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HomeMy WebLinkAboutAnnual Reports - 5/1/2000.:•sue i _� .. f.. r �rlfi r•I i �jlc vhl et �iTi+''<'}'�ji�' <4�"`,��ry.L`' ./'!��T4 Tr'[•: NJ�Y? ... w-���..�/..v!'I¢C�riUi i�. ... t� TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT MAY 2000 ORO VALLEY TOWN COUNCIL Paul Loomis, Mayor Richard Johnson, Vice Mayor Wayne Bryant, Council Member Fran LaSala, Council Member Paul Parisi, Council Member ORO VALLEY WATER UTILITY COMMISSION John Dohogne, Chair Michael Caporaso, Vice -Chair Jennifer Gillaspie, Member Leo Leonhart, Member Carle Staub, Member Nicolas Vale, Member LaQuita Stec, Member TOWN STAFF Chuck Sweet, Town Manager Shirley Seng, Interim Utility Director David Andrews, Finance Director Carolyn Schneider, Customer Service Supervisor Ron Kozoman, CPA, Consultant John McGill, Member, Finance Subcommittee SECTION TITLE Executive Summary Preferred Scenario Alternative Water Resources Tucson Water System Within Oro Valley Conservation Service Area Debt Financing Water Quality Water Supply Revenue Requirements O & M Debt Service Requirements 5 Year Capital Improvements Plan Recommendation on Water Rates Financial Summary Alternate Financial Scenarios Conclusion Appendices TABLE OF CONTENTS TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT MAY 2000 PAGE 1 6 7 8 8 9 9 10 11 11 12 14 14 18 18 19 INDEX OF APPENDICES TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT MAY 2000 APPENDIX A. Preferred Financial Scenario (Scenario C-4) 1) Assumptions 2) Enterprise Fund 5-Year Projected Net Income Statement 3) Enterprise Fund 5-Year Projected Debt Service Statement 4) Enterprise Fund 5-Year Projected Cash Flow Statement B. FY 2000-01 Projected Income and Cash Flow Statements 1) Water Enterprise Fund 2) Connection Fee Fund 3) Alternative Water Resource Development Fee Fund C. Proposed Conservation Program Expenditures D. Water Quality 1) Water Quality Monitoring Schedule for Year 2000 2) Water Quality Testing Results E. Water Supply 1) Static Water Level Measurements 2) Pumping Capacity Status F. 5-Year Capital Improvements Plan 1) Existing System Improvements 2) Expansion Related Improvements G. Proposed Rate Schedules 1) Proposed Rate Schedules 2) Tables for Monthly Charges H. Alternate Financial Scenario (Scenario C- 5) 1) Assumptions 2) Enterprise Fund 5-Year Projected Net Income Statement 3) Enterprise Fund 5-Year Projected Debt Service Statement 4) Enterprise Fund 5-Year Projected Cash Flow Statement 5) Table for Monthly Charges I�fT.`TI 1�17;II«�7►�`/►l fy TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT MAY 2000 LIST OF ACRONYMS USED IN THIS REPORT ADWR Arizona Department of Water Resources CAGRD Central Arizona Groundwater Replenishment District CAP Central Arizona Project CDO Canada Del Oro CIP Capital Improvement Plan COLA Cost of Living Allowance EPA Environmental Protection Agency FTE Full Time Employee FY Fiscal Year GPCD Gallons Per Capita Per Day GPM Gallons Per Minute MCL Maximum Contaminate Level MDWID Metropolitan Domestic Water Improvement District O&M Operations & Maintenance OVWID#1 Oro Valley Water Improvement District #1 OVWU Oro Valley Water Utility SAWRSA Southern Arizona Water Rights Settlement Act T) EXECUTIVE SUMMARY TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT MAY 2000 INTRODUCTION In October, 1996 the Oro Valley Town Council (Mayor and Council) formed the Oro Valley Water Utility Commission (Commission) to act as the official advisory body to the Mayor and Council regarding water related issues. The functions and duties of the seven member commission include reviewing and developing recommendations for water revenue requirements, water rate and fee structures, and water system capital improvement planning. The Commission is required to prepare an annual report to the Council regarding its recommendations. This report is the Commission's fourth Annual Report. It includes recommendations related to establishing a conservation program, debt financing, regulatory requirements, revenue requirements, system operations and maintenance requirements, debt service requirements, a five-year capital improvements plan, rate adjustments and alternative water supply strategies. This Executive Summary contains a briefing on the implementation of the recommendations presented in the 1999 Annual Report. It also contains a briefing on new recommendations specific to water issues facing the Town in FY 2000/2001 and beyond. Explanations and financial analyses that are more detailed may be found in the body of the report and the Appendices. The main body of the report presents details related to the Commission's preferred scenario. For comparison purposes, a section describing other alternatives is presented at the end of the report. IMPLEMENTATION OF THE 1999 REPORT RECOMMENDATIONS • Water Rates: The rates recommended by the Commission were adopted in June 1999 by Mayor and Council. j • Alternative Water Resources: The renewable water resource subcommittee has 1 worked diligently during the past year in an effort to identify alternative water resource options and costs affiliated with each option. The subcommittee will present their final report to the Commission before the end of this fiscal year. The Commission will then forward their recommendation to Town Council early this summer. • Master Planning Reports: The potable water system master plan was adopted by J Mayor and Council in January 2000. The plan will be reviewed and/or updated every three to five years. -1- � 1 Oro Valley Water Improvement District #1: Transfer of management of the OVWID#1 system from MDWID to the OVWU was successfully completed in July 1999. Additionally, the operational and capital objectives identified in the OVWID#1 Task Force report as "Priority A" were completed by the end of July 1999. The objectives identified as "Priority B" and "Priority C" are included in the utility's five year capital improvements plan and are estimated to be completed during fiscal year 2000/01. Liens that were placed on the homes of the OVWID#1 customers in 1992 were released when the Town paid the outstanding debt in full. Financing was accomplished by the sale of excise tax revenue bonds in June 1999. • Tucson Water System within Oro Valley: Mayor and Council, along with staff, have continued discussions and analysis necessary to evaluate the feasibility of acquiring the assets of the Tucson Water service area located within and near the Oro Valley town limits. To assist in this evaluation, the Town employed an engineering firm to perform an appraisal of the infrastructure. Status reports and discussion with the Commission on possible recommendations to the Mayor and Council are expected before the end of FY 1999/00. • Conservation: A conservation program was approved by the Commission in February 2000. This program will include, but not be limited to, public education via elementary school programs, newsletters, and billing inserts; modification of the conservation rate structure; and membership in conservation organizations. The program will be presented to Mayor and Council, along with the annual report, for approval during FY 1999/00 with implementation scheduled for FY 2000/01. J • Service Area: As of this writing, no policy statements have been developed regarding } the expansion or reduction of the existing service area. This item will remain on the Commission's work plan for FY 2000/01. • Debt Financing: Capital projects in FY 1999/00 were financed with existing revenues with the exception of the improvements to the OVWID#1 system. Bond proceeds have been used for improvements to the OVWID#1 system during this fiscal year and will also be used for the remaining improvements in FY 00-01. • CAP Water: As of this writing, no policy statements have been developed regarding additional CAP allocations, use of incentive priced CAP water or ADWR programs regarding the use of CAP water. This item will be addressed with alternative water resource planning. • Human Resource Management: The OVWU departmental structure and position classifications were reviewed during the FY 1999/00 budget process. • Service Fees and Charges: Changes in the service fees and charges recommended by the Commission were adopted in September 1999 by Mayor and Council. J i -2- J • Annual Report Due Date: A change in the Annual Report due date from March 1st to April 1st was approved in November 1999 by Mayor and Council. • Emergency Services Strategic Plan: This plan was not presented to the Commission during FY 99-00 for their evaluation in terns of level of service, implementation and cost impacts to the Utility. • Water Quality: In December 1999, Mayor and Council approved the implementation of three new initiatives that will enable the utility to fulfill its responsibility of delivering a safe water supply to our residents and customers. The initiatives are the installation of water quality sampling stations, a comprehensive system flushing program and a system- wide continuous disinfection program. With the pending EPA regulation regarding radon in drinking water, the Utility tested all of the production wells in the system. Council 1 directed staff to continue to monitor the water supply and stay abreast of all changing regulations regarding radon and other contaminants that the EPA may regulate in the future. • Water Supply: The static water levels of all utility wells were first taken in February of 1999 by utility staff. A standard operating procedure has been established that will result in water levels being taken annually using consistent measurement techniques. • Line Extension Agreements: In February 2000, the Town Code was amended to no longer include refund provisions in line