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TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
NOVEMBER 2016
TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
NOVEMBER 2016
ORO VALLEY TOWN COUNCIL
Satish Hiremath, Mayor
Lou Waters, Vice Mayor
Joe Hornat, Council Member
Rhonda Pina, Council Member
Bill Rodman, Council Member
Mary Snider, Council Member
Steve Solomon, Council Member
ORO VALLEY WATER UTILITY COMMISSION
Winston Tustison, Chair
Anne Campbell, Vice Chair
Javier Arriaga, Commission Member
Tom Kibler, Commission Member
Robert Milkey, Commission Member
Sharma Weagle, Commission Member
TOWN STAFF
Daniel Sharp, Interim Town Manager
Stacey Lemos, Finance Director
Philip C. Saletta, P.E., Water Utility Director
Shirley Kiel, Water Utility Administrator
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TABLE OF CONTENTS
SECTION TITLE PAGE
Index of Appendices
Executive Summary
1
Introduction
4
Growth Rates
5
Water Use Trends
5
Debt Service
6
Debt Service Coverage Requirements
7
Cash Reserve Policy for Operating Fund
8
Operating Fund
8
Revenue Requirements
10
Alternative Water Resources Development Impact Fee Fund
13
Potable Water System Development Impact Fee Fund
14
Preferred Financial Scenario
15
Recommendation on Water Rates, Fees & Charges
15
Service Fees & Charges
18
Conclusion
18
Appendices
INDEX OF APPENDICES
APPENDIX
A. Preferred Financial Scenario Pro Forma
A-1 Operating Fund
A-2 Groundwater Preservation Fee
A-3 Alternative Water Resources Development Impact Fee Fund
A-4 Potable Water System Development Impact Fee Fund
n A-5 Summary of all Funds
B. Rate Schedules & Tables for Bill Comparisons for Preferred Financial Scenario
B-1 Tables for Bill Comparisons by Meter Size -Potable
B-7 Tables for Bill Comparisons by Meter Size —Reclaimed
C. 5-Year Capital Improvement Schedules
C-1 Operating Fund
C-1 Groundwater Preservation Fee
C-2 Alternative Water Resources Development Impact Fee Fund
C-2 Potable Water System Development Impact Fee Fund
D. Assumptions for Preferred Financial Scenario
D-1 Operating Fund
D-5 Alternative Water Resources Development Impact Fee Fund
D-6 Potable Water System Development Impact Fee Fund
TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
NOVEMBER 2016
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
i Oro Valley Water Utility:
7 ➢ 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 taxes or other payments from the General Fund.
In accordance with policy, the water rates analysis is prepared annually based on the most up-to-
date information available for a five year projection period. Although the analysis is for five years,
Jany rate increases being considered for approval are only approved for the first year of that five year
projection period.
The Water Utility Commission has made a recommendation for a Preferred Financial Scenario.
Under the Preferred Financial Scenario, the Operating Fund is projected to have an ending cash
l balance of $5,582,031 at the end of the five year projection period which meets the cash reserve
Jrequirement. In addition, the debt service coverage ratio of 1.3 is met or exceeded. Operational
needs and capital improvements are included in the analysis. The Preferred Financial Scenario
includes cash funding and new debt to finance capital projects.
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The Preferred Financial Scenario also results in financially sound 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.
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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. The Water
Utility Commission and Water Utility Staff have made the following recommendations on water
rates in the Preferred Financial Scenario for FY 2016-17:
➢ Increase in the potable water and reclaimed water monthly base rates
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➢ Increase in the potable water commodity rates
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➢ Increase in the potable construction water rates
➢ No increase in the reclaimed water commodity rate
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➢ No increase in the potable water or reclaimed water Groundwater Preservation Fee (GPF)
Current and proposed monthly base rates for both potable and reclaimed water use are provided in
Table 1 below:
Table 1
Meter Size Current Proposed
$
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(in inches) Base Rate Base Rate
Increase
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5/8 x 3/4 14.19 14.62
0.43
3/4 x 3/4 21.29 21.93
1 35.48 36.54
0.64
1.06
1.5 70.95 73.08
2.13
2 113.53 116.94
3.41
3 227.05 233.86
6.81
4 354.77 365.41
10.64
6 709.54 730.83
21.29
8 1135.26 1169.32
34.06
Costpermonth.
Current and proposed commodity rates and GPF for each 1,000 gallons used are
in Table 2 below:
Table
2
Current
Customer Classifications Commodity Rate
Proposed
Commodity Rate
$
Increase
Single Family Residential
Tier 1 2.32
2.34
0.02
Tier 2 3.19
3.25
0.06
Tier 3 4.40
4.53
0.13
Tier 6.05
6.29
0.24
Irrigation
JTier
1 2.32
2.34
0.02
Tier 2 3.19
3.25
0.06
Tier 3 4.40
4.53
0.13
Tier 4 6.05
6.29
0.24
Commercial 2.32
2.34
0.02
Master Metered Multi -Family Residential 2.32
2.34
0.02
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Turf 2.32
2.34
0.02
JConstruction
7.05
7.29
0.24
All Reclaimed Classes 2.27
2.27
0.00
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Groundwater Preservation Fee - Potable 0.90
0.90
0.00
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Groundwater Preservation Fee - Reclaimed 0.47
0.47
0.00
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Cost per 1,000 gallons
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There is a tiered commodity rate structure based upon meter size for potable water for single family
residential and irrigation classifications to encourage water conservation. There is no tiered rate
structure for commercial, multi -family, construction water or reclaimed water classifications. Multi-
family and commercial customers have separate irrigation meters that have a tiered rate structure.
The financial impact of the proposed rates for a residential customer using 8,000 gallons of water is
an increase of $0.63 per month. This is a 1.5% increase in the current average monthly water bill of
$40.82.
The average commercial customer with a 2-inch meter using 57,000 gallons of water will experience
a $4.55 increase per month. This is a 1.5% increase in the current average monthly water bill of
$297.07
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Tables providing the financial impact to all customer classifications by meter size may be found in
Appendix B.
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The Water Utility presents this Water Rates Analysis Report for the review and consideration of the
Mayor and Council. The Oro Valley Water Utility Commission and Water Utility Staff are
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recommending approval of the Preferred Financial Scenario. The Water Utility Commission and
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Utility Staff are dedicated to serving the Town of Oro Valley and the customers of its water utility.
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TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
NOVEMBER 2016
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Introduction
I 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
7 ➢ 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 revenue from
taxes or other payments 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 and expenditures are accounted for within the Operating Fund.
The Alternative Water Resources Development Impact Fee Fund (AWRDIF) was established in 1996
i 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. Expenditures include
capital repayment obligation charges for the Town's CAP allotment and infrastructure and
J 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
current bond covenants. Otherwise, each fund is independent with regard to revenue and expenses.
Pursuant to Arizona Revised Statute (ARS) 9-463.05 Section B.S., impact fees must be placed in a
separate fund and accounted for separately. ARS 9-463.05 Section B.5. 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 13 and 14 of the report.
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Growth Rates
The Utility's growth rates have fluctuated over the past several years. Figure 1 illustrates the Utility's
growth rate of 10.7 percent or 1,902 new metered connections over the last 10 years.
Figure 1
Growth Rates
400 368
346
350
300
250 196 214 -2
200 165 155
z150 97
10 68 61
50
0
06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16
Fiscal Year
In developing the growth projections, the Community Development staff reviewed the current
housing inventory along with plans that are in the review process and estimated future growth in a
conservative manner. The growth projections used for this report are consistent with the Town's
J financial forecasting and are shown in following table.
Table 3
New Metered Connections 2016-17 2017-18 2018-19 2019-20 2020-21
Single Family Residential 230 250 275 225 200
Commercial, Multi -Family, Irrigation 8 11 7 6 12
Water Use Trends
The Utility has experienced a reduction in water use, both potable and reclaimed, over the last 10
years. Figure 2 illustrates this reduction in total water use from FY 2006-07 through FY 2015-16. The
trend line emphasizes an overall decline in water use even though the utility experienced growth in
the number of customers in that same time frame. During FY 2015-16, the single family residential
customer with a 5/8 x 3/4 inch water meter averaged water use of 7,300 gallons per month.
Declining water use has been experienced not only on a local level, but also on regional and national
levels. This can be largely attributed to water conservation.
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Figure 2
Potable & Reclaimed Water Sales
3,250
3,200 3,191
0 3,150 3,111
3,100 3,161 3,065
3,060
3,050
c 3,000
3,096
N
0 2,950 3,022
t7 2,900 2,945 2,922
2,850
2,800 2,873
06-07 07-08 08-09 09-10 1&11 11-12 12-13 13-14 14-15 15-16
Fiscal Year
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 2016-17 are provided in Table 4.
Table 4
Fund Year Debt Purpose Balance
Operating 2007 Excise Tax Bonds Existing Potable System $ 13,562,620
Operating-GPF 2008 WIFA Loan Reclaimed Water System $ 2,828,106
Operating 2009 WIFA Loan Existing Potable System $ 1,585,381
Operating 2012 Sr. Lien Bonds — Refinance 2003 Existing Potable System $ 3,573,006
Operating-GPF 2012 Sr. Lien Bonds — Refinance 2003 Reclaimed Water System $ 6,512,839
Operating 2013 Private Placement— Refinance 2003 Existing Potable System $ 2,995,000
J Operating 2014 WIFA Loan AM] Meter Replacement $ 3,870,921
Operating 2015 Excise Tax Bonds — Refinance 2005 Land for MOC $ 1,244,430
PWSDIF 2012 Sr. Lien Bonds — Refinance 2003 Potable System Expansion $ 2,009,155
-j Total Debt $ 38,181,458
J This rates analysis includes an assumption for new debt in the amount of $5,200,000 in FY 2017-18
1 to finance existing system improvements as shown in Appendix C. It is assumed that the Utility will
- issue bonds with a 20 year term at a three percent interest rate. The assumption that the Utility will
issue bonds rather than seek financing from the Arizona Water Infrastructure Finance Authority
(WIFA) is because of the costs associated with the requirement to pay Davis -Bacon wages and the
- mandatory use of American made steel products. These requirements could significantly increase
the project costs.
J During FY 2015-16 the Town refunded the 2005 Excise Tax Bonds of which the Utility's
proportionate share is 33 percent. The Utility realized a savings of $110,147 in FY 2016-17. This
JI refunding was a private placement with an investment institution. The next opportunity to refund
older bonds is in 2017 when the 2007 bonds reach the optional early redemption date; however,
because of timing of the refunding, projected savings have not been included in the analysis.
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Debt Service Coverage Requirements
The method for calculating the debt service coverage ratio is pursuant to the Town Financial and
Budgetary Policies adopted by the Town Council in 2008. Section C.1— Debt Capacity, Issuance &
Management states the following with respect to debt service coverage ratios:
"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
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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
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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
responsible to pay for these debt service payments from water sales revenues. However, since
excise taxes are pledged as coverage, a calculated debt service coverage ratio of 1.0 is applied to
avoid double coverage when calculating the debt service coverage ratio for these excise tax -backed
bonds in 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
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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 2015-16 the debt
service coverage ratio was 10.53 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 5.
Table 5
2016-17 2017-18 2018-19 2019-20 2020-21
Debt Service Coverage 1.75 1.54 1.73 2.07 1.95
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Cash Reserve Policy for Operating Fund
The Town of Oro Valley Mayor and Council Water Policies were adopted in 1996. Following the
Commission recommendation, an amended policy was submitted to the Town Council and was
subsequently adopted June 17, 2015. The amended policy may be found in Section II.A.l.d. and
states "The Utility shall maintain a cash reserve in the Operating Fund of not less than 20% of the
combined total of the annual budgeted amounts for personnel, operations and maintenance, and
debt service. This cash reserve amount specifically excludes budgeted amounts for capital projects,
depreciation, amortization and contingency. No cash reserve is required for the water utility impact
fee funds." The cash from GPF is accounted for in the Operating Fund and is included in the total
cash reserve balance. In the Preferred Financial Scenario, the projected cash reserve balance for the
Operating Fund for each year in the analysis is listed in Table 6 showing compliance in all years.
