City of Detroit Water and Sewerage Department
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THE FOSTER GROUP TFG City of Detroit City of Detroit Water and Water and Sewerage Sewerage Department Department Wholesale Customer Rates Wholesale Customer Rates Meeting Meeting Water Supply System Water Supply System Meeting #2 – Projected FY Meeting #2 – Projected FY 2010-11 Revenue Requirements 2010-11 Revenue Requirements November 19, 2009 November 19, 2009
description
City of Detroit Water and Sewerage Department. Wholesale Customer Rates Meeting Water Supply System Meeting #2 – Projected FY 2010-11 Revenue Requirements November 19, 2009. Customer Rate Season Schedule. This is the second of a series of meetings - PowerPoint PPT Presentation
Transcript of City of Detroit Water and Sewerage Department
THE FOSTER GROUP
TFG
City of DetroitCity of DetroitWater and Sewerage Water and Sewerage
DepartmentDepartment
Wholesale Customer Rates Wholesale Customer Rates MeetingMeeting
Water Supply SystemWater Supply System
Meeting #2 – Projected FY 2010-Meeting #2 – Projected FY 2010-11 Revenue Requirements 11 Revenue Requirements
November 19, 2009November 19, 2009
THE FOSTER GROUP
TFG11/19/0911/19/09
Customer Rate Season Customer Rate Season ScheduleSchedule
• This is the second of a series of meetingsThis is the second of a series of meetings 10/13 –Capital Improvement Program 10/13 –Capital Improvement Program
PresentationPresentation
11/19 – Units of Service, Preliminary 11/19 – Units of Service, Preliminary SYSTEM Revenue Levels SYSTEM Revenue Levels
12/17 – Preliminary Cost Allocations to 12/17 – Preliminary Cost Allocations to CustomersCustomers
1/21/2010 – Preliminary Individual Rate 1/21/2010 – Preliminary Individual Rate ProposalsProposals
2/24/2010 – BOWC Public Hearing2/24/2010 – BOWC Public Hearing
3/ /2010 – City Council Public Hearing3/ /2010 – City Council Public Hearing
7/1/2010 – Effective Date for Rates7/1/2010 – Effective Date for Rates
• Parallel meetings of TAC Work GroupsParallel meetings of TAC Work GroupsPage Page 22
THE FOSTER GROUP
TFG11/19/0911/19/09
Information PortalsInformation Portals
• DWSD web siteDWSD web site www.dwsd.org
Customer Information / “Wholesale Customer Information / “Wholesale Customers Season Rate Schedule”Customers Season Rate Schedule”
• eroomeroom For information contact Teresa NewmanFor information contact Teresa Newman
Page Page 33
THE FOSTER GROUP
TFG11/19/0911/19/09
Today’s AgendaToday’s Agenda
• Preliminary Units of Service for FY Preliminary Units of Service for FY 2010-11 Water Rates2010-11 Water Rates
• Preliminary Revenue Requirements Preliminary Revenue Requirements (And System Revenue) for FY 2010-11(And System Revenue) for FY 2010-11
• Introduction of Cost of Service Introduction of Cost of Service Allocation Issues for FY 2010-11 Water Allocation Issues for FY 2010-11 Water RatesRates
Page Page 44
THE FOSTER GROUP
TFG11/19/0911/19/09
The 3 Fundamental Steps The 3 Fundamental Steps in the Water Rate in the Water Rate MethodologyMethodology
• Revenue Requirement ProjectionsRevenue Requirement ProjectionsHow Much Money is Needed?How Much Money is Needed?
• Cost of Service AnalysisCost of Service AnalysisFrom Whom Should the Money be From Whom Should the Money be
Collected?Collected?
