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HomeMy WebLinkAboutAnnual Reports - 5/1/2002d r' ;fit_ jII R40 IJ 1L,IN TOWN OF ORO VALLEY my 9?02Am10Q6 TOV 9 COUNCIL COMMUNICATION MEETING DATE: May 15, 2002 TO: HONORABLE MAYOR & COUNCIL FROM: Shirley Seng, Utility Administrator SUBJECT: Addendum to the Oro Valley Water Utility Commission 2002 Annual Report SUMMARY: On April 3, 2002 the Council accepted the Oro Valley Water Utility Commission 2002 Annual report. During a joint study session held on April 22" a, concerns were expressed regarding the compounding effect of the proposed rate increases. In follow-up discussions between staff and the utility's rate consultant, it was discovered that the compounding effect had been calculated incorrectly. This error had a significant impact on the proposed rate increases. By way of the Addendum, the Commission is submitting a revised financial scenario and proposed rate design for the Council's consideration. The revised financial scenario will produce a 4.9% revenue increase. The increase is proposed to be achieved by eliminating the 1,000 gallons of water currently included in the base rate. The base rate and commodity rates will not increase under this scenario. The percent increase realized by customers will vary depending on individual water usage; however, the increased dollar amount will be identical for every customer. Since completion of the Annual Report in March, more accurate information became available regarding projected customer growth and debt service payments. These changes were also included in the revised financial scenario. On May 1, 2002 the Town Council adopted Resolution No. (R) 02-35 which provided the Town's notice of intent to increase water rates and fees for the Oro Valley Water Utility and established a public hearing date of June 5, 2002. The Town Attorney has confirmed that this resolution is valid and does not require amendment. At the public hearing the Council may adopt the rate design of their choice so long as the increase is not greater than the increase identified in the rate report attached to the resolution. FISCAL IMPACT: Acceptance of the addendum has no fiscal impact Recommendations contained within the addendum will be brought to Council for action at the public hearing scheduled for June 5, 2002. COMMISSION RECOMMENDATIONS: The Water Utility Commission respectfully recommends that Mayor and Council accept the Addendum to the Oro Valley Water Utility Commission 2002 Annual Report. STAFF RECOMMENDATIONS: Staff concurs with the Water Utility Commission recommendation. ATTACHMENTS: 1. Addendum to the Oro Valley Water Utility Commission 2002 Annual Report TOWN OF ORO VALLEY COUNCIL COMMUNICATION SUGGESTED MOTION: I move to accept the Addendum to the Water Utility Commission 2002 Annual Report. Or I move to AL106 — �kter Utility Manager PAGE 2OF2 4, ,� ;F ; !I: tI Oro Valley Water Utility Commission 2002 Annual Report May 2002 On April 3, 2002 the Oro Valley Town Council accepted the Commission's Annual Report. During the joint study session held on April 22, 2002 concerns were expressed regarding the compounding effect of the proposed rate increases. In follow-up discussions between staff and the utility's rake consultant, it was discovered that the compounding effect had been calculated incorrectly. This error had a significant impact on the proposed rate increases. By way of this Addendum, the Commission is submitting a revised financial scenario and proposed rate design for the Council's consideration. The revised financial scenario will produce a 4.9% revenue increase. The increase is proposed to be achieved by eliminating the 1,000 gallons of water currently included in the base rate. The base rate and commodity rates will not increase under this scenario. The percent increase realized by customers will vary depending on individual water usage; however, the increased dollar amount will be identical for every customer. Since completion of the Annual Report in March, more accurate information became available regarding projected customer growth and debt service payments. These changes were also included in the revised financial scenario. Attachments to this Addendum include: ➢ Assumptions used to prepare financial projections ➢ Revised Preferred Financial Scenario B-5-C ➢ Revised Proposed Rate Design RS-BS-C ➢ Tables indicating impact to customers Revised Financial Scenario Scenario B-S-C The following are the assumptions used in preparing these projections: • Growth is based on 500 new residential customers in all 5 years. Golf courses will be removed from groundwater over 3 years beginning in FY 2004-05 - Stone Canyon & Vistoso Highlands golf courses removed in April 2005 - Sun City golf course removed during FY 2005-06 - El Conquistador golf courses removed during FY 2006-07 - El Conquistador 9-hole course will not be removed for these projections • Elimination of the 1,000 gallons of water currently included in the base rate with no changes to the base rate or commodity rates for FY 2002-03. • Two percent (2%) rate increases in FY 2003-04, 2004-05, 2005-06 and 2006-07. • Rate increases are effective at the beginning of each fiscal year. • Personnel costs only include 1 FTE in FY 2002-03. No new FTE's in any other years. • Personnel costs for COLA and merit increase 2.5% in FY 2002-03 and up to 5% in FY 2006-07 • Operations and maintenance costs increase annually by 2.28%, 2.34%, 2.38%, 2.42%, and 2.45% over the 5 year period. • CAP costs increase annually for excess water charges to the CAGRD. These charges decrease as golf courses are removed from groundwater. • No additional CAP water right acquisition assumed during 5 year period. • Debt service does not fall below the required 1.25:1 ratio. • The utility does not experience a loss for more than 2 consecutive years. • The minimum cash balances meet or exceed 15% of cash outlays excluding capital. • Retained earnings maintain a positive balance. • Utility to pay City of Tucson directly for CAP in FY 2002-03 • Bond issued in FY 2003-04 to pay Tucson balance of debt plus finance capital projects I,-m ((D N N U) 0 O O O r N O O N W V M N (O O M (h m O N H3 e3 fA 00 M a co W D) O LO co r co V Cl) N � M W M V ER fR EA � a °' w a OC F- o o QW O U o C m m r- m rn o o W F' N N M (D N N F IT O m W LL £ Cl)C7 a N Z U U Z O W o o co m _ M m rD o o F U N N (D (D o N N U d Z v 00 rn in rn ° Z W O N ri W } V it ea a O of QN r Q W Z O N co N o } W F• U Q w+ W %' O O LO O (D ((C O N N (D IT CDy J J F Q USN °CD ZCD N CT)O WZ N C Z fR fA H3 Q eo cmN W Q? � i U W LL F' c LL.WO �y W y E - } ® m(7W O a 0 W W o o y 02a ZU)Z o o c U LL U m 02 L 0 Pp d CO 6n. 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U UU a H 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 W N M C C fO t0 W N 01 O 0 C 0 C 0 OM d W r O VJ am o¢ Z o 0 0 0 0 0 0 Z Q N O M O COOOOOO CO N O O O w< af N W U) Q CO � v g W W M M fO aD V � �O M W O O O O O O o 0 0 0 0 0 00 00 0 ❑ w 0 a vi ❑ M N p O e O O d Z M O M O O G G M M O fA W Z F 0 0 0 0 0 0 0 0 0 O Z w O O O O O O c O O O J N N N M 0 0 Q cr M N O O O M N U M M o o M o M o 0 ❑ o e o 0 0 0 o o a wM N O O a ❑ O Q. O 0 O 0 O 0 0 0 0 0 0 0 C 0 0 0 0 0 W d o o m wo wai c o" ® J U N = o 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 N W F ui vi n v v C6 m m Z Z O O O LU N N ro m U° U 0 0 O 0 0 (Op M of <O6 W 001 tp � W W O O O O O O O O O O O O O O O O O O y o 0 0 o e o 0 0 0 ❑ D o o m M m m m o 0 w a W W 7 d o 0 o e o 0 0 0 0 U o 0 0 0 0 0 0 0 0 W 2 0 0 0 0 0 O~ Z o o ro n o� o d o J w o w m Q 0 D o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 W W M F N X X N MI;r W W W W d � M TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON CUSTOMERS WITH A 518 X 3/4" METER PROPOSED BASE RATE 0% INCREASE IN BASE RATE REMAINS AT $12.00 (INCLUDES 0 GALS) PROPOSED COMMODITY 0% INCREASE IN TIER 1 REMAINS AT $1.90 (0 - 10,000 GALS) 0% INCREASE IN TIER 2 REMAINS AT $2.35 (10,001 - 25,000 GALS) RS-B5-C 0% INCREASE IN TIER 3 REMAINS AT $3.00 (OVER 25,000 GALS) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED CUSTOMERS IN USAGE CATEGORY PERCENT OF CUSTOMER BASE 0 12.00 12.00 0.00 0.0 431 2.8% 1,000 12.00 13.90 1.90 15.8 574 3.7% 2,000 13.90 15.80 1.90 13.7 777 5.0% 3,000 15.80 17.70 1.90 12.0 1007 6.5% 4,000 17.70 19.60 1.90 10.7 1160 7.5% 5,000 19.60 21.50 1.90 9.7 1256 8.1% 6,000 21.50 23.40 1.90 8.8 1204 7.8% 7,000 23.40 25.30 1.90 8.1 1064 6.9% 8,000 25.30 27.20 1.90 7.5 950 6.2% 9,000 27.20 29.101 1.90 7.0 809 5.2% 10,000 29.10 31.001 1.90 6.5 701 4.5% 11,000 31.45 33.35 1.90 6.0 575 3.7% 12,000 33.80 35.70 1.90 5.6 494 3.2% 13,000 36.15 38.05 1.90 5.3 426 2.8% 14,000 38.50 40.40 1.90 4.9 351 2.3% 15,000 40.85 42.75 1.90 4.7 299 1.9% 16,000 43.20 45.10 1.90 4.4 241 1.6% 17,000 45.55 47.45 1.90 4.2 207 1.3% 18,000 4T90 49.801 1.90 4.0 183 1.2% 19,000 50.25 52.15 1.90 3.8 153 1.0% 20,000 52.60 54.50 1.90 3.6 139 0.9% 21,000 54.95 56.85 1.90 3.5 119 0.8% 22,000 57.30 59.20 1.90 3.3 101 0.7% 23,000 59.65 61.55 1.90 3.2 86 0.6% 24,000 62.00 63.90 1.90 3.1 76 0.5% 25,000 64.35 66.25 1.90 3.0 63 0.4% 26,000 67.35 69.251 1.90 2.8 57 0.4% 27,000 70.35 72.25 1.90 2.7 48 0.3% 28,000 73.35 75.25 1.90 2.6 44 0.3% 29,000 76.35 78.25 1.90 2.5 36 0.2% 30,000 79.35 81.25 1.90 2.4 36 0.2% 31,000 82.35 84.25 1.90 2.3 28 0.2% 32,000 85.35 87.25 1.90 2.2 30 0.22R. 33,000 88.35 90.25 1.90 2.2 21 0.1% 34,000 91.35 93.251 1.90 2.1 21 0.1% 35,000 94.35 96.25 1.90 2.0 16 0.1% 36,000 97.35 99.25 1.90 2.0 17 0.1% 37,000 100.35 102.25 1.90 1.91 15 0.1% 38,000 103.35 105.25 1.90 1.8 13 0.1% 39,000 106.35 108.25 1.90 1.8 10 0.1% 40,000 109.35 111.25 1.90 1.71 ill 0.1 Shaded area represents 64.2% of total customer base at 12/31101. TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE _ $18.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 10,000 GALLONS TIER 2 = $2.35 FOR 10,001 - 25,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 25,000 GALLONS GALLONS USEDIN 1MONTH SILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 N/A 18.00 N/A N/A 10,000 N/A 37.00 N/A N/A 25,000 N/A 72.25 N/A N/A 40,000 N/A 117.25 N/A N/A 50,000 N/A 1 147.25 N/A N/A TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1" METER BASE RATE _ $30.01 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 16,000 GALLONS TIER 2 = $2.35 FOR 16,001 - 27,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 27,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 30.01 30.01 0.00 0.0% 16,000 58.51 60.41 1.90 3.2% 27,000 84.36 86.26 1.90 2.3% 38,000 117.36 119.26 1.90 1.6 % 50,000 153.361 155.261 1.901 1.2% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1 1/2" METER BASE RATE _ $60.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 38,000 GALLONS TIER 2 = $2.35 FOR 38,001 - 64,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 64,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 60.00 60.00 0.00 0.0% 38,000 130.30 132.20 1.90 1.5 % 64,000 191.40 193.30 1.90 1.0 % 90,000 269.40 271.30 1.90 0.7% 125,000 1 374.40 376.30 1.90 0.5% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 2" METER BASE RATE = $96.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 80,000 GALLONS TIER 2 = $2.35 FOR 80,001 - 134,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 134,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 96.00 96.00 0.00 0.0% 80,000 246.10 248.00 1.90 0.8% 134,000 373.00 374.90 1.90 0.5% 275,000 796.00 797.90 , 1.90 0.2% 325,000 946001 947901 1.90 0.2% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3" METER BASE RATE = $192.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 186,000 GALLONS TIER 2 = $2.35 FOR 186,001 - 311,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 311,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 192.00 192.00 0.00 0.0% 100,000 380.10 382.00 1.90 0.5% 186,000 543.50 545.40 1.90 0.3% 311,000 837.25 839A5 1.90 0.2% 450,000 1254.25 1256.151 1.90 0.2% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 4" METER BASE RATE = $300.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 169,000 GALLONS TIER 2 = $2.35 FOR 169,001 - 283,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 283,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 300.00 300.00 0.00 0.0% 100,000 488.10 490.00 1.90 0.4% 169,000 619.20 621.10 1.90 0.3% 283,000 887.10 889.00 1.90 0.2% 350,000 1 1088,101 1090.00 1.90 0.2% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 6" METER BASE RATE = $600.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.35 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 600.00 600.00 0.00 0.0% 1,000,000 2498.10 2500.00 1.90 0.1% 1,800,000 4018.10 4020.00 1.90 0.0% 3,000,000 6838.10 6840.00 1.90 0.0% 5,000,000 1 2834.20 12836.10 1.90 0.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 8" METER BASE RATE = $1,200.