Town Hall on Proposed Aqua VA Rate Increases. Hosted by Jeff Black and Clay Forehand of the Board of Supervisors

Transcription

1 Town Hall on Proposed Aqua VA Rate Increases and WWISC Hosted by Jeff Black and Clay Forehand of the Board of Supervisors 1

2 Guests in Attendance Ben Emerson County Attorney, Sands Anderson Alan Partin Deputy County Administrator Joseph Schiebel Director of Public Works/Utilities David Sadler Caroline County IT Manager 2

3 Aqua VA has filed application with State Corporation Commission (Case No. PUR ) for general increase in rates and ability to impose Water and Wastewater Infrastructure Service Charge ( WWISC ) Purpose of Town Hall Meeting Proposal would produce increase in water revenues of $1,488,998 and increase in wastewater revenues of $399,069 from Aqua customers statewide Constitutes 11% increase in water revenues and 5.4% increase in wastewater revenues (combined increase of 9%) statewide 3

4 Purpose of Town Hall Meeting (Continued) Latest application represents 5 th request for rate increase by Aqua in Caroline County since 2006 If approved, increased rates would affect approximately 2,872 homes in Lake Caroline, Lake Land Or, Lake Heritage, Campbell s Creek, Bridlewood, Elsinore, Twin Cedars & Countryside Apartments 4

5 If 2017 Aqua rate increase proposal is approved: Monthly bill for 5,000 gallons water only usage will have increased from $25.70 in 1995 (Land Or Utility Co.) to $58.39 in 2018* History of Aqua VA Rates in Caroline County Monthly bill for 5,000 gallons sewer only usage will have increased from $20.70 in 1995 (Land Or Utility Co.) to $ in 2018 Monthly bill for 5,000 gallons water/sewer combined will have increased from $46.40 in 1995 (Land Or Utility Co.) to $ in 2018 *All rates shown do not include proposed WWISC. See handout for more details 5

6 If 2017 Aqua VA rate increase proposal is approved: Current Rates vs. Proposed Rates (PUR ) Current monthly bill for 5,000 gallons water only usage will increase from $51.32 to $58.39 Current monthly bill for 5,000 gallons sewer only usage will increase from $ to $ Current monthly bill for 5,000 gallons water/sewer combined will increase from $ to $ *All rates shown do not include proposed WWISC. See handout for more details 6

7 Impact of Proposed WWISC According to Aqua, WWISC would provide the necessary financial support to accelerate infrastructure replacement without having to file for new base rates, while providing the Commission with a significant opportunity for review and approval Initial plan runs for three year period and includes investment beginning on February 1, 2019 through December 31, 2022 Applied as percentage of total water and wastewater charge (base charge plus usage) 7

8 Impact of Proposed WWSIC (Continued) Initial service charge, effective February 1, 2019, calculated to recover costs of eligible infrastructure investment not previously reflected in rate base and investments to be placed in service between February 1, 2019 and January 31, 2020 Calculated and updated on yearly basis to reflect eligible infrastructure projected to be placed in service during upcoming annual WWISC period 8

9 WWISC calculated each year as follows: Impact of Proposed WWISC (Continued) Company determines eligible infrastructure replacement costs for the annual period the rider applies. Company determines annual throughput (water sales) for that annual period Company divides eligible infrastructure replacement costs by annual throughput to determine percentage to be applied to the current period to customer accounts 9

10 Capped at 10% of the amount billed to customers under otherwise applicable rates and charges Impact of Proposed WWISC (Continued) Subject to audit at intervals determined by SCC Subject to annual reconciliation based on a reconciliation period consisting of the twelve months ending for each rate year Revenue received under WWISC for reconciliation period compared to eligible costs for same period. Difference between revenue and costs recouped or refunded, as appropriate, over remaining portion of rate year 10

11 Outcome of 2014 Rate Increase Application (Case No. PUE ) Water Only Base Fee Water Only Per 1,000 Gallons Sewer Only Base Fee Sewer Only Per 1,000 Gallons Water/Sewer Combined Rates for 5,000 Gallon Usage Rate Requested by Aqua Rate Received Savings $17.87 $17.62 $0.25 $6.80 $6.74 $0.06 $31.41 $31.26 $0.15 $15.40 $15.05 $0.35 $ $ $

