HomeMy WebLinkAbout(3) PORT ARTHUR RATE STUDY2020 Water and Wastewater
Rate Study and Financial Forecast
City Council Presentation
City of Port Arthur
December 2020
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Why are Water/WW Rates Increasing?
Inflation
General increases in the cost of doing business
Environmental and other regulations
Capital Improvement Plan needed to repair and expand system
AWWA forecasts that water and wastewater rates across USA will triple in the next 15 years (supply, infrastructure)
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City of Port Arthur
Current Water Rate Structure
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Table I-6,ES3
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City of Port Arthur
Current Wastewater Rate Structure
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Table I-6,ES3
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Monthly Residential Charges
5,000 Gal Water; 5,000 Gal Wastewater
5/8“ Meter
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Residential Comp data Tab
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Monthly Commercial Charges
25,000 Gal Water and Wastewater
2“ Meter
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Residential Comp data Tab
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Actual and Forecast Annual
Total Water Accounts
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Average Annual Increase = 1.4%
Table II-3,4
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Actual and Forecast Annual Water Billed Consumption
(Thousand Gallons)
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Average Annual Increase = 0.73%
1,000 Gallons
Table II-7,8
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Average Monthly Water
Consumption by Rate Class
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Gallons
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LNVA Cost Increases
2020 -- 2029
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Forecast Water/Wastewater
Capital Improvement Plan 2020-2029
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Long-Term Financing
Forecast Future Bond Issues
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Term = 20 Years
Interest = 3.5%
Fixed P&I
* FY 2021 bond interest rate = 1.0%
Water = $46,500,000
Wastewater = $42,000,000
Total = $80,500,000
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Forecast Water Utility
Cost of Service
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CHART 7
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Forecast Wastewater Utility
Cost of Service
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CHART 7
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Notes on Rate Proposal
Current rates are underrecovering total costs, particularly due to recent new debt
Project team recommends implementing a 5-year rate plan with annual adjustments effective January 2021 through January 2025
No change recommended to basic rate design; percentage increases to be applied to each customer class
Wastewater rate adjustments must be higher to compensate for the greater amount of debt recently funded
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Proposed Water Rate Plan
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Proposed Wastewater Rate Plan
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Impact on Monthly Charges
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Forecast Revenues and Expenses
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Presentation Summary
Benefits of Proposed Rate Plan
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Rate plan will ensure that combined utilities operate on a stand-alone basis and independent of general fund assistance
Will result in financially-healthy utility that has ability to fund operations
Will ensure that ratepayers pay only what it costs to provide service
Will allow $165 million in capital investment into system to improve quality of service and provide a well-functioning system for future generations
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Questions?
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