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TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
MARCH 2O18
TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
MARCH 2O18
ORO VALLEY TOWN COUNCIL
Satish I. Hiremath, D.D.S., 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
Anne Campbell, Chair
Robert Milkey, Vice Chair
Chuck Hollingsworth, Commission Member
Tom Kibler, Commission Member
Bill Leedy, Commission Member
Byron McMillian, Commission Member
Winston Tustison, Commission Member
TOWN STAFF
Mary Jacobs, Town Manager
Stacey Lemos, CPA, Finance Director
Peter A. Abraham, 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
3
Growth Rates
4
Water Use Trends
4
Debt Service
5
Debt Service Coverage Requirements
6
Cash Reserve Policy for Operating Fund
7
Operating Fund
Revenue Forecast
8
Revenue Requirements
10
Alternative Water Resources Development Impact Fee Fund
12
Potable Water System Development Impact Fee Fund
13
Preferred Financial Scenario
14
Recommendation on Water Rates, Fees & Charges
16
Service Fees & Charges
18
Conclusion
18
Appendices
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INDEX OF APPENDICES
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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
B. Rate Schedules & Tables for Bill Comparisons
B-1 Proposed Water Rate Schedule
B-2
Tables for Bill Comparisons by Meter Size -Potable
B-8
Tables for Bill Comparisons by Meter Size —Reclaimed
C. 5-Year Capital Improvement Schedules
C-1
Operating Fund
JC-2
Groundwater Preservation Fee
C-2
Alternative Water Resources Development Impact Fee Fund
C-3
Potable Water System Development Impact Fee Fund
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D. Services Fees and Charges
D-1
NSF Returned Check Fees
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E. Assumptions for Preferred Financial Scenario
E-1
Operating Fund
1 E-5
Alternative Water Resources Development Impact Fee Fund
J E-6
Potable Water System Development Impact Fee Fund
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TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
MARCH 2O18
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Executive Summary
An annual review of the revenue requirements and water rates is a critical component in ensuring
J the long-term financial health of the Water Utility. Functions of the Oro Valley Water Utility
Commission include reviewing and developing recommendations for water revenue requirements,
water rates and fee structures. The Commission evaluates staff recommendations based on a rates
J analysis to ensure the recommendations meet Town policies and bond covenants. Water rates and
charges are reviewed annually in accordance with Mayor and Town Council Water Policies —
II.A.2.b(4).
The Utility has based this financial analysis on the American Water Works Associations (AWWA)
Cash Needs Approach. The AWWA is the largest national organization that develops water and
wastewater policies, specifications and rate setting guidelines accepted by both government -owned
and private water and wastewater utilities worldwide.
This Water Rates Analysis Report contains detailed information on the three funds that comprise the
Oro Valley Water Utility:
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J ➢ Operating Fund
➢ Alternative Water Resources Development Impact Fee Fund
➢ Potable Water System Development Impact Fee Fund
Each fund is individually analyzed with regard to revenue and revenue requirements. As an
enterprise of the Town, the Utility generates revenue from rates, fees and charges and does not
receive revenue from taxes or other payments from the General Fund. Additionally, revenue
generated by the Utility does not fund operating costs of any other Town department.
In accordance with policy, the water rates analysis is prepared annually based on the most up-to-
date information available for a five year period. Although the analysis is for five years, any rate
increases considered would be approved only for the first year in the five year projection period.
In the past, emphasis was placed on developing commodity rates that would promote water
conservation. The current tiered rate structure for the commodity rates encourages water
conservation as intended. Because of the decline in water consumption, the emphasis of the rate
design will now transition to increase the Utility's fixed cost recovery to ensure revenue stability.
This will be accomplished with increases to the monthly base rate.
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
balance of $3,289,826 at the end of the five year projection period. This meets the cash reserve
requirement. In addition, the debt service coverage ratio of 1.3 is met or exceeded each year.
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Operational needs and capital improvements are included in the analysis. The Preferred Financial
l { Scenario demonstrates a strategic balance between incurring new debt and a planned use of cash
reserves to finance capital projects.
The Preferred Financial Scenario also results in financially sound cash balances in the two
development impact fee funds. In compliance with state statutes, these cash balances will be used
to finance capital projects to meet the demands of new growth.
The Preferred Financial Scenario evaluates the impact of future costs and the revenue sources that
will be required to meet those costs. The proposed water rates in the Preferred Financial Scenario
will increase the Utility's fixed cost recovery. The Water Utility Commission and Water Utility staff
have made the following recommendations on water rates in the Preferred Financial Scenario for FY
2018-19:
➢ Increase in the potable water monthly base rates
n The reclaimed base rates and commodity rates are not proposed to increase throughout the
J projection period. The financial analysis illustrates that the reclaimed operating costs are being met
with revenue from the reclaimed water rates.
The potable and reclaimed GPF rates will also remain unchanged over the projection period. The
financial analysis illustrates that the expenses to be funded with GPF revenue are being met with
7 the existing GPF rates.
Current and proposed monthly base rates for potable water use are provided in Table 1 below:
Table 1
Meter Size Current Proposed Monthly
(in inches) Base Rate Base Rate Increase
5/8 $ 14.62 $ 16.45 $ 1.83
3/4 $ 21.93 $ 24.67 $ 2.74
7 1 $ 36.54 $ 41.11 $ 4.57
1.5 $ 73.08 $ 82.22 $ 9.14
l 2 $ 116.94 $ 131.56 $ 14.62
_> 3 $ 233.86 $ 263.09 $ 29.23
1 4 $ 365.41 $ 411.09 $ 45.68
6 $ 730.83 $ 822.18 $ 91.35
8 $1,169.32 $1,315.49 $146.17
Cost per month.
1 The financial impact of the proposed rates for a customer with a 5/8-inch meter is an increase of
J $1.83 per month. Since this is a base rate increase only, the increase will be the same for all
customers with this meter size regardless of the volume of water used. Customers with a 5/8-inch
meter represent 88 percent of the total customer base and include residential, commercial and
irrigation classifications with the vast majority of those being residential.
The Water Utility presents this Water Rates Analysis in support of the proposed rates contained in
the Preferred Financial Scenario. The Oro Valley Water Utility Commission and Water Utility staff
recommend approval of rate increase detailed in the Preferred Financial Scenario.
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Introduction
TOWN OF ORO VALLEY
WATER UTILITY
WATER RATES ANALYSIS REPORT
MARCH 2018
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.
j The Funds are as follows:
➢ Operating Fund
(j ➢ Alternative Water Resources Development Impact Fee Fund
J ➢ 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 expenses 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; however, it does not receive
revenue from taxes or other payments from the General Fund. Groundwater Preservation Fee (GPF)
revenue and expenses are accounted for within the Operating Fund but are segregated because GPF
revenue is restricted for specific uses. This is illustrated in Appendix A, Page A-2.
1 The Alternative Water Resources Development Impact Fee Fund (AWRDIF Fund) was established in
1996 to manage capital expenses related to alternative water resources including reclaimed water
l and Central Arizona Project (CAP) water. Revenue for this fund is from impact fees collected at the
J time water meters are purchased and from interest income. Expenses include capital repayment
obligation charges for the Town's CAP allotment, CAP infrastructure and associated debt incurred to
1 deliver CAP water to the Town to meet the demands of future growth.
The Potable Water System Development Impact Fee Fund (PWSDIF Fund) was established in 1996 to
manage capital expenses related to expansion or growth -related potable water capital projects and
J related debt service. Revenue for this fund is from impact fees collected at the time water meters
are purchased and from interest income. Expenses include wells, pump stations, reservoirs and
j mains for the potable water system required to meet the demands of future growth.
J The revenue and expenses 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.9., impact fees must be placed in a
separate fund and accounted for separately. ARS 9-463.05 Section B.S. states that the impact fees
may not be used for operations and maintenance of existing facilities. Each fund is addressed in
more detail on pages 12 and 13 of the report.
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i Growth Rates
The Utility's growth rates have fluctuated during the past several years. Figure 1 illustrates the
Utility's growth of 1,874 new metered connections over the last 10 years. At the end of FY 2016-17
the customer base totaled 19,588 metered connections.
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Figure 1
Annual Growth
400 346
340
350
300
v 250 214 232
a
2 200 165 155
z96 150 97
100 68 61
s0
0
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17
Throughout the rates analysis process, Utility staff collaborated with other Town staff. In developing
the growth projections, assistance was received from the Community Development staff who
reviewed the current housing inventory, along with plans that have been submitted for review, to
conservatively estimate future growth. The growth projections used for this report are consistent
with the Town's financial forecasting and are shown in the following table.
Table 2
New Metered Connections I 2018-19 2019-20 2020-21 2021-22 2022-23
Single Family Residential 300 286 220 140 188
Commercial, Multi -Family, Irrigation 20 6 14 2 2
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 2007-08 through FY 2016-17. The
graph depicts an overall decline in water use even though the Utility experienced growth of 1,874
metered connections in that same time frame. Water use increased slightly in FY 2016-17. This was
due to the water use of all new metered connections, not an increase in individual water use. In the
Jpast, a single family residential customer used an average of 10,000 gallons of water per month. This
average water use has gradually declined over the years. During FY 2016-17, a single family
residential customer with a 5/8-inch water meter used an average of 7,300 gallons of water per
month.
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3,250 3,191
3,200 \
c
3,150
O
3,100
3,050
c
3,000
ii
2,950
2,900
2,850
2,800
Figure 2
Potable & Reclaimed Water Deliveries
00 3,115
3,063 3,071
3,045
3,026
2,948 2,929
2,889
07-08 08.09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17
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 — both intentional and unintentional.
Intentional water conservation is the conscious effort to reduce water use by commonly known
measures including changing landscape to drought tolerant plants and the removal of lawns.
Unintentional water conservation is a result of plumbing code changes and other regulatory changes
regarding water efficiency. For example, all new water using appliances and fixtures are required to
be low flow. The consumer's intention may not have been to conserve water when they chose to
replace an aging or broken dishwasher, clothes washer or bathroom faucet.
Debt Service
The current annual debt service obligations are met with revenue generated from water rates, the
GPF and impact fees in the PWSDIF Fund. A summary of the existing debt and the outstanding
balances at the beginning of FY 2017-18 are provided in Table 3.
Table 3
Repayment
Year
Debt
Purpose
Balance
Water Rates
2009
WIFA Loan
Existing Potable System
$
1,484,834
Water Rates
2012
Sr. Lien Bonds — Refinance 2003
Existing Potable System
$
3,132,839
Water Rates
2013
Private Placement — Refinance 2003
Existing Potable System
$
2,005,000
Water Rates
2014
WIFA Loan
AMI Meter Replacement
$
3,592,731
Water Rates
2015
Excise Tax Bonds — Refinance 2005
Land for MOC
$
1,100,550
Water Rates
2017
Excise Tax Bonds — Refinance 2007
Existing Potable System
$
13,186,444
GPF
2008
WIFA Loan
Reclaimed Water System
$
2,613,309
GPF
2012
Sr. Lien Bonds— Refinance 2003
Reclaimed Water System
$
5,710,516
PWSDIF
2012
Sr. Lien Bonds — Refinance 2003
Potable System Expansion
$
1,761,645
Total Debt
$
34,587,868
i In April 2017, the Series 2007 bonds were refunded through a private placement bond issue. This
refunding opportunity resulted in a net present value savings to the Utility of $992,000. The interest
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rate received on the refunding was two and one half percent. The maturity term of the 2017
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refunding bonds is the same as the Series 2007 bonds; therefore, not extending the annual debt
service payments. The Utility requested level debt service payments over the 10-year term. This
resulted in higher payments in 2017 and 2018; however, payments in subsequent years are lower
than they would have been under the Series 2007 bonds.
This rates analysis includes an assumption for new debt in the amount of $6,000,000 in FY 2018-19
to finance existing system improvements as shown in Appendix C. It is assumed that the Utility will
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issue bonds with a 20-year term at a five percent interest rate. The Utility will be seeking a
traditional bond issue.
The Town entered into an IGA with Metropolitan Domestic Water Improvement District and the
Town of Marana to construct a recharge, recovery and delivery system known as the NWRRDS
project to bring additional CAP water into the Town. This rates analysis includes an assumption for
new debt in the amount of $10,000,000 in FY 2022-23 to finance portions of the NWRRDS project.
The timing of this debt is dependent on the progress of the project. If the project is delayed, the
debt will also be delayed. It is assumed that the Utility will issue traditional bonds with a 20-year
term at a six percent interest rate. The debt will be repaid with both GPF and Alternative Water
Resource Development Impact Fees. Repayment will be prorated based on the beneficiaries of the
projects — existing customers and new development respectively. Project costs are identified for the
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NWRRDS project in the five year capital plan shown in Appendix C.
Debt Service Coverage Requirements
The method for calculating the debt service coverage ratio is pursuant to the Town Financial and
JBudgetary
Policies adopted by the Town Council in 2008. Section CA — Debt Capacity, Issuance &
Management states the following with respect to debt service coverage ratios:
J"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
debt coverage in times of revenue fluctuation."
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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.
J 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
j revenues are pledged as the repayment sources for these bonds in the bond indentures. Even
J 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
lbonds in the water rates analysis.
