06-29-2020 - Budget WorkshopCity Council
City of Edgewater
Meeting Agenda
104 N. Riverside Drive
Edgewater, FL 32132
Council Chambers4:00 PMMonday, June 29, 2020
Workshop - Budget - Utilities (Water & Sewer)
We respectfully request that all electronic devices are set for no audible notification.
1. CALL TO ORDER and ROLL CALL
2. PRESENTATIONS
Presentation by Henry Thomas and Shawn Ocasio of Raftelis on the Utility Rate Study -
Water & Sewer
a.
Utility Rate Design Presentation - June 29th Workshop - 2020Attachments:
3. ADJOURN
Pursuant to Chapter 286, F.S., if an individual decides to appeal any decision made with respect to any
matter considered at a meeting or hearing, that individual will need a record of the proceedings and
will need to ensure that a verbatim record of the proceedings is made. The City does not prepare or
provide such record.
In accordance with the Americans with Disabilities Act, persons needing assistance to participate in any
of these proceedings should contact City Clerk/Paralegal Robin L. Matusick, CMC, 104 N. Riverside
Drive, Edgewater, Florida, telephone number 386-424-2400 x 1102, 5 days prior to the meeting date.
If you are hearing or voice impaired, contact the relay operator at 1-800-955-8771.
Page 1 City of Edgewater Printed on 6/18/2020
City of Edgewater
Legislation Text
104 N. Riverside Drive
Edgewater, FL 32132
File #:AR-2020-4822,Version:1
COUNCIL AGENDA ITEM
SUBJECT:
Presentation by Henry Thomas and Shawn Ocasio of Raftelis on the Utility Rate Study - Water & Sewer
DEPARTMENT:
City Clerk/Paralegal
City of Edgewater Printed on 6/18/2020Page 1 of 1
powered by Legistar™
CITY OF EDGEWATER
Fiscal Year 2020 Utility Rate Study Update
-Water and Wastewater Rate Design Analysis-
Presented on June 29th, 2020
Background
•June 9th Workshop to Review Rate Study Update
▫Customer, Sales, and Revenue Projections
▫Operating Expenses, Debt Payments, Transfers, Capital
Improvement Program Funding Plan, and Compliance
▫Identified Rate Adjustment Needs
•Scope of Services Included a Task to Review Alternative
Water and Wastewater Rate Structures
•Council Discussion on Rate Design Issues
▫Potable Water – Changes to Pricing Tiers
▫Wastewater – Billing Cap or Tiered Rate
2
Revisions to Financial Forecast
•Charter Reserve Deposit for 2020 to Be Delayed One Year to
Allow Phase in of Rate Increases
•Rate Increases Presented on June 9th Were Revised to Phase
the Customer Bill Impacts Over Time
3
Description
June 9th Financial
Forecast Results
Revised Financial
Forecast Results
Effective Year Water Wastewater Water Wastewater
October 2020 (FY 2021) 9.00% 9.00% 6.00% 6.00%
October 2021 (FY 2022) 3.00% 3.00% 6.00% 6.00%
October 2022 (FY 2023) 3.00% 3.00% 4.00% 4.00%
October 2023 (FY 2024) 3.00% 3.00% 3.00% 3.00%
October 2024 (FY 2025) 3.00% 3.00% 3.00% 3.00%
Revised Financial Forecast Results
4
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2020 2021 2022 2023 2024 2025
Projected Combined Revenue Requirements
Total Operating Expenses Total Debt Service
Payment In Lieu of Franchise Fees Renewal and Replacement Fund Transfer
Capital Funded from Rates / Reserves Transfer to Charter Reserve Fund
Total Revenues at Existing Rates Total Revenues at Proposed Rates
Revised Financial Forecast Results
5
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
2020 2021 2022 2023 2024 2025
Unrestricted Reserves Ending Cash Balances
