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
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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