J It is important to note that the bond indentures for the excise tax -backed bonds require that the
Town's excise tax collections each fiscal year total at least 2.5 times the annual debt service
requirements in order to avoid having to fund a debt service reserve fund. These conditions have
been met annually in the past and are expected to continue in the future. For FY 2016-17 the debt
service coverage ratio was 12.63 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
l debt in the rates analysis process is an accepted practice in the industry and has been reviewed by
1 the Town's Finance Director and the Town's financial advisors with Stifel, Nicolaus & Company, Inc.
j The debt service coverage ratio is determined by dividing the annual net operating revenue by the
1 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
jthis 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
n Preferred Financial Scenario is shown in Table 4. This includes current and proposed new debt.
LJ Table 4
Q2018-19 2019-20 2020-21 2021-22 2022-23
Debt Service Coverage 2.43 2.54 2.37 2.28 1.99
Cash Reserve Policy
The cash reserve policy may be found in the Town of Oro Valley Mayor and Council Water Policies
Section II.A.1.d. The policy states "The Utility shall maintain a cash reserve in the Operating Fund of
not less than 2096 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." In the Preferred Financial Scenario, the projected cash
Jreserve balance for the Operating Fund for each year in the analysis is listed in Table 5 showing
compliance in all years. The projected cash reserve balances include annual increases in the monthly
base rates.
J Table 5
l Operating Fund 2018-19 2019-20 2020-21 2021-22 2022-23
I Cash Reserve Requirement $ 3,000,021 $ 2,881,801 $ 2,952,300 $ 3,034,112 $ 3,095,189
JJJI{ Cash Reserve Balance $ 3,281,294 $ 3,430,220 $ 3,508,915 $ 3,534,014 $ 3,289,826
J Cash reserve balances in the Operating Fund are projected to be stable throughout the analysis. This
is a result of strategically balancing the required financing of capital projects with the planned used
J of cash reserves. The Utility works diligently to balance the use of cash reserves with the issuance of
new debt to minimize rate increases.
There is no cash reserve requirement for revenue from the GPF because these funds are restricted
to pay for renewable water resources, infrastructure and associated debt. Although accounted for in
the Operating Fund, the GPF cash is segregated from the Operating Fund cash. It is not be fiscally
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prudent to combine cash that has a restricted use with cash that has unrestricted use in determining
compliance with a cash reserve policy. Similarly, the expenses paid by GPF revenue are segregated
from the general operating expenses for purposes of calculating the cash reserve requirement. In
I 1 the Preferred Financial Scenario, the projected cash reserve balance for the GPF in each year of the
J analysis is listed in Table 6.
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Table 6
Groundwater Preservation Fees 2018-19 2019-20 2020-21 2021-22 2022-23
Cash Reserve Balance $ 2,722,066 $ 2,512,353 $ 2,561,491 $ 1,837,526 $ 1,234,241
GPF cash reserve balances are projected to decrease over the five year projection period. This is a
direct result of using the cash to pay for capital projects associated with the delivery of additional
CAP water through the NWRRDS project. The GPF cash reserve balance will be used to offset those
capital costs. The on -going revenue from the GPF will be used to pay future annual debt service on
the portion of capital costs that will be financed. The planned use of GPF cash reserves to pay
NWRRDS project costs will result in the Utility's ability to reduce future debt for the NWRRDS
project by approximately $6.2 million based on estimated construction costs.
Operating Fund
Revenue Forecast
The Operating Fund is projected to have a cash balance of $4,499,844 at the beginning of FY 2018-
19 and is projected to have a balance of $3,289,826 at the end of FY 2022-23. 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, expenses and cash balances for the GPF are accounted
for separately within the Operating Fund. As discussed above, use of GPF funds is restricted to
renewable water resources, infrastructure and associated debt.
The revenue forecast was based on analysis of the Utility's water use data for FY 2016-17 and
projected growth in the number of new connections detailed in Table 2 on page 4. The revenue
forecast includes proposed increases in the potable water base rates shown below in Table 7. The
potable water base rates are projected to increase annually beginning in FY 2018-19. There are no
recommended increases in the potable water commodity rates while the Utility transitions the
emphasis of the rate design to increase the fixed cost recovery. Fixed costs are costs the Utility
incurs that do not fluctuate based on the volume of water sold. Examples of fixed costs include, but
are not limited to, debt service, personnel, billing costs, fleet maintenance and regulatory costs. The
current base rates generate a 38 percent fixed cost recovery. Increasing the Utility's ability to
recover fixed costs with fixed rate revenue or base rates will ensure revenue stability. Water rates
that are dependent on water sales to pay for fixed costs can result in revenue volatility. The
proposed increases in the potable water base rates throughout the five year projection period are
shown in Table 7.
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Table 7
Base Rates
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Potable Water Only
Rates
Rates
Rates
Rates
Rates
Rates
Meter Sizes (inches)
2018-19
2019-20
2020-21
2021-22
2022-23
5/8
$ 14.62
$ 16.45
$ 18.79
$ 21.14
$ 23.47
$ 25.81
3/4
$ 21.93
$ 24.67
$ 28.19
$ 31.71
$ 35.20
$ 38.72
1
$ 36.54
$ 41.11
$ 46.97
$ 52.84
$ 58.65
$ 64.51
1.5
$ 73.08
$ 82.22
$ 93.93
$ 105.67
$ 117.30
$ 129.03
2
$ 116.94
$ 131.56
$ 150.30
$ 169.09
$ 187.69
$ 206.46
3
$ 233.86
$ 263.09
$ 300.58
$ 338.16
$ 375.35
$ 412.89
4
$ 365.41
$ 411.09
$ 469.67
$ 528.37
$ 586.50
$ 645.15
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6
$ 730.83
$ 822.18
$ 939.34
$1,056.76
$1,173.01
$1,290.31
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8
$1,169.32
$1,315.49
$1,502.94
$1,690.81
$1,876.80
$2,064.48
r! The reclaimed base rates and commodity rates are not proposed to increase throughout the
projection period. The financial analysis illustrates that the reclaimed operating costs are being met
with revenue from the reclaimed water rates.
The potable and reclaimed GPF rates will also remain unchanged over the projection period. The
financial analysis illustrates that the expenses to be funded with GPF revenue are being met with
the existing GPF rates.
Table 8 provides the water sales and GPF revenue forecast for the five year projection period using
j the proposed base rates in Table 7. The Utility will be utilizing $924,000 conditionally allocated to
J the Town by the Central Arizona Project. The funds are restricted and may only be used for
infrastructure that would provide the Town with water resource reliability. The funds will be used to
pay for NWRRDS project costs over two years.
Table 8
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Revenue Source I 2018-19 2019-20 2020-21 2021-22 2022-23
Potable Water
Reclaimed Water
Total Water Sales
GPF Revenue
NW Reliability Funds
$11,417,516 $12,239,742
1,735,407 $ 1,735,407
$13,152,923 $13,975,149
$ 2,437,507 $ 2,449,667
$ 240,000 $ 684,000
$13,059,548 $13,849,513 $14,648,245
1,735,407 1,735,407 1,735,407
$14,794,955 $15,584,920 $16,383,652
$ 2,459,968 $ 2,465,725 $ 2,473,318
Other revenue generated by the Utility consists of charges for services. Charges for services include
funds received as a result of an IGA with the Pima County Wastewater Reclamation Department to
provide monthly billing services on their behalf. The IGA was renewed in September 2017 and
included an increase in the amount to be paid to the Water Utility. The IGA will be reviewed
-J I annually to insure cost recovery. Charges for services also include, but are not limited to, new
service establishment fees, late fees, reconnection fees, inspection fees and plan review fees. The
l total of all charges for services are projected to generate annual revenue ranging from $705,300 to
$726,500.
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Projections for interest income are a cumulative total of $288,396 over the five year period. A one
percent interest rate was assumed for each year in the projection period. This interest rate is
consistent with the Town's financial planning.
Revenue Requirements
Table 9 is a summary of revenue requirements for the Operating Fund that were used in the
I financial analysis. These revenue requirements exclude expenses to be paid with GPF revenue.
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Table 9
Operating Fund
2018-19
2019-20
2020-21
2021-22
2022-23
Expenses
Personnel
$ 2,966,907
$ 3,088,485
$ 3,215,738
$ 3,348,976
$ 3,488,534
Operations/Maintenance
1,971,960
2,021,258
2,071,790
2,123,585
2,176,674
Powerfor Pumping
846,248
858,208
868,278
878,690
885,374
CAP Wheeling Costs
1,499,222
1,781,070
1,871,628
1,971,378
2,028,962
CAP Recharge Costs
1,794,900
1,722,765
1,753,680
1,815,510
1,815,510
Reclaimed Personnel
443,115
461,478
480,711
500,864
521,988
Reclaimed Operations/Maint.
986,497
1,011,160
1,036,439
1,062,350
1,088,908
Reclaimed Power for Pumping
62,000
62,000
62,000
68,200
68,200
Subtotal Expenses
$ 10,570,849
$ 11,006,424
$ 11,360,264
$ 11,769,553
$ 12,074,150
Debt Service
4,429,257
3,402,580
3,401,234
3,401,008
3,401,794
Capital Outlay
139,000
182,000
741,000
1,173,000
1,928,000
Total Expenses
$ 15,139,106
$ 14,591,004
$ 15,502,498
$ 16,343,561
$ 17,403,944
Projected personnel costs include three and one half percent annual merit increases and eight
"l percent annual increases in health care costs with no new employees being added within the five
J year projection period. These projected increases are consistent with the General Fund's financial
planning. A portion of the personnel costs have been allocated to the reclaimed water system. The
allocations vary depending on the functions of staff in each division. Only five percent of
J administrative labor costs are allocated to reclaimed operations while 24 percent of operations
labor are allocated.
The projected operations and maintenance (O&M) costs for both the potable and reclaimed water
systems are based on the FY 2017-18 budget and include inflationary increases of two and one half
1 percent annually. The inflation factors are consistent with the General Fund's financial planning. The
J reclaimed 0&M costs now include allocations for administrative costs, fleet service cost and trustee
services which had not been done in the past. The allocations were based on the gallons of
reclaimed water sold compared to the total gallons of all water sold. With exception to personnel
J costs, the allocations represent 24 percent of the total applicable costs.
Power costs for the potable and reclaimed water systems were segregated from the traditional
J O&M costs because they are not subject to annual inflationary increases. Tucson Electric Power has
historically increased its pumping rates every four years. In 2017, the power rate increased by 10
I percent. Another 10 percent rate increase has been projected in FY 2021-22.
-10-
1, CAP wheeling costs are the fees charged by Tucson Water to wheel Oro Valley's CAP water through
their recharge and recovery system. The IGA with Tucson Water was renegotiated in FY 2016-17.
t Based on the new IGA, costs are assumed to increase annually by seven percent. The costs are also
projected to increase in FY 2019-20 when the Utility takes 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 2,660 acre feet in that
r year and subsequent years.
CAP water recharge costs represent costs to take annual delivery of the Utility's entire CAP water
J
allotment of 10,305 acre feet. 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 Central Arizona Project.
_1
Projected capital outlay for existing system improvements in this analysis includes drilling and
equipping two replacement wells, water main replacements, fire line backflow prevention, vehicles
n
and computer equipment. The schedule for five year capital improvements may be found in
Appendix C.
Debt service costs increase in FY 2018-19 when it is projected that the Utility will issue bonds to
finance capital improvements but will decrease in FY 2019-20 when the 2013 bonds are paid off.
Debt service will increase again in FY 2022-23 when the Utility is projected to issue bonds to finance
portions of the NWRRDS project. The NWRRDS project debt service will be repaid with both GPF and
development impact fees from the AWRDIF Fund.
t
Table 10 is a summary of revenue requirements paid with GPF revenue.
Table 10
—�
Groundwater Preservation Fees
2018-19 2019-20 2020-21 2021-22 2022-23
Expenses
Capital Cost of $6,748 AF of CAP
$ 310,408 $ 388,010 $ 482,482 $ 499,352 $ 492,604
1
Capital Cost for NWRRDS project
240,000 1,570,616 546,000 1,309,000 771,000
J
Debt Service
1,385,861 1,384,753 1,382,348 1,381,337 1,812,999
Total GPF Expenses
$ 1,936,269 $ 3,343,379 $ 2,410,830 $ 3,189,689 $ 3,076,603
Expenses paid with GPF funds include the existing customers' portion of the CAP water capital costs
associated with ownership of the CAP water allotment. These costs increase annually based on
i
projected rates developed by the Central Arizona Project. In FY 2018-19, the Utility will begin
incurring costs on the NWRRDS project. During FY 2018-19 and FY 2019-20 there is a total of
$924,000 in restricted funds that will be used to offset the Utility's costs of this project. The Central
Arizona Project conditionally allocated these funds to the Utility with the requirement that the funds
be used solely for a project that would result in water reliability. The NWRRDS meets the intent of
the Central Arizona Project requirements.
Debt service costs for the reclaimed water system are consistent over the projection period and are
paid with GPF funds. Outstanding debt on the reclaimed water system will be paid in full by July
2029. This analysis includes an assumption that the Utility will borrow an additional $5 million to
complete the existing customers' portion of the NWRRDS project which will be repaid with GPF
J
revenue.