• Design of Recommended RatesDesign of Recommended RatesHow Should DWSD Services be How Should DWSD Services be
Priced?Priced?Page Page 55
THE FOSTER GROUP
TFG
FY 2010-11 Units of FY 2010-11 Units of Service – Water Service – Water Supply SystemSupply System
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Flow VolumesAnnual Flow Volumes
• Use in Rate ModelUse in Rate ModelProject revenue baseProject revenue baseEstablish demographic baseline for Establish demographic baseline for
max day and peak hour demandsmax day and peak hour demandsAllocate Commodity based costs Allocate Commodity based costs
customerscustomers Chemicals, etc.Chemicals, etc.
• TheoryTheoryCertain costs are uniform regardless Certain costs are uniform regardless
of how customers use waterof how customers use waterCustomers should be allocated these Customers should be allocated these
cots solely on the volume of cots solely on the volume of commodity purchasedcommodity purchasedPage Page 77
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Flow VolumesAnnual Flow VolumesMethod of DeterminationMethod of Determination
• For “New Contract” For “New Contract” CustomersCustomersUse Volume in ContractUse Volume in Contract
• For “Old Contract” CustomersFor “Old Contract” CustomersReview Historical DataReview Historical DataProject Rate Year Based on Project Rate Year Based on
Regression Analyses, etc.Regression Analyses, etc.Transmit Projections to Transmit Projections to
Customer CommunitiesCustomer CommunitiesUtilize Input from CustomersUtilize Input from Customers
Page Page 88
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Flow VolumesAnnual Flow Volumes
• Summary of FY 2008-09:Summary of FY 2008-09:SYSTEM ~ 13% Below TargetSYSTEM ~ 13% Below TargetSub Wholesale ~ 12% Below TargetSub Wholesale ~ 12% Below TargetDetroit Retail ~ 17% Below TargetDetroit Retail ~ 17% Below Target
• More Conservative Projection More Conservative Projection Approach Established for FY Approach Established for FY 2009-10 Rates2009-10 RatesPerhaps not conservative enough?Perhaps not conservative enough?
Page Page 99
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Water Sales – Annual Water Sales – (mgd)(mgd)
Page Page 1010
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Suburban Wholesale Annual Suburban Wholesale Water Sales Water Sales (mgd)(mgd)
Page Page 1111
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Suburban Annual Suburban Wholesale Billed Volumes – Wholesale Billed Volumes – (mgd)(mgd)
Page Page 1212
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Detroit Retail Water Annual Detroit Retail Water Sales Sales (mgd)(mgd)
Page Page 1313
THE FOSTER GROUP
TFG11/19/0911/19/09
Annual Flow Volumes - Annual Flow Volumes - Rate Planning ChallengeRate Planning Challenge
• Annual Sales Volumes in new Annual Sales Volumes in new contracts do not reflect contracts do not reflect recent reduction in in actual recent reduction in in actual sales volumessales volumes
• Continuing to adhere to Continuing to adhere to contract volumes may contract volumes may necessitate modifications in necessitate modifications in the rate development processthe rate development process
Page Page 1414
THE FOSTER GROUP
TFG11/19/0911/19/09
Distance FactorDistance Factor
• Use in Rate ModelUse in Rate ModelAllocate to customers the costs of:Allocate to customers the costs of:
Major transmission system (big pipes)Major transmission system (big pipes) Pumping (high lift pumps and booster Pumping (high lift pumps and booster
stations)stations) Responsibility for Non-Revenue Responsibility for Non-Revenue
(Unaccounted for) Water(Unaccounted for) Water
• TheoryTheoryCustomers further away from the water Customers further away from the water
treatment plants:treatment plants: Are using more of the pipesAre using more of the pipes Require more pumping powerRequire more pumping power
