City of Independence, Oregon Review of Sewer & Water Rates - PowerPoint PPT Presentation

City of Independence, Oregon Review of Sewer & Water Rates July 19, 2016

Review of council actions on sewer & water rates  Council took actions last year to adopt sewer & water capital improvement plans and rate adjustments  This presentation contains the analysis Council relied on to take these actions 2

Agenda  Review the analysis:  Sewer  Water  Discuss comparisons to other cities in Oregon  Open discussion 3

Sewer Utility 4

How sewer rates got to where they are 180% Percent EDUs 160% Percent, Personnel, Materials, Services 163% 140% Percent Rates 147% 120% 101% 100% 100% 87% 80% 60% 67% 64% 55% 40% 20% 0% 2009 2010 2011 2012 2013 2014 2015 Fiscal Year Ending June 30, 5

Sewer—Operating results $9,000,000 2019 Bond $8,000,000 Debt Service Net operating income $7,000,000 Cash Balance $6,000,000 2017 Bond $5,000,000 $4,000,000 HISTORY $3,000,000 $2,000,000 $1,000,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year Ending June 30 6

Sewer—Capital expenditures $9,000,000 2019 Debt Service Bond $8,000,000 Capital Expenditures Cash Balance $7,000,000 $6,000,000 2017 Bond $5,000,000 HISTORY $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year Ending June 30 7

Sewer—Forecast highlights  Deferred maintenance and capital replacement needed  WWTP out of compliance with discharge permit  Two new bonds anticipated for capital improvements  1 st issue is completed  2 nd issue in 2 -3 years 8

Sewer—Household bill $60.00 $55.90 HISTORY 4.4%/year $50.00 11.0%/year $44.22 $42.93 $40.00 $37.09 $30.00 $24.82 $20.00 $10.00 $0.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year Ending June 30, 9

Water Utility 10

Water—Operating results $1,400,000 Debt Service, MINET HISTORY 2016 Bond Debt Service, Water $1,200,000 Net operating income Cash Reserves $1,000,000 696,657 $800,000 364,286 562,545 562,545 562,545 562,545 562,545 $600,000 562,545 562,545 444,098 $400,000 315,823 311,959 307,736 291,288 $200,000 95,320 95,320 95,320 95,320 95,320 94,310 71,760 $0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year Ending June 30 11

Water—Capital expenditures & reserves $1,400,000 2016 Bond Debt Service, MINET History Debt Service $1,200,000 Cash Reserves Capital Expenditures $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fiscal Year Ending June 30 12

Water—Forecast highlights  Deferred maintenance and capital replacement needed  Water utility debts taken out by GO bond measure  Uncertain obligation for MINET debts  One additional bond needed (in process) 13

Water—household water bill (800 cf/month) 14

Summary of rate increases 15

Comparison to other utilities 16

Comparison of selected utilities Rankings City Water Sewer Total Water Sewer Total Toledo $62.36 $90.54 $152.90 3 1 1 Albany $70.38 $57.49 $127.87 2 9 2 Lebanon $52.55 $68.97 $121.52 8 4 3 Newberg $40.66 $79.66 $120.32 15 2 4 North Plains/CWS $77.70 $39.02 $116.72 1 21 5 Lake Oswego $43.30 $64.48 $107.78 13 5 6 Tillamook $30.75 $73.25 $104.00 23 3 7 Aurora^ $52.81 $51.00 $103.81 7 11 8 Willamina $44.02 $59.43 $103.45 12 8 9 Wilsonville $36.85 $64.09 $100.94 19 6 10 Newport† $39.34 $59.54 $98.87 17 7 11 $53.38 $44.22 $97.60 6 16 12 INDEPENDENCE Tigard/CWS $57.45 $39.02 $96.47 5 21 13 Creswell $50.91 $44.05 $94.96 9 17 14 Philomath $41.00 $53.00 $94.00 14 10 15 Banks/CWS $49.43 $41.02 $90.45 10 19 16 Veneta $37.05 $46.26 $83.31 18 13 17 Hood River $32.59 $48.00 $80.59 22 12 18 Astoria $36.07 $43.44 $79.51 20 18 19 Lincoln City $34.77 $35.52 $70.29 21 25 20 Manzanita^/Nehalem Bay Sewer $45.75 $24.00 $69.75 11 27 21 Salem $25.06 $44.57 $69.63 26 14 22 Dallas $24.18 $44.26 $68.44 28 15 23 Gresham $39.40 $28.73 $68.13 16 26 24 Tualatin $25.54 $40.27 $65.81 25 20 25 Monmouth $27.22 $37.81 $65.03 24 24 26 Sherwood/CWS $23.27 $38.53 $61.80 29 23 27 Clackamas River Water $61.57 $0.00 $61.57 4 29 28 Talent/RVSS $25.03 $16.10 $41.13 27 28 29 Source: EFA Survey June 2016 ^ does not include GO property tax 17

Household water & sewer bills (800 cf) 18

Household water bills 19

Household sewer bills 20

Why bills differ across cities  Water supply & quality  Different sources  Distance to consumers  Level of treatment  Terrain affects pumping required  Long history of different piping and treatment technologies & practices 21

Why bills differ  Demand for water varies  Climate  Consumer demands (income, age, household size)  Economic composition (commercial, industrial mix)  Price of water vs. other goods & services 22

Why bills differ  Policy differences  Cross-subsidization among classes of customers  Water conservation directives  Financing methods ○ cash vs. borrowing; ○ GO bonds vs. revenue bonds  Budget policies 23

Discussion 24