- 11 -
r�
Development Impact Fee Funds
Alternative Water Resources Development Impact Fee Fund
The Alternative Water Resources Development Impact Fee Fund (AWRDIF Fund) is projected to have
a cash balance of $7,627,097 at the beginning of FY 2018-19 and is projected to have $3,799,997 at
the end of FY 2022-23. 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 $349,554 for this analysis. A one percent interest rate was assumed for
each year in the projection period and is consistent with the Town's financial planning.
The revenue forecast was based on new service units related to the number of new connections. A
service unit is the equivalent of one single family residential (SFR) 5/8-inch water meter. The 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-inch water meter or one service unit is $4,045. It is assumed that the
f existing Alternative Water Resources Development Impact Fees will not change during this five year
projection period. Table 11 provides the projected growth in service units and the revenue
associated with that growth. These growth projections are consistent with the Town's financial
1 planning.
Table 11
Growth / Revenue 2018-19 2019-20 2020-21 2021-22 2022-23
J
SFR Service Units
300 284 220 140 188
Other Service Units
64 12 32 5 5
Projected Revenue $1,472,380 $1,937,320 $1,019,340 $586,525 $780,685
AWRDIF funds may be used for capital expenses related to CAP water. Capital expenses during this
projection period total $10,800,280 and include the capital costs assessed by the Central Arizona
Project for 3,557 acre feet of our CAP water allotment and design and construction of the NWRRDS
project that will deliver additional CAP water to the Town. These projects are identified in the five
year capital improvement project schedule shown in Appendix C. It is assumed that the Utility will
finance $5 million of the project costs in FY 2022-23. This is in addition to the debt for the existing
icustomers' portion of the project. The annual capital expenses and debt service for the AWRDIF
Fund are listed in the table below.
Table 12
-% Expenses 2018-19 2019-20 2020-21 2021-22 2022-23
CAP Capital Charges
$ 163,623 $ 204,528 $ 254,326 $ 263,219 $ 259,661
JCAP Facilities
$ 360,000 $ 2,355,923 $ 819,000 $ 1,963,501 $ 2,156,499
Debt Service
$ 432,624
Total Expenses
$ 523,623 $ 2,560,451 $ 1,073,326 $ 2,226,720 $ 2,848,784
J
-12-
0
I
I
Potable Water System Development Impact Fee Fund
The Potable Water System Development Impact Fee Fund (PWSDIF Fund) is projected to have a cash
balance of $5,924,988 at the beginning of FY 2018-19 and is projected to have $489,841 at the end
of FY 2022-23. 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 $200,167 for this analysis. A one percent interest rate was assumed for each year in the
projection period and is consistent with the Town's financial planning.
The revenue forecast was based on new service units related to the number of new connections. A
service unit is the equivalent of one single family residential (SFR) 5/8-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-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 13 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 13
Growth/ Revenue
2018-19
2019-20
2020-21
2021-22
2022-23
SFR Service Units
Other Service Units
300
64
284
12
220
32
140
5
188
5
Projected Revenue
$733,460
$596,440
$507,780
$292,175
$388,895
PWSDIF funds may be used for capital expenses 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 expenses in this analysis total $6,500,000 and include drilling and equipping
a new well, new water main, property acquisition, construction of a reservoir and booster station to
meet demands of future growth. These projects are identified in the five year capital improvement
plan shown in Appendix C. Debt service for previously constructed growth -related facilities is also
paid from revenues collected from impact fees. There is no new debt projected in this analysis. The
table below lists all expenses forecast for the PWSDIF.
Table 14
Expenses 2018-19 2019-20 2020-21 2021-22 2022-23
Debt Service $ 331,627 $ 331,328 $ 330,630 $ 330,364 $ 330,115
Capital Projects 700,000 1,300,000 1,050,000 $ 1,450,000 $ 2,000,000
Total Expenses I $ 1,031,627 $ 1,631,328 $ 1,380,630 $ 1,780,364 $ 2,330,115
All expenses will be paid for with impact fees collected. Projects will be constructed commensurate
with the timing of new development demands.
-13-
r.-1
L
I
Preferred Financial Scenario
Prior to developing forecasts, financial considerations were evaluated relating to projected
operating costs, capital expenses, the Utility's existing cash reserves, existing outstanding debt and
debt service payments. When developing a Preferred Financial Scenario, the goals of the Utility are
to ensure that all existing rate setting policies are met, cash reserves are utilized to minimize future
debt and proposed rate increases do not result in rate shock. One of the rate setting policies
included in the Mayor and Council Water Policies is for rate structures to be designed to encourage
water conservation.
The development of water conservation pricing, also known as a tiered commodity rate, began in
1999 when a second tier was added to the uniform or flat commodity rate. That structure evolved
into four tiers by 2007. Over the last 10 years, the Utility has increased the tiered commodity rates
to a level that encourages water conservation. Having achieved rates that encourage water
conservation, the Utility is now transitioning the rate design to increase fixed cost recovery to
ensure revenue stability.
Figure 3 illustrates the decline in water deliveries even though the Utility experienced growth in the
customer base. To stabilize revenue when water deliveries decline, it is necessary to increase fixed
charge revenue which is revenue received from base rates.
Figure 3
Potable Water Deliveries & Growth
(excluding golf courses)
2,600,000,000
20,000
y 2,400,000,000
19,500
p
v 2,200,000,000
19,000
Ya
w
y 2,000,000,000
18,500
c
1,800,000,000
1,600,000,000
18,000
v` 1,400,000,000
17,500
1,200,000,000
17,000
1,000,000,000
16,500
06-0707-0808-09 09-1010-1111-1212-1313-1414-15 IS-1616-17
wiiii Water Sales —Service Connections
Fixed costs are costs incurred by the Utility that do not fluctuate based on the volume of water
delivered. These costs include, but are not limited to, billing related costs, regulatory expenses,
personnel, debt service, insurance, fleet maintenance and administrative services paid to the Town's
General Fund. These costs are all incurred every year regardless of the volume of water that is
delivered. The Utility's fixed costs budgeted for FY 2017-18 total $10.5 million. Ideally, these costs
would be paid by revenues received from the base rate revenue. Base rates charged to customers
are the same every month regardless of the volume of water delivered. The existing base rates
generate $4.4 million or 38 percent of the fixed costs. As a result, the Utility is dependent on water
sales to generate the revenue needed to recover the remaining $6.1 million in fixed costs.
-14-
r,
Variable costs are those costs incurred by the Utility that fluctuate based on the volume of water
I I delivered. If the deliveries decrease, the costs decrease and likewise, if deliveries increase, the costs
increase. Variable costs include, but are not limited to, power for pumping, chemicals for
I I disinfection, delivery of reclaimed water, CAP water wheeling costs and maintenance on plant
I I facilities. The Utility's variable costs budgeted for FY 2017-18 total $3.1 million. These costs are paid
by revenues received from the variable charge revenue also known as commodity rate revenue.
I 1 Commodity rates are charged on the volume of water delivered which varies from customer to
I 1 customer and from month to month. The existing commodity rates generate $8.1 million. Funds in
excess of the variable costs are used to help pay for fixed costs.
IJ
I
I
The Utility's customer base is not diverse enough to rely so heavily on revenue from commodity
rates. To increase revenue stability, the Utility will need to reduce its dependence on water sales for
fixed cost recovery. This can be accomplished by increasing the monthly base rates. Declining water
consumption has impacted water providers on a regional level. The table below illustrates how
regional water providers have increased their base rates over the last eight years to compensate for
the declines in water consumption as compared to Oro Valley.
Table 15
Year
Oro Valley
Metro
Marana
Tucson
2017
14.62
29.50
19.09
14.39
2016
14.19
29.50
18.18
12.67
2015
14.19
27.00
17.31
11.90
2014
14.19
22.00
16.18
11.00
2013
14.19
20.00
15.12
9.68
2012
14.19
17.50
15.12
8.27
2011
14.19
17.50
15.12
7.53
2010
14.19
15.03
15.12
5.87
The Water Utility developed a Preferred Financial Scenario that supports key financial and policy
goals. The scenario generates the revenue needed to maintain an adequate cash balance in all funds
over the projected five year period. Additionally, the scenario balances the use of both available
cash and proposed new debt to finance capital projects. The scenario meets the cash reserve
requirements in each year of the projection period. Under this scenario, the fixed cost recovery is
projected to increase from 38 percent to 43 percent by the end of FY 2018-19. If all proposed rate
increases are implemented as shown in the Preferred Financial Scenario, fixed cost recovery could
increase to approximately 60 percent by the end of FY 2022-23.
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 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 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 E.
-15-
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 2018-19, the Water Utility Commission and Utility staff
recommend the following:
➢ Increase in the potable water monthly base rates
There is no recommended increase in the potable water commodity rates. In the past, emphasis was
placed on developing commodity rates that would promote water conservation. The current tiered
rate structure for the commodity rates encourages water conservation as intended. Because of the
decline in water consumption, the emphasis of the rate design will now transition to increase the
Utility's fixed cost recovery to ensure revenue stability. This will be accomplished with increases to
the monthly base rates.
JThe reclaimed base rates and commodity rates are not proposed to increase throughout the
projection period. The financial analysis illustrates that the reclaimed operating costs are being met
with revenue from the current reclaimed rates.
The potable and reclaimed GPF rates will also remain unchanged over the projection period. The
financial analysis illustrates that the expenses to be funded with GPF revenue are being met with
the existing GPF rates. The planned use of GPF cash reserves will result in the Utility's ability to
reduce future debt service for the NWRRDS project by approximately $6.2 million based on the
estimated construction costs attributed to existing customers.
With regard to the recommendation to increase the water rates, the following table shows the
proposed potable water base rates for each meter size. Approximately 88 percent of the Utility's
customers use a 5/8-inch water meter and will see an increase of $1.83 per month regardless of the
volume of water they use.
JTable 16
Meter Size Current Proposed Monthly
(in inches) Base Rate Base Rate Increase
5/8 $ 14.62 $ 16.45 $ 1.83
3/4 $ 21.93 $ 24.67 $ 2.74
l 1 $ 36.54 $ 41.11 $ 4.57
J1.5 $ 73.08 $ 82.22 $ 9.14
2 $ 116.94 $ 131.56 $ 14.62
l 3 $ 233.86 $ 263.09 $ 29.23
J 4 $ 365.41 $ 411.09 $ 45.68
6 $ 730.83 $ 822.18 $ 91.35
8 $1,169.32 $1,315.49 $146.17
Table 17 illustrates Oro Valley's current and proposed water rates for a customer with a 5/8-inch
water meter. Water rates of other water providers in the region are included for comparison of the
base rates and the cost per 1,000 gallons.
16-
n
i
Table 17
Water Provider
MonthlyTier
Base Rate
1
Tier 2
Tier 3
Tier 4
Tier 5 GPF or Water
(
Resource Fee
F 11
Oro Valley Current
$14.62
$2.34
$3.25
$4.53
$6.29
--- $0.90
Oro Valley Proposed
$16.45
$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
$19.09
$3.11
$4.33
$5.63
$6.94
$9.97 $0.48
n
J
Tucson Water
$14.39
$2.31
$4.44
$10.33
$16.04
--- $0.78
Cost per 1,000 gallons.
n Direct comparison of specific base rates and commodity rates is not an ideal way to make
`J comparisons 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 18 provides a calculation of a
monthly bill amount for a single family residential customer with a 5/8-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 18
Cost for Cost for Cost for Cost for
Water Provider 8,000 Gallons 15,000 Gallons 25,000 Gallons 40,000 Gallons
Oro Valley Current $41.45 $70.50 $123.52 $219.05
Oro Valley Proposed $43.28 $72.33 $125.35 $220.88
Metro Water $47.25 $79.25 $143.25 $249.65
Marana Water $47.97 $79.34 $134.14 $239.19
Tucson Water $44.26 $107.31 $156.10 $390.35
The following table illustrates the financial impact to customers with varying meter sizes based on
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.
-1 Table 19
Classification
Meter Size
(inches)
Water Use
(gallons)
Current Bill
Proposed Bill
Increase
SF Residential
5/8
8,000
$ 41.45
$ 43.28
$ 1.83
SF Residential
5/8
15,000
$ 70.50
$ 72.33
$ 1.83
Irrigation
5/8
25,000
$123.52
$125.35
$ 1.83
Commercial
5/8
40,000
$144.22
$146.05
$ 1.83
Irrigation
1
27,000
$133.12
$137.69
$ 4.57
Commercial
2
57,000
$301.62
$316.24
$ 14.62
MF Residential
4
700,000
$ 2,633.41
$ 2,679.09
$ 45.68
Turf -Potable
4
4,000,000
$13,325.41
$13,371.09
$45.68
Commercial
6
6,000,000
$20,170.83
$20,262.18
$ 91.35
-17-
�l
Proposed rates for all Oro Valley Water Utility meter sizes may be 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-inch meters and a variety of
increments for larger meter sizes.
I
Service Fees & Charges
' The Utility charges fees for services rendered in an amount designed to recover the cost to provide
_l that service. These fees and charges are evaluated annually to determine if any adjustments are
needed. The Preferred Financial Scenario includes an increase in the NSF Returned Check Fees.
NSF Returned Check Fees are charged to customers when payments for water bills are returned for
insufficient funds. The fees charged to customers are cost recovery only. The Utility is proposing an
increase of $5.00 per returned item. The current fee is $25.00 and the proposed fee is $30.00.
Details of the proposed fee increase may be found in Appendix D.
IConclusion
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.