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.35 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.00 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 1200.00 1200.00 0.00 0.0% 1,000,000 3098.10 3100.00 1.90 0.1% 1,800,000 4618.10 4620.00 1.90 0.0% 3,000,000 7438.10 7440.00 1.90 0.0% 5,000,000 1 3434.20 13436.101 1.90 0.0% GOLF COURSE CONSERVATION RATES TO BECOME EFFECTIVE WHEN USAGE EXCEEDS THE ARIZONA DEPT. OF WATER RESOURCES ANNUAL ALLOTMENT. TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2002 ORO VALLEY TOWN COUNCIL Paul Loomis, Mayor Fran LaSala, Vice Mayor Richard Johnson, Council Member Bart Rochman, Council Member Werner Wolff, Council Member ORO VALLEY WATER UTILITY COMMISSION Michael Caporaso, Chair Leo Leonhart, Vice -Chair Gordon Byrnes, Member John Dohogne, Member Gregg Forszt, Member Jennifer Gillaspie, Member LaQuita Stec, Member Wendell Yoder, Finance Subcommittee TOWN STAFF Chuck Sweet, Town Manager Alan Forrest, Water Utility Director Shirley Seng, Utility Administrator David Andrews, Finance Director Ron Kozoman, CPA, Consultant Special recognition to OVWU staff who provided information, graphics, photos and, most of all, their time to assist in the preparation of this report: Mary C. Kobida Iris Chaparro Edgar Rivera George Kendrick Carolyn Schneider Jeff Kane Charles Soper Robert Jacklitch SECTION TITLE List of Acronyms Index of Appendices Executive Summary Preferred Scenario Renewable Water Resources Renewable Water Resources Surcharge Conservation Water Quality Water Supply Revenue Requirements O & M Debt Service Requirements Capital Improvements Recommendation on Water Rates Financial Summary Alternate Financial Scenarios Conclusion Appendices TABLE OF CONTENTS TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2002 PAGE i ii 1 5 7 11 12 13 16 18 19 20 23 25 26 27 LIST OF ACRONYMS TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2002 LIST OF ACRONYMS USED IN THIS REPORT ADEQ Arizona Department of Environmental Quality ADWR Arizona Department of Water Resources AF Acre Feet CAGRD Central Arizona Groundwater Replenishment District CAP Central Arizona Project CCF One Hundred Cubic Feet (1 ccf = 748 gallons) CIP Capital Improvement Plan COLA Cost of Living Allowance EPA Environmental Protection Agency FTE Full Time Employee FY Fiscal Year GOVAC Greater Oro Valley Arts Council GPCD Gallons Per Capita Per Day GPM Gallons Per Minute IGA Intergovernmental Agreement IOC Inorganic Compound MCL Maximum Contaminate Level MDWID Metropolitan Domestic Water Improvement District NAS National Academy of Science NDWAC National Drinking Water Advisory Council O&M Operations & Maintenance OVWID#1 Oro Valley Water Improvement District #1 OVWU Oro Valley Water Utility POE Point Of Entry PQL Practical Quantitation Limit PVC Polyvinyl Chloride RWR Renewable Water Resources SARWMS Southern Arizona Regional Water Management Study SCADA Supervised Control And Data Acquisition SOC Synthetic Organic Compound TCE Trichloreoethylene TTHM Total Trihalomethanes VOC Volatile Organic Compound pCi/L Picocuries Per Liter ppb Parts Per Billion ppm Part Per Million i INDEX OF APPENDICES TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT APRIL 2002 APPENDIX A. Preferred Financial Scenario B-5 1) Assumptions 2) Summary 3) Enterprise Fund 5-Year Projected Net Income Statement 4) Enterprise Fund 5-Year Projected Debt Service Statement 5) Enterprise Fund 5-Year Projected Cash Flow Statement B. Water Quality 1) Water Quality Monitoring Schedule for Year 2001 2) Water Quality Testing Results C. Water Supply 1) Static Water Level Measurements D. 5-Year Capital Improvements Plan 1) Existing System Improvements 2) Expansion Related Improvements E. Proposed Rate Schedules 1) Proposed Rate Schedules 2) Tables for Monthly Charges F. Alternate Financial Scenario B-3 1) Assumptions 2) Summary 3) Enterprise Fund 5-Year Projected Net Income Statement 4) Enterprise Fund 5-Year Projected Debt Service Statement 5) Enterprise Fund 5-Year Projected Cash Flow Statement 6) Table for Monthly Charges G. Alternate Financial Scenario B-2 1) Assumptions 2) Summary 3) Enterprise Fund 5-Year Projected Net Income Statement 4) Enterprise Fund 5-Year Projected Debt Service Statement 5) Enterprise Fund 5-Year Projected Cash Flow Statement 6) Table for Monthly Charges H. Utility Statistics for Calendar Year 2001 ii 9 EXECUTIVE SUMMARY TOWN OF ORO VALLEY WATER UTILITY COMNUSSION ANNUAL REPORT APRIL 2002 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 fifth Annual Report. It includes recommendations related to water conservation, revenue requirements, system operations and maintenance, debt service, a five-year capital improvements plan, rate adjustments and renewable water supplies. It also provides an overview of the utility's accomplishments during the past year. This Executive Summary contains a briefing on the implementation of the recommendations presented in the 2001 Annual Report as well as new recommendations specific to water > issues facing the Town in FY 2002-2003 and beyond. Explanations and financial analyses > that are more detailed may be found in the body of the report and the appendices. WATER RATES The rates recommended by the Commission last year were adopted by Mayor and Council in July 2001. Implementation of those rates provided a 7% revenue increase resulting in a 6.7% rate increase for the average residential customer. The Commission's preferred revenue scenario and rate design for the upcoming fiscal year are discussed in detail in the body of the report. Based on the analysis of five year projected expenses and required revenue, the Commission recommends the following rate structure for FY 2002-2003: ➢ Elimination of the "free" 1,000 gallons contained in the base rate. ➢ The monthly base rate to remain unchanged ranging from $12.00 to $1200.00 per month depending on the meter size. ➢ The Tier 1 commodity rate to remain unchanged at $1.90 per each 1,000 gallons for usage up to and including 10,000 gallons. ➢ The Tier 2 commodity rate to increase to $2.61 per each 1,000 gallons for usage between 10,001 - 25,000 gallons. This represents an increase of 26 cents per 1,000 gallons. ➢ The Tier 3 commodity rate to increase to $3.33 per each 1,000 gallons for all usage over 25,000 gallons. This represents an increase of 33 cents per 1,000 gallons. RENEWABLE WATER RESOURCES During 2001, the Town made significant strides toward its goal of serving future demands substantially with renewable water resources. Acting on its Renewable Water Resources (RWR) Plan completed in October 2000, the Town launched a vigorous effort to identify and secure new sources of renewable water that will ensure meeting the projected demand of 17,000 acre-feet (AF) by the year 2030. Specifically, on November 2, 2001, the Town approved a settlement agreement with the City of Tucson (Tucson) that provided rights to an additional 4,454 AF of CAP water. Additionally, based on the settlement agreement, the water utility estimates its annual entitlement to treated wastewater effluent will range from an initial 1,700 AF to a projected 4,000 AF in 2030. The Town also anticipates acquiring an additional entitlement to CAP water based on the reallocation of approximately 60,000 AF of unallocated CAP water with the State. The Town's estimated share of CAP reallocation is approximately 3,357 AF. The additional CAP allocations can be utilized to serve future potable water demands, non -potable uses or be recharged within the basin to offset overdrafts or for water banking credits. These developments mark a significant first step toward full implementation of a Non - Potable Turf Irrigation Alternative employing RWR (Phase 1 of the RWR Plan). At the present time, the Town is retaining the two options for turf water as identified in the RWR Plan. These are identified as Options A and B and represent utilization of CAP and reclaimed water respectively. It is anticipated; however, that the Town will move first to exercise Option B based on various logistical considerations that favor effluent utilization within a shorter timeframe than CAP water. Nevertheless, it is anticipated that meeting the projected water demand for the Town at build -out will require full utilization of all available renewable water supplies including both effluent and CAP water sources. RENEWABLE WATER RESOURCES SURCHARGE 1 Last year the Commission recommended that the utility implement a renewable water resources surcharge. The surcharge will allow the utility to set aside additional funds to provide debt service for the bonds that will be issued to finance capital costs of the renewable water system. A surcharge will facilitate accounting for and segregation of funds dedicated to construction and financing of the system. As sudden, large rate increases can occur in the J 2 first years of payments for new projects, initiation of a surcharge at this time can smooth annual increases in future years and lessen potential "rate shock". The consulting firm C112M HILL submitted a scope of work and proposal to research, evaluate, and implement a renewable water resources surcharge. Although this report will not contain all the findings of their work, it is anticipated that a proposed surcharge will be recommended to the Town Council concurrently with the proposed water rates for FY 2002- 2003. CONSERVATION The water conservation newsletter, Oro Valley Water Ways, was included in water bills every other month. The utility renewed its membership with the Water Conservation Alliance of Southern Arizona (Water CASA) which has continued to provide the utility with welcome packets and conservation retro-fit devices given to customers at no charge. Utility staff and Commission members stationed a booth at the GOVAC Jazz Festival to promote water conservation by speaking directly to residents and providing them with conservation related pamphlets directed at all ages. The Commission recommends that work continue this coming year on the possibility and/or feasibility of changing the building code with regard to hot water re -circulating pumps. Additionally, it is their recommendation that the short-term conservation program be continued throughout the coming year. The conservation subcommittee, along with staff, will begin working on the recommended long-term conservation program in the near future. Both conservation programs are discussed in detail in the body of the report. DEBT FINANCING A Last year, the Commission recommended a bond issue to finance the CAP water rights to be j acquired from the City of Tucson. At the time of this writing, it had not yet been determined if the utility would sell bonds or if it would obtain financing directly from the City of Tucson. > The impact of both scenarios was explored during the rate setting process for FY 2002-2003. The utility needs to construct capital improvements necessary to meet existing demands; however, the required infrastructure is costly. The financial analysis prepared for this report indicated that to build the infrastructure on a "pay-as-you-go" basis would create a negative cash flow for the utility. As a result, the Commission is recommending that the Town finance the capital costs in order to spread those costs over twenty years which will allow the utility to keep future annual rate increases below ten percent. J J WATER QUALITY The utility experienced only one water quality violation in calendar year 2001 for Total Coliform bacteria. The violation occurred in the Countryside service area in August. The system was disinfected and retests were negative for the bacteria. Of the hundreds of water quality samples tested annually, no contaminant was found to exceed the MCL other than that stated above. In September of 2001, the National Drinking Water Advisory Council (NDWAC) concluded that the Environmental Protection Agency (EPA) had done a "credible" job of calculating the cost to water providers to implement a reduced drinking water standard for arsenic. The EPA's new ruling became effective February 22, 2002 with January 1, 2006 established as the compliance date for water providers to ensure that there is no more than 10 parts per billion (ppb) of arsenic in the water they deliver to customers. The arsenic testing performed in the Oro Valley service area resulted in "no detect" levels. The Countryside service area testing resulted in a level of 1.3 ppb of arsenic, still well below the new EPA standard. WATER SUPPLY Groundwater levels continued to decline placing added emphasis on the importance of delivering renewable water supplies for both potable and non -potable uses. During calendar year 2001, the water production system operated at an average of 51.6% of its capacity while during peak months the system operated at an average of 62.9% of its capacity. It is important to note that during peak hours in the summer months, the system frequently operated between 95% - 100% of its capacity. With the addition of a new well planned for the coming year, the increased capacity from two replacement wells and the addition of over two million gallons of reservoir capacity, the water production system should not be as stressed in the coming years. Removal of golf courses from the potable water system will also increase capacity for domestic use, thus reducing the number of new wells that will need to be drilled in the future. 