Alameda County Water District Community Meetings Proposed 2019 Rates & Charges Los Cerritos Community Center, January Month, 30, 2019 Day, Year
Presentation Overview ACWD Rate Setting Process Why are Water Rates Going Up? What is ACWD Doing to Do to Control Costs? ACWD s Financial Plan ACWD s Proposed Water Rates & Charges How Can I Save Money? Customer Assistance Program: Help On Tap ACWD s Conservation Programs How Can I Learn More? 2
ACWD Rate Setting Process Held SIX public financial workshops February 2018 to October 2018 Developed a long-range expenditure forecast Analyzed water demand and projected revenues Calculated rates needed to meet the cost of service Evaluated rate structure options Found rate increases of 4 percent necessary in each of the next two years February 2018 December 2018 3
Why Are Rates Going Up? Multiple factors create pressure on rates: Increasing labor costs latest union contract includes a 1% cost-ofliving increase in 2018 and 3% each year in 2019 and 2020. Capital projects, including Alameda Creek Fish Ladders, Pipeline replacement and renewal projects, CA WaterFix Project, and Advanced Metering Infrastructure (AMI). Increasing costs for water purchases from the State Water Project. Paying down liabilities for retiree benefit obligations over the next 13 years which increases short-term costs but saves about $45 million long-term. Increasing costs for energy, chemicals, and other essential supplies. Unfunded State mandates (e.g., lead testing in schools, environmental regulations, etc.) 4
Aging Infrastructure Jan 29, 2019 20-inch Main Break, Warm Springs Blvd. & Mission Blvd. 5
Fish Ladder: Allows Fish to Pass Structures 6
RD3 Fish Ladder Structure 7
RD1 Fish Ladder Site (Coming this Summer) Alameda Creek Flood Control Drop Structure & Rubber Dam, May 20, 2018 8
Where is the Money Going? Based on revenue allocated proportional to District expenditures (District Estimated Projected FY 19/20 Budget is $137.9 million) 9
Why Are Rates Going Up? Changes Between FY 2018/19 and FY 2019/20 from the Latest Financial Planning Model Cost Category % of Increase Total in Dollars Increase (in millions of dollars) Purchased Water $1.5 9% Labor & Benefits $1.9 12% Labor Vacancy* -$0.8-5% All Other Expenses $1.8 11% Debt Service $0.8 5% Capital $10.9 68% Total Increase $16.1 100% *3% Based on Historical 3 Year Average Revenue Category Change in Dollars (in millions of dollars) % of Total Revenue Water Rates $4.2 26% Property Taxes $1.5 9% Customer Job Revenue -$1.9-12% Other Revenues $1.1 7% Debt Proceeds $14.5 90% Reserves -$3.3-20% Total Revenue $16.1 100% 10
What is ACWD Doing to Control Costs? Negotiated significant long-term savings on health benefits costs in latest union contract. Responsibly addressing retirement-related liabilities. Continued Lean staffing. Managing water supplies to maximize use of lowest-cost water (Decommissioned the Mission San Jose Water Treatment Plant). Prioritizing the highest priority capital projects. Increasing energy efficiency to reduce power costs. 11
What is ACWD Doing to Control Costs? Finding other sources of revenue: Secured ~$18 million in grants and reimbursements for mandated projects in Alameda Creek Maintaining a great bond rating and may strategically use debt for a portion of the AMI project. 12
FY 2018/19 Residential Bill Impacts 13
FY 2018/19 Customer Impacts of 4% Revenue Adjustment 14
Proposed Water Rates Increases How do ACWD s rates compare? 2019 AVERAGE WATER BILL COMPARISON* Based on 16 HCF (200 gallons per day) Consumption Bimonthly and a 5/8 or 3/4 inch meter CITY OF BURLINGAME NORTH COAST COUNTY WATER DISTRICT CITY OF MILLBRAE CALIF WATER SVS. CO. - BEAR GULCH CITY OF SAN BRUNO MID-PENINSULA WATER DISTRICT CITY OF PALO ALTO CITY OF REDWOOD CITY CALIF WATER SVS. CO. - SOUTH SF CALIF WATER SVS. CO. - MID-PENINSULA SAN FRANCISCO WATER DEPT (SFPUC) SAN JOSE WATER COMPANY CALIF WATER SVS. CO. - LOS ALTOS CITY OF MOUNTAIN VIEW CITY OF HAYWARD MARIN MUNICIPAL WATER DISTRICT CITY OF MILPITAS CALIF WATER SVS. CO. - LIVERMORE CONTRA COSTA WATER DIST CITY OF SAN JOSE MUNICIPAL WATER ACWD (Proposed) ACWD (Current) NORTH MARIN WATER DIST - NOVATO DUBLIN SAN RAMON SERVICE DIST EAST BAY MUD CITY OF DALY CITY CITY OF SUNNYVALE CITY OF FOSTER CITY ( ESTERO) CITY OF LIVERMORE CITY OF SANTA CLARA CITY OF PLEASANTON CITY OF EAST PALO ALTO * Comparison based on November 5, 2018 data. (Dollars) $125.13 $120.31 0 50 100 150 200 250
Droughts & Long-Term Outages California Lessons Learned Water Financial
Water Shortage Emergency Stage Rates Four levels of stage rates are proposed based on conservation targets of 10%, 20%, 30%, and 50% Stage rates are set up as a charge on each unit of consumption. If you use more you pay more, but if you use less you pay less Example with a 20% conservation target: Customer A Customer B Customer C Does not conserve Conserves requested 20% Conserves 30% Bill goes up Bill stays about the same Bill goes down 17
How Can I Save Money? Residential Oversize Meters (1-inch and 1-1/2 inch meters) The Board will be considering it s policies on residential sprinklers at its February 7 meeting. The District offers a $20 credit on each bill for incomequalified customers through the Help on Tap program More information available at www.acwd.org/hot The Board will consider an increase to $25 at its February 7 meeting The District offers complimentary water check-ups and water-saving devices 18
How Can I Learn More? February 7, 2019: Public Hearing at 6:00 p.m. 43885 South Grimmer Blvd., Fremont Brief staff presentation will be provided followed by public comments. Visit www.acwd.org/rates to see the following: Information about each of the six financial workshops conducted in 2018. A copy of the proposed rate increase notice A copy of the study prepared by the District s financial consultant Electronic protest form To protest, visit www.acwd.org/rateform 19
Thank You!
General Fund Reserve Balances 21
Stage 2 Emergency Sample Bills 23
Water Supply & Demand Uncertainties Regulatory Uncertainty CA WaterFix Environmental Requirements Future Regulations Climate Change Sea Level Rise Weather Changes Future Water Use Water Efficiency Water Use Patterns