Town of Orange Park Water & Wastewater Rate Study. Town Council Meeting. March 19, 2019

Transcription

1 Town of Orange Park Water & Wastewater Rate Study Town Council Meeting March 19, 2019

2 Rate Setting

3 Rate Setting Rate Making Process Revenue Requirements Cost Allocation Rate Design Communication Operating Costs Capital Costs Financial Policies Debt Coverage Reserves Evaluate Available Data Identify Methodology Compare Results to Current Revenue Evaluate Objectives Identify Structures Set Parameters Customer Impacts Explain Process/Data Adjustment Drivers National Trends Local Practices

4 Rate Setting Orange Park Rate Study Process Revenue Requirements Compares revenues to operating & capital costs to determine adequacy of existing rates Cost Allocation Analysis Allocates the revenue requirements of the system to water and sewer in a fair and equitable manner Rate Structure Review Residential tier structure analysis Considered 4 rate structure scenarios centered around assisted living facilities base charge Survey Compare typical water and sewer monthly bills of local utilities

5 Revenue Requirements

6 Revenue Requirements Key Assumptions Working capital reserve: 6 months operations and maintenance expense Cash funding capital improvement program Account growth: 3 units annually FY 2020: 121 units as part of the development approval pipeline O&M escalation factors: varies by cost components as determined with Town Staff

7 Revenue Requirements Revenue Sufficiency Analysis Results Rate Adjustment* FY 2019 FY 2020 FY 2021 FY 2022 FY % 0.0% 0.0% 0.0% 0.0% *Applies to both water and sewer rates.

8 Survey

9 Survey Water & Sewer Monthly Bill Residential, 4,000 gallons Atlantic Beach Green Cove Springs Clay County Utility Authority Orange Park Jacksonville Beach Neptune Beach $- $10 $20 $30 $40 $50 $60 $70 $80 $90 Water Sewer

10 Cost Allocation

11 Cost Allocation Cost Recovery Summary $3.50M $3.00M $2.50M $2.00M $1.50M $1.00M $0.50M $0.00M Water Sewer Revenue Requirement $1,807,186 $2,937,273 Rate Revenue $2,177,268 $2,567,191

12 Rate Design

13 Rate Design Existing Rate Structure Components Single Family Irrigation Commercial Multifamily Hotels & Motels Fixed charge based on meter size Volume rates: increasing 5- tier structure Fixed charge based on meter size Volume rates: increasing 3- tier structure Fixed charge based on meter size Volume rates: uniform rate Includes assisted living facilities Fixed charge based on number of units/rooms Volume rates: uniform rate

14 Rate Design Existing Water Rates Water Fixed Monthly Charges Single Family Volumetric Rates Irrigation Volumetric Rates All other customer classes Meter Size Amount Tier Blocks 1,000 gallons Rate per Kgal Tier Blocks 1,000 gallons Rate per Kgal Tier Blocks 1,000 gallons Rate per Kgal 3/4" $ $ $ 3.98 All usage $ " $ $ $ /2" $ $ 3.98 Over 20 $ " $ $ " $ Over 20 $ " $ " $ " $ 1, " $ 1, MF Units* $ *Multifamily and Hotels & Motels customer classes are charged per unit.

15 Rate Design Existing Sewer Rates Sewer Fixed Monthly Charges Single Family Volumetric Rates All other customer classes Meter Size* Amount Tier Blocks 1,000 gallons Rate per Kgal Tier Blocks 1,000 gallons Rate per Kgal 3/4" $ $ 4.16 All usage $ " $ Over 12 $ /2" $ " $ " $ " $ " $ 1, " $ 1, " $ 2, MF Units** $ *All Single Family customers charged the 3/4" meter charge **Multifamily and Hotels & Motels customer classes are charged per unit.

16 Rate Design Existing Rate Structure Review Multiple ways assisted living facilities can be handled Single family volume tier sizes are appropriately sized Rate structure overall is compliant with current rate making practices

17 Rate Design Scenario Overview 1 Fixed monthly charge for all assisted living facilities (ALF) based on number of units 2 ALF fixed charge based on number of units Excludes Moosehaven 3 ALF fixed charge based on number of units Excludes Moosehaven and Astoria 4 All customers fixed charge based on meter size

18 Rate Design Rate Scenarios Average Bill Impacts Scenarios* Base Charge Residential (3/4" meter) Water $ $ $ $ Sewer Multifamily Unit Charge (3/4" meter) Water $ $ $ $ Sewer Hotel/Motel Unit Charge (4" meter) Water $ $ $ $ Sewer Assisted Living Unit Charge (6" meter) Water $ 7.58 $ 7.69 $ 7.72 $ 1, Sewer , Average Bill Impacts** Single Family -1.87% -0.96% -0.69% 19.05% Multifamily -1.77% -0.91% -0.65% % Hotel/Motel -1.82% -0.94% -0.67% % Assisted Living: Oakview Rehab % % % 17.11% Brookdale % % % 8.90% Heartland Health 84.38% 85.98% 86.47% 6.11% Consulate Health Care 3.27% 4.02% 4.25% 14.41% Moosehaven Impacts 7.09% 8.23% -0.76% % Astoria Impacts 27.45% -0.74% -0.53% % * Scenarios 1-3 charge by unit and Scenario 4 charges by meter size for all customer classes. ** Bill impacts are based upon average typical total bill and includes volumetric charge based on typical customer class volume

19 Scenario 1 Account Impact Distribution Rate Design Consulate Oakview Heartland Brookdale

20 Scenario 2 Account Impact Distribution Rate Design Consulate Oakview Heartland Brookdale

21 Scenario 3 Account Impact Distribution Rate Design Consulate Oakview Heartland Brookdale

22 Scenario 4 Account Impact Distribution Rate Design Consulate Oakview Heartland Brookdale

23 Conclusions

24 Conclusions Water & Wastewater Rate Study Revenue is sufficient to recover revenue requirements Water revenue is slightly over recovering water costs and sewer is under recovering sewer costs We recommend no change to the existing rate structure as it is compliant with current rate making practices

25 Questions?