extension agreements with exceptions for special circumstances where refunds for over -sizing may be required. All line extension agreements with no financial impact to the Town may now be executed by the Water Utility Director, while any agreement containing refunds provisions will continue to be approved by Town Council. This change is in keeping with the Town's policy that development pay for itself. • Regulatory: As of this writing, no policy statements have been developed regarding the regulatory environment in which the utility operates. This item will be removed from the Commission's work plan with the understanding that the Utility must meet or exceed regulatory guidelines established by governing agencies. • Wholesale Customers: The water rate for wholesale customers was increased as part of the rate increase approved by Mayor and Council in June 1999. NEW RECOMMENDATIONS FOR FY 2000/2001 • Water Rates, Revenue Requirements, O&M and Debt Service Requirements and the 5-Year CIP: Based on the analysis of 5-year projected expenses and required revenue detailed in the body of the report and the appendices, the Commission J recommends the following rate structure: -3- 48 It is recommended that all rates be equalized for the existing classifications of "Non - city", "City" and "OV#1". It is recommended that a three-tier rate structure be established to further promote conservation. The monthly base rate is recommended to increase between $0.44 and $192.55 per month depending on the meter size. Customers with a 5/8" x 3/4" meter would realize an increase of 44 cents per month under this proposal. 44 The Tier 1 commodity rate is recommended to increase to $1.78 per each 1000 gallons after the first 1000 gallons used. This represents an increase of 5 cents. 44- The Tier 2 commodity rate is recommended to increase to $2.08 per each 1000 gallons after the first 8000 gallons used. This represents an increase of 23 cents. The Tier 3 commodity rate is recommended to be established at $2.31 per each 1000 gallons after the first 16,000 gallons used. • Alternative Water Resources: Given the importance to the residents of Oro Valley in addressing alternative water resource issues and given the progress made in the past year, the Commission recommends that emphasis be place on public forums. This will facilitate citizen education, information dissemination and provide a means to gather public input to assist the Town in arriving at their decision for implementation of an alternative water resource plan. The Commission also recommends partnering with other jurisdictions where appropriate and investigating financial assistance from all potential sources. • Tucson Water System Within Oro Valley: The Commission recommends that the Town Council continue to pursue negotiations on the acquisition of the water production and delivery system serving residents of the Town who are currently customers of Tucson Water. • Conservation: The Commission recommends approval of the proposed conservation program as developed by the conservation subcommittee and further recommends that the program be expanded every year. The Commission recognizes the importance of establishing a long-term conservation program for guarding the future of our groundwater resources and will return to the Mayor and Council with specific recommendations in the coming year. • Service Area: The Commission recommends that policy statements regarding service area expansion and reduction be developed as part of the FY 2000-01 Commission work plan and forwarded to Mayor and Council for consideration. -4- • Debt Financing: The Commission recommends that capital projects continue to be financed on a pay as you go basis, except when service area acquisition requires service level equalization and when the cost of existing system improvements to meet system demands are such that revenues will not be adequate without excessive rate increases. • Water Quality: Water quality issues must continue to receive high priority; therefore, the Commission recommends that staff stay abreast of legislative changes regarding water quality issues including, but not limited to, radon and arsenic. The Commission also recommends that the Utility implement a public education program to address changes in EPA regulations as they arise on different contaminants. • Water Supply: The Utility began performing their own water level measurements in February 1999. These measurements are the baseline data for future measurements. The measurements taken in February 2000 indicate an average decline of 7.7 feet since February 1999. In addition to the measurements, this decline has been substantiated by a decline in pumping capacity of the wells. The total pumping capacity during the last year declined by 1000 gpm. The Commission recommends that the overall decline in water levels be established as one of the key factors driving the need to obtain and deliver an alternative source of water for golf course irrigation and/or recharge in or near the Utility's well fields. The Oro Valley Water Utility Commission is proud to serve the Mayor and Council and citizens of the Town of Oro Valley. We are pleased to present our Annual Report to the Mayor and Council for consideration. While much has been accomplished in the past year, the Commission looks forward to direction from Mayor and Council regarding those items mentioned in the Executive Summary and detailed in the Report. We thank the Mayor and Council for their consideration, direction and guidance. _5_ i J TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT FINANCIAL SCENARIO The Commission has arrived at a recommendation that adheres to the sound financial criteria developed for the 1998 Annual Report. Described below, the preferred financial scenario (Scenario C-4) also incorporates the elements of the other recommendations detailed in this report. The Commission and staff performed extensive analysis of numerous scenarios prepared by a rate consultant at their direction. To enable the Commission to more fully understand the long term effect of identifiable future variables that impact the Utility's financial resources, estimates for revenue, O&M, capital expenditures and debt service have been forecast for a period of five years. Examples of major future expenses with varying long term impacts are: costs incurred with membership in the CAGRD; lost revenue from the removal of golf courses from groundwater; costs for necessary capital improvements to the water system; growth factors; and debt service. Every effort has been made to employ the most accurate available data and reasonably conservative assumptions in the analysis of future financial requirements. The Commission developed a set of parameters for the rate consultant to use in developing the preferred scenario. The parameters used for Scenario C-4 are as follows: • Revenue increases are proposed only when necessary and in an amount no more than necessary. • In addition to the major items identified above, projected expenditures were adjusted for inflation, additional personnel, O&M related to the new initiatives, and existing system improvements. • Financial criteria established in 1998 must be met, setting the foundation for sound fiscal operation. • The capital improvements to the existing system will be financed by bond funds. • Golf courses are expected to be removed from groundwater over a period of years commencing in FY 03-04. • Revenue projections include a residential customer growth factor of 870 in FY 00-01 and 750 connections per year thereafter. The FY 00-01 figure correlates to growth projections utilized by other departments in the budgeting process. The figure for subsequent years is a conservative estimate developed from historical data. • Expansion related revenue and expenditures are not considered for purposes of establishing rates. They are discussed separately in the report. J Revenue increases occur in each of the 5 fiscal years in Scenario C-4 projections. These increases allow the Utility to anticipate changes in the future revenues and expenditures as J described at the beginning of this section, including the loss of revenue when the golf courses -6- J ' are phased off of groundwater. In order to decrease reliance on golf course revenues for operations, Scenario C-4 includes setting aside the additional revenues that the golf courses will pay as a result of any rate increase. The "set aside" is recommended to be earmarked for ' special use in developing renewable water resources for use on golf courses in Oro Valley. "! Scenario C-4 proposes generating needed revenue from an increase to the monthly base rate 'l and the creation of a 3-tiered conservation rate structure. The input data for the 5-year projection assumes that both personnel and other costs will ") increase 5% annually. Allowances have been included for power costs and increases in '? depreciation relating to the addition of new plant. CAP and recharge costs are scheduled to increase; however, the costs are established by state agencies over which the Town has no control. Interest and principal payment on existing bond sales, as well as the proposed bond issue for this year, will also increase over the 5 year period. The FY 2000-01 projected Income Statement, Debt Service Statement and Cash Flow Statement for Scenario C-4 may be found in Appendix A. Financial analysis of Scenario C-4 indicates that it meets all of the required financial criteria. Retrained earnings maintain a positive value and the net income of the Utility do not reflect a loss for more than two consecutive years. Additionally, the net revenues provide debt service coverage in excess of 1.35 time the annual debt service as required by the