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HomeMy WebLinkAboutItem No. 2 PPP 11-16-2022 Steering Committee - Rate Program Summary11/15/2022 ■ • Rate assumptions are included annually with each adopted budget • Each budget includes a ten-year cashflow estimate • Capital Improvement Program (CIP) Master Plan was last completed in 2017 11/15/2022 1 • Staff engaged a qualified independent consulting firm, HDR Engineering, to conduct a comprehensive cost of service rate study to validate financial assumptions. • HDR performed the revenue analysis to develop cost based Regional Sewer Service Fees, Capacity Charges and ancillary charges as well as cost allocation amongst customer classes. • HDR also evaluated the current rebate program and recommended changes for better efficiency and to simplify the process for both the customer and OC San. 3 Majority of OC San Revenue comes from the General User Fees 1) General User Fees $ 356.5 M 69.2% 2) Property Taxes $ 109.8 M 21.3% 3) Interest/Assessments $ 18.0 M 3.5% 4) Other Fees/Charges $ 31.1 M 6.0% Total Fees & Charges $ 515.4 M 100.0% 4 11/15/2022 Los Angeles County $226 Fresno $309 Oro Loma $342 OC San $347 IRWD $357 Sacramento $444 Hayward $463 East Bay MUD $475 Dublin San Ramon $496 Union Sanitary $530 City of Los Angeles $636 City of San Diego $687 Central Contra Costa $690 Vallejo $769 San Francixo $1,270 200 400 600 800 1,000 1,200 1,400 5 General User Fees 9', of total revenue) Staff recommends on average 3.5% annual increases 2022 (Current) $351 $347 $347 2023 $359 $358 $358 2024 $367 $370 $371 2025 $373 $382 $384 2026 $379 $395 $397 2027 $385 $408 $411 6 .1 11/15/2022 Industrial User O&M Fee High Strength Dischargers Represents $12.5M (2.4% of total revenue) • Staff recommends annual increases of 4.7%-5.6% over a five-year period for high strength dischargers. CFCC One -Time Connection Charge Represents $12.9M (2.5% of total revenue) Residential Capacity Charges will remain flat for 2023-24 and increase annually by the Engineering News Record (ENR) Construction Cost Index. Non-residential Capacity Charges will decrease by approximately 33% in 2023-24 and then increase annually by the ENR Construction Cost Index. M 11/15/2022 SCFCC Annual charge for exceeding established baselines Represents $4.3M (.8% of total revenue) • The SCFCC is charged to high strength industrial users who exceed standard discharge amounts. • Currently, there are 45 industrial dischargers who are charged the SCFCC for one or more constituents. • These users would see increases on average of 6.3%. 0 • OC San processes over 2000 rebate/refund requests annually with an additional 1200 customers locked into a reduced charge. • Staff and our consultant evaluated our current rebate program • Staff recommends redesigning the program and modeling it after LA County Sanitation Districts tiered rebate program and moving from a 3-year lock -in to a 5-year lock -in to better serve our customers: 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% 10 11/15/2022 1) November Steering Committee — Rate Plan Overview 2) December Operations Committee — Rate Plan Overview 3) December Admin Committee — Rate Study and Prop. 218 Notices 4) December Board — Rate Study and Prop. 218 Notices 5) February 2023 — Mail Prop. 218 Notices 6) February Board — First Reading of the Ordinances 7) March Board — Public Hearing, Second Reading and Adoption 8) July 1, 2023 — New rate schedules go into effect 11 12 M