This Water Rates Analysis Report is presented in support of the proposed water rates contained in
the Preferred Financial Scenario. The Oro Valley Water Utility Commission and the Water Utility staff
recommend approval of the water rates detailed in the Preferred Financial Scenario.
The Oro Valley Water Utility staff and Commission are dedicated to serving the Town of Oro Valley
and the customers of its water utility and extend their appreciation to the Mayor and Council for
consideration of the proposed water rates.
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
l
J
Oro Valley Water Utility
REVENUES
Water Sales
Potable Water Sales (excluding golf courses)
Potable Water Sales from Growth - Res. & Com.
Potable Water Sales - Golf Courses
Total Potable Water Sales
Reclaimed Water Sales
Total Water Sales
Other Operating Revenue
Service Fees & Charges
Interest Income
Total Other Operating Revenue
Total Operating Revenue
OPERATING EXPENSES
Potable Operating Expenses
Personnel
Operations & Maintenance
Power for Pumping
CAP Wheeling Costs
CAP Water Recharge Costs
Total Potable Operating Expenses
Reclaimed Operating Expenses
Personnel
Operating & Maintenance
Power for Pumping
Total Reclaimed Operating Expenses
Total Operating Expenses
PREFERRED FINANCIAL SCENARIO
Operating Fund
FY 2018-19 FY 2019.20 FY 2020-21 FY 2021-22 FY 2022-23
$ 11,237,242 $ 11,925,739 $ 12,615,746 $ 13,298,853 $ 13,988,183
68,731
201,757
330,851
437,012
545,710
111,543
112,246
112,951
113,648
114,352
11,417,516
12,239,742
13,059, 548
13,849, 513
14,648,245
1,735,407
1,735,407
1,735,407
1,735,407
1,735,407
13,152,923
23,975,149
14,794,955
15,584,920
16,383,652
705,300
705,300
726,500
726,500
726,500
62,333
59,482
59,738
57,239
49,604
767,633
764,782
786,238
783,739
776,104
$ 13,920,556
$ 14,739,931
$ 15,581,193
$ 16,368,659
$ 17,159,756
2,966,907
3,088,485
3,215,738
3,348,976
3,488,534
1,971,960
2,021,258
2,071,790
2,123,585
2,176,674
846,248
858,208
868,278
878,690
885,374
1,499,222
1,781,070
1,871,628
1,971,378
2,028,962
1,794,900
1,722, 765
1,753, 680
1,815,510
1,815, 510
$ 9,079,237 $ 9,471,786 $ 9,781,114 $ 10,138,139 $ 10,395,054
443,115 461,478 480,711 500,864 521,988
986,497 1,011,160 1,036, 439 1,062,350 1,088, 908
62,000 62,000 62,000 68,200 68,200
$ 1,491,612 $ 1,534,638 $ 1,579,150 $ 1,631,414 $ 1,679,096
$ 10,570,849 $ 11,006,424 $ 11,360,264 $ 11,769,553 $ 12,074,150
Net Operating Revenue $ 3,349,707 $ 3,733,SO7 $ 4,220,929 $ 4,599,106 $ 5,085,606
DEBT SERVICE - POTABLE
P&I - 2009 WIFA Loan - Exist. System CIP
P&I - 2012 Sr. Lien Bonds - Exist. System -Ref! 2003
P&I - 2013 Refunding - Excise - Private Placement
P&I - 2014 WIFA Loan - Sr. Lien - AM[
P&I - 2015 Excise Tax Bonds - Refinance 2005
P&I - 2017 Excise Tax Bonds - Refinance 2007
P&I - 2019 Sr. Lien Bonds - Exist. System CIP- 20 yrs.
Total Potable System Debt Service
Other Obligations
Machinery & Equipment & Vehicles
Capital Improvements: Existing System
Total Other Obligations
Net Balance From Operations
Beginning Cash Balance
Net Balance From Operations
Ending Cash Balance
149,175
149,123
149,069
149,014
148,956
589,759
589,227
587,986
587,514
587,071
1,024,645
-
-
-
-
377,060
376,959
376,856
376,750
376,642
152,576
151,286
151,279
151,534
152,706
1,658,007
1,657,950
1,658,009
1,658,161
1,658,384
478,035
478,035
478,035
478,035
478,035
$ 4,429,257 $ 3,402,580 $ 3,401,234 $ 3,401,008 $ 3,401,794
$ 139,000 $ 182,000 $ 241,000 $ 173,000 $ 128,000
- - 500,000 1,000,000 1,800,000
$ 139,000 $ 282,000 $ 741,000 $ 1,173,000 $ 1,928,000
$ (1,218,550) $ 148,927 $ 78,695 $ 25,098 $ (244,287)
$ 4,499,844 $ 3,281,294 $ 3,430,220 $ 3,508,915 $ 3,534,014
(1,218,550) 148,927 78,695 25,098 (244,187)
$ 3,281,294 $ 3,430,220 $ 3,508,915 $ 3,534,014 $ 3,289,826
A-1
Oro Valley Water Utility PREFERRED FINANCIAL SCENARIO
Operating Fund
Groundwater Preservation Fees
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021.22
FY 2022-23
GPF Beginning Balance
$ 1,980,828
$
2,722,066
$ 2,512,353
$ 2,561,491
$
1,837,526
Revenue
GPF Revenue -Potable
2,079,840
2,079,840
2,079,840
2,079,840
2,079,840
GPF Revenue - Reclaimed
344,896
344,896
344,896
344,896
344,896
GPFRevenue- Growth
12,771
24,931
35,232
40,989
48,582
Total GPF Revenue
$ 2,437,507
$
2,449,667
$ 2,459,968
$ 2,465,725
$
2,473,318
NW Reliability Restricted Cash ($924,000)
240,000
684,000
Total All Revenue
$ 2,677,507
$
3,133,667
$ 2,459,968
$ 2,465,725
$
2,473,318
Expenses
Capital Cost for CAP Allotment 6,748 AF
310,408
388,010
482,482
499,352
492,604
Capital Costs for NWRRDS Project
240,000
1,570,616
546,000
1,309,000
771,000
P&I - 2007 Sr. Lien - WIFA -Reclaimed Ph.2
310,866
310,727
310,583
310,434
310,280
P&I - 2012 Sr. Lien Bonds - Reclaimed Ph.1
1,074,995
1,074,026
1,071,765
1,070,903
1,070,095
P&I - 2022 Sr. Lien Bonds - NWRRDS
-
-
-
-
432,624
Total Expenses
1,936,269
3,343,379
2,410,830
3,189,689
3,076,603
GPF Ending Balance $ 2,722,066 $ 2,522,353 $ 2,561,491 $ 1,837,526 $ 1,234,241
A-2
Oro Valley Water Utility
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 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23
$ 1,472,380 $ 1,197,320 $ 1,019,340 $ 586,525 $ 780,685
1,472,380 1,197,320 1,019,340 586,525 780,685
80,619 80,317 73,489 66,414 48,715
80,619 80,317 73,489 66,414 48,715
$ 1,552,999 $ 1,277,637 $ 1,092,829 $ 652,939 $ 829,400
OPERATING EXPENSES
N/A - - - - -
Total Operating Expenses $ - $ - $ - $ - $
Net Operating Revenue $ 1,552,999 $ 1,277,637 $ 1,092,829 $ 652,939 $ 829,400
DEBT SERVICE
P&I - Sr. Lien Bonds - NWRRDS - Growth (2022) - - - - 432,624
Total Debt Service $ - $ - $ - $ - $ 432,624
OTHER OBLIGATIONS
Capital Improvements:
CAP Capital Charges 3557 acre feet 163,623 204,528 254,326 263,219 259,661
CAP Facilities Engineering & Construction 360,000 2,355,923 819,000 1,963,501 2,156,499
Total Other Obligations $ 523,623 $ 2,560,451 $ 1,073,326 $ 2,226,720 $ 2,416,160
Net Balance From Operations
Beginning Cash Balance
Net Balance From Operations
Ending Cash Balance
$ 1,029,376 $ (1,282,814) $ 19,503 $ (1,573,781) $ (2,019,384)
$ 7,627,097 $ 8,656,473 $ 7,373,659 $ 7,393,162 $ 5,819,381
$ 1,029,376 $ (1,282,814) $ 19,503 $ (1,573,781) $ (2,019,384)
$ 8,656,473 $ 7,373,659 $ 7,393,162 $ 5,819,381 $ 3,799,997
A-3
Oro Valley Water Utility
REVENUES
Development Impact Fees
Subtotal Revenue
Other Operating Revenue
Interest Income
Subtotal Other Operating Revenue
Total Operating Revenue
OPERATING EXPENSES
N/A
Total Operating Expenses
PREFERRED FINANCIAL SCENARIO
Potable Water System Development Impact Fee Fund
FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23
$ 733,460 $ 596,440 $ 507,780 $ 292,175 $ 388,895
$ 733,460 $ 596,440 $ 507,780 $ 292,175 $ 388,895
57,883 52,104 43,019 31,900 15,261
57,883 52,104 43,019 31,900 15,261
$ 791,343 $ 648,544 $ 550,799 $ 324,075 $ 404,156
Net Operating Revenue $ 791,343 $ 648,544 $ 550,799 $ 324,075 $ 404,156
DEBT SERVICE
P&I - Sr, Lien Bonds - Expansion Related (2012)
$
331,627
$ 331,328
$ 330,630
$ 330,364
$
330,115
Total Water System Debt Service
$
331,627
$ 331,328
$ 330,630
$ 330,364
$
330,115
OTHER OBLIGATIONS
Growth Related Capital Projects
700,000
1,300,000
1,050,000
1,450,000
2,000,000
Total Other Obligations
$
700,000
$ 1,300,000
$ 1,050,000
$ 1,450,000
$
2,000,000
Net Balance From Operations
$
(240,284)
$ (982,784)
$ (829,831)
$ (1,456,289)
$
(1,925,959)
Beginning Cash Balance $ 5,924,988 $ 5,684,704 $ 4,701,920 $ 3,872,089 $ 2,415,800
Net Balance From Operations $ (240,284) $ (982,784) $ (829,831) $ (1,456,289) $ (1,925,959)
Ending Cash Balance $ 5,684,704 $ 4,701,920 $ 3,872,089 $ 2,415,800 $ 489,841
A-4
Oro Valley Water Utility PREFERRED FINANCIAL SCENARIO
�I Summary of all Funds
REVENUES
Water Sales
Potable Water Sales (exclude golf courses)
Potable Water Sales from Growth
Potable Water Sales - Golf Courses
Total Potable Water Sales
Reclaimed Water Sales
Total Water Sales
1 Other Operating Revenue
Groundwater Preservation Fees
Groundwater Preservation Fee - Potable
Groundwater Preservation Fee - Reclaimed
Groundwater Preservation Fee - Growth
Total Groundwater Preservation Fees
Potable Water Impact Fees
Alternative Water Impact Fees
Service Fees & Charges
NW Reliabiity Restricted Cash ($924,000)
Interest Income
Total Other Operating Revenue
7 Total Operating Revenue
OPERATING EXPENSES
Potable Operating Expenses
Personnel
Operations & Maintenance
Power for Pumping
J CAP Wheeling Casts
CAP Recharge Costs
Costs paid by GPF Revenue (excludes debt & capital project)
Total Potable Operating Expenses
Reclaimed Operating Expenses
Personnel
Operating & Maintenance
Power for Pumping
Total Reclaimed Operating Expenses
Total Operating Expenses
FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022.23
$ 11,237,242 $ 11,925,739 $ 12,615,746 $ 13,298,853 $ 13,988,183
68,731
201,757
330,851
437,012
545,710
111,543
112,246
112,951
113,648
114,352
11,417,516
12,239,742
13,059,548
13,849,513
14,648,245
1,735,407
1,735,407
1,735,407
1,735,407
1,735,407
13,152,923
13,975,149
14,794,955
15,584,920
16,383,652
2,079,840
2,079,840
2,079,840
2,079,840
2,079,840
344,896
344,896
344,896
344,896
344,896
12,771
24,931
35,232
40,989
48,582
2,437,507
2,449,667
2,459,968
2,465,725
2,473,318
733,460
596,440
507,780
292,175
388,895
1,472,380
1,197,320
1,019,340
586,525
780,685
705,300
705,300
726,500
726,500
726,500
240,000
684,000
-
-
-
200, 835
191,903
176,246
155,553
113,580
5,789,482
5,824,630
4,889,834
4,226,478
4,482,978
$ 18,942,405 $ 19,799,779 $ 19,684,789 $ 19,811,398 $ 20,866,630
2,966,907
3,088,485
3,215,738
3,348,976
3,488,534
1,971,960
2,021,258
2,071,790
2,123,585
2,176,674
846,248
858,208
868,278
878,690
885,374
1,499,222
1,781,070
1,871,628
1,971,378
2,028,962
1,794,900
1,722o765
1,753,680
1,815,510
1,815,510
310,408
388,010
482,482
499,352
492,604
$ 9,389,645 $ 9,859,796 $ 10,263,596 $ 10,637,491 $ 10,887,658
443,115
461,478
480,711
500,864
521,988
986,497
1,011,160
1,036,439
1,062,350
1,088,908
62,000
62,000
62,000
68,200
68,200
$ 1,491,612 $
1,534,638
$ 1,579,150 $
1,631,414 $
1,679,096
$ 10,881,257 $ 11,394,434 $ 11,842,746 $ 12,268,905 $ 12,566,754
Net Operating Revenue $ 8,061,148 $ 8o405,345 $ 7,842,043 $ 7,542,493 $ 8,299,876
A-5
Oro Valley Water Utility
PREFERRED FINANCIAL SCENARIO
Summary of all Funds
FY 2018-19
FY 2019-20
FY 2020-21
FY 2021-22
FY 2022-23
Debt Service
Debt Service - Potable- Existing System
P&I - 2009 WIFA Loan - Exist. System CIP
149,175
149,123
149,069
149,014
148,956
P&I - 2012 Sr. Lien Bonds - Existing System -Refinance 2003
589,759
589,227
587,986
587,514
587,071
-7 P&I - 2013 Refunding - Excise - Private Placement
1,024,645
-
-
-
-
J P&I - 2014 WIFA Loan - Sr. Lien -AMI
377,060
376,959
376,856
376,750
376,642
P&I - 2015 Excise Tax Bonds - Refinance 2005
152,576
151,286
151,279
151,534
152,706
P&I - 2017 Excise Tax Bonds - Refinance 2007
1,658,007
1,657,950
1,658,009
1,658,161
1,658,384
P&I - 2019 Sr. Lien Bonds - Existing System CIP
478,035
478,035
478,035
478,035
478,035
Total Potable Existing System Debt Service
$
4,429,257
$
3,402,580
$ 3,401,234
$ 3,401,008
$
3,401,794
Debt Service - GPF
P&I -Sr.Lien - WIFA -Reclaimed Ph.2(2007)
$
310,866
$
310,727
$ 310,583
$ 310,434
$
310,280
P&I - Sr. Lien Bonds - Reclaimed Ph.1 (2012)
1,074,995
1,074,026
1,071,765
1,070,903
1,070,095
P&I - Sr. Lien Bonds - NWRRDS- Exist. Customers (2022)
-
-
-
-
432,624
�t Total GPF Debt Service
$
1,385,861
$
1,384,753
$ 1,382,348
$ 1,381,337
$
1,812,999
Debt Service - AWRDIF - Growth Related
J P&I - Sr. Lien Bonds - NWRRDS - Growth Related(2022)
432,624
Total AWRDIF Growth Related Debt Service
$
-
$
$ -
$ -
$
432,624
Debt Service - Potable - Growth Related
P&I - Sr. Lien Bonds - Growth Related (2012)
331,627
331,328
330,630
330,364
330,115
Total Potable Growth Related Debt Service
$
331,627
$
331,328
$ 330,630
$ 330,364
$
330,115
1 Total Water System Debt Service
$
6,146,745
$
5,118,661
$ 5,114,212
$ 5,112,709
$
5,977,532
j Other Obligations
Machinery & Equipment & Vehicles
$
139,000
$
182,000
$ 241,000
$ 173,000
$
128,000
Capital improvements:
Existing System
500,000
1,000,000
1,800,000
Groundwater Preservation Fees
240,000
1,570,616
546,000
1,309,000
771,000
Alternative Water Resources
523,623
2,560,451
1,073,326
2,226,720
2,416,160
Potable Water System Expansion
700,000
1,300,000
1,050,000
1,450,000
2,000,000
Total Other Obligations
$
1,602,623
$
5,613,067
$ 3,410,326
$ 6,158,720
$
7,115,160
Net Balance From Operations
$
311,781
$
(2,326,382)
$ (682,495)
$ (3,728,936)
$
(4,792,815)
J
l Growth - New Metered Connections
320
290
234
140
188
J Monthly increase to residential customer using 8K gals.
