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Village of Downers Grove Water Rate Study Rate Study Overview and Recommendations

Village of Downers Grove Water Rate Study Rate Study Overview and Recommendations. Presented by: David Hyder. September 21, 2010. Agenda. Rate Requirements Overview Rate Structure Alternatives Overview Recommendations. Rate Requirements Overview. Total Annual Revenue Requirements.

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Village of Downers Grove Water Rate Study Rate Study Overview and Recommendations

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  1. Village of Downers GroveWater Rate StudyRate Study Overview and Recommendations Presented by: David Hyder September 21, 2010

  2. Agenda Rate Requirements Overview Rate Structure Alternatives Overview Recommendations

  3. Rate Requirements Overview

  4. Total Annual Revenue Requirements Operating and Maintenance Expenses (Day to Day Operations) Planned Capital Improvement Projects Annual Revenue Requirement Outstanding Debt (Annual Principal and Interest Payments)  Contributions to Reserves

  5. Projected Cash Flow with Current Rates

  6. Rate Requirements - Current Rate Structure * Current Minimum Bill of 2 CCF

  7. Rate Structure Alternative Overview

  8. Water Rate Structure Alternatives • Alternative A - Current Rate Structure with Updated Costs • Alternative B - Fixed Charge Based on Meter Size with Unit Rate Volume Charge • Alternative C - Fixed Charge Based on Meter Size with Multiple Class Inclining Block Rates *Each Alternative Produces the Same Amount of Revenue Water Increases will produce 14% more revenue for each alternative 8

  9. Recommendations

  10. Water Rate Recommendation • Alternative B rate structure is recommended for implementation in 2011 • Alternative B will accomplish the following objectives: • Generate a 14% increase in revenues. • Increase revenue stability within the Water Fund. • Impose the fixed charge based on meter size resulting in greater equity among users of the system. • Minimizes the impact on most customer due to limited change in structure (compared to Alternative C) 10

  11. Recommended Water Rates

  12. Alternative B Phase In

  13. Residential Sample Bi-Monthly Bill 5/8” Meter - 5 CCF (Small User)

  14. Residential Sample Bi-Monthly Bill 5/8” Meter - 15 CCF (Average User)

  15. Residential Sample Bi-Monthly Bill 5/8” Meter - 40 CCF (High User)

  16. Commercial Sample Bi-Monthly Bill 1 ½” Meter - 100 CCF (Average User)

  17. Industrial / School Sample Bi-Monthly Bill 2” Meter - 200 CCF (Average User)

  18. Recommended Tap Fees • Fees imposed to recover the cost of labor and materials incurred while taping the water main for a new connection. • Tap fees should be increased annually due to inflation. 18

  19. Recommended Meter Charges • Charges imposed on new customers to recover cost of meter and meter installation. • Meter charges should be increased annually due to inflation. 19

  20. Recommended Capacity Fees • Fees imposed on new customers to recover capital cost of providing system capacity. • We recommend that capacity fees for 4” lines and larger be evaluated on a case by case basis. 20

  21. Next Steps • Final Report and Vote on Rate Change - October

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