Table 6
Operating Fund
2016-17
2017-18
2018-19
2019-20
2020-21
Cash Reserve Requirement
Cash Reserve Balance
$ 3,045,879
$ 8,218,878
$ 3,233,897
$ 7,355,168
$ 3,202,039
$ 6,880,320
$ 3,398,163
$ 5,964,602
$ 3,354,217
$ 5,582,031
Cash reserve balances in the Operating Fund are the main driver for the proposed changes in water
rates. This is largely due to using cash to fund capital projects in FY 2016-17. The projected cash
reserve balances shown in Table 6 include revenue from the proposed rate changes. Those changes
include increases in the base rates and commodity rates throughout the projection period. The
proposed changes allow for the cash balances to be at appropriate levels for both the Operating
Fund and the GPF.
Cash reserves in the amount of $3,225,000 will be used to fund capital projects in FY 2016-17. The
projects will be funded with GPF and Operating Fund cash reserves. To maintain cash reserves
without large rate increases, the Preferred Financial Scenario assumes $5,200,000 in new debt to
finance future capital expenditures from FY 2017-18 through FY 2020-21. All capital projects are
detailed in Appendix C.
Operating Fund
Revenue Forecast
The Operating Fund had a cash balance of $11,876,464 at the beginning of FY 2016-17 and is
projected to have a balance of $5,582,031 at the end of FY 2020-21. These funds may be used for
operating costs including personnel, operations and maintenance, capital improvements for the
existing potable water system and debt service. Groundwater Preservation Fees are included in the
Operating Fund; however, the revenues and cash balances for the GPF are tracked separately within
the Operating Fund because the GPF funds are restricted to capital projects for renewable water
and wheeling payments for CAP water.
The revenue forecast was based on analysis of the Utility's water use data for FY 2015-16 and
projected growth in the number of new connections detailed in Table 3 on page 5. The revenue
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forecast includes proposed increases in the base rates shown below in Table 7. The base rates are
projected to increase annually beginning in FY 2016-17.
Table 7
Base Rates
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Potable & Reclaimed
Rates
Rates
Rates
Rates
Rates
Rates
Meter Sizes (inches)
2016-17
2017-18
2018-19
2019-20
2020-21
5/8 x 3/4
14.19
14.62
14.91
15.21
15.51
15.82
3/4 x 3/4
21.29
21.93
22.37
22.81
23.27
23.74
1
35.48
36.54
37.28
38.02
38.78
39.56
1.5
70.95
73.08
74.54
76.03
77.55
79.10
2
113.53
116.94
119.27
121.66
124.09
126.58
3
227.05
233.86
238.54
243.31
248.18
253.14
4
354.77
365.41
372.72
380.18
387.78
395.53
6
709.54
730.83
745.44
760.35
775.56
791.07
8
1,135.26
1,169.32
1,192.70
1,216.56
1,240.89
1,265.71
The revenue forecast also includes proposed annual increases in commodity rates shown below in
Table 8. The GPF revenue is also
shown in Table 8 to illustrate that
there are
no proposed changes in
this fee over the projection period.
Table 8
Commodity Rates
Current Proposed
Proposed
Proposed
Proposed
Proposed
Rates
Rates
Rates
Rates
Rates
Rates
Customer Classifications
2016-17
2017-18
2018-19
2019-20
2020-21
Single Family Residential
Tier 1
2.32
2.34
2.38
2.42
2.46
2.50
Tier 2
3.19
3.25
3.32
3.39
3.46
3.53
Tier 3
4.40
4.53
4.67
4.81
4.95
5.10
Tier 4
6.05
6.29
6.54
6.80
7.07
7.35
Irrigation
Tier 1
2.32
2.34
2.38
2.42
2.46
2.50
Tier 2
3.19
3.25
3.32
3.39
3.46
3.53
Tier 3
4.40
4.53
4.67
4.81
4.95
5.10
Tier 4
6.05
6.29
6.54
6.80
7.07
7.35
Commercial
2.32
2.34
2.38
2.42
2.46
2.50
Master Metered Multi -Family
2.32
2.34
2.38
2.42
2.46
2.50
Turf
2.32
2.34
2.38
2.42
2.46
2.50
Construction
7.05
7.29
7.54
7.80
8.07
8.35
All Reclaimed Classes
2.27
2.27
2.30
2.33
2.36
2.40
Groundwater Preservation Fee
Potable
0.90
0.90
0.90
0.90
0.90
0.90
Reclaimed
0.47
0.47
0.47
0.47
0.47
0.47
Cost per 1,000 gallons.
The water use included in each tier is detailed on the proposed water rates table on page 16.
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Table 9 provides the water sales revenue and GPF revenue forecast for the five year projection
period using the proposed base rates in Table 7 and commodity rates in Table 8.
Table 9
Water Sales Revenue 2016-17 2017-18 2018-19 2019-20 2020-21
Potable Water $10,308,626 $10,572,362 $10,906,843 $11,243,802 $11,564,963
Reclaimed Water 1,618,478 $ 1,626,162 1,649,198 1,669,171 1,694,573
Total Water Sales $11,927,104 $12,198,524 $12,556,041 $12,912,973 $13,259,536
GPF Revenue $ 2,358,523 $ 2,389,602 $ 2,431,598 $ 2,463,060 $ 2,495,759
Other revenue generated by the Utility consists of charges for services. Those charges for services
include an intergovernmental agreement with the Pima County Wastewater Reclamation
Department to provide monthly billing services. The intergovernmental agreement will be subject to
renewal in FY 2018-19. It is projected that the revenue will increase by $6,800 representing a three
percent increase upon renewal. Charges for service also include, but are not limited to, new service
establishment fees, late fees, reconnection fees, convenience fees, and plan review fees. The total
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of all charges for services are projected to generate annual revenue ranging from $697,800 to
$703,980.
Projections for interest income are a cumulative total of $741,413 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.
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Revenue Requirements
Table 10 is a summary of revenue requirements for the Operating Fund that were used in the
financial analysis. These revenue requirements include expenditures to be paid with GPF revenue.
Projected personnel costs include three and one half percent annual merit increases and two
percent annual increases in health care costs with no new employees being added within the five
year projection period. These projected increases are consistent with the General Fund's financial
planning.
1 The projected operations and maintenance (0&M) costs for both the potable and reclaimed water
systems include inflationary increases of one percent annually. The inflation factors are consistent
J with the General Fund's financial planning.
Power for pumping costs were segregated from the traditional O&M costs because they are not
' subject to annual inflationary increases. Tucson Electric Power has already begun their rate increase
process. As such, a ten percent rate increase for power costs was projected in the last quarter of FY
2016-17.
The Utility purchased 2,000 acre feet of groundwater extinguishment credits in FY 2016-17 for
$380,000. The analysis includes another $450,000 in FY 2017-18 to purchase additional 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.
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Table 10
Utility Expenditures
2016-17
2017-18
2018-19
2019-20
2020-21
Operating Fund (ex. GPF)
Personnel
$ 3,161,854
$ 3,335,756
$ 3,519,223
$ 3,712,780
$ 3,916,983
Operations/Maintenance
1,946,240
1,965,702
1,985,359
2,005,213
2,025,265
Power for Pumping
820,000
880,000
880,000
880,000
880,000
Water Resource Mgmt.
380,000
450,000
0
0
0
CAP Wheeling Costs 25%
272,834
292,736
292,736
336,236
379,661
CAP Recharge Costs
1,770,705
1,856,730
1,928,865
2,186,490
2,371,980
Reclaimed Maintenance
884,758
892,991
905,805
914,204
922,686
Subtotal Operating Fund
$ 9,236,391
$ 9,673,915
$ 9,511,988
$ 10,034,923
$ 10,496,575
Debt Service
3,581,068
3,896,920
3,900,523
4,229,969
3,418,949
Capital Outlay
1,913,765
135,189
297,726
132,955
185,495
Total Expenditures (ex. GPF)
$ 14,731,224
$ 13,706,024
$ 13,710,237
$ 14,397,847
$ 14,101,019
GPF Expenditures
CAP Wheeling Costs —75%
$ 818,502
$ 878,207
$ 878,207
$ 1,008,707
$ 1,139,207
Capital Outlay
1,909,188
330,652
330,652
330,652
330,652
Debt Service
1,384,247
1,389,793
1,388,825
1,386,563
1,385,701
Total GPF Expenditures
$ 4,111,937
$ 2,598,652
$ 2,597,684
$ 2,725,922
$ 2,855,560
Total All Operating Fund
Expenditures
$ 18,843,161
$ 16,304,676
$ 16,307,921
$ 17,123,769
$ 16,956,579
CAP wheeling costs are the fees charged by Tucson Water to wheel our CAP water through their
recharge and recovery system. These fees are pursuant to an IGA and are subject to renegotiation in
FY 2016-17. Based on the on -going negotiations, costs are assumed to increase in the last 6 months
of FY 2016-17 due to a projected rate increase by Tucson Water. The costs are projected to increase
again in FY 2019-20 due to delivery of an additional 300 acre feet of CAP water as allowed in the
IGA. It is projected that the CAP wheeling costs will increase again in FY 2020-21 when deliveries are
increased by another 300 acre feet for a total of 2,600 acre feet in that year. CAP wheeling costs are
paid with both water sales revenue and GPF revenue.
CAP water recharge costs represent costs to take delivery of the Utility's entire CAP water allotment
of 10,305 acre feet annually. This water will be recharged and stored in various recharge facilities
including the Tucson Water facilities. Costs to take delivery of and store the CAP water are based on
the rate schedule adopted by the CAP.
Projected capital outlay for existing system improvements in this analysis includes water main
replacements, pumping station modifications and replacements, well upgrades, reservoir
improvements, vehicles and computer equipment. The only capital projects to be financed with GPF
revenue are improvements to the reclaimed water system. The schedule for five year capital
improvements may be found in Appendix C.
Debt service costs increase annually through FY 2019-20. A small portion of the increase is due to
the new debt projected to occur in FY 2017-18 as described on page 6. The remaining increase is
- 11 -
r-,
Development Impact Fee Funds
Alternative Water Resources Development Impact Fee Fund
I 1
The Alternative Water Resources Development Impact Fee Fund (AWRDIF) had a cash balance of
$5,040,292 at the beginning of FY 2016-17 and is projected to have $2,552,254 at the end of FY
2020-21. 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 $592,921 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
0
service unit is the equivalent of one single family residential (SFR) 5/8 x 3/4-inch water meter. The
j
SFR service units are equal to the number of new connections. The other service units are forecast
based on pending development projects within the Town. Other service units include commercial,
multi -family and irrigation uses with the number of service units depending on the estimated meter
sizes for each project.
The impact fee for a SFR 5/8 x 3/4-inch water meter or one service unit is $4,045. It is assumed that
`J
the existing Alternative Water Resources Development Impact Fees will not change during this five
year projection period. Table 14 provides the projected growth in service units and the revenue
j
associated with that growth. These growth projections are consistent with the Town's financial
J
planning.
Table 14
JJJ
Growth/ Revenue
2016-17 2017-18 2018-19 2019-20 2020-21
SFR Service Units
230 250 275 225 200
Other Service Units
47 31 36 20 30
Projected Revenue
$1,120,465 $1,136,645 $1,257,995 $991,025 $930,350
J
AWRDIF funds may be used for capital expenditures related to CAP water. The capital expenditures
1
during this projection period total $8,517,439 and include the capital costs assessed by CAP for
J
3,557 acre feet of our CAP water allotment and design and construction of facilities that will deliver
an additional 1,000 acre feet of CAP water to the Town. These projects are identified in the five year
CIP shown in Appendix C. The annual capital expenditures for the AWRDIF Fund are listed in the
J
table below.