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 3 Council for their consideration, direction and guidance. J J J TOWN OF ORO VALLEY WATER UTILITY COMMISSION ANNUAL REPORT PREFERRED 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 B-5) 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 B-5 are as follows: ' ➢ Revenue increases are proposed only when necessary and in an amount no more than necessary. ➢ Projected expenditures were adjusted for inflation, additional personnel, O&M, debt service 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 in FY 2004-2005 will be financed by bond funds to be sold in FY 2003-2004. ➢ The acquisition of CAP water rights will be financed by payment directly to the City -� of Tucson until FY 2003-2004. This debt will be refinanced and combined with the sale bonds for capital improvements. ➢ Golf courses are expected to be removed from groundwater over a period of years l commencing in FY 2004-2005. ➢ Revenue projections include a residential customer growth factor of 575 in all five _) years. The FY 2002-2003 figure was projected based on anticipated growth for FY 2001-2002. The figure for subsequent years is a conservative estimate based on the more recent trend in growth within the Town. ➢ Expansion related revenue and expenditures are not considered for purposes of } establishing rates. They are discussed separately in the report. J J J 5 J ➢ Alternative water related revenue and expenditures are not considered for purposes of establishing potable water rates. They are discussed separately in the report. Revenue increases occur in each of the five fiscal years in Scenario B-5 projections. These increases allow the utility to anticipate changes in the fixture revenues and expenditures as described at the beginning of this section, including the loss of revenue when the golf courses are phased off groundwater. It is important to note that this scenario is valid only if financing of CAP water rights and capital improvements occur in FY 2003-2004. Scenario B-5 proposes generating needed revenue from eliminating the "free" 1,000 gallons included in the base rate and modification of the second and third tiers of the commodity rates. Projections in years 3, 4 and 5 include decreases in revenue when golf courses are no longer served groundwater. However, the utility will receive revenue from providing the golf courses a renewable source of water. It will be difficult to project what revenue will be realized from providing renewable water sources to the golf courses until cost estimates to construct the infrastructure are developed and it is determined if there will be financial partnering with any other water providers. Therefore, revenue projections relating to renewable water resources have not been included in Scenario B-5. The data for the five year projections assumes that both personnel and related costs will increase annually beginning with 2.5% in the first year and gradually increasing to 5% in the fifth year. The O&M costs are assumed to increase annually based on inflation factors received from the Arizona State Auditor General's office. In each year, the inflation factor is less than 3%. Allowances have been included for power costs and increases in depreciation relating to the addition of infrastructure. CAP water and recharge costs are scheduled to increase; however, the costs are established by state agencies over which the Town has no control. CAGRD costs increase annually and then decrease as golf courses are phased off groundwater. Interest and principal payments on outstanding bonds will also increase over the five year period as a result of additional financing for CAP water rights and capital improvements. Financial analysis of Scenario B-5 indicates that it meets all of the required financial criteria. Retained earnings maintain a positive value and the net income of the utility does not reflect a loss for more than two consecutive years. Additionally, the net revenues provide debt service coverage in excess of 1.0 times 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 excluding capital expenditures. The FY 2002-2003 projected Income Statement, Debt Service Statement and Cash Flow Statement for Scenario B-5 may be found in Appendix A. The Commission has provided two alternative financial scenarios for the Mayor and Council's consideration. Projected Income Statements, Debt Service Statements and Cash Flow Statements for Scenarios B-3 and B-2 may be found in Appendix F and Appendix G respectively. 6 RENEWABLE WATER RESOURCES The Southern Arizona Regional Water Management Study (SARWMS), a cooperative effort involving the Town, three other local water providers and the US Bureau of Reclamation, was completed in August 2000. The final report provided information on the cost of several prospective CAP water treatment methods. Slow sand filtration treatment turned out to have the lowest cost — less than one-fourth the cost of conventional treatment. Twin Peaks Pumping Plant In August 2001, local partners joined with the US Bureau of Reclamation to participate in the implementation of a CAP water quality treatment study. In this pilot study, a slow sand filtration system was used as a pretreatment method to a membrane filtration system. The system was installed at the Twin Peaks Pumping Plant on the CAP canal just north of Tucson. This testing procedure was used to evaluate the quality of water produced by this treatment methodology and to verify the cost of treatment. The initial results of this pilot project have demonstrated the effectiveness of slow sand filtration as a pretreatment to reverse osmosis (the standard method for removing salt). The final report and summary of findings is expected to be completed by June 2002. This coming year, the Town will continue to address tasks prerequisite for implementation of RWR Phase 1. Specifically, the Town will be implementing various interagency agreements related to the delivery of its newly acquired assets. Additionally, various conceptual studies will be performed by a consultant. These studies will involve issues related to alternative delivery locations, user/demands, hydraulics, pipeline routing and alignment, water quality, constructability, and customer impacts of the Non -Potable Turf Distribution System. The consultant will prepare preliminary construction cost estimates, assess the regulatory framework, and develop an implementation plan and schedule. A public meeting will be held to discuss findings of the consultant report. Other work that has been tasked to consultants includes preparation of revised water resource estimates for the service area. This is expected to provide important information particularly related to the estimate of net natural recharge, which is a key variable in determining the safe yield for the aquifer. During calendar year 2002, the Commission's RWR Subcommittee will assist the water utility in reviewing the Phase 1 assumptions that led to the formulation and selection of Options A and B. The subcommittee will also review the work products of consultants and assess impact of the conclusions and recommendations presented on the RWR Plan with the goal of the eventual preparation of a Master Plan for RWR. Figure 1 compares the water demands for both potable and non -potable uses in calendar year 2001 versus the projected demands in calendar year 2030. Figures 2 and 3 compare the composition of the water supply sources proposed to meet these demands in years 2001 and 7 el C_ [ 0 0 0 0 0 0 0 0 0 `O N op (JV) puuuiaQ 0 M 0 0 N I ei 00 U o zz04 9 M w 10 2030 respectively. It should be noted; however, that despite the ownership of these various supply sources, considerable work and infrastructure will be required to complete delivery of these supplies to their respective points of use. It is important to emphasize that despite the Town's possession of these resources, at the present time they cannot be accessed. So the existing water demand must be served by means of the Town's municipal well field, with the exceptions of areas served by MDWID and Tucson Water via cooperative arrangements. RENEWABLE WATER RESOURCES SURCHARGE The Commission's 2001 Annual Report recommended to the Mayor and Council the establishment of a renewable water resources surcharge payable by all water consumers who will ultimately benefit from the future use of a renewable water source. Planning and implementation of a separate water rate surcharge to help finance the renewable water system is a priority for the utility in FY 2002-2003. The implementation of a surcharge for all water users is needed as soon as possible to build reserves to fund infrastructure costs, including debt service, for the development and delivery of renewable water resources. CH2M HILL, a consulting firm under contract with the Town, > is currently preparing a separate study to review the issues associated with implementing the onsite non -potable renewable water distribution system infrastructure needs, associated costs 7 and potential rate impacts. The anticipated renewable water resources surcharge will be billable to all water users, not only golf or turf users. The renewable water system will extend the life of available supplies of potable water for all water users. A separate commodity rate for non -potable sources is premature at this time since deliveries of renewable water are not expected for several years. The utility's existing impact fee for renewable water resource development will be reviewed at a later date, but that fund presently does not have sufficient balances or anticipated revenues to entirely finance the new system. The Town's overall policies relating to rates, impact and system development fees will be part of a comprehensive master plan financial study in the near future. The goal of that plan will be to develop recommended potable and non -potable pricing that balances the overall financial requirements of the water system with incentive pricing that encourages customers to voluntarily use the non -potable water sources. With the immediate objective of implementing the surcharge to start building capital reserves and the constraint that the overall financial plan for the utility's water system will not be ready in a few months, the priority is to achieve approval and implementation of a customer surcharge in the next fiscal year. Refinements to the level of the surcharge will become part of the annual water rate setting process. The Commission expects to forward a recommendation on the surcharge to Mayor and Council concurrently with the proposed water rates for FY 2002-2003, 11 CONSERVATION A short-term or ongoing conservation program can provide customers with information to assist them in understanding the importance of conserving water. During FY 2001-2002 the conservation program made significant progress toward its short-term goals. The Commission recommends that the utility continue to improve and expand these conservation efforts. The O&M expenditures for conservation are proposed to remain the same as last fiscal year for a total of $35,000 in FY 2002-2003. This will allow the utility to maintain its existing short-term conservation program which includes the following: ➢ Membership in Water CASA ➢ Employ a full time FTE to follow-up and maintain the conservation program by targeting commercial and public facilities and to assist with customer education, information and onsite visits or audits. Estimated salary of the FTE is $35,000 annually. ➢ Bi-monthly publication of the Oro Valley Water Ways conservation newsletter. ➢ Purchase educational materials such as workbooks, activity books and crayons for students. ➢ Provide a conservation booth at GOVAC events such as Arts & Crafts Fair, Jazz Festival, and Fourth of July celebrations to distribute conservation information, educational materials, retrofits, etc. ➢ Invite Parks & Recreation and other Town departments to participate in discussions and provide input as it relates to conservation issues with new parks. ➢ Continued modification of the water rate structure to promote conservation. ➢ Participate with the Town library to provide conservation and educational materials to Town residents. ➢ Miscellaneous/Other (workshops, training, other Town events that may arise) As referenced above, the Commission recommends that the utility establish and employ a full-time conservation staff position to begin implementing long-term goals, to maintain short-term goals and begin searching for additional funding through grants, donations, etc. This position was included as a long-term conservation goal in last year's annual report. The Commission reiterates its recommendation that a long-term conservation program be established to provide objectives and guidelines to minimize the decline of groundwater levels and to ensure that the Town has established codes where necessary for the protection of our water resources and the enforcement of regulations. The following are proposed long- term issues to be reviewed by the Commission in future years: ➢ Evaluate alternative funding sources such as grants. ➢ Promote and help facilitate usage of CAP and/or reclaimed water use in guidance with water utility operations. ➢ Evaluate the cost of establishing a toilet, front loading washing machine and/or hot water re -circulating pump rebate program. ➢ Monitor and maintain water infrastructure in a manner that will set an example of conservation for the customers. 