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97.Item Nos. 19-20-21 Rates Presentation 02-28-18
Rate Program Summary 2018-2023 Operational Efficiencies •Chemical Optimization Reform –$5 million savings annually •Power Generation –$5 million savings annually •Sludge Dewatering –$4 million annually (starting in 2019) •Grant Funds –$2.5 million •Staffing has Decreased from 2009 levels Financial Efficiencies •Debt Refinancing –$67 million in savings •Pension Reform –$37 million savings over 20 years •Elimination of Unfunded Pension Liability –72% rate reduction Planning and Forecasting •Proactive Planning and Forecasting •Facilities Master Plan •Biosolids Master Plan •Independent Rate Study •Legal Review •Strong Financial Planning •Cost Efficiencies •AAA Bond Rating •No New Debt $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 19 9 4 19 9 6 19 9 8 20 0 0 20 0 2 20 0 4 20 0 6 20 0 8 20 1 0 20 1 2 20 1 4 20 1 6 20 1 8 20 2 0 20 2 2 20 2 4 20 2 6 20 2 8 20 3 0 20 3 2 20 3 4 20 3 6 20 3 8 20 4 0 20 4 2 20 4 4 OCSD Outstanding Debt Strategic debt program with no new borrowing 1% Annual Increases Year 2013 2017 $339 2018 $347 2019 $355 2020 $364 2021 $372 2022 $382 2017 $331 $337 $344 $351 $358 $365 Proposed $331 $335 $339 $343 $347 $351 Proposed Rate Schedule 1.2% Annual Increase = $4 per year Year 2017 2018 2019 2020 2021 2022 Rate $331 $335 $339 $343 $347 $351 Incr. per yr.$4 $4 $4 $4 $4 The proposed rate increase is to cover the cost of inflation on items needed to inspect, repair, operate and maintain our $10 billion dollars in aging infrastructure. Projected 10 Year Cashflow Category 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28 Total User Fee $335 $339 $343 $347 $351 $365 $380 $395 $411 $427 Percent 1.21%1.19%1.18%1.17%1.15%4.00%4.00%4.00%4.00%4.00% Beg. Bal.591 626 672 650 579 496 489 484 484 522 Revenues 468 489 502 513 523 530 542 565 589 616 5,337 Outlays (433) (444) (525) (583) (607) (537) (547) (565) (551) (600) (5,390) Variance 35 46 (22)(71)(84)(7)(5)0 38 16 (53) End Bal.626 672 650 579 496 489 484 484 522 538 Res Policy 532 533 531 530 532 534 536 538 537 544 Policy Var 94 139 119 50 (36)(45)(52)(54)(15)(5) Projected 10 Year Cashflow –Without the Increase Proposed 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28 User Fee $335 $339 $343 $347 $351 $365 $380 $395 $411 $427 Percent 1.21%1.19%1.18%1.17%1.15%4.00%4.00%4.00%4.00%4.00% No Increase 18-19 19-20 20-21 21-22 22-23 23-24 24-25 25-26 26-27 27-28 User Fee $331 $331 $331 $331 $331 $355 $380 $408 $437 $469 Percent 0.00%0.00%0.00%0.00%0.00%7.20%7.20%7.20%7.20%7.20% Reserves •Non Discretionary Reserves •Debt Service Reserve –Mandated $100M •Dry Period –Debt Service Dry Period $ 83M •Dry Period –Operating Budget Dry Period $ 76M •Total Non Discretionary Reserves $259M •Discretionary Reserves •Capital Improvement Reserve –50% of the Average CIP $123M •Replacement and Refurbishment $ 66M •Catastrophe Funds $ 57M •Operating Contingencies –10% of the Operating Budget $ 15M •Total Discretionary Reserves $261M •Discretionary Reserves are approximately 2.5% of our total assets Rate Program Summary •Fiscally Responsible –Does not push out larger rate increases •Cost Saving Measures –Debt Mgmt. and Pension Cost Reduction •Planned and Forecasted –Various Studies and Planning Efforts •Allows Focus on Infrastructure –75% of Costs