Utility Rate Discussion · Current Sewer Rates Seattle $ 122.70 Kirkland $ 95.95 City of Arlington...

Utility Rate Discussion

Edmonds City Council October 11, 2016

Sewer Rates

Assume a monthly rate

Assume 1,000 cubic feet of water usage per month

Includes all applicable taxes

Current Sewer RatesSeattle $ 122.70

Kirkland $ 95.95

City of Arlington $ 70.15

Woodinville WD $ 69.18

Mukilteo W & S District Westside $ 64.12

City of Lake Forest Park $ 59.12

Alderwood Water & Wastewater $ 57.75

Redmond $ 56.18

Shoreline (via Ronald WWD) $ 53.50

Mountlake Terrace $ 48.00

Lynnwood $ 44.38

Everett $ 42.43

Edmonds $ 36.57

Olympic View W & S District $ 28.21

Current Sewer RatesSeattle $ 122.70

Kirkland $ 95.95

City of Arlington $ 70.15





Redmond $ 56.18



Lynnwood $ 44.38

Everett $ 42.43

Edmonds $ 36.57


Average = $60.59

Sewer Rates

2013 Rate study assumed 9.5% rate adjustments each year until 2019

2016 Rate recommendation consistent with 2013 staff presentation.

Sewer Rates

Revenue Requirements 2017 2018 2019 2020 2021 2022

Revenues

Rate Revenues Under Existing Rates 6,372,883$ 6,404,747$ 6,436,771$ 6,468,955$ 6,501,300$ 6,533,806$

Non-Rate Revenues 2,184,340 2,278,569 2,377,997 2,477,020 2,581,837 2,692,905

Total Revenues 8,557,223$ 8,683,317$ 8,814,768$ 8,945,975$ 9,083,137$ 9,226,711$

Expenses

411 Sewer Cash O&M Expenses [a] 3,170,399$ 3,359,590$ 3,562,413$ 3,722,987$ 3,891,393$ 4,068,123$

411 Treatment O&M - Edmonds Only 3,826,106 3,981,922 4,146,515 4,320,560 4,504,791 4,700,010

Transfer to Fund 414 (excl. Capital) 130,098 129,695 129,979 130,203 130,473 113,177

Existing Debt Service 1,355,068 1,354,906 1,351,946 1,347,476 1,347,962 1,348,987

New Debt Service - - - - - -

Rate Funded System Reinvestment 450,000 700,000 950,000 1,250,000 1,500,000 1,900,000

Rate Funded CIP - - - - - -

Total Expenses 8,931,670$ 9,526,112$ 10,140,852$ 10,771,225$ 11,374,619$ 12,130,298$

Annual Rate Adjustment 9.50% 9.50% 9.50% 4.00% 4.00% 4.00%

Rate Increases Dictated by: Policy Policy Policy Policy Policy Policy

Rate Revenues After Rate Increase 6,978,307$ 7,679,452$ 8,451,045$ 8,833,033$ 9,232,286$ 9,649,585$

Net Cash Flow After Rate Increase 230,977 431,909 688,190 538,827 439,504 212,192

[a] Includes additional taxes due to proposed rate increases.

Edmonds Sewer Rates – 2019(Compared to current rates for others)

Seattle $ 122.70

Kirkland $ 95.95

Arlington $ 70.15



Lake Forest Park $ 59.12


Redmond $ 56.18


Edmonds $ 48.01


Lynnwood $ 44.38

Everett $ 42.43


Edmonds Sewer Rates – 2019(Using 3%/year escalator for others)

Seattle $ 134.08

Kirkland $ 104.84

Arlington $ 76.65





Redmond $ 61.39



Lynnwood $ 48.50

Edmonds $ 48.01

Everett $ 46.36


Stormwater Rates

monthly rate vs. bi-monthly (billing rate)

Assumes 1 ERU (Equivalent Residential Unit)

Includes all applicable taxes

Current Stormwater RatesSeattle $ 32.50

Kirkland $ 18.14

Everett $ 17.44

Redmond $ 16.56


Mukilteo $ 15.73

Edmonds $ 14.20

Shoreline $ 13.40

Lynnwood $ 11.56


Woodinville $ 7.26

Arlington $ 6.89

Current Stormwater RatesSeattle $ 32.50

Kirkland $ 18.14

Everett $ 17.44

Redmond $ 16.56


Mukilteo $ 15.73

Edmonds $ 14.20

Shoreline $ 13.40

Lynnwood $ 11.56


Woodinville $ 7.26

Arlington $ 6.89

Average = $15.09

Stormwater Rates

2013 rate study assumed 4.5% rate adjustments each year

2016 rate study assumes 10% rate adjustments each year (2017 to 2019)

Stormwater Rates


Revenues


Non-Rate Revenues 26,701 29,096 31,555 31,130 31,159 31,701

Total Revenues 3,358,242$ 3,368,965$ 3,379,774$ 3,387,720$ 3,396,140$ 3,405,095$

Expenses

Cash O&M Expenses [a] 2,064,625$ 2,190,394$ 2,325,527$ 2,470,869$ 2,610,354$ 2,734,706$

Existing Debt Service 669,483 668,849 669,172 670,805 670,030 668,968


Rate Funded System Reinvestment 950,000 1,200,000 1,550,000 1,800,000 1,950,000 2,050,000


Total Expenses 3,684,108$ 4,059,243$ 4,544,699$ 4,941,674$ 5,230,384$ 5,453,674$




Net Cash Flow After Rate Increase 7,288 11,095 (56,665) 3,839 72,311 21,283

Coverage After Rate Increases 3.21 3.71 4.25 4.85 5.28 5.38

[a] Includes additional B&O taxes due to the proposed rate increases.