Table 15
Capital Expenditures
2016-17 2017-18 2018-19 2019-20 2020-21
CAP Capital Charges
$ 110,267 $ 174,293 $ 174,293 $ 174,293 $ 174,293
j
Jl
CAP Facilities
$ 100,000 --- $ 400,000 $ 4,110,000 $ 3,100,000
Total Capital Expenditures
$ 210,267 $ 174,293 $ 574,293 $ 4,284,293 $ 3,274,293
J
There is no outstanding debt in the AWRDIF Fund and no future debt is projected for this analysis.
All capital projects shown above will be financed with impact fees contained within this fund.
-13-
Potable Water System Development Impact Fee Fund
The Potable Water System Development Impact Fee Fund (PWSDIF) had a cash balance of
$5,068,238 at the beginning of FY 2016-17 and is projected to have $5,891,087 at the end of FY
j 2020-21. The revenue sources for the PWSDIF 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 $568,554 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.
I
J
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
include commercial, multi -family and irrigation uses with the number of service units depending on
the meter sizes for each project.
The impact fee for a SFR 5/8 x 3/4-inch water meter or one service unit is $2,015. It is assumed that
the existing Potable Water System Development Impact Fees will not change during this five year
projection period. Table 16 provides the projected growth in service units and the revenue
associated with that growth. These growth projections are consistent with the Town's financial
planning.
Table 16
Growth / Revenue
2016-17
2017-18
2018-19
2019-20
2020-21
SFR Service Units
Other Service Units
230
47
250
31
275
36
225
20
200
30
Projected Revenue I $558,155 $566,215 $626,665 $493,675 $463,450
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. Capital expenditures include property acquisition and design services for a reservoir
and booster station to meet the demands of future growth. These project are identified in the five
year CIP shown in Appendix C. Debt service for previously constructed growth -related facilities is
paid from revenues collected from impact fees. No new debt is projected in this analysis. The table
below lists all expenditures forecast for the PWSDIF.
Table 17
Expenditures 2016-17 2017-18 2018-19 2019-20 2020-21
Debt Service $ 329,916 $ 331,627 $ 331,328 $ 330,630 $ 330,364
Capital Projects - - - $500,000 $ 300,000
Total Expenditures I $ 329,916 $ 331,627 $ 331,328 $ 830,630 $ 630,364
All expenditures will be paid for with impact fees contained within this fund.
-14-
Preferred Financial Scenario
Prior to developing financial forecasts, financial considerations were evaluated relating to projected
future operating costs, capital expenditures, the Utility's existing cash reserves, existing outstanding
debt and debt service payments. To develop a Preferred Financial Scenario, the goals of the Utility
were to ensure that all existing rate setting policies were met, cash reserves were utilized to
minimize future debt and proposed rate increases would not result in rate shock.
1 The Water Utility has prepared 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 both available cash and proposed new debt to finance capital
projects. The Scenario meets the debt service coverage ratio and cash reserve requirements in each
year of the projection period. The Preferred Financial Scenario includes projections for five years;
however, water rates are approved annually and only for the first year in the projection period. The
Water Utility Commission and Utility staff recommend approval of this Preferred Financial Scenario.
The cash balance in the PWSDIF fund increases over the five year period while the cash balance in
the AWRDIF fund decreases as cash is used for capital projects. The cash balance will be important
in the future as the Town moves forward with additional projects to increase deliveries of CAP water
and constructing potable water system infrastructure to meet the demands of new growth.
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. The pro forma for the Preferred Financial Scenario may be found in Appendix A. The
assumptions used to develop the financial projections contained in the Preferred Financial Scenario
may be found in Appendix D.
Recommendation on Rates, Fees & Charges
After reviewing the analysis of the three funds and their respective revenue requirements contained
in the Preferred Financial Scenario for FY 2016-17, the Water Utility Commission and Utility staff
recommend the following:
➢ Increase in the potable water and reclaimed water base rates
➢ Increase in the potable water commodity rates
➢ Increase in the potable construction water rates
1 ➢ No increase in the reclaimed water commodity rates
J ➢ No increase in the potable water or reclaimed water Groundwater Preservation Fee
J The proposed base rate increase is greater than the proposed commodity rate. This is due to
declines in water sales in recent years and the need to maintain revenues to cover fixed costs. The
following table (Table 18) shows the proposed monthly base rates for each meter size and the
1 proposed commodity rates for each meter size.
-15-
r,
Table 18-Proposed Water Rates
PROPOSED BASE RATES
POTABLE & RECLAIMED
METER SIZE
BASE RATE
(in inches)
5/8x3/4
$14.62
3/4x3/4
$21.93
1
$36.54
1.5
$73.08
2
$116.94
3
$233.86
4
$365.41
6
$730.83
8 1
$1,169.32
PROPOSED COMMODITY RATES- POTABLE WATER
RESIDENTIAL& IRRIGATION CLASSIFICATIONS
METER
COMMODITY
COMMODITY
COMMODITY
COMMODITY
SIZE
TIER
TIER
TIER
TIER
$2.34
$3.25
$4.53
$6.29
COST PER 1000 GALS. COST PER 1000 GALS.
COST PER 1000 GALS.
COST PER 1000 GALS.
5/8x3/4
0-7,000
7,001-16,000
16,001-32,000
OVER 32,000
3/4x3/4
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
OVER3,500,000
81
0-860,000
1
860,001-2,000,000
2.000,001 - 3,500,000
OVER3,500,000
COMMERCIAL CLASSIFICATION
$2.34 per 1000 gallons for all water use
MASTER -METERED MULTIFAMILY CLASSIFICATION
$2.34 per 1000 gallons for all water use
CONSTRUCTION WATER
$7.29 per 1000 gallons for all water use
PROPOSED COMMODITY RATES - RECLAIMED WATER
ALL RECLAIMED WATER USES & CLASSIFICATIONS $ 2.27 per 1000 gallons for all water use
PROPOSED GROUNDWATER PRESERVATION FEES
POTABLE WATER $ 0.90 per 1000 gal Ions for all water use
RECLAIMED WATER $ 0.47 per 1000 gallons for all water use
Table 19 illustrates the proposed water rates for a single family residential customer with a 5/8 x 3/4
inch water meter. Approximately 87 percent of the utility's customers fall into this category. Water
rates of other water providers in the region are included for comparison of the cost per 1,000
gallons.
-16-
l
Table 19
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 2.32 3.19 4.40 6.05 0.90
Oro Valley Proposed 14.62 2.34 3.25 4.53 6.29 --- 0.90
Metro Water 29.50 2.75 4.60 6.10 7.10 --- 0.50
Marana Water 18.18 2.96 4.12 5.36 6.61 9.50 0.48
Tucson Water 12.67 2.08 4.02 10.02 15.75 --- 0.87
Cost per 1,000 gallons.
Direct comparison of specific base rates and commodity rates is less effective because of the varying
rate structures of each utility. A more effective comparison is to calculate the cost for specific
consumption levels for one month. Table 20 provides a calculation of a monthly bill amount for a
single family residential customer with a 5/8 x 3/4 inch meter for the water utilities surrounding the
Oro Valley Water Utility service area. The following bill comparisons include water rates and water
resource fees similar to the Utility's GPF.
Table 20
Cost for Costfor Cost for Cost for
Water Provider 8,000 Gallons 15,000 Gallons 25,000 Gallons 40,000 Gallons
Oro Valley Current 40.82 69.45 121.24 213.94
Oro Valley Proposed 41.45 70.50 123.52 229.05
j
Metro Water 47.25 79.25 143.25 249.65
J
Marana Water 45.70 75.58 127.78 227.88
Tucson Water 34.61 85.32 199.93 435.56
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 21
Classification
Meter Size
(inches)
Water Use
(gallons)
Current Bill
Proposed Bill
Change
SF Residential
5/8
8,000
$ 40.82
$ 41.45
$ 0.63
SF Residential
5/8
15,000
$ 69.45
$ 70.50
$ 1.05
SF Residential
5/8
25,000
$121.24
$123.52
$ 2.28
SF Residential
5/8
40,000
$213.94
$219.05
$ 5.11
Irrigation
1
27,000
$131.12
$133.12
$ 2.00
Commercial
2
57,000
$297.07
$301.62
$ 4.55
MF Residential
4
700,000
$ 2,608.77
$ 2,633.41
$ 24.64
Turf- Potable
4
4,000,000
$13,234.77
$13,325.41
$ 90.64
Reclaimed - Turf
6
10,000,000
$23,130.83
$28,130.83
$21.29
-17-
I
J
1
J
J
Proposed rates for all Oro Valley Water Utility meter sizes maybe found in Appendix B. Tables that
calculate monthly bills under the proposed rates may also be found in Appendix B. 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.
There is no proposed increase in the reclaimed water commodity rates. Table 22 shows the
comparison to Tucson Water's reclaimed water rate.
Table 22
Water Provider Commodity Rate GPF
Oro Valley Water — Current $2.27 $0.47
Oro Valley Water — Proposed $2.27 $0.47
Tucson Water $2.50 N/A
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. The Preferred Financial Scenario does not include increases in any service fees and charges.
Conclusion
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
evaluated when they are included in the analysis. It is important that the Utility perform a water
rates analysis every year to plan for changes in debt service, operating or capital costs.
The Water Utility 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 NOI) to increase water rates on December 7, 2016. Although the analysis is for a five years,
the request for a rate increase is only for the first year in the analysis. The NOI does not approve the
water rates. The NOI sets the maximum amount of a rate increase, publishes the report and
establishes the date for the public hearing to consider an increase in water rates.
The Oro Valley Water Utility Staff and Commission are dedicated to serving the Town of Oro Valley
and the customers of its water utility. Water Utility Staff and the Commission extend their
appreciation to the Mayor and Council for consideration and guidance regarding water rates.
M -10
APPENDIX A
Preferred Financial Scenario Pro Forma
A-1 Operating Fund
A-2 Groundwater Preservation Fee
A-3 Alternative Water Resources Development Impact Fee Fund
A-4 Potable Water System Development Impact Fee Fund
A-5 Summary of All Funds
Oro Valley Water Utility
Prepared: October 24, 2016
Revised: November 8, 2016
i
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
r'
Total Water Sales
.