bond covenants and depreciation is fully recovered by the rates. The total cash reserves are maintained in excess of 15% of the expected cash outlays. ALTERNATIVE WATER In 1998 the Town Council directed the OV WU staff to give preferred status to the reclaimed water option involving Pima County. This concept was to expand treatment facilities at the Ina Road wastewater treatment plant and extend a distribution facility up the CDO wash to Oro Valley. This would provide a means of delivering effluent for golf course irrigation. Ensuing litigation between the City of Tucson and Pima County regarding effluent rights at this facility caused the Town to reevaluate other previously identified options of obtaining an alternative water source for golf course irrigation. J During this past year, the Commission's renewable water resources subcommittee has been reevaluating options available to the Town to provide an alternative water source for golf course irrigation. During this past year, the subcommittee has developed a number of options as well as costs affiliated with each option. The report is expected to be submitted to the Commission during the month of June 2000. This progress is encouraging and essential to the long-term operation of the Water Utility. The Commission recognizes that the effort to accomplish providing an alternative source of water for golf course irrigation will involve a multi -discipline team and will take several years to complete. The Commission recommends that the Town partner with other water providers and jurisdictions where appropriate and investigate all options for financing the infrastructure. The Town has continued to participate with other jurisdictions in feasibility studies regarding recharge options in the northwest region. These studies are nearing completion and thus far have returned favorable results with regard to recharge in the Canada Del Oro Wash and Big Wash. Contact with the Bureau of Reclamation has also been initiated regarding effluent rights available through the SAWRSA settlement. In order for Town residents to understand the Town's commitment to removing golf courses from groundwater, it will be essential to provide public forums as a means of education and information dissemination. The Commission recommends extensive public relations efforts to assist the Council in understanding the desires of the residents as well as informing the residents of what must be done to preserve our groundwater for future generations. The Commission further recommends that a Renewable Water System Master Plan be developed to look beyond the golf course issues and develop strategies and methodologies on addressing the long range renewable water resource issues. This effort will compliment the recently completed Potable Water System Master Plan and give the Town a comprehensive approach to its water resource management. The alternative water resource development impact fee fund balance is estimated to be $1,200,000 by June 30, 2001. This revenue is to be used solely for alternative water resource issues and/or resulting capital expenditures. A cash flow statement and income statement are included in Appendix B. TUCSON WATER SYSTEM WITHIN ORO VALLEY Town staff has continued negotiations with the City of Tucson in an effort to acquire the Tucson Water service area within the town limits. The Commission supports the objective of the Town being the water provider to all Oro Valley residents. However, any such effort must be made on sound financial principals. The Commission recognizes that it may be impractical to have its water service area match exactly with its political boundaries, but has a concern about expanding the service area to include customers in outlying areas that are not residents of the Town. As staff moves forward in their negotiations with the City of Tucson, the Commission looks forward to providing Mayor and Council with formal recommendations on the issues involved. WIXIM0461A 1111810 An ongoing conservation program can provide customers with information to assist them in understanding the importance of conserving water, our most precious resource. An initial or short-range conservation program was prepared by the conservation subcommittee. Key components in the initial program focus on public education via elementary school programs, newsletters and billing inserts; modification of the conservation rate structure and membership in conservation organizations. This program should be reviewed annually and expanded accordingly. -8- of capital projects needed to meet existing system demands wherein the costs may be too excessive to recover through rate increases. The Council adopted the potable water system master plan in January of this year. The master plan identified existing system improvements that needed to be constructed within the next 5 years. These improvements would provide the capacity needed to meet water supply demands, water pressure and fire flow to existing customers. The estimated costs to construct the plant identified as essential in the coming fiscal year exceed $6,000,000. Numerous financial scenarios were analyzed to ascertain what rate increase would provide the required revenue. To avoid rate shock, the Commission recommended financing the capital needs and increasing the rates to provide enough revenue to meet the debt service requirements. Additionally, the Town Council adopted increased development impact fees, or connection fees, in February of this year. A large component of the new fee is financing costs. It was determined that in order for the Utility to have the infrastructure in place prior to the demand being placed on the system, it would need to finance the capital costs through the sale of bonds. This debt service will be repaid through impact fees collected after building permits have been issued and when water meters are purchased. WATER QUALITY During the past year, the Utility experienced a high volume of total coliform violations and was unable to determine the cause. In December 1999, the Town Council approved a budget modification to reallocate funds for the implementation of three new initiatives that would enable the Utility to improve the quality and safety of the water being delivered to its customers. The initiatives included a system -wide continuous disinfection program; the installation of sampling stations; and the implementation of a valve exercising and main line flushing program. These programs are in various stages of completion; however, the Utility has not experienced a total coliform violation since the programs began. The EPA's proposed regulation for radon in drinking water is scheduled for adoption in August of 2000. Given the number of negative comments sent to the EPA regarding their methodology of arriving at the MCL, it is doubtful that the proposed regulation will be implemented as scheduled. There appears to be a general consensus that the EPA is attempting to control an air quality problem by regulating radon in drinking water. The Utility tested all the production wells in the system to determine if the radon levels would meet the proposed compliance level and found that all test results exceeded the proposed MCL. Engineering consultants were employed to perform a radon assessment study. The report identified the worst case scenario if the MCL was adopted and the Utility was forced to treat their water for radon. The total estimated cost to construct the required collection and treatment facilities as in excess of $6,000,000. -10- The Mayor and Council provided staff direction to continue monitoring the radon levels, work with other jurisdictions, and develop a public education program that would provide ' accurate information to the Utility's customers. This past year the Utility published its first Consumer Confidence Report and distributed it to all existing customers. The Utility has also continued to distribute the report to all customers ' who have moved into the service area since the report was originally distributed. In 1 accordance with EPA regulations, a Consumer Confidence Report will be produced annually. The report contains mandatory language on specific contaminants, bottled water, health effects related to contaminants, and a listing of all contaminants detected in the Utility's ' water supply that exceeded the MCL during the prior year. A complete list of contaminants that the Utility tests for may be found in Appendix D. WATER SUPPLY The Utility has records pertaining to static water levels taken on the wells in their production system. Unfortunately, there is no documentation available that identifies specific measuring points or techniques used to obtain the information, thus the accuracy of historic measurements may be questioned. As a result, the Utility purchased "well sounding" equipment in FY 98-99 and began performing their own measuring in February 1999. These measurements will become the baseline data for future measurements. In addition, a standard operating procedure was established that will result in water levels being taken annually using consistent measurement techniques. The measurements taken in February 2000 indicate an average decline of 7.7 feet since February 1999. In addition to the measurements, this decline has been substantiated by a decline in pumping capacity of the wells. The total pumping capacity during the last year declined by 1000 gpm. Detailed information on individual wells may be found in Appendix E. The groundwater level declines cannot solely be attributed to growth or golf courses. The lack of substantial natural recharge due to minimal snow and rainfall can be a major factor for the decline in groundwater levels. The past two dry winters have