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HomeMy WebLinkAbout96.Item 4 PPP Steering Committee Meeting 11-15-17_Rate ProgramRate Program Summary 2018-2023 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)Capital Improvement Program (CIP) 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% Comparison of Single Family Residential Rates(July 2017) $163 $331 $937 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 LA C S D OR A L o m a IR W D Fr e s n o OC S D Ea s t B a y M U D Un i o n S a n i t a r y Du b l i n S a n R a m o n Sa c r a m e n t o Ci t y o f L A Ce n t r a l C o n t r a C o s t a Va l l e j o Sa n D i e g o Sa n F r a n c i s c o Do l l a r s p e r Y e a r Ha y w a r d General User Fees (63% of total revenue)Staff recommends 1% annual increasesHalf of Anticipated Inflation 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 General User Fees (63% of total revenue) Industrial User O&M FeeHigh Strength DischargersRepresents $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 Capital Facilities Capacity Charge One-Time Connection Charge Represents $8M (2% of total revenue) Increase Rationale OCSD uses a “Buy In” Methodology During expansion, OCSD used “Growth pays for Growth” However, there is less expansion today Returning to a Buy In Methodology is now appropriate now Staff recommends annual increases of 4% over a five-year period to minimize impacts to the users Supplemental Capital Facilities Capacity Charge (SCFCC)Annual charge for exceeding established baselinesRepresents $2M (1% of total revenue) Currently, there are 36 users These users would see increases of approximately 3% 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 does the following: Average Flow divided Customer by Assumed Discharge Reduction 90% or Greater 0% 70% -89%20% 50% -69%30% 30% -49%60% 29% or less 80% Schedule 1)November Steering Committee –Rate Plan Overview 2)December Operations Committee –Rate Plan Overview 3)December Administration Committee – CIP Master Plan, Rate Study, Prop. 218 Notices 4)December Board – CIP Master Plan, Rate Study and Prop. 218 Notices 5)February 2018 –Mail Prop. 218 Notices 6)February Board –First Reading of the Ordinance 7)March Board –Second Reading and Adoption 8)July 1, 2018 –New Rates go into effect QUESTIONS