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Home My WebLink About2009-07-20 - Revenues and Rates Ad Hoc Committee Meeting Agenda PacketYorba Linda Wester District AGENDA YORBA LINDA WATER DISTRICT REVENUES AND RATES AD HOC COMMITTEE MEETING Monday, July 20, 2009, 10:00 AM 1717 E Miraloma Ave, Placentia CA 92870 COMMITTEE STAFF Director Ric Collett, Chair Ken Vecchiarelli, General Manager Director William R. Mills Pat Grady, Assistant General Manager 1. PUBLIC COMMENTS Any individual wishing to address the committee is requested to identify themselves and state the matter on which they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five minutes. 2. DISCUSSION ITEMS This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda may also include items for information only. 2.1. Notice of Public Hearing to Consider 2009 Water Rate Report 2.2. Draft 2009 Water Rate Report 2.3. Future Agenda Items and Staff Tasks 3. ADJOURNMENT 3.1. The next regular meeting of the Revenues and Rates Committee will be scheduled. Items Distributed to the Committee Less Than 72 Hours Prior to the Meetina Pursuant to Government Code section 54957.5, non - exempt public records that relate to open session agenda items and are distributed to a majority of the Committee less than seventy -two (72) hours prior to the meeting will be available for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District's internet website accessible at http: / /www.ylwd.com /. Accommodations for the Disabled Any person may make a request for a disability - related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714 - 701 -3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885 -0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability- related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. Meeting Date: Subject: ATTACHMENTS: July 20, 2009 Name: PowerPoint Presentation. pdf AGENDA REPORT Draft 2009 Water Rate Report Description: PowerPoint Presentation ITEM NO. 2.2 Yorba Linda Water District REVENUE &RATES AD HOC MEETING Monday, July 20, 2009 10:00 AM DISCUSSION ITEMS I. Water Rate Increase • FY 2009/10 Water Budget Deficit • Target Revenue • Fixed Charge & Commodity Charge • Usage Patterns and Percentages • Tiered Rates Verses Fixed Rates • Typical Bill Comparisons • Conservation Effects (Plus and Minus) FY 2009/10 Budget Water Deficit FY 2009/10 WATER REVENUES Budget Revenue (Operating) FY 2009110 Water Sales $ 16,3599073 Fixed Charge $ 21364, 720 Other $ 637,900 $ 191 361, 693 Revenue (Non- Operating) Property Taxes $ 1,092,000 Interest & Investments $ 127,900 Other $ 105, 500 $ 1, 325, 400 Total $ 20,687,093 FY 2009/10 WATER EXPENSES Budget Expenses (Operating) FY 2009110 Depreciation & Amortization $ 3,945, 750 Variable Water Costs (G W, Import & Power) $ 12,612Y 700 Salaries and Benefits $ 6,538,008 Supplies & Services $ 4,032,096 $ 27,128, 554 Expenses (Non- Operating) Interest on Long Tenn