contributed to the limited amount of natural recharge. The Commission believes that the overall decline in water levels should be one of the key factors driving the need to obtain and deliver an alternative source of water for golf course irrigation and/or recharge in or near the Utility's well fields. REVENUE REQUIREMENTS Water Utility Enterprise Fund: The Commission and Town staff, in conjunction with a rate consultant, analyzed the revenue 1 and cash flow requirements necessary to operate and maintain the system, fund needed " capital improvements and make debt service payments on the water system acquisition "J bonds, OVWID bonds and the proposed bond issue in year 2000. Revenues and cash flows -11- J were projected for FY 2000/01 based on anticipated annual growth in customer base of 870 residential customers and water consumption patterns similar to FY 1998/99. Projected > operating expenses were developed by the water utility staff. Capital expenditures will be funded with depreciation and bond funds. The following table indicates the amount of water sales revenue that would be realized by a 6.74% revenue increase (Scenario C-4), and increased service connections of 870: FY 1999/2000 Revenue Estimate FY 2000/2001 Revenue Projection Dollar Increase $5,767,000 $6,465,800 $698,800 Increases in service fees and charges were approved by Mayor and Council in September 1999. No other adjustments to these fees are necessary at this time; however, the Commission recommends that the services fees and charges continue to be reviewed on an annual basis. Connection Fee Fund: In April 2000, Mayor and Council adopted Ordinance No. (0) 00-11 which increased the potable water system development impact fees. The fee structure included a financing component as well as infrastructure costs identified in the master plan. Because the impact fees may not be collected prior to issuance of a building permit, it was deemed necessary to finance infrastructure costs so that the plant could be constructed prior to the customer needing the water supply. Thus capital expenditures will be funded with bond proceeds and the debt will be repaid with the impact fees. An estimated cash flow and income statement may be found in Appendix B. Alternative Water Resource Development Fee Fund: These fees have not increased since they were originally adopted by Council in 1996. To date, there have been no capital expenditures from this fund. However, fees for professional services and feasibility studies relating to alternative water issues are paid from this fund. An estimated cash flow and income statement may be found in Appendix B. O & M AND DEBT SERVICE REQUIREMENTS Because of the timing of the preparation of this report relative to the Town's budgeting process, the Commission recognizes that both the projected revenues and the projected expenses may need to be revised. The amounts shown below and used in the financial analysis may differ from those included in the Department Budget Request and the Manager's Budget Review because of the availability of more recent and reliable information. The Commission understands that OVWU staff, the Town Manager and the Council will adjust expenses to fit the final estimate of revenues based on the action of the Town Council on the rate structure for FY 2000/2001. -12- The following table is a comparative summary of expenses and debt service requirements for the water utility enterprise fund. Budgeted amounts as amended for FY 1999/00 are compared to the projected expenses for FY 2000/01 used in the financial analysis: OVWU Expenses FY 1999/00 Amended Budget FY 2000/01 Projected Change Personnel $ 952,300 $ 1,164,900 $ 212,600 O & M 1,492,000 1,881,200 389,200 C.A.P. 310,700 315,000 4,300 C.A.W.C.D. 0 48,000 48,000 Deprec. & Amort. 1,351,000 1,377,200 26,200 Interest Payments 1,616,800 2,061,900 445,100 Principal Pmts. 385,000 636,300 251,300 Totals $ 6,107,800 $ 7,484,500 $1,376,700 Projected FY 2000/01 personnel costs would be increased to fund a routine salary increase (COLA & merit). The projected personnel costs also include two additional full time employees and the reclassification of three positions. The estimated growth of 870 connections is estimated to require an additional two FTEs to provide services to these customers. For reference, the following table provides current employee to customer ratio comparisons with other cities, towns and water utilities within the State of Arizona. As shown in the table, Oro Valley Water Utility is projected to have 1 employee for every 556 customers at the end of the current fiscal year. When fully staffed at the end of the next fiscal year, the OVWU is projected to have available 1 employee for every 547 customers. The average ratio for those entities surveyed is 1 employee for every 462 customers. Municipality or Water Utility Number of Employees Number of Customers Employee to Customer Ratio Marana Water 6 1,200 1:200 Cave Creek, City of 7.5 1,700 1:227 Metro Water Dist. 50 16,000 1:320 Douglas, City of 16 5,800 1:363 Tucson, City of 558 186,085 1:316 Bella Vista Water 17 6,800 1:400 Oro Valley at 6-30-01 (projected) 28 15,320 1:547 Oro Valley at 6-30-00 (projected) 26 14,450 1:556 Avondale, City of 16 9,000 1:563 Kingman, City of 22 14,000 1:636 Lake Havasu City 31 20,000 1:645 Green Valley 5.5 3,700 1:673 Prescott, City of 23 17,000 1:739 13- The request for increased operations and maintenance costs reflect, among other items, " ? increased expenses for electrical power for pumping, water recharge costs, excess groundwater withdrawal fees, capital costs for additional CAP allotment, water quality testing, chemical for disinfection, plant and equipment repairs. Some costs are fixed by ') outside agencies with no control by the Town. Others may be subject to change as the '1 iterative process of budget development is completed. Principal and interest payments reflect debt service pursuant to bond repayment schedules for the bonds related to OVWID#1, bonds related to the original acquisition of the utility, and for the proposed bond issue to fund necessary system improvements. 5 YEAR CAPITAL IMPROVEMNTS PLAN (CIP) The Oro Valley Water Utility Commission, in conjunction with staff and engineering consultants, undertook extensive analysis to develop a 5-year Capital Improvements Plan for the water enterprise fund and the connection fee fund. Needs identified in the plans include machinery, equipment, vehicles, wells, booster stations, reservoirs, fire hydrants, mains and structures. Funding sources for existing system improvements include water rates and bond proceeds that will be repaid with water sales revenue. The funding source for expansion related improvements will be bond proceeds that will be repaid with impact fees. The following table summarizes total amounts by year for each plan: 5 Year C.I.P. FY 00/01 FY 01/02 FY 02/03 FY'/. FY 04/05 Total Existing System $6,366,550 $1,891,375 $1,873,750 $2,783,875 $3,016,500 $15,932,050 Expansion Related $1,000,000 $1,955,000 $1,567,500 $1,255,000 $1,453,750 $ 7,231,250 Total $7,366,550 $3,846,375 $3,441,250 $4,038,875 $4,470,250 $23,163,300 The two plans identify essential system improvements and equipment purchases through FY 2004/05. Results of the potable water system master planning process were included in the amounts above. Recommended projects to be funded will be identified in the water utility budget and the connection fee budget. Details of the Capital Improvement Plans may be found in Appendix F. RECOMMENDATION ON WATER RATES The Commission recommends adjusting the monthly base rate and replacing the existing 2- tier commodity rate with a 3-tier design. A 6.74% revenue increase for the preferred scenario (Scenario C-4) is proposed to be accomplished via the following changes: -ta- J • Equalize all rates for all customers formerly classified as "Non -city", "City", and "OV#1". • The monthly base rate is recommended to increase between $0.44/month and $192.55/month depending on the meter size. Most residential customers have a 5/8" x 3/4" meter and will realize a 44 cent per month increase in the monthly base rate. • The Tier 1 commodity rate is recommended to increase to $1.78 per each 1000 gallons after the first 1000 gallons used. This represents an increase of 5 cents. • The Tier 2 commodity rate is recommended to increase to $2.08 per each 1000 gallons after the first 8000 gallons used. This represents an increase of 23 cents. • The Tier 3 commodity rate is recommended to be established at $2.31 per each 1000 gallons after the first 16,000 gallons used. This represents an increase of 46 cents over the existing 2"a tier. • Threshold points established for the tiers will depend on the meter size and are detailed in Appendix G. The threshold point for golf courses is recommended to be set equal to the volume of their annual allotment as determined by ADWR. • The wholesale rates will be equalized with the all other rates based on meter size. The recommended rate structure yields a 6.74% overall revenue increase for FY 00-01 operations. The amount of revenue available for operations does not include the amount that has been `set -aside'. The source of this `set -aside' is the incremental revenue from the golf courses generated from the rate increase applied to their consumption over and above their ADWR allotment. The Commission recommends that this `set -aside' amount be reserved for renewable water resource uses in an effort to reduce the dependency on golf course revenues. The proposed revenue increase would allow the Utility enterprise fund to meet sound financial criteria regarding the operations of a municipal utility while costs keep pace with inflation, growth issues are not ignored, infrastructure