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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
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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.
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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.
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➢ 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
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potable supplies are free of such contamination.
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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
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- 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.
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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.
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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.
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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
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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
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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
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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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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.
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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%