Other Operating Revenue
Service Fees & Charges
Interest Income
1
Total Other Operating Revenue
Total Operating Revenue (Excluding GPF)
OPERATING EXPENSES
Il j
Potable Operating Expenses
Personnel
Operations & Maintenance
Power for Pumping
Water Resource Management Costs
CAP Wheeling Costs - 25%
CAP Water Recharge Costs
Total Potable Operating Expenses
Reclaimed Operating Expenses
Operating & Maintenance
Total Reclaimed Operating Expenses
Total Operating Expenses (Excluding GPF)
PREFERRED FINANCIAL SCENARIO
Operating Fund
FY 2016-17 FY 2017-18 FY 2018-19
FY 2019-20 FY 2020-21
$ 10,137,600 $ 10,297,404 $ 10,505,543 $ 10,725,172 $ 10,940,420
61,046
163,670
288,207
403,477
507,640
109,980
111,288
113,093
115,153
116,903
10,308, 626
10,572,362
10,906,843
12,243,802
11,564, 963
1,618,478
1,626,162
1,649,198
1,669,171
1,694,573
11,927,104
12,198,524
12,556,041
12,912,973
13,259,536
697,800
697,800
703,980
703,980
703,980
202,148
155,039
141,454
128,039
114,733
899,948
852,839
845,434
832,019
918,713
$ 12,827,052
$ 13,051,363
$ 13,401,475
$ 13,744,992
$ 14,078,249
3,161,854
3,335,756
3,519,223
3,712,780
3,916,983
1,946,240
1,965,702
1,985,359
2,005,213
2,025,265
820,000
880,000
880,000
880,000
880,000
380,000
450,000
-
-
-
272,834
292,736
292,736
336,236
379,661
1,770,705
1,856,730
1,928,865
2,186,490
2,371,980
$ 8,351,633 $ 8,780,924 $ 8,606,183 $ 9,120,720 $ 9,573,889
884,758 892,991 905,805 914,204 922,686
$ 884,758 $ 892,991 $ 905,805 $ 914,204 $ 922,686
$ 9,236,391 $ 9,673,915 $ 9,511,988 $ 10,034,923 $ 10,496,575
Net Operating Revenue (Excluding GPF) $ 3,590,661 $ 3,377,448 $ 3,889,487 $ 3,710,069 $ 3,581674
DEBTSERVICE- POTABLE
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 - Private Placement (2013)
P&I - WIFA Loan - Sr. Lien - AMI (2014)
P&I - Excise Tax Bonds - Refinance 2005 (2015)
P&I - Sr. Lien Bonds - Existing System (2018)
Potable System Debt Service (Excluding GPF)
Other Obligations
Machinery & Equipment & Vehicles
Capital Improvements: Existing System
Total Other Obligations (Excluding GPF)
Net Balance From Operations (Excluding GPF)
Operating Fund Beginning Cash Balance
Net Balance From Operations
Operating Fund Ending Cash Balance (Excl. GPF)
1,259,936
1,255,326
1,258,553
2,615,276
1,804,838
150,820
150,820
150,820
150,820
150,820
589,716
589,759
589,227
587,986
587,514
1,033,428
1,024,073
1,024,645
-
-
395,534
377,158
377,060
376,959
376,856
151,634
152,142
152,576
151,286
151,279
-
347,642
347,642
347,642
347,642
$ 3,581,068 $ 3,896,920 $ 3,900,523 $ 4,229,969 $ 3,418,949
$ 363,765 $
1,550,000
135,189 $
0
297,726
0
$
132,955
0
$
185,495
0
$ 1,913,765 $
135,189 $
297,726
$
132,955
$
185,495
$ (1,904,172) $ (654,660) $ (308,762) $ (652,855) $ (22,770)
$ 9,043,330 $ 7,139,158 $ 6,484,498 $ 6,175,736 $ 5,522,881
(1,904,172) (654,660) (308,762) (652,855) (22,770)
$ 7,139,158 $ 6,484,498 $ 6,175,736 $ 5,522,881 $ 5,500,110
A-1
Oro Valley Water Utility
Prepared: October 24, 2016
Revised: November 8, 2016
GPF Beginning Balance
GPF Revenue
GPF Revenue - Potable
GPF Revenue- Reclaimed
i GPF Revenue -Growth
Total GPF Revenue
I
7
I
I
J
GPF Expenses
CAP Wheeling Costs - 75%
Capital Cost for CAP Allotment 6,748 AF
Reclaimed Capital Projects- Main Relocate & Extend
P&I - Sr. Lien - WIFA -Reclaimed Ph.2 (2008)
P&I - Sr. Lien Bonds - Reclaimed Ph.1 (2012)
Total GPF Expenses
GPF Ending Cash Balance
Operating Fund Cash Balance (excluding GPF)
GPF Ending Cash Balance
Total Operating Fund Ending Cash Balance
PREFERRED FINANCIAL SCENARIO
Operating Fund
Groundwater Preservation Fees
FY 2016.17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
$ 2,833,134 $ 1,079,720 $ 870,670 $ 704,584 $ 441,722
2,020,676
2,020,676
2,020,676
2,020,676
2,020,676
313,710
313,710
313,710
313,710
313,710
24,137
55,216
97,212
128,674
161,373
2,358,523
2,389,602
2,431,598
2,463,060
2,495,759
818,502
878,207
878,207
1,008,707
1,139,207
209,188
330,652
330,652
330,652
330,652
1,700,000
-
-
-
-
314,798
314,798
314,798
314,798
314,798
1,069,449
1,074, 995
1,074,027
1,071, 765
1,070, 903
4,111,937
2,598,652
2,597,684
2,725,922
2,855,560
$ 1,079,720 $
870,670 $
704,584 $
441,722 $
81,920
$ 7,139,158 $ 6,484,498 $ 6,175,736 $ 5,522,881 $ 5,500,110
1,079,720 870,670 704,584 441,722 81,920
$ 8,218,878 $ 7,355,168 $ 6,880,320 $ 5,964,602 $ 5,592,031
A-2
Oro Valley Water Utility
Prepared: October 24, 2016
Revised: November 8, 2016
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 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
$ 1,120,465 $ 1,136,645 $ 1,257,995 $ 991,025 $ 930,350
1,120,465 1,136,645 1,257,995 991,025 930,350
109,149 130,014 149,307 129,512 74,939
109,149 130,014 149,307 129,512 74,939
$ 1,229,614 $ 1,266,659 $ 1,407,302 $ 1,120,537 $ 1,005,289
OPERATING EXPENSES
N/A - - - - -
Total Operating Expenses $ - $ - $ - $ - $ -
Net Operating Revenue $ 1,229,614 $ 1,266,659 $ 1,407,302 $ 1,120,537 $ 1,005,289
DEBT SERVICE
N/A
Total Debt Service
OTHER OBLIGATIONS
Capital Improvements:
CAP Capital Charges 3557 acre feet
$
110,267 $
174,293 $
174,293
$
174,293
$ 174,293
CAP Facilities Engineering & Construction
100,000
-
400,000
4,110,000
3,100,000
Total Other Obligations
$
210,267 $
174,293 $
574,293
$
4,284,293
$ 3,274,293
Net Balance From Operations
$
1,019,347 $
1,092,366 $
833,009
$
(3,163,756)
$ (2,269,004)
Beginning Cash Balance
$
5,040,292
$
6,059,639
$
7,152,005
$
7,985,014
$
4,821,258
Net Balance From Operations
$
1,019,347
$
1,092,366
$
833,009
$
(3,163,756)
$
(2,269,004)
Ending Cash Balance
$
6,059,639
$
7,152,005
$
7,985,014
$
4,821,258
$
2,552,254
A-3
Oro Valley Water Utility
PREFERRED FINANCIAL SCENARIO
Prepared: October 24, 2016
Revised: November 8, 2016
Potable Water
System Development Impact
Fee Fund
FY 2016-17
FY 2017-18
FY 2018-19
FY 2019-20
FY 2020-21
REVENUES
Development Impact Fees
$
558,155
$
566,215
$
626,665
$
493,675
$
463,450
Subtotal Revenue
$
558,155
$
566,215
$
626,665
$
493,675
$
463,450
Other Operating Revenue
Interest Income
103,457
110,149
117,601
120,063
117,284
Subtotal Other Operating Revenue
103,457
110,149
117,601
120,063
117,284
Total Operating Revenue
$
661,612
$
676,364
$
744,266
$
613,738
$
580,734
OPERATING EXPENSES
N/A
-
-
-
-
Total Operating Expenses
$
-
$
-
$
-
$
-
$
-
Net Operating Revenue
$
661,612
$
676,364
$
744,266
$
613,738
$
580,734
DEBT SERVICE
P&I - Sr. Lien Bonds - Expansion Related (2012)
$
329,916
$
331,627
$
331,328
$
330,630
$
330,364
Total Water System Debt Service
$
329,916
$
331,627
$
331,328
$
330,630
$
330,364
OTHER OBLIGATIONS
Growth Related Capital Projects
-
-
-
500,000
300,000
Total Other Obligations
$
-
$
-
$
-
$
500,000
$
300,000
Net Balance From Operations
$
331,696
$
344,737
$
412,938
$
(216,892)
$
(49,630)
Beginning Cash Balance
$
5,068,238
$
5,399,934
$
5,744,671
$
6,157,609
$
5,940,717
Net Balance From Operations
$
331,696
$
344,737
$
412,938
$
(216,892)
$
(49,630)
Ending Cash Balance
$
5,399,934
$
5,744,671
$
6,157,609
$
5,940,717
$
5,891,087
A-4
Oro Valley Water Utility
r'
Prepared: October 24, 2016
Revised: November 8, 2016
_
REVENUES
Water Sales
1
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
rj
Groundwater Preservation Fee - Reclaimed
JI
Groundwater Preservation Fee - Growth
Total Groundwater Preservation Fees
r
Potable Water Impact Fees
Alternative Water Impact Fees
l�
Service Fees & Charges
Interest Income
I-j
Total Other Operating Revenue
JTotal
Operating Revenue
OPERATING EXPENSES
otable Operating Expenses
Personnel
perations & Maintenance
Power for Pumping
'-j
Water Resource Management Costs
J
CAP Wheeling Costs
CAP Recharge Costs
1
Costs paid by GPF Revenue (excluding debt service)
Total Potable Operating Expenses
Reclaimed Operating Expenses
Operating & Maintenance
Total Reclaimed Operating Expenses
j
J
Operating P TotalO eratin Expenses
J
PREFERRED FINANCIAL SCENARIO
Summary of all Funds
FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
$ 10,137,600 $ 10,297,404 $ 10,505,543 $ 10,725,172 $ 10,940,420
61,046
163,670
288,207
403,477
507,640
109,980
111,288
113,093
115,153
116,903
10,308,626
10,572,362
10,906,843
11,243,802
11,564,963
1,618,478
1,626,162
1,649,198
1,669,171
1,694,573
11,927, 204
12,198,524
12,556,041
12,912,973
13,259,536
2,020,676
2,020,676
2,020,676
2,020,676
2,020,676
313,710
313,710
313,710
313,710
313,710
24,137
55,216
97,212
128,674
161,373
2,358,523
2,389,602
2,431,598
2,463,060
2,495,759
558,155
566,215
626,665
493,675
463,450
1,120,465
1,136,645
1,257,995
991,025
930,350
697,800
697,800
703,980
703,980
703,980
414,754
395,202
408,362
377,614
306,956
5,149,697
5,185,464
5,428,600
5,029,354
4,900,495
$ 17,076,801 $ 17,383,988 $ 17,984,641 $ 17,942,327 $ 18,160,031
3,161,854
3,335,756
3,519,223
3,712,780
3,916,983
1,946,240
1,965,702
1,985,359
2,005,213
2,025,265
820,000
880,000
880,000
880,000
880,000
380,000
450,000
-
-
-
272,834
292,736
292,736
336,236
379,661
1,770,705
1,856,730
1,928,865
2,186,490
2,371,980
1,027,690
1,208,859
1,208,859
1,339,359
1,469, 859
$ 9,379,323 $ 9,989,783 $ 9,815,042 $ 10,460,078 $ 11,043,748
884,758 892,991 905,805 914,204 922,686
$ 884,758 $ 892,991 $ 905,805 $ 914,204 $ 922,686
$ 10,264,081 $ 10,882,774 $ 10,720,847 $ 11,374,281 $ 11,966,433
Net Operating Revenue $ 6,812,720 $ 6,501,214 $ 7,263,794 $ 6,568,046 $ 6,193 598
Debt Service
Debt Service - Potable- Existing System
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 - Private Placement (2013)
P&I - WIFA Loan - Sr. Lien - AMI (2014)
P&I - Excise Tax Bonds - Refinance 2005 (2015)
P&I - Sr. Lien Bonds - Existing System (2018)
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.1 (2012)
Total Non -Potable System Debt Service
Total Water System Debt Service
1,259,936
1,255,326
1,258,553
2,615,276
1,804,838
150,820
150,820
150,820
150,820
150,820
589,716
589,759
589,227
587,986
587,514
1,033,428
1,024,073
1,024,645
-
-
395,534
377,158
377,060
376,959
376,856
151,634
152,142
152,576
151,286
151,279
-
347,642
347,642
347,642
347,642
$ 3,581,068 $ 3,896,920 $ 3,900,523 $ 4,229,969 $ 3,418,949
329,916 331,627 331,328 330,630 330,364
$ 329,916 $ 331,627 $ 331,328 $ 330,630 $ 330,364
$ 314,798 $ 314,798 $ 314,798 $ 314,798 $ 314,798
1,069,449 1,074,995 1,074, 027 1,071, 765 1,070, 903
$ 1,384,247 $ 1,389,793 $ 1,388,825 $ 1,386,563 $ 1,385,701
$ 5,295,231 $ 5,618,340 $ 5,620,676 $ 5,947,162 $ 5,135,014
A-5
J
1
Oro Valley Water utility PREFERRED FINANCIAL SCENARIO
Prepared: October 24, 2016 Summary of all Funds
Revised: November 8, 2016
FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21
Other Obligations
Machinery & Equipment & Vehicles
Capital Improvements:
Existing System
GPF Projects
Alternative Water Resources
Potable Water System Expansion
Total Other Obligations
Net Balance From Operations
Growth - New Metered Connections
Monthly increase to residential customer using 8K gals.
