The URL can be used to link to this page

Home My WebLink AboutWater Rates Analysis Report - 11/1/2014I ol F- ORO VALLEY TOWN COUNCIL Satish Hiremath, Mayor Lou Waters, Vice Mayor Brendan Burns, Council Member Bill Garner, Council Member Joe Hornat, Council Member Mary Snider, Council Member Mike Zinkin, Council Member ORO VALLEY WATER UTILITY COMMISSION Robert Milkey, Chair Richard Davis, Vice Chair Javier Arriaga, Commissioner Anne Campbell, Commissioner Richard Reynolds, Commissioner Elizabeth Shapiro, Commissioner Richard Verlaque, Commissioner TOWN STAFF Greg Caton, Town Manager Stacey Lemos, Finance Director Philip C. Saletta, P.E., Water Utility Director Shirley Seng, Water Utility Administrator TOWN OF ORO VALLEY WATER UTILITY COMMISSION WATER RATES ANALYSIS REPORT NOVEMBER 2014 TABLE OF CONTENTS SECTION TITLE rr IJ Index of Appendices n LnJ Executive Summary Introduction 1 Growth Rates Water Use Trends L Debt Service Debt Service Coverage Requirements Cash Reserve Policy for Operating Fund Operating Fund Groundwater Preservation Fee Alternative Water Resources Development Impact Fee Fund Potable Water System Development Impact Fee Fund Preferred Financial Scenario Recommendation on Water Rates, Fees & Charges Other Service Fees & Charges 1 Jl Conclusion J Appendices PAGE i 1 3 4 4 5 6 7 7 10 12 13 14 15 17 17 INDEX OF APPENDICES APPENDIX A. Assumptions for Preferred Financial Scenario A-1 Operating Fund ( l A-5 Alternative Water Resources Development Impact Fee Fund A-6 Potable Water System Development Impact Fee Fund B. Preferred Financial Scenario B-1 Operating Fund B-2 Groundwater Preservation Fee B-3 Alternative Water Resources Development Impact Fee Fund B-4 Potable Water System Development Impact Fee Fund B-5 Summary of all Funds C. Rate Schedules & Tables for Bill Comparisons for Preferred Financial Scenario C-1 Potable & Reclaimed Water Rates C-2 Tables for Bill Comparisons by Meter Size -Potable C-8 Tables for Bill Comparisons by Meter Size —Reclaimed D. Other Service Fees & Charges D-1 Proposed Security Deposits D-2 Proposed Meter Installation Fees D-3 Supporting Documentation for Meter Installation Fees E. 5-Year Capital Improvement Schedules E-1 Operating Fund E-2 Groundwater Preservation Fee E-2 Alternative Water Resources Development Impact Fee Fund E-2 Potable Water System Development Impact Fee Fund i I■. ICI ll u I I I I TOWN OF ORO VALLEY WATER UTILITY COMMISSION WATER RATES ANALYSIS REPORT NOVEMBER 2014 Executive Summary The functions and duties of the Oro Valley Water Utility Commission include reviewing and developing recommendations for water revenue requirements, water rates and fee structures. The Commission annually evaluates staff recommendations based on a rates analysis to assure the recommendations meet Town policies and bond covenants. Water rates and charges shall be reviewed annually under Mayor and Town Council Water Policies— II.A.2.b(4). The Utility has based its financial analysis on the American Water Works Association (AWWA) Cash Needs. Approach. The AWWA is the largest national organization that develops water and wastewater policies, specifications and rate setting guidelines accepted by both government -owned and private water and wastewater utilities worldwide. This Water Rates Analysis Report contains detailed information on the three funds that comprise the Oro Valley Water Utility: ➢ Operating Fund ➢ Alternative Water Resources Development Impact Fee Fund (AWRDIF Fund) ➢ Potable Water System Development Impact Fee Fund (PWSDIF Fund) Each fund is individually analyzed with regard to revenue and revenue requirements. The Utility is an enterprise of the Town and generates revenue from rates, fees and charges and does not receive revenue from any taxes or payments from the General Fund. The Water Utility Commission has made a recommendation for a Preferred Financial Scenario. Under the Preferred Financial Scenario, the Operating Fund will have an ending cash balance of $1.6 million at the end of the five-year projection period. The cash balance of Groundwater Preservation Fees at the end of the five-year projection period is $5.8 million. The Preferred Financial Scenario includes cash funding for all capital projects except the Advanced Metering Infrastructure (AMI) and Meter Replacement Project which is funded by a loan from the Water Infrastructure Finance Authority of Arizona (WIFA). The Preferred Financial Scenario proposes no other new debt for capital expenditures. Each year the water rates analysis is prepared based on the most up-to-date information available for a five-year projection period. Operational needs and capital improvement requirements change annually and are carefully evaluated when they are included in the analysis. JThe Preferred Financial Scenario results in increasing cash balances in the AWRDIF Fund and the PWSDIF Fund. These cash balances will be used to finance capital projects to meet the demands of new growth and development. Pursuant to Arizona Revised Statute 9-463.05, revenue from the individual impact fee funds may not be consolidated nor used for any purpose other than for which they were originally established. The Preferred Financial Scenario includes five year projections for each fund and evaluates the impact of future costs and the revenue sources that will be required to meet those costs. Based on the data contained within the Preferred Financial Scenario, the Water Utility Commission has made I 1 the following recommendations on water rates for FY 2014-15: I J ➢ Decrease in the potable and reclaimed Groundwater Preservation Fee (GPF) ➢ Increase in the potable and reclaimed commodity rates ➢ No increase in the monthly base rates for potable and reclaimed water ➢ Increase in the potable and reclaimed construction water rates ➢ Increase in meter installation fees to recover costs ➢ Increase in residential security deposits for non -property owner accounts ➢ Increase in residential security deposits for landlord accounts Current and proposed commodity rates and GPF are provided in the table below Table 1 Customer Classifications Current Commodity Rate Proposed Commodity Rate Increase (Decrease) Single Family Residential Tier 1 2.23 2.27 0.04 Tier 2 3.01 3.10 0.09 Tier 3 4.07 4.23 0.16 Tier4 5.49 5.76 0.27 Irrigation Tier 1 2.23 2.27 0.04 f Tier 2 3.01 3.10 0.09 Tier3 4.07 4.23 0.16 Tier4 5.49 5.76 0.27 Commercial 2.23 2.27 �. 0.04 Master Metered Multi -Family Residential 2.23 2.27 0.04 Turf 2.23 2.27 0.04 Construction 6.49 6.76 0.27 All Reclaimed Classes 2.20 2.23 0.03 L Groundwater Preservation Fee - Potable 0.95 0.90 (0.05) Groundwater Preservation Fee - Reclaimed 0.50 0.47 (0.03) Cast per 1,000 gallons With a small increase in commodity rates and a decrease in the GPF, the financial impact of the proposed rates for the average residential customer is a decrease of $0.03 per month. The average residential customer has a 5/8 x 3/4-inch meter and uses 8,000 gallons of water per month. The average commercial customer with a 2-inch meter using 60,000 gallons of water will experience a $0.60 decrease per month. Tables providing the financial impact to all meter sizes and customer classifications may be found in Appendix C. The Commission presents this Water Rates Analysis Report for the review and consideration of the l_ Mayor and Council. The Oro Valley Water Utility Commission is proud to serve the Town of Oro Valley, its citizens and the customers of its water utility. h I 7 7 I TOWN OF ORO VALLEY WATER UTILITY COMMISSION WATER RATES ANALYSIS REPORT NOVEMBER 2014 Introduction The Oro Valley Water Utility was established in 1996 as a self-supporting enterprise of the Town. The Utility is comprised of three separate funds that have been established for specific purposes. The Funds are as follows: ➢ Operating Fund ➢ Alternative Water Resources Development Impact Fee Fund ➢ Potable Water System Development Impact Fee Fund The Operating Fund is the primary fund for the Utility. Revenue for this fund includes water sales, service fees, miscellaneous charges and interest income. The Utility does not receive any revenue from taxes or money from the Town General Fund. The expenditures managed from this fund include personnel, operations and maintenance for both potable and reclaimed water systems, capital costs for existing potable water system improvements and related debt service. The Utility pays the General Fund for services received including finance, human resources, fleet services, information technology, legal, insurance and rental of office space. Groundwater Preservation Fee (GPF) revenue is accounted for within the Operating Fund. GPF revenue is currently dedicated to fund capital expenditures for renewable water resources and related debt. Under current policy, this revenue may not be used to pay for operating costs. More information on the GPF may be found on page 10 of this report. The Alternative Water Resources Development Impact Fee Fund (AWRDIF) was established in 1996 to manage capital expenditures related to alternative water resources including reclaimed water and Central Arizona Project (CAP) water. Revenue for this fund is received from impact fees collected at the time water meters are purchased and from interest income. Based on the recent impact fee analysis, expenditures include capital repayment obligation charges for the Town's CAP allotment and infrastructure and associated debt service to deliver CAP water to the Town for future growth and development. The Potable Water System Development Impact Fee Fund (PWSDIF) was established in 1996 to manage capital expenditures related to expansion or growth -related potable water capital projects and related debt service. Revenue for this fund is received from impact fees collected at the time water meters are purchased and from interest income. Expenditures may include wells, pump stations, reservoirs and mains for the potable water system required to meet the demands of future growth and development. The revenue and expenditures of all three funds are combined to determine if the Utility meets the debt service coverage requirement established in the Mayor and Town Council Water Policies and -3- current bond covenants. Otherwise, each fund is independent with regard to revenue and Ll expenses. Pursuant to Arizona Revised Statute (ARS) 9-463.05 Section B.9., impact fees must be placed in a separate fund and accounted for separately. ARS 9-463.05 Section B.S. states that the impact fees may not be used for operations and maintenance of existing facilities. Each fund is addressed in more detail on pages 12 and 13 of the report. Growth Rates The Utility's growth rates have fluctuated over the past several years. Figure 1 illustrates the Utility's growth rate of 2,023 new metered connections over the last nine years. Figure 1 Growth Rates 600 500 508 400 368 v 346 2 300 214 z 200 196 97 165 100 68 61 0 2005-06 2006-07 2007.08 2008-09 2009-10 2010.11 2011-12 2012-13 2013-14 i The growth projections used for this report are consistent with the Town's financial forecasting and are shown in following table. Table 2 l New Metered Connections 2014-15 2015-16 2016-17 2017-18 2018-19 Single Family Residential 200 300 275 200 100 �- Commercial, Multi -Family, Irrigation 11 15 13 10 5 r Water Use Trends The Utility has experienced an overall reduction in water use, both potable and reclaimed, over the - last nine years. Figure 2 reflects a 9.8 percent reduction in total water use from FY 2005-06 through FY 2013-14. The trend line emphasizes a continuous decline in water use even though the utility experienced growth of 11.9 percent equivalent to 2,023 new connections in that same time frame. During FY 2013-14, the average single family residential customer with a 5/8 x 3/4 inch water meter r, F used 7,880 gallons. For the analysis in this report, the average monthly water use for a single family residential customer with a 5/8 x 3/4 inch water meter is calculated at 8,000 gallons per month. Figure 2 Water Use History 3,500 3,395 3,400 c 3,300 3,191 3,200 --.