Fund 440 - Operating Fund 90 Days of Rate Revenue 45 Days of Rate Revenue
Revised Financial Forecast Results
6
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
2020 2021 2022 2023 2024 2025
Capital Funds & Charter Reserve Ending Balances
Charter Reserve R&R Fund Combined Connection Fee Funds Charter Reserve Fund Balance Target
Revised Financial Forecast Results
7
201%
276%
319% 309%
243% 237%
0%
50%
100%
150%
200%
250%
300%
350%
2020 2021 2022 2023 2024 2025
All-In Debt Service Coverage
All-In Debt Service Coverage Minimum Coverage Target (150%)
Rate Design Tasks
•Step 1 – Detailed Review of Water and Wastewater
Customer Billing Statistics by Customer Class
▫Bill Frequency Analysis – Count of Bills Rendered by Usage
Level
▫Usage Distribution Analysis – Total Usage Billed per 1,000
Gallon Increments
•Step 2 – Develop Revenue Neutral Rate Alternatives
▫Rate Design Alternatives Based on 2020 Rate Levels
•Step 3 – Increases Revenue Neutral Rates by 6% to
Reflect the Rate Phasing Plan
•Step 4 – Prepare Bill Impact Analysis
8
Bill Frequency Analysis
9
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0
5,000
10,000
15,000
20,000
25,000
30,000
Bill Frequency Analysis - Residential Single Family
Bills Rendered Cumulative Bills
•6% of Bills Rendered at 0 Gallons per Month
•30% of Bills Rendered Between 1,000 -2,000 Gallons per Month
•47% of Bills Rendered Between 2,001 – 5,000 Gallons per Month
•15% of Bills Rendered Between 5,001 – 10,000 Gallons per Month
•2% of Bills Rendered Above 10,000 Gallons per Month
Average Residential Monthly Usage of Approximately 3,200 Gallons per Month
Usage Distribution Analysis
10
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
Usage Distribution Analysis - Residential Single Family
Billed Flow Cumulative Flow
•51% of Billed Flow at 2,000 Gallons per Month or Less
•35% of Billed Flow at 2,001 - 5,000 Gallons per Month
•10% of Billed Flow at 5,001 – 10,000 Gallons per Month
•4% of Billed Flow Above 10,000 Gallons per Month
Existing Rate Structure
11
Residential Single Family
Description
Block Ranges
Water
Tier Price
Multiplier
Wastewater
Base ¾” Meter $13.92 N/A $20.20
Tier 1 0 – 2,000 $2.34 1.00x $7.95
Tier 2 2,001 – 5,000 $7.78 3.32x $7.95
Tier 3 5,001 – 10,000 $9.74 4.16x $7.95
Tier 4 10,001+ $12.16 5.20x $7.95
Existing Rate Structure
12
Residential Multi-Family
Description
Block Ranges
Water
Tier Price
Multiplier
Wastewater
Base Per Unit $10.46 N/A $15.16
Tier 1 0 – 2,000 $2.34 1.00x $7.95
Tier 2 2,001 – 5,000 $7.78 3.32x $7.95
Tier 3 5,001 – 10,000 $9.74 4.16x $7.95
Tier 4 10,001+ $12.16 5.20x $7.95
Note - 95% of Billed Multi-Family Usage Falls Within the First Two Blocks
Existing Rate Structure (Cont.)
13
Commercial Base Charges
Description Water Wastewater
¾” Meter $13.92 $20.20
1” Meter $34.83 $50.52
1 ¼” Meter $48.76 $70.82
1 ½ ” Meter $69.65 $101.04
2” Meter $111.45 $161.68
3” Meter $222.88 $323.32
4” Meter $348.26 $505.19
6” Meter $696.85 $1,010.39
8” Meter $1,114.43 $1,616.62
Existing Rate Structure (Cont.)
14
Commercial Usage Charges
Description Block Ranges [*] Water Wastewater
Tier 1 0 – 2,000 $2.34 $7.95
Tier 2 2,001 – 5,000 $7.78 $7.95
Tier 3 5,001 – 10,000 $9.74 $7.95
Tier 4 10,001+ $12.16 $7.95
[*] Block ranges for meter sizes larger than ¾” increase based on meter equivalency
factors. The most common larger meter sizes are shown below.
