2.38

8.14

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Scenario ComparisonScenario 1 - 60%/40%• Similar revenue split as

current structure • Allows 3-tiered structure

• Greater emphasis on water conservation

• May assist in achieving 20% by 2020, but may not be necessary

• Allotments 15 hcf in Tiers 1&2

• Heavy users pay significantly more

Scenario 2 – 65%/35%• Greater Revenue Stability• 2-tiered structure

• Similar to existing• Rate structure promotes

efficient use of water between tiers by adjusting price differential in rates

• Allocates 30hcf in Tier 1• Customer Impact more balance• Heavy users still pay more