Town of Anthony, TX Cost of Service and Rate Design Study Water and - - PowerPoint PPT Presentation

Nelisa Heddin Consulting, LLC (512) 589-1028 nheddin@nelisaheddinconsulting.com

Town of Anthony, TX

Cost of Service and Rate Design Study Water and Wastewater Utility

Overview

• Introduction
• Background
• Methodology
• Findings
• Recommendations

“When the well is dry, we learn the worth of water.”

• Ben Franklin -

Economic Reality of Water

Revenues

• Water has an inherent value to fund infrastructure

necessary for treatment and distribution

Economy

• Water is critical to a variety of industries, and as a

result, the economy

Community

• Water is a fundamental building block for

communities

Commodity

• Water is a commodity which we cannot live

without

Step 1: Revenue Requirements

• Expenses – Off-sets = Revenue Requirements
• 5-Year Outlook
• Used FYE2019 Budget as Starting Point
• Does NOT currently include future CIP projects

Step 1: Revenue Requirements

Revenue Requirement Options:

Transitional Plan – assumes:

– Transition over five-years to move to cost-based rates. – Includes 100% of water/sewer debt beginning in 2020. – Transitions from utilization of garbage fees in the water/sewer fund to no subsidy from garbage. – Does not include additional reserve funds in the rates or future capital projects.

2018 Estimated Actual 2020 2021 2022 2023 Water $568,253 $616,638 $650,915 $686,365 $722,034 Wastewater 394,699 545,243 577,676 610,556 643,898 Total $962,952 $1,161,881 $1,228,590 $1,296,921 $1,365,931 2018 Actual Over/(Under) $(198,929) $(265,638) $(333,969) $(402,979) % Over/(Under) 2018 Actual

• 21%
• 28%
• 35%
• 42%

Step 2: Rate Design

• Recovers Cost of Service from Each Class of

Customers

• Packaged to Mitigate Financial Impact to

Customers for Each Scenario

Step 2: Rate Design

• Scenario 2: Transitional Plan, Water

Current residential base fees include 3,000 gallons in the base fee. The proposed base fees would not include any consumption. This will allow customers a higher degree of control over how much the Town’s water rates impact them personally.

Base Fees Current 2020 2021 2022 2023 1" Meter $49.45 $49.95 $49.95 $49.95 $49.95 2" Meter $49.45 $49.95 $49.95 $49.95 $49.95 3" Meter $49.45 $75.20 $79.99 $84.90 $89.87 4" Meter $49.45 $95.71 $101.81 $108.06 $114.38 6" Meter $49.45 $143.57 $152.71 $162.08 $171.57 3/4" Meter $14.91 $7.52 $8.00 $8.49 $8.99

Step 2: Rate Design

Current residential volumetric fees are $3.22 per thousand gallons, current commercial volumetric fees are $2.77. The proposed volumetric rates would be the same for all customer classes.

• Scenario 2: Transitional Plan, Water

Volumetric Rate Current 2020 2021 2022 2023 All customer classes $2.77-3.22 $3.19 $3.37 $3.56 $3.75

Step 2: Rate Design

The average residential customer uses approximately 6,000 gallons in the Town of Anthony, and would thus see an approximate $2.10 increase in their monthly water bill for 2020.

• Scenario 2: Transitional Plan, Water

Average Water Bill Current 2020 2021 2022 2023 Residential, 3,000 Gallons $14.91 $17.10 $18.12 $19.17 $20.23 Residential, 6,000 Gallons $24.57 $26.68 $28.23 $29.85 $31.47 Residential, 10,000 Gallons $37.45 $39.45 $41.72 $44.08 $46.45 Residential, 20,000 Gallons $69.65 $71.37 $75.45 $79.67 $83.92 Commercial, 2" Meter, 10,000 Gallons $77.15 $81.87 $83.68 $85.54 $87.42 Commercial, 2" Meter, 100,000 Gallons $326.45 $369.20 $387.21 $405.87 $424.62 COMMERCIAL, 4" Meter, 53,000 Gallons $196.26 $264.91 $280.55 $296.70 $312.96

Step 2: Rate Design

Currently, the Town bases all customer wastewater bills on their water consumption. Using the new rates, residential customers would receive a bill based upon their winter average consumption, commercial customers would be billed based upon their water

• consumption. Winter averaging more closely reflects what a residential customer is

sending back to the system as wastewater and is considered to be a more fair and equitable means of wastewater billing. As such, customers are not penalized for summer irrigation through their wastewater bill.

• Scenario 2: Transitional Plan, Wastewater

Wastewater Rates Current 2020 2021 2022 2023 Base Fee RESIDENTIAL $10.34 $9.95 $10.48 $11.01 $11.55 COMMERCIAL $30.00 $30.00 $30.00 $30.00 $30.00 Volumetric Fee 1.06-2.97 $3.90 $4.15 $4.39 $4.64

Step 2: Rate Design

The average residential customer uses approximately 6,000 gallons in the Town of Anthony and has a winter average of approximately 3,000 gallons, and would thus see an approximate $6.00 increase in their monthly water bill for 2020.

• Scenario 2: Transitional Plan, Wastewater

Average Wastewater Bill Current 2020 2021 2022 2023 Residential, 3,000 Gallons Winter Average and 6,000 Gallons Water Use $15.64 $21.66 $22.92 $24.18 $25.47 Commercial, 2" Meter, 10,000 Gallons $56.73 $69.04 $71.49 $73.91 $76.40