Water Rates Adjustments Phase 2

Transcription

1 Water Rates Adjustments Phase 2 Presented by Shana E. Epstein Director of Public Works, City of Beverly Hills

2 Background Phase 1-Effective January 18, year revenue requirement 3% annual increase through 2022 Authorization of pass-through expenses Phase 2- Effective March 8, 2019 (If Approved) Cost of Service Water reliability charge Revenue stabilization rates schedule 2

3 What Do Rates Pay for? Water Sources: Imported-Metropolitan Water District (MWD), Local (Wells) Existing System 170 Miles of Water Mains 2,500 hydrants 11,000 Meters and Service connections 9 Reservoirs, 40 Million Gallons storage 6 Wells Water Treatment Plant Planned Enhancements Additional groundwater development New wells Enhanced treatment facility Transmission main construction 3

4 What is an Enterprise Fund? Water Operations and Capital are Self- Funded through service charges (Water Bills) Separate and Distinct from City s General Fund Revenues generated by fees and charges are devoted to funding all operations of the enterprise activity 4

5 Cost-of-Service Allocations 3% overall increase in revenue (previously approved by Council) Impacts customer classes differently Cost-of-service analysis realigns the revenue requirement among customer classes in proportion to their service requirements 5

6 Rate Structure Water Bill, $ = Service Charge + Quantity Charge Service Charge: fixed bimonthly fee, based on the size of your water meter and covers the production of water, maintenance of facilities (reservoir, production wells, pipelines), electrical costs for pumping water, and other fixed operating costs. Quantity Charge: Water Consumption Charge covers the actual cost of water consumed. The charge varies with increased usage per unit of water used; One unit =100 Cubic Feet = 748 gallons 6

7 Fixed Service Charge Structure Water Service Charges Maintain 12% proportion of total revenues Adjustment based on cost allocations Fire Protection Service Charges Maintain 3% proportion of total revenues Inside and Outside City customers pay same service charges going forward Inside increases and Outside decreases 7

8 Inside City Service Charge Summary (eff. 3/8/19) Bi-Monthly Fixed Service Charges Proposed Current 3/8/2019 1/1/2020 1/1/2021 1/1/2022 1" $44.66 $48.97 $50.44 $51.95 $ " $77.41 $85.88 $88.46 $91.11 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $1, $1, $1, $1, $1, Outside City 1" $55.83 $48.97 $50.44 $51.95 $ " $96.77 $85.88 $88.46 $91.11 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $1, $1, $1, $1, $1, Service charges are now equal for Inside and Outside customers No change in fire service charges 8

9 Quantity Charge Structures Single-Family Residential Customers Maintain four tiers Adjust tier breakpoints to reflect current demand Quantity Charges remain consistent with industry practices in California Multi-Family Residential Customers Consolidate four tiers to two tiers Adjust single breakpoint to reflect current demand Quantity Charges remain consistent with industry practices in California Commercial Customers Maintain current uniform rate to account for diverse customer class 9

10 Quantity Charge Structures Irrigation rates Create single-family, multi-family, commercial irrigation classes for new irrigation customers Charge corresponding rate by class Evaluate irrigation rates as class size grows Better control of irrigation water use during shortages 10

11 Quantity Charge Adjustments Lease revenue credit- General Fund subsidizes leases of water enterprise properties at market rates Formerly credit applied only to Inside City Customer Proposed now: $0.72 per HCF credit to Inside and Outside City quantity charge rates Included in proposed rate calculations 11

12 Quantity Charge Adjustments General Fund reimbursement Public Safety, Government Facility Capital Costs, and Right-of-Way maintenance costs Costs are already paid by Inside City customers through their taxes Outside City customers have not paid property taxes to the Beverly Hills General Fund to cover their share $0.82 per HCF added to Outside City quantity charge rates (subject to evaluation during future rates studies) 12