-- --. 3,111 3,300 3,161 31060 31062 0 3,02 3, 09 7 3,000 2,900 2,945 2,800 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Debt Service Annual debt obligations are met with the revenue generated in the Operating Fund, the AWRDIF and the PWSDIF. A summary of the existing debt allocated to each of these funds and the outstanding balances at the beginning of FY 2014-15 are provided in Table 3. Table 3 Fund Year Debt Purpose Balance Operating 2005 Excise Tax Bonds Land for MOC $ 1,324,950 Operating 2007 Excise Tax Bonds - Refinance Existing Potable System $ 14,770,440 Operating-GPF 2008 WIFA Loan Reclaimed Water System $ 3,235,942 Operating 2009 WIFA Loan Existing Potable System $ 1,777,300 Operating 2012 Sr. Lien Revenue Bonds - Refinance Existing Potable System $ 4,417,909 Operating-GPF 2012 Sr. Lien Revenue Bonds - Refinance Reclaimed Water System $ 8,052,849 Operating 2013 Excise Tax Bonds - Refinance Existing Potable System $ 4,935,000 Operating 2014 WIFA Loan AMI & Meter Replacement $ 1,000,711 PWSDIF 2012 Sr. Lien Revenue Bonds - Refinance Potable System Expansion $ 2,484,241 Total Debt $ 41,999,342 No new debt is proposed throughout the five-year projection period. -5- Debt Service Coverage Requirements 11 The method for calculating the debt service coverage ratio is pursuant to the Town Financial and l Budgetary Policies adopted by the Town Council in 2008. Section CA — Debt Capacity, Issuance & Management states the following with respect to debt service coverage ratios: �l "When utility revenues are pledged as debt service payments, the Town will strive to maintain a 1.3 debt service coverage ratio or the required ratio in the bond indenture (whichever is greater) to ensure debt coverage in times of revenue fluctuation." The Water Utility currently pays debt service on a number of outstanding debt issuances and loans. For the Series 2012 Senior Lien Water Revenue Bonds, the 2008, 2009 and 2014 Water Infrastructure Finance Authority (WIFA) Loans, water utility revenues are specifically pledged as the repayment source for these obligations at 1.3 times coverage per the Town's adopted financial policy. The remaining outstanding debt obligations of the Water Utility are excise tax pledged obligations meaning that the Town's unrestricted sources of sales taxes, fines, permit fees and state shared revenues are pledged as the repayment sources for these bonds in the bond indentures. Even though the bond indentures pledge these excise taxes as the repayment source, the Water Utility is and will continue to be responsible for these debt service payments. However, since excise taxes are pledged as coverage, a calculated debt service coverage ratio of 1.0 (rather than the 1.3) is applied to avoid double coverage when calculating the debt service coverage ratio for the water rates analysis. It is important to note that the bond indentures for the excise tax -backed bonds require that the Town's excise tax collections each fiscal year total at least 2.5 times the annual debt service requirements in order to avoid having to fund a debt service reserve fund. These conditions have been met annually in the past and are expected to continue in the future. For FY 2013-14 the debt service coverage ratio was 8.26 for the General Fund which substantially exceeds the 2.5 requirement. This methodology of segregating the water utility revenue -pledged debt from the excise tax -pledged debt in the rates analysis process is an accepted practice in the industry and has been reviewed by the Town's Finance Director and the Town's financial advisors with Stifel, Nicolaus & Company, Inc. The debt service coverage ratio is determined by dividing the annual net operating revenue by the annual debt service payments. Using the methodology described above is in accordance with the 2008 policy and reduces the amount of the debt service coverage requirement amount. Applying this methodology has been key in minimizing water rate increases. Debt service coverage for the Water Utility's outstanding senior lien debt issuances and loans in the Preferred Financial Scenario is shown in Table 4. Table 4 2014-15 2015-16 2016-17 2017-18 2018-19 Debt Service Coverage 2.02 2.11 2.07 1.92 1.73 -6- L F1 Cash Reserve Policy for Operating Fund The Town of Oro Valley Mayor and Council Water Policies were adopted in 1996. The policy specific to cash reserves may be found in Section II.A.1.d. and states "The Utility shall maintain cash reserves for known future obligations plus an allowance for unbudgeted contingencies set at 5 percent (5%) of the total annual budget." The Commission is recommending that this policy be reviewed in the coming year. Interpretation of the policy for this analysis is that the Utility must have five percent of the total annual operating budget including debt service and capital expenditures. In the Preferred Financial Scenario, the projected cash reserve balance for the Operating Fund for each year in the analysis is listed in Table 5 showing compliance in all years. Table 5 Operating Fund 2014-15 2015-16 2016-17 2017-18 2018-19 n Cash Reserve Requirement $ 731,321 $ 723,318 $ 745,380 $ 745,699 $ 780,564 L1 Cash Reserve Balance $ 6,517,505 $ 5,291,215 $ 3,950,866 $ 2,956,502 $ 1,612,884 Cash reserve balances in the Operating Fund are the main driver for the proposed changes in water rates. The projected cash reserve balances shown in Table 5 include revenue from the proposed rate n changes. Those changes include increases in the commodity rates with corresponding decreases in Jthe GPF. These proposed changes allow for the cash balances to be at appropriate levels for both the Operating Fund and the GPF. The impact to the customers from these proposed changes are n minimal except for single family residential and irrigation customers who are high water users. JDetails of the impact to all water users are in Appendix C. The use of cash to fund capital expenditures results in a projected decrease of $6.6 million in cash reserves over the five-year projection period. In light of this, the Commission is recommending that the current cash reserve policy be reviewed. A consideration may be to evaluate implementing a cash reserve policy similar to the one currently in place for the Town's General Fund. The General Fund cash reserve policy states, "The Town shall maintain, at a minimum, a fund balance contingency reserve in the General Fund that represents 25 percent of the General Fund's annual expenditures with no use of the General Fund contingency to support ongoing operational expenditures. This minimum reserve amount will be incorporated into the General Fund budget adopted by formal action taken by the Town Council. Accordingly, these reserves will be classified as committed fund balances." Reviewing the Water Utility's cash reserve policy will be placed on the Water Utility Commission's work plan for the coming year. Operating Fund Revenue Forecast The Operating Fund had a cash balance of $8.2 million at the beginning of FY 2014-15 and is projected to have a balance of $1.6 million at the end of FY 2018-19. These funds may be used for operating costs including personnel, operations and maintenance, capital improvements for the existing potable water system and debt service. 7 The revenue forecast was based on analysis of the Utility's monthly billing data for FY 2013-14 and a projection of water usage and growth in number of new connections detailed in Table 2 on page 4. Analysis of the water use trends for FY 2013-14 indicated the average monthly use for a single family residence with a 5/8 x 3/4 inch water meter was 7,880 gallons per month. For this analysis, 8,000 gallons per month was used to project water sales revenue. The revenue forecast includes proposed increased commodity rates shown below in Table 6. The GPF revenue is also shown in Table 6 for informational purposes and to illustrate the proposed decrease. Table 6 Commodity Rate Current Proposed Proposed Proposed Proposed Proposed Rates Rates Rates Rates Rates Rates Customer Classifications 2014-15 2015-16 2016-17 2017-18 2018-19 Single Family Residential Tier 1 2.23 2.27 2.32 2.37 2.44 2.51 Tier 2 3.01 3.10 3.19 3.29 3.40 3.52 Tier 3 4.07 4.23 4.40 4.58 4.76 4.95 Tier 4 5.49 5.76 6.05 6.36 6.67 7.01 Irrigation Tier 1 2.23 2.27 2.32 2.37 2.44 2.51 Tier 2 3.01 3.10 3.19 3.29 3.40 3.52 Tier 3 4.07 4.23 4.40 4.58 4.76 4.95 Tier 4 5.49 5.76 6.05 6.36 6.67 7.01 Commercial 2.23 2.27 2.32 2.37 2.44 2.51 Master Metered Multi -Family 2.23 2.27 2.32 2.37 2.44 2.51 Turf 2.23 2.27 2.32 2.37 2.44 2.51 Construction 6.49 6.76 7.05 7.36 7.67 8.01 All Reclaimed Classes 2.20 2.23 2.26 2.31 2.38 2.45 Groundwater Preservation Fee Potable 0.95 0.90 0.85 0.85 0.85 0.85 Reclaimed 0.50 0.47 0.44 0.44 0.44 0.44 Cost per 1,000 gallons. The water use included in each tier is detailed on the proposed water rates table in Appendix C. Table 7 provides the water sales revenue forecast for the five-year projection period using the proposed commodity rates in Table 6. The GPF and associated revenues and expenditures are detailed on pages 10 - 11. Table 7 Water Sales Revenue 2014-15 2015-16 2016-17 2017-18 2018-19 Potable Water $10,252,130 $10,542,605 $10,852,834 $11,166,348 $11,473,209 Reclaimed Water $ 1,796,098 $ 1,818,296 $ 1,850,323 $ 1,899,317 $ 1,949,954 Total Water Sales $12,048,228 $12,360,901 $12,703,157 $13,065,665 $13,423,163 M Other revenue generated by the Utility includes interest income and charges for services. Charges r for service include, but are not limited to, new service establishment fees, late fees, reconnection fees, convenience fees, and plan review fees. These service fees are projected to generate annual revenue ranging from $845,000 to $896,000. Projections for interest income are a cumulative total of $892,147 over the five-year period. A two percent interest rate was assumed for each year in the projection period. This interest rate is consistent with the Town's financial planning. I I I 1 J Revenue Requirements The following table is a summary of revenue requirements for the Operating Fund that were used in the financial analysis. These revenue requirements do not include expenditures to be paid with GPF revenue. Table 8 Utility Expenditures 2014-15 2015-16 2016-17 2017-18 2018-19 Personnel $ 2,874,528 $ 3,003,882 $ 3,139,056 $ 3,280,314 $ 3,427,928 Operations/Maintenance 2,043,303 2,063,736 2,086,437 2,111,474 2,138,924 Powerfor Pumping 900,000 900,000 900,000 1,035,000 1,035,000 Water Resource Mgmt. 450,000 450,000 450,000 450,000 450,000 CAP Wheeling Costs 1,164,300 1,188,192 1,198,192 1,208,192 1,214,192 CAP Recharge Costs 1,324,000 1,401,680 1,443,205 1,484,730 1,509,645 Reclaimed Maintenance 890,360 899,264 909,156 920,065 932,026 Subtotal Expenditures $ 9,646,491 $ 9,906,753 $ 10,126,046 $ 10,489,775 $ 10,707,715 Debt Service 3,582,907 3,576,601 3,585,554 3,575,207 3,578,569 Capital Outlay 1,397,020 983,000 1,196,000 849,000 1,325,000 Total Expenditures $ 14,626,418 $ 14,466,354 $.14,907,600 $ 14,913,982 $ 15,611,284 Projected personnel costs do not include any new personnel; however, a four percent annual merit increase and a 0.5 percent increase in retirement benefits have been projected. These projected increases are consistent with the General Fund's financial planning. The projected operations and maintenance (0&M) costs for both the potable and reclaimed water systems include inflationary increases that average 1.7 percent annually. The inflation factors were provided by the Arizona Department