Should pay a larger share of these costsShould pay a larger share of these costsPage Page 1515
THE FOSTER GROUP
TFG11/19/0911/19/09
Distance FactorDistance FactorMethod of DeterminationMethod of Determination
• Average distance from each WTP Average distance from each WTP to a customer’s representative to a customer’s representative location (or “point of commerce”)location (or “point of commerce”)
• Definition of representative Definition of representative locationlocationMeter location for customers with Meter location for customers with
one meter one meter Customers with more than one Customers with more than one
meter = weighted (by meter meter = weighted (by meter capacity) average of average capacity) average of average distance to each meterdistance to each meter
Page Page 1616
THE FOSTER GROUP
TFG11/19/0911/19/09
Distance Factor Method of Distance Factor Method of Determination Change for Determination Change for 20112011• For “deduct meter” deduct For “deduct meter” deduct
meters will not be factored meters will not be factored into averageinto average
• Rather, distance for those Rather, distance for those meters will be equated to that meters will be equated to that of the “normal” DWSD master of the “normal” DWSD master meter through which the flow meter through which the flow passespasses
Page Page 1717
THE FOSTER GROUP
TFG11/19/0911/19/09
Distance FactorDistance FactorCalculation ExampleCalculation Example
NOVI
Southwest Plant
NV01 NV02
NV04 NV03
WaterWorks Park
Northeast Plant
Lake Huron
Springwells
Distance (mi.) NV01 NV02 NV03 NV04
Lake Huron 63.7 66.6 65.8 62.4Northeast 21.6 24.0 22.5 23.8Springwells 16.8 18.3 16.7 20.4Southwest 20.2 20.5 19.7 24.5WWPark 24.5 26.4 24.9 27.5 Avg________ ________ ________ ________
Avg. 29.4 31.2 29.9 31.7 30.5
Meter Capacity (eq mtr) NV01 NV02 NV03 NV04 Total123 123 285 900 1,431
Distance-Capacity (mi.-eq mtr) NV01 NV02 NV03 NV04 Total3,611 3,833 8,527 28,548 44,519
44,519Distance Factor = 1,431 = 31.1
Page Page 1818
THE FOSTER GROUP
TFG11/19/0911/19/09
Elevation FactorElevation Factor
• Use in Rate ModelUse in Rate ModelAllocate costs of pumping (high Allocate costs of pumping (high
lift pumps and booster stations) lift pumps and booster stations) to customersto customers
• TheoryTheoryCustomers with higher average Customers with higher average
elevation difference from the elevation difference from the water treatment plants require water treatment plants require more pumping power and more pumping power and should pay a larger share of should pay a larger share of these coststhese costsPage Page 1919
THE FOSTER GROUP
TFG11/19/0911/19/09
Elevation FactorElevation FactorMethod of DeterminationMethod of Determination
• Average elevation difference Average elevation difference from each WTP to a customer’s from each WTP to a customer’s representative location (or representative location (or “point of commerce”)“point of commerce”)
• Definition of representative Definition of representative locationlocationMeter locationMeter location
Customers with one meter = meter elevationCustomers with one meter = meter elevation Customers with more than one meter = Customers with more than one meter =
weighted (by equivalent meter) average of weighted (by equivalent meter) average of average elevation difference to each meteraverage elevation difference to each meter
Page Page 2020
THE FOSTER GROUP
TFG11/19/0911/19/09
Elevation FactorElevation FactorCalculation ExampleCalculation Example
Equiv. Elev-EquivElevation, ft Meters Meters
NV01 864 123 106,272NV02 875 123 107,625NV03 867 285 247,095NV04 960 900 864,000________ ________
Total 358 331,248
331,248_________Weighted Avg. Elevation = 358
Weighted Avg. Elevation = 926 Meter Capacity (gpm)
Avg. WTP Elevation 598
Elevation Difference 328Page Page 2121
THE FOSTER GROUP
TFG11/19/0911/19/09