13 Quantity Charge Rate Summary (eff. 3/8/19) Current Quantity Charge Rates Proposed Quantity Charge Rates Cost-of-Service Adjustments Lease Revenue General Fund Cost Allocation Tier Size $/HCF Tier Size $/HCF Total Inside City Single Family Single Family Tier HCF $4.02 Tier HCF $4.06 ($0.72) $0.00 $3.34 Tier HCF $5.30 Tier HCF $7.23 ($0.72) $0.00 $6.51 Tier HCF $8.36 Tier HCF $10.30 ($0.72) $0.00 $9.58 Tier 4 Over 120 HCF $16.15 Tier 4 Over 86 HCF $14.33 ($0.72) $0.00 $13.61 Multi Family Multi Family Tier HCF $4.02 Tier HCF $4.98 ($0.72) $0.00 $4.26 Tier HCF $5.30 Tier 2 Over 8 HCF $12.89 ($0.72) $0.00 $12.17 Tier HCF $8.36 Tier 4 Over 16 HCF $16.15 Commercial $6.86 Commercial $7.35 ($0.72) $0.00 $6.63 Outside City Single Family Single Family Tier HCF $5.01 Tier HCF $4.06 ($0.72) $0.82 $4.16 Tier HCF $6.63 Tier HCF $7.23 ($0.72) $0.82 $7.33 Tier HCF $10.45 Tier HCF $10.30 ($0.72) $0.82 $10.40 Tier 4 Over 120 HCF $20.18 Tier 4 Over 86 HCF $14.33 ($0.72) $0.82 $14.43 Multi Family Multi Family Tier HCF $5.01 Tier HCF $4.98 ($0.72) $0.82 $5.08 Tier HCF $6.63 Tier 2 Over 8 HCF $12.89 ($0.72) $0.82 $12.99 Tier HCF $10.45 Tier 4 Over 16 HCF $20.18 Commercial $8.58 Commercial $7.35 ($0.72) $0.82 $

14 Summary of Recommended Rates ( ) Bi-Monthly Variable Quantity Charges Current Quantity Charge Rates Proposed Quantity Charge Rates $/HCF Tier Size $/HCF Tier Size 3/8/2019 1/1/2020 1/1/2021 1/1/2022 Inside City Single Family Single Family Tier HCF $4.02 Tier HCF $3.34 $3.44 $3.54 $3.65 Tier HCF $5.30 Tier HCF $6.51 $6.71 $6.91 $7.12 Tier HCF $8.36 Tier HCF $9.58 $9.87 $10.17 $10.48 Tier 4 Over 120 HCF $16.15 Tier 4 Over 86 HCF $13.61 $14.02 $14.44 $14.87 Multi Family Multi Family Tier HCF $4.02 Tier HCF $4.26 $4.39 $4.52 $4.66 Tier HCF $5.30 Tier 2 Over 8 HCF $12.17 $12.54 $12.92 $13.31 Tier HCF $8.36 Tier 4 Over 16 HCF $16.15 Commercial $6.86 Commercial $6.63 $6.83 $7.03 $7.24 Outside City Single Family Single Family Tier HCF $5.01 Tier HCF $4.16 $4.28 $4.41 $4.54 Tier HCF $6.63 Tier HCF $7.33 $7.55 $7.78 $8.01 Tier HCF $10.45 Tier HCF $10.40 $10.71 $11.03 $11.36 Tier 4 Over 120 HCF $20.18 Tier 4 Over 86 HCF $14.43 $14.86 $15.31 $15.77 Multi Family Multi Family Tier HCF $5.01 Tier HCF $5.08 $5.23 $5.39 $5.55 Tier HCF $6.63 Tier 2 Over 8 HCF $12.99 $13.38 $13.78 $14.19 Tier HCF $10.45 Tier 4 Over 16 HCF $20.18 Commercial $8.58 Commercial $7.45 $7.67 $7.90 $8.14 3% annual increases occurred prior to cost-of-service restructuring in

15 Quantity Charge Rates Single Family Inside City Outside City Assumptions: Lease credit applies to Inside and Outside City Outside City includes cost reimbursements to General Fund 15

16 Quantity Charge Rates Multi Family Inside City Outside City Assumptions: Lease credit applies to Inside and Outside City Outside City includes cost reimbursements to General Fund 16

17 Water Reliability Charge Objective: Create long-term local water supply 17 Deliver raw water to City s Foothill Water Treatment Plant from 3 new wells 1,700 Acre Feet per year (approx. 18% of current water demand) Less reliant on MWD water Project costs until up and running in 2025 $55.8M in capital costs $4.5M in O&M costs Average annual O&M costs once up and running = $4.6M Net Present Value (2018$) = $0.29 per HCF

18 Water Reliability Charge Water Reliability Charge = $0.23 per HCF inside City, 2019 Water Reliability Charge = $0.38 per HCF outside City, 2019 Charged uniformly across tiers, all customer classes Inside City customers benefit from General Fund subsidy, pay $0.15/HCF less than outside City Water Reliability Charge increases $0.01/ year for 30 years 18