12 -� ➢ Review existing plumbing codes to identify which conservation oriented modifications are in need of change. ➢ Evaluate the options to establish a mobile landscapetirrigation unit to audit irrigation systems for residents via obtaining sponsorship for the unit. ➢ Assist the water utility to achieve regulatory compliance with the Arizona Department of Water Resources (ADWR) regulations and enforcement as it relates to the Town's GPCD, assured water supply designations and replenishment requirements through the CAGRD and groundwater decline. It is the intent of the Commission to include these issues in the work plan for FY 2002-2003 as well as future years. The Commission looks forward to returning to Mayor and Council with specific recommendations regarding proposed programs. WATER QUALITY ' The mission of Oro Valley Water Utility is to provide assurance that drinking water is safe, clean, and meets all local, state, and federal drinking water health standards. In order to protect public health, the United States Environmental Protection Agency (USEPA) sets drinking water standards which all public water providers must meet. Regular monitoring and testing of the water supply is required to assure customers are provided with safe water in their homes and businesses. The USEPA regulations require water providers to regularly > test public drinking water supplies for bacteria and other microorganisms, and numerous ? other natural -occurring or man-made organic and inorganic constituents. Over the course of a year, the utility collects hundreds of water samples from numerous sites including groundwater wells, reservoirs and pumping stations, and from locations throughout the water distribution system specially selected to represent the entire water delivery system. Each sample is tested for numerous constituents, which may include bacteria, minerals, metals, or man-made chemicals. The USEPA sets national drinking water standards, which are administered in Arizona by the Arizona Department of Environmental Quality (ADEQ). The utility provides all water quality testing results to ADEQ and works closely with that agency to ensure all federal and state standards are maintained. It is important to remember that the detection of a contaminant in drinking water does not necessarily represent a threat to public health. Current technology allows water utilities to detect extremely low levels of contaminants in drinking water. Groundwater is the source of all of the drinking water delivered by Oro Valley Water Utility. All drinking water, including bottled water, may reasonably be expected to contain at least small amounts of some contaminants. Oro Valley's groundwater contains dissolved minerals and organic compounds, which have been leached from the rock, sediments, and plant materials through which the water traveled. One would expect to find minerals such as calcium and magnesium, chloride, bicarbonate, and sulfate, and metals such as iron, copper, arsenic, and lead, which may be either beneficial or harmless at low concentrations, but harmful at high concentrations. In addition to these naturally occurring contaminants, our groundwater may contain contaminants resulting from human, industrial or domestic activities. For this reason, 13 water utilities must currently monitor for approximately 90 regulated and 48 unregulated contaminants. - , Three inorganic contaminants of special interest are arsenic, fluoride, and nitrate. Fluoride and arsenic are naturally occurring and tend to increase as water is drawn from greater i depths. Nitrate on the other hand is typically found in higher concentrations near the surface of the groundwater table because it is frequently associated with fertilizer use, septic tanks - and other human activities. Nitrates in drinking water at levels above 10 parts per million -7 (ppm) could pose a health risk for infants and the elderly. High nitrate levels in drinking water can cause blue baby syndrome. The concentrations for nitrates in Oro Valley's water - ranges from "no -detect" to 3.8 ppm. Fluoride is found naturally in our drinking water. Oro _j Valley's groundwater has fluoride at low concentrations ranging from 0.15 to 0.58 ppm, well ,l below the EPA limit of 4.0 ppm. Fluoride at a level of 1.0 ppm has been shown to help prevent tooth decay. In concentrations substantially greater than that, fluoride may be harmful. An extensive discussion on arsenic is presented later in this report. The level of water hardness varies from one well to another. Hardness is a measurement of } the concentration of calcium and magnesium in the water. If the hardness of water is more than 120 milli ams er liter m gr p ( g/1), then a water softener would probably reduce the formation of scale within a household and make soap lathering easier. The hardness levels in ? Oro Valley's water ranges from 32 mg/l to 230 mg/l. Other contaminants that may be present in source water are microbial contaminants, such as viruses and bacteria, which may come from sewage, agricultural livestock, and wildlife. Total Coliform is an indicator to more closely monitor the distribution system for possible > unwanted bacteria. Public notification to affected customers is required if positive sample 7 results exceed more than one sample per month. Two samples taken in the Countryside service area in August 2001 exceeded the Total Coliform limit which constituted a violation. The utility adds chlorine as a precaution against bacterial growth in its distribution system. } Inorganic Compounds (IOC), such as salts and metals, can be natural occurring or result from urban stormwater runoff, industrial or domestic wastewater discharges, oil and gas production, mining, or farming. Testing for contaminants in this group resulted in "no detect" with the exception of fluoride and nitrate. Fluoride and nitrate levels were within the } limits set by USEPA as discussed above. } Synthetic Organic Compounds (SOC) include pesticides and herbicides, which may come from a variety of sources such as agriculture, urban stormwater runoff, and residential uses. None of these contaminants have been found in Oro Valley's water supply. Volatile Organic Compounds (VOC) include such compounds as trichloroethylene (TCE) and tetrachloroethylene (PCE). These compounds are volatile like alcohol or gasoline and are made up of relatively small molecules, that allow them to migrate readily through soils. Solvents such as TCE and PCE have been commonly used for cleaning machine parts and for Jdry cleaning. Despite the vulnerability of groundwater to such contamination, Oro Valley's J potable supplies are free of such contamination. J J 14 J n r� Total Trihalomethanes (TTHMs) are formed when chlorine combines with naturally occurring organic material in water. Since the level of organic matter in our groundwater is extremely low, these compounds are found at very low concentrations. The highest TTHM result in any system sample was 0.0033 ppm. The standard is 0.8 ppm. Adjusted Gross Alpha is a measure of radioactivity due to naturally occurring minerals in groundwater. The standard for gross alpha radioactivity is set at 15 picocuries per liter (pCi/1). The range for Oro Valley's water supply is "no detect" to 4.3 pCi/l. Most lead and copper contamination occurs within the water distribution system and is caused by corrosive water coming into contact with plumbing materials that contain lead. The Lead and Copper Rule established action levels for lead (0.015 mg/1) and copper (1.3 mg/1). Exceedences of these levels trigger "action" to be taken by the system to determine compliance and community reporting. Samples are taken from within the customer's residence. Sampling in 2001 had results for lead as "no detect" and the highest copper level was 0.33 mg/l. The groundwater delivered by Oro Valley Water Utility meets all drinking water standards without treatment. However, approximately 0.5 ppm of chlorine is added to the drinking water supply at well sites, reservoirs and other facilities to provide assurance that water delivered to customers will remain free of microbiological contamination. Because of chlorine's effectiveness in killing germs, disinfection with chlorine provides critical protection for drinking water consumers. Around the world, millions of people suffer from waterborne diseases due to microorganisms in their drinking water. In the United States, we have few waterborne disease outbreaks because the water is very carefully monitored for disease -causing organisms. Most water providers add a chlorine -based disinfectant to the drinking water supply to kill existing microorganisms. The word arsenic conjures negative thoughts from mystery novels and plays with Old Lace. Yet, arsenic is a naturally occurring mineral that is predominately found in the western United States. Arsenic in drinking water has been reported in media reports off and on during the past year as the federal government has debated the appropriate amount of arsenic permissible in water. At present, 50 ppb of arsenic is allowed under the Safe Drinking Water Rules. Recent EPA studies raised questions about the amount of risk in even lower quantities of arsenic in water (i.e. 10 ppm). In September 2001, the National Academy of Sciences (NAS) issued its report on the health effects of ingested arsenic. NAS was charged with reviewing and updating the 1999 National Research Council report on arsenic health effects that was used in drafting the 10 ppb proposal. The NAS examined four epidemiological studies that were published after the 1999 report was released. Three of those confirmed an association between internal cancer and arsenic exposure via drinking water. The fourth study was deemed unusable because of the way it was conducted. The American Water Works Association and others had expressed 15 J - concern about the original 1999 study because it did not factor in lifestyle influences, such as smoking. However, more recent studies take such factors into account. NAS believes "more research is needed on the possible association between arsenic exposure i and cancers other than skin, bladder, and lung, as well as non -cancer effects, particularly impacts on the circulatory system (high blood pressure, heart disease, and stroke), diabetes, and reproductive outcomes." - In September 2001, the National Drinking Water Advisory Council (NDWAC) concluded that EPA had done a "credible" job of calculating the cost of a 10 ppb standard. Under the EPA's new ruling, water providers are to ensure by January 2006 that there is no more than 10 ppb of arsenic in the water they deliver to customers. In July and November of 2001, Oro Valley Water Utility completed arsenic monitoring at all points of entry (POE) to the water system to determine the impact of this new standard. The Countryside system, under the state's Monitoring Assistance Program, reported a level of 1.3 ppb of arsenic. The 19 POE's in Oro Valley system reported "no detect" for arsenic by Turner Laboratory. A "no detect" is defined as Not Detected at or above the Practical Quantitation Limit (PQL). The PQL is 5 ppb. At this time, any result reported below the PQL by Turner Laboratory would be considered an "estimated concentration". A complete listing of all contaminants that the utility tests for and the most recent test results may be found in Appendix B. WATER SUPPLY The aquifer beneath the Town of Oro Valley is currently the sole source of water resources for potable and non -potable uses. Non -potable uses include turf irrigation of golf courses and parks. The current state of the aquifer is affected by long-term and short-term rates and distribution of groundwater withdrawals and recharge. Groundwater withdrawals occur at the active water supply wells owned and operated by the Town and some privately owned wells. Natural recharge occurs from the infiltration of surface runoff near the mountain fronts of the Santa Catalina and Tortolita Mountains and the stream beds of Big Wash, Canada Del Oro Wash and small washes in the area. Current water demands supplied by withdrawals of local groundwater resources have outpaced groundwater recharge resulting in a local water deficit. It is estimated that average annual recharge at the local mountain fronts and stream channels total about 5,000 to 6,000 acre-feet less than the amount withdrawn in 2000. Over the past several years, dry conditions have persisted with less than normal precipitation and runoff Not only have the dry conditions resulted in less recharge, they have resulted in greater water demands which have further exacerbated the current deficit. As a result, marked water level declines at wells have been experienced. Rates of decline over various time periods are provided in Appendix C. The largest rates of decline occurred in the central east portion of the water service area. 16 This area has the largest concentration of high capacity wells. The table below shows the distribution of measured rates of decline in feet per year from 1999 to 2001. ORO VALLEY SYSTEM Time Period 1 Year 3 Years Historic (>10 yrs) Average Annual 6.7 ft/yr 6.7 ft/yr 1.9 ft/yr Decline Range 0.7ft. —13.Oft. 2.1ft. —13.Oft. 0.6 ft. — 3.8 ft. When we look at water levels over the ` long-term (10 — 30 years), we have f 4i seen an average annual decline rate of about 2 feet per year within Oro h rt Valley. This reflects the relatively low _ water demands over this period and more typical rainfall patterns. However, recent years have seen an increase in groundwater withdrawal is 43 resulting from an increase in water a- demand. Water demands have _._ . r doubled between 1990 to 2000 from about 4,300 to over 9,000 acre-feet ne per year. Continued growth is u'_ expected for Oro Valley, however, at s^ a slower rate than we experienced 'Q from 1990 to 2000. Current demand �q. projections for the year 2030, ap anticipated build out