Monthly increase to residential customer using 8K gals.
CIS Coverage Ratio: Sr. Lien Bonds & WIFA
Debt Service Coverage Requirement = 1.30
Required Cash Reserves (20% of personnel, O&M, debt)
(does not include depreciation/amortization)
Beginning Cash Balance - All Funds
Net Balance From Operations - All Funds
Ending Cash Balance - All Funds
Operating Fund (excluding GPF)
Groundwater Preservation Fees
Total Operating Fund
AWRD Impact Fee Fund
J PWSD Impact Fee Fund
Total Ending Cash Balance
-� Contingent Reserve Fund:
Contingent Reserve Requirement = 130%
�1
J
$
363,765
$ 135,189
$ 297,726
$ 132,955
$ 185,495
1,550,000
-
-
-
-
1,700,000
-
-
-
-
210,267
174,293
574,293
4,284,293
3,274,293
-
-
-
500,000
300,000
$
3,824,032
$ 309,482
$ 872,019
$ 4,917,248
$ 3,759,788
$
(2,306,543)
$ 573,393
$ 771,099
$ (4,296,364)
$ (2,701,205)
230
250
275
225
200
1.5%
1.5%
1.5%
1.5%
1.5%
$0.63
$0.64
$0.65
$0.65
$0.66
1.75
1.54
1.73
2.07
1.95
$ 3,045,879 $ 3,233,897 $ 3,202,039 $ 3,398,163 $ 3,354,217
$
21,984,994
(2,306,543)
$ 19,678,452
573,393
$
20,251,844
771,099
$
21,022,943
(4,296,364)
$ 16,726,579
(2,701,205)
$
19,678,452
$ 20,251,844
$
21,022,943
$
16,726,579
$ 14,025,374
$
7,139,158
$ 6,484,498
$
6,175,736
$
5,522,881
$ 5,500,110
1,079,720
870,670
704,584
441,722
81,920
8,218,878
7,355,168
6,880,320
5,964,602
5,582,031
6,059,639
7,152,005
7,985,014
4,821,258
2,552,254
5,399,934
5,744,671
6,157,609
5,940,717
5,891,087
$ 19,678,452 $ 20,251,844 $ 21,022,943 $ 16,726,578 $ 14,025,372
372% 360% 374% 291% 273%
A-6
APPENDIX B
Preferred Financial Scenario
Tables for Bill Comparisons
B-1 Tables for Bill Comparisons by Meter Size - Potable
B-7 Tables for Bill Comparisons by Meter Size - Reclaimed
TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON
RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 5/8 X 3/4" METER
PREFERRED FINANCIAL SCENARIO
= Tiers
=Average Water Use
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
14.62
0.43
3.0%
0.00
0.00
0.00
0.43
14.62
3.0%
1,000
16.51
16.96
0.45
2.7%
0.90
0.90
0.00
0.45
17.86
2.6%
2,000
18.83
19.30
0.47
2.5%
1.80
1.80
0.00
0.47
21.10
2.3%
3,000
21.15
21.64
0.49
2.3%
2.70
2.70
0.00
0.49
24.34
2.1%
4,000
23.47
23.98
0.51
2.2%
3.60
3.60
0.00
0.51
27.58
1.9%
5,000
25.79
26,32
0.53
2.1%
4.50
4.50
0.00
0.53
30.821
1.7%
6,000
28.11
28.66
0.55
2.0%
5.40
5.40
0.00
0.55
34.06
1.6%
7,000
30.43
31.00
0.57
1.9%
6.30
6.30
0.00
0.57
37.30
1.6%
8,000
33.62
34.25
0.63
1.9%
7.20
7.20
0.00
0.63
41.45
1.5%
9,000
36.81
37.50
0.69
1.9%°
8.10
8.10
0.00
0.69
45.60
1.5%
10,000
40.00
40.751
0.75
1.9%
9.00
9.00
0.00
0.75
49.75
1.5%
11,000
43.19
44.00
0.81
1.9%
9.901
9.90
0.001
0.81
53.90
1.5%
12,000
46.38
47.25
0.87
1.9%
10.80
10.80
0.00
0.87
58.05
1.5%
13,000
49.57
50.50
0.93
1.9%
11.70
11.70
0.00
0.93
62.20
1.5%
14,000
52.76
53.75
0.99
1.9%°
12.60
12.60
0.00
0.99
66.35
1.5%
15,000
55.95
57.00
1.05
1.9%
13.50
13.50
0.00
1.05
70.50
1.5%
16,000
59.14
60.25
1.11
1.9%
14.40
14.40
0.00
1.11
74.65
1.5%
17,000
63.54
64.78
1.24
2.0%
15.30
15.30
0.00
1.24
80.08
1.6%
18,000
67.94
69.31
1.37
2.0%
16.20
16.20
0.00
1.37
85.51
1.6%
19,000
72.34
73.84
1.50
2.1%
17.101
17.10
0.001
1.50
90.94
1.7%
20,000
76.74
78.37
1.63
2.1%
18.001
18.00
0.00
1.63
96.37
1.7%°
21,000
81.14
82.90
1.76
2.2%
18.90
18.90
0.00
1.76
101.80
1.8%
22,000
85.54
87.43
1.89
2.2%
19.80
19.80
0.00
1.89
107.23
1.8%
23,000
89.94
91.96
2.02
2.2%
20.70
20.70
0.00
2.02
112.66
1.8y°
24,000
94.34
96.49
2.15
2.3%°
21.60
21.60
0.00
2.15
118.09
1.9%
25,000
98.74
101.02
2.28
2.3%
22.50
22.50
0.00
2.28
123.52
1.9%
26,000
103.14
105.55
2.41
2.3%
23.40
2340
0.00
2.41
128.95
1.9%
27,000
107.54
110.08
2.54
2.4%
24.30
24.30
0.001
2.54
134.38
1.99'°
28,000
111.94
114.61
2.67
2.4%
25.201
25.20
0.00
2.67
139.81
1.9%
29,000
116.34
119.14
2.80
2.4%
26.101
26.16
0.00
2.80
145.24
2.0%
30,000
120.74
123.67
2.93
2.4%
27.00
27.00
0.00
2.93
150.67
2.0%
31,000
125.14
128.20
3.06
2.4%°
27.90
27.90
0.00
3.06
156.10
2.0%
32,000
129.54
132.73
3.19
2.5%
28.80
28.80
0.00
3.19
161.53
2.0%
33,000
135.59
139.02
3.43
2.5%
29.70
29.70
0.00
3.43
168.72
2.1%
34,000
141.64
145.31
3.67
2.6%
30.60
30.60
0.00
3.67
175.91
2.1%
35,000
147.69
151.60
3.91
2.6%
31.50
31.50
0.001
3.91
183.10
2.2%
36,000
153.74
157.89
4.15
2.7%
32.40
32.40
0.001
4.15
190.29
2.2T
37,000
159.79
164.18
4.39
2.7%
33.301
33.30
0.001
4.39
197.48
2.3%
38,000
165.84
170.47
4.63
2.8%
34.20
34.20
0.001
4.63
204.671
2.3%
39,000
171.89
176.76
4.87
2.8%
35.10
35.10
0.001
4.87
211.861
2A
40,000
177,94
183.05
5.11
2.9%
36.00
36.00
0.00
5.11
219.05
2.4%
41,000
183.99
189.34
5.35
2.9%
36.90
36.90
0.00
5.35
226.24
2.4%
42,000
190.04
195.63
5.59
2.9%
37.80
37.80
0.00
5.59
233.43
2.5%
43,000
196.09
201.92
5.83
3.0%
38.70
38.70
0.00
5.83
240.62
2.5%
44,000
202.14
208.21.