4.4%
5.4%
5.2%
4.9%
4.7%
Monthly increase to residential customer using 8K gals.
$1.83
$2.34
$2.35
$2.33
$2.34
Debt Service Coverage Requirement Amount
$
7,140,200
$
6,111,489
$ 6,105,690
$ 6,103,614
$
7,227,464
DS Coverage Ratio: 2012 Sr. Lien Bonds & WIFA
2.43
2.54
2.37
2.28
1.99
Debt Service Coverage Requirement = 1.30
JRequired Cash Reserves (20% of personnel, O&M, debt)
$
3,000,021
$
2,881,801
$ 2,952,300
$ 3,034,112
$
3,095,189
(does not include depreciation/amortization)
.Operating Fund
$
3,281,294
$
3,430,220
$ 3,508,915
$ 3,534,014
$
3,289,826
Groundwater Preservation Fees
2,722,066
2,512,353
2,561,491
1,837,526
1,234,241
AWRD Impact Fee Fund
8,656,473
7,373,659
7,393,162
5,819,381
3,799,997
PWSD Impact Fee Fund
5,684,704
4,701,920
3,872,089
2,415,800
489,841
Total Ending Cash Balance
$
20,344,537
$
18,018,152
$ 17,335,657
$ 13,606,720
$
8,813,905
A-6
APPENDIX B
Rate Schedules & Tables for Bill Comparisons
B-1 Proposed Water Rate Schedule
B-2 Tables for Bill Comparisons by Meter Size - Potable
B-8 Tables for Bill Comparisons by Meter Size - Reclaimed
F1
I
ORO VALLEY WATER UTILITY
PREFERRED FINANCIAL SCENARIO
PROPOSED WATER RATES
METER SIZE
(in inches)
POTABLE BASE RATE
RECLAIMED BASE RATE
5/8
$16.45
$14.62
3/4
$24.67
$21.93
1
$41A1
$36.54
1.5
$82.22
$73.08
2
$131.56
$116.94
3
$263.09
$233.86
4
$411.09
$365.41
6
$822.18
$730.83
8
$1,315.49
$1,169.32
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.
5/8
0-7,000
7,001-16,000
16,001 - 32,000
OVER 32,000
3/4
0-10,000
10,001- 24,000
24,001- 48,000
OVER 48,000
1
0-17,000
17,001 - 40,000
40,001 - 80,000
OVER 80,000
1.5
0 - 35,000
35,001- 80,000
80,001 - 160,000
OVER 160,000
2
0 - 56,000
56,001 - 128,000
128,001- 256,000
OVER 256,000
3
0 - 112,000
112,001 - 256,000
256,001 - 512,000
OVER 512,000
4
0-175,000
175,001- 400,000
400,001 - 800,000
OVER 800,000
6
0 - 860,000
860,001- 2,000,000
2,000,001- 3,500,000
OVER 3,500,000
8 1
0-860,000
1
860,001 - 2,000,000
2,000,001 - 3,500,000
OVER 3,500,000
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
COMMODITY RATES - RECLAIMED WATER
ALL RECLAIMED WATER USES & CLASSIFICATIONS 1 $ 2.27 per 1000 gallons for all water use
GROUNDWATER PRESERVATION FEES
POTABLE WATER $ 0.90 per 1000 gallons for all water use
RECLAIMED WATER $ 0.47 per 1000 gallons for all water use
B-1
n TABLE FOR MONTHLY CHARGES & PERCENT INCREASE COMPARISON
RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 5/8 X 3/4" METER
PREFERRED FINANCIAL SCENARIO
=Tiers
no== Water Use
n
C
III
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
14.62
16.45
1.83
12.5%
0.00
0.00
0.00
1.83
16.45
12.5%
1,000
16.96
18.79
1.83
10.8%
0.90
0.90
0.00
1.83
19.69
10.2Y.
2,000
19.30
21.13
1.83
9.5%
1.80
1.80
0.00
1.83
22.93
8.7%
3,000
21.64
23.47
1.83
8.4%
2.70
2.70
0.00
1.83
26.17
7.5%
4,000
23.98
25.81
1.83
7.6%
3.60
3.60
0.00
1.83
29.41
6.6%
5,000
26.32
28.15
1.83
6.9%
4.50
4.50
0.00
1.83
32.65
5.9%
6,000
28.66
30.49
1.83
6.4%
5.40
5.40
0.00
1.83
35.89
5.4%
7,000
31.00
32,83
1.83
5.9%
6.30
6.30
0.00
1.83
39.13
4.9%
8,000
34.25
36.08
1.83
5.3%
7.20
7.20
0.00
1.83
43.28
4.4%
9,000
37.50
39.33
1.83
4.9%
8.10
8.10
0.00
1.83
47.43
4.0%
10,000
40.75
42.58
1.83
4.5%
9.00
9.00
0.00
1.83
51.58
3.7%
11,000
44.00
45.83
1.83
4.2%
9.901
9.90
0.001
1.83
55.731
3.4%
12,000
47.25
49.08
1.83
3.9%
10.80
10.80
0.00
1.83
59.88
3.1%
13,000
50.50
52.33
1.83
3.6%
11.70
11.70
0.00
1.83
64.03
2.9%
14,000
53.75
55.58
1.83
3.4%
12.60
12.60
0.00
1.83
68.18
2.8%
15,000
57.00
58.83
1.83
3.2%
13.50
13.50
0.00
1.83
72.33
2.6%
16,000
60.25
62.08
1.83
3.0%
14.40
14.40
0.00
1.83
76.48
2.4%
17,000
64.78
66.61
1.831
2.8%
15.30
15.30
0.00
1.83
81.91
2.3%
18,000
69.31
71.14
1.83
2.6%
16.20
16.20
0.00
1.83
87.34
2.1%
19,000
73.84
75.67
1.83
2.5%
17.101
17.10
0.001
1.83
92.771
2.0%
20,000
78.37
80.20
1.83
2.3%
18.00
18.00
0.00
1.83
98.20
1.9%
21,000
82.90
84.73
1.83
2.2%
18.90
18.90
0.00
1.83
103.63
1.8%.
22,000
87.43
89.26
1.83
2.1%
19.80
19.80
0.00
1.83
109.06
1.7%
23,000
91.96
93.79
1.83
2.0%
20.70
20.70
0.00
1.83
114.49
1.6%
24,000
96.49
98.32
1.83
1.9%
21.60
21.60
0.00
1.83
119.92
1.5%
25,000
101.02
102.85
1.831
1.8%
22.50
22.50
0.00
1.83
125.35
1.5%
26,000
105.55
107.38
1.83
1.7%
23.40
23.40
0.00
1.83
130.78
1.4%
27,000
110.08
111.91
1.83
1.7%
24.301
24.30
0.001
1.83
136.21
1.4%
28,000
114.61
116.44
1.83
1.6%
25.20
25.20
0.00
1.83
141.64
1.391
29,000
119.14
120.97
1.83
1.5%
26.10
26.10
0.00
1.83
147.07
1.3%
30,000
123.67
125.50
1.83
1.5%
27.00
27,00
0.00
1.83
152.50
1.2%
31,000
128.20
130.03
1.83
1.4%
27.90
27.90
0.00
1.83
157.93
1.2%
32,000
132.73
134.56
1.83
1.4%
28.80
28.80
0.00
1.83
163.36
1.1%
33,000
139.02
140.85
1.831
1.3%
29.70
29.70
0.00
1.83
170.55
1.1%
34,000
145.31
147.14
1.83
1.3%
30.60
30.60
0.00
1.83
177.74
1.0%
35,000
151.60
153.43
1.83
1.2%
31.501
31.50
0.00
1.83
184.93
1.0%
36,000
157.89
159.72
1.83
1.2%
32.40
32.40
0.00
1.83
192.12
1.0%
37,000
164.18
166.01
1.83
1.1%
33.30
33.30
0.00
1.83
199.31
0.9%
38,000
170.47
172.30
1.83
1.1%
34.20
34.20
0.00
1.83
206.50
0.9%
39,000
176.76
178.59
1.83
1.0%
35.10
35.10
0.00
1.83
213.69
0.9%
40,000
183.05
184.88
1.83
1.0%
36.00
36.00
0.00
1.83
220.88
0.8%
41,000
189.34
191.17
1.831
1.0%
36.90
36.90
0.001
1.83
228.07
0.8%
42,000
195.63
197.46
1.83
0.9%
37.80
37.80
0.00
1.83
235.26
0.8%
43,000
201.92
203.75
1.83
0.9%
38.701
38.70
0.00
1.83
242.45
0.8%
44,000
208.21
210.04
1.83
0.9%
39.60
39.60
0.00
1.83
249.64
0.7%
45,000
214.50
216.33
1.83
0.9%
40.50
40.50
0.00
1.83
256.831
0.7%
46,000
220.79
222.62
1.83
0.8%
41.40
41.40
0.00
1.83
264.02
0.7Ya
47,000
227.08
228.91
1.83
0.8%
42.30
42.30
0.00
1.83
271.21
0.7%
48,000
233.37
235.20
1.83
0.8%
43.20
43.20
0.00
1.83
278.40
0.7%
49,000
239.66
241.49
1.83
0.8%
44.10
44.10
0.00
1.83
285.59
0.6Yo
50,000
245.95
247.78
1.83
0.7%
45.00
45.00
0.00
1.83
292.781
0.6%
M
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 3/4" x 3/4" METER
BASE RATE $ 24.67
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
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
21.93
24.67
2.74
12.5%
0.00
0.00
0.00
2.74
24.67
12.551
7,000
38.31
41.05
2.74
7.2%
6.30
6.30
0.00
2.74
47.35
6.1%
11,000
48.58
51.32
2.74
5.6%
9.90
9.90
0.00
2.74
61.22
4.7%
25,000
108.95
111.69
2.74
2.5%
25.20
25.20
0.00
2.74
136.89
2.0%
50,000
212.13
214.87
2.74
1.3%1
45.001
45.001
0.001
2.74
259.87
1.1Y°
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3/4" x 3/4" METER
BASE RATE $ 24.67
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
BILLATTHE
CURRENT
RATE
BILL ATTHE
PROPOSED
RATE
AMOUNTOF
INCREASE
Water Rate
PERCENT
INCREASED
Water Rate
CURRENT
GPF
PROPOSED
GPF
INCREASE IN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNTOF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
21.93
24.67
2.74
12.5%
0.00
0.00
0.00
2.74
24.67
12.5%
7,000
38.31
41.05
2.74
7.2%
6.30
6.30
0.00
2.74
47.35
6.1%
11,000
47.67
50.41
2.74
5.8%
9.90
9.90
0.00.
