Billing Methodology Alternatives SAG Alternatives Evaluation - PowerPoint PPT Presentation

NEW Water - Green Bay Metropolitan Sewerage District Billing Methodology Alternatives SAG Alternatives Evaluation Workshop July 10, 2014

Today’s Agenda • Meeting Purpose and Goals • Current Project Status • Recap from Workshop #1 • Review Survey Findings • Improved Status Quo • Alternatives Evaluation • Next Steps 2

Meeting Purpose and Goals Purpose: Identify and evaluate potential alternative billing methodologies. Goals: Establish “Improved Status Quo” to serve as a benchmark for comparison of alternatives and discuss advantages and disadvantages of alternative methodologies. SAG Mission Statement: “To serve in an advisory capacity toward the establishment of a new defensible and equitable billing methodology.” 3

Project Status - Tasks Task 1: Project Initiation, Information Gathering and Review Task 2: Review & Evaluate Current Methodology Task 3: Assess Alternatives for New Billing Methodology Task 4: Develop Customer Billing Framework Task 5: Reports and Communications 4

Project Status: Meeting Dates Key Meeting Dates Date NEW Water Kick-off Meeting (#1) April 23, 2014 All Customers Issues Meeting (#2) April 24, 2014 1 st SAG Workshop: Scoring Criteria (#3) June 19, 2014 2 nd SAG Workshop: Alternatives Evaluation (#4) July 10, 2014 Added SAG Workshop: Alternatives Evaluation (#5) July 23, 2014 1 GBMSD Commission Meeting July 24, 2014 1 3 rd SAG Workshop: Cost Analysis (#6) August 1, 2014 4 th SAG Workshop: Recommendations (#7) August 28, 2014 All Customer Meeting (#8) Sept. 18, 2014 GBMSD Commission Meeting (#9) October 22, 2014 1) The original July 23 rd Commission Meeting replaced with a second Alternatives Evaluation Workshop; and Commission Meeting rescheduled to July 24 th with NEW Water to present Updates. 5

Workshop #1 - Evaluation Process • Identify Criteria • Assign Weightings Step 1 • Identify Alternatives • Rate Alternatives Step 2 • Score Alternatives Using Matrix • Select Top 2 for Further Evaluation Step 3 Rating Weight Score

Workshop #1 - Evaluation Criteria and Weighting Evaluation Criteria Weight 1. Accuracy of Billing 5 2. Equitable Allocation of Cost 5 Scale of 1- 3. Cost Effective/Efficient 5 5 and 5 having high 4. Institutional Acceptance 3 importance 5. Quality Assurance/Control 4 6. Predictable and Stable 3 Least Somewhat Important Very Important Most Important Important Important . 1 2 3 4 5

Workshop #1 Evaluation Criteria Attributes Criteria Attributes Accuracy of Methodologies that maximize the accuracy of the bills taking into account confidence of Billing measured units and the equitable allocation/distribution of those units to customers. Methodologies that are subject to interpretation or estimates or conditions outside the control of the customers or NEW Water are deterred. Equitable Maintains a fair and equitable allocation of costs across customers based on usage Allocations characteristics and standard cost allocation principles established by the industry and EPA. Cost Methodology is efficient and appropriately balances cost/benefits. Does not require Effective/ substantial capital investment, does not substantially increase operating costs, does not Efficient place additional burden on staff or resources, has potential to decrease operating costs, potential cost recovery risks are well defined and accounted for. Institutional Does not require significant public education and/or changes in practices. Methodology is easily understood – simpler is better. It can be implemented within the next budget cycle Acceptance and is compatible with current rate structure. It is consistent with Wisconsin CMOM goals. Quality Accounts for variation in metering/sampling requirements, includes definitive resolution Assurance/ process for potential bad samples/data. Minimizes requirements for manual quality Control assurance and control checking. Minimizes potential for errors. Maintains accuracy/applicability under changing conditions. Predictable/ Customers can, within reasonable accuracy, estimate or predict monthly bills and annual Stable costs for budgeting purposes. Customers have potential to control monthly variations.