date of the E1,VLANA'IION service area, approach 17,000 acre- feet per year. Over this period, P Y alternative water resources including reclaimed water and CAP water will supplement groundwater resources to meet demands. These alternative water resources will allow turf irrigation with groundwater resources to be greatly reduced or eliminated and provide access to renewable water resources for domestic purposes. Demands supplied by alternative water resources will likely approach 8,000 to 13,000 acre-feet per year or greater, reducing groundwater demands in 2030 dramatically. Static groundwater level measurements taken in January and February of this year indicate an average decline of 6.7 feet. Current system demand coupled with the lack of substantial natural recharge due to minimal snow and rainfall may be a factor for the decline in groundwater levels. Detailed information on individual wells may be found in Appendix C. 17 7 .j REVENUE REQUIREMENTS Water Utility Enterprise Fund: The Commission and Town staff, in conjunction with a rate consultant, analyzed the revenue and cash flow requirements necessary to operate and maintain the system, funds needed for capital improvements and debt service payments for outstanding bonds. Revenues and cash flows were projected for FY 2002-2003 based on anticipated annual growth in the customer base of 575 residential customers and water consumption patterns similar to FY 2000-2001. Projected operating expenses were developed by the water utility staff. Capital expenditures will be funded with water rates, depreciation and bond funds. The following table indicates the amount of water sales revenue that would be realized by a 7% revenue increase (Scenario B-5) and increased service connections of 575: FY 2001-2002 Revenue Estimate FY 2002-2003 Revenue Projection Dollar Increase $7,274,000 $7,890,456 $616,456 It was recently determined by the Town Fire Marshal that when a residential fire sprinkler is installed, either by choice or to mitigate fire flow requirements, a "full flow 3/d' x 3/4" water meter" is the minimum meter size capable of providing the flow necessary to support the fire sprinkler system. Although the utility is able to provide a full flow 3/s" x 3/4" water meter, there are no established fees for the meter installation or the monthly base rate. Thus, the Commission recommends that, as with other fees, an appropriate fee be established in a manner that allows the utility to recover the costs incurred with meter installations. It is further recommended that the monthly base rate be established in the same manner as base rates for all other meter sizes. No other adjustments to service fees and charges are necessary at this time; however, the Commission recommends that the service fees and charges continue to be reviewed on an annual basis. Connection Fee Fund: In October of 2000, Mayor and Council approved the sale of $6,770,000 in bonds to finance three years of growth -related infrastructure. During FY 2002-2003 the last of the scheduled projects will be constructed. All impact fees collected are pledged to repay the debt. To continue to have growth -related infrastructure in place prior to the demand, it will be necessary to continue to finance the costs. The utility will be updating the potable water system master plan this coming year as a result of the slow down in residential and commercial growth, where the growth is actually taking place, and the resulting changes in infrastructure requirements. Upon completion of the master plan update, the existing impact fees will be evaluated to determine if the fees are still adequate. The Commission will forward a recommendation on impact fees to Mayor and Council at that time. The five year CIP may be found in Appendix D. 18 -, Alternative Water Resource Development Fee Fund: Alternative water resource development fees are collected for each new connection to the - potable water system. These fees have not increased since they were originally adopted by ,.. Mayor and Council in 1996. To date, there have been no capital expenditures from this fund. In the past, fees for professional services and feasibility studies relating to renewable water resource issues were paid from this fund. During this past year, some of the costs paid from ,) this fund included water quality testing for the slow sand filtration pilot project at the Twin Peaks pumping plant and engineering costs to begin the preliminary design of the on -site non -potable distribution system to the golf courses. During FY 2002-2003 the costs paid from this fund will not only be incurred for engineering of non -potable uses of renewable water resources, but also for potable uses. The Commission recommends that the utility r develop a renewable water resources master plan. This will enable the utility to evaluate infrastructure costs to substantiate the existing fee or justify increasing the fees in an amount that would aid in the repayment of financing for required infrastructure. 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 Mayor and Council will adjust expenses to fit the final estimate of revenues based on the action of the Council on the rate structure for FY 2002-2003. The following table is a comparative summary of expenses and debt service requirements for the water utility enterprise fund. Budgeted amounts for FY 2001-2002 are compared to the projected expenses for FY 2002-2003 used in the financial analysis: OVWU Expenses FY 2001-2002 Budget FY 2002-2003 Projected Change Increase Decrease Personnel $1,439,160 $1,513,577 $ 74,417 -O&M $1,851,555 $2,033,522 $181,967 C.A.P. $ 402,664 $ 460,164 $ 57,500 C.A.G.R.D. $ 90,000 S 160100 $ 70,100 De rec. & Amort. $1,377,200 $1,603,193 $225,993 Interest Payments $1,697 883 $2 011330 $313 447 Principal Payments $1,207,000 $1,192,"0 $14,560 Totals $8,974,326 $908,864 Personnel costs are projected to be increased to fund a 2.5% COLA and one additional full time employee to fulfill staffing needs for the long-term conservation program. 19 J The request for 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, chemicals 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 iterative process of budget development is completed. Principal and interest payments reflect debt service pursuant to bond repayment schedules for the bonds related to acquisition of the utility; assuming management of the OVWID#1; the bond issue in FY 2000-2001 for existing system improvements; acquisition of CAP water rights; and the proposed capital expenditures in FY 2004-2005. The substantial increase in depreciation is due to the completion of approximately $8,000,000 in infrastructure during the past year. Since this plant has been put into service, it must now be depreciated over the expected life of each facility. CAPITAL Il14PROVEMENTS This past year, the OVWU budget for capital improvements for both existing system and expansion related projects totaled in excess of $10 million. By June 2002, it is anticipated that projects totaling over $8 million will have been completed and brought into service. Two replacement wells were also completed this past year. They were drilled specifically to replace two existing wells that were failing. Both new wells were drilled to a depth of 800 feet. Additional capacity gained from the replacement wells is approximately 600 gallons per minute (gpm). The older wells have been removed from service and will be abandoned this coming year. Construction has recently begun on a new well with completion expected by December 2002. It is anticipated that after completion, the well will provide 800 gpm. Naranja Booster Station Replacement Well E-5 The utility constructed two new multi -zone booster stations and is completing upgrades to several existing booster facilities. These projects will enhance the distribution system by allowing the utility to move water from a lower elevation to a higher elevation. Booster stations also maintain water pressure throughout the system. 20 Water mains are key components of the distribution system. They connect the source of the supply to the end points. In other words, the mains carry water from the wells to the booster stations and reservoirs and finally to the consumers. During this past year, the utility installed over 20,000 linear feet of water mains varying in size from 8-inch to 16-inch. The mains are made of ductile iron and/or polyvinyl chloride also known as PVC. 16" Water Main — North to Water Plant 14 Reservoir By the end of this fiscal year, all but two sites will be equipped with a Supervised Control And Data Acquisition (SCADA) system. The SCADA system is a means of electronically controlling the operation of wells, reservoirs and booster stations as well as recording historic system operations data. Utility personnel can observe system operations 24 hours a day from remote sites such as the office or home. Control of the water system with SCADA has allowed the utility to become extremely proactive when dealing with system problems thus significantly reducing the number of water service interruptions to its customers. The overall system status can be ascertained immediately at any given time allowing system operators to correct potential problems before they occur. Allied Signal Reservoir — 500,000 Gallon Capacity The inclusion of SCADA equipment has become a standard specification for construction of new water infrastructure. The photo to the left is a reservoir site equipped with SCADA equipment that is solar powered. There is no electrical service to this site and the cost to bring power in was considerably more expensive than the $2,800 it cost to use solar equipment. The utility has not experienced any power related problems at this site. The SCADA equipment at the Water Plant 13 reservoir is also solar powered. 21 7 7 7 7 7 7 7 7 7 I The utility increased existing storage capacity in excess of 2 million gallons with the addition of three reservoirs. Reservoirs provide water for emergency fire flow and meeting peak demands. In most cases, reservoirs also provide water supply that is delivered to customers by way of gravity. Thus water can still be delivered to customers during a power outage. The newest reservoir now in service is also the system's largest with a 1 million gallon capacity. It is also the utility's first buried concrete reservoir. Typically, the utility's reservoirs are above ground and are constructed out of steel. Countryside Reservoir 800,000 Gallons Water Plant No. 13 Reservoir —1.0 Million Gallon Capacity The Oro Valley Water Utility Commission, in conjunction with staff and engineering consultants, undertook extensive analysis to develop a five-year capital improvements plan (CIP) for the water enterprise fund and the connection fee fund. Improvements detailed in the plans include machinery, equipment, vehicles, wells, booster stations, reservoirs, fire hydrants, mains and structures. Both capital improvement plans identify essential system improvements through FY 2006-2007. The potable water system master plan was a critical tool used in the identification of necessary improvements and the related costs. Recommended projects to be funded will be itemized in the water utility budget and the connection fee budget, respectively. Funding sources for existing system improvements include water rates, depreciation, and bond proceeds that will be repaid with water sales revenue. The funding source for expansion related improvements are bond proceeds that will be repaid with impact fees. The following table summarizes total amounts by fiscal year for each plan: 22 5 Year C.I.P. FY 02/03 FY 03/04 FY 04/0 FY 05/06 FY 06/07 Total Existing System $ 3,371,875 $1848 00 $3 918 50 $1841000 $1 91000 $12 70 625 Expansion Related $ 2,660,000 $2,336,250 $2,000,000 $3,421,250 $2,761,250 $13,178 750 Total $ 6,031,875 $4,184,750 $5,918,250 $5,262,250 $4,352,250 $25,749,375 The improvements slated for FY 2002-2003 include 0.4M gallons of additional reservoir capacity, one replacement well, upgrades to existing booster stations, the installation of approximately 40,000 feet of water mains and completion of various projects already in progress. These improvements increase service levels to customers by providing system reliability and extra capacity to meet peak demands and fire flow requirements. Details of the capital improvement plans may be found in Appendix D. As the Town moves toward implementation of renewable water sources for turf irrigation, the Commission recommends that the utility develop a CIP for the on -site and off -site distribution systems with the understanding that it may change as issues with the proposed alternatives are resolved. RECOMMENDATION ON WATER RATES The Commission recommends eliminating the "free" 1,000 gallons of water that is currently included in the monthly base rate and modifying the second and third tier of the 3-tier commodity rate to finther encourage water conservation and to provide the revenue necessary to meet projected expenditures. The usage thresholds in the commodity rates will remain the same. A 7% revenue increase for the preferred financial scenario (Scenario B-5) is proposed to be accomplished via the following changes: ➢ Elimination of the "free" 1,000 gallons contained in the base rate. ➢ The monthly base rate to remain unchanged ranging from $12.00 to $1200.00 per month depending on the meter size. ➢ The Tier 1 commodity rate to remain unchanged at $1.90 per each 1,000 gallons for usage up to and including 10,000 gallons. ➢ The Tier 2 commodity rate to increase to $2.61 per each 1,000 gallons for usage between 10,001 - 25,000 gallons. This represents an increase of 26 cents per 1,000 gallons. ➢ The Tier 3 commodity rate to increase to $3.33 per each 1,000 gallons for all usage over 25,000 gallons. This represents an increase of 33 cents per 1,000 gallons. 