is replaced as it is worn out and the level of service to the customer improves. The following table illustrates the proposed changes for a typical residential customer with a 5/8"x 3/4" meter. Other water providers in the region are included for comparison. OVWU Customer Category Current Monthly Base Rate Proposed Monthly Base Rate Current Tier I Com.Rate Proposed Tier 1 Com.Rate Current Tier 2 Com.Rate Proposed Tier 2 Com.Rate Current Tier 3 Com.Rate Proposed Tier 3 Com.Rate City 9.35 11.25 1.73 1.78 1.85 2.08 N/A 2.31 Non -City 10.81 11.25 1.73 1.78 1.85 2.08 N/A 2.31 OVWID#1 10.22 11.25 1.85 1.78 1.85 2.08 N/A 2.31 MDWID 11.06 N/A 2.00 N/A 335 N/A N/A NIA Marana 14 N/A 2.55 N/A 2.55 N/A N/A N/A Tucson 5.30 N/A 1.62 N(A 2.61 N/A 3.29 N/A A table providing proposed rates for all meter sizes may be found in Appendix G. 15- As indicated, the monthly base rate for the "City" customers (primarily the Highlands Mobile Home Park residents) would be increased from $9.35 to $11.25 per month. The Town Council, at the time of acquisition of the two private water utilities, agreed to equalize the "City" customer rates over a period of four years to avoid rate shock, with this years increase being the last year. The "OVWID#1" customers rates were unchanged when the Town assumed management in July 1999. They were already paying a higher base rate, thus they will experience a smaller increase. Appendix G also contains several spreadsheets that calculate the dollar increase and the percentage increase that a customer would experience on a monthly bill under the proposed rate change. There is a separate table for each meter size. The tables (`non -city', `city' and `OVWID#1' customers) are presented for the most common meter size (5/8"x 3/4"). Monthly bill amounts are calculated in 1000 gallons and other various increments. The above scenario recommendations combine to result in changes to monthly base rates between $0.44 and $192.55 (between 4.1% and 20.6% respectively), depending on meter size. The average consumption for customers with a 5/8"x 3/4" meter is approximately 8,000 gallons per month. For the `non -city' customer, the proposed rate structure would increase their monthly bill by 79 cents (3.4%). A cost of service study ascertained that the residential class of customers is currently not paying rates that would provide revenues sufficient to recover all costs incurred to serve them. Analysis showed that, utilizing a `demand concept', that the currently monthly base rate is extremely understated ($11.25 vs. $28.74). Analysis also showed the rate of return for each customer class was not equal. Rate of return values ranged from —3.06% for the 5/8"x 3/4" meter customer class to +40.63% for the 6" meter customer class. Overall, the rate of return was calculated at-0.695%. This implies that the OVWU is over -reliant on commodity sales for revenue to operate. The demand concept allocates expenses to the various meter customer classes on the basis of the service level demand they place on the system that is unrelated to the amount of water consumed. Some expenses such as billing, meter reading, repairs & maintenance, insurance, testing, vehicles, regulatory compliance and interest can be at least partially attributable to service level demand. The proposed increase to the monthly base rate is a continuing step to phase in use of the demand concept. This will continue the process of gradually allocating costs accurately, insulating the Utility operations from the impact of fluctuating water sales influenced by climate and other factors as well as preparing the Utility for the loss of golf course revenue when the golf courses are removed from groundwater. The establishment of a 3-tiered rate structure will further encourage water conservation of the Utility's customers whereby usage in excess of the annual average usage for each customer class is penalized with higher rates. The Commission's recommended rate design is intended to encourage voluntary conservation practices. In order to avoid increasing reliance on golf course revenues for operations, Scenario C-4 includes setting aside the additional revenues that the golf courses will pay as a result of any rate increase (monthly base rate or conservation). The `set aside' is recommended to be 16- l earmarked for special use in developing renewable water resources for use on golf courses in Oro Valley. For FY 2000-01, the `set aside' amount is project to be $17,444. For comparison purposes, the following table provides a calculation of a monthly bill amount for a 5/8"x 3/4" meter for several of the other water utilities surrounding the Oro Valley Water Utility service area. Direct comparison of raw base rates and raw commodity rates is not effective because of the varying rate structures of each utility. The best way to compare is to calculate the cost for certain consumption levels. Water Utility Cost for 8,000 Gallons Cost for 16,000 Gallons Cost for 26,000 Gallons Cost for 40,000 Gallons Marana 29.30 49.70 75.20 110.90 Metro Water 23.06 39.06 42.41 89.31 Tucson Water 15.02 32.93 61.75 107.81 Oro Valley Current 22.92 37.48 55.98 81.88 Oro Valley Proposed 23.71 40.35 63.45 95.79 As previously described, the proposed revenue increase for Scenario C-4 would allow the utility enterprise fund to meet sound financial criteria regarding the operations of a municipal utility while costs keep pace with inflation, growth issues are not ignored, infrastructure is replaced as it is worn out and the level of service to the customer improves. These recommendations were developed with the assistance of a Cost of Service Study and Rate Analysis performed by Mr. Ron Kozoman, CPA. -17- FINANCIAL SUMMARY Retained earnings is the cumulative measure used by enterprise funds to determine the amount of earnings remaining after expenses are deducted from revenues since the inception of operations. For Scenario C-4, the following table represent the estimate retained earnings at June 30, 2001: 7/l/2000 6/30/2001 Estimated Net Income (Loss) Projected Retained Earnings Retained Earnings $1,003,714 $145,989 $1,505,253 The Utility is projected to have positive retained earnings of $1,505,253 at the end of FY 2000-01 under the preferred scenario. Maintaining positive retained earnings is an important element of the financial criteria used to guide staff in arriving at proposed revenue increases. Cash flow is an analysis of all changes that effect the cash account. The following table reflects the estimated cash balances at June 30, 2001: 7/1/2000 6/30/2001 Estimated Change in Cash Balance Projected Cash Balance Cash Balance $4,905,533 ($626,220) $4,279,313 The cash balance is estimated to decrease to $626,220 at the end of FY 2000-01. The projected cash decrease is largely attributable to cash payments for additional debt service. Appendix B contains estimated income and cash flow statements and a comparison of funding requirements with projected revenues for the utility enterprise fund for FY 00-01. Estimated income and cash flow statements for the connection fee fund and the alternative water resources development fee fund are also included in Appendix B. ALTERNATE FINANCIAL SCENARIOS Appendix H presents an alternate financial projection to allow for a comparison with the preferred scenario (Scenario C-4). The financial criteria used to evaluate the financial soundness of a proposed revenue and expense scenario was applied to this alternate scenario. The conclusion of that analysis was that it did comply with the guidelines of the financial criteria and could be considered a valid option. However, the impact of the rate increase to the low end user was far greater than the preferred scenario. Scenario C-5 (Appendix H) used identical assumptions for growth, operating costs and revenue increases. The difference between the preferred scenario (Scenario C-4) and this scenario is the rate design. In Scenario C-5 the rates were designed to eliminate the "free" 1000 gallons included in the base rate, equalize all base rates to the existing Non -city rate of $10.81 and implement a three tiered commodity structure. The first tier would remain ') unchanged at $1.73 per 1000 gallons up to 8,000 gallons. The second tier would be increased by 3% above the existing rate for a cost of $1.90 per 1000 gallons for usage between 8,001 and 16,000 gallons. The third tier would be established at 10% above tier 2 for a cost of $2.10 per 1000 gallons for all usage over 16,000 gallons. CONCLUSION The Commission presents this annual report for the review and consideration of Mayor and Council. The Commission would be glad to discuss this report in greater detail at a joint study session or other appropriate forum. Please advise if such a discussion is desired. The Oro Valley Water Utility Commission is proud to serve the Town of Oro Valley and the customers of its water utility. Much has been accomplished in the fourth full year of the Utility's operation. The commission looks forward to continued direction from Mayor and Council, especially on those issued discussed in this report. The Commission extends their appreciation to the Mayor and Council for its consideration, direction and guidance. 