2018 Town Hall Water Rates - Tucson · 2018-03-29 · Ways to Learn More About Water Rates, Service...
Transcript of 2018 Town Hall Water Rates - Tucson · 2018-03-29 · Ways to Learn More About Water Rates, Service...
2018 Town HallWater Rates
Mayor & Council is Seeking your Input
• Smoothing Model vs Traditional
• Reclaimed Rate Increase
• Monthly Service Charge
• Limited Income Assistance Program
• Two or Four Year Rate Adjustments
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Revenue and Rates Recommendations
Proposal is to adopt a Four-Year Rate Adjustment based on the following components:
• Gradually declining annual revenue increases over the next four years to minimize impacts to all customers
• Annual reclaimed water rate increases that match the general revenue requests each year to achieve equity with all other water users
• Continuing the “rate smoothing” practice, adopted in our prior two-year rate approval, to protect the single-family residential rate class
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● Reduced interest rates
● Operational efficiencies
● Preventative maintenance
● CAP costs
● Existing debt service
● Replacing aging infrastructure
● Investments in Customer Service
● Declining water sales
Downward
Pressure
Upward
Pressure
What Drives Rate Changes?
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Tucson Leads the Way inWater Conservation
To date, programs funded by the conservation fee have resulted in:
• More than 1.6 billion gallons (5,026 acre-feet) conserved
• More than 8.8 million dollars invested in rebates and incentives
• Nearly 50,000 HET and urinal installations
• Over 1,700 rainwater harvesting, and gray water installations
Conservation Saves Cash
Alliance for Water Efficiency Report (2017):
“In Tucson, Arizona, customers today pay water and wastewater rates that are at least 11.7% lower than they might have been if they had not conserved for the past 30 years.”
Annual Revenue Requests:Trending in a Good Direction
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Benefits of Proposed Rate Adjustments
• Proposed Rate Adjustments will achieve the following financial goals:
– Meets anticipated utility O&M needs and increases CIP budget to meet investment target of $70 M/year
– Maintains compliance with all key financial metrics
– Decreases annual revenue requests year-by-year, reflecting ongoing process improvement and efficiency
– Reduces new debt, creates peak of debt service, and progresses towards a pay-as-you-go approach for CIP funding in the future
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Charges Included on the Water Portion of Your Utility Services Statement
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Monthly Service Charge
• Fixed charge based on meter size
Volume
Charges
• Variable charge per unit of water consumption
CAP
Charge
• Costs to purchase Colorado River water
Conservation
Fee
• Fund dedicated to water efficiency and conservation programs
Proposed Residential Rate AdjustmentsFiscal Years 2019-2022
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Effective Date
Monthly
Service
Charge
Tier I
1-7 Ccf
Tier II
8-15 Ccf
Tier III
16-30 Ccf
Tier IV
> 30 Ccf CAP Fee
Conservation
Fee
Current Rates 13.53$ 1.73$ 3.32$ 7.48$ 11.75$ 0.69$ 0.09$
July 2018 15.00$ 1.87$ 3.56$ 7.95$ 12.35$ 0.69$ 0.10$
July 2019 16.33$ 2.07$ 3.82$ 8.39$ 12.93$ 0.70$ 0.10$
July 2020 17.78$ 2.24$ 4.04$ 8.54$ 13.17$ 0.76$ 0.10$
July 2021 19.35$ 2.40$ 4.27$ 8.87$ 13.56$ 0.79$ 0.10$
Residential (Single Family) Rate Adjustments
Debt Service:Bending Down the Debt Curve
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New Debt IssuancesFY 19 - $23.5mFY 20 - $22.2mFY 21 - $20.9mFY 22 - $17mFY 23 - $ 9.0m
Average Single Family Customer uses 8 Ccf a month
Fiscal Year(July 1-
June 30)
Average Monthly
Bill
Proposed MonthlyIncrease
FY 2018 $35.20
FY 2019 $37.97 $2.77
FY 2020 $41.05 $3.08
FY 2021 $44.38 $3.33
FY 2022 $47.54 $3.16
How much is 8 Ccf? Approximately 6,000 gallons How much does 8 Ccf cost?
Mayor & Council is Seeking your Input
• Smoothing Model vs Traditional
• Reclaimed Rate Increase
• Monthly Service Charge
• Limited Income Assistance Program
• Two or Four Year Rate Adjustments
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Average Residential Impacts
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SMOOTHING CCF’s FY 2018 FY 2019 Change Percent
Winter Average 7 $31.10 $33.76 $2.66 8.6%
Annual Average 8 $35.20 $38.15 $2.95 8.4%
Summer Average 9 $39.30 $42.54 $3.24 8.2%
SMOOTHING w/
RECLAIMEDCCF’s FY 2018 FY 2019 Change Percent
Winter Average 7 $31.10 $33.62 $2.52 8.1%
Annual Average 8 $35.20 $37.97 $2.77 7.9%
Summer Average 9 $39.30 $42.32 $3.02 7.7%
TRADITIONAL CCF’s FY 2018 FY 2019 Change Percent
Winter Average 7 $31.10 $34.11 $3.01 9.7%
Annual Average 8 $35.20 $38.57 $3.37 9.6%
Summer Average 9 $39.30 $43.03 $3.73 9.5%
Total Reclaimed Costswith Portions Paid by Reclaimed Users & Incentives Paid by Potable Users
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Projected2019
Projected2020
Projected2021
Projected2022
Costs Paid by Reclaimed Users Incentive Paid by Potable Users
Monthly Service Charge – 2018 Survey
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% Increase
Current Charge $13.53
Proposed FY19 $15.00 10.9%
Proposed FY20 $16.33 8.9%
Proposed FY21 $17.78 8.9%
Proposed FY22 $19.35 8.8%
Residential Service Charge
*Rate outside jurisdiction
Limited Income: New Option
Customers with limited income may be eligible for financial assistance to help with the charges on their utility services statement.
• Current Option: Assistance covers 50% of Water Bill– Includes Base Rate portion of bill & volumetric charges
• New Option: Assistance covers Base Rate plus 2 Ccf– Ex: Base Rate of $15.00 + ($1.87 Ccf x 2) = $18.74 in monthly assistance
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Choice: Two or Four Year Rate ScheduleCurrently in two year rate schedule (FY 2017 & FY 2018)
Staff recommends a Four Year schedule (FY 2019 through FY 2022)
Benefits of proposed four year schedule
• Improves revenue stability
• Supports long term planning
• Gives predictability to customers
• Lowers dependence on new debt
• Helps bond ratings
• Requires highest level of accountability
• Commits utility to downward trend
Risks of proposed four year schedule
• Economic conditions may change
• New regulations
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Ways to Learn More AboutWater Rates, Service Fees & Water Reliability
Website for rates & fees, rebates, reports & moretucsonaz.gov/water
Call to request more info or group presentation(520) 791-4331 (800) 598-9449(520) 791-2639 TDD
Email public information office [email protected]
Like Tucson Water on Facebook facebook.com/tucsonwater
Attend May 22, 2018, Mayor and Council public hearing on proposed rates and fees
Follow Tucson Water on Twitter twitter.com/tucsonwater