23 J ➢ The wholesale rates will continue to be the same rates as a standard 6" meter. 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 customer service 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. Water Provider Monthly Base Rate Tier 1 Commodity Rate Tier 2 Commodity Rate Tier 3 Commodity Rate OroValley Current 12.00 1.90 2.35 3.00 OroValley Proposed 12.00 1.90 2.61 3.33 MDWID 11.96 2.16 2.88 3.62 Marana 14.00 2.55 2.55 2.55 Tucson 5.35 1.11 3.34 4.58 Oro Valley Water Utility currently includes 1,000 gallons in its base rate, but it is recommended that it be eliminated this coming fiscal year. MDWID includes 2,000 gallons in their base rate. Marana has reduced the water in their base rate to 1,000 gallons. Tucson Water has also reduced the water in their base rate to lccf which is the equivalent of 748 gallons. A table providing proposed rates for all OVWU meter sizes may be found in Appendix E. Appendix E 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. Monthly bill amounts are calculated in 1000 gallon increments for the 5/8" x 3/4" meters and a variety of increments for larger meter sizes. Scenario B-5 recommendations result in no changes to monthly base rates or the first tier of the commodity rate. The average consumption for customers with a 5/8"x 3/4" meter is approximately 9,000 gallons per month. The modification of the 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. 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 specific consumption levels during a summer month. 24 Water Utility Cost for 9,000 Gallons Cost for 18,000 Gallons Cost for 27,000 Gallons Cost for 40,000 Gallons Oro Valley Current 27.20 47.90 70.35 109.35 Oro Valley Proposed 29.10 51.88 76.81 120.10 MDWID 27.08 48.68 76.08 123.14 Marana 34.40 57.35 80.30 113.45 Tucson 17.56 51.05 98.93 195.66 As previously described, the proposed revenue increase for Scenario B-5 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. 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 B-5, the following table represents the projected retained earnings at June 30, 2003: 6/30/2002 6/30/2003 Estimated Net Income (Loss) Projected Retained Earnings Retained Earnings $3,173,309 $892,031 $4,065,340 The utility is projected to have positive retained earnings of $4,065,340 at the end of FY 2002-2003 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. The retained earnings accumulated since 1996 has reached a significant balance given the utility's goal of matching revenue and expenses to operate at a "break even" point. Depreciation funds are used to meet debt service requirements on bond financed capital projects. Rates have been increased to allow the utility to maintain a positive cash flow when golf courses are removed from groundwater and to provide contingency funds for emergency repairs. These have contributed to the retained earnings balance. Another contributing factor is approximately $432,000 in equity obtained from the dissolution of the IGA between Oro Valley and MDWID in FY 1998-1999. Also, in past years actual growth exceeded the projections which were accompanied by a drier climate that produced more revenue than anticipated. As this cash is used to finance capital improvements, the retained earnings balance will decrease. 25 Cash flow is an analysis of all changes that affect the cash account. The following table reflects the estimated cash balances at June 30, 2003: 6/30/2002 6/30/2003 Estimated Change in Cash Balance Projected Cash Balance Cash Balance $5,789,892 ($2,248,801) $3,541,091 The cash balance is estimated to decrease by $2,248,801 at the end of FY 2002-2003. The projected cash decrease is largely attributable to the use of cash on hand and bond funds for capital improvements and debt service. j ALTERNATE FINANCIAL SCENARIOS j Appendix F presents alternate financial projections to allow for a comparison with the preferred scenario. Alternate Financial Scenario B-3 used identical assumptions for growth and operating costs. However, there are two major differences between the preferred scenario and this alternate scenario. Scenario B-3 assumes the utility will sell bonds to finance the acquisition of CAP water rights in FY 2002-2003 and finance capital improvements in FY 2004-2005. Additionally, Scenario B-3 assumes a 6% revenue increase 1 in FY 2002-2003 versus a 7% increase in the preferred scenario. Although the Commission has determined that alternate Scenario B-3 is a viable option, there are concerns that this option is committing a future Town Council to imposing higher rate increases in later years than what might be acceptable. Appendix G presents alternate financial projects to allow for a comparison with the Preferred Scenario B-5 and Alternate Scenario B-3. Alternate Financial Scenario B-2 also used identical assumptions for growth and operating costs. The only difference between this scenario and Scenario B-3 is the assumed 5% rate increase in FY 2002-2003. Again, the Commission has determined that alternate Scenario B-2 is a viable option, but noting concerns that this option also commits a future Town Council to imposing higher rate increases in later years than what might be acceptable. RM CONCLUSION The Commission presents this annual report for the review and consideration of the 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 fifth year of the utility's operation. The Commission looks forward to continued direction from Mayor and Council, especially on those issues discussed in this report. The Commission extends their appreciation to the Mayor and Council for its consideration, direction and guidance. 27 APPENDIX A Preferred Financial Scenario Scenario B5 The following are the assumptions used in preparing these projections: • Growth is based on 575 new residential customers in all 5 years. • Wholesale rates will remain the same as the standard 6" meter. • Golf courses will be removed from groundwater over 3 years beginning in FY 2004-05 - Stone Canyon & Vistoso Highlands golf courses removed in April 2005 - Sun City golf course removed during FY 2005-06 - El Conquistador golf courses removed during FY 2006-07 - El Conquistador 9-hole course will not be removed for these projections • Seven percent (7%) revenue increases in V year followed by 7.25% in remaining 4 years. • Rate increases are effective at the beginning of each fiscal year. • Personnel costs only include 1 FTE in FY 2002-03. No new FTE's in any other years. • Personnel costs for COLA and merit increase 2.5% in FY 2002-03 and up to 5% in FY 2006-07 • Operations and maintenance costs increase annually by 2.28%, 2.34%, 2.38%, 2.42%, and 2.45% over the 5 year period. • CAP costs increase annually for excess water charges to the CAGRD. These charges decrease as golf courses are removed from groundwater. • No additional CAP water right acquisition assumed during 5 year period. • Debt service does not fall below the required 1.25:1 ratio. • The utility does not experience a loss for more than 2 consecutive years. • The minimum cash balances meet or exceed 15% of cash outlays excluding capital. • Retained earnings maintain a positive balance. • Utility to pay City of Tucson directly for CAP in FY 2002-03 • Bond issued in FY 2003-04 to pay Tucson balance of debt plus finance capital projects f- n co N M O O N `- O O N N M co O (eJ f) I� C) O N v N Cl) Q O N EA Efl 69 O coO M r- o O In DJ N LO (D (D N M 0) 0) V M U:> (13 69 a m v a 0 O ,n LO LO a)O N O O o W U >- o N W V DJ N r N v LO rn LO rn U) C p N V w LL Q za wRa w p w o LO = F U v o ,LO a) co IT w .- LO ry Q Z N O co lD o U a Z_ (h 00 co co rn n N z 69 (» 64 O } Q N a NN U) Zt c Z O O r W N 0 (J N r LL w + 7 c") O O 40 M CDO It 0) V (O O O =- N N N N L (D m f� J Fair W Cl) o M Q=' Z Q a Z Z N N GI) fA 6s — w a z m 2 LL LL W W LL LL LL Ln W F- 0 N E } O J W m W O a 0 J (D N Q Q W = Z W a)X e E � 3 0 N > a a.Z a 0 E U � co O 2 w> a' 7 w W w U U 7 N �� N N L m o a) 0U)(L U)Hw UQ Z 0 U W N } -O F- U) 0 W LL N ~L Iz L W E M =) N W 0 U Q U U W n z z U Q } z - Q I LL + W x V U) % O WN Cl) � O z z N LU 2 LL n W W F- m L) CO W oQ0 K z o W z (n z W U n U 7 (n U) F w F- z W LU H F J_ Q F F- � rn w 2 0 Q U N N z o 0 (j 0 r N J F N N jU -0 w : Dc 0 0 D d o a a X no vnoM(DNoomoD o v MM q0 v v m (c m o w 0 (D N V' m O O OD O m O n m (D O n 0 0 It to [I-N Cl) Cl) (O (O N W O V m O O M 00 0 7 M M 0 r 0 r r- 0 h D) ' (D N ' N N (O NO(OO(O (O OO OD n L6MNM 00 M 0(On V O C) C) N� } (O (O M(OnnO(O WnItqtNrM M N n (D r I LL M m ct O m m m co n r r v (O CO 'V' M n 00 (O V N N (D r 00 r N r V7 r r qt n 0 7 r n 0 0 a0 (O O O D) r N W V O n OD (D 00 V' (0 O LO 0-000 0) (D O O O N IT O n N f D n( D O O N I I P.-N N r LO M G fD Na0O LL0000 V 0 7N(O n(O (OMrtOM N N ' r ao CD CA N O N O V7 W W In O (n N N M N aD M C1 0 0 (O C) D) V (D OD rl N n } (O r co Cl) O(Dn Oro ONN V V'rr M00 00 1 n CA 7 v LL m m V 00 C) m 'd' 00 r r n r (O 7 d' Cl)(O Cl) (D V N m (D v 00 � N r (O N .- p qT n 0 n N 0 0 LO to M O (O 0 M M 7 0 r LO (O 00 N m LO � o W D) 01 (O n (O CD CD 70 00 CO(D CO O D) 00 co N n T (o C c0N W r (n CO O O (O D) mO V CO OOnr -tN (O n' v a r N n� n } LO, (00 CO (OO C00 O M m N n O '-V' a 0 W M co (OO D) N (r r LL cM O [I (O t M 0) (O O r (O N It N 00 to (D V' LO (O co OD r N r (O N r p V n 0 0 V n 0 0 N It 0 00 N OD le O N O D) O I O r o 00 m O O V' N O O M 00 O 0) co D) (O (D O (O 00 O O 00 O U) (O (O N W N c0 0 0 0 00 M 00 N to 07 (O (O 00 N (O N ' O m M w N C) (ON ONItNOO CD OD'7O Cl) 0Itn0)O co (O (O IZ O r I� (O r O C) O N M O I (O N 00 V' 00 n r 0) N c0 O Cl) n O LL Cl) O) 7 M 7 Cl) co (O O cO r V' N O n O N to t0 (O W r N r (O N r C V n 00 O n 0 0 (0 n O N m M It O co O c0 V O r o 00 0) co c0 V O O LLD n (O n O n (O O O LO O n (O M LO O NO (O N m 0) O O qt (O (n 0) co rn LO r r m O M ' cO V O O (ON V' <q rLLDO (O M00 Mnr 000 4 1--7 M OD C4 n )- (O 7 O r N O 1 ,Lf r n I�t LO O 0 n V M m cO C) LL M a) V r V' M (O 00 (O q r n c0 n N 00 00 O 0 r r r In N r U N N F- m � c 0) $ O 5 c2(D 0 0 F U LCL oo0o Z) o) .�..�. 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IA m m m N N N N N O O W W m 1n In N IA YI f0 f0 f0 f0 f0 M M M M m m m m O] r r r b IA IA IA IA N N N h❑❑ N N N N N N N N N N N N N N N N N N �' �' N N N N O O a a O O n d m O O to N e 16 M N O M IN M O n N Y] O) O d m IA Id h N N N M A It m fp O d O (O f0 O f0 O O Co t7 6 N N IA [p n n n r r n^ m m- M W 0 0 m A Q m O N (G ' C• C' n O O O N N N N N N O m M W O O m O N t+l m M W T N n m W O N m d T O N N N tG tp O f0 OI O N O N � c c OP°?mm ?'rn-6 m44 a?�4mmm rn mQ 4 m qq44 �..qq 9 c a aL > > c c u a ❑ IL 4L Z IL I ❑ AlL Mma IL 4L LL LL 10 � J O O O O O O O O O O O O O O O O O e e d d d N d d O O O O N W F IL N N N N N N N N N N N N N N N N N IQO Ne feD N N N N N N N N N N N N N N N W W J W W W w w w W W J J J J J J J J W W w W w w W J J J J J J J (� O J 0 0 0 S J J J J J J J J J 0 0 0 0 J J J J J J J J J J J J J J J 0 0 0 0 J J J J J J J J 0 0 5 J W 0 0 0 0 w W W W w W W W 0 0 0 0 W w w W W W w 0 0 0 0 0 0 0 0 w a3 0 o- O_ N Z m o Q N U w J J W JLU ❑ J > > > > F F r H > LU F o Q a a U Q a U ❑ U Z U W U 9 > W W J W M >Lj Q m N N N N f W Ul Ld c d w K A U > >❑ Yd] N (n N � (A Q O � < N !7 u% M � N> N W O N ❑❑ a s um um N F vm F N r O fn J W 3 LL LL N w n w n cS W Q N N N FF N O v A y � � o `9 'u > r z w a u 0 0 0 w a N N N W J L Q ❑ F 3 Z U W z W ❑ U' 0 c m N F U w 0 m 0 z U o ❑ 2 K W m ❑ w w O a J a a w K W 3 F w n 0 K U W 2 LL J U w O > > K LL 2 a J LL LL w m N a C w z oom c Z w w a 5yw� W Xm ❑ O m S _ w w 3 ❑ z w z N N z y U ❑ J W J w J < w w ❑3a > w c J a J � a � F v L W Q U F a H W ~ a m > a a 0 O x w 3 O O M of 'a r o r Wo w o a e m, n 1` N V W N CI W fD W th m r n m V m m V N O m m Y< Y Y W W W W W W W W U m z z z a m a m❑❑ w >> -❑i O r O i APPENDIX D O p 0 0 o 0 0 0 0 o O o 0 o N o 0 0 0 0 0 o w o 0 0 0 0 0 0 O O O O O O O O O O O O O O f� O O O N O O O` O p O O O O O O O O N N O O O O O O O O O of O O O N O O O O O O O O O O O O N 1 N N O N O O O N N N O O O O N O w O O N O N O O A O O (O N m 1 m h O N N N N N Q O O N N O N O Ol N N N N O 01 w w w tlf k9 f9 w w w b3 t9 w �A w t9 tH e9 w w w w w w e9 w w w 19 e9 w O O p O O O N O O p N N O N w w w w w w w 0 0 0 0 0 0 0 0 0 0 o O 0 0 O N w w w w w w w w w 0 0 O O O O O O O O O O O O O O N_ 0 N O O O O O O O M N N V M M Q N d O N p N N N w 4f e9 w N w w w w w w w w O O O O O O O Q O N O N O O O N N N O O M O M O N O N O N w w t9 w w b3 w w w b3 w O O O O O O O O O O O O O 0 0 0 0 O O N O O O O M O O O O O O O O O O O O O O O O O O n O O O O p O O O O O O N O O O N O O O N O O O O O O O N O N O 1p w M N 0 0 O 0 O 0 O O N O O M M O N O N O N O itl N 0 O O wO 1O h O N N N N N N 0 O N N N O N 0 N w w w w w w w w w w w w w w w w w w w w w w w w w N N N N N N N V1 I/i N T m O) n m OI OI m OI OI m OI Ol m m O O O V N 6 N q V O N n N n Q Q N n n n n n n n n a n n v v v n n v N w w 0 W❑ U W W m LL LL w w❑ w 0 O U O O Z Z li Q O o a v N o > o m z E > '� d an O E `o Ti fn N v > > 2 v N « U R ry Q 3 Y o L jp v 'O d E U' v E m E 2 v J v t > rn E E d a` v v 6 m c� m v c « o u U Z o U o n n o w `o Q m a U` i° 3 v tl1 o m w E o Q 0 J v K IX1 a a n n U v m m E t q m c o❑ m e o m m y Zo J C) m U�❑ U> fL f J F- J - � U J U � N C9 W w 2= d o W O H o F O H O H O F O I- p d L .O L d L O N M Q N N 1� M W O O N M Q N h (O m .r- N .