19 Proposed Rates-Inside City Proposed Bi-Monthly Effective Date Water Rates 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Meter Size Bi-Monthly Service Charge (All Customers) 1" $44.66 $48.97 $50.44 $51.95 $ /2" $77.41 $85.88 $88.46 $91.11 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ Meter Size Bi-Monthly Fire Service Charge (All Customers) 2" or smaller $27.20 $27.20 $28.02 $28.86 $ /2" $40.56 $40.56 $41.78 $43.03 $ " $59.08 $59.08 $60.85 $62.68 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $1, $1, $1, $1, $1, Customer Class Volume Rates ($/HCF*) Single-Family Residential & Single-Family Irrigation Tier 1 0 up to 10 $ up to 26 $3.34 $3.44 $3.54 $3.65 Tier 2 Over 10 up to 55 $5.30 Over 26 up to 48 $6.51 $6.71 $6.91 $7.12 Tier 3 Over 55 up to 120 $8.36 Over 48 up to 86 $9.58 $9.87 $10.17 $10.48 Tier 4 Over 120 $16.15 Over 86 $13.61 $14.02 $14.44 $14.87 Multi-Family Residential & Multi-Family Irrigation Tier 1 0 up to 4 $ up to 8 $4.26 $4.39 $4.52 $4.66 Tier 2 Over 4 up to 9 $5.30 Over 8 $12.17 $12.54 $12.92 $13.31 Tier 3 Over 9 up to 16 $8.36 Tier 4 Over 16 $16.15 Non-Residential & Non-Residential Irrigation $6.86 $6.63 $6.83 $7.03 $7.24 Customer Class Water Reliability Charge ($/HCF*) All Customer Classes n/a $0.23 $0.24 $0.25 $0.26 *HCF (hundred cubic feet) = 748 gallons 19

20 Proposed Rates-Outside City Proposed Bi-Monthly Water Effective Date Rates 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Meter Size Bi-Monthly Service Charge (All Customers) 1" $55.83 $48.97 $50.44 $51.95 $ /2" $96.77 $85.88 $88.46 $91.11 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ Meter Size Bi-Monthly Fire Service Charge (All Customers) 2" or smaller $34.00 $27.20 $28.02 $28.86 $ /2" $50.71 $40.56 $41.78 $43.03 $ " $73.86 $59.08 $60.85 $62.68 $ " $ $ $ $ $ " $ $ $ $ $ " $ $ $ $ $ " $1, $1, $1, $1, $1, Customer Class Volume Rates ($/HCF*) Single-Family Residential & Single-Family Irrigation Tier 1 0 up to 10 $ up to 26 $4.16 $4.28 $4.41 $4.54 Tier 2 Over 10 up to 55 $6.63 Over 26 up to 48 $7.33 $7.55 $7.78 $8.01 Tier 3 Over 55 up to 120 $10.45 Over 48 up to 86 $10.40 $10.71 $11.03 $11.36 Tier 4 Over 120 $20.18 Over 86 $14.43 $14.86 $15.31 $15.77 Multi-Family Residential & Multi-Family Irrigation Tier 1 0 up to 4 $ up to 8 $5.08 $5.23 $5.39 $5.55 Tier 2 Over 4 up to 9 $6.63 Over 8 $12.99 $13.38 $13.78 $14.19 Tier 3 Over 9 up to 16 $10.45 Tier 4 Over 16 $20.18 Non-Residential & Non-Residential Irrigation $8.58 $7.45 $7.67 $7.90 $8.14 Customer Class Water Reliability Charge ($/HCF*) All Customer Classes n/a $0.38 $0.39 $0.40 $0.41 *HCF (hundred cubic feet) = 748 gallons 20

21 Inside City Bill Impacts-Average User Average Bi-monthly Bill Impacts - INSIDE City Customers - (Proposed)) Meter Water Current Proposed Size Use (HCF) Bill 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Single Family 1" 48 Service Charge $44.66 $48.97 $50.44 $51.95 $53.51 Quantity Charge $ $ $ $ $ Water Reliability Charge $0.00 $11.04 $11.52 $12.00 $12.48 Total Bill $ $ $ $ $ $ Change $3.81 $8.85 $9.10 $9.36 Multi Family (10 units) 1" 90 Service Charge $44.66 $48.97 $50.44 $51.95 $53.51 Quantity Charge $ $ $ $ $ Water Reliability Charge $0.00 $20.70 $21.60 $22.50 $23.40 Total Bill $ $ $ $ $ Per Dwelling Unit $47.05 $53.22 $54.84 $56.51 $58.23 $ Change $6.17 $1.62 $1.67 $1.72 Commercial 1.5" 126 Service Charge $77.41 $85.88 $88.46 $91.11 $93.84 Quantity Charge $ $ $ $ $ Water Reliability Charge $0.00 $28.98 $30.24 $31.50 $32.76 Total Bill $ $ $ $1, $1, $ Change $8.47 $28.90 $29.73 $