Debt $ 1,981,300 Other $ 194Y500 $ 2,175, 800 Total $ 291304,35 OY 2009/10 WATER BUDGET DEFICIT Budget FY 2009110 Net Revenue $ 20, 687, 093 Net Expenses $ (29, 304, 354) Debt Obligation (Principal Payment) $ (825,000) Vehicle & Equipment Outlay $ (628,500) TARGET REVENUE Assumptions • Reserve Fund Revenue set to 25% of Depreciation & Amortization • Fixed Revenue (Basic Service Charge) set at 25% of Fixed Expenses • Property Tax Revenue Pledged to Debt Service • Commodity Rate Generates 89% of Total Revenue needs • Allocation Penalties not Considered in Formulas and Models for this Discussion • Annexation Reserves Fund Vehicles & Equipment Outlay FY 2009/10 DEFICIT DEFERRALS Net Gain or Loss Depreciation deferral (75%) Transfers for Veh & Equip Outlay Deferred Subtotal Budget FY 2009/10 $ (10, 0 70,761) $ 2,959,313 $ 628, 500 $ 3,587,813 FY 2009/10 W� r Rate Revenue Tarp Budget FY 2009/10 Operating Revenue $ 195361,693 Deficit Compensation $ 6,4823,949 2009/10 ADJUSTED EXPENSES Expenses (Operating) Depreciation & Amortization (25% only) Variable Water Costs (GW, Import& Power) Salaries and Benefits Supplies & Services $ 24,169, 242 Expenses (Non - Operating) Interest & Principal on Long Term Debt $ 21806,300 Other $ 194Y500 $ 31 000, 800 Budget FY 2009/10 $ 986Y438 $ 121612Y 700 $ 6, 538, 008 $ 4, 032, 096 $ 24,169, 242 Expenses (Non - Operating) Interest & Principal on Long Term Debt $ 21806,300 Other $ 194Y500 $ 31 000, 800 10.3% - Interest & Principal on Long Tenn Debt ($2.81M) 14.8 % - Supplies & Services ($4.03M) 24.1 % - Salaries and Benefits ($6.54M) EXPENSES (ADJ) 0.7% - Other ($0.19M) 3.6%-25% Depreciation & Amortization ($0.99M) 46.4% - Variable Water Costs - GW, Import & Power ($12.61 M) FIXED CHARGE & COMMODITY CHARGE FY 2009/10 Water Rate RE nue Ta Revenue - Fixed Charge (25% Fixed Op. & Non Op. Exp.) Revenue - Com Basic Service Charge per month (assumes 23,600 accts) Commodity Charge per unit (assumes 20,872 AFYsales) FY 2009110 $ 21889y 136 $ 22, 955, 506 FY 2009/10 Budget Water Rate Revenue $2.52 X 20,872 AF X 435.6 units/AF = $22,911,445 $10.20 /mo. X 23,600 X 12 mo. = $2,888,640 Total Projected Water Rate Revenue = $25,800,085 Other Revenue = $1,325,400 Total Revenue = $271125,485 Operating Expenses Variable Water Costs (GW, Import & Power) Salaries and Benefits Supplies & Services % Total $ 129612,700 54.4% $ 6,538,008 28.2% $ 4,032,096 17.4% $ 23,182,804 100.0% TYPICAL BILLS Consumption Charge per unit Subtotal 10 units $ 2.52 $ 25.20 Basic Service Charge $ 10.20 Total Water Charges $ 35.40 Consumption Charge per unit Subtotal 30 units $ 2.52 $ 75.60 Basic Service Charge $ 10.20 Total Water Charges $ 85.80 Consumption Charge per unit Subtotal 20 units $ 2.52 $ 50.40 Basic Service Charge $ 10.20 Total Water Charges $ 60.60 Consumption Charge per unit Subtotal 60 units $ 2.52 $ 151.20 Basic Service Charge $ 10.20 Total Water Charges $ 161.40 USAGE PATTERNS AND