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Water Sales and Budget Issues

Water Sales and Budget Issues. Paul Helliker General Manager Marin Municipal Water District ACWA Spring 2010 Conference. Founded in 1912 – California’s first municipal water district Serves 190,000 residents of Central and Southern Marin County

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Water Sales and Budget Issues

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  1. Water Sales and Budget Issues Paul Helliker General Manager Marin Municipal Water District ACWA Spring 2010 Conference

  2. Founded in 1912 – California’s first municipal water district Serves 190,000 residents of Central and Southern Marin County Primary supply is local reservoirs (5 on Mt. Tamalpais watershed, 2 in West Marin) Marin Municipal Water District

  3. MMWD Service Area and Lakes Kent Bon Tempe Alpine Phoenix Lagunitas

  4. Current MMWD Supplies High cost Recycled 2% Russian River (via NMWD ) 26% Reservoirs Supply decrease of 25% 72% Climate uncertainties

  5. MMWD Details • 950 miles of pipe • 135 water storage tanks • 95 pump stations • 3 potable treatment plants (71 MGD total)/1 recycling plant (2 MGD) • 22,400 acre watershed

  6. Earlier Stimulus Packages

  7. MMWD Customer Classes and Usage

  8. Precipitation in MMWD Watershed

  9. Water Supply Situation 10% Voluntary Conservation – Rates Increase 10% 25% Mandatory Rationing – Rates Increase 25% Deep Doo-Doo

  10. 0 , 0 0 0 Shortage without current conservation plan: 6,700 Acre-feet per year Water Demand Without Current Conservation 5 , 0 0 0 Water Demand With Current 0 , 0 0 0 Available Water Supply 5 , 0 0 0 Shortage with current conservation plan: 3,300 Acre-feet per year 0 , 0 0 0 5 , 0 0 0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2001 1993 1995 1997 1999 2025 1987 1989 1991 2003 2023 The Long-Term Deficit MMWD Water Demand vs. Available Supply 4 3 3 acre-feet per year 2 2 1

  11. Production & Water Supply Projections

  12. There, there it is again—the invisible hand of the marketplace giving us the finger. Adam Smith Strikes Back

  13. FY 2009-10 Budget Reductions 2009 Revenues: % Below Budget Projections • Cut budget by 10% ($5.2 million) • Reduced conservation rebates by $1.6 million • Reduced filled positions by 6% • Reduced overtime, canceled standby pay

  14. MMWD FY 2010 Revenues Water Sales - Budget vs Actual FY 2009-10 50 45 40 Original Budget 35 30 Revised Budget Cumulative Sales ($ Million) 25 20 Actual Revenues: 13% below original 5% below revised 15 10 5 July August September October November December January February March April May June

  15. MMWD Residential Rate Structure and Bimonthly Usage Cost 59 99 26 Tier 4: $20.34/ccf Tier 1: $3.39/ccf Tier 3: $13.56/ccf Tier 2: $6.78/ccf $ Bimonthly Bimonthly CCFs

  16. MMWD Rate History CPI Adjusted Tier 1 - $/ccf 4.00 4.00 3.51 3.44 3.23 3.07 2.98 3.47 3.00 3.00 2.78 3.34 2.55 3.13 3.03 2.39 2.34 2.30 2.93 2.66 2.47 2.00 2.00 1.00 1.00 2.43 2.43 2.43 2.52 2.21 2.81 3.04 3.39 2.13 2.13 2.13 2.13 2.13 2.21 2.21 2.21 2.21 - 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1994 2008 2009 2010 Actual Tier 1 Rate - $/ccf

  17. YEAR Rate Increase (%) No. of Protest Letters No. of Speakers at Hearing 3.7 135 11 2007 11.5 49 9 MMWD Experience – Prop. 218 30,000 Protest Letters Required for Disapproval 2008 2009 8.2 389 14 2010 11.5 232 28

  18. MMWD Rate Increases and Debt Coverage Ratio 4.5 14 11.5% 11.5% 4 12 10% 9.25% 3.5 10 3 0% 0% 0% 3.7% 9.5% 8 2.5 8.2% 5.5% 2 6 1.5 4 1 2 0.5 0 0 2011 2014 2004 2005 2006 2007 2008 2009 2010 2012 2013 Rate Increases (%) Debt Coverage Ratio

  19. 120 100 80 60 40 20 0 Cost Comparison – Bay Area Bimonthly bill for 22 CCF usage ($) East Bay MUD North Marin WD Alameda County WD Contra Costa WD San Francisco PUC Marin Municipal WD City of Mountain View Includes monthly service charges and other charges,but not property taxes

  20. Rates 1990-2010: CA Examples $6.00 Comparison Rate History for AVG. Usage of 16 ccf $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Coachella Vally Water District Desert Water Agency (Palm Springs) Hayward City of Riverside Humboldt Community Services District Montecito Palmdale Water District Helix Water Carpinteria Valley Fort Bragg Mountainview Aurora Colorado EBMUD Los Osos City of Tehachapi Santa Cruz (Outside City) Santa Cruz (Inside City) MMWD

  21. Selling Some Product This Year?

  22. 2010 Rate Study • Analyze and project MMWD operating and capital costs through 2025 • Review and compare MMWD rates, tier structure and service charges • Analyze price elasticity of demand • Develop spreadsheet rate model • Complete by Fall 2010 • Black and Veatch is consultant

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