6.07
3.0%°
39.60
39.60
0.00
6.07
247.81
2.5%
45,000
208.19
214.50
6.31
3.0%
40.50
40.50
0.00
6.31
255.00
2.5%
46,000
214.24
220.79
6.55
3.1%
41.40
41.40
0.00
6.55
262.19
2.6%
47,000
220.29
227.08
6.79
3.1%
42.30
42.30
0.001
6.79
269.38
2.6%
48,000
226.34
233.37
7.03
3.1%
43.20
43.20
0.00
7.03
276,571
2.6%°
49,000
232.39
239.66
7.27
3.1%
44.10
44.10
0.001
7.27
283.76
2.6%
50,000
238.44
245.95
7.51
3.1%
45.00
45A0
0.00
7.51
290.951
2.6%
B-1
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 3/4" x 3/4" METER
BASE RATE $ 21.93
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 10,000 GALLONS
TIER 2 = $ 3.25 FOR 10,001 - 24,000 GALLONS
TIER 3 = $ 4.53 FOR 24,001- 48,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 48,000 GALLONS
= Average Water Use
GALLONS
USEDIN
1 MONTH
BILL AT THE
CURRENT
RATE
BILLATTHE
PROPOSED
RATE
AMOUNT OF
INCREASE
Water Rate
PERCENT
INCREASED
Water Rate
CURRENT
GPF
PROPOSED
GPF
INCREASEIN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNT OF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
21.29
21.93
0.64
3.0%
0.00
0.00
0.00
0.64
21.93
3.0%
7,000
37,53
38.31
0.78
2.1%
6.30
6.30
0.00
0.78
44.61
1.8%
11,000
47.68
48.58
0.90
1.9%
9.90
9.90
0.00
0.90
58.48
1.6%
28,000
106.75
108.95
2.20
2.1%
25.20
25.20
0.00
2.20
134.15
1.7%
50,000
206.85
212.13
5.28
2.6%
45.00
45.00
0.00
5.28
257.13
2.1%
I
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3/4" x 3/4" METER
BASE RATE $ 21.93
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3= N/A
TIER 4= N/A
3
GALLONS
USEDIN
1 MONTH
BILL ATTHE
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
21.93
0.64
3.0%
0.00
0.00
0.00
0.64
21.93
3.0%
7,000
37.53
38.31
0.78
2.1%
6.30
6.30
0.00
0.78
44.61
1.8%
11,000
46.81
47.67
0.86
1.8%
9.90
9.90
0.00
0.86
57.57
1.5%
28,000
86.25
87.45
1.20
1.4 0
25.20
25.20
0.00
1.20
112.65
50,000
137.29
138.93
1.64
1.2%
45.00
45.00
0.00
1.641
183.93 1
0.95/0
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 1" METER
BASE RATE $ 36.54
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 17,000 GALLONS
TIER 2 = $ 3.25 FOR 17,001- 40,000 GALLONS
TIER 3 = $ 4.53 FOR 40,001 - 80,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 80,000 GALLONS
GALLONS
USEDIN
1 MONTH
BILLAT 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
35.48
36.54
1.06
3.0%
0.00
0.00
0.00
1.06
36.54
3.0%
17,000
74.92
76.32
1.40
1.9%
15.30
15.30
0.00
1.40
91.62
1.6%
27,000
106.82
108.82
2.00
1.9%
24.30
24.30
0.00
2.00
133.12
1.5%
38,000
141.91
144.57
2.66
1.9%
34.20
34.20
0.00
2.66
178.77
1.5%
50,000
192.29
196.37
4.08
2.1%
45.00
45.00
0.00
4.08
241.37
1.7%
B-2
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1" METER
BASE RATE $ 36.54
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3 = N/A
TIER 4= N/A
= Average Water Use
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
35.48
36.54
1.06
3.0%
0.00
0.00
0.00
1.06
36.54
3.0%
15,000
70.28
71.64
1.36
1.9%
13.50
13.50
0.00
1.36
85.14
1.6V
27,000
98.12
99.72
1.60
1.6%
24.30
24.30
0.00
1.60
124.02
1.3%
38,000
123.64
125.46
1.82
1.5%
34.20
34.20
0.00
1.82
159.66
1.2%
50,000
151.48
153.54
2.06
1.4%
45.00
45.00
0.00
2.06
198.54
1.0%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 1.5" METER
BASE RATE $ 73.08
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 35,000 GALLONS
TIER 2 = $ 3.25 FOR 35,001- 80,000 GALLONS
TIER 3 = $ 4.53 FOR 80,001-160,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 160,000 GALLONS
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
70.95
73.08
2.13
3.0%
0.00
0.00
0.00
2.13
73.08
3,091
38,000
161.72
164.73
3.01
1.9%
34.20
34.20
0.00
3.01
198.93
1.5%
64,000
244.66
249.23
4.57
1.9%
57.60
57.60
0.00
4.57
306.83
1.5%a
90,000
339.70
346.53
6.83
2,0%
81.00
81,00
0.00
6.83
427.53
1.6%
125,000
493.70
505.08
11.38
2.3%
112.50
112.50
0.00
11.38
617.58
1.9%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1.5" METER
BASE RATE $ 73.08
COMMODITY RATE: TIER 1 = $ 2.34 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 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
73.08
2.13
3.0%
0.00
0.00
0.00
2.13
73.08
3.0%
30,000
140.55
143.28
2.73
1.9%
27.00
27.00
0.00
2.73
170.28
1.6%
64,000
219.43
222.84
3.41
1.6%
57.60
57.60
0.00
3.41
280.44
1.2%
90,000
279.75
283.68
3.93
1.4%
81.00
81.00
0.00
3.93
364.68
1.1%
125,000
360.95
365.58
4.63
1.3%
112.50
112.50
0.00
4.63
478.08
1.0%
B-3
r�
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON = Average Water Use
FOR IRRIGATION CUSTOMERS WITH A 2" METER
BASE RATE $ 116.94
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 56,000 GALLONS
TIER 2 = $ 3.25 FOR 56,001 - 128,000 GALLONS
j TIER 3 = $ 4.53 FOR 128,001- 256,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 256,000 GALLONS
ll
ll
GALLONS
USEDIN
1 MONTH
BILLAT 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
113.53
116.94
3,41
3.0%
0.00
0.00
0.00
3.41
116.94
3.0%
57,000
246.64
251.23
4.59
1.9%
51.30
51.30
0.00
4.59
302.53
1.5%
130,000
481.93
491.04
9.11
1.9%
117.00
117.00
0.00
9.11
608.04
1.551
250,000
1,009.93
1,034.64
24.71
2.4%
225.00
225.00
0.00
24.71
1,259.64
2.0%
325,000
1,453.78
1,495.53
42.05
2.9%
292.50
292.50
0.06
42.05
1,788.33
2.4%
n TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
L� FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 2" METER
BASE RATE $ 116.94
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3= N/A
TIER 4= N/A
J
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
AMOUNT OF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
113.53
116.94
3.41
3.0%
0.00
0.00
0.00
3.41
116.94
3.07
57,000
245.77
250.32
4.55
1.9%
51.30
51.30
0.00
4.55
301.62
1.5%
128,000
410.49
416.46
5.97
1.5%
115.20
115.20
0.00
5.97
531.66
1.1%
250,000
693.53
701.94
8.41
1.2%
225.00
225.00
0.00
8.41
926.94
0.9%
325,000
867.53
877.44
9.91
1.1%
292.50
292.50
0.00
9.91
1,169.94
0.9%
J
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 3" METER
BASE RATE $ 233.86
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 112,000 GALLONS
TIER 2 = $ 3.25 FOR 112,001- 256,000 GALLONS
TIER 3 = $ 4.53 FOR 256,001 - 512,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 512,000 GALLONS
GALLONS
USEDIN
1 MONTH
BILLAT THE
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
227.05
233.86
6.81
3.0%
0.00
0.00
0.00
6.81
233.86
3.0%
50,000
343.05
350.86
7.81
2.3%
45.00
45.00
0.00
7.81
395.86
2.0%
150,000
608.11
619.44
11.33
1.9%
135.00
135.00
0.00
11.33
754.44
1.5%
300,000
1,139.85
1,163.26
23.41
2.1%
270.00
270.00
0.00
23.41
1,433.26
1.7%
500,000
2,019.85
2,069.26
49.41
2.4%
450.00
450.00
0.00
49.41
2,519.26
2.0%
B-4
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON = Average Water Use
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3" METER
BASE RATE $ 233.86
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2= N/A
TIER 3= N/A
TIER 4= N/A
I
i
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
AMOUNT OF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
227.05
233.86
6.81
3.0%
0.00
0.00
0.00
6.81
233.86
3.0%
50,000
343.05
350.86
7.81
2.3%
45.00
45.00
0.00
7.81
395.86
2.0%
150,000
575,05
584.86
9.81
1.7%
135.00
135.00
0.00
9.81
719.86
1.4%
300,000
923.05
935.86
12.81
1.4°/a
270.00
270.00
0.00
12.81
1,205.86
1.1%
500,000
1,387.05
1,403.86
16.81
1.2%
450.00
450.00
0.00
16.81
1,853.86
0.9Yo
i
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 4"
METER
BASE RATE $ 365.41
COMMODITY RATE: TIER 1= $
2.34
FOR 0 - 175,000 GALLONS
TIER 2 = $
3.25
FOR 175,001- 400,000 GALLONS
TIER 3 = $
4.53
FOR 400,001- 800,000 GALLONS
TIER 4 = $
6.29
FOR ALL USAGE OVER 800,000 GALLONS
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
AMOUNT OF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
354.77
365.41
10.64
3.0%
0.00
0.00
0.00
10.64
365.41
3.0%
300,000
1,159.52
1,181.16
21.64
1.9%
270.00
270.00
0.00
21.64
1,451.16
1.5%
550,000
2,138.52
2,185..66
47.14
2.2%
495.00
495.00
0.00
47.14
2,680.66
1.8%
700,000
2,798.52
2,865.16
61.64
2.4%
630.00
630.00
0.00
66.64
3,495.16
1.9%
850,000
3,541.02
3,632.66
91.64
2.6%
765.00
765.00
0.00
9 1.641
4,397.66 1
2.151
] TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 4" METER
BASE RATE $ 365.41
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3= N/A
TIER 4= N/A
J
J
t
J
GALLONS
USEDIN
1 MONTH
BILL ATTHE
CURRENT
RATE
BILLATTHE
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
354.77
365.41
10.64
3.0%
0.00
0.00
0.00
10.64
365.41
3A%
300,000
1,050.77
1,067.41
16.64
1.6%
270.00
270.00
0.00
16.64
1,337.41
1.3%
550,000
1,630.77
1,652.41
21.64
1.3%
495.00
495.00
0.00
21.64
2,147.41
1.0%
700,000
1,978.77
2,003.41
24.64
1.2%
630.00
630.00
0.00
24.64
2,633.41
0.9Ya
850,000
2,326.77
2,354.41
27.64
1.2%
765.00
765.00
0.00
27.64
3,119.41
0.9%
B-5
r, TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON = Average Water Use
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 6" METER
BASE RATE $ 730.83
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 860,000 GALLONS
TIER 2 = $ 3.25 FOR 860,001- 2,000,000 GALLONS
TIER 3 = $ 4.53 FOR 2,000,001 - 3,500,000 GALLONS
TIER 4 = $ 6,29 FOR ALL USAGE OVER 3,500,000 GALLONS
I1
lJ
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
AMOUNT OF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
709.54
730.83
21.29
3.0%
0.00
0.00
0.00
21.29
730.83
3.0%
425,000
1,695.54
1,725.33
29.79
1.8%
382.50
382.50
0.00
29.79
2,107.83
1.4%
1,000,000
3,151.34
3,198.23
46.89
1.5%
900.00
900,00
0.00
46.89
4,098.23
1.2%
1,500,000
4,746.34
4,823.23
76.89
1.6%
1,350.00
1,350.00
0.00
76.89
6,173.23
1.3%
2,000,000
6,341.34
6,448.23
106.89
1.7%
1,800.00
1,800.00
0.00
106.59
8,248.23
1.3Yo
LJ
n TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
LJ FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 6" METER
BASE RATE $ 730.83
n COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
�JJ TIER 2= N/A
TIER 3= N/A
DTIER 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
709.54
730.83
21.29
3.0%
0.00
0.00
0.00
21.29
730.83
3.0%
425,000
1,695.54
1,725.33
29.79
1.8%
382.50
382.50
0.00
29.79
2,107.83
1.4%
1,000,000
3,029.54
3,070.83
41.29
1.4%
900.00
900.00
0.00
41.29
3,970.83
1.1%
1,500,000
4,189.54
4,240.83
51.29
1.2%
1,350.00
1,350.00
0.00
51.29
5,590.83
0.9%
2,000,000
5,349.54
5,410.83
61.29
1.1%
1,800.00
1,800.00
0.00
61,29
7,210.83
0.9%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 8" METER
BASE RATE $ 1,169.32
COMMODITY RATE: TIER 1 =
$
2.34
FOR 0 - 860,000 GALLONS
TIER 2 =
$
3.25
FOR 860,001- 2,000,000 GALLONS
TIER 3 =
$
4.53
FOR 2,000,001 - 3,500,000 GALLONS
l TIER 4 =
$
6.29
FOR ALL USAGE OVER 3,500,000 GALLONS
J
I
J
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
1,135.26
1,169.32
34.06
3.0%
0.00
0.00
0.00
34.06
1,169.32
3.0%
425,000
2,121.26
2,163.82
42.56
2.0%
382.50
382.50
0.00
42.56
2,546.32
1.7%
1,000,000
3,577.06
3,636.72
59.66
1.7%
900.00
900.00
0.00
59.66
4,536.72
1.3%
1,500,000
5,172.06
5,261.72
89.66
1,710
1,350.00
1,350.00
0.00
89.66
6,611.72
1.4%
2,000,000
6,767.06
6,886.72
119.66
1.8%
1,800.00
1,800.00
0.00
119.66
8,686.72
1.4Y"
(There are no active 8-inch potable meters in the OVWU system)
B-6
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON = Average Water Use
FOR COMMERCIAL AND MULTIFAMILY CUSTOMERS WITH A 8" METER
BASE RATE $ 1,169.32
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
j TIER 3 = N/A
n TIER 4= N/A
I'I
!1
GALLONS
USEDIN
1 MONTH
BILL ATTHE
CURRENT
RATE
BILL ATTHE
PROPOSED
RATE
AMOUNT OF
INCREASE
Water Rate
PERCENT
INCREASED
Water Rate
CURRENT
GPF
PROPOSED
GPF
INCREASEIN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNTOF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
1,135.26
1,169.32
34.06
3.0%
0.00
0.00
0.00
34.06
1,169.32
3.0%
425,000
2,121.26
2,163.82
42.56
2.0%
382.50
382.50
0.00
42.56
2,546.32
1.7%
1,000,000
3,455.26
3,509.32
54.06
1.6%
900.00
900.00
0.00
54.06
4,409.32
1.2%
1,500,000
4,615.26
4,679.32
64.06
1.4yo
1,350.00
1,350.00
0.00
6,10
6,029.32
1.1%
2,000,000
5,775.26
5,849.32
74.06
1.3%
1,800.00
1,800.00
0.00
i
74.06
7,649.32
1.0yo
7 (There are no active 8-inch potable meters in the OVWU system,
n TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
LJ FOR CUSTOMERS WITH A 1.5" METER - RECLAIMED WATER USE
BASE RATE $ 73.08
� COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3 = N/A
7 TIER 4= N/A
GALLONS
USEDIN
1 MONTH
BI LL 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
70.95
73.08
2.13
3.0%
0.00
0.00
-
2.13
73.08
3.0%
50,000
184.45
186.58
2.13
1.2%
23.50
23.50
-
2.13
210.08
1.0%
135,000
377.40
379.53
2.13
0.6%
63.45
63.45
-
2.13
442.98
6.55'
200,000
524.95
527.08
2.13
0.4yo
94.00
94.00
-
2.13
621.08
0.3%
250,.00
638.45
640.58
2.13
0.3%
117.50
117.50
-
2.13
758.08
0.3%
J
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 2" METER - RECLAIMED WATER USE
BASE RATE $ 116.94
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
AMOUNTOF
MONTHLY
BILL
TOTAL
CENT
RED
:I:EREA3SO%.
