Presentation on theme: "Water and Sewer City Council Meeting July 18, 2011."— Presentation transcript:
Water and Sewer City Council Meeting July 18, 2011
2011/2012 Budget with increase City of Brisbane City Council Meeting July 2011 Today’s Goals: Protest Meeting regarding Increase for Water and Sewer Water and Sewer Program 1)Provide a safe and secure water system for personal use and fire protection and an environmentally-friendly wastewater disposal system at a fair rate. 2)Ensure coverage of bond rate covenants. 2011/2012 Water & Sewer Budget
History 2000 – City Engaged Consultant to Review Rate Structure and Infrastructure, Consultant began public review process 2001- Consultant continued public review process, Council had 5 meetings for public hearings, reviewed and adopted ordinance FCS Group’s Rate Recommendation 200% - 300% to cover on-going maintenance and capital 200% - 300% to cover on-going maintenance and capital
History (cont.) 2002 – Council reviews the rate ordinance, holds meetings concerning criteria for master plans and awards contracts 2003 – Council reviews water and Sewer Master plans as well as set date for workshop in 2004 2004 – Council reviewed master plans.
History (cont’d) FY 09-10 projected only a cost of living increase in water and sewer rates. Given that the prior year was a 17% increase, it was decided to leave the rates alone. FY 10-11 staff recommended a 3% increase which the sub-committee sent to the council. Because of the economic climate, the full council declined to raise rates.
Enterprise Funds Definition: A fund that provides goods or services to the public for a fee that makes the entity self-supporting. It basically follows Generally Accepted Accounting Principles (GAAP), as does a commercial enterprise. An example is a government- owned utility.
What’s behind the Cost? SFPUC Infrastructure Depreciation Indirect Costs Community demands/expectations
Water Infrastructure Pipes Check Valves Pressure Reducing Valves Water Mains Water Tanks Pump Stations Meters Cost of Water Capital Assets $15,500,000
SFPUC Rates January 13, 2011 expect a 31.0% increase April 13, 2011 expect a 47.4% increase May 10, 2011 authority to raise rates by 38.4% effective July 1, 2011 Every water agency served by SFPUC has the same increase. Cost of retrofitting Hetch Hetchy pipeline Conservation led to the increase!
Sewer Infrastructure Pipes Lift Stations Sewer Mains Force Mains Manhole covers Cost of Sewer Capital Assets $5,400,000
Other Capital Assets Vehicles Sewer Monitoring camera Fire Hydrants
Depreciation The historic cost of the asset (infrastructure) divided by the life expectancy of the asset. Our water and sewer system has a life expectancy of 65 years. Current annual depreciation: $632,416. Unfunded accumulated depreciation through June 2010: $11,681,421.
Capital Improvements Summary WaterSewer CIP Expenditures 2002 - present$4,151,395$4,421,695 Unfunded CIPs12,773,0008,516,200 CIPs to be Developer Funded4,206,720392,000 Total21,131,11513,329,895
Completed Water Capital Projects CIP NameYear Closed Total ExpensedFunding Source Chloraminated Water Mixing System 2003/4$390,306Connection fees Water System Circulation112,772Connection fees Glen Parkway Fire Main & PRV 2006/7399,524Connection fees Lake Street Booster Pump Station Replacement 2005/6896,294Bond issue Glen Park Tank Construction & Upgrade 2007/81,747,422Bond Issue 458,000 Grant Seismic Upgrades to Pump Stations & Tanks 2004/59,161Connection fees Crystal Springs Aqueduct Flow Control Vault Stns In progressFederal grant Rates Seismic Upgrades to Water Storage Tanks 2009/10595,916Connection Fees Rates
Unfunded Water CIP CIP Name2003 Master Plan Priority Ranking 2003 Cost Estimate Fire Main Improvements & Annis PRV2$1,710,240 Glen Park Pump Station Upgrade21,758,400 Seismic Upgrades – Studies/plans278,400 SCADA System Replacement2336,800 2013 Water Master Plan2145,000 North Hill Pump Station Upgrade3616,000 Water Main Replacement – Headloss Reduction 3776,160 Crocker Tank Replacement31,792,000 Pipeline Replacement – Beyond Design Life35,000,000 Golden Aster Pump Station Addition3560,000
Potential Developer Funded Water CIP CIP Name2003 Water Master Plan Priority Ranking 2003 Cost Estimate Water Main Installation – Aqueduct Zone 4$1,462,720 Storage Tank Installation – Aqueduct Zone 42,744,000
Completed Sewer Capital Projects CIP NameYear ClosedTotal ExpensedFunding Source Valley Drive Lift Station 2004/5$2,792,300Bond Issue Redevelopment Standby Generator 2003/439,200Connection fees Sewer Replacement 2004/51,152,804Connection fees Federal Grant Glen Parkway pipes 2007/8264,931Connection fees Federal Grant Addition to Public Sewer (Kings Rd) 2005/6111,109Rates Bayshore South Sewer (DESIGN ONLY) 61,351Connection fees