of Revenue and are consistent with the General Fund's financial planning. Power for pumping costs were segregated from the traditional 0&M costs because they are not Jsubject to annual inflationary increases. A 15 percent rate increase by Tucson Electric Power was projected in FY 2017-18. The Utility recently began implementation of an energy efficiency program l which will reduce power costs as the pumps and motors are replaced. After all the equipment has J been installed, the projected energy savings will be reflected in the power costs. The Utility plans to purchase groundwater extinguishment credits. These credits will be pledged to the Groundwater Allowance Account (GWA) to help maintain a balance in the GWA that will facilitate growth in the water service area. It is anticipated that the Utility will purchase approximately 3,000 acre feet of extinguishment credits annually over the five-year projection period. J Projected costs for wheeling CAP water through the Tucson Water delivery system represent 2,000 acre feet annually. The rate charged by Tucson Water is a contract price and remains constant over the five years. The cost to take delivery of the CAP water increases annually. The CAP water delivery rates are established by Central Arizona Project. CAP water recharge costs represent costs to take delivery of the Utility's entire CAP water allotment �l of 10,305 acre feet annually. This water will be recharged in various recharge facilities including the 2,000 acre feet in Tucson Water's facilities. Recharge costs increase by $15 per acre foot when the water is recharged in Central Arizona Water Conservation District (CAWCD) facilities. ( l Projected capital outlay for existing system improvements in this analysis includes the replacement of approximately 10,000 water meters and installation of AMI equipment in the Oro Valley water service area; water main replacements; and installation of energy efficient pumps and motors. Capital outlay also includes the purchase of vehicles, computer and security equipment. The schedule for five-year capital improvements may be found in Appendix E. The meter replacement project is being financed with a loan from the Water Infrastructure Finance Authority of Arizona (WIFA) and will be completed in FY 2015-16. This loan was approved by the Town Council in January 2014. There is no additional new debt proposed in this analysis. All other capital expenditures are proposed to be funded with revenue generated from water sales, fees, charges and cash reserves. Groundwater Preservation Fee The Groundwater Preservation Fee (GPF) was established in 2003 to generate revenue to finance alternative water resources, capital expenditures for infrastructure needed to deliver alternative water to the Town and related debt service. The current policy for GPF revenue specifically excludes the use of those funds for operations and maintenance costs. The Water Utility Commission will consider making a recommendation to the Town Council to amend this policy. The consideration will be placed on the Commission's work plan in the coming year. Prior to FY 2013-14, the GPF revenue was transferred from the Operating Fund to the AWRDIF Fund to pay the debt service on the reclaimed water system and the capital component of costs associated with the CAP water allotment and CAP water wheeling costs. The GPF revenue was used to pay these costs in conjunction with the impact fees collected in the AWRDIF Fund. While updating the impact fees in FY 2013-14, it was determined that construction on the reclaimed water system was complete and beneficiaries of the reclaimed water system were the existing customers. As such, the debt associated with the reclaimed water system was removed from the AWRDIF Fund and placed in the Operating Fund. Additionally, GPF revenue is no longer transferred to the AWRDIF Fund. Revenue from the GPF will continue to pay the debt associated with the reclaimed water system and other authorized capital costs from within the Operating Fund. As previously mentioned, the current policy for GPF revenue dedicates the use of GPF revenue to alternative water capital expenditures and related debt service. For this reason, the GPF will now be accounted for separately within the Operating Fund. Currently the GPF revenue received is in excess of the allowable expenditures resulting in the cash reserves growing by $3.1 million over the five- -10- year projection period. This is inclusive of a projected five percent reduction in the GPF rate in FY 2014-15 and FY 2015-16. Table 9 shows the current and proposed GPF rates. Table 9 Current 2014-15 2015-16 2016-17 2017-18 2018-19 Rate Proposed Proposed Proposed Proposed Proposed GPF — Potable Rate $0.95 $0.90 $0.85 $0.85 $0.85 $0.85 GPF—Reclaimed Rate $0.50 $0.47 $0.44 $0.44 $0.44 $0.44 Cost per 1,000 gallons. The table below provides the revenue forecast for the five-year projection period using the proposed GPF rates in Table 9. Table 10 GPF Revenue 2014-15 2015-16 2016-17 2017-18 2018-19 Potable Water $ 2,181,231 $ 2,085,419 $ 2,027,458 $ 2,044,543 $ 2,054,097 Reclaimed Water 361,568 339,402 325,105 325,105 325,105 Total GPF Revenue $ 2,542,799 $ 2,424,821 $ 2,352,563 $ 2,369,648 $ 2,379,202 The revenue from the GPF is dedicated to capital expenditures to deliver alternative water resources to the Town and related debt service. Table 11 provides the proposed expenditures that will be funded with GPF revenue. 11 Expenditures 1 2014-15 _2015-16 2016-17 2017-18 2018-19 Debt Service- Reclaimed System $1,372,628 $1,385,641 $1,380,450 $1,385,861 $1,384,754 Capital Costs for CAP Wheeling 142,360 142,360 142,360 142,360 142,360 Capital Cost for CAP Allotment 148,456 155,204 161,952 168,700 168,700 Reclaimed Main Relocation 100,000 350,000 Total Expenditures $1,763,444 $2,033,205 $1,684,762 $1,696,921 $1,695,814 - 11 - Development Impact Fee Funds Alternative Water Resources Development Impact Fee Fund The Alternative Water Resources Development Impact Fee Fund (AWRDIF) had a cash balance of $3.3 million at the beginning of FY 2014-15 and is projected to have $5.3 million at the end of FY 2018-19. The revenue sources for the AWRDIF Fund are from impact fees collected when a water meter is purchased and from interest earned on cash balances. Interest income is projected to be a total of $585,547 for this analysis. A two percent interest rate was assumed for each year in the projection period and is consistent with the Town's financial planning. l The revenue forecast was based on new service units related to the number of new connections. A service unit is the equivalent of one single family residential (SFR) 5/8 x 3/4-inch water meter. The SFR service units are equal to the number of new connections. The other service units are forecast based on historic trends and pending development projects within the Town. Other service units l include commercial, multi -family and irrigation units. The Town Council adopted new impact fees that became effective July 1, 2014. The new impact fee for a SFR 5/8 x 3/4-inch water meter or one service unit is $4,045. Table 12 provides the projected growth in service units and the revenue associated with that growth. Table 12 Growth / Revenue 2014-15 2015-16 2016-17 2017-18 2018-19 , SFR Service Units 200 300 275 200 100 Other Service Units 145 120 104 80 40 Projected Revenue $1,409,646 $1,698,900 $1,553,055 $1,132,600 $566,300 i AWRDIF funds may be used for capital expenditures related to alternative water resources including reclaimed water and CAP water. The capital expenditures during this projection period total $4.9 million and include the capital costs assessed by CAP for 3,557 acre feet of our CAP water allotment; construction of a CAP water blending booster station; and design and construction of facilities that will deliver an additional 1,000 acre feet of CAP water. The table below lists the capital expenditures for the AWRDIF Fund. Table 13 Capital Expenditures 2014-15 2015-16 2016-17 2017-18 2018-19 CAP Capital Charges $ 78,254 $ 81,811 $ 85,368 $ 88,925 $ 88,925 L CAP Facilities 700,000 400,000 3,410,000 Total Capital Expenditures $ 778,254 $ 81,811 $ 85,368 $ 488,925 $ 3,498,925 [ . There is no outstanding debt in the AWRDIF Fund. The outstanding reclaimed water system debt was transferred to the Operating Fund. This is discussed in detail in the Groundwater Preservation Fee section on page 10 of this report. -12- i17 ' Potable Water System Development Impact Fee Fund n The Potable Water System Development Impact Fee Fund (PWSDIF) had a cash balance of $4.5 million at the beginning of FY 2014-15 and is projected to have $6.5 million at the end of FY 2018-19. The revenue sources for the PWSDIF Fund are from impact fees collected when a water meter is n purchased and from interest earned on cash balances. Interest income is projected to be a total of J $568,624 for this analysis. A two percent interest rate was assumed for each year in the projection period and is consistent with the Town's financial planning. The revenue forecast was based on new service units related to the number of new connections. A service unit is the equivalent of one single family residential (SFR) 5/8 x 3/4-inch water meter. The n SFR service units are equal to the number of new connections. The other service units are forecast J based on historic trends and pending development projects within the Town. Other service units include commercial, multi -family and irrigation units. The Town Council adopted new impact fees that became effective July 1, 2014. The new impact fee for a SFR 5/8 x 3/4-inch water meter or one service unit is $2,015. Table 14 provides the projected growth in service units and the revenue associated with that growth. Table 14 I I Growth / Revenue 2014-15 2015-16 2016-17 2017-18 2018-19 SFR Service Units 200 300 275 200 100 Other Service Units 145 120 104 80 40 Projected Revenue 1 $707,691 $846,300 $763,685 $564,200 $282,100 PWSDIF funds may be used for capital expenditures related to potable water system improvements including wells, booster stations, reservoirs and water mains that are required to meet the demands of new growth. There are no 0&M expenditures in this fund. The projections detailed in the Preferred Financial Scenario for the PWSDIF Fund assume no growth -related capital projects throughout the projection period. This will be reviewed annually for changes, but until the growth rate changes, it is unlikely that the Utility will need to construct growth -related facilities. Debt service for previously constructed growth -related facilities will be paid from revenues collected from impact fees and use of cash reserves. The Potable Water System Development Impact Fees are not projected to increase or decrease during the five year period. The table below lists all expenditures forecast for the PWSDIF. Table 15 J Expenditures 2014-15 2015-16 2016-17 2017-18 2018-19 Debt Service $ 327,424 $ 331,478 $ 329,916 $ 331,627 $ 331,328 Capital Projects Total Expenditures I $ 327,424 $ 331,478 $ 329,916 $ 331,627 $ 331,328 -13- I,. Preferred Financial Scenario Prior to developing financial forecasts, financial considerations were evaluated relating to proposed future operating costs, significant short and long term capital expenditures, the Utility's existing cash reserves, existing outstanding debt and the related debt service payments. To develop a Preferred Financial Scenario, the goals of the Commission were to ensure that all existing rate 1 setting policies were met, cash reserves were utilized to minimize future debt and proposed rate increases would not result in rate shock. r i The Water Utility Commission has made a recommendation for a Preferred Financial Scenario. The Scenario generates the revenue needed to