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Home My WebLink About96.PPP Item No. 8 - New Rate Summary Administration Committee -NEW B Rate Program Summary 2018 - 2023 SA N I rq Troy 2 � C LNG THE ENv\Q Preparation and Analysis 1 Rate increase assumptions of 1 %-2% were included in each of the last five budgets 2) Cashflow estimates are updated annually looking forward for a ten year period 3) Facilities Master Plan has been completed 4) Staff engaged an engineering consultant to develop an Independent Rate Study to validate financial assumptions Rate Study Scope Allocation of Unit Cost Expenditures Single Family Residential Rates Capital Facility Capacity Charge (CFCC) Calculation 4) Rebate process review 5) Miscellaneous Fees and Charges 6) Five-Year Financial Projections Allocation of Unit Cost Expenditures 1 ) Treatment Constituents Flow, Strength (BOD ) , Solids (TSS ) 2) Cost Categories O&M , CIP, Debt Service , In Plant Service Majority of OCSD Revenue comes from the Single Family User Fee 1) General User Fees $ 300 M 63% 2) Property Taxes $ 100 M 21% 3) Interest/Assessments $ 50 M 11% 4) Other Fees/Charges $ 25M 5% Total Fees & Charges $475 M 100% 4 � N 9 n h THE ENv\Po� Comparison of Single Family Residential Rates (July 2017) $900 93 $800 $700 L $600 L a $500 i o $400 $331 $300 log $200 $163 • $100 $0 Efficiency Measures Debt Refunding - $67 Million Unfunded Actuarial Accrued Liability (UAAL) 3) Efficiencies in Chemical Purchases 4) Dewatering Projects General User Fees (63% of total revenue) Staff recommends 1 % annual increases Half of Anticipated Inflation Year 2013 2017 Proposed 2017 $339 $331 $331 2018 $347 $337 $335 2019 $355 $344 $339 2020 $364 $351 $343 2021 $372 $358 $347 2022 $382 $365 $351 9 n h cr/' TMF ENv\Po Industrial User O&M Fee High Strength Dischargers Represents $ 13M million (3% of total Revenue) Increase Rationale 1 ) Full Secondary Treatment component costs were not incorporated after the 2013 Rate Study 2) Rates increases were tied to the Single Family Rate and were not adjusted for these individual cost changes 3) Staff recommends annual increases of 1 %-4% over a five year period to minimize impacts to the users aV S MI i> 4 � N 9 n h cr/' TMF ENv\Po Capital Facilities Capacity Charge One-Time Connection Charge Represents $8M (2% of total revenue) Charges are calculated based on the projected funding needs for the next two decades. "Growth pay for Growth" vs. "Buy In" Methodologies However, there is much less expansion today Returning to a Buy In Methodology is now appropriate aV S MI i> 4 � N 9 n h cr/' hE ENv\Po Capital Facilities Capacity Charge Increase Rationale OCSD's Current Single Family Charge is $3855 The Current State Average is $6000 The OCSD charge will move to $5719 using a five-year phase-in approach , minimizing the impacts to the users: 2017 2018 2019 2020 2021 2022 $3855 $4228 $4601 $4973 $5346 $5719 The OCSD charge in five years will be lower than the current State Average 4 � N 9 n h cr/' THE ENv\Po Supplemental Capital Facilities Capacity Charge (SCFCC) Annual charge for exceeding established baselines Represents $2M (1 % of total revenue) Currently, there are 36 users Users would see increases of approximately 1 %-3% aV S MI i> 4 � N 9 n h cr/' THE ENv\Po Five-Year Financial Projection Year Reserves Policy Variance 2018 $586 $523 $ 63 2019 $629 $521 $108 2020 $675 $527 $148 2021 $649 $529 $120 2022 $584 $534 $ 50 2023 $503 $537 $(34) SANQ Rebates and Refunds Staff recommends the Flow-only Approach Examples with a 10% flow reduction Current Methodology 10,000 Flow 1,000 BOD 100 TSS 1000 100 10 9,000 Flow 900 BOD 9 TSS Proposed Methodology 10,000 Flow 1,000 BOD 100 TSS 1 000 (0) (0) 9,000 Flow 1,000 BOD 10 TSS aV S MI i> 4 � N 9 n Customers can provide sampling data if they believe the calculation is not representative of their system impact r HE ENv'" Schedule 1 ) November Steering Committee — Rate Plan Overview 2) December Operations Committee: Facilities Master Plan and Rate Plan Overview 3) December Administration Committee : Facilities Master Plan and Rate Plan Overview 4) December Board : Facilities Master Plan , Rate Study, Prop. 218 Notices 5) February 2018 — Mail Prop. 218 Notices 6) February Board — First Reading of the Ordinance ON SANI iAT/O 7) March Board — Second Reading and Adoption r p o 8 Jul 1 2018 — New Rates o into effect 9°"°rN THE EN`POr Y � g QUESTIONS 4 � N 9 n h Operating Expense Summary FY 17-18 Description Approved Salaries and Benefits $ 93 .4 M Contractual Services 29. 2 M Mat' Is & Supplies 15 .8 M Repairs and Maintenance 16 .0 M Utilities 7 .9 M Other 9 .0 M Cost Allocation -19.4 M Net Operating Expense $ 15189 M TABLE 7.1 Summary of Wastehauler Loads and Volume Discharged into Plant No, 1 Disposal Station, Fiscal Years 2012-2017 Orange :ounry Sanitation District, Resource Protection Division Loads Volume 'A'aste Received Fiscal Year Delivered Millions of Gallons 2012-13 6,015 12.3 2013-14 6,331 12.9 2014-15 6,972 14.8 2015-1 rl 7,472 14.2' 2016-17 8,465 18.1' JHtV S oil W r 9 ' Volume reported is based on Wastehauler self-reported Apes 9�i a,r Fcr/ THE ENV\Po� Laboratory Productivity 500 Analysis completed/Analyst/Month 480 458 460 440 420 420 402 400 406 380 385 369 360 358 364 340 320 326 300 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 4 9 n h THE ENv\Po