2020 City Utilities Rates Finance & Strategic Planning Committee Meeting December 9, 2019
Rate Setting Objectives • 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 2
What do rates fund for 2020? City of Waterloo: Region of Waterloo: Water Distribution Water Supply - Purchases • • Sanitary Sewer Collection Wastewater - Treatment • • Stormwater Management • 3
Breakdown of Rate Change 2019 2020 Increase Actual Proposed Increase (%) Rates ($) ($) ($) 6.0% City Portion of Rate - Water 0.8251 0.8747 0.0496 2.6% City Portion of Rate - Sanitary Sewer 1.1939 1.2249 0.0310 4.0% Sub-total - City Portion / m 3 2.0190 2.0996 0.0806 1.9% Region Portion of Rate - Water 1.0749 1.0953 0.0204 3.9% Region Portion of Rate - Sanitary Sewer 1.2561 1.3051 0.0490 Sub-total - Region Portion / m 3 2.3310 2.4004 0.0694 3.0% TOTAL VOLUMETRIC RATE /m 3 4.3500 4.5000 0.1500 3.4% 2019 2020 Increase Actual Proposed Increase (%) Rates ($) ($) ($) 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% 5.9% TOTAL FIXED FEES / MONTH 15.12 16.01 0.89 4
Average Annual Household Impact $27.00 (2.5%) Increase 2019 *** 2020 *** Increase over total Average Household Annual Impact ($) ($) ($) 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 **** 410.54 426.95 16.41 1.5% (Water/Sanitary) City Utilities Rate - Region Portion **** 473.63 488.50 14.87 1.4% (Water/Sanitary) 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 5
Municipal Comparators – water/sewer 6
Municipal Comparators – stormwater 7
Reserve Levels – Rate Stabilization 2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model 8
Reserve Levels – Capital 2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model 9
Reserve Levels – Capital (Stormwater) 2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model 10
Advanced metering system -Water meter -RNI -Sensus Flexnet -Remote reader -Data hosting system -Transmitter / -Administrative -TGB Endpoint tools -Customer access 11
AMI pilot project • Pilot started in Sept 2015 • Included 350+ customers • IPPW2017-037 provided a summary of the pilot project and overall AMI system • Key objectives of the pilot – Performance of the AMI system – Impact on Customer service – Impact on Administrative and Operational duties – Financial impact 12
AMI pilot findings • 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 13
Financial Impact • AMI initial conversion is included in the capital budget and operating 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 Difference ONGOING OPERATIONAL COST ESTIMATES No AMI With AMI WNH Access Fees $0 $128,593 $128,593 Customer Website (3rd Party) plus Hosting $0 $68,193 $68,193 Services Third Party Meter Reading Costs $142,800 $0 -$142,800 $142,800 $196,786 $53,986 14
Non-competitive procurement AMI Transmitter 15
AMI – transmitter installation ∗ Typical residential installation ∗ Transmitter / Endpoint ∗ 2 wire / 3 wire ∗ Sensus transmitter ‘snaps on’ to remote reading device 16
Implementation Schedule 17
AMI - Conclusions • 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 18
High Water Bill Adjustment Policy - update • 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 19
Summary • 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 20
APPENDIX 21
Recommended Rates - 2020 22
Rate Setting Process Regulatory Requirements Region wholesale rates & consumption trends Infrastructure Needs Capital & Operating Budget 10 Year City Utilities Rate Model Public Notice of Rate Changes Council Approval of Rate 23
Reserve Levels – Consolidated 2018 value – actual 2019 value – projected as of Sept. 2019 2020 - 2029 – forecast based on financial model 24
Capital Program Breakdown 25
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