Description Tier 1 Tier 2 Tier 3 Tier 4
1” Meter 0–5,000 5,001–13,000 13,001–25,000 25,000+
1.5” Meter 0–10,000 10,001–25,000 25,001–50,000 50,000+
2” Meter 0–16,000 16,000–40,000 40,001–80,000 80,000+
3” Meter 0–32,000 32,001–80,000 80,001–160,000 160,000+
4” Meter 0–50,000 50,000–125,000 125,001–250,000 250,000+
Rate Design Alternatives
15
•Water Rate Alternative
▫Keep Existing Base Charges
▫Combine Tier 1 and Tier 2 Blocks Into One Block and Blend
Usage Rates to an Average Rate
▫Keep Tier 3 and Tier 4 at Current Levels
•Wastewater Rate Alternative 1
▫Keep Existing Base Charges
▫Cap Residential Billed Flows at 12,000 Gallons per Month
•Wastewater Rate Alternative 2
▫Keep Existing Base Charges
▫Develop Tiered Wastewater Rate Structure with Declining
Rate Starting After 12,000 Gallons per Month
Water Rate Design Alternative
16
Residential Single Family
Description Block Ranges Existing Proposed
Base ¾” Meter $13.92 $13.92
Tier 1 0 – 2,000 $2.34 $4.04
Tier 2 2,001 – 5,000 $7.78 $4.04
Tier 3 5,001 – 10,000 $9.74 $9.74
Tier 3 10,001+ $12.16 $12.16
Residential Multi-Family
Description Block Ranges Existing Proposed
Base Per Unit $10.46 $10.46
Tier 1 0 – 2,000 $2.34 $4.04
Tier 2 2,001 – 5,000 $7.78 $4.04
Tier 3 5,001 – 10,000 $9.74 $9.74
Tier 3 10,001+ $12.16 $12.16
Water Rate Design Alternative (Cont.)
17
Commercial
Description Block Ranges Existing Proposed
Base ¾” Meter $13.92 $13.92
Tier 1 [*] 0 – 2,000 $2.34 $4.04
Tier 2 [*] 2,001 – 5,000 $7.78 $4.04
Tier 3 [*] 5,001 – 10,000 $9.74 $9.74
Tier 3 [*] 10,001+ $12.16 $12.16
[*] Block ranges for meter sizes larger than ¾” increase based on
existing meter equivalency factors.
Wastewater Rate Design Alternative 1
18
Residential Single Family / Multi-Family
Description Block Ranges Water
Base ¾” Meter / Per Unit $20.20 /$15.16
Tier 1 0 – 12,000 / 0 – 9,000 $8.17
Tier 2 12,001+ / 9,000+ $0.00
Commercial
Description Block Ranges Water
Base ¾” Meter $20.20
Usage All Flow $8.17
Wastewater Rate Design Alternative 2
19
Residential Single Family / Multi-Family
Description Block Ranges Water
Base ¾” Meter / Per Unit $20.20 /$15.16
Tier 1 0 – 12,000 / 0 – 9,000 $8.00
Tier 2 12,001+ / 9,000+ $6.00
Commercial
Description Block Ranges Water
Base ¾” Meter $20.20
Usage All Flow $8.00
Bill Impact Analysis - Water
20
Residential Monthly Bill Comparison
Usage Existing Alternative $ Change % Change % of Bills [*]
0 $13.92 $13.92 $0.00 0.0% 5.95%
1,000 $16.26 $17.96 $1.70 10.5% 12.59%
2,000 $18.60 $22.00 $3.40 18.3% 17.68%
3,000 $26.38 $26.04 ($0.34) (1.3%) 19.53%
4,000 $34.16 $30.08 ($4.08) (11.9%) 15.93%
5,000 $41.94 $34.12 ($7.82) (18.6%) 11.09%
6,000 $51.68 $43.86 ($7.82) (15.1%) 6.64%
7,000 $61.42 $53.60 ($7.82) (12.7%) 3.91%
8,000 $71.16 $63.34 ($7.82) (11.0%) 2.34%
9,000 $80.90 $73.08 ($7.82) (9.7%) 1.41%
10,000 $90.64 $82.82 ($7.82) (8.6%) 0.87%
[*] Usage Levels Shown Represent 98% of Residential Bills Rendered
Bill Impact Analysis – Wastewater Alt. 1
21
Residential Monthly Bill Comparison with 12,000 Gallon Billing Cap
Usage Existing Alternative $ Change % Change % of Bills [*]
0 $20.20 $20.20 $0.00 0.0% 5.95%
1,000 $28.15 $28.37 $0.22 0.8% 12.59%
2,000 $36.10 $36.54 $0.44 1.2% 17.68%
3,000 $44.05 $44.71 $0.66 1.5% 19.53%
4,000 $52.00 $52.88 $0.88 1.7% 15.93%
5,000 $59.95 $61.05 $1.10 1.8% 11.09%
6,000 $67.90 $69.22 $1.32 1.9% 6.64%
7,000 $75.85 $77.39 $1.54 2.0% 3.91%