maintain an adequate cash balance in all funds over the projected five-year period. Additionally, the Scenario uses available cash for capital projects and meets the debt service coverage requirements in each year of the projection period. The Preferred Financial Scenario includes projections for five years; however, water rates are approved annually l for the first year in the projection period. The cash balance in the AWRDIF and PWSDIF funds increase over the five year period. The cash balance will be important in the future as the Town moves forward with increased deliveries of CAP water and constructing potable water system infrastructure to meet the demands of new growth. State statutes preclude the use of impact fees for general operating expenses of the Utility. The financial projections for the Operating Fund, AWRDIF Fund and the PWSDIF Fund were combined to evaluate the overall debt service coverage at the end of each fiscal year. Analysis indicates that, under the Preferred Financial Scenario, the Utility will meet the debt service coverage requirement established by the Mayor and Council Water Polices and Bond Covenants for all five years. Proformas for the Preferred Financial Scenario may be found in Appendix B. The assumptions used to develop the financial projections contained in the Preferred Financial Scenario may be found in Appendix A. -14- li Recommendation on Rates, Fees & Charges n After reviewing the analysis of the three funds and their respective revenue requirements contained in the Preferred Financial Scenario, the Water Utility Commission is recommending: ➢ Decrease in the potable and reclaimed Groundwater Preservation Fee (GPF) l J ➢ Increase in the potable and reclaimed commodity rates ➢ No increase in the monthly base rates for potable and reclaimed water j� ➢ Increase in the potable and reclaimed construction water rates J ➢ Increase in meter installation fees to recover costs ➢ Increase in residential security deposits for non -property owner accounts ➢ Increase in residential security deposits for landlord accounts Table 16 illustrates the proposed water rates for a single family residential customer with a 5/8 x 3/4 inch water meter. Approximately 93 percent of the utility's residential customers fall into this 'L category. Other water providers in the region are included for comparison. Tucson Water's commodity rates are assessed on the use of 100 cubic feet which is equivalent to 748 gallons. To j simplify the comparison, the rates for Tucson Water have been converted to represent a charge for 1,000 gallons. Table 16 Water Provider Monthly Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 GPF or Water Base Rate Resource Fee Oro Valley Current 14.19 2.20 2.99 4.03 5.38 --- 0.95 Oro Valley Proposed 14.19 2.27 3.10 4.23 5.76 0.90 Metro Water 22.00 2.00 2.70 4.05 5.62 7.02 0.20 Marana Water 16.18 2.63 3.67 4.77 5.89 8.45 0.43 Tucson Water 11.00 1.85 4.02 9.38 15.08 --- 0.84 l Cost per 1,000 gallons. J For comparison purposes, the following table provides a calculation of a monthly bill amount for a 1 single family residential customer with a 5/8 x 3/4 inch meter for the water utilities surrounding the JOro Valley Water Utility service area. Direct comparison of specific base rates and commodity rates is less effective because of the varying rate structures of each utility. A better comparison is to j calculate the cost for specific consumption levels for one month. The following bill comparisons Jinclude water rates and water resource fees similar to the Utility's GPF. Water Provider Cost for 8,000 Gallons Table 17 Cost for 15,000 Gallons Cost for 25,000 Gallons Cost for 40,000 Gallons Oro Valley Current 40.41 68.13 117.27 203.16 Oro Valley Proposed 40.38 68.38 118.55 207.74 Metro Water 40.80 68.74 122.71 231.01 Marana Water 40.66 67.28 113.78 202.98 Tucson Water 32.98 87.43 204.33 434.15 -15- The following table illustrates the financial impact to customers with varying meter sizes based on the average monthly water use for specific customer classifications. These charges are for Oro Valley Water Utility customers and include the base rates, commodity rates and groundwater preservation [ fees. Table 18 Classification Meter Size Water Use Current Bill Proposed Bill Change. SF Residential 5/8 8,000 $ 40.41 $ 40.38 - $ 0.03 SF Residential 5/8 15,000 $ 68.13 $ 68.38 $ 0.25 SF Residential 5/8 25,000 $117.27 $118.55 $ 1.28 SF Residential 5/8 40,000 $203.16 $207.74 $ 4.58 Irrigation 1 27,000 $129.14 $129.37 $ 0.23 Commercial 2 57,000 $294.79 $294.22 -$0.57 MF Residential 4 550,000 $ 2,103.77 $ 2,098.27 -$ 5.50 Turf —Potable 4 3,000,000 $ 9,894.77 $9,864.77 -$30.00 Reclaimed - Turf 6 15,000,000 $41,209.54 $41,209.54 $ 0.00 Proposed rates for all Oro Valley Water Utility meter sizes may be found in Appendix C. Tables that calculate monthly bills under the existing rates may also be found in Appendix C. Monthly bill amounts are calculated in 1,000 gallon increments for the 5/8 x 3/4 inch meters and a variety of increments for larger meter sizes. Table 19 contains the proposed reclaimed rates. Tucson Water's rates have been included for comparison. Tucson Water's reclaimed rate is assessed on the use of 100 cubic feet which is equivalent to 748 gallons. To simplify the comparison, the rates for Tucson Water have been converted to represent a charge for 1,000 gallons. Table 19 I Water Provider Commodity Rate GPF Oro Valley Water — Current $2.20 $0.50 Oro Valley Water — Proposed $2.23 $0.47 Tucson Water $2.50 N/A 1 Each year the water rates analysis is prepared based on the most up-to-date information available. Operational needs and capital improvement requirements change annually and are carefully I evaluated when they are included in the analysis. It is important that the Utility perform a water l_ rates analysis every year because any changes in debt service, operating or capital costs could result in the need for a rate increase. Other Service Fees & Charges The Utility charges fees for services rendered in an amount designed to recover the cost to provide that service. These fees and charges are evaluated annually to determine if any adjustments are needed. It is recommended that water meter installation fees be increased to recover labor costs and a price increase in the meters and transceivers. The amount of the increase depends on the size and type of water meter. In some instances, there is a slight decrease in the fees. A complete schedule of the fees may be found in Appendix D. It is also recommended that residential security deposits for non -property owner accounts be n increased to minimize the Utility's risk when these customers move without paying their bills. This ` would impact customers who are renting homes from the property owners. During FY 2013-14, security deposits totaling $1,770 were applied to final bills when the tenants moved out. An additional $2,712 was written off as uncollectible on these accounts. To reduce the potential for financial loss in the future, it is recommended that residential security deposits for non -property owner accounts be increased from $100 to $150. These deposits will continue to be held by the n Utility until the account is closed. Additionally, the Utility experienced losses when landlords sold their property leaving unpaid balances. Currently, landlord accounts are charged a security deposit of $50 per account that is refunded after one year. It is recommended that security deposits for 7 landlord accounts be increased from $50 to $75 per account and that the deposit be held by the Utility until the landlord agreement is terminated and the account is closed. IConclusion The Commission presents this Water Rates Analysis Report for the review and consideration of the Mayor and Council. The Commission and Water Utility Staff are available to discuss this report in greater detail at Council's request. Utility Staff will be requesting Council's approval of the Notice of Intent to increase water rates on December 3, 2014. The Oro Valley Water Utility Commission is proud to serve the Town of Oro Valley, it citizens and the customers of its water utility. The Commission extends their appreciation to the Mayor and Council for their consideration and guidance and looks forward to their continued direction. -17- APPENDIX A Assumptions for Preferred Financial Scenario A-1 Operating Fund A-5 Alternative Water Resources Development Impact Fee Fund A-6 Potable Water System Development Impact Fee Fund PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR OPERATING FUND Growth n SFR growth rates were provided by the Finance Department and are consistent with Town financial Il JI forecasting. Other growth rates include commercial and irrigation connections. I I Connections FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 SFR 200 300 275 200 100 Other it 15 13 10 5 Current Water Rate Structure The following commodity rates are the cost per 1,000 gallons: Classifications Tier Tier Tier Tier SF Residential & Irrigation $2.23 $3.01 $4.07 $5.49 MF Residential & Commercial $2.23 --- --- --- Construction Water $6.49 --- --- --- Reclaimed Water $2.20 --- --- --- GPF-Potable $0.95 --- --- --- GPF- Reclaimed $0.50 --- --- --- Proposed Water Rate Structure for FY 2014-15 The following proposed commodity rates are the cost per 1,000 gallons: Classifications Tier 1 Tier 2 Tier 3 Tier 4 SF Residential & Irrigation $2.27 $3.10 $4.23 $5.76 MF Residential & Commercial $2.27 --- --- --- Construction Water $6.76 --- --- Reclaimed Water $2.23 --- --- --- GPF-Potable $0.90 --- --- --- GPF-Reclaimed $0.47 --- --- There are no proposed changes to the usage allowed in each tier of the SF Residential and Irrigation classifications. JProposed Potable Water Rate Increases The "overall increase" and "monthly impact' are representative of a residential customer with a 5/8 x 3/4 inch water meter averaging 8,000 gallons of water use per month. Base Overall Monthly Rate Tier Tier Tier Tier4 GPF Change Imoact FY 14-15 N/A 2.0% 3.0% 4.0% 5.0% -5.3% -0.1% -$0.03 FY 15-16 N/A 2.0% 3.0% 4.0% 5.0% -5.6% 0.1% $0.04 FY 16-17 N/A 2.0% 3.0% 4.0% 5.0% 0.0% 1.1% $0.45 FY 17-18 N/A 3.0% 3.5% 4.0% 5.0% 0.0% 1.5% $0.60 FY 18-19 N/A 3.0% 3.5% 4.0% 5.0% 0.0% 1.5% $0.61 Proposed Reclaimed Water Rate Increases The proposed reclaimed rate increases are shown below: i FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Base Rate N/A N/A N/A N/A N/A Commodity Rate $2.23 $2.26 $2.31 $2.38 $2.45 Percent Increase 1.5% 1.5% 2.0% 3.0% 3.0% A-1 PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR OPERATING FUND (continued) Groundwater Preservation Fee Rates (cost per 1,000 gallons) GPF is no longer transferred to the AWRDIF Fund effective FY 13-14. 5.3% decrease in GPF in FY 14-15 for both potable & reclaimed ($0.05 and $0.03 respectively). 