12 Outcome of 2014 Rate Increase Application (Continued) SCC ruled against Aqua Virginia and other water companies that asked to establish rules under which they could seek a water and wastewater infrastructure service charge (WWISC) SCC order stated the need for infrastructure investment, and the corresponding need for Aqua Virginia and other companies to recover that investment, can be addressed on a case by case basis that analyzes the specific circumstances involved Bottom line: SCC can still allow Aqua Virginia to establish WWISC on case by case basis (Virginia American Water Company previously allowed to impose three year pilot WWISC in Alexandria) 12

13 Comparison of Aqua Rates to Surrounding Localities (based on 5,000 gallons usage) Spotsy County Hanover County Caroline County King Geo. County SA Aqua Proposed Aqua Prop w/ 10% WWISC* Water $30.35 $22.95 $26.51 $26.14 $58.39 $64.23 Sewer $29.80 $43.60 $71.52 $80.01 $ $ Total $60.15 $66.55 $98.03 $ $ $ # Water Customers # Sewer Customers 28,633 19,171 1,500 3,899 24,160 (statewide) 27,753 18, ,935 6,903 (statewide) 13

14 SCC to hold public hearing on April 24, 2018, at 10 a.m., in the SCC Courtroom, Second Floor, Tyler Building, 1300 East Main Street, Richmond, Virginia 23219, to receive comments from public County will request additional public hearing in Caroline What Can be Done? Interested persons may participate as a respondent by filing a notice of participation on or before January 16, 2018 Interested persons desiring to submit comments electronically may do so by April 17, 2018 by following instructions found on SCC website: Document water quality complaints to Aqua and Virginia Department of Health 14

15 Refute data and financial support for rate increase or capital service charge (WWISC) What are Some Specific Arguments for Opposing this Increase? Discredit business practice of using rate increases and capital fees from one area to support other areas or acquisitions Provide scrutiny regarding customer service, responsiveness to issues and overall quality of service for fees charged Comparison between public water systems and Aqua rates and fees Noticeable absence of fire hydrants in neighborhoods 15

16 County working with local home owner s associations & other localities served by Aqua to consider hiring legal counsel and subject matter expert to contest rate increase & WWISC before SCC What s Next? Estimated cost for attorney & expert between $85,000 to $115,000 Fluvanna County Board of Supervisors deciding whether to participate with Caroline on November 1 16

17 Caroline Board to discuss providing County funds to hire legal counsel and expert at November 16 th Board meeting What s Next? (Continued) County spent $49,390 in legal fees on 2014 Aqua SCC rate case plus share of $25,000 cost for expert Expenditures represent approximately 1% of actual General Fund expenditures 17

18 County pays annual debt service of $169,674 on 20 year interest free VRLF loan to construct Dawn Wastewater System Assistance Provided to Other County Citizens with Utility Related Issues County also contributed $367,489 toward cost of Phase 1 and $193,000 toward cost of Phase 2 of Dawn Wastewater Project Allowed Non LMI (low to moderate income) customers to connect to Dawn Wastewater System at reduced availability fee of $1,600 payable over 5 years at no interest (actual connection cost was $3,200) BOS agreed to waive past due balances and penalties for Dawn Wastewater System customers of $60,820 18

19 Assistance Provided to Other County Citizens with Utility Related Issues (Continued) County borrowed $1,988,447 to connect County waterline and provide service to Caroline Pines subdivision (partially offset by $1,016,400 in availability fees collected) Reduced Caroline Pines availability fee from $8,000 to $2,800 (payable over 5 years at no interest) for customers who signed agreement before deadline Agreed to boundary adjustment with Town of Port Royal largely to provide $70,000 in additional revenue to secure Town funding for loan to repair water system 19

20 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 3% WWISC Had Been Approved Water Only Base Fee Water Only Per 1,000 Gallons Sewer Only Base Fee Sewer Only Per 1,000 Gallons Water/Sewer Combined Rates for 5,000 Gallon Usage Rate Requested by Aqua Rate Received Rate Savings Savings w/3% WWISC Total Savings Combined $17.87 $17.62 $0.25 $0.53 $0.78 $6.80 $6.74 $0.06 $0.20 $0.26 $31.41 $31.26 $0.15 $0.94 $1.09 $15.40 $15.05 $0.35 $0.45 $0.80 $ $ $2.45 $4.74 $

21 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 3% WWISC Had Been Approved Annual Savings if 3% WWISC Had Been Approved (5,000 Gallons) Subdivision # Water Cust # Sewer Cust Annual Saving Twin Cedars 36 0 $ Bridlewoods $ 4, Campbell s Creek $ 12, Elsinore 60 0 $ 1, Lake Land Or Heritage $ 67, Lake Land Or $ 18, Twin Cedars 36 0 $ Total $ 107,