0
113.53
116.94
3.41
3.0%
0.00
0.00
0.00
3.41
116.94
150,000
411.45
413.58
2.13
0.5%
70.50
70.50
-
2.13
484.08
0.4%
265,000
672.50
674.63
2.13
0.3%
124.55
124.55
-
2.13
799.18
0.3yo
450,000
1,092.45
1,094.58
2.13
0.2yo
211.50
211.50
-
2.13
1,306.08
0.2%
600,000
1,432.95
1,435.08
2.13
0.1%
282.00
282.00
-
2.13
1,717.08
0.1%
B-7
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 3" METER - RECLAIMED WATER USE
BASE RATE $ 233.86
COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE
TIER 2= N/A
TIER 3= N/A
TIER 4 = N/A
= Average Water Use
GALLONS
USEDIN
1 MONTH
BILLATTHE
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
227.05
233.86
6.81
3.0%
0.00
0.00
0.00
6.81
233.86
3.0%
20,000
272.45
279.26
6.81
2.5%
9.40
9.40
-
6.81
288.66
2.4i
50,000
340.55
347.36
6.81
2.0%
23.50
23.50
-
6.81
370.86
1.9%
100,000
454.05
460.86
6.81
1.5%
47.00
47.00
-
6.81
507.86
1.4%
150,000
567.55
574.36
6.81
1.2%
70.50
70.50
-
6.81
644.86
1.13'Y
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 4" METER - RECLAIMED WATER USE
BASE RATE $ 365.41
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 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
354.77
365.41
10.64
3.0%
0.00
0.00
0.00
10.64
365.41
3.0%°
209,000
829.20
839.84
10.64
1.3%
98.23
98.23
-
10.64
938.07
1.1%
300,000
1,035.77
1,046.41
10.64
1.0%
141.00
141.00
-
10.64
1,187.41
0.9%
450,000
1,376.27
1,386.91
10.64
0.8%
211.50
211.50
-
10.64
1,598.41
0.7%
600,000
1,716.77
1,727.41
10.64
0.6°/Y
282.00
282.00
-
10.64
2,009.41
0.5Y/o
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 6" METER - RECLAIMED WATER USE
BASE RATE $ 730.83
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 ATTHE
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
730.83
21.29
3.0%
0.00
0.00
0.00
21.29
730.83
3.0%
470,000
1,776.44
1,797.73
21.29
1.2%
220.90
220.90
-
21.29
2,018.63
1.1%
5,000,000
12,059.54
12,080.83
21.29
0.2%
2,350.00
2,350.00
-
21.29
14,430.83
10,000,000
23,409.54
23,430.83
21.29
0.1%
4,700.00
4,700.00
-
21.29
28,130.83
0.1%
15,000,000
34,759.54
34,780.83
21.29
O.lYY
7,050.00
7,050.00
-
21.29
41,830,83
0.1%
20,000,000
46,109.54
46,130.83 1
21.29
0.0%1
9,400.00
1 9,400.00 1
21.29
55,530.83 1
0.0%
B-8
APPENDIX C
5-Year Capital Improvement Schedules
C-1 Operating Fund
C-1 Groundwater Preservation Fee
C-2 Alternative Water Resource Development Impact Fee Fund
C-2 Potable Water System Development Impact Fee Fund
Ij
fJ
I
I
J
ORO VALLEY WATER UTILITY
OPERATING FUND
CAPITAL IMPROVEMENTS PROJECTS
EXISTING POTABLE SYSTEM IMPROVEMENTS
PROJECTS.
2016-17
2017-18
2018-19
1 2019-20
2020-21
SYearTotal
PRODUCTION
Hydropneumatic Tank Replacement - Wells
$ 60,000
$ 60,000F$60,000
$ 180,000
Replace Well Pumps
$ 75,000
$ 100,000
$ 250,000
Well E2 Upgrade
$ 160,000
$ 150,000Well
Production Modifications
$ 50,000
$ 50,000
$ 50,000
$ 200,000
Water Quality Control Program
$ 70,000
$ 70,000
Glover Reservoir Coating & Lining
$ 100,000
$ 100,000
Big Wash Reservoir Coating
$ 100,000
$ 100,000
El Con Storage - Operational Improvements
$ 50,000
1
$ 50,000
Booster Station Modifications
$ 50,000
$ 50,000
$ 50,000
$ 50,000
$ 200,000
Water Plant 4 Site Improvements
$ 50,000
$ 50,000
Replace Crimson Canyon Booster Station
$ 250,000
$ 250,000
Hydropneumatic Tank Replacement - Boosters
$ 60,000
$ 60,000
$ 60,000
$ 180,000
High Mesa E and F Zone Bstr. Enhancements
$ 50,000
$ 50,000
Production Facility Building Retrofit
$ 80,000
$ 100,000
$ 180,000
Wall Upgrades and Improvements
$ 75,000
1 $ 75,000
SCADA server and monitors
$ 50,000
$ 50,000
SCADA Legacy Replacement
$ 100,000
$ 100,000
Golf Course Metering Stations Modifications
$ 25,000
$ 25,000
SUBTOTAL
$ 660,000
$ 420,000
$ 520,000
$ 210,000
$ 460,000
$ 2,260,000
■ •
Main Valve Replacements
$ 50,000 1 $ 50,000 1 $ 50,000 $ 50,000 $ 200,000
W. Lambert Ln. 12" Main Relocation (DIS)
$ 600,000
$ 600,000
Tangerine Potable Main Extension (DIS) RTA
$ 20,000
$ 20,000
System Connection Upgrades
$ 50,000
$ 50,000
La Cholla -Lambert to Tangerine (RTA)
$ 70,000
$ 500,000
$ 570,000
Relocate 3 PRV'S OV Area
$ 100,000
$ 100,000
Rancho Verde Hydrants
$ 200,000
$ 200,000
Hilton Hotel & Cashes Main Replacement
$ 100,000
$ 1,300,000
$ 700,000
$ 2,100,000
OV Community & Rec. Center Main Repl.
$ 600,000
$ 600,000
Linda Vista Citrus Tracts Main Replacements
$ 250,000
$ 250,000
SUBTOTAL
$ 890,000
$ 750,000
$ 150,000
$ 1,950,000
$ 950,000
$ 4,690,000
TOTAL ALL CAPITAL PROJECTS
$ 1,560,000 1
$ 1,170,000
$ 670,000
$ 2,160,000
$ 1,400,000
$ 61950,000
All Divsions $ 244,000 1 $ 70,000 $ 75,000 1 $ 70,000 1 $ 125,000
$ 684,000
TOTAL ALL CAPITAL EXPENDITURES $ 1,794,000 1 $ 1,240,000 $ 745,000 1 $ 2,230,000 1 $ 1,6257000 $ 7,534,000
GROUNDWATER PRESERVATION FEE
CAPITAL IMPROVEMENTS PROJECTS
RECLAIMED SYSTEM IMPROVEMENTS
Project Name
2016-17 2017-18
1 2018-19 2019-20 2020-21
1 6 Year Total
24 Inch Reclaimed Main Tangerine (DIS) RTA
$ 1,500,00,
$ 1,500,000
Additional Reclaimed Booster Pump Installation
$ 200,000
$ 200,000
TOTAL
$ 1,700,000
$ -
$ -
$ -
$ -
$ 1,700,000
C-1
ORO VALLEY WATER UTILITY
ALTERNATIVE WATER RESOURCES DEVELOPMENT IMPACT FEE FUND
CAPITAL IMPROVEMENTS PROJECTS
CAP WATER DELIVERY PROJECTS
Project Name 2016.17
2017-18 2018-19 2019-20 2020-21
5 Year Total
E-C PRV Naranja Reservoir $ 100,000
$ 100,000
CAP Wheeling TW Naranja 1000 AF/Yr
$ 400,000
$ 400,000
$ 800,000
CAP La Cholla D-E Blending Booster Station
$ 700,000
$ 700,000
TW Naranja Booster Station Upgrade
$ 1,200,000
$ 1,200,000
24" pipe Naranja/ La Cholla/Tangerine
$ 1,600,000
$ 1,200,000
$ 2,800,000
TW Oasis Booster Station Upgrades
$ 30,000
$ 100,000
$ 330,000
TW 12" Pipe
$ 80,000
$ 800,000
$ 880,000
TW 16" Pipe Oasis Rd.
$ 100,000
$ 1,000,000
$ 1,100,000
TOTAL
$ 100,000
$ -
$ 400,000
$ 4,110,000
$ 3,100,000
$ 7,710,000
ORO VALLEY WATER UTILITY
POTABLE WATER SYSTEM DEVELOPMENT IMPACT FEE FUND
CAPITAL IMPROVEMENTS PROJECTS
GROWTH RELATED POTABLE WATER PROJECTS
Project Name 2016-17
2017-18 1 2018-19 2019-20 20M150,OOO
5 Year Total
Property Acquisition -Reservoir Site
$ 500,000$
500,000
Booster Station
$
$ 150,000
1.0 MG Reservoir
$
$ 150,000
TOTAL $ -
$ -
$ -
$ 500,000
$ 300,000
$ 800,000
C-2
APPENDIX D
Assumptions for Preferred Financial Scenario
D-1 Operating Fund
D-6 Alternative Water Resources Development Impact Fee Fund
D-7 Potable Water System Development Impact Fee Fund
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND
Growth
Single Family Residential (SFR) growth rates were provided by the Finance Department on 8/29/16 and
are consistent with Town financial forecasting. Other growth rates include commercial, irrigation and
multi -family connections.