Workshop #1: Scoring Matrix 3. Score 1. Evaluation Criteria and Weight and Rank 2. Alternatives and Rating Financial Criteria Implementation Criteria Equitable Cost Institutional Quality Total Accuracy of Predictability Weighted Billing Methodology Alternatives Allocation of Effectiveness Acceptance/ Assurance Billing and Stability Score Cost and Efficiency Transparency and Control Criteria Weight 5 5 5 3 4 3 IMPROVED STATUS QUO 0 ALTERNATIVE #1 : 0 ALTERNATIVE #2 : 0 ALTERNATIVE #3 : 0 Rating System (1-5) where a high score represents high compliance with attributes Poor Not So Good Good Very Good Excellent 1 2 3 4 5 9

Summary of Survey Findings • Of the ten communities reviewed, most have a volumetric charge based on wastewater flow or metered water consumption and treat loadings as a “system” cost. Some include surcharges for abnormal strength wastewater. Some also include a fixed customer charge or water meter size charge or a monthly service availability fee. • Four agencies (Madison MSD, Milwaukee MSD, Metro Wastewater Water Reclamation District, and the Bergen County Utilities Authority) use billing methodologies similar to NEW Water where they have separate charges for loadings with one of the four using what could be considered a hybrid method. • None of the responding utilities uses a methodology based on real-time measured loadings and many do not conduct any system wide sampling. It appear their is a greater emphasis on simplicity and administrative costs, than complexity and precision. • There is no industry billing methodology standard. Agencies appear to develop methodologies that balances their highest priorities, which often times means striking a balance between level of complexity, cost allocation precision, and administrative burden.

Wastewater Agency Survey Findings: Wastewater Agency Wholesale Billing Methodology Customer fixed fee of $10 per bill plus a volumetric charge per 1,000 gallons based on wastewater Austin Water Utility, flow. Volumetric charge for customers without flow meters based on a 3 month wastewater average TX (which is based on a water consumption average) or actual metered water consumption, whichever is less. I/I and loadings are treated as “system” costs and are included in the volumetric rate. Industrial user flow contribution and loadings quantified and deducted from plant flow and loadings; Bergen County remaining plant flow and loadings then allocated to wholesale customers based on metered Utilities Authority, wastewater flow. Customers then billed based on metered wastewater flow plus industrial users within NJ their service area. I/I is accounted for through use of metered wastewater flow. Customers billed a volumetric charged based on metered water use. Some sewer services also include an additional charge for “Effluent” (surcharge levied against users to recover the costs of Greater Cincinnati rendering wastewater treatment system service for discharges whose strength is in excess of normal strength). Rates per ccf for wastewater exceeding “normal” concentrations established for BOD, SS Water Works/Metropolitan and NOD (nitrogenous oxygen demand). However, to the extent the strength of any of these Sewer District pollutants is less than eighty percent (80%) of the corresponding value for normal strength sewage, a credit is allowed as an offset against surcharge otherwise due. I/I is treated as “system” cost and included in the volumetric rate. About half of the customers are billed a volumetric charge based on wastewater flow plus a customer charge (monthly fixed fee). The other half is billed a volumetric charge based on metered water Metropolitan Utilities consumption plus a customer charge that includes an I/I component. The I/I component is based on a District, City of comparison of plant flows vs. billed loadings. Industrial customers have discharge permits and billed Omaha, NE based on water use, plus high strength (as applicable) plus a meter size charge. Wholesale volumetric charge based on metered wastewater flow with no surcharges. Industrial customers, however, are billed a minimum charge based on water meter size plus a volumetric charge El Paso Water based either on wastewater or metered water for normal strength. Surcharges for excess strength Utilities Board, TX BOD and SS based on El Paso sampling analysis in accordance with their Rules and Regulations. I/I is treated as “system” cost and included in the volumetric rate.