2.74
60.31
4.8%
28,000
87.45
90.19
2.74
3.1%
25.20
25.20
0.00
2.74
115.39
2.4%
50,000
138.93
141.67
2.74
2.0%
45.00
45.00
0.00
2.74
iS6.67
1.5%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 1" METER
BASE RATE $ 41.11
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
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
36.54
41.11
4.57
12.5%
0.00
0.00
0.00
4.57
41.11
12.591°
17,000
76.32
80.89.
4.57
6.0%
15.30
15.30
0.00
4.57
96.19
5.0%°
27,000
108.82
113.39
4.57
4.2%
24.30
24.30
0.00
4.57
137.69
3.4%
35,000
144.57
149.14
4.57
3.2%
34.20
34.20
0.00
4.57
153.34
2.6%
50,000
196.37
200.94
4.57
2.3%
45.00
45.00
0.00
4.57
245.94
B-3
n
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1" METER
BASE RATE $ 41.11
COMMODITY RATE: TIER 1 = $ 2.34 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3= N/A
TIER 4= N/A
i= Average Water Use
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
36.54
41.11
4.57
12.5%
0.00
0.00
0.00
4.57
41.11
12.5%
15,000
71.64
76.21
4.57
6.4%
13.50
13.50
0.00
4.57
89.71
5.4%
27,000
99.72
104.29
4.57
4.6%
24.30
24.30
0.00
4.57
128.59
3.7%
38,000
125.46
130.03
4.57
3.6%
34.20
34.20
0.00
4.57
164.23
2.9%
50,000
153.54
158.11
4.57
3.0%a
45.00
45.00
0.00
4.57
203.11
2.3%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 1.5" METER
BASE RATE $ 82.22
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
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
73.08
82.22
9.14
12.5%
0.00
0.00
0.00
9.14
82.22
12.57
38,000
164.73
173.87
9.14
5.5%
34.20
34.20
0.00
9.14
208.07
4.6%
64,000
249.23
258.37
9.14
3.7%
57.60
57.60
0.00
9.14
315.97
3.0%
90,000
346.53
355.67
9.13
2.6'Ya
81.00
81.00
0.00
9.13
436.67
2,1%
125,000
505.08
514.22
9.13
1.SYa
112.50
112.50
0.00
9.13
626.72
1.5%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 1.5" METER
BASE RATE $ 82.22
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
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
73.08
82.22
9.14
12.5%
0.00
0.00
0.00
9.14
82.22
12.5%
30,000
143.28
152.42
9.14
6.4%
27.00
27.00
0.00
9.14
179.42
5.4%
64,000
222.84
231.98
9.14
4.1%
57.60
57.60
0.00
9.14
289.58
3.3%
90,000
253.68
292.82
9.13
3.2%
81.00
81.00
0.00
9.13
373.82
2.SYe
125,000
365.58
374.72
9.14
2.SYo
112.50
112.50
0.00
9.14
487.22
1.9%
B-4
J
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON = Average Water Use
FOR IRRIGATION CUSTOMERS WITH A 2" METER
BASE RATE $ 131.56
COMMODITY RATE: TIER 1 = $ 2.34 FOR 0 - 56,000 GALLONS
TIER 2 = $ 3.25 FOR 56,001 - 128,000 GALLONS
TIER 3 = $ 4.53 FOR 128,001 - 256,000 GALLONS
TIER 4 = $ 6.29 FOR ALL USAGE OVER 256,000 GALLONS
GALLONS
USEDIN
1 MONTH
BILLATTHE
CURRENT
RATE
BILL ATTHE
PROPOSED
RATE
AMOUNTOF
INCREASE
Water Rate
PERCENT
INCREASED
Water Rate
CURRENT
GPF
PROPOSED
GPF
INCREASE IN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNTOF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
116.94
131.56
14.62
12.5%
0.00
0.00
0.00
14.62
131.56
12.5%
57,000
251.23
265.85
14.62
5.8%
51.30
51.30
0.00
14.62
317.15
4.851
130,000
491.04
505.66
14.62
3.0%
117.00
117.00
0.00
14.62
622.66
2.4%.
250,2002
1,034.64
1,049.26
14.62
1.4%
225.00
225.00
0.00
14.62
1,274.26
1.2%
325,000
1,495.83
1,510.45
14.62
1.0%
292.50
292.50
0.00
14.62
1,802.95
0.8%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 2" METER
BASE RATE $ 131.56
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
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
116.94
131.56
14.62
12.5%
0.00
0.00
0.00
14.62
131.56
12.5%
57,000
250.32
264.94
14.62
5.8%
51.30
51.30
0.00
14.62
316.24
4.8%
128,000
416.46
431.08
14.62
3.5%
115.20
115.20
0.00
14.62
546.28
2.7%
250,000
101.14
716.56
14.62
2.1%
225.00
225.00
0.00
14.62
941.56
1.6%
325,000
877.44
892.06
14.62
1.7%
292.50
292.50
0.00
14.62
1,184.56
1.2%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 3" METER
BASE RATE $ 263.09
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
l TIER 4 = $ 6.29 FOR ALL USAGE OVER 512,000 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
233.86
263.09
29.23
12.5%
0.00
0.00
0.00
29.23
263.09
12.5%
50,000
350.86
380.09
29.23
8.3%
45.00
45.00
0.00
29.23
425.09
7.4%
150,000
619.44
648.67
29.23
4.7%
135.00
135.00
0.00
29.23
783.67
3.9%
300,000
1,163.26
1,192.49
29.23
2.5%a
270.00
270.00
0.00
29.23
1,462.49
2.0%
500,000
2,069.26
2,098.49
29.23
1.4%
450.00
450.00
0.00
29.23
2,548.49
1.2%
B-5
J
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 3" METER
BASE RATE $ 263.09
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 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
233.86
263.09
29.23
12.5%
0.00
0.00
0.00
29.23
263.09
12.5%
50,000
350.86
380.09
29.23
8.3%
45.00
45.00
0.00
29.23
425.09
7.4%
150,000
584.86
614.09
29.23
5.0%
135.00
135.00
0.00
29.23
749.09
4.1%"
300,000
935.86
965.09
29.23
3.1%
270.00
270.00
0.00
29.23
1,235.09
2.4%
500,000
1,403.86
1,433.09
29.23
2.1%
450.00
450.00
0.00
29.23
1,883.09
1.6%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR IRRIGATION CUSTOMERS WITH A 4" METER
BASE RATE $ 411.09
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 AT THE
CURRENT
RATE
BILL AT THE
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
365.41
411.09
45.68
12.5%
0.00
0.00
0.00
45.68
411.09
12.5%
300,000
1,181.16
1,226.84
45.68
3.9%
270.00
270.00
0.00
45.68
1,496.84
3.191
550,000
2,185.66
2,231.34
45.68
2.1%
495.00
495.00
0.00
45.68
2,726.34
1.7%
700,000
2,865.16
2,910.84
45.68
1.6%
630.00
630.00
0.00
45.68
3,540.84
1.3%
850,000
3,632.66
3,678.34
45.68
1.3°/a
765.00
765.00
0.00
45.68
4,443.34
1.0%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 4" METER
BASE RATE $ 411.09
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
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
365.41
411.09
45.68
12.5%
0.00
0.00
0.00
45.68
411.09
12.5%
300,000
1,067.41
1,113.09
45.68
4.3%
270.00
270.00
0.00
45.68
1,383.09
3.4%
550,000
1,652.41
1,698.09
45.68
2.8%
495.00
495.00
0.00
45.68
2,193.09
2.1%
700,000
2,003.41
2,049.09
45.68
2.3%
630.00
630.00
0.00
45.68
2,679.02
1.1%
850,000
2,354.41
2,400.09
45.68
1.9%
765.00
765.00
0.00
45.68
3, 165.09
1.5Yo
B-6
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR RESIDENTIAL & IRRIGATION CUSTOMERS WITH A 6" METER
BASE RATE $ 822.18
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
';t"�'��";=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
730.83
822.18
91.35
12.5%
0.00
0.00
0.00
91.35
822.18
12.5%
425,000
1,725.33
1,816.68
91.35
5.3%
382.50
382.50
0.00
91.35
2,199.18
4.3%
1,000,000
3,198.23
3,289.59
91.35
2.9%
900.00
900.00
0.00
91.35
4,189.58
2.2°/a
1,500,000
4,823.23
4,914.58
91.35
1.9%
1,350.00
1,350.00
0.00
91.35
6,264.58
1.5%
2,000,050
6,448.23
6,539.58
91.35
1.4%
1,800.00
1,800.00
0.00
91.35
8,339.58
1.T%
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR COMMERCIAL & MULTIFAMILY CUSTOMERS WITH A 6" METER
BASE RATE $ 822.18
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
BILLAT THE
PROPOSED
RATE
AMOUNT OF
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
730.83
822.18
91.35
12.5%
0.00
0.00
0.00
91.35
822.18
12.5%
425,000
1,725.33
1,816.68
91.35
5.3%
382.50
382.50
0.00
91.35
2,199.18
4.391
1,000,000
3,070.83
3,162.18
91.35
3.0%
900.00
900.00
0.00
91.35
4,062.18
2.3%
1,500,000
4,240.83.
4,332.18
11.35
2.2%
1,350.00
1,350.00
0.00
91.35
5,682.18
1.6%
2,000,000
5,410.83
5,502.18
91.35
1.7°/a
1,800.00
1,800.00
0.00
91.35
7,302.18
1.3Yo
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 8" METER
BASE RATE $ 1,315.49
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
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
1,169.32
1,315.49
146.17
12.5%
0.00
0.00
0.00
146.17
1,315.49
12.5%
425,000
2,163.82
2,309.99
146.17
6.8%
382.50
382.50
0.00
146.17
2,692.49
5.7%
1,000,000
3,636.72
3,782.89
146.17
4.0%
900.00
900.00
0.00
146.17
4,682.89
3.2%
1,500,000
5,261.72
5,407.89
146.17
2.8%
1,150.00
1,350.00
0.00
146.17
6,757.89
2.21
2,000,000
6,886.72
7,032.89
146.17
2.1%
1,800.00
1,800.00
0.00
146.17
8,832.89
1.7%
(There are no active 8-inch potable meters in the OVWU system)
J
B-7
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
1
� FOR COMMERCIAL AND MULTIFAMILY CUSTOMERS WITH A 8" METER
BASE RATE $ 1,315.49
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
INCREASE IN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNTOF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
1,169.32
1,315.49
146.17
12.5%
0.00
0.00
0.00
146.17
1,315.49
12.5%
425,000
2,163.82
2,309.99
146.17
6.8%
382.50
382.50
0.00
146.17
2,692.49
5.791
1,000,000
3,509.32
3,655.49
146.17
4.2%
900.00
900.00
0.00
146.17
4,555.49
3.3%
1,500,000
4,679.32
4,825.49
146.17
3.1%
1,350.00
1,350.051
0.00
146.17
6, 175.49
2.4%
2,000,000
5,849.32
5,995.49
146.17
2.5%
1,800.00
1,800.00
0.00
146.17
7,795.49
(There are no octNe 8dnch potable meters in the OVWU system)
TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
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
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
INCREASEIN
GPF
TOTAL
MONTHLY
INCREASE
TOTAL
AMOUNTOF
MONTHLY
BILL
TOTAL
PERCENT
INCREASED
0
73.08
73.08
-
0.0%
0.00
0.00
-
-
73.08
0.0%
50,000
186.58
186.58
-
0.0%
23.50
23.50
-
-
210.08
0.0%
135,000
379.53
379.53
-
0.0%
63.45
63.45
-
-
442.98
0.0%
200,000
527.08
527.08
-
0.0%
94.00
94.00
-
-
621.08
0.0%
250,000
640.58
640.58
-
0.05'°
117.50
117.50
-
-
758.08
J TABLE FOR MONTHLY CHARGES AND PERCENT INCREASE COMPARISON
FOR CUSTOMERS WITH A 2" METER - RECLAIMED WATER USE
BASE RATE $ 116.96
COMMODITY RATE: TIER 1 = $ 2.27 FOR ALL WATER USAGE
TIER 2 = N/A
TIER 3 = N/A
TIER 4= N/A
J
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
116.96
116.96
-
0.0%
0.00
0.00
0.00
-
116.96
0.0%
150,000
457.46
457.46
-
0.0%
70.50
70.50
-
-
527.96
0.0%
240,000
661.76
661.76
-
0.0%
112.80
112.80
-
-
774.56
O.0%
450,000
1,138.46
1,138.46
-
0.0%
211.50
211.11
-
-
1,349.96
O.OY°
600,000
1,478.96
1,478.96
-
0.0°/a
282.00
282.00
-
-
1,760.96
0.0%
B-8
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
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
233.86
233.86
-
0.0%
0.00
0.00
0.00
-
233.86
0.0%
20,000
279.26
279.26
-
0.0%
9.40
9.40
-
-
288.66
0.0%
80,000
415.46
415.46
-
0.0%
37.60
37.60
-
-
453.06
0.0%
100,000
460.56
460.56
-
0.0%
47.00
47.00
-
-
507.86
0.0%
150,000
574.36
574.36
-
O.OYo
70.50
70.50
-
-
I 644.86
0.0%
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
BILLATTHE
CURRENT
RATE
BILLATTHE
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
365.41
365.41
-
0.0%
0.00
0.00
0.00
-
365.41
0.0%
220,000
864.81
864.81
-
0.0%
103.40
103.40
-
-
968.21
0.0%
300,000
1,046.41
1,046.41
-
0.0%
141.00
141.00
-
-
1,187.41
0.0%
450,000
1,386.91
1,356.91
-
0.0%
211.50
211.50
-
-
1,595.41
0.0%
600,000
1,727.41
1,727.41
-
0.0%
282.00
282.00
-
-
2,009.41
0.0%
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
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
730.83
730.83
-
0.0%
0.00
0.00
0.00
-
730.83
0.0%
900,000
2,773.83
2,773.83
-
0.0%
423.00
423.00
-
-
3,196.83
0.0%
5,000,000
12,080.83
12,080.83
-
0.0%
2,350.00
2,350.00
-
-
14,430.83
0.0%
10,000,000
23,430.83
23,430.83
-
O.OY°
4,700.00
4,700.00
-
-
28,130.83
0.0%
15,000,000
34,780.53
34,780.53
-
0.0%
7,050.00
7,050.00
-
-
41,830.83
O.OY°
20,000,000
46,130.83 1
46,130.83 11
0.0%1
9,400.00
1 9,400.00
11
1 55,530.83
1
B-9
APPENDIX C
5-Year Capital Improvement Schedules
C-1 Operating Fund
C-2 Groundwater Preservation Fee
C-2 Alternative Water Resources Development Impact Fee Fund
C-3 Potable Water System Development Impact Fee Fund
Oro Valley Water Utility
Proposed Capital Projects Program
J
Water Utility Operating Fund
Existing System Improvement
Project No.