50 APPENDIX A Preferred Financial Scenario Scenario C-4 The following are the assumptions used in preparing these projections: • Growth is based on 870 new residential customers in FY 2000-01 and 750 new residential customers per year thereafter. • All rates have been equalized for the former Non -city, City, OVWID#1 and Wholesale customers. • Golf courses will be removed from groundwater over two years beginning in FY 2003-04. • Rate increases are effective at the beginning of each fiscal year with the exception of FY 2000-01 in which the rates are projected to be effective by October 1, 2000. • Financing will be achieved through the sale of bonds for capital improvements and the purchase of rights to alternative water resources. • Assumed a 6.25% interest rate on the proposed bond issue. > • Personnel costs increase 5% annually for COLA and merit. • Operations and maintenance costs increase 5% annually. • Debt service does not fall below the required 1.25:1 ratio. • The Utility does not run at a loss for more than two consecutive years. • The minimum cash balances meet or exceed 15% of cash outlays excluding capital. • Retained earnings maintain a positive balance. 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LL F- Vl U U m z z U z U APPENDIX B ORO VALLEY WATER ENTERPRISE FUND ESTIMATED INCOME STATEMENT Budget FY 1999/00 Estimated Actuals FY 1999/00 Projected FY 2000/01 OPERATING REVENUES: Water Sales: Unmetered/Wholesale $ 32,000 $ 33,100 $ 45,300 Residential 3,556,000 3,777,300 4,475,000 Commercial 274,000 344,300 334,400 Irrigation 318,000 475,500 418,700 Turf Related 926,000 902,900 923,800 Construction 122,000 233,900 268,600 Subtotal Water Sales $ 5,228,000 $ 5,767,000 $ 6,465,800 Other Revenue: Miscellaneous Service $ 56,000 $ 30,400 $ 60,000 Meter Income 100,000 146,900 150,000 New Service Establishment Fees 44,000 58,600 55,000 Reconnect Fees 9,000 8,700 8,000 Miscellaneous 11,000 - Subtotal Other Revenue $ 209,000 $ 255,600 $ 273,000 Total Operating Revenues $ 5,437,000 $ 6,022,600 $ 6,738,800 OPERATING EXPENSES: Personnel $ 952,339 $ 953,053 $ 1,164,900 Operations & Maintenance 1,802,691 2,135,295 2,244,200 Depreciation 1,306,000 1,225,000 1,369,600 Amortization 45,000 52,200 52,200 Total Operating Expenses $ 4,106,030 $ 4,365,548 $ 4,830,900 Operating Income $ 1,330,970 $ 1,657,052 $ 1,907,900 NON -OPERATING REVENUES (EXPENSES): Interest Revenue $ 190,000 $ 325,000 $ 300,000 Interest Expense 1,616,833 1,626,502 2,061,911 Total Non -Operating Revenues (Expenses) $ (1,426,833) $ (1,301,502) $ (1,761,911) Net Income (Loss) $ (95,863) $ 355,550 $ 145,989 Retained Earnings, beginning of year $ 1,003,714 $ 1,359,264 Retained Earnings, end of year $ 1,359,264 $ 1,505,253 ORO VALLEY WATER ENTERPRISE FUND ESTIMATED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH: Estimated Actuals FY 1999/00 Projected FY 2000/01 Cash flows from operating activities: Cash received from water revenues $ 5,767,000 $ 6,465,000 Cash received from other revenues 255,600 273,000 Cash payments for operating expenses (3,088,348) (4,830,900) Net cash provided(used) by operating activity $ 2,934,252 $ 1,907,100 Cash flows from capital & financing activities: Improvements $ (1,099,400) $ (6,748,550) Machinery & Equipment (64,740) (58,600) Vehicles (170,000) (28,000) Interest expense (1,626,502) (2,061,911) Principal payments (395,000) (636,259) Net cash provided(used) from capital & financing activities $ (3,355,642) $ (9,533,320) Cash flows from investing activities: Interest $ 325,000 $ 300,000 FY 2000101 Bond Proceeds - 6,700,000 Net cash provided by investing activities $ 325,000 $ 7,000,000 Net increase (decrease) in cash $ (96,390) $ (626,220) Cash at beginning of year $ 5,001,923 $ 4,905,533 CASH A T END OF YEAR $ 4,905,533 $ 4,279,313 ORO VALLEY WATER CONNECTION FEE FUND ESTIMATED INCOME STATEMENT Budget FY 1999/00 Estimated Actuals FY 1999/00 Projected FY 2000/01 REVENUES: Connection Fees $ 775,000 $ 645,000 $ 1,717,800 Total Revenues $ 775,000 $ 645,000 $ 1,717,800 EXPENSES: Capital Improvements $ (1,324,000) $ (52,426) $ (1,050,000) Total Expenses $ (1,324,000) $ (52,426) $ (1,050,000) Surplus (Deficit) $ (549,000) $ 592,574 $ 667,800 NON -OPERATING REVENUES (EXPENSES): Interest Revenue $ - $ 45,000 $ 44,125 Interest Expense 27,696 27,696 671,050 Total Non -operating Revenues (expenses) $ 27,696 $ 72,696 $ 715,175 Water System Revenue Bond Proceeds $ - $ - $ 8,075,000 General Fund Loan -Series B Revenue Bonds - 747,500 General Fund Loan-Fireflow Revenue Bonds - 575,000 Net Income (Loss) $ (521,304) $ 665,270 $ 10,780,475 Fund Balance, beginning of year $ 429,433 $ 11094,703 Fund Balance, end of year $ 1,094,703 $ 11,875,178 ORO VALLEY WATER CONNECTION FEE FUND ESTIMATED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH: Estimated Actuals FY 1999/00 Request FY 2000/01 Cash flows from operating activities: Cash received from connection fees $ 645,000 $ 1,717,800 Cash payments for operating expenses - - Net cash provided(used) by operating activity $ 645,000 $ 1,717,800 Cash Flows from capital & financing activities: Improvements $ (52,426) $ (1,050,000) Interest expense (27,696) (671,050) Principal payments (514,815) (534,500) Water System Revenue Bond Proceeds 8,075,000 General Fund Loan -Series B Rev. Bonds 747,500 General Fund Loan-Fireflow Rev. Bonds 575,000 Net cash provided (used) from capital and financing activities $ (594,937) $ 7,141,950 Cash flows from investing activities: Interest Revenue $ 45,000 $ 44,125 Net cash provided by investing activities $ 45,000 $ 44,125 Net increase in cash $ 95,063 $ 8,903,875 Cash at beginning of year $ 940,909 $ 1,035,972 CASH AT END OF YEAR $ 1,035,972 $ 9,939,847 ORO VALLEY WATER ALTERNATIVE WATE RESOURCE FEE FUND ESTIMATED INCOME STATEMENT Budget FY 1999/00 Estimated Actuals FY 1999/00 Projected FY 2000/01 REVENUES: Alternative Water Resource Fees $ 240,000 $ 385,000 $ 261,000 Total Revenues $ 240,000 $ 385,000 $ 261,000 EXPENSES: Operation & Maintenance $ (140,000) $ (140,000) $ (150,000) Total Expenses $ (140,000) $ (140,000) $ (150,000) Surplus (Deficit) $ 100,000 $ 245,000 $ 111,000 NON -OPERATING REVENUES (EXPENSES): Interest Revenue $ 40,000 $ 40,800 $ 50,000 Interest Expense - - _ Total Non -operating Revenues (expenses) $ 40,000 $ 40,800 $ 50,000 Net Income (Loss) $ 140,000 $ 285,800 $ 161,000 Fund Balance, beginning of year $ 807,339 $ 1,093,139 Fund Balance, end of year $ 1.093.139 $ 1,254,139 ORO VALLEY WATER ALTERNATIVE WATER RESOURCE DEV. FEE FUND ESTIMATED STATEMENT OF CASH FLOWS INCREASE (DECREASE) IN CASH: Estimated Actuals FY 1999/00 Request FY 2000/01 Cash flows from operating activities: Cash received from connection fees $ 385,000 $ 261,000 Cash payments for operating expenses (140,000) (150,000) Net cash provided(used) by operating activity $ 245,000 $ 111,000 Cash Flows from capital & financing activities: Improvements $ - $ - Interest expense - - Principal payments - - Net cash provided (used) from capital and financing activities $ - $ - Cash flows from investing activities: Interest Revenue $ 40,800 $ 50,000 Net cash provided by investing activities $ 40,800 $ 50,000 Net increase in cash $ 285,800 $ 161,000 Cash at beginning of year $ 829,132 $ 1,114,932 CASH A T END OF YEAR $ 1,114,932 $ 1,275,932 APPENDIX C PROPOSED CONSERVATION PROGRAM 1) Annual funding for a conservation program is to be provided from the conservation rate structure 2) An ongoing conservation program is proposed to be established and expanded, as additional funds become available. 3) The proposed program will include the following: a) Annual membership in Water CASA to assist in providing information and lowering of costs with group purchases b) The enclosure of conservation information flyers with the water utility bills on a regular basis c) Involvement of students in local schools in a conservation program with puppet shows and educational materials d) Providing Home Audit Kits to customers at no charge on an available upon request basis PROPOSED PROGRAM EXPENDITURES PROGRAM JUL-SEPT 2000 OCT-DEC 2000 JAN-MAR 2001 APR-JUN 2001 TOTALS Water CASA $12,500 $12,500 Bill Inserts* $985 $985 $985 $985 $3,940 Schools $2,140 $2,140 Home Audit 1 $313 $313 $313 $3131 1,252 Totals $13,798 $3,438 $1,298 $1,298 $19,832 Quarterly cost — conservation inserts provided bi-monthly — quarterly here for sake of space APPENDIX D 1 ti xr o u50 =m Y U r $O N U 0 o A o P- 9- A o- 9- 9- o- p o y 9 'a 5 3 0 0 0 O u u 4 4 JQ N .r� C a'a'a,,O�,$p$oo a CCCCOCyy �pp..O f�OO L1 OO OppOt N��O v > > Q Q Q Q Q Q Q Q Q Q Q Q Q pT4 N 9 N N N^"— r------ ill Cl O Q$ 299299999999942 99� �2 �, 9 44449��ii 444g4g4 -> -', �4�ii42Rp4gg N N 4 N N N 9 -- -- ----- 444444_94_4R9 �p {9{�9 y4y'44_ 00�S�000S� OOx 2 r ❑aE4 4 9999999999999999 444 JO--'� W 4 9 9 9 9 M 9 9 9 9 9 m 9 9 N N N 4 4 4 4 4 9 4 4 4 4 9 4 p 4 4 9 4 99 Q T— v-�i C C C C C C C> C C C> -'•-'�'c'"I' l 1, Qp K 1, Z z < 080 r �,.l '.9 trl 4 NMplmmmmmmmNmNmmN mOO aa 2!j 299 J N'S N "'"� 75 �LLLLLLLLLLLLLLLLLLLLLLLL� LL 0 O_ 449p 4 44_y4_y4_y 9_y 4_yy444 444 Q H yyc 4 999 4Z <' �000000, O<<l W= 4 m $4�o�99999>9M > > > > > c ZZZZZZZZZZZ ZOO�< »4c4c Z w W m 'iQ coo m n mnom o m m w o$$ N m n m m o n m m r' m n v w m meYi nevi v4io4i nln�N�unmM m m N v p Id m I(J 2� 11(1 YJ h m h N N m N m h YmJ N h N m h h N m N Id N YYl) II[ a m m N > > O 'O LL y o a y r F E N d d W t C N Q Q r O! 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E m v Vi I I 11N, I l i J E J v o CJ a 'v a o I II I I �o of I� m o. o oa I N i I J <O m tD m O N V �O t7 Nt V d; m C d' M In N O N M O '0 m N Z O O 0'' O O 0 0 U V 19 o _aI,U a + + + 66+ + + + + + O + + + + + + ++ of+'lo, W N M M O, N m V V - v r LO r, V <o h o In tp N N V IM' c- m m mmm mmmmmmmmmmmmo�aommmmao w.y m m m m mm m E oa «E �I� Ei n i=i_ m! vvvvvmvrnv<vrn�oc�vo<+jnrn Ex N M M M M M M M^ M M M M o E t9 m m 'm 'm o o o N E j O l0 V V V R ^ er C V d' of V V a "r V V a a' N fah'-10 O OIO OOj OOOOOOOOOOOOO � C 0 0_ O 'O 0 6 6 6 6 6 6 6 O ,O O �, d f N N �f1 If) f0 N O N N M er LO f0 I� m m o N M V N S o o o o o 0 0 0 o 0 o o o o 0 0 o o o, E m O 0 N h N M 0 N M J m — fNV N- In O- m- tNJh y J J J J J J J J J J J J J J J J J J J J J J E W W (n W W W w W W W W W W W W W W W W W W W W W W Ilz �33�,333333,3333333333333� 3 c J II n n n CO W } z a� z� 0 �W 1w mQ �3 U > O J z > w 0 aOf 0 x z J V w WO U. a I-. d o IL r !2 n d N k y E 0 E z O N o E LU CD W ma f c O _O a W V y WLL O O IL FS g N 0) LU E w'. 