Connections
FY 16-17
FY 17-18
FY SS-19
FY 19-20
FY 20-21
SFR
230
1
250
275
225
200
Other
8
it
7
6
12
Current Water Rate Structure
The following base rates are for both the potable and reclaimed water meters:
Meter Sizes (lninches)
Amount
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
The following commodity rates are the cost per 1,000 gallons for potable and reclaimed water use:
Classifications
Tier
Tier
Tier
Tier4
Single Family Residential
$2.32
$3.19
$4.40
$6.05
Irrigation
$2.32
$3.19
$4.40
$6.01
Multi -family Residential
$2.32
--
---
---
Commercial
$2.32
___
---
Construction Water
$7.05
--
---
_
Reclaimed Water
$2.27
GPF- Potable
$0.90
___
GPF-Reclaimed
$0.47
--
--
-_
Proposed Water Rate Structure for FY 2016-17
The following are the proposed base rates for both potable and reclaimed water meters:
Meter Sizes (ininches)
Amount
5/8 x 3/4
$
14.62
3/4 x 3/4
$
21.93
1
$
36.54
1.5
$
73.08
2
$
116.94
3
$
233.86
4
$
365.41
6
$
730.83
8
$ 1,169.32
D-1
n
II
I
I
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND continued
The following proposed commodity rates are the cost per 1,000 gallons for potable and reclaimed water use:
Classifications
Tier 1
Tier 2
Tier 3
Tier 4
Single Family Residential
$2.34
$3.25
$4.53
$6.29
Irrigation
$2.34
$3.25
$4.53
$6.29
Multi -family Residential
$2.34
-
---
--
Commercial
$2.34
--
--
---
Construction Water
$7.29
---
--
---
Reclaimed Water
$2.27
---
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.
Proposed 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 using 8,000 gallons of water per month.
Base
Rate
Tier
Tier
Tier
Tier4
GPF
Overall
Increase
Monthly
Imoact
FY 16-17
3.0%
1.00%
2.0%
3.0%
4.0%
0.0%
1.5%
$0.63
FY 17-18
2.0%
1.50%
2.0%
3.0%
4.0%
0.0%
1.5%
$0.64
FY 18-19
2.0%
1.50%
2.0%
3.0%
4.0%
0.0%
1.5%
$0.65
FY 19-20
2.0%
1.50%
2.0%
3.0%
4.0%
0.0%
1.5%
$0.65
FY 20-21
2.0%
1.50%
2.0%
3.0%
4.0%
0.0%
1.5%
$0.66
Proposed Reclaimed Water Rate Increases
The proposed reclaimed rate increases are shown below:
FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21
Base Rate 3.0% 2.0% 2.0% 2.0% 2.0%
Commodity Rate 0.0% 1.5% 1.5% 1.5% 1.5%
Groundwater Preservation Fee Rates (cost per 1,000 gallons)
There are no proposed changes in the GPF throughout the five year projection period.
Water Use Trends
Projections include similar water use trends as those in FY 15-16. The average monthly water use for a
residential customer with a 5/8 x 3/4 inch water meter remained at 7,300 gallons per month the same as it was
in FY 2014-15.
Other Revenue
Other revenue is based on FY 16-17 proposed budget. With the exception of revenue from sewer billing, other
revenue is not projected to increase because misc. charges fluctuate annually. Other revenue includes late
fees, reconnect fees, new service establishment fees, sewer billing, stormwater billing and meter income.
Sewer billing is projected to increase by 3% in FY 2018-19.
Beginning Cash Balance
Taken from 6/30/16 Balance Sheet of respective funds (MUNIS reports dated 9/12/16)
D-2
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND continued
Interest Income
The interest rate for all 5 years in the analysis period is projected to be 2.0%. Interest rate provided by the
Finance Department on 8/29/16.
Personnel Costs
One new employee was added in FY 16-17. No other new employees were added during the projection period.
The following increases were provided by the Finance Department on 8/29/16 and are consistent with Town
j financial forecasting: the annual merit increase is projected to be 3.5% annually and health care costs are
l projected to increase by 2% annually. It is projected that the state pension will remain constant over the five
year projection period.
IO&M Costs - Potable
Based on Utility's proposed budget for FY 16-17 and updated with the most recent information.
n Projected 10% increase in power costs for a potential Tucson Electric rate increase in the 4th quarter of
L I FY 17-18 and again in the 4th quarter of FY 20-21.
JJJ O&M Costs - Reclaimed
Based on Utility's proposed budget for FY 16-17 and updated with the most recent information.
Projected 10% increase in power costs for a potential Tucson Electric rate increase in the 4th quarter of
FY 17-18 and again in the 4th quarter of FY 20-21.
Inflation Rates
The following inflation rates were provided by the Town's Finance Department on 8/29/16:
FY 16-17
FY 17-18 FY 18-19
FY 19-20
FY 20-21
1.0%
1.0% 1.0%
1.0%
1.03'0
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 for FY 16-17 and FY 17-18 have been estimated. The actual volume purchased will depend
on the number of acre feet purchased and the negotiated cost per acre foot.
Reclaimed Water Wheeling Costs
Pursuant to the existing IGA, the reclaimed water is delivered on a non -interruptible basis at an interruptible
rate. Inflationary increases of 2% are included annually. Included in the wheeling costs are funds to be paid to
Tucson Water for the purchase of their effluent when Oro Valley doesn't produce enough effluent. An average
1 of $26,200 per year has been included in the reclaimed operating costs for FY 2016-17 through FY 2020-21.
CAP Wheeling Costs
Costs include the fees charged by Tucson Water to wheel the CAP water through their recharge and recovery
J system. Tucson Water fees are fixed pursuant to an IGA and are being renegotiated in FY 2016-17. It is
assumed that there were be a 10% increase in the power component and a 5% increase in the 0&M
component for and estimated wheeling rate of $580 per AF. It is also assumed that the Utility will wheel 2,000
AF per year for FY 2016-17 through FY 2018-19. The amount wheeled is projected to increase to 2,300 AF for FY
2019-20 and increase to 2,600 AF in FY 2020-21.
CAP Recharge Costs
Costs are based on the rate schedule adopted by CAP 6/09/16. The figures represent the annual cost to deliver
the Utility's entire allotment of CAP water (10,305 AF) for recharge.
D-3
J
r-,
I�
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND continued
n Capital Improvements—OperatingFund
The following table identifies the amount of the capital projects for the existing potable water system for
each fiscal year and the related financing as identified in the revised 15 Year CIP dated 2/23/16:
Fiscal Total Project Financing
Year Capital Costs Cash Reserves New Debt
2016-17
$ 1,794,000
$ 1,794,000
------
2017-18
$ 1,240,000
$ 120 000
$ 1,120,000
2018-19
$ 745,000
$ 225,000
$ 520,000
2019-20
$ 2,230,000
$ 70,000
$ 2,160,000
7 2020-21
$ 1,525,00
$ 7,534,000
S 125,000
$ 2,334,000
$1,400,000
$ 5,200,000
Assumed additional debt in the amount of $5,200,000 is incurred in FY 17-18 for existing system improvements
through the sale of bonds at an interest rate of 3`Y over 20 years.
Capital Improvements —Groundwater Preservation Fee
The amount of the capital projects for the reclaimed water system is $1,700,000 for FY 2016-17. There are no
other capital projects in the remaining for years.
Debt Service & Minimum Debt Service Coverage Requirement
The following tables identify the debt service included in this proforma:
Bonds Type Description Amortization Schedule By
FY 16 17 Payment
2008 Sr. Lien Reclaimed Ph. 2 WIFA
$ 314,798
2009 Sr. Lien Existing System CIP WIFA
$ 150,820
2012 Sr. Lien Refunding (Reclaim Ph. 1) Stone & Youngberg
$ 1,069,449
2012 Sr. Lien Refunding (2003) Stone & Youngberg
$ 589,716
j 2013 Sr. Lien Refunding (2003) Stifel & Nicolaus & Co.
$ 1,033,428
J 2014 Sr. Lien AM[ Project WIFA
$ 395,534
2019 Sr. Lien Existing System CIP TBD
S0
$ 3,553,788
The minimum debt service coverage for the Sr. Lien debt is 1.30.
Bonds Type Description Amortization Schedule By
FY 16 17 Payment
2007 Excise Tax Refunding (1996 & 1999) Stone & Youngberg
$ 1,259,936
2015 Excise Tax Refunding (2005) Stifel & Nicolaus & Co.
151,634
$ 1,411,570
The minimum debt service coverage for the excise tax pledged debt is 1.0.
Cash Reserve Requirement
Mayor & Town Council Water Policies require the Utility to maintain cash reserves in the Operating Fund of not
less than 20% of the combined total of the annual budgeted amounts for personnel, O&M and debt service.
This specifically excludes costs for capital projects, depreciation, amortization and contingency
D4
I�
r-,
I l
I
Growth
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR AWRDIF FUND
SFR growth rates were provided by the Finance Department on 8/29/16 and are consistent with Town
financial forecasting. Other Service Units (SU's) include commercial, irrigation and multi -family connections.
FY 15-16
FY 16-17
FY 17-18
FY 18-19
FY 19-20
SFR SU's
230
250
27 5
225
200
Other SU's
47
31
36
20
30
AWRD Impact Fees
Impact fees are $4,045 per EDU, Ordinance No. (0) 14-05, effective 7/01/14
Not projected to change in the five year projection period.
Beginning Cash Balance
Taken from 6/30/16 Balance Sheet of respective funds (MUNIS reports dated 9/12/16).
Interest Income
The interest rate for all five years in the analysis period is projected to be 2.0%. Interest rate was provided
by the Finance Department on 8/29/16.
7 CAP Capital Costs
Based on 3,557 AF at rate schedule adopted by CAP 6/09/16.
Debt Service
There is no debt service in this fund during the five year projection period.
Capital Improvements
The following table identifies the amount of the CAP water capital projects for each fiscal year
and the related financing as identified in the revised 15 Year CIP dated 2/23/16:
Fiscal Total Proiect Financing
Year Capital Costs Cash Reserves New Debt
2016-17
$ 100,000
$ 100,000
2017-18
-----
-----
2018-19
$ 400,000
$ 400,000
2019-20
$4,110,000
$4,110,000
2020-21
$3,100,000
$3,100,000
$7,710,000
$7,710,000
D-5
Fiji
Growth
FI
ll
I
I
I
I
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR PWSDIF FUND
SFR growth rates were provided by the Finance Department on 8/29/16 and are consistent with Town
financial forecasting. Other Service Units (SU's) include commercial, irrigation and multi -family connections.
FY 16-17
FY 17-18
FY 18-19
FY 19-20
FY 20-21
SFR SU's
230
250
275
225
200
Other SU's
47
31
36
20
30
PWSD Impact Fees
Impact fees are $2,015 per EDU, Ordinance No. (0) 14-05, effective 7/01/14.
Not projected to change in the five year projection period.
Beginning Cash Balance
Taken from 6/30/16 Balance Sheet of respective funds. (MUNIS reports dated 9/12/16).
Interest Income
The interest rate for all five years in the analysis period is projected to be 2.0%. Interest rate was provided
by the Finance Department on 8/29/16.
Debt Service
There is no new debt in this fund during the projection period. The following table identifies the existing debt service
included in this proforma:
Bonds Type Description Amortization Schedule By FY 16 17 Payment
2012 Sr. Lien Refunding (2003) Stone & Youngberg $ 329,916
The minimum debt service coverage for the Sr. Lien debt is 1.30.
Capital Improvements
The following table identifies the amount of growth -related capital projects for each fiscal year
and the related financing as identified in the revised 15 Year CIP dated 2/23/16:
Fiscal Total Proiect Financing
Year Capital Costs Cash Reserves New Debt
2016-17 -----
2017-18 -----
2018-19 -----
2019-20 $ 500,000
2020-21 300,000
$ 800,000
$ 500,000 ------
300 000 ------
$ 800,000
M