Elevation Factor Method of Elevation Factor Method of Determination Change for Determination Change for 20112011• For “deduct meter” deduct For “deduct meter” deduct
meters will not be factored meters will not be factored into averageinto average
• Rather, elevation for those Rather, elevation for those meters will be equated to that meters will be equated to that of the “normal” DWSD master of the “normal” DWSD master meter through which the flow meter through which the flow passespasses
Page Page 2222
THE FOSTER GROUP
TFG11/19/0911/19/09
Status Update - Elevation Factor Status Update - Elevation Factor Investigation by TAC Water Rates Work Investigation by TAC Water Rates Work GroupGroup
• Water Rates WG explored concept of Water Rates WG explored concept of augmenting weighted meter augmenting weighted meter elevation with a “Hydraulic Grade elevation with a “Hydraulic Grade Line” factor to incorporate delivery Line” factor to incorporate delivery pressures into cost allocation of pressures into cost allocation of pumping costspumping costs
• No consensus to recommend change No consensus to recommend change at this time – continue to reviewat this time – continue to reviewPressure ranges in contracts may spur Pressure ranges in contracts may spur
a changea changePage Page 2323
THE FOSTER GROUP
TFG11/19/0911/19/09
Customer Max Day and Peak Customer Max Day and Peak Hour DemandsHour Demands
• Use in Rate ModelUse in Rate ModelAllocate costs of low lift Allocate costs of low lift
pumping, treatment, and storage pumping, treatment, and storage (and capital costs of large pipes) (and capital costs of large pipes) to customersto customers
• TheoryTheoryCustomers that place higher max Customers that place higher max
day and peak hour demands on day and peak hour demands on the System require additional the System require additional facilities and operating facilities and operating requirements and should pay a requirements and should pay a larger share of these costslarger share of these costs
Page Page 2424
THE FOSTER GROUP
TFG11/19/0911/19/09
Customer Max Day and Peak Customer Max Day and Peak Hour Demands – Hour Demands – Method of Method of DeterminationDetermination
• For “New Contract” Customers. . .For “New Contract” Customers. . .Use Demands in ContractUse Demands in Contract
• For other CustomersFor other CustomersSeven years of history establishes Seven years of history establishes
proxyproxyUse absolute highest community max Use absolute highest community max
day and community peak hour on day and community peak hour on DWSD’s max day (exclude midnight to DWSD’s max day (exclude midnight to 6 am)6 am)
Adjust uniformly (20% increase) to Adjust uniformly (20% increase) to reflect recent absence of reflect recent absence of extraordinary demand conditionsextraordinary demand conditions
Adjust relative to projected volume to Adjust relative to projected volume to reflect demographic conditionsreflect demographic conditions
Page Page 2525
THE FOSTER GROUP
TFG
Evolution of Contracted Evolution of Contracted Customer DemandsCustomer Demands
• As of January 23, 2009 (cut off date for FY As of January 23, 2009 (cut off date for FY 2009-10 rate study) 2009-10 rate study) 3232 Customers had Customers had negotiated new contracts under the negotiated new contracts under the Model Model ContractContract Contract Demands were prospectively reflected Contract Demands were prospectively reflected
in FY 2009-10 rate calculationsin FY 2009-10 rate calculations FY 2008-09 rates were reviewed and modified as FY 2008-09 rates were reviewed and modified as
necessarynecessary
• Through June 30, 2009, an additional Through June 30, 2009, an additional 1616 communities had negotiated new contractscommunities had negotiated new contracts FY 2008-09 rates were reviewed and modified as FY 2008-09 rates were reviewed and modified as