0. LU CIE I L LL N LLJ W m L 3 wjJa G J W N 3 > Lu N N W '2 a N C �IZI •• W o W! OI Q O C LLJ F z y 2 Q O GO ,� N M V N Ny G + + + 7�02"� } ++ + d O O 0 0 O O O ONNV0 N N I I C � D) N y 7 U J 9, V1 p > E7o N❑ N O N= N U 3m > C 2 = ooz m N J O II 0 N t0 r t• N >3 a 0 tp N O) N N f` C i3 N D) O a+ + + } + } } } ++ ++ G 100 (0D a w 0W 00 0l t00 N M top m N V It M N M m R N tM 10 N L O O N > > Q S N y (0 d m N C 9 N N N N td m J O O d' d' C)fD (D (O'V ❑ 7L W U` Q J NiV N,N OJ 'A.O r Iy p,. ` � p p �y U 6++ Imo. +I+ +',++ + + Q + + ++ + + ++ �, + `+ + ++ Z ++ to o 0 0!00 0 0 0 0 0 0 0 0.0 0 0 0 0 ono C y N o o Cl)E y ❑ E O U 0� t ❑ =_ I# d tU y y ❑ C N t0 Y N EO I W N N CD N N i J C❑ L L Y '_ F @ J 2 ` d N '$ �` 2` r N N£ C C d L d op C C Lp 2 j2 Lu U U O1 Q1 LC m L N N N U L N � Q fO M N �' ao0000mmmmp'maL�tam mf45 UUZZZZ 0_'R'F-F mE aZU JJ U U�UJ E .0 O OO I O N O O N W N a t• M tU N� M��NMN O�N�NNnaD��V' N� �N�O dImh Q i�CL OJ� N I N Ln aJ � NV L6 N In V V V n In In Ui L6 N NO m 0 0 V V V V V V V O 00 NN Q WS V V V. d � I I a a a E E a EE�� C c c E E o p I Z z MICROBIOLOGICAL CONTAMINANTS (POSITIVES) ORO VALLEY WATER UTILITY SYSTEM 10-164 SYSTEM 10-175 DATE ADDRESS DATE ADDRESS Aug-92 1360 Rams Hill Jun-92 9000 Camino De Oeste Aug-92 1360 Rams Hill Jun-92 Degrazia - bid A Aug-94 10702 Glen Abbey Jun-92 9251 Sea Otter Aug-94 10575 Stargazer Jun-92 9241 Sea Otter Aug-94 11092 Eagle Crest Aug-98 8972 Eagleston Lp Aug-94 11092 Eagle Crest Jul-99 4949 Manatee Aug-94 11052 Eagle Crest Jul-99 4837 Daphne Jun-97 02C Dec-99 4837 Daphne Aug-97 03C 9501 Albatross Aug-97 11C 4949 Manatee Nov-97 09C Nov-97 10C Nov-97 11C Dec-98 10531 Buck Ridge Dec-98 2411 Stone Stable Apr-99 1783 Wimbledon Way 1 Jul-99 10154 Calls De Carnero ") Jul-99 10531 Buck Ridge Aug-99 11140 N. Divot Dr Aug-99 1779 Wimbledon Way Aug-99 1311 Sandtrap Way Sep-99 11140 N. Divot Dr Sep-99 11262 Twin Spur Ct Sep-99 10341 Hacinda Hermosa Oct-99 11262 Twin Spur Ct Nov-99 11518 Ironwood Canyon 2411 Stone Stable Dr Dec-99 1060 Canada Vista 10145 Calls De Carnero 10531 Buck Ridge Dr Jan-00 systems 10-212 merged with 10-164 13025 Meadview Way 14657 Lost Arrow 2199 Bedrock 215 Horizon Circle 1060 Canada Vista 10145 Calls De Carnero 1 1477 Ganymede Dr 11445 Mandarin Ln 11518 Ironwood Canyon J 9631 Calle Buena Vista 1000 Calls Concordia 261 Highcourte Ln J 1133 Saddlehorn Dr ' 9856 Linda Golf View J J SYSTEM 10-212 DATE ADDRESS Jul-90 none listed Aug-93 booster 11 Aug-94 booster 11 May-95 booster 11 Jan-96 booster 11 Jun-96 booster 11 Jun-96 booster12 Jun-96 booster 10 Jun-97 booster 1 Mar-98 booster 1 Mar-98 booster 21 Oct-98 13956 Honey Bee Tr Oct-98 13956 Honey Bee Tr Oct-98 13956 Honey Bee Tr Oct-98 13956 Honey Bee Tr Oct-98 X1 Jul-99 13025 Meadview Dec-99 12289 Red Mountain 12898 Whitlock APPENDIX E Information from American Water Works Association manual of water supply practices: Lowered water table. The water table in the vicinity of a well may recede seasonally or during long dry periods when recharge to the aquifer is at its minimum. An aquifer may be reduced if the stored groundwater is being gradually depleted by pumping. Finally, the successive installation of additional wells in an area with overlapping cones of depression can also cause the water table to recede. A receding water table will cause significant mutual interference, in which the overlapping cones of depression cause reduction in the water levels of the wells. Consequently, pumping levels will be lowered to a point that is lower than that found in a single operating well. Figure 7-1 illustrates the operating problem that results from a drop in the water table caused by any of these occurrences. Curve 1 represents the relationship between well yield and pumping level. Curves 2 and 3 represent lower pumping levels caused by recessions of the water table. The drawdown in each case is the difference between the depth to water at zero discharge and any other point on one of these curves. The limiting yield is indicated as the condition where increase in yield ceases to be approximately proportional to increase in drawdown. Assume that the pump was originally designed to operate at point A on curve 1. If a drop in water level changes the well performance to curve 2, the same pump may operate at about point C, which is undesirable. The situation can be improved only by cutting back the pumping rate to less than 800 gpm. 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E _ (§y \)w/ LLJ k \ )ea �` ®(Lij §} wco \(E maNN w /0Z : / \\§\ „ ( \ § 7 \ \ 0 w 0 (( :o §LU ym / Fn __ \ } § R g \§R 2 � « 0 LU k _ 0 )g \\ \ I-- § ) \& ORO VALLEY WATER UTILITY PUMPING CAPACITY CHANGE INCREASE WELL # 1999 GPM 2000 GPM (DECREASE) CH 1 452 421 -31 CH 2 307 355 48 CH 3 1279 1250 -29 CH 4 270 263 -7 CH 5 200 193 -7 CH 6 306 287 -19 CH 7 324 320 -4 CH 8 200 187 -13 CH 9 141 not in service N/A CH 10 733 732 -1 CH 11 695 559 -136 CH 12 662 526 -136 CH 13 not in service not in service N/A CH 14 294 299 5 CH 15 653 633 -20 CH 17 480 416 -64 CH 18 1431 1312 -119 CH 23 not in service 1531 N/A RV 1 449 300 -149 RV 2 533 350 -183 RV 3 475 289 -186 RV 9 162 160 -2 RV 19 356 351 -5 RV 20 649 568 -81 RV 22 330 293 -37 APPENDIX F w C N E d Q E E d N T N C .N X W C 16 a a C N E c y o O > O N C N E L y V L R a � R TV d d �rC m a o � ` O ii a 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 J 0 0 0 0 O O O O O O O O O O N O N O O N O O N O N N O O N A 0 0 0 OJ 0 0 0 O 0 0 0 Ih i(j r 0 fV A N N N N N N N O � N M o 0 0 m N N O rn N O N N r N W O N t0 N N N N N O A a O N N F fV A f9 M N tli Vi t9 M M Vi 19 Yi b9 M N Vi M M M b9 M Vi t9 N bf eA M 1A b9 t9 f9 o O N G O O N O O C N N O N N N N f9 N N 0 O O N N O N N H f9 Yi M N N O O O O O O O O M N O N O O o m N N N LLA'� V OA1 N O i00 N M b9 f9 W f9 to M e9 N 0 0 0 0 O 0 0 0 0 0 0 O N O O O O O O O O O O O O � O O O O O N O O N O N N N N (9 f9 M f9 M f9 f9 Hi f9 f9 di M 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p o 0 0 0 0 0 0 o ID 0 o m O N O N O N O O O T N N O N LL') h N N C4 M O O O M O N N A V O N N o 0 N N N N (/1 N N f� N N N N N N N N N UI N N Vi N N N f/I N N fq O N UI N N N N N N N N N O N N N N O N UJ N N N d N N N 0 9 N N a t`0 N N N N N � D! 2 rn 0! 2 OI rn m rn OI N OI N rn N O) N O) 10 rn N rn N rn N Ol (O O) N rn N OI N O N O) N O lV rn N O N rn N OI 2 W 10 d d O. 6 6 a a 6 d d d 6 6 6 6 d d d d d d d d d d 6 6 J J J N W W U U❑ LL❑ U' U W U 0 (Di UJ M U LL ❑ LL U' U' W O U M o > O E O 6 ry CD 0 � � i � C7 m � � � m � � W a E _ m ,p O O O O> Oof y O r a N rn >. d y (p O p M O U N C D N a d N N d ry 0 y Q > m z ## y 0 y O N O Q "00 N D d V�i C U E c N c d o U N N M i U > C _ O > w�. 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H o dE o LL N Z d o o, : o x N m o c❑i c❑ 3 z a w 3 O` 9 y 3 Z y r m° y L U L U L U L U L U L U L U L U L U L U L U L U L U L U 'o y N# y# ,E c s c c c c c c c c c c c m v a a $ a a a s> N- N N N N- N N N N- N a` 3 z C 3 3 m>> > > > N 6 N N N N 0 CV d 2 m m R N 'o y APPENDIX G TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON CITY CUSTOMERS WITH A 5/8 X 3/4" METER PROPOSED BASE RATE 20.3 % INCREASE FROM 9.35 TO 11.25 (INC. 1000 GALLONS) PROPOSED COMMODITY 3 % INCREASE IN TIER 1 FROM 1.73 TO 1.78 12% INCREASE IN TIER 2 FROM 1.85 TO 2.08 TS-14 ESTABLISH TIER 3 AT 2.31 (25% OVER TIER 2) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED 0 9.35 11.25 1.90 20.3 1,000 9.35 11.25 1.90 20.3 2,000 11.08 13.03 1.95 17.6 3,000 12.81 14.81 2.00 15.6 4,000 14.54 16.59 2.05 14.1 5,000 16.27 18.37 2.10 12.9 6,000 18.00 20.15 2.15 11.9 7,000 19.73 21.93 2.20 11.2 8,000 21.46 23.71 2.25 10.5 9,000 23.19 25.79 2.60 11.2 10,000 24.92 27.87 2.95 11.8 11,000 26.77 29.95 3.18 11.9 12,000 28.62 32.03 3.41 11.9 13,000 30.47 34.11 3.64 11.9 14,000 32.32 36.19 3.87 12.0 15,000 34.17 38.27 4.10 12.0 16,000 36.02 40.35 4.33 12.0 17,000 37.87 42.66 4.79 12.6 18,000 39.72 44.97 5.25 13.2 19,000 41.57 47.28 5.71 13.7 20,000 43.42 49.59 6.17 14.2 21,000 45.27 51.90 6.63 14.6 22,000 47.12 54.21 7.09 15.0 23,000 48.97 56.52 7.55 15.4 24,000 50.82 58.83 8.01 15.8 25,000 52.67 61.14 8.47 16.1 26,000 54.52 63.45 8.93 16.4 27,000 56.37 65.76 9.39 16.7 28,000 58.22 68.07 9.85 16.9 29,000 60.07 70.38 10.31 17.2 30,000 61.92 72.69 10.77 17.4 31,000 63.77 75.00 11.23 17.6 32,000 65.62 77.31 11.69 17.8 33,000 67.47 79.62 12.15 18.0 34,000 69.32 81.93 12.61 18.2 35,000 71.17 84.24 13.07 18.4 36,000 73.02 86.55 13.53 18.5 000 74.87 88.86 13.99 18.7 000 [N4 76.72 91.17 14.45 18.8 000 78.57 93.48 14.91 19.0 000 80.421 95.791 15.371 19.1 TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON OV#1 CUSTOMERS WITH A 518 X 3/4" METER PROPOSED BASE RATE 10% INCREASE FROM 10.22 TO 11.25 (INC. 1000 GALLONS) PROPOSED COMMODITY 4 % DECREASE IN TIER 1 FROM 1.85 TO 1.78 ESTABLISH TIER 2 AT 2.08 (17% OVER TIER 1) TS-14 ESTABLISH TIER 3 AT 2.31 (25% OVER TIER 1) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED 0 10.22 11.25 1.03 10.1 1,000 10.22 11.25 1.03 10.1 2,000 10.22 13.03 2.81 27.5 3,000 12.07 14.81 2.74 22.7 4,000 13.92 16.59 2.67 19.2 5,000 15.77 18.37 2.60 16.5 6,000 17.62 20.15 2.53 14.4 7,000 19.47 21.93 2.46 12.6 8,000 21.32 23.71 2.39 11.2 9,000 23.17 25.79 2.62 11.3 10,000 25.02 27.87 2.85 11.4 11,000 26.87 29.95 3.08 11.5 12,000 28.72 32.03 3.31 11.5 13,000 30.57 34.11 3.54 11.6 14,000 32.42 36.19 3.77 11.6 15,000 34.27 38.27 4.00 11.7 16,000 36.12 40.35 4.23 11.7 17,000 37.97 42.66 4.69 12.4 18,000 39.82 44.97 5.15 12.9 19,000 41.67 47.28 5.61 13.5 20,000 43.52 49.59 6.07 13.9 21,000 45.37 51.90 6.53 14.4 22,000 47.22 54.21 6.99 14.8 23,000 49.07 56.52 7.45 15.2 24,000 50.92 58.83 7.91 15.5 25,000 