22 Outside City Bill Impacts-Average User Average Bi-monthly Bill Impacts - OUTSIDE City Customers -(Proposed) Meter Water Current Proposed Size Use (HCF) Bill 1/1/2019 1/1/2020 1/1/2021 1/1/2022 Single Family 1" 48 Service Charge $55.83 $48.97 $50.44 $51.95 $53.51 Quantity Charge $ $ $ $ $ Water Reliability Charge $0.00 $18.24 $18.72 $19.20 $19.68 Total Bill $ $ $ $ $ $ Change ($21.24) $10.03 $10.32 $10.61 Multi Family (10 units) 1" 90 Service Charge $55.83 $48.97 $50.44 $51.95 $53.51 Quantity Charge $ $ $ $ $ Water Reliability Charge $0.00 $34.20 $35.10 $36.00 $36.90 Total Bill $ $ $ $ $ Per Dwelling Unit $58.77 $61.95 $63.79 $65.69 $67.64 $ Change $3.17 $1.85 $1.90 $1.95 Commercial 1.5" 126 Service Charge $96.77 $85.88 $88.46 $91.11 $93.84 Quantity Charge $1, $ $ $ $1, Water Reliability Charge $0.00 $47.88 $49.14 $50.40 $51.66 Total Bill $1, $1, $1, $1, $1, $ Change ($105.39) $32.00 $32.92 $

23 Revenue Stabilization Adjustments Revenue stabilization rates schedule Ensure sufficient revenues are available during water shortage conditions Effective when Council approves mandatory reductions in water use Goal to minimize impact to indoor water use and limit irrigation Customers receive 30 day s notice Rates return to normal schedule when mandatory reductions end 23

24 Revenue Stabilization Adjustments Class Shortage Reductions By Class Stage A Stage B Stage C Stage D Stage E 5% Reduction 10% Reduction 20% Reduction 30% Reduction 50% Reduction Single Family 6% 12% 24% 36% 58% Multi Family 3% 5% 11% 16% 31% Commercial 4% 7% 15% 22% 40% Irrigation 11% 22% 45% 67% 100% Class Revenue Stabilization Factors By Class Stage A Stage B Stage C Stage D Stage E 5% Reduction 10% Reduction 20% Reduction 30% Reduction 50% Reduction Single Family Multi Family Commercial Irrigation n/a To be applied to the non-shortage rates in effect prior to the shortage has been declared. No factor for irrigation in Stage E, which requires 100% cutback 24

25 Bill Comparisons 26

26 Bill Comparisons 27

27 Bill Comparisons 28

28 Bill Comparisons 29

29 Cost per Gallon BH Tap Water Avg. Bottled Water Whole Milk (CA) Gasoline (regular) (Southern California) $0.01/g $1.11/g A $3.28/g B $3.68 C A Per International Bottled Water Association-2016 B U.S Department of Agriculture-Average through November 2018 C Per U.S. Energy Information Administration, California- October 29,

30 Public Noticing City required to complete a protest hearing before adopting rates Notices mailed to all parcel owners or property tenant ( water customers ) at least 45 days prior to hearing November 19, 2018-November 30, 2018 Written protests may be delivered to the City Clerk at the public hearing, prior to the end of the public hearing, or may be mailed or personally delivered to the City Clerk at City Hall January 15, 2019-Public Hearing and 1 st reading of ordinance February 5, nd reading of ordinance March 8, Rates effective 30

31 Community Engagement Water Rates Website Launched Week of November 12, 2018 Public Notice Distributed November 19, November 30, 2018 Town Hall Meeting November 29, 2018 Public Works Commission Meeting December 13, 2018 Town Hall Meeting January 10, 2019 Community Presentations: Homeowner groups, Commissions, Chamber of Commerce, others by request November 2018-January 2019 Social Media Campaign November 2018-January 2019 Newspaper advertisements November 2018-January 2019 Media Interviews November 2018-January 2019 Replay Town Halls on BHTV November 2018-January 2019 Public Hearing and 1 st Reading of Ordinance January 15, nd Reading of Ordinance February 5,