5.6% decrease in GPF in FY 15-16 for both potable & reclaimed ($0.05 and $0.03 respectively). No other decreases in remaining years of projection period. Water Use Trends Projections include similar water use trends as those in FY 13-14. The average monthly water use for a residential customer with a 5/8 x 3/4 inch water meter decreased to 7,880 gallons per month in FY 13-14 from 8,200 gallons in FY 12-13. For this analysis 8,000 gallons was used as the average monthly water use. Other Revenue Other revenue is based on FY 14-15 proposed budget. Other revenue is not projected to increase because mist. charges fluctuate annually. Other revenue includes late fees, reconnect fees, new service establishment fees, sewer billing, stormwater billing, and meter income. Beginning Cash Balance Taken from 6/30/14 Balance Sheet of respective funds (MUNIS reports dated 9/17/14) Interest Income The interest rate for all 5 years in the analysis period is projected to be 2.0%. Information provided by the Finance Department on 7/02/14. Personnel Costs No new employees were added over the 5 year projection period. The following increases were provided by the Finance Department on 7/26/14 and are consistent with Town financial forecasting. Fiscal Year Merit ASRS New FTE 14-15 4.0% 0.5% N/A 15-16 4.0% 0.5% N/A 16-17 4.0% 0.5% N/A 17-18 4.0% 0.5% N/A 18-19 4.0% 0.5% N/A O&M Costs - Potable Based on Utility's proposed budget for FY 14-15 updated with the most recent information. Projected 15% increase in power costs for potential Tucson Electric rate increase in FY 17-18. O&M Costs - Reclaimed Based on Utility's proposed budget for FY 14-15 updated with the most recent information. Projected 15% increase in power costs for potential Tucson Electric rate increase in FY 17-18. A-2 I I I PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR OPERATING FUND (continued) Inflation Rates The following inflation rates were provided by the Arizona Department of Revenue: FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 1.7% 1.6% 1.7% 1.8% 1.7% Water Resource Management Costs Costs are for the purchase of groundwater extinguishment credits. These credits will be pledged to the Groundwater Allowance Account to help maintain a balance that will facilitate growth in the water service area. Annual costs are based on purchasing 3,000 AF at $150/AF. Reclaimed Water Wheeling Costs Pursuant to the existing IGA, the reclaimed water rate is non -interruptible at an interruptible rate. It is assumed that when the IGA is renegotiated, the utility will opt for an interruptible rate; therefore, only inflationary increases are included annually. The rate for FY 14-15 is $292 / AF plus a monthly base rate. CAP Wheeling Costs Costs include the CAP water delivery costs - rates adopted by CAP on 6/5/14 (refer to CAP recharge costs table below). Costs also include fees charged by Tucson Water to wheel the JCAP water through their recharge and recovery system. Tucson Water fees are fixed pursuant to an IGA and subject to re -negotiation. Tucson Water Rates FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 CAP Volume Wheeled 2,000 AF 2,000 AF 2,000 AF 2,000 AF 2,000 AF Commodity Rate per AF $ 499.89 $ 499.89 $ 499.89 $ 499.89 $ 499.89 Base Rate 4-inch Meter (2) $ 203.83 $ 203.83 $ 203.83 $ 203.83 $ 203.83 Base Rate 8-inch Meter (1) $ 323.32 $ 323.32 $ 323.32 $ 323.32 $ 203.83 CAP Recharge Costs Based on the rate schedule adopted by CAP 6/5/14. The following table reflects the amount projected to be recharged annually: FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Recharge at Tucson Water 2,000 AF 2,000 AF 2,000 AF 2,000 AF 2,000 AF Recharge at Kai Farms 4,000 AF 4,000 AF 4,000 AF 4,000 AF 4,000 AF Recharge at CAWCD 4,305 AF 4,305 AF 4,305 AF 4,305 AF 4,305 AF Cost to Recharge $ 157.00 $ 161.00 $ 166.00 $ 171.00 $ 174.00 Additional for CAWCD $ 15.00 $ 15.00 $ 15.00 $ 15.00 $ 15.00 A-3 PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR OPERATING FUND (continued) Debt Service The following table describes the debt service included in this proforma: Bonds Type Description Amortization Schedule By 2005 Excise Tax Land —MOC Stone&Youngberg 2007 Excise Tax Refunding (1996 & 1999) Stone & Youngberg 2008 Sr. Lien Reclaimed Ph. 2 WIFA 2009 Sr. Lien Existing System CIP WIFA 2012 Sr. Lien Refunding (Reclaim Ph. 1) Stone & Youngberg 2012 Sr. Lien Refunding (2003) Stone & Youngberg 2013 Sr. Lien Refunding (2003) Stifel & Nicolaus & Co. 2014 Sr. Lien AMI Project WIFA Debt Service Coverage 1.30 debt service coverage ratio for 2012 & 2013 Sr. Lien Bonds & WIFA Loans 1.00 debt service coverage ratio for all Excise Tax Pledged Bonds Capital Improvements —Operating Fund The following table identifies the amount of the capital projects for each fiscal year and the related financing as identified in the revised 5-Year CIP dated 8/27/14: Fiscal Year Total Capital Costs Cash Reserves Project Financing Existing WIFA Loan New Debt 2014-15 $ 3,597,020 $1,397,020 $2,200,000 N/A 2015-16 $ 2,783,000 $ 983,000 $1,800,000 N/A 2016-17 $ 1,196,000 $1,196,000 N/A 2017-18 $ 849,000 $ 849,000 N/A 2018-19 $ 1,325,000 $1,325,000 N/A $ 9,750,020 $5,750,020 $4,000,000 Assumed no additional debt in throughout the 5-year forecast period. Capital Improvements — Groundwater Preservation Fee The following table identifies the amount of the capital projects for each fiscal year and the related financing as identified in the revised 15-Year CIP dated 8/27/14: Fiscal Total Project Financing Year Capital Costs Cash New Debt Reserves 2014-15 $ 100,000 $ 100,000 N/A 2015-16 $ 350,000 $ 350,000 N/A 2016-17 N/A N/A N/A 2017-18 N/A N/A N/A 2018-19 N/A N/A N/A A-4 PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR AWRDIF FUND ll Growth n SFR growth rates were provided by the Finance Department and are consistent with Town financial forecasting. Other Service Units (SU's) include commercial and irrigation connections. FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 SFR SU's 200 300 275 200 100 Other SU's 145 120 104 80 40 AWRD Impact Fees Decreased to $4,045 per EDU, Ordinance No. (0) 14-05, effective 7/1/14 Not projected to change in the 5 year projection period. i Beginning Cash Balance Taken from 6/30/14 Balance Sheet of respective funds (MUNIS reports dated 9/17/14). Interest Income The interest rate for all 5 years in the analysis period is projected to be 2.0%. Information provided by the Finance Department on 7/02/14. CAP Capital Costs Based on 3,557 AF at rate schedule adopted by CAP 6/5/14. Debt Service Debt service for the reclaimed water system has been moved to the Operating Fund. Capital Improvements The following table identifies the amount of the capital projects for each fiscal year and the related financing as identified in the revised 5-Year CIP dated 8/27/14: -� Fiscal Total Project Financing Year Capital Costs Cash Reserves New Debt 2014-15 $ 700,000 $ 700,000 N/A 2015-16 $ 0 $ 0 N/A 2016-17 $ 0 $ 0 N/A 2017-18 $ 400,000 $ 400,000 N/A lI 2018-19 J $3,410,000 $3,410,000 N/A A-5 Growth PREFERRED FINANCIAL SCENARIO ASSUMPTIONS FOR PWSDIF FUND SFR growth rates were provided by the Finance Department and are consistent with Town financial forecasting. Other Service Units (SU's) include commercial and irrigation connections. FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 SFR SU's 1 200 300 275 200 100 Other SU's 1 145 120 104 80 40 PWSD Impact Fees Decreased impact fees to $2,015 per EDU, Ordinance No. (0) 14-05, effective 7/1/14. Not projected to change in the five year projection period. Beginning Cash Balance Taken from 6/30/14 Balance Sheet of respective funds. (MUNIS reports dated 9/17/14). Interest Income The interest rate for all 5 years in the analysis period is projected to be 2.0%. Information provided by the Finance Department on 7/02/14. Debt Service The following table describes the debt service included in this proforma: Bonds Type Description Amortization Schedule By 2012 Sr. Lien Refunding (2003) Stone & Youngberg Debt Service Coverage 1.30 debt service coverage ratio for 2012 Sr. Lien Bonds Capital Improvements No capital projects were identified in the revised 5-year CIP dated 8/27/14. F-IT I r II r APPENDIX B Preferred Financial Scenario B-1 Operating Fund B-2 Groundwater Preservation Fee B-3 Alternative Water Resources Development Impact Fee Fund B-4 Potable Water System Development Impact Fee Fund B-5 Summary of All Funds I �1 J Oro Valley Water Utility Prepared: October 22, 2014 REVENUES Water Sales Potable Water Sales (excluding golf courses) Potable Water Sales from Growth - Res. & Com. Potable Water Sales - Golf Courses Total Potable Water Sales Reclaimed Water Sales Total Water Sales Other Operating Revenue Service Fees & Charges Interest Income Total Other Operating Revenue Total Operating Revenue OPERATING EXPENSES Potable Operating Expenses Personnel Operations & Maintenance Power for Pumping Water Resource Management Costs CAP Wheeling Costs CAP Water Recharge Costs Total Potable Operating Expenses Reclaimed Operating Expenses Operating & Maintenance Total Reclaimed Operating Expenses Total Operating Expenses PREFERRED FINANCIAL SCENARIO Operating Fund FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 $ 10,065,575 $ 10,229,109 $ 10,397,653 $ 10,585,864 $ 10,809,196 58,508 182,973 322,133 443,572 523,122 128,047 130,523 133,048 136,912 140,891 10,252,130 10,542,605 10,952,834 11,166,348 11,473,209 1,796,098 1,818, 296 1,850, 323 1,899,317 1,949,954 12,048,228 12,360,901 12,703,157 13,065,665 13,423,163 689,200 689,200 689,200 689,200 689,200 207,233 189,964 174,894 164,753 155,303 896,433 879,164 864,094 853,953 844,503 $ 12,944,662 $ 13,240,065 $ 13,567,251 $ 13,919,618 $ 14,267,666 2,874,528 3,003,882 3,139,056 3,280,314 3,427,928 2,043,303 2,063,736 2,086,437 2,111,474 2,138,924 900,000 900,000 900,000 1,035,000 1,035,000 450,000 450,000 450,000 450,000 450,000 1,164,300 1,188,192 1,198,192 1,208,192 1,214,192 1,324,000 1,401,680 1,443,205 1,484,730 1,509,645 $ 8,756,131 $ 9,007,490 $ 9,216,890 $ 9,569,710 $ 9,775,688 890,360 899,264 909,155 920,065 932,026 $ 890,360 $ 899,264 $ 909,155 $ 920,065 $ 932,026 $ 9,646,491 $ 9,906,753 $ 10,126,046 $ 10,489,775 $ 10,707,715 Net Operating Revenue $ 3,298,170 $ 3,333,312 $ 3,441,205 $ 3,429,843 $ 3,559,951 DEBT SERVICE - POTABLE P&I - Excise Tax Bonds - Land for MOC (2005) P&I - Excise Tax Bonds - Refinance 1996 (2007) P&I - WIFA Loan - Exist. System CIP (2009) P&I - Sr. Lien Bonds - Existing System (2012) P&I - Refunding - Excise (2013) P&I -WIFA Loan - Sr. Lien -AMI (2014) Total Potable System Debt Service Other Obligations Machinery & Equipment Vehicles Capital Improvements: Existing System Total Other Obligations Net Balance From Operations Beginning Cash Balance Net Balance From Operations Ending Cash Balance 152,516 152,227 151,691 152,417 152,668 1,255,948 1,258,530 1,259,936 1,255,326 1,258,553 149,368 149,322 149,275 149,226 149,175 582,284 589,494 586,716 589,759 589,227 1,046,558 1,022, 420 1,033,428 1,024,073 1,024, 645 396,233 404,608 404,508 404,406 404,301 $ 3,582,907 $ 3,576,601 $ 3,585,554 $ 3,575,207 $ 3,578,569 $ 103,020 $ 98,000 $ 91,000 $ 69,000 $ 200,000 234,000 155,000 230,000 70,000 75,000 1,060,000 730,000 875,000 710,000 1,050,000 $ 1,397,020 $ 983,000 $ 1,196,000 $ 849,000 $ 1,325,000 $ (1,681,757) $ (1,226,289) $ (1,340,349) $ (994,365) $ (1,343,618) $ 8,199,262 $ 6,517,505 $ 5,291,215 $ 3,950,866 $ 2,956,502 (1,681,757) (1,226,289) (1,340,349) (994,365) (1,343,618) $ 6,517,505 $ 5,291,215 $ 3,950,866 $ 2,956,502 $ 1,612,884 B-1 Oro Valley Water Utility PREFERRED FINANCIAL SCENARIO Prepared: October 22, 2014 Operating Fund Groundwater Preservation Fee FY 2014.15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 r GPF Beginning Balance $ 2,670,948 $ 3,450,303 $ 3,841,919 $ 4,509,720 $ 5,182,447 GPF Revenue (existing+growth) 2,542,799 2;424,821 2,352,563 2,369,648 2,379,202 Less Capital Component of TW Wheeling Costs (142,360) (142,360) (142,360) (142,360) (142,360) Less Capital Charge for CAP Allotment 6,748 AF (148,456) (155,204) (161,952) (168,700) (168,700) Less Reclaimed Project- Main Relocation (100,000) (350,000) Less P&I - Sr. Lien - WIFA -Reclaimed Ph.2 (2008) (311,256) (311,130) (311,001) (310,866) (310,727) Less P&I - Sr. Lien Bonds - Reclaimed Ph.1 (2012) (1,061,372) (1,074,511) (1,069,449) (1,074,995) (1,074,027) GPF Ending Balance $ 3,450,303 $ 3,841,919 $ 4,509,720 $ 5,182,447 $ 5,865,835 M Oro Valley Water Utility Prepared: October 22,2014 REVENUES AWRD Impact Fee Revenue Subtotal Revenue Other Operating Revenue Interest Income Subtotal Other Operating Revenue Total Operating Revenue PREFERRED FINANCIAL SCENARIO Alternative Water Resources Development Impact Fee Fund FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 $ 1,409,646 $ 1,698,900 $ 1,553,055 $ 1,132,600 $ 566,300 1,409,646 1,698,900 1,553,055 1,132,600 566,300 72,510 95,623 128,508 152,879 136,027 72,510 95,623 128,508 152,879 136,027 $ 1,482,156 $ 1,794,523 $ 1,681,563 $ 1,285,479 $ 702,327 OPERATING EXPENSES N/A - - - - - Total Operating Expenses $ - $ - $ - $ - $ - Net Operating Revenue $ 1,482,156 $ 1,794,523 $ 1,681,563 $ 1,285,479 $ 702,327 DEBT SERVICE N/A Total Debt Service OTHER OBLIGATIONS Capital Improvements: CAP Capital Charges 3557 acre feet $ 78,254 $ 81,811 $ 85,368 $ 88,925 $ 88,925 CAP Facilities Engineering & Construction 700,000 - - 400,000 3,410,000 Total Other Obligations $ 778,254 $ 81,811 $ 85,368 $ 488,925 $ 3,498,925 Net Balance From Operations $ 703,902 $ 1,712,712 $ 1,596,195 $ 796,554 $ (2,796,598) Beginning Cash Balance $ 3,336,099 $ 4,040,001 $ 5,752,713 $ 7,348,908 $ 8,145,462 Net Balance From Operations $ 703,902 $ 1,712,712 $ 1,596,195 $ 796,554 $ (2,796,598) Ending Cash Balance $ 4,040,001 $ 5,752,713 $ 7,348,908 $ 8,145,462 $ 5,348,864 B-3 Oro Valley Water Utility PREFERRED FINANCIAL SCENARIO Prepared: October 22,2014 Potable Water System Development Impact Fee Fund FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 REVENUES Development Impact Fees $ 707,691 $ 846,300 $ 763,685 $ 564,200 $ 282,100 Subtotal Revenue $ 707,691 $ 846,300 $ 763,685 $ 564,200 $ 282,100 Other Operating Revenue Interest Income 93,598 104,309 115,949 125,099 129,669 Subtotal Other Operating Revenue 93,598 104,309 115,949 125,099 129,669 Total Operating Revenue $ 801,289 $ 950,609 $ 879,634 $ 689,299 $ 411,769 OPERATING EXPENSES N/A - - - - - Total Operating Expenses $ - $ - $ - $ - $ - Net Operating Revenue $ 801,289 $ 950,609 $ 879,634 $ 689,299 $ 411,769 DEBT SERVICE M -Sr. Lien Bonds -Expansion Related(2012) $ 327,424 $ 331,478 $ 329,916 $ 331,627 $ 331,328 Total Water System Debt Service $ 327,424 $ 331,478 $ 329,916 $ 331,627 $ 331,328 OTHER OBLIGATIONS N/A Total Other Obligations Net Balance From Operations Beginning Cash Balance Net Balance From Operations Ending Cash Balance $ 473,865 $ 619,131 $ 549,718 $ 357,672 $ 80,441 $ 4,505,635 $ 4,979,500 $ 5,598,631 $ 6,148,349 $ 6,506,021 $ 473,865 $ 619,131 $ 549,718 $ 357,672 $ 80,441 $ 4,979,500 $ 5,598,631 $ 6,148,349 $ 6,506,021 $ 6,586,462 B-4 M I Oro Valley Water Utility Potable & Reclaimed Water Systems Prepared: October 22, 2014 REVENUES Water Sales Potable Water Sales (exclude golf courses) Potable Water Sales from Growth Potable Water Sales - Golf Courses Total Potable Water Sales Reclaimed Water Sales Total Water Sales Other Operating Revenue Groundwater Preservation Fees Groundwater Preservation Fee - Potable Groundwater Preservation Fee- Reclaimed Groundwater Preservation Fee - Growth Total Groundwater Preservation Fees Potable Water Impact Fees Alternative Water Impact Fees Service Fees & Charges Interest Income Total Other Operating Revenue Total Operating Revenue OPERATING EXPENSES Potable Operating Expenses Personnel Operations & Maintenance Power for Pumping Water Resource Management Costs CAP Wheeling Costs - CAP Recharge Costs Costs paid by GPF Revenue Total Potable Operating Expenses Reclaimed Operating Expenses Operating & Maintenance Total Reclaimed Operating Expenses Total Operating Expenses PREFERRED FINANCIAL SCENARIO Summary of all Funds FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 $ 10,065,575 $ 10,229,109 $ 10,397,653 $ 10,585,864 $ 10,809,196 58,508 182,973 322,133 443,572 523,122 128,047 130,523 133,048 136,912 140,891 10,252,130 10, 542,605 10,852,834 11,166,348 11,473,209 1,796,098 1,818,296 1,850,323 1,899,317 1,949,954 12,048,228 12,360,901 12,703,157 13,065, 665 13,423,163 2,168,917 2,052,785 1,974,252 1,974,252 1,974,252 361,568 339,402 325,105 325,105 325,105 12,314 32,634 53,206 70,291 79,845 2,542,799 2,424,821 2,352,563 2,369,648 2,379,202 707,691 846,300 763,685 564,200 282,100 1,409,646 1,698,900 1,553,055 1,132,600 566,300 689,200 689,200 689,200 689,200 689,200 373,341 389,896 419,351 442,731 420,999 5,722,677 6,049,117 5,777,854 5,198,379 4,337,801 $ 17,770,905 $ 18,410,018 $ 18,481,011 $ 18,264,044 $ 17,760,964 2,874,528 3,003,882 3,139,056 3,280,314 3,427,928 2,043,303 2,063,736 2,086,437 2,111,474 2,138,924 900,000 900,000 900,000 1,035,000 1,035,000 450,000 450,000 450,000 450,000 450,000 1,164,300 1,188,192 1,198,192 1,208,192 1,214,192 1, 3 24, 000 1,401, 680 1, 443, 205 1,484,730 1,509,645 290,816 297,564 304,312 311,060 311,060 $ 9,046,947 $ 9,305,054 $ 9,521,202 $ 9,880,770 $ 10,086,748 890,360 899,264 909,155 920,065 932,026 $ 890,360 $ 899,264 $ 909,155 $ 920,065 $ 932,026 $ 9,937,307 $ 10,204,317 $ 10,430,358 $ 10,800,835 $ 11,018,775 Net Operating Revenue $ 7,833,598 $ 8,205,701 $ 8,050,653 $ 7,463,209 $ 6,742,189 l Debt Service JDebt Service - Potable- Existing System P&I - Excise Tax Bonds - Land for MOC (2005) P&I - Excise Tax Bonds - Refinance 1996 (2007) P&I - WIFA Loan - Exist. System CIP (2009) P&I - Sr. Lien Bonds - Existing System (2012) P&I - Refunding- Excise (2013) 1 P&I - WIFA Loan - Meter Replacement (2014) JI Total Potable Existing System Debt Service Debt Service - Potable - Expansion Related P&I - Sr. Lien Bonds - Expansion Related (2012) Total Potable Expansion Related Debt Service Debt Service - Non -Potable P&I - Sr. Lien - WIFA-Reclaimed Ph.2 (2008) P&I - Sr. Lien Bonds - Reclaimed Ph.l (2012) Total Non -Potable System Debt Service Total Water System Debt Service 152,516 152,227 151,691 152,417 152,668 1,255,948 1,258,530 1,259,936 1,255,326 1,258,553 149,368 149,322 149,275 149,226 149,175 582,284 589,494 586,716 589,759 589,227 1,046, 558 1,022,420 1,033,428 1,024,073 1,024, 645 396,233 404,608 404,508 404,406 404,301 $ 3,582,907 $ 3,576,601 $ 3,585,554 $ 3,575,207 $ 3,578,569 327,424 331,478 329,916 331,627 331,328 $ 327,424 $ 331,478 $ 329,916 $ 331,627 $ 331,328 $ 316,526 $ 316,402 $ 316,273 $ 316,140 $ 316,002 1,061, 372 1,074, 511 1,069,449 1,074,995 1,074,027 $ 1,377,898 $ 1,390,913 $ 1,385,722 $ 1,391,135 $ 1,390,029 $ 5,288,229 $ 5,298,992 $ 5,301,192 $ 5,297,969 $ 5,299,926 B-5 Oro Valley Water Utility Potable & Reclaimed Water Systems Prepared: October 22, 2014 Other Obligations Machinery & Equipment Vehicles Capital Improvements: Existing System GPF Projects Alternative Water Resources Total Other Obligations Net Balance From Operations Growth - New Connections Increase from Water Rates Decrease from Groundwater Preservation Fees Increase(Decrease) to Residential Customer using 8K gals. Increase(Decrease) to Residential Customer using 8K gals. Required Cash Reserves (5% of budget) (does not include depreciation/amortization) Debt Service Coverage Requirement Amount DS Coverage Ratio: Sr. Lien Bonds & WIFA Debt Service Coverage Requirement = 1.30 Beginning Cash Balance Net Balance From Operations Ending Cash Balance Operating Fund Groundwater Preservation Fees AWRD Impact Fee Fund PWSD Impact Fee Fund Total Ending Cash Balance Contingent Reserve Fund: Contingent Reserve Requirement = 130% PREFERRED FINANCIAL SCENARIO Summary of all Funds FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 $ 103,020 $ 98,000 $ 91,000 $ 69,000 $ 200,000 234,000 155,000 230,000 70,000 75,000 1,060,000 730,000 875,000 710,000 1,050,000 100,000 350,000 - - - 778,254 81,811 85,368 488,925 3,498,925 $ 2,275,274- $ 1,414,811 $ 1,281,368 $ 1,337,925 $ 4,823,925 $ 270,095 $ 1,491,898 $ 1,468,093 $ 827,314 $ (3,391,662) 200 300 275 200 100 1.1% 1.3% 1.1% 1.5% 1.5% -1.2% -1.2% 0.0% 0.0% 0.0% -0.1% 0.1% 1.1% 1.5% 1.5% ($0.03) $0.04 $0.45 $0.60 $0.61 $ 875,041 $ 845,906 $ 850,646 $ 871,836 $ 1,057,131 $ 6,452,159 $ 6,465,462 $ 6,468,062 $ 6,465,037 $ 6,466,538 2.02 2.11 2.07 1.92 1.73 $ 18,711,944 $ 18,982,038 $ 20,473,936 $ 21,942,029 $ 22,769,344 270,095 1,491,898 1,468,093 827,314 (3,381,662) $ 18,982,038 $ 20,473,936 $ 21,942,029 $ 22,769,344 $ 19,387,682 $ 6,517,505 $ 5,291,215 $ 3,950,866 $ 2,956,502 $ 1,612,884 3,450,303 3,841,919 4,509,720 5,182,447 5,865,835 4,040,001 5,752,713 7,348,908 8,145,462 5,348,864 4,979,500 5,598,631 6,148,349 6,506,021 6,586,462 $ 18,987,308 $ 20,484,478 $ 21,957,843 $ 22,790,432 $ 19,414,045 359% 387% 414% 430% 366% M APPENDIX C Preferred Financial Scenario Rate Schedules & Tables for Bill Comparisons C-1 Potable & Reclaimed Water Rates C-2 Tables for Bill Comparisons by Meter Size ORO VALLEY WATER UTILITY PREFERRED FINANCIAL SCENARIO PROPOSED WATER RATES POTABLE & RECLAIMED METER SIZE BASE RATE (in inches) 5/8 x 3/4 $14.19 3/4 x 3/4 $21.29 1 $35.48 1.5 $70.95 2 $113.53 3 $227.05 4 $354.77 6 $709.54 8 $1,135.26 COMMODITY RATES - POTABLE WATER RESIDENTIAL & IRRIGATION CLASSIFICATIONS METER COMMODITY COMMODITY COMMODITY COMMODITY SIZE TIER 1 TIER 2 TIER 3 TIER 4 $2.27 $3.10 $4.23 $5.76 COST PER 1000 GALS. COST PER 1000 GALS. COST PER 1000 GALS. COST PER 1000 GALS. 5/8x 3/4 0-7,000 7,001-16,000 16,001 - 32,000 OVER 32,000 3/4 x 3/4 0 - 10,000 10,001 - 24,000 24,001 - 48,000 OVER 48,000 1 0 - 17,000 17,001- 40,000 40,001 - 80,000 OVER 80,000 1.5 0 - 35,000 35,001- 80,000 80,001 - 160,000 OVER 160,000 2 0 - 56,000 56,001- 128,000 128,001 - 256,000 OVER 256,000 3 0-112,000 112,001 - 256,000 256,001 - 512,000 OVER 512,000 4 0-175,000 175,001 - 400,000 400,001 - 800,000 OVER 800,000 6 0-860,000 860,001 - 2,000,000 2,000,001 - 3,500,000 OVER 3,500,000 8 0 - 860,000 860,001- 2,000,000 2,000,001- 3,500,000 OVER 3,500,000 COMMERCIAL CLASSIFICATION $2.27 per 1000 gallons for all water use MASTER -METERED MULTIFAMILY CLASSIFICATION $2.27 per 1000 gallons for all water use CONSTRUCTION WATER $6.76 per 1000 gallons for all water use COMMODITY RATES - RECLAIMED WATER ALL RECLAIMED WATER USES & CLASSIFICATIONS 1 $ 2.23 per 1000 gallons for all water use GROUNDWATER PRESERVATION FEES POTABLE WATER $ 0.90 per 1000 gallons for all water use RECLAIMED WATER $ 0.47 per 1000 gallons for all water use C-1 TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 5/8 X 3/4" METER E I Imo. I I I GALLONS USED CURRENT WATER RATE PROPOSED WATER RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 14.19 14.19 0.00 0.0% 0.00 0.00 0.00 0.00 14.19 0.0% 1,000 16.42 16.46 0.04 0.2% 0.95 0.90 -0.05 -0.01 17.36 -0.1% 2,000 18.65 18.73 0.08 0.4% 1.90 1.80 -0.10 -0.02 20.53 -0.1% 3,000 20.88 21.00 0.12 0.6% 2.85 2.70 -0.15 -0.03 23.70 -0.1% 4,000 23.11 23.27 0.16 0.7% 3.80 3.60 -0.20 -0.04 26.87 -0.1% 5,000 25.34 25.54 0.20 0.8% 4.75 4.50 -0.25 -0.05 30.04 -0.2°% 6,000 27.57 27.81 0.24 0.9% 5.70 5.40 -0.30 -0.06 33.21 -0.2% 7,000 29.80 30.08 0.28 0.9% 6.65 6.30 -0.35 -0.07 36.38 -0.2% 8,000 32.81 33.18 0.37 1.1% 7.60 7.20 -0.40 -0.03 40.38 -0.1% 9,000 35.82 36.28 0.46 1.3% 8.55 8.10 -0.45 0.01 44.38 0.0% 10,000 38.83 39.38 0.55 1.4% 9.50 9.00 -0.50 0.051 48.38 0.1% 11,000 41.84 42.48 0.64 1.5% 10.45 9.90 -0.55 0.09 52.38 0.2% 12,000 44.85 45.58 0.73 1.6% 11.40 10.80 -0.60 0.13 56.38 0.2% 13,000 47.86 48.68 0.82 1.7% 12.35 - 11.70 -0.65 0.17 60.38 0.3% 14,000 50.87 51.78 0.91 1.8% 13.30 12.60 -0.70 0.21 64.38 0.3% 15,000 53.88 54.88 1.00 1.9% 14.25 13.50 -0.75 0.25 68.38 0.4% 16,000 56.89 57.98 1.09 1.9% 15.20 14.40 -0.80 0.29 72.38 0.4% 17,000 60.96 62.21 1.251 2.1% 16.151 15.30 -0.851 0.40 77.511 0.5% 18,000 65.03 66.44 1.41 2.2% 17.10 16.20 -0.90 0.51 82.64 0.6% 19,000 69.10 70.67 1.57 2.3% 18.05 17.10 -0.95 0.62 87.77 0.7°% 20,000 73.17 74.90 1.73 2.4% 19.00 18.00 -1.00 0.73 92.90 0.8% 21,000 77.24 79.13 1.89 2.4% 19.95 18.90 -1.05 0.84 98.03 0.9% 22,000 81.31 83.36 2.05 2.5% 20.90 19.80 -1.10 0.95 103.16 0.9% 23,000 85.38 87.59 2.21 2.6% 21.85 20.70 -1.15 1.06 108.29 1.0% 24,000 89.45 91.82 2.37 2.6% 22.80 21.60 -1.20 1.17 113.42 1.0°% 25,000 93.52 96.051 2.53 2.7% 23.751 22.50 -1.251 1.28 118.551 1.1% 26,000 97.59 100.28 2.69 2.8°% 24.70 23.40 -1.30 1.39 123.681 1.1% 27,000 101.66 104.51 2.85 2.8% 25.65 24.30 -1.35 1.50 128.81 