Unfunded Sewer CIP CIP Name2003 Master Plan Priority Ranking 2003 Cost Estimate 2013 Sewer Master Plan2$262,000 Bayshore South Sewer – CONSTRUCTION ONLY 3257,600 Television Inspection & Evaluation3472,000 North Hill Pump Station Upgrade3616,000 Pipeline Replacement – Beyond Design Life35,000,000 Bayshore Blvd North41,713,600 Terminal Sewer Replacement45,000 Trinity Sewer Replacement150,000
Potential Developer Funded Sewer CIP CIP Transferred to Private Property Owners CIP Name2003 Sewer Master Plan Priority Ranking 2003 Cost Estimate Sierra Point Lift Station Improvement (LS#4) 3$392,000 CIP Name2003 Sewer Master Plan Priority Ranking 2003 Cost Estimate Hitachi Lift Station Abandonment (LS #3) 3$112,000
Indirect Costs Services from: City Council City Council City Manager City Manager City Clerk City Clerk Finance Finance Human Resources Human Resources City Attorney City Attorney Building and Grounds Building and Grounds Based on ratio of budget
Community Expectations Assistance with high water bills & tracking the source of any leaks Due date notification on sign boards Hand delivered late notices Special envelopes for late notices Low income assistance (LIRA)
Components of the Utility Bill Service Readiness charge for water Water usage Service Readiness charge for sewer Sewer processing charge based on water usage based on water usage winter average for residents winter average for residents
Water Readiness Costs Charge Certain costs are constant. The fewer the number of customers, the higher that price. Each customer class must pay for itself. Often referred to as Pipelines and People.
I cut back on my water! Conservation efforts mean less revenue Less revenue means higher rates needed to cover fixed costs.
Other considerations Have Cal-Water take over Rates set by California Public Utilities Commission Rates set by California Public Utilities Commission Earns a modest return on the funds it invests in infrastructure Earns a modest return on the funds it invests in infrastructure Major costs to operate a water system include purchased electric power, purchased water, treatment costs, groundwater pumping fees, labor and chemicals Major costs to operate a water system include purchased electric power, purchased water, treatment costs, groundwater pumping fees, labor and chemicals Shared service with neighboring cities
Reduced Rate Contracts GVMID $0.125 per unit up to 12,000 units a month (Turnout #2). Maxed out in summer, managed in winter for best possible results. Turnout #3 also a reduced rate and always maxed out. Same reduce rate, variable cap depending on month. Reduced rates are included in our projected water costs.
Bond Covenants 2002 Bond for $4,450,000 used for financing capital improvement projects Debt service paid by water and sewer rates Rate covenant – produce sufficient Gross Revenues that net revenue is at least 1.25 times the installment payment coming due.
Bond Covenants (cont’d) If insufficient, must notify the Trustee and employ an independent consultant to make recommendations to produce the required revenues Required to implement recommendations
AgencyWater Readiness Usage Rate WaterSewer Readiness Usage Rate Sewer Westborough Water District 12.703.325.73 min. of 12 units yr on tax bill CWS-SSF20.323.1679 - 7 units 3.5457 -12 4.3853 – over 12 88.67532.00 annual on tax bill CWS-Mid Peninsula20.323.1679-7 units 3.5457-12 units 4.3853-over 12 93.64561.84 annual on tax bill Brisbane21.594.94-3units 6.67-8 units 8.28-16 units 10.52-over 16 64.362.63-8 units 7.16 over 8 Based on winter average Daly City23.280-6 free 4.39 7-10 4.49 11-14 4.60 15-20 4.69 21-50 4.80 51-70 4.91 71-100 4.82 per unit based on water on tax bill Millbrae24.804.5383.404.91 based on winter average San Bruno25.444.29 0-18 6.50 over 18 33.325.72 based on winter usage Burlingame62.205.088.06 based on winter average; converted from gallons
AgencyWater Readiness Usage Rate WaterSewer Readiness Usage Rate Sewer San Francisco14.003.50 0-6 4.60 over 6 ?7.16 per unit
Increase from S.F. PUC Increase in water purchase will be 41.2% from S.F. PUC. Increase in waste water processing will be 5%
SFPUC’S Wholesale Water Rate Proposal Changed Over Time 1. February—the SFPUC proposed changing the rate structure – That proposal was dropped 2. 2. February—SFPUC states historical rate structure would require wholesale rate increase between 42 to 60% 3. 3. April—SFPUC proposed a 47.4% rate increase to $2.80 per Ccf, increased mid-year if sales drop below 130 mgd 4. 4. May—SFPUC proposed a 38.4% rate increase to $2.63 per Ccf, increase mid-year if sales drop below 135 mgd-- This proposal was adopted BAWSCA BAWSCA
Raising rates this year Increase from SFPUC is for water usage Need to capture the 15.2% from prior year Sewer increase of 5% for next year Need to capture 6% from prior year
Raising rates this year (cont’d) Increase water readiness charge 7% Increase water usage rates by 35% Increase sewer by 4%