Proposed Water & Sewer Rates

1. Proposed Water & Sewer Rates FY2014 April 1, 2013 Department of Utilities & General Services

2. Budget Challenges • Our water supplier Chesterfield County is proposing increases to both the commodity and capacity fees (3.52% and 9.72% respectively) . • This increased expense will add $8,900.00 to our operational budget. • DEQ has increased requirements for effluent testing at both WWTPs. • This increased expense will add $6,100.00 to our operational budget. Department of Utilities & General Services

3. Budget Challenges • Total minimum increase to the Utilities operational budget for FY2014 will be $15,000.00. • Evaluated two options for raising user fees which would minimize the impact of these increased operational expenses. • Option 1: Mimic Chesterfield’s proposed increases; generates approximately $11,000. • Option 2: Pass the increased expenses proportionally to the appropriate users; generates approximately $15,000. Department of Utilities & General Services

4. Bi-Monthly User Charges The bi-monthly user charge consists of the following components: • The commodity charge is the cost for the flow of water and/or wastewater; it is charged at a rate per 1,000 gallons of flow. • The capacity charge is the minimum charge assessed based on the size of the connection to “reserve space” on the system; these funds are used to maintain the infrastructure already in place. Department of Utilities & General Services

5. Proposed Option 1 • Increase both our commodity and capacity fees by the same percentages that Chesterfield has proposed raising the fees they charge their customers. Department of Utilities & General Services

6. Commodity Charges – Proposed Option 1 Department of Utilities & General Services

7. Water Capacity Charges – Proposed Option 1 ^Approximate proposed rate *Locality’s current rates Department of Utilities & General Services

8. Sewer Capacity Charges – Proposed Option 1 *Locality’s current rates (no changes for Chesterfield in FY2014) Department of Utilities & General Services

9. Comparison of Bi-Monthly Rates – Option 1 Average Residential Bill$7.35 Increase (Approximately 6%)5/8” connection – 10,000 gallons usage Bi-monthly rates calculated using the following formula: [(# Gallons/1,000) x Commodity Charge] + Capacity Charge *Locality’s current rates Department of Utilities & General Services

10. Option 1 Analysis Department of Utilities & General Services

11. Proposed Option 2 • Raise our water commodity fee proportionally across that customer base to cover the increased expense for purchasing water from Chesterfield. • Raise our sewer commodity fee proportionally across that customer base to cover the increased expense for effluent testing. Department of Utilities & General Services

12. Commodity Charges – Proposed Option 2 Department of Utilities & General Services

13. Water Capacity Charges – Proposed Option 2 ^Approximate proposed rate *Locality’s current rates (no changes for Powhatan in FY2014 Department of Utilities & General Services

14. Sewer Capacity Charges – Proposed Option 2 *Locality’s current rates (no changes for Chesterfield or Powhatan in FY2014) Department of Utilities & General Services

15. Comparison of Bi-Monthly Rates – Option 2Average Residential Bill $8.90 Increase (Approximately 7%)5/8” Connection – 10,000 gallons usage Bi-monthly rates calculated using the following formula: [(# Gallons/1,000) x Commodity Charge] + Capacity Charge *Locality’s current rates Department of Utilities & General Services

16. Option 2 Analysis Department of Utilities & General Services

17. Recommendation Option 2 • Maintain current capacity charge (minimum fee); increase commodity charge (cost per gallon). • Minimize impact to Utilities Fund. • No increase to supplemental transfer from the General Fund. • Encourage water conservation by users. Department of Utilities & General Services

18. Questions or Comments? Department of Utilities & General Services