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Proposals to Change Water and Sewer Rates & Rate Structure

Proposals to Change Water and Sewer Rates & Rate Structure. Presented to: Avon Lake Board of Municipal Utilities Presented by: Todd Danielson December 23, 2010. Outline. Current Rates and Structure Current Revenues and Expenses Additional CIP Needs Water Structure & Rate Changes

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Proposals to Change Water and Sewer Rates & Rate Structure

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  1. Proposals to Change Water and Sewer Rates & Rate Structure Presented to: Avon Lake Board of Municipal Utilities Presented by: Todd Danielson December 23, 2010

  2. Outline • Current Rates and Structure • Current Revenues and Expenses • Additional CIP Needs • Water Structure & Rate Changes • Sewer Rate Changes • Anticipated Additional Revenues • Average Bills

  3. Current Rates and Structure • 5 Tier Declining Block Water Rate, last changed 1/1/08 • Tier 1 First 20,000 gal $1.19 / 1,000 gal • Tier 2 Next 30,000 gal $1.10 / 1,000 gal • Tier 3 Next 200,000 gal $1.02 / 1,000 gal • Tier 4 Next 250,000 gal $0.93 / 1,000 gal • Tier 5 Over 500,000 gal $0.84 / 1,000 gal • Sewer Rate, last changed 4/1/08 • $8.25 /qtr + $2.18 / 1,000 gal

  4. Current Annual Revenues and Costs • Water • Wastewater

  5. Additional CIP Needs • Water • WTP Sludge Treatment Improvements (~$3M) • WTP Capacity Improvements (~$2.5M) • Main Replacements (~$6M in 5 yrs) • Water Tank(s) (~$2.5M) • Wastewater • WPCC Upgrades (~$12M) • Sewer Rehabilitations (~$2M) • Combined Sewer Separations (~$15M in 8 yrs)

  6. Water Structure & Rate Changes • Collapse existing 5 tier system to 3 tier system and phase in rate changes • Phase I – tier collapse & initial change 7/1/11 • Tier 1: First 50,000 gal $1.37 / 1,000 gal • Tier 2: Next 200,000 gal $1.15 / 1,000 gal • Tier 3: Over 250,000 gal $0.95 / 1,000 gal • Tier 1 – Recovers all expenses • Tier 2 – Recovers all, except 10% of salaries & benes • Tier 3 – Recovers all, except 20% of salaries & benes

  7. Water Structure & Rate Changes – cont’d • Phase II – rate change 7/1/12 • Tier 1: First 50,000 gal $1.55 / 1,000 gal • Tier 2: Next 200,000 gal $1.28 / 1,000 gal • Tier 3: Over 250,000 gal $1.06 / 1,000 gal

  8. Sewer Rate Changes • Phase I 7/1/11 • Administrative fee $8.25 / bill • Rate $2.51 / 1,000 gal • Phase II 7/1/12 • Administrative fee $ 8.25 / bill • Rate $2.84 / 1,000 gal • Phase III 7/1/13 • Administrative fee $ 8.25 / bill • Rate $3.17 / 1,000 gal

  9. Anticipated Additional Revenue(over current revenue)

  10. Average Annual Water Bills

  11. Average Annual Sewer Bills

  12. Average Total Water & Sewer Bills

  13. Requested Motions • I move to adopt the proposed modifications to ALMU’s water rates and structure as presented, which will be implemented in two phases beginning 7/1/11. • I move to adopt the proposed modifications to ALMU’s sewer rate as presented, which will be initially implemented in three phases beginning 7/1/11.

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