- N N w N N N N N O Lo m N J N m Z Q 0 2 Z 0 N W W F U F Q h K Q Q W )o U) Z Z W O " 2 a U w w J W �- R M o M M M M M M M M M o W O O M M M M M M M M M IL U a J Z Q Q M wCD Ow 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 UO U a J W �--� (n Q N O O W o a2w o(o<o<oCo<oeoCo1om I I I � r � l o2 F� N N N N N N N N N O a a }U F Z ZoN C7 W O �' O w2 n M n M N M u-) c`'i Lo M CO. M M M w- D 2 o N N N N N N N N N UO Ir U a J W H Q r 0 O0�0 0 0 0 0 0 0 0 0 a 2 w g 0 2 P M r— m m m m m m M rn rn F d U a F J Z w W o 00 0 M 0 0 C 0 0 m 0 m 0 m 0 m 0 M 0 H U O w U a OLU LU 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 O, N c- O M O fD M m N m 0 M 0 t00 0 N aw oco am W O O Q 0 0 0 0 0 0 0 0 0 0 0 0 0 Z a N Z O O (O N O O O [If X M (D m m 0 0 w CQ U m W N ELF mm X M X N M V f0 W N Lo LoM m W Z Q Z N 0 J Lu Lu (D F O o 00 w Z C)o U Z Z w fn LU wx m¢ Z ❑ W W w V) U O w 2 a �w 2 H WO 0 O 0 O C O C O 0 O O O O 0 C C 0 0 W Q a N N N M m N 0 0 W Q O r m J K Q. O O O O O O O O O U M Z 2 Z O~ w O o O O O O O O O J N N N (gyp M W O O Q m N c 0 `m U d m `mm dmm d 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q O O O O, O O O O W N N N N N V 10 y M M N d O 0 O U)N M N O O O M M Q o 0 0 0 0 0 0? o W a M (O O] IG O C O In W M J 0 C 0 0 0 0 0 0 0 0 Z N U) w Z 0 0 0 N 0 M 0 M 0 0 Q N N M N C~ O W S M J Q' Q 0 0 C 0 0 0 0 0 6 (9 o o 6 M OJ M fD N W Q o 0 0 0 0 0 0 0 0 W 0 0 0 0 0 0 0 0 0 WO M W OJ ImG O] NO InM Ua o 0 0 0 0 0 0 0 0 Z Q, y W_ Z 0~ o o 0 0 0 0 0 0 C J W o o '� m c�i m 0 0 0 U o 0 0 0 0 0 0 0 0 V 7 W W H N Cl) x m x N M a CO CO L N m v L0 M w w 2 O F- 0 7 U w Q. M w J O 2 W F- J y Q M M IL 2 w o m H M M O W o M C7 O 0 � o cr 2 LU o O ~ U O U a W F J Q N amwa O 02 P N O d U a Z J Z 0 N f � W 0 M ~ N U O U a W �- J a m M w 02 F a U a Z J w O O = o 0 2 U OU a wLLJ N O O m 6. W am F w LU < o Oro W O U Q m 2 W W H N to W N TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON CUSTOMERS WITH A 518 X 3/4" METER PROPOSED BASE RATE 0% INCREASE IN BASE RATE: REMAINS AT $12.00 (INC. ZERO GALS) PROPOSED COMMODITY 0% INCREASE IN TIER 1: REMAINS AT $1.90 (0 - 10,000 GALS) 11.0% INCREASE IN TIER 2 FROM $2.35 TO $2.61 (10,001 - 25,000 GALS) RS-B5-0 11.0% INCREASE IN TIER 3 FROM $3.00 TO $3.33 (OVER 25,000 GALS) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED CUSTOMERS IN USAGE CATEGORY PERCENT OF CUSTOMER BASE 0 12.00 12.00 0.00 0.0 431 2.80% 1,000 12.00 13.90 1.90 15.8 574 3.7% 2,000 13.90 15.80 1.90 13.7 777 5.0% 3,000 15.80 17.70 1.90 12.0 1007 6.5% 4,000 17.70 19.60 1.90 10.7 1160 7.5% 5,000 19.60 21.50 1.90 9.7 1256 8.1% 6,000 21.50 23.40 1.90 8.8 1204 7.8% 7,000 23.40 25.30 1.90 8.1 1064 6.9% 8,000 25.30 27.20 1.90 7.5 950 6.2% 9,000 27.20 29.10 1.90 7.0 809 5.2% 10,000 29.10 31.00 1.90 6.5 701 4.5% 11,000 31.45 33.61 2.16 6.9 575 3.7% 12,000 33.80 36,22 2.42 7.2 494 3.2% 13,000 36.15 38.83 2.68 7.4 426 2.8% 14,000 38.50 41.44 2.94 7.6 351 2.3% 15,000 40.85 44.05 3.20 7.8 299 1.9% 16,000 43.20 46.66 3.46 8.0 241 1.6% 17,000 45.55 49.271 3.72 8.2 207 1.30o 18,000 47.90 51.88 3.98 8.3 183 1.2% 19,000 50.25 54.49 4.24 8.4 153 1.0% 20,000 52.60 57.10 4.50 8.6 139 0.9% 21,000 54.95 59.71 4.76 8.7 119 0.8% 22,000 57.30 62.32 5.02 8.8 101 0.7% 23,000 59.65 64.93 5.28 8.9 86 0.6% 24,000 62.00 67.54 5.54 8.9 76 0.5% 25,000 64.35 70.15 5.80 9.0 63 0.4% 26,000 67.35 73.48 6.13 9.1 57 0.4% 27,000 70.35 76.81 6.46 9.2 48 0.3% 28,000 73.35 80.14 6.79 9.3 44 0.3% 29,000 76.35 83.47 7.12 9.3 36 0.27% 30,000 79.35 86.80 7.45 9.4 36 0.2% 31,000 82.35 90.13 7.78 9.4 28 0.2% 32,000 85.35 93.461 8.11 9.5 30 0.2% 33,000 88.35 96.791 8.44 9.6 21 0.1% 34,000 91.35 100.12 8.77 9.6 21 0.1% 35,000 94.35 103.45 9.10 9.6 16 0.1% 36,000 97.35 106.78 9.43 9.7 17 0.1% 37,000 100.35 110.11 9.76 9.7 15 0.1% 38,000 103.35 113.44 10.001 9.81 131 0.1% 39,000 106.35 116.77 10.42 9.81 101 0.1% 40,000 109.351 120.10 10.751 9.81 ill 0.1% Shaded area represents 64.2% of total customer base at 12/31/01. TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE _ $18.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 10,000 GALLONS TIER 2 = $2.61 FOR 10,001 - 25,000 GALLONS TIER 3 = $3.33 FOR USAGE OVER 25,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 N/A 18.00 N/A N/A 10,000 N/A 37.00 N/A N/A 25,000 N/A 76.15 N/A N/A 40,000 N/A 126.10 N/A N/A 50,000 1 N/A 159.40 N/A I N/A TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1" METER BASE RATE _ $30.01 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 16,000 GALLONS TIER 2 = $2.61 FOR 16,001 - 27,000 GALLONS TIER 3 = $3.33 FOR USAGE OVER 27,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 30.01 30.01 0.00 0.0% 16,000 58.51 60.41 1.90 3.2% 27,000 84.36 89.12 4.76 5.6% 38,000 117.36 125.75 8.39 7.1 % 50,000 1 153.361 165.71 12.351 8.1% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1 1/2" METER BASE RATE _ $60.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 38,000 GALLONS TIER 2 = $2.61 FOR 38,001 - 64,000 GALLONS TIER 3 = $3.33 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 60.00 60.00 0.00 0.0% 38,000 130.30 132.20 1.90 1.5% 64,000 191.40 200.06 8.66 4.5% 90,000 269.40 286.64 17.24 6.4% 125,000 374.401 403191 28.791 7.7% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 2" METER BASE RATE = $96.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 80,000 GALLONS TIER 2 = $2.61 FOR 80,001 - 134,000 GALLONS TIER 3 = $3.33 FOR USAGE OVER 134,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 96.00 96.00 0.00 0.0% 80,000 246.10 248.00 1.90 0.8% 134,000 373.00 388.94 15.94 4.3% 275,000 796.00 858.47 62.47 7.8% 325,000 1 946.001 1191.471 245.471 25.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3" METER BASE RATE = $192.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 186,000 GALLONS TIER 2 = $2.61 FOR 186,001 - 311,000 GALLONS TIER 3 = $3.33 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 0 192.00 192.00 0.00 0.0% 100,000 380.10 382.00 1.90 0.5% 186,000 543.50 545.40 1.90 0.3% 311,000 837.25 876.65 39.40 4.7% 450,000 1254.251 1334.521 80.271 6.4% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 4" METER BASE RATE = $300.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 169,000 GALLONS TIER 2 = $2.61 FOR 169,001 - 283,000 GALLONS TIER 3 = $3.33 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 0 300.00 300.00 0.00 0.0% 100,000 488.10 490.00 1.90 0.4% 169,000 619.20 621.10 1.90 0.3% 283,000 887.10 918.64 31.54 3.6% 350,000 1088.10I 1-141.751 53.651 4.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 6" METER BASE RATE _ $600.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.61 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.33 FOR USAGE OVER 3,006,000 GALLONS GALLONS USED IN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 600.00 600.00 0.00 0.0% 1,000,000 2498.10 2500.00 1.90 0.1% 1,800,000 4018.10 4020.00 1.90 0.0% 3,000,000 6838.10 7152.00 313.90 4.6% 5,000,000 1 12834.201 13807.681 973.481 7.6% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 8" METER BASE RATE _ $1200.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.61 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.33 FOR USAGE OVER 3,006,000 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 1200.00 1200.00 0.00 0.0% 1,000,000 3098.10 3100.00 1.90 0.1% 1,800,000 4618.10 4620.00 1.90 0.0% 3,000,000 7438.10 7752.00 313.90 4.2% 5,000,000 1 13434.201 14407.681 973.481 7.2% GOLF COURSE CONSERVATION RATES TO BECOME EFFECTIVE WHEN USAGE EXCEEDS THE ARIZONA DEPT. OF WATER RESOURCES ANNUAL ALLOTMENT. APPENDIX F Alternate Financial Scenario Scenario B-3 The following are the assumptions used in preparing these projections: • Growth is based on 575 new residential customers in all 5 years. • Wholesale rates will remain the same as the standard 6" meter. • Golf courses will be removed from groundwater over 3 years beginning in FY 2004-05 - Stone Canyon & Vistoso Highlands golf courses removed in April 2005 - Sun City golf course removed during FY 2005-06 - El Conquistador golf courses removed during FY 2006-07 - El Conquistador 9-hole course will not be removed for these projections • Revenue increases over 5 year period are: 6%, 6%, 6.5%, 7.5%, 8% • Rate increases are effective at the beginning of each fiscal year. • Personnel costs only include 1 FTE in FY 2002-03. No new FTE's in any other years. • Personnel costs for COLA and merit increase 2.5% in FY 2002-03 and up to 5% in FY 2006-07 • Operations and maintenance costs increase annually by 2.28%, 2.34%, 2.38%, 2.42%, and 2.45% over the 5 year period. • CAP costs increase annually for excess water charges to the CAGRD. These charges decrease as golf courses are removed from groundwater. • No additional CAP water right acquisition assumed during 5 year period. • Debt service does not fall below the required 1.25:1 ratio. • The utility does not experience a loss for more than 2 consecutive years. • The minimum cash balances meet or exceed 15% of cash outlays excluding capital. • Retained earnings maintain a positive balance. • If utility sells bonds in FY 2002-03 to finance CAP, the payment terms are 5.5% for 20 years. 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V M p N O O M 0) m a O O O O O Cn CD O 'V' � O m V O (O (D 1h (O O O O M r 00 O (O LO O ON 00 N O Mr-- M N O (O O co (O toO O O O } (7) 00 (O (O N 06 (D O 00 C7 Ni < L6 O O O rl (C) LL r N N CD OO - .- I- [O r w O N 0 w O I v O 0) W It Cl) 00 Cl) O O M N OO r--V O) v V. z (O (n M U W y F' Cl) W F W U F to W U w w W U ¢ H WZZ)a ¢ C7 of W > F j>>w z F- V W w F> U ¢ H W w 0 U W Of Z z LL _ ¢ x w a ~ C7 E I a� --N� U Q Z W2 O L W VZ _ as a� p C9 UU f=- O Q OW OLU W < W a. wz w O� J 0LL ?Da UUW N W Z ZO0} �m LL LL (nw cZ K U¢ uj LLI W wW wp FZw 7w�W_ O ZZ >. 2 Up �» z X<in wip F- wCO ¢ w w g a w >¢ Xmm> OO U a U UUU} O CO LLC� W J O U co LO O U a co a Z o> N 7 = W W Z Z O a a Z J Q a O W Z LL U U U a � a v= a w z a¢ LL W N N Q Q Q Z U U? d Lu W U U W a> LL Z LL LL Q W ¢ W Q W m U z 0 z U Z 0 w a TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON CUSTOMERS WITH A 5/8 X 3/4" METER PROPOSED BASE RATE 0% INCREASE IN BASE RATE: REMAINS $12.00 (INC. ZERO GALS) PROPOSED COMMODITY 0% INCREASE IN TIER 1: REMAINS $1.90 (0 - 10,000 GALS) 6.5% INCREASE IN TIER 2 FROM $2.35 TO $2.50 (10,001 - 25,000 GALS) RS-63-0 6.5% INCREASE IN TIER 3 FROM $3.00 TO $3.20 (OVER 25,000 GALS) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED CUSTOMERS IN USAGE CATEGORY PERCENT OF CUSTOMER BASE 0 12.00 12.00 0.00 0.0 431 2.8% 1,000 12.00 13.90 1,90 15.8 574 3.7% 2,000 13.90 15.80 1.90 13.7 777 5.0% 3,000 15.80 17.70 1.90 12.0 1007 6.5% 4,000 17.70 19.60 1.90 10.7 1160 7.50% 5,000 19.60 21.50 1.90 9.7 1256 8.1% 6,000 21.50 23A0 1.90 8.8 1204 7.80/. 7,000 23.40 25.30 1.90 8.1 1064 6.9% 8,000 25.30 27.20 1.90 7.5 950 6.2% 9,000 27,20 29.10 1.90 7.0 809 5.2% 10,000 29.10 31.001 1.90 6.5 701 4.5% 11,000 31.45 33.50 2.05 6.5 575 3.7% 12,000 33.80 36.00 2.20 6.5 494 3.20% 13,000 36.15 38.50 2.35 6.5 426 2.8% 14,000 38.50 41.00 2.50 6.5 351 2.37/6 15,000 40.85 43.50 2.65 6.5 299 1.9% 16,000 43.20 46.00 2.80 6.5 241 1.6% 17,000 45.55 48.50 2.95 6.5 207 1.3% 18,000 47.90 51.001 3.10 6.5 183 1.2% 19,000 50.25 53.50 3.25 6.5 153 1.00% 20,000 52.60 56.00 3.40 6.5 139 0.9% 21,000 54.95 58.50 3.55 6.5 119 0.8% 22,000 57.30 61.00 3.70 6.5 101 0.7% 23,000 59.65 63.50 3.85 6.5 86 0.6% 24,000 62.60 66.00 4.00 6.5 76 0.5% 25,000 64.35 68.50 4.15 6.4 63 0.4% 26,000 67.35 71.701 4.35 6.5 57 0.401. 27,000 70.35 74.90 4.55 6.5 48 0.3% 28,000 73.35 78.10 4.75 6.5 44 0.3% 29,000 76.35 81.30 4.95 6.5 36 0.2% 30,000 79.35 84.50 5.15 6.5 36 0.2% 31,000 82.35 87.70 5.35 6.5 28 0.2% 32,000 85.35 90.90 5.55 6.5 30 0.2% 33,000 88.35 94.10 5.75 6.5 21 0.1% 34,000 91.35 97.301 5.95 6.5 21 0.10% 35,000 94.35 100.50 6.15 6.5 16 0.1% 36,000 97.35 103.70 6.35 6.5 17 0.1% 37,000 100.35 106.90 6.55 6.5 15 0.1% 38,000 103.35 110.10 6.75 6.5 13 0.1% 39,000 106.35 113.30 6.95 6.5 10 0.1% 40,000 109.35 116.50 7.15 6.5 11 0.1% Shaded area represents 64.2% of total customer base at 12/31/01. TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON 1 FOR CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE _ $18.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 10,000 GALLONS .� TIER 2 = $2.50 FOR 10,001 - 25,000 GALLONS } TIER 3 = $3.20 FOR USAGE OVER 25,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 N/A 18.00 N/A N/A 10,000 N/A 37.00 N/A N/A 25,000 N/A 74.50 N/A N/A 40,000 N/A 122.50 N/A N/A 50,000 1 N/A 1 154.50 N/A I N/A TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1" METER BASE RATE _ $30.01 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 16,000 GALLONS TIER 2 = $2.50 FOR 16,001 - 27,000 GALLONS TIER 3 = $3.20 FOR USAGE OVER 27,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 30.01 30.01 0.00 0.0% 16,000 58.51 60.41 1.90 3.2% 27,000 84.36 87.91 3.55 4.2% 38,000 117.36 123.11 5.75 4.9% 50,000 1 153.361 161.511 8.151 5.3% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1 1/2" METER BASE RATE _ $60.