1.2% 28,000 105.73 108.74 3.01 2.8% 26.60 25.20 -1.40 1.61 133.94 1.2% 29,000 109.80 112.97 3.17 2.9% 27.55 26.10 -1.45 1.72 139.07 1.3% 30,000 113.87 117.20 3.33 2.9% 28.50 27.00 -1.50 1.83 144.20 1.3% 31,000 117.94 121.43 3.49 3.0% 29.45 27.90 -1.55 1.94 149.33 1.3% 32,000 122.01 125.66 3.65 3.0% 30.40 28.80 -1.60 2.05 154.46 1.3% 33,000 127.50 131.421 3.92 3.1% 31.351 29.70 -1.65 2.27 161.12 1.4% 34,000 132.99 137.18 4.19 3.2% 32.30 30.60 -1.701 2.49 167.78 1.5% 35,000 138.48 142.94 4.46 3.2% 33.25 31.50 -1.75 2.71 174.44 1.6% 36,000 143.97 148.70 4.73 3.3% 34.20 32.40 -1.80 2.93 181.10 1.6% 37,000 149.46 154.46 5.00 3.3°% 35.15 33.30 -1.85 3.15 187.76 1.7% 38,000 154.95 160.22 5.27 3.4% 36.10 34.20 -1.90 3.37 194.42 1.8% 39,000 160.44 165.98 5.54 3.5% 37.05 35.10 -1.95 3.59 201.08 1.8% 40,000 165.93 171.74 5.81 3.5% 38.00 36.00 -2.00 3.81 207.74 1.9% 41,000 171.42 177.501 6.08 3.5% 38.951 36.90 -2.05 4.03 214.40 1.9% 42,000 176.91 183.26 6.35 3.6% 39.90 37.80 -2.101 4.25 221.06 2.0% 43,000 182.40 189.02 6.62 3.6% 40.85 38.70 -2.15 4.47 227.72 2.0% 44,000 187.89 194.78 6.89 3.7% 41.80 39.60 -2.20 4.69 234.38 2.0% 45,000 193.38 200.54 7.16 3.7°% 42.75 40.50 -2.25 4.91 241.04 2.1% 46,000 198.87 206.30 7.43 3.7% 43.70 41.40 -2.30 5.13 247.70 2.1% 47,000 204.36 212.06 7.70 3.8°% 44.65 42.30 -2.35 5.35 254.361 2.1% 48,000 209.85 217.82 7.97 3.8% 45.60 43.20 -2.40 5.57 261.02 2.2% 49,000 215.34 223.58 8.24 3.8°� 46.55 44.10 -2.45 5.79 267.68 2.2% 50,000 220.83 229.34 8.51 3.9% 47.50 45.00 -2.50 6.01 274.34 2.2% C-2 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE $ 21.29 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 10,000 GALLONS TIER 2 = $ 3.10 FOR 10,001- 24,000 GALLONS TIER 3 = $ 4.23 FOR 24,001- 48,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 48,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 21.29 21.29 - 0.0% 0.00 0.00 0.00 0.00 21.29 0.0% 7,000 36.90 37.18 0.28 0.8% 6.65 6.30 -0.35 -0.07 43.48 -0.2% 11,000 46.60 47.09 0.49 1.1% 10.45 9.90 -0.55 -0.06 56.99 -0.1% 28,000 102.01 104.31 2.30 2.3% 26.60 25.20 -1.40 0.90 129.51 0.7% 50,000 194.39 200.43 6.04 3.1% 47.50 45.00 -2.50 3.54 245.43 1.5% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3/4" x 3/4" METER BASE RATE $ 21.29 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 21.29 21.29 - 0.0% 0.00 0.00 0.00 0.00 21.29 0.0% 7,000 36.90 37.18 0.28 0.8% 6.65 6.30 -0.35 -0.07 43.48 -0.2% 11,000 45.82 46.26 0.44 1.0°% 10.45 9.90 -0.55 -0.11 56.16 -0.2% 28,000 83.73 84.85 1.12 1.3°% 16.60 25.20 -1.40 -0.28 110.05 -0.3% 50,000 132.79 134.79 2.00 1.5% 47.50 45.00 -2.50 -0.50 179.79 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 1" METER BASE RATE $ 35.48 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 17,000 GALLONS TIER 2 = $ 3.10 FOR 17,001 - 40,000 GALLONS TIER 3 = $ 4.23 FOR 40,001 - 80,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 80,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 35.48 35.48 - 0.0°% 0.00 0.00 0.00 0.00 35.48 0.0% 16,000 71.16 71.80 0.64 0.9°% 15.20 14.40 -0.80 -0.16 86.20 -0.2% 27,000 103.49 105.07 1.58 1.5°% 25.65 24.30 -1.35 0.23 129.37 0.2% 38,000 136.60 139.17 2.57 1.9% 36.10 34.20 -1.90 0.67 173.37 0.4% 50,000 183.32 187.67 4.3.5 2.4% 47.50 45.00 -2.50 1.85 232.67 0.8% C-3 I TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1" METER BASE RATE $ 35.48 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 35.48 35.48 - 0.0% 0.00 0.00 0.00 0.00 35.48 0.0% 16,000 71.16 71.80 0.64 0.9% 15.20 14.40 -0.80 -0.16 86.20 -0.2% 27,000 95.69 96.77 1.08 1.1% 25.65 24.30 -1.35 -0.27 121.07 -0.2% 38,000 120.22 121.74 1.52 1.3% 36.10 34.20 -1.90 -0.38 155.94 -0.2 50,000 146.98 148.98 2.00 1.4% 47.50 45.00 -2.50 0 193.98 % TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR IRRIGATION CUSTOMERS WITH A 1.5" METER BASE RATE $ 70.95 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 35,000 GALLONS TIER 2 = $ 3.10 FOR 35,001 - 80,000 GALLONS TIER 3 = $ 4.23 FOR 80,001- 160,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 160,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILL ATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 70.95 70.95 - 0.0% 0.00 0.00 0.00 0.00 70.95 0.0% 38,000 158.03 159.70 1.67 1.1% 36.10 34.20 -1.90 -0.23 193.90 -0.1% 64,000 236.29 240.30 4.01 1.7% 60.80 57.60 -3.20 0.81 297.90 0.3% 90,000 321.11 332.20 7.05 2.2% 85.50 81.00 -4.50 2.55 413.20 0.6% 125,000 467.60 480.25 12.65 2.7% 118.75 112.50 -6.25 6.40 592.75 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1.5" METER BASE RATE $ 70.95 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 70.95 70.95 - 0.0% 0.00 0.00 0.00 0.00 70.95 0.0% 38,000 155.69 157.21 1.52 1.0% 36.10 34.20 -1.90 -0.38 191.41 -0.2% 64,000 213.67 216.23 2.56 1.2°% 60.80 57.60 -3.20 -0.64 273.83 -0.2% 90,000 271.65 275.25 3.60 1.3% 85.50 51.00 -4.50 -0.90 356.25 -0.3% 125,000 349.70 35,170 5.00 1.4% 118.75 112.50 -6.25 -1.25 467.20 -0.3% C-4 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR IRRIGATION CUSTOMERS WITH A 2" METER BASE RATE $ 113.53 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 56,000 GALLONS TIER 2 = $ 3.10 FOR 56,001 - 128,000 GALLONS TIER 3 = $ 4.23 FOR 128,001 - 256,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 256,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 113.53 113.53 - 0.0% 0.00 0.00 0.00 0.00 113.53 0.0°% 57,000 241.42 243.75 2.33 1.0% 54.15 51.30 -2.85 -0.52 295.05 -0.2% 128,000 455.13 463.85 8.72 1.9% 121.60 115.20 -6.40 2.32 579.05 0.4% 250,000 951.67 979.91 28.24 3.0% 237.50 225.00 -12.50 15.74 1,204.91 1.3% 325,000 1,354.90 1,402.73 47.83 3.5% 308.75 292.50 -16.25 31.58 1,695.23 1.9% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 2" METER BASE RATE $ 113.53 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2 = N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 113.53 113.53 - 0.0% 0.00 0.00 0.00 0.00 113.53 0.0% 57,000 240.64 242.92 2.28 0.9% 54.15 51.30 -2.85 -0.57 294.22 -0.2% 128,000 398.97 404.09 5.12 1.3% 121.60 115.20 -6.40 -1.28 519.29 -0.2% 250,000 671.03 681.03 10.00 1.5% 237.50 225.00 -12.50 -2.50 906.03 -0.3% 325,000 838.28 851.28 13.00 1.6% 308.75 292.50 -16.25 -3.25 1,143.75 -0.3% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR IRRIGATION CUSTOMERS WITH A 3" METER BASE RATE $ 227.05 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 112,000 GALLONS TIER 2 = $ 3.10 FOR 112,001- 256,000 GALLONS TIER 3 = $ 4.23 FOR 256,001- 512,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 512,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 227.05 227.05 - 0.0% 0.00 0.00 0.00 0.00 227.05 0.0% 50,000 338.55 340.55 2.00 0.6% 47.50 45.00 -2.50 -0.50 385.55 -0.1% 150,000 591.19 599.09 7.90 1.3% 142.50 135.00 -7.50 0.40 734.09 0.1% 300,000 1,089.33 1,113.81 24.48 2.2% 115.00 270.00 -15.00 9.48 1,353.81 0.7% 500,000 1,903.33 1,959.81 56.48 3.0% 475.00 450.00 -25.00 31.45 2,409.81 C-5 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3" METER BASE RATE $ 227.05 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 227.05 227.05 - 0.0% 0.00 0.00 0.00 0.00 227.05 0.0% 50,000 338.55 340.55 2.00 0.6% 47.50 45.00 -2.50 -0.50 385.55 -0.1% 150,000 561.55 567.55 6.00 1.1% 142.50 135.00 -7.50 -1.50 702.55 -0.2% 300,000 896.05 908.05 12.00 1.3% 285.00 270.00 -15.00 -3.00 1, 178.05 -0.3% 500,000 1,342.05 1,362.05 20.00 1.5% 475.00 450.00 -25.00 -5.00 1,812.05 1 -0.3% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR IRRIGATION CUSTOMERS WITH A 4" METER BASE RATE $ 354.77 COMMODITY RATE: TIER 1= $ 2.27 FOR 0 - 175,000 GALLONS TIER 2 = $ 3.10 FOR 175,001 - 400,000 GALLONS TIER 3 = $ 4.23 FOR 400,001- 800,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 800,000 GALLONS GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 354.77 354.77 - 0.0% 0.00 0.00 0.00 0.00 354.77 0.0°% 300,000 1,121.27 1,139.52 18.25 1.6% 285.00 270.00 -15.00 3.25 1,409.52 0.2% 550,000 2,032.77 2,084.02 51.25 2.5% 522.50 495.00 -27.50 23.75 2,579.02 0.9% 700,000 2,643.27 2,718.52 75.25 2.8% 665.00 630.00 -35.00 40.25 3,19152 1.2% 850,000 3,324.77 3,429.52 104.75 3.2°� 807.50 765.00 -42.50 62.25 4,194.52 1.5% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 4" METER BASE RATE $ 354.77 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 354.77 354.77 - 0.0% 0.00 0.00 0.00 0.00 354.77 0.0% 300,000 1,023.77 1,035.77 12.00 1.2% 285.00 270.00 -15.00 -3.00 1,305.77 -0.2% 550,000 1,581.27 1,603.27 22.00 1.4% 522.50 495.00 -27.50 -5.50 2,098.27 -0.3% 700,000 1,915.77 1,943.77 28.00 1.5°� 665.00 630.00 -35.00 -7.00 2,573.77 -0.3% 550,000 2,250.27 2,284.27 34.00 1.5% 807.50 765.00 -42.50 -8.50 3,049.27 1 -0.3% C-6 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 6" METER BASE RATE $ 709.54 COMMODITY RATE: TIER 1= $ 2.27 FOR 0 - 860,000 GALLONS TIER 2 = $ 3.10 FOR 860,001 - 2,000,000 GALLONS TIER 3 = $ 4.23 FOR 2,000,001- 3,500,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 3,500,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 709.54 709.54 - 0.0% 0.00 0.00 0.00 0.00 709.54 0.0% 425,000 1,657.29 1,674.29 17.00 1.0% 403.75 382.50 -21.25 -4.25 2,056.79 -0.2% 1,000,000 3,048.74 3,095.74 47.00 1.5% 950.00 900.00 -50.00 -3.00 3,995.74 -0.1% 1:520:000 4,553.74 4,645.74 92.00 2.0% 1,425.00 1,350.00 -75.00 17.00 5,995.74 0.3% 2,000,000 6,058.74 6,195.74 137.00 2.3% 1,900.00 1,800.00 -100.00 37.00 7,995.74 0.5% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 6" METER BASE RATE $ 709.54 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2 = N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILL ATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNT OF MONTHLY BILL TOTAL PERCENT INCREASED 0 709.54 709.54 - 0.0% 0.00 0.00 0.00 0.00 709.54 0.0% 425,000 1,657.29 1,674.29 17.00 1.0% 403.75 382.50 -21.25 -4.25 2,056.79 -0.2% 1,000,000 2,939.54 2,979.54 40.00 1.4% 950.00 900.00 -50.00 -10.00 3,879.54 -0.3°% 1,500,000 4,054.54 4,114.54 60.00 1.5% 1,425.00 1,350.00 -75.00 -15.00 5,464.54 -0.3% 2,000,000 5,169.54 5,249.54 80.00 1.5% 1,900.00 1,800.00 -100.00 -20.00 7,049.54 -0.3% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 8" METER BASE RATE $ 1,135.26 COMMODITY RATE: TIER 1 = $ 2.27 FOR 0 - 860,000 GALLONS TIER 2 = $ 3.10 FOR 860,001 - 2,000,000 GALLONS TIER 3 = $ 4.23 FOR 2,000,001 - 3,500,000 GALLONS TIER 4 = $ 5.76 FOR ALL USAGE OVER 3,500,000 GALLONS GALLONS USEDIN 1 MONTH BILL AT THE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 1,135.26 1,135.26 - 0.0% 0.00 0.00 0.00 0.00 1,135.26 0.0% 425,000 2,083.01 2,100.01 17.00 0.8°% 403.75 382.50 -21.25 -4.25 2,482.51 -0.2°% 1,000,000 3,474.46 3,521.46 47.00 1.4% 950.00 900.00 -50.00 -3.00 4,421.46 -0.1% 1,500,000 4,979.46 5,071.46 92.00 1.8°1 1,425.00 1,350.00 -75.00 17.00 6,421.46 0.3°% 2,000,000 6,484.46 6,621.46 137.00 2.1% 1,900.00 1,800.00 -100.00 37.00 8,421.46 0.4% C-7 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR COMMERCIAL AND MULTIFAMILY CUSTOMERS WITH A 8" METER BASE RATE $ 1,135.26 COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER4= N/A GALLONS USEDIN 1 MONTH BILL ATTHE CURRENT RATE BILL ATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 1,135.26 1,135.26 - 0.0% 0.00 0.00 0.00 0.00 - 1,135.26 0.0% 425,000 2,083.01 2,100.01 17.00 0.8% 403.75 382.50 -21.25 -4.25 2,482.51 -0.2% 1,000,000 3,365.26 3,405.26 40.00 1.2% 950.00 900.00 -50.00 -10.00 4,305.26 -0.2% 1,500,000 1 4,480.26 4,540.26 60.00 1.3% 1,425.00 1,150.00 -75.00 -15.00 5,890.26 -0.3% 2,000,000 5,595.26 5,675.26 80.00 1.4% 1,900.00 1,800.00 -100.00 -20.00 7,475.26 -0.39/ TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 1.5" METER - RECLAIMED WATER USE BASE RATE $ 70.95 COMMODITY RATE: TIER 1= $ 2.23 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILL AT THE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 70.95 70.95 - 0.0% 0.00 0.00 0.00 - 70.95 0.0% 50,000 180.95 182.45 1.50 0.8% 25.00 23.50 (1.50) (0.00) 205.95 0.0% 135,000 367.95 372.00 4.05 1.1% 67.50 63.45 (4.05) 0.00 435.45 0.0°% 200,000 510.95 516.95 6.00 1.2% 100.00 94.00 (6.00) - 610.95 0.0% 250,000 620.95 628.45 7.50 1.2% 125.00 117.50 (7.50) - 745.95 0.