22 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 3% WWISC Had Been Approved Water Only Base Fee Water Only Per 1,000 Gallons Sewer Only Base Fee Sewer Only Per 1,000 Gallons Water/Sewer Combined Rates for 4,000 Gallon Usage Rate Requested by Aqua Rate Received Rate Savings Savings w/3% WWISC Total Savings Combined $17.87 $17.62 $0.25 $0.53 $0.78 $6.80 $6.74 $0.06 $0.20 $0.26 $31.41 $31.26 $0.15 $0.94 $1.09 $15.40 $15.05 $0.35 $0.45 $0.80 $ $ $2.04 $4.08 $

23 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 3% WWISC Had Been Approved Annual Savings if 3% WWISC Had Been Approved (4,000 Gallons) Subdivision Water Cust Sewer Cust Annual Saving Bridlewoods $ 3, Campbell s Creek $ 11, Elsinore 60 0 $ 1, Lake Land Or Heritage $ 57, Lake Land Or $ 16, Twin Cedars 36 0 $ Total $ 90,

24 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 5% WWISC Has Been Approved Water Only Base Fee Water Only Per 1,000 Gallons Sewer Only Base Fee Sewer Only Per 1,000 Gallons Water/Sewer Combined Rates for 5,000 Gallon Usage Rate Requested by Aqua Rate Received Rate Savings Savings w/5% WWISC $17.87 $17.62 $0.25 $0.88 $1.13 Total Savings Combined $6.80 $6.74 $0.06 $0.34 $0.40 $31.41 $31.26 $0.15 $1.56 $1.66 $15.40 $15.05 $0.35 $0.75 $1.10 $ $ $2.45 $7.89 $

25 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 5% WWISC Had Been Approved Annual Savings if 5% WWISC Had Been Approved (5,000 Gallons) Subdivision Water Cust Sewer Cust Annual Saving Bridlewoods $ 6, Campbell s Creek $ 18, Elsinore 60 0 $ 2, Lake Land Or Heritage $ 97, Lake Land Or $ 27, Twin Cedars 36 0 $ 1, Total $ 153,

26 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 5% WWISC Had Been Approved Water Only Base Fee Water Only Per 1,000 Gallons Sewer Only Base Fee Sewer Only Per 1,000 Gallons Water/Sewer Combined Rates for 4,000 Gallon Usage Rate Requested by Aqua Rate Received Rate Savings Savings w/5% WWISC $17.87 $17.62 $0.25 $0.88 $1.13 Total Savings Combined $6.80 $6.74 $0.06 $0.34 $0.40 $31.41 $31.26 $0.15 $1.56 $1.66 $15.40 $15.05 $0.35 $0.75 $1.10 $ $ $2.04 $6.80 $

27 Outcome of 2014 Rate Increase Application (Case No. PUE ) If 5% WWISC Had Been Approved Annual Savings if 5% WWISC Had Been Approved (4,000 Gallons) Subdivision Water Cust Sewer Cust Annual Saving Bridlewoods $ 5, Campbell s Creek $ 15, Elsinore 60 0 $ 1, Lake Land Or Heritage $ 83, Lake Land Or $ 24, Twin Cedars 36 0 $ 1, Total $ 131,

28 Potential Real Estate Loss of 10% Subdivision Total Value Total # of Lots 2017 Real Estate Tax Revenue Tax Rate $0.83/$100 Bridlewood $ 9,569, $ 79, Campbell's Creek $ 16,900, $ 140, Elsinor $ 6,369, $ 52, Lake Caroline $ 208,368, $ 1,729, Lake Land 'Or $ 264,299, $ 2,193, Twin Cedars $ 4,021, $ 33, Grand Total $ 509,528, $ 4,229, If Real Estate value was reduced by 10% due to high water & sewer charges $ 422, Penny = $ Cents on tax rate to equalize (just over 1 ½cents) 28

29 Potential Real Estate Loss of 5% Subdivision Total Value Total # of Lots 2017 Real Estate Tax Revenue Tax Rate $0.83/100 Bridlewood $ 9,569, $ 79, Campbell's Creek $ 16,900, $ 140, Elsinor $ 6,369, $ 52, Lake Caroline $ 208,368, $ 1,729, Lake Land 'Or $ 264,299, $ 2,193, Twin Cedars $ 4,021, $ 33, Grand Total $ 509,528, $ 4,229, If Real Estate value was reduced by 5% due to high water & sewer charges $ 211, Penny = $ 252, Cents on tax rate to equalize 0.84 (less than a penny) 29

30 Wrap Up Final Comments Questions? 30