necessarynecessary FY 2009-10 rates were reviewed and modified as FY 2009-10 rates were reviewed and modified as
necessarynecessary11/19/0911/19/09
Page Page 2626
THE FOSTER GROUP
TFG
Evolution of Contracted Evolution of Contracted Customer Demands Customer Demands (continued)(continued)
• Since July 1, 2009 an additional Since July 1, 2009 an additional 88 Customers Customers had negotiated new contractshad negotiated new contracts FY 2009-10 rates were (or are being) reviewed FY 2009-10 rates were (or are being) reviewed
and modified as necessaryand modified as necessary
• As we stand here today, As we stand here today, 5656 communities communities have negotiated new contracts, and one has have negotiated new contracts, and one has been consolidated, meaning that 29 been consolidated, meaning that 29 communities remain under the old contractcommunities remain under the old contract Contracts approved prior to December 15, 2009 Contracts approved prior to December 15, 2009
will be prospectively reflected in FY 2010-11 rate will be prospectively reflected in FY 2010-11 rate calculationscalculations
After that date new demands will be reviewed After that date new demands will be reviewed and rate will be modified if necessaryand rate will be modified if necessary
11/19/0911/19/09
Page Page 2727
THE FOSTER GROUP
TFG
Summary Review of Summary Review of Demand Data – System Demand Data – System DemandsDemands
11/19/0911/19/09
Page Page 2828
THE FOSTER GROUP
TFG
Summary Review of Demand Data Summary Review of Demand Data – Customer Demand Proxies– Customer Demand Proxies
11/19/0911/19/09
Page Page 2929
THE FOSTER GROUP
TFG
Summary Review of 2009 Summary Review of 2009 Demand DataDemand Data
11/19/0911/19/09
Page Page 3030
THE FOSTER GROUP
TFG
Summary Review of 2009 Summary Review of 2009 Demand DataDemand Data
• Number of “old contract” Customers Number of “old contract” Customers that experienced new recent high that experienced new recent high demands in Summer 2009 that demands in Summer 2009 that increased their proxies = increased their proxies = 00
• Potentially two exceedances of Potentially two exceedances of contract demands by “new contract” contract demands by “new contract” customerscustomersUnder review by the TAC Analytical Work Under review by the TAC Analytical Work
GroupGroup• Overall System Demands lowered to Overall System Demands lowered to
reflect reduction in total productionreflect reduction in total production
11/19/0911/19/09
Page Page 3131
THE FOSTER GROUP
TFG
FY 2010-11 Revenue FY 2010-11 Revenue Requirement Levels Requirement Levels
– Water Supply – Water Supply SystemSystem
THE FOSTER GROUP
TFG11/19/0911/19/09
• DWSD has established preliminary DWSD has established preliminary revenue requirements for FY 2010-11revenue requirements for FY 2010-11
• Meeting these revenue requirements Meeting these revenue requirements will require a revenue (System rate) will require a revenue (System rate) increaseincrease
• Current planning is being refined, and Current planning is being refined, and the precise amount of that increase is the precise amount of that increase is not yet knownnot yet known
• Today DWSD is presenting information Today DWSD is presenting information that reflects the approximate mid-that reflects the approximate mid-point of a range of possible outcomespoint of a range of possible outcomes
Preliminary Revenue Preliminary Revenue Requirement PlanningRequirement Planning
Page Page 3333
THE FOSTER GROUP
TFG
Rate Development Challenges Rate Development Challenges for FY 2010-11for FY 2010-11
• Availability of Historical Financial Availability of Historical Financial DataDataIn a perfect year, we’d have audited In a perfect year, we’d have audited
results for results for FY 2008-09FY 2008-09 to help to help guide assumptions, etc.guide assumptions, etc. Won’t be available until ????Won’t be available until ????