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 2" METER - RECLAIMED WATER USE BASE RATE $ 113.53 COMMODITY RATE: TIER 1 = $ 2.23 FOR ALL WATER USAGE TIER 2= N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILL ATTHE CURRENT RATE BILL ATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 113.53 113.53 - 0.0% 0.00 0.00 0.00 - 113.53 0.0% 150,000 400.95 405.45 4.50 1.1% 75.00 70.50 (4.50) - 475.95 0.0% 300,000 730.95 739.95 9.00 1.2% 150.00 141.00 (9.00) - 880.95 0.0% 450,000 1,060.95 1,074.45 13.50 1.3% 225.00 111.50 (13.50) - 1,285.95 0.0% 600,000 1,390.95 1,408.95 18.00 1.3% 300.00 282.00 (18.00) - 1,690.95 0.0% C-8 TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 3" METER - RECLAIMED WATER USE BASE RATE $ 227.05 COMMODITY RATE: TIER 1 = $ 2.23 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASEIN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 227.05 227.05 - 0.0% 0.00 0.00 0.00 - 227.05 0.0% 20,000 271.05 271.65 0.60 0.2% 10.00 9.40 (0.60) 0.00 281.05 0.0% 50,000 337.05 338.55 1.50 0.4% 25.00 23.50 (1.50) - 362.05 0.0% 120:0002 447.05 450.05 3.00 0.7% 50.00 47.00 (3.00) (0.00) 497.05 0.0% 150,000 557.05 561.55 HO 0.8% 75.00 70.50 (4.50) - 632.05 0.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 4" METER - RECLAIMED WATER USE BASE RATE $ 354.77 COMMODITY RATE: TIER 1 = $ 2.23 FOR ALL WATER USAGE TIER 2= N/A TIER 3= N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 354.77 354.77 - 0.0% 0.00 0.00 0.00 - 354.77 0.0% 150,000 684.77 689.27 4.50 0.7% 75.00 70.50 (4.50) - 759.77 0.0% 300,000 1,014.77 1,023.77 9.00 0.9% 150.00 141.00 (9.00) - 1,164.77 0.0% 450,000 1,344.77 1,358.27 13.50 1.0% 225.00 211.50 (13.50) - 1,569.77 0.0% 600,000 1,674.77 1,692.77 18.00 1.1% 300.00 282.00 (18.00) - 1,974.77 0.0% TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON FOR CUSTOMERS WITH A 6" METER - RECLAIMED WATER USE BASE RATE $ 709.54 COMMODITY RATE: TIER 1 = $ 2.23 FOR ALL WATER USAGE TIER 2 = N/A TIER 3 = N/A TIER 4= N/A GALLONS USEDIN 1 MONTH BILLATTHE CURRENT RATE BILLATTHE PROPOSED RATE AMOUNTOF INCREASE Water Rate PERCENT INCREASED Water Rate CURRENT GPF PROPOSED GPF INCREASE IN GPF TOTAL MONTHLY INCREASE TOTAL AMOUNTOF MONTHLY BILL TOTAL PERCENT INCREASED 0 709.54 709.54 - 0.0% 0.00 0.00 0.00 - 709.54 0.0% 5,000,000 11,709.54 11,859.54 150.00 1.3% 2,500.00 2,350.00 (150.00) - 14,209.54 0.0% 10,000,000 22,709.54 23,009.54 300.00 1.3°% 5,000.00 4,700.00 (300.00) - 27,709.54 0.0% 15,000,000 33,709.54 34,159.54 450.00 1.3% 7,500.00 7,050.00 (450.00) - 41,209.54 0.0% 20,000,000 44,709.54 45,309.54 600.00 1.3% 10,000.00 9,400.00 (600.00) - 54,709.54 C-9 I I I I APPENDIX D Other Service Fees & Charges D-1 Security Deposits D-2 Proposed Meter Installation Fees D-3 Supporting Documentation for Meter Installation Fees SERVICE FEES AND CHARGES Proposed Security Deposits Purpose: To reduce the Utility's financial loss when tenants and landlords leave their premises with unpaid balances on the accounts. Current Proposed Non -Property Owner Accounts $100.00 $150.00 Landlord Accounts $50.00 $75.00 NOTES: There are no proposed changes to the single family residential owner occupied accounts. There are no proposed changes to the commercial, multifamily or construction accounts. D-1 SERVICE FEES AND CHARGES Proposed Meter Installation Fees Purpose: To provide the Utility a means of recovering labor and material costs related to installing water meters. Costs: The costs related to installing water meters include staff labor, water meters and travel. Refer to page D-3 for an itemized decription of all costs. r Due to increased costs to perform this service, it is recommended that the Meter Installation Fees increase as shown: Proposed Meter Installation Fees Meter Size Meter Type Current Fees Proposed Fees 5/8 x 3/4 standard $ 296.00 $ 299.25 3/4 x 3/4 standard $ 296.00 $ 312.75 1 standard $ 370.00 $ 376.75 1.5 irrigation (turbine) T2 $ 1,105.00 $ 1,111.73 1.5 high use (compound) C2 $ 1,568.00 $ 1,571.73 2 irrigation (turbine) T2 $ 1,280.00 $ 1,261.73 2 high use (compound) C2 $ 1,795.00 $ 1,792.63 3 irrigation (turbine) $ 1,575.00 $ 1,637.33 3 high use (compound) $ 2,224.00 $ 2,222.33 4 irrigation (turbine) $ 2,868.00 $ 3,038.37 4 high use (compound) $ 3,758.00 $ 3,745.37 6 irrigation (turbine) $ 5,093.00 $ 5,442.85 6 high use (compound) $ 6,452.00 $ 6,442.85 8 irrigation (turbine) $ 7,635.00 $ 8,398.60 8 high use (compound) N/A $ 9,698.60 Meter installation fees are paid by developers at the time a new meter is purchased. Meter installation fees are subject to 8.1% sales tax. The proposed fees include the cost of meter plus labor costs to install. D-2 I I I I Service Fees and Charges Supporting Documentation for Proposed Meter Installation Fees: Total Labor Total Total Meter FTEs Hours to Cost Labor Labor & Meter Size Meter Type Meter AMI Equip. Costs Req'd Install Per Hour Costs Materials 5/8 x 3/4 standardiPerl $ 122.50 $ 151.00 $ 273.50 1 1.00 $ 25.75 $ 25.75 $ 299.25 3/4 x 3/4 standardiPerl $ 136.00 $ 151.00 $ 287.00 1 1.00 $ 25.75 $ 25.75 $ 312.75 1 standard iPerl $ 200.00 $ 151.00 $ 351.00 1 1.00 $ 25.75 $ 25.75 $ 376.75 1.5 irrigation (turbo) Omni T2 $ 850.00 $ 151.00 $ 1,001.00 2 2.15 $ 25.75 $ 110.73 $ 1,111.73 1.5 high use (compound) Omni C2 $ 1,310.00 $ 151.00 $ 1,461.00 2 2.15 $ 25.75 $ 110.73 $ 1,571.73 2 irrigation (turbo) Omni T2 $ 1,000.00 $ 151.00 $ 1,151.00 2 2.15 $ 25.75 $ 110.73 $ 1,261.73 2 high use (compound) Omni C2 $ 1,500.00 $ 151.00 $ 1,651.00 2 2.75 $ 25.75 $ 141.63 $ 1,792.63 3 irrigation (turbo) Omni T2 $ 1,315.00 $ 151.00 $ 1,466.00 2 2.75 $ 31.15 $ 171.33 $ 1,637.33 3 high use (compound) Omni C2 $ 1,900.00 $ 151.00 $ 2,051.00 2 2.75 $ 31.15 $ 171.33 $ 2,222.33 4 irrigation (turbo) Omni T2 $ 2,593.00 $ 151.00 $ 2,744.00 3 3.15 $ 31.15 $ 294.37 $ 3,038.37 4 high use (compound) Omni C2 $ 3,300.00 $ 151.00 $ 3,451.00 3 3.15 $ 31.15 $ 294.37 $ 3,745.37 6 irrigation (turbo) Omni T2 $ 4,700.00 $ 151.00 $ 4,851.00 4 4.75 $ 31.15 $ 591.85 $ 5,442.85 6 high use (compound) Omni C2 $ 5,700.00 $ 151.00 $ 5,851.00 4 4.75 $ 31.15 $ 591.85 $ 6,442.85 8 irrigation (turbo) $ 7,500.00 $ 151.00 $ 7,651.00 4 6.00 $ 31.15 $ 747.60 $ 8,398.60 8 high use (compound) Omni C2 $ 8,800.00 $ 151.00 $ 8,951.00 4 6.00 $ 31.15 $ 747.60 $ 9,698.60 Assumptions: Sensus Meter & AMR equipment costs quoted by Dana Kepner 11/22/13. Average hourly rate for an Operator I is $18.05 per hour plus benefits of $7.70 per hour. Average hourly rate for an Opertor 2 and above is $22.95 per hour plus benefits of $8.20 per hour. Hours to install includes travel time of 15 minutes each way. Use of iPerl meters for 5/8, 3/4 and 1-inch are proposed because of the following reasons: iPerl meters meansure flow as low as .03 gpm and up to 25 gpm (for 5/8-inch) The current meters being used measure flow from .25 gpm and up to 20 gpm The iPerl meter contain no moving parts & have a 20-year life The current meters being used contain moving parts & have a 10-year life Use of Omni meters for 1.5 and 2-inch meters are proposed because of the following reasons: C2 meters measure flow as low as .5 gpm and up to 200 gpm The current meters being used measure flow from 2 gpm to 200 gpm T2 meters measure flow as low as 1.25 gpm up to 200 gpm (1.5-inch) The current meters being used measure flow from 4 gpm to 120 gpm T2 meters measure flow as low as 1.5 gpm up to 200 gpm (2-inch) The current meters being used measure flow from 4 gpm to 160 gpm Additionally C2 & T2 meters can be tested without removing the meter and has data logging capability to record up to 31 days of of water use on an hourly basis. D-3 APPENDIX E 5-Year Capital Improvement Schedules E-1 Operating Fund E-2 Groundwater Preservation Fee E-2 Alternative Water Resource Development Impact Fee Fund E-2 Potable Water System Development Impact Fee Fund I I■I Il I I I Water Utility Operating Fund Existing System Capital Improvements Project No. Project Name 2014-2015 2015.2016 1 2016-2017 1 2017-2018 1 2018-2019 1 5 YearTotal 1 Steam Pump Drill and Construct $ 600,000 $ 800,000 $ 1,400,000 2 Well E2 Upgrade $ 100,000 $ 100,000 3 Hydropneumatic Tank Replace. $ 60,000 $ 60,000 4 Replace Well Pumps - $ 75,000 $ 75,000 $ 150,000 Subtotal $ - $ 60,000 $ 175,000 $ 600,000 $ 875,000 $ 1,710,000 Reservoirs 5 EI Con Storage - Ops. Improve. $ 50,000 $ 50,000 6 r Big Wash Reservoir Coating $ 100,000 $ 100,000 btotal $ - $ - $ 100,000 $ 50,000 $ - $ 150,000 Boosters 7 Energy Efficiency Bstr. Upgrades $ 150,000 $ 100,000 $ 250,000 8 Deer Run Booster PRV Installation $ 40,000 $ 40,000 9 Hydropneumatic Tank Replace. $ 20,000 $ 60,000 $ 60,000 $ 140,000 10 Reclaimed Bstr. & Pump Replace. $ 200,000 $ 200,000 Subtotal $ 150,000 $ 120,000 $ 300,000 $ 60,000 $ - $ 630,000 Mains 11 W. Lambert Ln. 12" Main Relo $ 75,000 $ 350,000 $ 425,000 12 Naranja Shannon / La Cholla Main Relo $ 50,000 $ 50,000 13 Tangerine Shannon/ La Canada Main Relo $ 75,000 $ 100,000 $ 175,000 14 Relocate 3 PRV'S OV Area $ 100,000 $ 100,000 15 New Tto D" 6Inch PRV Cliff Dweller $ 60,000 $ 60,000 16 Rancho Verde Hydrants $ 200,000 $ 200,000 17 Main Valve Replacements $ 50,000 $ 50,000 18 ICS1 to CS2 12 Inch Main Replace. $ 500,000 $ 500,000 19 El Con. Patio Homes/Casitas Main Repl- $ 100,000 $ 100,000 20 System Connection Upgrades $ 100,000 $ 100,000 $ 200,000 Subtotal $ 910,000 $ 550,000 $ 300,000 $ - $ 100,000 $ 1,860,000 Structures & Walls 21 ISecurity Walls $ 75,000 $ 75,000 Subtotal I $ - $ - $ - $ - $ 75,000 $ 75,000 Meters & Equipment 22 AMI Meter Replacement - Oro Valley $ 2,200,000 $ 1,800,000 $ 4,000,000 23 Machinery & Equipment $ 103,020 $ 98,000 $ 91,000 $ 69,000 $ 361,020 24 SCADA server and monitors $ 50,000 $ 50,000 25 SCADA Legacy Replacement $ 100,000 $ 100,000 26 Golf Course Metering Stations Mod. $ 50,000 $ 50,000 Subtotal $ 2,303,020 $ 1,898,000 $ 91,000 $ 69,000 $ 200,000 $ 4,561,020 Vehicles 27 Meters Vehicles $ 70,000 $ 45,000 $ 115,000 28 Distribution Vehicles $ 85,000 $ 70,000 $ 50,000 $ 205,000 29 Production Vehicles $ 30,000 $ 50,000 $ 70,000 $ 150,000 30 Director Vehicle $ 35,000 $ 35,000 31 Pool Vehicles $ 25,000 $ 25,000 $ 50,000 32 Backhoe & Trailer $ 119,000 $ 119,000 33 On Call Service Truck s $ 90,000 $ 90,000 Subtotal $ 234,000 $ 155,000 $ 230,000 $ 70,000 $ 75,000 $ 764,000 Total Existing System Improvements $ 3,597,020 $ 2,783,000 $ 1,196,000 $ 849,000 $ 1,325,000 $ 9,750,020 E-1 Groundwater Preservation Fee Revenue Renewable Water Capital Projects Project No. Project Name 2014-2015 2015-2016 1 2016-2017 2017-2018 2018-2019 1 5 Year Total 1 241nch Reclaim Main Tangerine (DIS) RTA $ 100,000 $ 350,000 $ 450,000 Total Expansion Related Capital Improvements $ 100,000 $ 350,000 $ - $ - $ - $ 450,000 Alternative Water Resources Development Impact Fee Fund CAP Water Capital Projects Project No. Project Name 2014-2.015 2015-2016 2016-2017 2017-2018 2018.2019 5 Year Total 1 CAP La Cholla D-E Blending Booster Statioi 700,000 $ 700,000 2 CAP Wheeling TW Naranja 1000 AF/Yr $ 400,000 $ 400,000 $ 800,000 3 24" pipe Naranja/ La Cholla/Tangerine $ 1,600,000 $ 1,600,000 4 TW Naranja Booster Station Upgrade $ 1,200,000 $ 1,200,000 5 TW Oasis Booster Station Upgrades $ 30,000 $ 30,000 6 TW 12" Pipe $ 80,000 $ 80,000 7 TW 16" Pipe Oasis Rd. $ 100,000 $ 100,000 Total Alternative Water Capital Improvements $ 700,000 1 $ -Is - $ 400,000 1 $ 3,410,000 1 $ 4,510,000 Potable Water System Development Impact Fee Fund Expansion Related Capital Projects Project No. Project Name 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 5 Year Total Total Expansion Related Capital Improvements $ - $ - $ - $ - $ - $ r E-2