Project Name
2018-2019
2019.2020
2020.2021
2021-2022
2022-2023
5 yearTotals
1
Nakoma Sky Replacement Drill & Construct
$
800,000
$
800,000
2
Well D8 Replacement Well Drill & Construct
$ 700,000
$
700,000
3
Mag Meter Replacements (20)
$
75,000
$
75,000
$
150,000
4
Well Production Modifications
$
50,000
$
50,000
$
50,000
$ 50,000
$
200,000
5
Hydropneumatic Tank Replacement
$
100,000
$
100,000
$
100,000
$
300,000
6
Replace Well Pumps
$
100,000
$ 100,000
$
200,000
Subtotal
$
975,000
$
225,000
$
250,000
$
50,000
$ 850,000
$
2,350,000
$
Subtotal
$
-
§
-
$
-
$
$
$
7
High Mesa E and F Zone Bstr. Enhancements
$
50,000
$
50,000
8
El Con Storage - Operational Improvements
$
50,000
$
50,000
9
Replace Crimson Canyon Booster Station
$
250,000
$
250,000
10
Hydropneumatic Tank Replacement
$
100,000
$
100,000
$
100,000
$
300,000
11
Woodburn Booster Relocqation E-F Zone
$
100,000
$
500,000
$
600,000
12
Booster Station Modifications
$
50,000
$
50,000
$
50,000
$ 50,000
$
200,000
Subtotal
Mains
$
100,000
$
350,000
$
650,000
$
300,000
$ 50,000
$
1,450,000
13
12-Inch F-Zone Main (Woodburn Booster)
$
100,000
$
Allill,111111111
100,000
14
Fireline Backflow Protection
$
188,000
$
188,000
$
188,000
$
564,000
15
Drinking Fountain Re -work
$
50,000
$
50,000
16
Valve Exercising & Documentation
$
150,000
$
150,000
17
Rancho Feltz Valve & DVA Replacements
$
150,000
$
150,000
18
Countryside DVA Replacements
$
210,000
$
210,000
19
2 PRVs - Corbett Lane & Aldersprings
$
70,000
$
60.000
$
130,000
20
Rancho Verde Hydrants
$
100,000
$
100,000
21
Main Valve Replacements
$
50,000
$
50.000
$
50,000
$
50,000
$
200,000
22
La Cholla -Lambert to Tangerine (RTA)
$
600,000
$
200,000
$
800,000
23
Hilton Hotel & Casitas Main Replacement
$ 150,000
$
150,000
24
Linda Vista Citrus Tracts Main Replacement
$
250,000
$
250,000
$ 250,000
$
750,000
25
Pusch Ridge Estates Main Replacement
$ 500,000
$
500,000
26
TW Wheeling at Oracle & Hardy (roll over)
$
150,000
$
150,000
Subtotal
$
1,208,000
$
858,000
$
638,000
$
400,000
$ 900,000
$
4,004,000
27
Wall Upgrades and Improvements
$
85,000
$
110,000
$
195,000
28
Operations Office Improvements - Reclaim
$
150,000
$
150,000
Subtotal
$
235,000
$
110,000
§
-
$
$ -
$
345,000
29
SCADA Legacy Replacement
$
100,000
$
100,000
30
Instrumentation Replacement
$
250,000
$
250,000
31
Electric Sub -metering Wells/Boosters
$
75,000
$
75,000
Subtotal
1 r ,-
$
-
$
175,000
$
$
250,000
$ -
$
425,000
32
Replacement Vehicles - Meter Operations
$
75,000
$
50,000
$
125,000
33
Distribution Vehicles
$
50,000
$ 70,000
$
120,000
34
Production Vehicles
$
70,000
$
75,000
$
145,000
35
Inspector Vehicles
$
36
Water Meters- New Metered Connections
$
121,000
$
94,000
$
78,000
$
48,000
$ 58,000
$
399,000
Subtotal
$
121,000
$
164,000
$
203,000
$
173,000
$ 128,000
$
789,000
otal Existing System Improvements
$
2,639,000
$ 1,882,000
$ 1,741,000�$
1,173,000 1
$ 1,928,000 1
$
9,363,000
C-1
J
Oro Valley Water Utility
Proposed Capital Projects Plan
Groundwater Preservation Fees
CAP Water Delivery System Improvements (Existing Customers)
Project No. Project Name
%
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023
5 Year Total
1
.. .5 I-
Program Support Services
40%
$ 160,000
_
$ 44,000 $ 192,000
$ 296,000 $ 8,000
$ 700,000
2
Pipeline Design
40%
$ 440,462
$ 440,462
3
Forebay Design
40%
$ 66,154
$ 66,154
4
Well Improvement Analysis & Permitting
40%
$ 40,000
$ 40,000
5
Well Drilling & Testing
40%
$ 234,000
$ 234,000
6
Pipeline Construction
40%
$ 880,923
$ 880,923
$ 1,761,846
7
Forebay Reservoir Construction
40%
$ 132,077
$ 132,077
$ 264,154
8
Well Const. Permlt/DNII/Developrrest
40%
$ 780,000
$ 780,000
9
Well Equiping Design/Site Improvements
40%
$ 390,000
$ 390,000
Subtotal NWRRDS Partnered Projects
NWRRDS Independent Projects:
$ 160,000
$ 590,616
E 428,000
E 7,309,000
$ 2,191,000
E 4,676,616
10
Route Study & Prelim Design
.......
40%
$ 80,000
$ 80,000
11
Reservoir& Booster Property Acq.
40%
$ 80,000
$ 80,000
12
Pipeline Easement Acquisition
40%
$ 300,000
$ 300,000
13
Pipeline Design (9.68 miles 16-in. DIP)
40%
$ 560,000
$ 560,000
]Pipeline
14
NWRRDS Res & Bstr Station Design
40%
$ 40,000
$ 40,000
15
Shannon Res & Bstr Station Design
40%
$ 120,000
$ 120,000
16
NWRRDS Bstr Station Construction
40%
$ 200,000
$ 200,000
17
Shannon Reservoir Construction
40%
$ 280,000
$ 280,000
18
Shannon Bair Station Construction
40%
$ 100,060
$ 100,000
Subtotal NWRRDS Independent Projects
$ 80,000
$ 980,000
$ 120,000
$
$ 580,000
$ 1,760,000
Total NWRRDS Capital Improvements $ 240,000 $ 1,570,616 $ 546,000 $ 1,309,000 1 $ 2,7717000 $ 6,436,616
Alternative Water Resources Develoment Impact Fee Fund
CAP Water Delivery System Improvements (New Growth)
Project No. Project Name % 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 1 5 Year Total
1
Program Support Services 60% $ 240,000
$ 66,000 $ 288,000 $ 444,000 $ 12,000 1 $ 1,050,000
2
Pipeline Design
60%
$ 660,692
$ 660,692
3
Forebay Design
60%
$ 99,231
$ 99,231
4
Well Improvement Analysis & Permitting
60%
$ 60,000
$ 60,000
5
Well Drilling & Testing
60%
$ 351,000
$ 351,000
6
Pipeline Construction
60%
$ 1,321,385
$ 1,321,384
$ 2:642.769
7
Forebay Reservoir Construction
60%
$ 198,116
$ 198,115
$ 396,231
8
Well Const.PermitlDrill/Developrrest
60%
$ 1,170,000
$ 1,170,000
9
Well Equiping Design/Site Improvements
60%a
$ 585,000
$ 585,000
Subtotal NWRRDS Partnered Projects
NWIRRDS Independent Projects:
$ 240,000
1 $ 885,923
E 639,000
E 1,963,501
$ 3,286,499
$ 7,014,923
10
Pipeline Route Study & Prelim Design
60%
$ 120,000
$ 120,000
11
Reservoir& Booster Property Acq.
60%
$ 120,000
$ 120,000
12
Pipeline Easement Acquisition
60%
$ 450,000
$ 450,000
13
Pipeline Design (9.68 miles 16-in. DIP)
60%
$ 840,000
$ 840,000
14
NWRRDS Res & Bstr Station Design
60%
$ 60,000
$ 60,000
15
Shannon Res & Bair Station Design
60%
$ 180,000
$ 180,000
16
NWRRDS Bair Station Construction
60%
$ 300,000
$ 300,000
17
Shannon Reservoir Construction
60%
$ 420,000
$ 420,000
18
Shannon Bstr Station Construction 1
60%
1
$ 150,000
$ 150,000
Subtotal NWRRDS Independent Projects
$ 120,000
$ 1,470,000
$ 180,000 1
$
$ 870,000
$ 2,640,000
Total NWRRDS Capital Improvements It 360,000 $ 2,355,923
$ 819,000 1 $ 1,963,501
$ 4,156.499 $ 9,654,923
C-2
II
Oro Valley Water Utility
Proposed Capital Projects Plan
Potable Water System Develoment Impact Fee Fund
Expansion Related Improvements
Project No.
Project Name
Category
1 2018-2019
1 2019-2020
2020-2021
2021-2022
1 2022-2023
5
Year Total
1
Steamp Pump Well
Potable
$ 700,000
$ 800,000
$
1,500,000
2
Property Acquisition
Potable
$ 500,000
$
500,000
3
Booster Station
Potable
$ 150,000
$ 300,000
$
450,000
4
1.0 MG Reservoir
Potable
$ 150,000
$ 1,000.000
$ 500,000
$
1,650,000
5
New 16" Pipe Main
Potable
$ 150.000
$ 1,500,000
$
1,650,000
6
Moore Rd. Interconnect F-Zone
Potable
$ 750,000
$
760,000
Total Expansion Related Capital Improvements
$ 700,000 1
$ 1,300,000 1
$ 1,050,000
$ 1,450,000
1 $ 2,000,000
$
6,500,000
C-3
APPENDIX D
Service Fees and Charges
D-1 NSF Returned Check Fees
SERVICE FEES & CHARGES
I I
Insufficient Funds Return Check and ACH Fees (NSF):
Purpose: To provide the Utility a means of recovering labor and material costs related
to processing insufficient funds for returned checks and ACH
payments.