Audited figures for Audited figures for FY 2007-08FY 2007-08 were expected Spring 2009were expected Spring 2009 Still not yet finalizedStill not yet finalized
11/19/0911/19/09
Page Page 3434
THE FOSTER GROUP
TFG11/19/0911/19/09
Mechanics Associated with Mechanics Associated with Establishing Revenue Establishing Revenue Requirement LevelsRequirement Levels
Cash Requirements
(RATES)
Accrual Requirements
(FINANCIAL STATEMENTS)
Coverage Req’ts
(BOND COVENANTS)
Page Page 3535
Revenue Financed Capital
Reserve Deposits
Debt Service Principal
Operation and Maintenance
Debt Service Interest Debt Service Interest
Operation and Maintenance
Debt Service Principal
Debt Service Interest
Operation and Maintenance
Depreciation Expense
X% of Debt Service Principal & Interest
THE FOSTER GROUP
TFG11/19/0911/19/09
PRELIMINARY FY 2010-11 Water PRELIMINARY FY 2010-11 Water Revenue Requirements Revenue Requirements ($millions)($millions)
Cash Requirements
(RATES)
O&M = $163.3
Int = $119.5
Page Page 3636
Prin = $44.8
RFC = $37.1
Rsrvs = $1.9
TOTAL = $366.6
Accrual Requirements
(FINANCIAL STATEMENTS)
Int = $119.5
Depr = $75.4
O&M = $163.3
TOTAL = $358.2
Coverage Req’ts
(BOND COVENANTS)
Prin = $44.8
Covg = $39.0
(Ratio = 1.24)
O&M = $163.3
Int = $119.5
TOTAL = $366.6
THE FOSTER GROUP
TFG11/19/0911/19/09
• Budget Request Under ReviewBudget Request Under ReviewEnhanced strategic review processEnhanced strategic review processProcess will extend beyond rate Process will extend beyond rate
development seasondevelopment season• Budget for Purposes of Rate Budget for Purposes of Rate
Development reflects overall target Development reflects overall target based on review of preliminary based on review of preliminary request and preliminary FY 2008-09 request and preliminary FY 2008-09 actualactualTarget may be adjusted as rate Target may be adjusted as rate
development process proceedsdevelopment process proceeds• Reflects revised allocation of fringe Reflects revised allocation of fringe
benefits from water to sewerbenefits from water to sewer
Operation and Operation and Maintenance Expense Maintenance Expense BudgetBudget
Page Page 3737
THE FOSTER GROUP
TFG
Recent DWSD Operating Recent DWSD Operating Expenses – Combined Water & Expenses – Combined Water & SewerSewer
11/19/0911/19/09
Page Page 3838
THE FOSTER GROUP
TFG
FY 2010-11 Budget Target – FY 2010-11 Budget Target – Combined Water & SewerCombined Water & Sewer
11/19/0911/19/09
Page Page 3939
THE FOSTER GROUP
TFG
FY 2007-08 O&M Expense – FY 2007-08 O&M Expense – Water and Sewer PortionsWater and Sewer Portions
11/19/0911/19/09
Page Page 4040
THE FOSTER GROUP
TFG
DWSD Strategic Cost Reduction DWSD Strategic Cost Reduction Program for FY 2010-11 BudgetProgram for FY 2010-11 Budget
11/19/0911/19/09
Aug 09 Dec 09 Feb 10 Mar 10
Apr 10 May 10 July 10>
Ongoing
Page Page 4141
THE FOSTER GROUP
TFG11/19/0911/19/09
• Existing Funds, augmented by Existing Funds, augmented by projected revenue transfers, projected revenue transfers, sufficient to finance CIP through sufficient to finance CIP through June 2011June 2011
• No issuance of additional debt No issuance of additional debt anticipated to be supported by FY anticipated to be supported by FY 2010-11 rates2010-11 rates
• Debt service increase reflects Debt service increase reflects initial principal amortization of initial principal amortization of 2006 Bonds2006 Bonds
Capital Financing PlanCapital Financing Plan
Page Page 4242
THE FOSTER GROUP
TFG
DWSD Debt Service – Fund DWSD Debt Service – Fund Water CIP thru 2013 Water CIP thru 2013 (last (last year)year)
11/19/200811/19/2008
Page Page 4343
THE FOSTER GROUP
TFG
DWSD Debt Service – Fund DWSD Debt Service – Fund Water CIP thru 2014 Water CIP thru 2014 (this (this year)year)