8,000 $83.80 $85.56 $1.76 2.1% 2.34%
9,000 $91.75 $93.73 $1.98 2.2% 1.41%
10,000 $99.70 $101.90 $2.20 2.2% 0.87%
11,000 $107.65 $110.07 $2.42 2.2% 0.54%
12,000 $115.60 $118.24 $2.64 2.3% 0.37%
14,000 $131.50 $118.24 ($13.26) (10.1%) 0.18%
16,000 $147.40 $118.24 ($29.16) (19.8%) 0.09%
[*] Usage Levels Shown Represent 99% of Residential Bills Rendered
Bill Impact Analysis – Wastewater Alt. 2
22
Residential Monthly Bill Comparison with Declining Tiered Rate at 12,000 Gallons
Usage Existing Alternative $ Change % Change % of Bills [*]
0 $20.20 $20.20 $0.00 0.0% 5.95%
1,000 $28.15 $28.20 $0.05 0.2% 12.59%
2,000 $36.10 $36.20 $0.10 0.3% 17.68%
3,000 $44.05 $44.20 $0.15 0.3% 19.53%
4,000 $52.00 $52.20 $0.20 0.4% 15.93%
5,000 $59.95 $60.20 $0.25 0.4% 11.09%
6,000 $67.90 $68.20 $0.30 0.4% 6.64%
7,000 $75.85 $76.20 $0.35 0.5% 3.91%
8,000 $83.80 $84.20 $0.40 0.5% 2.34%
9,000 $91.75 $92.20 $0.45 0.5% 1.41%
10,000 $99.70 $100.20 $0.50 0.5% 0.87%
11,000 $107.65 $108.20 $0.55 0.5% 0.54%
12,000 $115.60 $116.20 $0.60 0.5% 0.37%
14,000 $131.50 $128.20 ($3.30) (2.5%) 0.18%
16,000 $147.40 $140.20 ($7.20) (4.9%) 0.09%
[*] Usage Levels Shown Represent 99.5% of Residential Bills Rendered
Bill Impact Analysis – Water and
Wastewater Alternative 1
23
Bill Impact Analysis – Water and
Wastewater Alternative 2
24
Observations and Conclusions
•Low Average Monthly Usage
▫3,200 Gallons per Month for Single Family Residential
▫3,600 Gallons per Month System Average (Excluding
Wholesale)
•Low Number of Commercial Accounts to Total Accounts
▫– 516 Accounts or Approx. 4.7% of Total System
•Low Average Usage Per Account and Low Number of
Commercial Accounts Limits Flexibility to Make Structure
Changes and Increases Sensitivity to Structure Changes
25
Observations and Conclusions (Cont.)
•Water Bills Terminating in 1,000 – 2,000 Will
Experience Bill Increases From Water Rate Structure
Changes
▫Water Bill Increases of 10.5% - 18.3% Per Month
▫Approximately 30% of Residential Water Bills Rendered
•Water Bills Terminating in Remaining Blocks Will
Experience Bill Decreases or No Change from Water
Rate Structure Changes
▫6% of Bills Rendered Experience No Change in Bill
▫64% of Bills Rendered Experience a Decrease in Bill
Decreases of Up to 18.6%
26
Observations and Conclusions (Cont.)
•Wastewater Bills Terminating in 1,000 – 12,000 Will
Experience Bill Increases From Cap Implementation
▫Wastewater Bill Increases of 0.8% - 2.3% Per Month
▫Approximately 93% of Residential Wastewater Bills
Rendered Fall Within This Usage Level
•Wastewater Bills Terminating at 0 Gallons or Above
12,000 Gallons Per Month Will Experience Either No
Change or Bill Decreases From Cap Implementation
▫6% of Bills Rendered Experience No Change in Bill
▫1% of Bills Rendered Experience a Decrease in Bill
27
Observations and Conclusions (Cont.)
•Wastewater Bills Terminating in 1,000 – 12,000 Will
Experience Bill Increases From Declining Tier Rate
Implementation
▫Wastewater Bill Increases of 0.2% - 0.5% Per Month
▫Approximately 93% of Residential Wastewater Bills
Rendered Fall Within This Usage Level
•Wastewater Bills Terminating at 0 Gallons or Above
12,000 Gallons Per Month Will Experience Either No
Change or Bill Decreases From Declining Tier Rate
Implementation
▫6% of Bills Rendered Experience No Change in Bill
▫1% of Bills Rendered Experience a Decrease in Bill
28
Discussions & Questions
29