2020 City Utilities Rates Finance & Strategic Planning Committee - - PowerPoint PPT Presentation

Finance & Strategic Planning Committee Meeting December 9, 2019

2020 City Utilities Rates

• Meet or exceed regulatory & customer requirements
• Provide investment in infrastructure to ensure its continued

service and reliability

• Fund water, sanitary sewer, and stormwater utilities at a

sustainable level through appropriate, competitive and stable rates (no revenue generated from property taxes)

• Maintain reserves at or near Council approved targets

Rate Setting Objectives

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What do rates fund for 2020?

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Region of Waterloo:

• Water Supply - Purchases
• Wastewater - Treatment

City of Waterloo:

• Water Distribution
• Sanitary Sewer Collection
• Stormwater Management

Breakdown of Rate Change

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Rates 2019 Actual ($) 2020 Proposed ($) Increase ($) Increase (%) City Portion of Rate - Water 0.8251 0.8747 0.0496 6.0% City Portion of Rate - Sanitary Sewer 1.1939 1.2249 0.0310 2.6% Sub-total - City Portion / m3 2.0190 2.0996 0.0806 4.0% Region Portion of Rate - Water 1.0749 1.0953 0.0204 1.9% Region Portion of Rate - Sanitary Sewer 1.2561 1.3051 0.0490 3.9% Sub-total - Region Portion / m3 2.3310 2.4004 0.0694 3.0%

TOTAL VOLUMETRIC RATE /m3 4.3500 4.5000 0.1500 3.4%

Rates 2019 Actual ($) 2020 Proposed ($) Increase ($) Increase (%) City Stormwater - Res Medium / month 11.92 12.75 0.83 7.0% City Service Fee - 15mm Meter / month 3.20 3.26 0.06 1.9%

TOTAL FIXED FEES / MONTH 15.12 16.01 0.89 5.9%

Average Annual Household Impact

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Average Household Annual Impact 2019 *** ($) 2020 *** ($) Increase ($) Increase

• ver total

cost (%) City Utilities Rate - City Stormwater * 142.31 152.17 9.86 0.9% City Utilities Rate - City Water Service Fee ** 38.33 39.06 0.73 0.1% City Utilities Rate - City Portion **** (Water/Sanitary) 410.54 426.95 16.41 1.5% City Utilities Rate - Region Portion **** (Water/Sanitary) 473.63 488.50 14.87 1.4% TOTAL COST 1,064.81 1,106.68 41.87 3.9% * Residential Medium Tier ** 15mm Water Service Charge *** Effective date of Feb. 1 for 2019-2020 rates **** Using average consumption - 17m3/month

$27.00 (2.5%)

Municipal Comparators – water/sewer

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Municipal Comparators – stormwater

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Reserve Levels – Rate Stabilization

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2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model

Reserve Levels – Capital

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2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model

Reserve Levels – Capital (Stormwater)

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2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model

Advanced metering system

• Water meter
• Remote reader
• Transmitter /

Endpoint

• Sensus Flexnet

system

• TGB
• RNI
• Data hosting
• Administrative

tools

• Customer access

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• Pilot started in Sept 2015
• Included 350+ customers
• IPPW2017-037 provided a summary of the pilot project and
• verall AMI system
• Key objectives of the pilot

– Performance of the AMI system – Impact on Customer service – Impact on Administrative and Operational duties – Financial impact

AMI pilot project

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• Administrative / customer service benefits:

– Final read booking and scheduling – Misreads investigation – High consumption cases – Zero consumption cases

• Operational benefits

– Meter chamber entries – Difficult to access properties – Properties under construction – Reduce the need for in house meter appointments

• Water conservation benefits

AMI pilot findings

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• AMI initial conversion is included in the capital budget and
• perating costs are built into the 10 year rate forecast model

– AMI transmitters are by far the largest cost – Recommended to fund initial conversion through reserves – Future transmitter replacement & annual operating costs (as per below table) incorporated into monthly service/meter fee

Financial Impact

ONGOING OPERATIONAL COST ESTIMATES No AMI With AMI Difference WNH Access Fees $0 $128,593 $128,593 Customer Website (3rd Party) plus Hosting Services $0 $68,193 $68,193 Third Party Meter Reading Costs $142,800 $0 -$142,800 $142,800 $196,786 $53,986

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Non-competitive procurement

AMI Transmitter

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AMI – transmitter installation

∗ Typical residential installation ∗ Transmitter / Endpoint ∗ 2 wire / 3 wire ∗ Sensus transmitter ‘snaps on’ to remote reading device

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Implementation Schedule

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• AMI proved to be a reliable and stable technology
• AMI would be a significant enhancement to the current

level of customer service and support

• There are both administrative and operational advantages

that the AMI system offers

• AMI is a definite industry trend for water utilities
• Staff recommend a non-competitive procurement
• Staff propose a 4 year implementation schedule

AMI - Conclusions

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High Water Bill Adjustment Policy - update

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• The policy was approved in May

2019 – IPPW2019-003

• FC-022 defined how the policy

was to be administered

• Staff had recommended allocating

$50,000 to fund potential applications

• To date, City Utilities have

received 23 applications, with the rebates totaling $9,974

• Staff feel the program is meeting

the key objectives of FC-022

Summary

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• 2020 recommended rates align with the proposed 2020 budget

and 2021-2029 capital forecast

• Annual financial impact of the recommended overall City Utilities

increase for 2020 is 3.9% (or $41.87) for the average household

• The City of Waterloo’s utility rates compare favourably to our

neighbouring municipalities

• Reserves are at appropriate levels through the forecast period
• Staff are recommending a city-wide AMI implementation
• City Utilities division continues to review and develop programs to

increase customer service and benefit rate payers

APPENDIX

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Recommended Rates - 2020

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Rate Setting Process

Capital & Operating Budget

Infrastructure Needs Region wholesale rates & consumption trends Regulatory Requirements

10 Year City Utilities Rate Model Public Notice of Rate Changes Council Approval of Rate

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Reserve Levels – Consolidated

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2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model

Capital Program Breakdown

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