11/19/200811/19/2008
Page Page 4444
THE FOSTER GROUP
TFG11/19/0911/19/09
Water Supply SystemWater Supply SystemPreliminary Revenue LevelPreliminary Revenue Level
Page Page 4545
THE FOSTER GROUP
TFG11/19/0911/19/09
Preliminary Water Rate Preliminary Water Rate Level – Level – Increase DriversIncrease Drivers
Page Page 4646
THE FOSTER GROUP
TFG11/19/0911/19/09
• Final Budget Request Modifications Final Budget Request Modifications Determination of Final Revenue Requirement LevelDetermination of Final Revenue Requirement Level Specific operating cost allocationsSpecific operating cost allocations
• Ongoing Review of FY 2007-08 and FY 2008-09 Ongoing Review of FY 2007-08 and FY 2008-09 Financial DataFinancial Data Specific operating cost allocationsSpecific operating cost allocations Allocation of fixed asset dataAllocation of fixed asset data Determination of capital structureDetermination of capital structure
Projected depreciation ratesProjected depreciation rates Rate of returnRate of return
• Ongoing review of Customer DemandsOngoing review of Customer Demands AWG meetingAWG meeting
• Review of potential means to address disconnect Review of potential means to address disconnect between annual volumes in contract and between annual volumes in contract and expected water salesexpected water sales
Cost Allocation to Cost Allocation to Customers Status ReportCustomers Status Report
Page Page 4747
THE FOSTER GROUP
TFG
Water Cost of Service/Rate Water Cost of Service/Rate Design Issues - FY 2010-11Design Issues - FY 2010-11
• Fixed / commodity wholesale rate structureFixed / commodity wholesale rate structure• Disconnect between contract volumes and Disconnect between contract volumes and
expected water salesexpected water sales Meaningful portion of cost recovery not Meaningful portion of cost recovery not
approved by TACapproved by TAC Modify volumes?Modify volumes? Compensate for risk via rate of returnCompensate for risk via rate of return
• Overall System MD/PH Demand for Overall System MD/PH Demand for allocation, given declineallocation, given decline
• Commitment to Potential Look-Back on FY Commitment to Potential Look-Back on FY 2010-11 Performance2010-11 Performance Pilot analyses applied to FY 2008-09 and 2009-Pilot analyses applied to FY 2008-09 and 2009-
10 results10 results
11/19/0911/19/09
Page Page 4848
THE FOSTER GROUP
TFG11/19/0911/19/09
Next StepsNext Steps
• Rate Development Process will Rate Development Process will continuecontinue
• TAC Water Rates Work Group TAC Water Rates Work Group meeting on December 2meeting on December 2
• Next roll-out meetingNext roll-out meetingDecember 17 – Intent is to Present December 17 – Intent is to Present
Preliminary FY 2010-11 Revenue Preliminary FY 2010-11 Revenue Requirement Allocations to CustomersRequirement Allocations to Customers
Page Page 4949
THE FOSTER GROUP
TFG11/19/0911/19/09
TakeawaysTakeaways
• DWSD Has Announced a Preliminary Overall DWSD Has Announced a Preliminary Overall SYSTEM Revenue Increase RANGE of 6% to 10%SYSTEM Revenue Increase RANGE of 6% to 10%Review is Ongoing and this May ChangeReview is Ongoing and this May Change
• IMPACTS ON INDIVIDUAL CUSTOMERS HAVE IMPACTS ON INDIVIDUAL CUSTOMERS HAVE NOT BEEN DETERMINEDNOT BEEN DETERMINED IT IS NOT ACCURATE TO ASSUME THAT ALL IT IS NOT ACCURATE TO ASSUME THAT ALL
RATES ARE GOING TO BE INCREASED BY RATES ARE GOING TO BE INCREASED BY THIS RANGE THIS RANGE
• Contract Negotiation “Deadlines”Contract Negotiation “Deadlines”Dec 15 for Dec 17 PresentationDec 15 for Dec 17 Presentation Jan 15 for Jan 21 ProposalsJan 15 for Jan 21 ProposalsDec 11 for Other Units of ServiceDec 11 for Other Units of Service
Page Page 5050
