HomeMy WebLinkAboutItem 11 PPP Ops Committee 12-06-17_Rate Program Rate Program Summary
2018 - 2023
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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
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%
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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
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
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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
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Capital Facilities Capacity Charge
One-Time Connection Charge
Represents $8M (2% of total revenue)
OCSD uses a "Buy In" Methodology
During expansion , OCSD used "Growth pays for Growth"
However, there is much less expansion today
Returning to a Buy In Methodology is now appropriate
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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
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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%
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Rebates and Refunds
OCSD receives and processes 4000 requests annually
Staff is reviewing other agencies' procedures and will make
recommendations for changes to ours next month
As an example, LA County Sanitation uses a flow only
approach and tiers
Average Flow divided Customer
by Assumed Discharge Reduction
90% or Greater 0%
70% - 89% 20%
50% - 69% 30%
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30% - 49% 60% r
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29% or less 80%
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Rebates and Refunds
OCSD staff recommends using the Flow approach only
Examples with a 10% flow reduction
Current Methodolgy
10,000 Flow 1,000 BOD 100 TSS
1 000 100 10
9,000 Flow 900 BOD 9 TSS
Proposed Methodology
10,000 Flow 1,000 BOD 100 TSS
1 000) 0)
9,000 Flow 1,000 BOD 10 TSS
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Customers can request sampling if they believe the calculation 9a,cr Po �
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is not representative of their system impact
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
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8 Jul 1 2018 — New Rates o into effect 9°"°rN THE EN`POr
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QUESTIONS
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