Edmonds Stormwater Rates – 2019(Using current rates for others)

Seattle $32.50

Edmonds $18.89

Kirkland $18.14

Everett $17.44

Redmond $16.56

Lake Forest Park $16.00

Mukilteo $15.73

Shoreline $13.40

Lynnwood $11.56

Mountlake Terrace $11.45

Woodinville $7.26

Arlington $6.89

Stormwater Rates – 2019(Using 3% escalator for others)Seattle $35.52

Kirkland $19.82

Everett $19.06

Edmonds $18.89

Redmond $18.10

Lake Forest Park $17.48

Mukilteo $17.19

Shoreline $14.64

Lynnwood $12.64

Mountlake Terrace $12.51

Woodinville $7.94

Arlington $7.53

Water Rates

Monthly cost

Assume 1,000 cubic feet of usage per month

Include all applicable taxes

Current Water RatesShoreline $ 87.70



Seattle $ 72.30

Kirkland $ 65.13

Arlington $ 52.73

Edmonds $ 52.51

Everett $ 42.49

Redmond $ 42.25

Olympic View W&S District $ 38.82




Lynnwood $ 34.75

Current Water RatesShoreline $ 87.70



Seattle $ 72.30

Kirkland $ 65.13

Arlington $ 52.73

Edmonds $ 52.51

Everett $ 42.49

Redmond $ 42.25





Lynnwood $ 34.75

Average = $54.58

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

AM

OU

NT

CO

NS

UM

ED

(C

CF

)

Edmonds Water Consumption CCF

CONSUMPTION CCF

Linear (CONSUMPTION CCF)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

AM

OU

NT

CO

NS

UM

ED

(C

CF

)

Edmonds Water Consumption CCF

CONSUMPTION CCF

Linear (CONSUMPTION CCF)

15% Reduction in ConsumptionThis does affect revenue

Water Rates

2013 Rate study assumed 9.0% rate adjustments each year until 2019

2016 Rate recommendation consistent with 2013 staff presentation.

Water Rates


Revenues


Non-Rate Revenues 109,579 114,349 119,236 119,441 119,786 119,987

Total Revenues 6,901,579$ 6,943,260$ 6,985,331$ 7,022,997$ 6,928,232$ 6,962,475$

Expenses

Cash O&M Expenses [a] 4,266,451$ 4,547,617$ 4,836,724$ 5,154,232$ 5,303,249$ 5,589,494$

Existing Debt Service 1,252,624 1,254,168 1,256,540 1,258,950 1,254,358 1,254,742


Rate Funded System Reinvestment 1,800,000 2,000,000 2,300,000 2,500,000 2,700,000 2,900,000


Total Expenses 7,319,075$ 7,801,785$ 8,393,264$ 8,913,181$ 9,257,607$ 9,744,236$




Net Cash Flow After Rate Increase 193,784 425,992 617,764 504,178 398,792 343,419

Coverage After Rate Increases 2.67 3.03 3.43 3.50 3.59 3.71

[a] Includes additional State Excise and B&O Taxes due to the proposed rate increases.

Edmonds Water Rates – 2019 (Using current rates for others)

Shoreline $ 87.70



Seattle $ 72.30

Edmonds $ 65.34

Kirkland $ 65.13

Arlington $ 52.73

Everett $ 42.49

Redmond $ 42.25





Lynnwood $ 34.75

Edmonds Water Rates – 2019 (Using 3%/year escalator for others)

Shoreline $ 95.83



Seattle $ 79.00

Kirkland $ 71.16

Edmonds $ 65.34

Arlington $ 57.62

Everett $ 46.43

Redmond $ 46.17





Lynnwood $ 37.97

Recommend Reducing Water Utility Tax Rate

Year Tax Rate

(Current)2016 18.70%

2017 17.07%

2018 15.50%

2019 14.05%

2020 12.68%

2021 10%

Water Utility Tax Rate

Recommend Reducing Water Utility Tax Rate

Lowers the utility tax on Water Utility customers by $5.72 per month by 2022

Maintains a constant utility tax revenue source for the GF

Total Utility Bill Comparison

27

City Current

2019 Projected at 3%/year for all Cities except Edmonds. Edmonds projected

at recommended rates

Seattle $227.50 $ 248.60

Kirkland $159.63 $ 195.83

Lake Forest Park $162.82 $ 177.92

Shoreline $154.60 $ 168.93

Woodinville $150.13 $ 164.05

Arlington $129.77 $ 141.80

Edmonds $ 132.25

Mukilteo $117.60 $ 128.50

Redmond $114.99 $ 125.65

Edmonds $103.28

Everett $102.36 $ 111.85

Mountlake Terrace $ 97.85 $ 106.92

Lynnwood $ 90.69 $ 99.10

Recommendation

• 9.5%/year increases (3 years) for Sewer

• 10%/year increases (3 years) for Storm

• 9.0%/year increase (3 years) for Water

For the period of 2017 to 2019

Capital Projects Covered

Annual Replacements for Water

Annual Replacements for Sewer

Begin Annual Replacement for Storm

Projects Not Covered

Large scale 1 time projects

– Lake Ballinger Trunk Main

– LS#1 Rehab/Replacement

– Replacement/Reconstruction of Drinking Water Reservoirs

– Shellabarger Creek/Edmonds Marsh

Questions

Utility Rate Discussion · Current Sewer Rates Seattle $ 122.70 Kirkland $ 95.95 City of Arlington...

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