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 38,000 GALLONS TIER 2 = $2.50 FOR 38,001 - 64,000 GALLONS TIER 3 = $3.20 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 60.00 60.00 0.00 0.0% 38,000 130.30 132.20 1.90 1.5 % 64,000 191.40 197.20 5.80 3.0% 90,000 269.40 280.40 11.00 4.1 % 125,000 1 374.401 392.401 18.001 4.8% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 2" METER BASE RATE _ $96.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 80,000 GALLONS TIER 2 = $2.50 FOR 80,001 - 134,000 GALLONS TIER 3 = $3.20 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 96.00 96.00 0.00 0.0% 80,000 246.10 248.00 1.90 0.8% 134,000 373.00 383.00 10.00 2.7% 275,000 796.00 834.20 38.20 4.8% 325,000 1 946.001 994.201 48.201 5.1 % TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3" METER BASE RATE _ $192.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 186,000 GALLONS TIER 2 = $2.50 FOR 186,001 - 311,000 GALLONS TIER 3 = $3.20 FOR USAGE OVER 311,000 GALLONS GALLONS USEDIN 1MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 192.00 192.00 0.00 0.0% 100,000 380.10 382.00 1.90 0.5% 186,000 543.50 545.40 1.90 0.3% 311,000 837.25 857.90 20.65 2.5% 450,000 1 1254.251 1302.701 48.451 3.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 4" METER BASE RATE _ $300.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 169,000 GALLONS TIER 2 = $2.50 FOR 169,001 - 283,000 GALLONS TIER 3 = $3.20 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 0 300.00 300.00 0.00 0.0% 100,000 488.10 490.00 1.90 0.4% 169,000 619.20 621.10 1.90 0.3% 283,000 887.10 906.10 19.00 2.1 % 350,000 1088.10 1120.50 32.401 3.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 6" METER BASE RATE _ $600.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.50 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.20 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 0 600.00 600.00 0.00 0.0% 1,000,000 2498.10 2500.00 1.90 0.1% 1,800,000 4018.10 4020.00 1.90 0.0% 3,000,000 6838.10 7020.00 181.90 2.7% 5,000,000 1 12834.201 13415.801 581.601 4.5% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 8" METER BASE RATE _ $1200.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.50 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.20 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 1200.00 1200.00 0.00 0.0% 1,000,000 3098.10 3100.00 1.90 0.1% 1,800,000 4618.10 4620.00 1.90 0.0% 3,000,000 7438.10 7620.00 181.90 2.4% 5,000,000 1 13434.201 14015.801 581.601 4.3% GOLF COURSE CONSERVATION RATES TO BECOME EFFECTIVE WHEN USAGE EXCEEDS THE ARIZONA DEPT. OF WATER RESOURCES ANNUAL ALLOTMENT. APPENDIX G O N LO (D N LOW COO N 00 n 0 CD Lr) coLO CO O) 0 O 0 O M 06 N fA Efl H3 D 0 M W V M V r A 0 N LO �) M (m LO ( J LX) o LO LO O � j V m( O N fA 69 EF3 00 O (O D N oc W O Q. N LO ^ It N o o (^n v m rn LO LL Q O N O W x W 2 F- a 0 o 00 rn 0 (Oo rn Z LU O 0LO M (O (O o W z m cor 0 r m O fA (� N M CD Q Z A H3 Vd O }a Q N Z O Z aN- LL Cl) .�- m m } W N o W X W) 0 °� (O ~ fA An N J VI i' O Q O O N N � 0 ItO 0 F Q} CALU — N R 0 0 N In M Ln Z Q W Q Q U Z Z O N W ER ffl ffl e Q LL W W LLLL C LL W O LU~ mLU W y J N U- O J} LU O Q O u a Q Z W a Z o y W >�ay zU)Z 0 cc o c U) u m U a� m O W> W U USN n �'a o d a) N m \ a)0_'W U OfAO d V7Fw UQ z 0 0 c w W LL LL Q W uj W 2 F W 0 0 z w 0 W 00 z az Z K U }z FQ Z W (ifN U) } p Q p O N � N � U p Z z z N LU 2 LL W W I- X M m W O Q 0 Q O w Z N z W U 2 U J (c) (n I- w z z W Ul H H J Q 7 to w g O 3z(30 W GLn N J H N j W d d O p a •5 Ix 0 i d Oaax V N N N CO O O t—_ N O V oD M V O [t O M N W O M t- V' M O O O to O (Dr- (D O t- (DO It N t- It0) 0) G CO N N I---Itco 0 0 0 N N V M CO f0 r Q) r h 0 N 0) V A co CON W 00 V (50 I. r Cn NMM W M O(On O 7 V W h } N O V (D CC) � O CO r- O h V V V N r M O CO h Cl) N CO LL M m N O co M 0) co I• r N, N (O V M r.- N N N NI to r (p r N v r (O r r 0 O V h r M 00 CO O O O r.-M r N W V O h 0) CO It CO (D O 00 0) N V M O O t. V O N r- (0 r (O CO O N CO r N If) c0 N r 0) N CO O O N N V N r CO CO N 00 r N CO O N o r r n O CO N co N CD O N O Ih (O N CO W N CO M O O N CO It co Ih h co } N Cl) O O n O O O N V N r M 0 0 O N 1` V LL M O V N MM V0) r rr V M N -It co N N CD CO r N V �- (O N r N V n V I� W 0 0 CO N M O 0) CO Co M V O r V N N O � 1` 00 0) 00 M r r- O O M It r W N (D (D O O 00 r 0 O 0) It(O N r o N �- O CDr W Cl) O CO V O O n r V N co r O O cor- CO N M CO CO CO 0' CD, M B CO N CO Cl) � LO V� M O N N N } N r N N CO M O h N N h V CD 'Tm N 00 M N N N r.-et LOLL M 0) V N It co 0) 0 O `-' r N N V N M O (O N N V (D CO r N r (O N r V O V� O V 0) CD O N V O CO NOD It N co 0)N O) 00 of 0 O r V r 0 0 n co O D) N 01 N O O N N (O r M V M (D N 'T 0 CO N O O M 0) 00 N O M O CO W N r N r h N O (O C 0) Ili(b O O N W V� O M O <t r-_N O O IOj 0 w r } N 00 r O r C0 0 N N N 00 V 00 r W Cl) 00 (O W N LL M 0) <M C0 V 00 r N O N r V N O co (O N w co o r N r (O N r M Q V� V O 00 00 M r O N 0) M et O co n co N w 00 00 0) M CO T O O N I-- N h (O n N O O N (O 0) I% N N CON W a)N O O O NN M(D 0)Nrr N V O� O N O ON r V cO NO U5 MOW V Mr r C7 O O V P.h O LL N V M M V N N E CO r V 0) Cl) r N n r N M r r r N N r V N N � m N 0.9 0 N w G = _ 7 O 7� iD 0 - CL g w w 0E00 O v V w z OLL W rn wwww ww XZW WoW w{Z W W Z Z U Z W 0� LLJLLI 0OUQ Z W O O O O z U LLf >vVWOfItwz00 � LL LL LL LL i — ♦- 0 7 U) LL y W LL Z z Z Z w w 0 ZQO W W W W t-�Co U LL x O-Z i W x Z 0= H 00 W U Q LL Z 00 QO 0) W _ILL LL W co0 g Z of K W 000W w uN U(p¢F¢LL W ¢0ONOm z a Z LLU F LLX 0E-0of ¢O �7 Z W Q Q= Q 2 U)O ca WJ�F-F-p00 n. 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M U 7 O (n F n p N Cl) O M N ( f) O O O O O O t ') O O O i LO o 0) N O c0 O Ih O 0 0 0 W 00 O M O O G OD O O M O M N O O O W (0 CDO O O 0) 0 a) O O t- < W (O O of O Ni n O O O O 6 } W (0 N (0 O f-- 00 O N 0 w 0 V 00 O co LL Il � Itr 00 V O M m Cl) M O co h (1'7 � V 01 v v v v O N M w W N F W F w > U w U) W w W U Q ~ F-zzX (9 z Wca w F- >> W Z U W w F > Q z F W W (7 H Z x LL w URwz_ Q2- w a ~ C9 m Q Z a U) Q U z w E 0Ww~ a LL 0w U Q F- 2 F- V z_ H = 0 oa CL a Q O C7 (n co N �U) w ~�Oo m ¢oi-W � LL Z ww > 3 g KLL °ULL HO w Z�w m Of mp LU a s W(` w 2p2z w w¢ w w pOW pp �Qoo LLj j W o LLw�� �aa�c�i w mm O ° w U" Q W w 2 > U> u� > Q O U W❑ 1 N U W W Q a 3: LU W wF-v~iQ (7 ��00 1 Z (_.) Z J w N N w w LLLd > Z J Q w LL a Z w N V w W a�i Z Ofn (n (n a oawv2 cr as wZ a Q O W NN Q Q Q Z 0 C N 2000 U LL W Q W Q F 2 U Z_ 2 }} U 2 W ALL' d >y W QUUU W Q���>U?LL W LL QZLLLL W Q (n w O LL a m U z U z U z U w a� TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON CUSTOMERS WITH A 5/8 X 3/4" METER PROPOSED BASE RATE 0% INCREASE IN BASE RATE: REMAINS $12.00 (INC. ZERO GALS) PROPOSED COMMODITY 0% INCREASE IN TIER 1: REMAINS $1.90 (0 - 10,000 GALS) 2.3% INCREASE IN TIER 2 FROM $2.35 TO $2.40 (10,001 - 25,000 GALS) RS-B2-0 2.3% INCREASE IN TIER 3 FROM $3.00 TO $3.07 (OVER 25,000 GALS) GALLONS USED CURRENT RATE PROPOSED RATE AMOUNT INCREASED PERCENT INCREASED CUSTOMERS IN USAGE CATEGORY PERCENT OF CUSTOMER BASE 0 12.00 12.00 0.00 0.0 431 2.8% 1,000 12.00 13.90 1.90 15.8 574 3.7% 2,000 13.90 15.80 1.90 13.7 777 5.0% 3,000 15.80 17.70 1.90 12.01 1007 6.5% 4,000 17.70 19.60 1.90 10.7 1160 7.5% 5,000 19.60 21.50 1.90 9.7 1256 8.1% 6,000 21.50 23.40 1.90 8.8 1204 7.8% 7,000 23.40 25.30 1.90 8.1 1064 6.9% 8,000 25.30 27.20 1.90 7.5 950 6.2% 9,000 27.20 29A0 1.90 7.0 809 5.2% 10,000 29.10 31.001 1.90 6.5 701 4.5% 11,000 31.45 33.40 1.95 6.2 575 3.7% 12,000 33.80 35.80 2.00 5.9 494 3.2% 13,000 36.15 38.20 2.05 5.7 426 2.8% 14,000 38.50 40.60 2A0 5.5 351 2.36/. 15,000 40.85 43.00 2.15 5.3 299 1.9% 16,000 43.20 45.40 2.20 5.1 241 1.6% 17,000 45.55 47.80 2.25 4.9 207 1.3% 18,000 47.90 50.201 2.30 4.8 183 1.2% 19,000 50.25 52.60 2.35 4.7 153 1.0% 20,000 52.60 55.00 2.40 4.6 139 0.9% 21,000 54.95 57.40 2.45 4.5 119 0.8°/a 22,000 57.30 59.80 2.50 4.4 101 0.7% 23,000 59.65 62.20 2.55 4.3 86 0.6% 24,000 62.00 64.60 2.60 4.2 76 0.5% 25,000 64.35 67.00 2.65 4.1 63 0.4% 26,000 67.35 70.071 2.72 4.0 57 0.4% 27,000 70.35 73.14 2.79 4.0 48 0.3% 28,000 73.35 76.21 2.86 3.9 44 0.3% 29,000 76.35 79.28 2.93 3.8 36 0.2% 30,000 79.35 82.35 3.00 3.8 36 0.2% 31,000 82.35 85.42 3.07 3.7 28 0.2% 32,000 85.35 88.49 3.14 3.7 30 0.2% 33,000 88.35 91.56 3.21 3.6 21 0.131. 34,000 91.35 94.63 3.28 3.6 21 0.1% 35,000 94.35 97.70 3.35 3.6 16 0.1% 36,000 97.35 100.77 3.42 3.5 17 0.1% 37,000 100.35 103.84 3.49 3.5 15 0.1% 38,000 103.35 106.91 3.56 3.4 13 0.1% 39,000 106.35 109.98 3.63 3.4 10 0.1% 40,000 109.35 113.05 3.70 3.41 ill 0.1% Shaded area represents 64.2% of total customer base at 12131/01. TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE _ $18.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 10,000 GALLONS TIER 2 = $2.40 FOR 10,001 - 25,000 GALLONS TIER 3 = $3.07 FOR USAGE OVER 25,000 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 N/A 18.00 N/A N/A 10,000 N/A 37.00 N/A N/A 25,000 N/A 73.00 N/A N/A 40,000 N/A 119.05 N/A N/A 50,000 1 N/A 1 149.75 N/A I N/A TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1" METER BASE RATE _ $30.01 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 16,000 GALLONS TIER 2 = $2.40 FOR 16,001 - 27,000 GALLONS TIER 3 = $3.07 FOR USAGE OVER 27,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 30.01 30.01 0.00 0.0% 16,000 58.51 60.41 1.90 3.2% 27,000 84.36 86.81 2.45 2.9% 38,000 117.36 120.58 3.22 2.7% 50,000 1 153.361 157.421 4.061 2.6% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1 1/2" METER BASE RATE _ $60.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 38,000 GALLONS TIER 2 = $2.40 FOR 38,001 - 64,000 GALLONS TIER 3 = $3.07 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 60.00 60.00 0.00 0.0% 3 8, 00 0 130.30 132.20 1.90 1.5 % 64,000 191.40 194.60 3.20 1.7% 90,000 269.40 274.42 5.02 1.9% 125,000 1 374.401 381.871 7.471 2.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 2" METER ,1 BASE RATE _ $96.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 80,000 GALLONS TIER 2 = $2.40 FOR 80,001 - 134,000 GALLONS TIER 3 = $3.07 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 96.00 96.00 0.00 0.0% 80,000 246.10 248.00 1.90 0.8% 134,000 373.00 377.60 4.60 1.2% 275,000 796.00 810.47 14.47 1.8% 325,000 1 946.001 963.971 17.971 1.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3" METER BASE RATE _ $192.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 186,000 GALLONS TIER 2 = $2.40 FOR 186,001 - 311,000 GALLONS TIER 3 = $3.07 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 0 192.00 192.00 0.00 0.0% 100,000 380.10 382.00 1.90 0.5% 186,000 543.50 545.40 1.90 0.3% 311,000 837.25 845.40 8.15 1.0% 450,000 1 1254.251 1272.131 17.881 1.4% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 4" METER BASE RATE _ $300.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 169,000 GALLONS TIER 2 = $2.40 FOR 169,001 - 283,000 GALLONS TIER 3 = $3.07 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 0 300.00 300.00 0.00 0.0% 100,000 488.10 490.00 1.90 0.4% 169,000 619.20 621.10 1.90 0.3% 283,000 887.10 894.70 7.60 0.9% 350,000 1088.10 1100.39 12.291 1.1 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 6" METER BASE RATE _ $600.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.40 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.07 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 600.00 600.00 0.00 0.0% 1,000,000 2498.10 2500.00 1.90 0.1% 1,800,000 4018.10 4020.00 1.90 0.0% 3,000,000 6838.10 6900.00 61.90 0.9% 5,000,000 1 12834.201 13035.981 201.781 1.6% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 8" METER BASE RATE _ $1200.00 COMMODITY RATE: TIER 1 = $1.90 FOR 0 - 1,800,000 GALLONS TIER 2 = $2.40 FOR 1,800,001 - 3,006,000 GALLONS TIER 3 = $3.07 FOR USAGE OVER 3,006,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNT OF INCREASE PER MONTH PERCENT OF INCREASE 0 1200.00 1200.00 0.00 0.0% 1,000,000 3098.10 3100.00 1.90 0.1% 1,800,000 4618.10 4620.00 1.90 0.0% 3,000,000 7438.10 7500.00 61.90 0.8% 5,000,000 1 13434.201 13635.981 201.781 1.5% GOLF COURSE CONSERVATION RATES TO BECOME EFFECTIVE WHEN USAGE EXCEEDS THE ARIZONA DEPT. OF WATER RESOURCES ANNUAL ALLOTMENT. 0 0 77) a APPENDIX H Utility Statistics for Calendar Year 2001 New Meters Installed 672 Services Established 2,522 Services Terminated 2,280 Service Orders Processed: Meter re -reads 156 Water quality 96 Water pressure 73 Meter replacements 5 Service repairs 51 Leaks 189 Other 90 Total service orders: 660 660 Total Water Pumped 3,083,293,400 gallons 9,462.28 acre feet Total Water Delivered 2,838,217,605 gallons 8,710.17 acre feet Lost & Unaccounted For Water * 229,630,458 gallons 704.71 acre feet 7.49 % * ADWR allows a maximum of up to 10% to maintain compliance status. Customers 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% by As of Meter December Size 31, 2001 & User Type - 518" - 1.5" - : y - -- 2" 1" 4" 3" 6" 8" ■ Wholesale 1 ■Turf 1 1 2 5 ■ Construction 430 24 26 ■ Irrigation 115 106 31 76 3 3 OCommercial 27 42 30 76 8 2 4 ■Residential 14,180 143 44 45 2 Totals 14,762 315 105 198 38 7 6 4 Accounts By User Type As of December 31, 2001 14,414 ■ Construction - 3% ❑ Commercial - 1 % ■ Residential - 94% ■ Irrigation - 2% ❑ Wholesale - 0% ® Turf - 0% Gallons Sold By User Type January - December 2001 194,213.713 1,616,357,817 27,250,919 4 ::Ns 785,581,142 66,633,271 146,336,426 Revenue By User Type January - December 2001 $47,901 $811,896 $263,523 $535,6 g439,842 $4,904,910 ■ Construction - 2% ❑ Commercial - 5% ■ Residential - 57% ■ Irrigation - 7% ❑ Wholesale - 1 % ® Turf - 28% ■ Construction - 4% ❑ Commercial - 6% ■ Residential - 70% ■ Irrigation - 8% ❑ Wholesale - 1% ■Turf - 11%