Costs: The costs related to insufficient funds for returned checks and ACH payments
includes staff labor and forms costs.
printed
The following are the steps involved for the processing of insufficient funds for returned
checks and ACH payments and the related costs to perform the function for each item
returned:
n
,1
�J
I
I
1
J
• Receive NSF or ACH notice from bank & look -up account (3 min)
• Make 3 copies at $.005 each for distribution (3 min)
• Send copy to Finance via inner office mail (Imin)
• Write up adjustment to reverse payment & charge fee (4 min)
• Data entry to post adjustment reversal to account (3 min)
• Process adjustment on Excel spreadsheet for EOM balancing (3 min)
• Process two (2) fonns for supervisor for checks & for ACH (6 min)
• Write letter to notify customer of NSF and provide payment date (5 min)
• Print envelope for sending NSF letter to customer (I min)
• Forms: envelope, letterhead
• Copy of letter (1 min)
• Postage
• Update NSF information to account notes (2 min)
• Mail Letter at Administration (3 min)
• Chase NSF fee to OVWU
• Balance return checks & ACH with Finance at EOM (20 min)
Total costs for insufficient funds return checks and ACH:
$ 1.32
$ 1.34
$ .44
$ 1.76
$ 1.32
$ 1.95
$ 2.64
$ 2.20
$ .44
$ .15
$ .44
$ .49
$ .88
$ 1.59
$ 4.50
8.80
$ 30.26
-Description
Current
Proposed
Insufficient Funds Returned
Check and ACH Fee (NSF)
$25.00
$30.00
D-1
APPENDIX E
Assumptions for Preferred Financial Scenario
E-1 Operating Fund
E-5 Alternative Water Resources Development Impact Fee Fund
E-6 Potable Water System Development Impact Fee Fund
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND
Growth
SFR growth rates for FY 2018-19 through FY2021-22 were provided by the Finance Department on 7/26/17
and are consistent with Town financial forecasting. The project growth for FY 2022-23 has been estimated
based on worksheets provided by D. Laws on 2/7/17.Other growth rates include commercial, irrigation
and multi -family connections.
Connections
FY 18-19
FY 19-20
FY 20-21
FY 21-22
FY 22-23
SFR
300
284
220
140
188
Other
20
6
14
2
2
Current Water Rate Structure
The following base rates are for both the potable and reclaimed water meters:
Meter Sizes (ininches)
Potable
Reclaimed
5/8 x 3/4
$ 14.62
$ 14.62
3/4 x 3/4
$ 21.93
$ 21.93
1
$ 36.54
$ 36.54
1.5
$ 73.08
$ 73.08
2
$ 116.94
$ 116.94
3
$ 233.86
$ 233.86
4
$ 365.41
$ 365.41
6
$ 730.83
$ 730.83
8
$ 1,169.32
$ 1,169.32
The following 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
---
---
---
Proposed Water Rate Structure for FY 2018-19
The following are the proposed base rates for the potable and reclaimed water meters:
Meter Sizes (ininches)
Potable
Reclaimed
5/8 x 3/4
$ 16.45
$ 14.62
3/4 x 3/4
$ 24.67
$ 21.93
1
$ 41.11
$ 36.54
1.5
$ 82.22
$ 73.08
2
$ 131.56
$ 116.94
3
$ 263.09
$ 233.86
4
$ 411.09
$ 365.41
6
$ 822.18
$ 730.83
8
$ 1,315.49
$ 1,169.32
E-1
I
I
ll
R
R
l J
I!1
J
J
.a
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
Tier
Tier3
Tier4
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 customer with a 5/8-inch water
meter using 8,000 gallons of water per month.
Base
Overall Monthly
Rate
Tier
Tier
Tier
Tier
GPF
Increase
Impact
FY 18-19
12.5%
0.0%
0.0%
0.0%
0.0%
0.0%
4.4%
$ 1.83
FY 19-20
14.3%
0.0%
0.0%
0.0%
0.0%
0.0%
5.4%
$ 2.34
FY 20-21
12.5%
0.0%
0.0%
0.0%
0.0%
0.0%
5.2%
$ 2.35
FY 21-22
11.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.9%
$ 2.33
FY 22-23
10.0%
0.0%
0.0%
0.0%
0.0%
0.0%
4.7%
$ 2.34
Proposed Reclaimed Water Rate Increases
The proposed reclaimed rate increases are shown below:
FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23
Base Rate 0.0% 0.0% 0.0% 0.0% 0.0%
Commodity Rate 0.0% 0.0% 0.0% 0.0% 0.0%
Groundwater Preservation Fee Rates (cost per 2,000 gallons)
There are no proposed changes in the GPF throughout the 5-year projection period.
Water Use Trends
Projections include similar water use trends as those in FY 2016-17. The average monthly water use for a
residential customer with a 5/8-inch water meter remained at 7,300 gallons per month the same as it was
in FY 2016-17.
Other Revenue
Other revenue is based on FY 2017-18 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 2020-21.
Beginning Cash Balance
Cash balance is estimated based on budgeted revenue, expenditures and known cost over runs for FY 2017-18.
Began with actual cash balance at 6/30/17, added budgeted revenues, subtracted budgeted and unbudgeted
expenditures.
E-2
I
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND continued
Interest Income
The interest rate for all five years in the analysis period is projected to be 1.0%. Interest rate provided by the
Finance Department on 7/26/17.
Personnel Costs
No new employees were added during the projection period. The following increases were provided by the
Finance Department on 7/26/17 and are consistent with Town financial forecasting: the annual merit increase
is projected to be 3.5% annually and health care costs are projected to increase by 8% annually. It is projected
that the state pension will remain constant over the 5-year projection period.
O&M Costs - Potable
Based on the Utility's proposed budget for FY 2017-18 plus 2.5% inflation. Costs increase annually by 2.5%
inflation except power costs. Projected 10% increase in power costs for a potential Tucson Electric rate
increase in FY 2021-22.
O&M Costs - Reclaimed
Based on the Utility's proposed budget for FY 2017-18 plus 2.5% inflation. Costs increase annually by 2.5%
inflation except power costs. Projected 10% increase in power costs for a potential Tucson Electric rate
increase in FY 2021-22. The O&M costs now include allocations for personnel, administrative costs, fleet service
costs and trustee services which had not been done in the past. The allocations were based on the gallons of
reclaimed water sold compared to the total gallons of water sold. The allocations represent 24% of the total
applicable costs with the exception of personnel costs. Personnel costs have been allocated based on the
function of the staff within a division as follows: Administration = 5%; Billing = 5%; Conservation = 0%;
Engineering = 5%; Construction Inspection = 0%; Operations = 24%.
Inflation Rates
The following inflation rates were provided by the Town's Finance Department on 7/26/17:
FY 18-19
FY 19-20
FY 20-21
FY 21-22
1FY 22-23
2.50%
2.50%
2.50%
2.50%
1 2.50%
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
of $29,200 per year has been included in the reclaimed operating costs for the five year projection period.
J CAP Wheeling Costs
Costs include the fees charged by Tucson Water to wheel the CAP water through their recharge and recovery
system. Tucson Water fees are in accordance with an IGA. The annual increases will be 7% per year. It is also
t assumed that the Utility will wheel 2,000 AF per year for FY 2018-19. The amount wheeled is projected to
J increase to 2,300 AF for FY 2019-20 and increase to 2,600 AF in FY 2020-21 and remain at that level.
l CAP Recharge Costs
J Costs are based on the rate schedule adopted by CAP 6/08/17. The rate for FY 2022-23 was estimated. The
lfigures represent the annual cost to deliver the Utility's entire allotment of CAP water (10,305 AF) for recharge.
J
E-3
I
J
I
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR OPERATING FUND continued
Capital Improvements — Operating Fund
The following table identifies the amount of the capital projects for the existing potable water system for
each fiscal year and the projected financing as identified in the revised five year CIP dated 1/19/18. New
debt financing in the amount of $6 million includes $800,000 for a project in FY 2017-18.
Fiscal
Year
Total
Capital Costs
Project Financing
Cash Reserves New Debt
2018-19
$
2,639,000
$
139,000
$ 2,500,000
2019-20
$
1,882,000
$
182,000
$ 1,700,000
2020-21
$
1,741,000
$
741,000
$ 1,000,000
2021-22
$
1,173,000
$
1,173,000
------
2022-23
$
1,928,000
S
1,928,000
$
9,363,000
$
4,163,000
$ 5,200,000
Capital Improvements — Groundwater Preservation Fee
The following table identifies the capital projects for the existing customers' portion of the NWRRDS
CAP water delivery system and the projected financing as identified in the revised CIP dated 1/19/18.
The projects will be both cash funded with revenue from groundwater preservation fees and new debt.
Fiscal
Year
Total
Capital Costs
Project Financing
Cash Reserves New Debt
2018-19
$
240,000
$ 240,000
------
2019-20
$
1,570,616
$ 1,570,616
------
2020-21
$
546,000
$ 546,000
------
2021-22
$
1,309,000
$ 1,309,000
------
2022-23
$
2,771,000
$ 771,000
$2,000,000
$
6,436,616
$ 4,436,616
$ 2,000,000
Debt Service
The following table identifies the debt service included in this pro forma:
Bonds Type Description Amortization Schedule By
2008
Sr. Lien
Reclaimed Ph. 2
WIFA
2009
Sr. Lien
Existing System CIP
WIFA
2012
Sr. Lien
Refunding (Reclaim Ph. 1)
Stone & Youngberg
2012
Sr. Lien
Refunding (2003)
Stone & Youngberg
2013
Excise Tax
Refunding (2003)
Stifel & Nicolaus & Co.
2014
Sr. Lien
AMI Project
WIFA
2015
Excise Tax
Refunding (2005)
Stifel & Nicolaus & Co.
2017
Excise Tax
Refunding (2007)
Stifel & Nicolaus & Co.
j 2018
Sr. Lien
Existing System CIP
Staff Projections
2022
Sr. Lien
NWRRDS
Staff Projections
Minimum Debt Service Coverage Requirement
l 1.30 debt service coverage ratio for 2012, 2018 and 2022 Sr. Lien Bonds & all WIFA Loans
J1.00 debt service coverage ratio for all Excise Tax Pledged Bonds
i Cash Reserve Requirement
JMayor and 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, 0&M and debt service.
This specifically excludes costs for capital projects, depreciation, amortization and contingency.
E-4
ll
FIN
J
I
7
Growth
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR AWRDIF FUND
SFR growth rates for FY 2018-19 through FY2021-22 were provided by the Finance Department on 7/26/17
and are consistent with Town financial forecasting. The project growth for FY 2022-23 has been estimated
based on worksheets provided by D. Laws on 2/7/17. Other Service Units (SU's) include commercial, irrigation
and multi -family connections and were projected by Water Utility staff.
FY 18-19
FY 19-20
FY 20-21
FY 21-22
FY 22-23
SFR SU's
300
284
220
140
188
Other SU's
64
12
32
5
5
AWRD Impact Fees
Impact fees are $4,045 per EDU, Ordinance No. (0) 14-05, effective 7/01/14 and are not
projected to change in the five year projection period.
Beginning Cash Balance
Cash balance is estimated based on budgeted revenue and expenditures for FY 2017-18. Began with
actual cash balance on 6/30/17, added budgeted revenue and subtracted budgeted expenditures.
Interest Income
The interest rate for all 5 years in the analysis period is projected to be 1.0` o. Interest rate was provided
by the Finance Department on 7/26/17.
CAP Capital Costs
Based on 3,557 AF at rate schedule adopted by CAP 6/08/17. Estimated the rate for FY 2022-23.
Debt Service
The following table identifies the debt service included in this pro forma:
Bonds Type Description Amortization Schedule By
2022 Sr. Lien NWRRDS Staff Projections
Debt Service Coverage
1.30 debt service coverage ratio for 2022 Sr. Lien Bonds
Capital Improvements
The following table identifies the amount of the NWRRDS CAP water capital projects for each fiscal year
and the related financing as identified in the revised five year CIP dated 1/19/18:
Fiscal Total Proiect Financing
Year Capital Costs Cash Reserves New Debt
2018-19
$
360,000
$
360,000
2019-20
$
2,355,923
$
2,355,923
2020-21
$
819,000
$
819,000
2021-22
$
1,963,501
$
1,963,501
2022-23
$
4,156,499
$
2,156,499
$ 9,654,923 $,7,654,923
S 2,000,000
$ 2,000,000
E-5
PREFERRED FINANCIAL SCENARIO
ASSUMPTIONS FOR PWSDIF FUND
Growth
SFR growth rates for FY 2018-19 through FY21-22 were provided by the Finance Department on 7/26/17
and are consistent with Town financial forecasting. The project growth for FY 2022-23 has been estimated
J based on worksheets provided by D. Laws on 2/7/17. Other Service Units (SU's) include commercial, irrigation
and multi -family connections and were projected by Water Utility staff.
lJ
7
FY 18-19
FY 19-20
FY 20-21
FY 21-22
FY 22-23
SFR SU's
300
284
220
140
188
Other SU's
64
12
32
5
5
PWSD Impact Fees
Impact fees are $2,015 per EDU, Ordinance No. (0) 14-05, effective 7/01/14 and are not
projected to change in the five year projection period.
Beginning Cash Balance
Cash balance is estimated based on budgeted revenue and expenditures for FY 2017-18. Began with
actual cash balance on 6/30/17, added budgeted revenue and subtracted budgeted expenditures.
Interest Income
The interest rate for all 5 years in the analysis period is projected to be 1.0%. Interest rate was provided
by the Finance Department on 7/26/17.
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
2012 Sr. Lien Refunding (2003) Stone & Youngberg
Debt Service Coverage
1.30 debt service coverage ratio for 2012 Sr. Lien Bonds
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 five year CIP dated 1/19/18:
Fiscal Total
Year Capital Costs
2018-19
$ 700,000
2019-20
$ 1,300,000
2020-21
$ 1,050,000
2021-22
$ 1,450,000
2022-23
$ 2,000,000
$ 6,500,000
Proiect Financing
Cash Reserves New Debt
$ 700,000 ------
$ 1,300,000 ------
$ 1,050,000 ------
$ 1,450,000 ------
2 000 000 ------
$ 6,500,000