PERCENTAGES Facts • Over 90% of YLWD Customer Accounts are Single Family Residential (SFR) • In CY 2004 -2006 SFR's averaged just over 25 units per month • Over 72% of SFR's averaged 30 units or less per month • Nearly 96% of SFR's averaged 60 units or less per month USAGE PATTERNS (Residential) Ave. Usage Accts % Total Cum % Billing Units % Total Cum % 0 -10 3,607 16.7% 16.7% 242,815 3.7% 3.7% 11 -20 6,350 29.4% 46.1% 1,211,129 18.6% 22.3% 21 -30 5,708 26.4% 72.5% 1,715,584 26.3% 48.6% 31 -40 2,926 13.5% 86.1% 1,227,352 18.8% 67.5% 41 -50 1,412 6.5% 92.6% 760,863 11.7% 79.1% 51-60 697 3.2% 95.8% 460,136 7.1% 86.2% 61-80 574 2.7% 98.5% 468,955 7.2% 93.4% 81 -100 184 0.9% 99.3% 196,255 3.0% 96.4% 101 -200 132 0.6% 100.0% 202,911 3.1% 99.5% 201 -500 10 0.0% 100.0% 31,984 0.5% 100.0% 21,600 100% 6,517,984 100.0% ALTERNATIVE TIERED RATE STRUCTURE FOR SFR ACCOUNTS MODELING RESULTS 6,506,631 $ 16,284,849 Total Cum % 30.9% 30.9% 39.9% 70.8% 19.0% 89.8% 4.1% 93.9%1 6.1% 100.0% 1 Per Unit Consumption Revenue Tier 1 1 -10 units $2.17 2,316,582 $ 5,026,983 Tier II 11 -30 units $2.50 2,598,951 $ 61497,378 Tier III 31 -60 units $2.83 1,094,000 $ 3,096,020 Tier IV 61 -80 units $3.16 213,347 $ 674,177 Tier V 80+ units $3.49 283,751 $ 990,291 6,506,631 $ 16,284,849 Total Cum % 30.9% 30.9% 39.9% 70.8% 19.0% 89.8% 4.1% 93.9%1 6.1% 100.0% 1 MODELING RESULTS Per Unit Consumption Revenue % Total Cum % Tier 1 1 -10 units $2.17 6,834,871 $ 14,831,670 29.7% 29.7% Tier II 11 -30 units $2.50 7,817,456 $ 19,543,640 39.1% 68.8% Tier III 31 -60 units $2.83 3,435,393 $ 9,722,162 19.5% 88.3% Tier IV 61-80 units $3.16 686,002 $ 2,167,766 4.3% 92.6% Tier V 80+ units $3.49 1,052,684 $ 3,673,867 7.4% 100.0% Total 19,826,406 $ 49,939,106 Average 6,608,802 $ 16,646,369 TYPICAL BILL COMPARISON Water Charge Water Usage Tier I 1 -10 units 10 Tier 11 11 -30 units 20 Tier 11131 -60 units 0 Tier IV 61 -80 units 0 Tier V 80+ units 0 Basic Service Charge Price Per Unit Cost $2.52 Rate $2.17 $21.70 $25.20 $2.50 $50.00 $50.40 $2.83 $0.00 $0.00 $3.16 $0.00 $0.00 $3.49 $0.00 $0.00 Total Water Charge $71.70 $75.60 $10.20 $10.20 Total $81.90 $85.80 Volumetric vs. Flat Rate 3/4" 518" V 11/2" 2" 3" 4" 6" 10" Total 1 1417 15 5539 58 44 7073 2 3 1 32 29 11 1 1 1 76 3 7 134 127 575 1 844 4 65 139 77 118 1 1 401 5 1 1 i i 1 12 1 1 15 4077 10 10389 90 24 Iason 8 1 6 3 10 24 1 157 74 178 1 1 1 11 3 12 8 60 84 13 14 Total 5593 26 16399 522 1052 3 4 1 1 % of Total 23.7% 0.1% 69.5% 2.2% 4.5% 0.0% 0.0% 0.0% 0.0% meters @ $8.35 /mo Current Flat Rate Annual Revenue Current Rate Total Proposed Flat Rate @ $10.20 size, inches 0.75 0.63 1.00 1.50 2.00 3.00 4.00 6.00 10.00 Factor by size s 0.56 0.39 1.00 2.25 4.00 9.00 16.00 36.00 100.00 Charge /mo. $6.19 $4.30 $11.00 $24.75 $44.00 $99.00 $176.00 $396.00 $1,100.00 Annual Revenw $412,979 $258 $2,164,668 $155,034 $555,456 $3,564 $8,448 $4,752 $13,200 Capacity Rate Total REVENUE IMPROVEMENT » 236011 QUESTIONS