52.77 61.14 8.37 15.9 26,000 54.62 63.45 8.83 16.2 27,000 56.47 65.76 9.29 16.5 28,000 58.32 68.07 9.75 16.7 29,000 60.17 70.38 10.21 17.0 30,000 62.02 72.69 10.67 17.2 31,000 63.87 75.00 11.13 17.4 32,000 65.72 77.31 11.59 17.6 33,000 67.57 79.62 12.05 17.8 34,000 69.42 81.93 12.51 18.0 35,000 71.27 84.24 12.97 18.2 36,000 73.12 86.55 13.43 18.4 37,000 74.97 88.86 13.89 18.5 38,000 76.82 91.17 14.35 18.7 39,000 78.67 93.48 14.81 18.8 40,000 80.521 95.791 15.27 19.0 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 1" METER BASE RATE _ $28.13 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 16,000 GALLONS TIER 2 = $2.08 FOR 16,001 - 27,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 27,000 GALLONS GALLONS USED IN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 27.10 28.13 1.03 3.8% 10,000 42.67 44.15 1.48 3.5% 20,000 60.45 63.15 2.70 4.5% 30,000 78.95 84.64 5.69 7.2% 40,000 97.45 107.741 10.29 10.6% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 1 1/2" METER BASE RATE _ $56.25 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 38,000 GALLONS TIER 2 = $2.08 FOR 38,001 - 64,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 64,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 54.19 56.25 2.06 3.8% 10,000 69.76 72.27 2.51 3.6% 20,000 87.06 90.07 3.01 3.5% 40,000 121.66 12% 4.61 3.8% 50,000 140.40 147.07 6.671 4.8% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 2" METER BASE RATE _ $90.00 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 80,000 GALLONS TIER 2 = $2.08 FOR 80,001 - 134,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 134,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 86.66 90.00 3.34 3.9% 25,000 128.18 132.72 4.54 3.5% 50,000 171.43 177.22 5.79 3.4% 75,000 214.68 221.72 7.04 3.3% 100,000 260.33 272.22 11.89 4.6% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 3" METER BASE RATE _ $180.00 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 186,000 GALLONS TIER 2 = $2.08 FOR 186,001 - 311,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 311,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 173.33 180.00 6.67 3.8% 50,000 258.10 267.2 9.10 3.5% 100,000 344.60 356.22 11.62 3.4% 200, 519.28 538.42 19.14 3.7% 300,000000 704.28 746.42 42.14 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 4" METER BASE RATE _ $281.25 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 169,000 GALLONS TIER 2 = $2.08 FOR 169,001 - 283,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 283,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 274.25 281.25 7.00 2.6% 50,000 359.02 368.47 9.45 2.6% 75,000 402.27 412.97 10.70 2.7% 100,000 445.52 457.47 11.95 2.7% 200,000 622.24 646.77 24.53 3.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 6" METER BASE RATE _ $562.50 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.08 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 548.50 562.50 14.00 2.6% 500,000 1411.77 1450.72 38.95 2.8% 1,000,000 2276.77 2340.72 63.95 2.80/. 1,500,000 3141.77 3230.72 88.95 2.8% 2,000,000 4030.77 4180.72 149.951 3.7% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR NON -CITY CUSTOMERS WITH A 8" METER BASE RATE _ $1,125.00 COMMODITY RATE: TIER 1 = $1.78 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.08 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $2.31 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 932.45 1125.00 192.55 20.6% 500,000 1975.72 2013.22 37.50 1.9% 1,000,000 2660.72 2903.22 242.50 9.1% 1,500,000 3525.72 3793.22 267.50 7.6% 2,000,000 4414.72 4743.22 328.501 7.4% GOLF COURSE CONSERVATION RATES TO BECOME EFFECTIVE WHEN USAGE EXCEEDS THE ARIZONA DEPT. OF WATER RESOURCES ANNUAL ALLOTMENT. APPENDIX H Alternate Financial Scenario Scenario C-5 The following are the assumptions used in preparing these projections: • Growth is based on 870 new residential customers in FY 2000-01 and 750 new residential customers per year thereafter. • All rates have been equalized for the former Non -city, City, OVWID#1 and Wholesale customers. • The base rate will no longer include 1,000 gallons of "free" water. • Golf courses will be removed from groundwater over two years beginning in FY 2003-04. • Rate increases are effective at the beginning of each fiscal year with the exception of FY 2000-01 in which the rates are projected to be effective by October 1, 2000. • Financing will be achieved through the sale of bonds for capital improvements and the purchase of rights to alternative water resources. • Assumed a 6.25% interest rate on the proposed bond issue. • Personnel costs increase 5% annually for COLA and merit. • Operations and maintenance costs increase 5% annually. • Debt service does not fall below the required 1.25:1 ratio. • The Utility does not run at a loss for more than two consecutive years. • The minimum cash balances meet or exceed 15% of cash outlays excluding capital. • Retained earnings maintain a positive balance. 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N I` N N LO 0 cc co0000t- N N LO O O Cl) 0coLO -It{ O 0 0 0 W N LD co O O r V O O Ih O V LL M M CO N M 04 LO W (D 0 0 Cl) LD D) LO M ' M LD (6 7 0 O N N d' Lb e0 0 M CO 0) N Cl) N It N M tt Cl) m m 0) N N (D LO I N 0 O O N (N 0 w LO LO r- V O •- 0 LO h1� 0 0 0M V P- 000 O W (0D w V I M V N V M O) M It 17 N N 0 N r 0 N M O O O lO M I O N f� O O O N O M h Cl)0 (D O O (O h 10 r OD� 0 00 W M M O N M N O O V— 0 M O M N -Na) O MIN D) O M LO V 0 N I N (D N D) t I LO 1- I I I ILO N D) CD N 0 OIOM cc co It �-LO 0 Ico N 0 (D W r V 0 O 0 00 CO M I- (O � � I IIt N 01 r= � U W 0 0) U 0 (Q O K z z 0 U) N ('; w W W F Z 06 W (n U) aofn QN IL X > O W' Q LLI w w z z~ W 0 U x w Of U W W Q: w Z Z W U z g z W (n z w Ft 0 co ¢ a a O a E5 z 5 OzOLLLLF z 00Z U W 2Q = i jZLL W z>00 aJZ�(nU)0 Um z � W LL � — W F W W W W F- W CD X LL wz O_ Q (n J z W i W M ��Z� W (~0 (�0 W 00F 0z W � z a D W H W 0 0 ~ W(L W Q Q O F O V OU W H W O z Q J a.0 0 0 U z z LL J W a a w 0 w 0 0 z 0 N 7 9 C N E N 0- 0 m J j J O w LL uj a N M 7 LO O O O O wO U o 0 0 0 0 z LL LL r LL r U LL LL LL LL W 0 z to N (D I,- LO (o v co 0 O M O a U N M 'I LO O O O O O O N CO V 0 0 0 0 0 } LL LL } LL LL LL LL W LL 0 1. 0 0 -. 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Cl) V V r N M O N IX) O fm O N Lon M r 0) (p M f� I >-N m N M� O M LL Cl) -T r O Cl) r N d G n M O CO N It N c0 0] d' (o �( s O N N N O� O r O 0 r a -It a LL M d r 0 n O M r M 0 I� O c h N 0) N O O N 0 N N C O O M O c0 c0 I- n } V d' d (D IX LL V r� M M C n W 7 U) z Z OLU Z 7 m N m Q > oo K U)W a o N o m W W W 2 W U (d (A (q Q M Z Z Z Z 06a W W W LLI (/)XXXZ OLL O 2' W W W W OU OU W W co U Q z LL of 0' z J ~ J H H Q Lu z°ZZZp¢ oov v m in O O co N co r O N N V N 'V r N M N r N O 00 rl N O O N00 O N It o)) (D CO N 0) aD m7tQ cn 000 h I W II 10 NON OI �II O N co O O O � co I ED M,, of III O O m O Q) O O O N O N N O O N W 1r O N r r IX) - , M O c0 KItC W o � O W o 04 z U) O q)} N z > Z U)r m O > o O f7 Q O N Q U LLI z z Z W > W W U } } } d N W a a a w m > d d d W N z z Z W F m z O� o ILaa O O N cLD O Lo cN) G V V O 00 O I Ld C r- N LL CC) � N ILn W cl 00 I Il� IT M r 0000 V M N Cl) O co Cl) O m D) C 00 In } I- cn O It LL O V N M 'O ID 00 cY CA M O cD coO cf) m O N (D N In O V OO O N r, O N � Cl) LL LQ � N I� £s] N m E W U Z a m U z Z Z Z_ 3 w m O O O � N O C) D m O 0) 00 N In m r00 - N N I- O rl C) O r O O m c!J M m W co N VO' m (D M 00 C W W L > > CC: CL' W W C S O C w � C LL G W W F > > L • w w ; ? U U j�[CC Q Q C U U C U) W F F- U a z 2 LU w 0- 0 G}0 O W U) 0 w 0 O w IL 2 a U H w Z O O O N lh O O O M OD OO t (O M M ce) O O ( o O) (MD LLm N O W O O m m m m O O N v (n N co r O O W N 0000 O O N N O O I_ N 00 O O -11, OM 06 V)j U) (D (00 Ln � N I� O) CO I- — 00 N v L6 c`7 O Lo O O D) V' m O I- r- O O h C ID O' O N O O Cl) m ID 00 O O m N cD NO O M O O I� • 00 O 00 O N N O C4 c6 (n 0 0 m Lo m O O (D 00 0 cOD 00 r O O O N (O U5 W (n I, LL0 O O N lam[) V .r.. O ((DD r- N N Lo N v V (D 00000) a) OO O Ir cn 0 0 0 (D O O O O 00 ID co O m N co O O O (D 00 00 C0 12 (D Cl 0 0 O (D N-' 0 r- `0co LQ M� O V (D N — m (O n (D Da U) W J a � f > CL a U = U a 5 O U Z ❑ W LL U W U C a w~ (nw?w N U) > O z a W W 0 H in �W«s xa } w - U a m ' W W W a w l (~ o U Z O W W U)Z fa.) 2 W ON 2 } LU z U Q: W Y LL O M Z W Q Q U TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON NON -CITY CUSTOMERS WITH A 5/8 X 3/4" METER PROPOSED BASE RATE 0% INCREASE - RATE REMAINS AT 10.81 (INC. NO FREE WATER) PROPOSED COMMODITY 0% INCREASE - TIER 1 REMAINS AT 1.73 3% INCREASE IN TIER 2 FROM 1.85 TO 1.90 TS-17 ESTABLISH TIER 3 AT 2.10 (10% OVER TIER 2) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED 0 10.81 10.81 0.00 0.0 1,000 10.81 12.54 1.73 16.0 2,000 12.54 14.27 1.73 13.8 3,000 14.27 16.00 1.73 12.1 4,000 16.00 17.73 1.73 10.8 5,000 17.73 19.46 1.73 9.8 6,000 19.46 21.19 1.73 8.9 7,000 21.19 22.92 1.73 8.2 8,000 22.92 24.65 1.73 7.5 9,000 24.65 26.55 1.90 7.7 10,000 26.38 28.45 2.07 7.8 11,000 28.23 30.35 2.12 7.5 12,000 30.08 32.25 2.17 7.2 13,000 31.93 34.15 2.22 7.0 14,000 33.78 36.05 2.27 6.7 15,000 35.63 37.95 2.32 6.5 16,000 37.48 39.85 2.37 6.3 17,000 39.33 41.95 2.62 6.7 18,000 41.18 44.05 2.87 7.0 19,000 43.03 46.15 3.12 7.3 20,000 44.88 48.25 3.37 7.5 21,000 46.73 50.35 3.62 7.7 22,000 48.58 52.45 3.87 8.0 23,000 50.43 54.55 4.12 8.2 24,000 52.28 56.65 4.37 8.4 25,000 54.13 58.75 4.62 8.5 26,000 55.98 60.85 4.87 8.7 27,000 57.83 62.95 5.12 8.9 28,000 59.68 65.05 5.37 9.0 29,000 61.53 67.15 5.62 9.1 30,000 63.38 69.25 5.87 9.3 31,000 65.23 71.35 6.12 9.4 32,000 67.08 73.45 6.37 9.5 33,000 68.93 75.55 6.62 9.6 34,000 70.78 77.65 6.87 9.7 35,000 72.63 79.75 7.12 9.8 36,000 74.48 81.85 7.37 9.9 37,000 76.33 83.95 7.62 10.0 38,000 78.18 86.05 7.87 10.1 39,000 80.03 88.15 8.12 10.1 40,000 81.881 90.251 8.371 10.2 D D n a �f a D i J J