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Home My WebLink About08.a. Preliminary rate discussion re Fiscal Year 2014-15 Sewer Service ChargeCentral Contra Costa Sanitary District ` BOARD OF DIRECTORS V POSITION PAPER Board Meeting Date: February 6, 2014 Subject: FISCAL YEAR 2014 -15 SEWER SERVICE CHARGE PRELIMINARY RATE STRUCTURE SCHEDULE AND SETTING OF PUBLIC HEARING Submitted By: Initiating Dept. /Div.: Roger Bailey, General Manager Administration - Final REVIEWED AND RECOMMENDED FOR BOARD ACTION: t ) w R. Bailey General Manag r ISSUE: Staff is starting the annual financial planning process, and will eventually be bringing suggested assumptions and preliminary calculations to the Finance Committee for its review and direction. After incorporating the Committee's input, the draft 10 -Year Financial Plan will be prepared and issued to the full Board for review. This review and presentation will take place at the Board Financial Planning and Policy Workshop (currently scheduled for March 6, 2014). Normally, the Board utilizes the information received at the workshop to set sewer service charge rates for the coming fiscal year. Last year, however, a two -year rate increase was adopted via Ordinance No. 278. The first year increase of $34 for Fiscal Year (FY) 2013 -14 was implemented effective July 1, 2013. But, in accordance with Ordinance No. 278, the Board must reevaluate the necessity of the previously approved $34 increase for FY 2014 -15 before it can be imposed. RECOMMENDATION: Discuss the schedule for setting rates, discuss what date and time of day to hold the public hearing for setting rates for FY 2014 -15, and provide guidance to staff on the 10 -Year Financial Plan. FINANCIAL IMPACTS: None for this discussion. ALTERNATIVES /CONSIDERATIONS: Decide to vote on the rates earlier than June, set the public hearing to take place on a date no later than the June 5, 2014 Board meeting, and possibly change the normal 2:00 p.m. time of the public hearing. BACKGROUND: The financial projections prepared last year indicated the need for a two -year $34 per year increase for FY 2013 -14 and FY 2014 -15 based on assumptions approved by the Board. These assumptions were discussed at the January 24, 2013 Financial Planning and Policy Workshop and based on costs for operations, maintenance, capital needs, mandated regulatory compliance, and prudent reserve levels. After considering the data, a sewer service charge rate increase of up to $34 was recommended and approved by the Board via Ordinance No. 278. The $34 increase each year for two years was to be used for capital projects, higher energy C: \Users \danderson\HppData \Local \Microsoft \Windows \Temporary Internet Files\ Content.Outlook \DVCG8C5G\2 -6 -14 14 -15 SSC Preliminary Rate Discussion Position -Paper (2).docx Page 1 of 2 POSITION PAPER Board Meeting Date: February 6, 2014 subject. FISCAL YEAR 2014 -15 SEWER SERVICE CHARGE PRELIMINARY RATE STRUCTURE SCHEDULE AND SETTING OF PUBLIC HEARING costs, regulatory compliance, salary and benefit cost increases, and paydown of unfunded liabilities. The $34 rate increase for FY 2013 -14 was implemented effective July 1, 2013. However, prior to imposing the rate set forth under Ordinance No. 278 for FY 2014 -15, the Board must consider, at a noticed public hearing held before June 30, 2014, the District's proposed budget, its financial condition, projected capital and operations and maintenance costs, as well as other factors which bear on the revenue requirements of the District to determine whether the increased amount of $34 is still necessary. As the Board Members reconsider the necessity for a rate increase for FY 2014 -15, the following excerpt from Ordinance No. 278 should be noted: If the District Board concludes by a majority vote that sewer service charges for less than the amount set forth in this Ordinance for FY 2014 -15 will produce adequate revenues for that fiscal year, the Board may by resolution fix the FY 2014 -15 sewer service charges to be imposed at appropriate amounts up to the maximum of the rates set forth herein without an amendment of this Ordinance. In such case, the resolution shall clearly set forth such lesser charges that are to be imposed and those charges shall remain in place until further action of the Board. If the Board determines the rates set forth in the table are appropriate for imposition in FY 2014 -15, no further action of the Board shall be required. Staff has prepared a schedule for preparing and considering the 2014 -15 budgets and sewer service charge rates. The latest date for holding the public hearing to consider the FY 2014 -15 rate increase is June 5, 2014. Once the date for the public hearing date is set, the Board can decide if it wishes to hold the public hearing at a time other than 2:00 p.m. COMMITTEE RECOMMENDATION: This is a preliminary discussion so there is no Finance Committee recommendation. A committee recommendation on the actual rates will be forthcoming at the March 6, 2014 Board Financial Planning and Policy Workshop. RECOMMENDED BOARD ACTION: Discuss the schedule for setting rates, discuss what time of day to hold the public hearing, and provide guidance to staff on the 10- Year Financial Plan. C:\ Users\ danderson WppData\Local\Microsoft \Windows \Temporary Internet Files\ Content.Outlook \DVCG8C5G\2 -6 -14 14 -15 SSC Preliminary Rate Discussion Position -Paper (2).docx Page 2 of 2 Central Contra Costa Sanitary District January 31, 2014 TO: HONORABLE BOARD OF DIRECTORS FROM: ROGER S. BAILEY, GENERAL MANAGER rvj SUBJECT: BOARD FINANCIAL PLANNING AND POLICY WORKSHOP PRELIMINARY 2014 -15 SEWER SERVICE CHARGE RATE DISCUSSION Attached is an informational PowerPoint for the Board's information. The presentation looks at possible scenarios using preliminary information, but does not make a recommendation. These scenarios are presented to show the changes in the District's financial position that have occurred since the last plan was presented for rate - setting in June of 2013. 1 will be presenting a condensed version at the February 6, 2014 Board meeting. After my presentation, I will be asking for your input as to what other scenarios you may like to see at the Board Financial Planning Workshop scheduled for March 6, 2014. Agenda Item 8.a. 10 -Year Financial Plan Board Workshop Preliminary 2014 -15 SSC Rate Discussion February 6, 2014 Presenter: Roger S. Bailey, General Manager L— Central Contra Costa Sanitary District Protecting Public Health and the Environment Overview of Topics • Historical Budget Information — Basic Rate Setting Approach Since 2001 • "Funds Required Calculation" - Why Needed • "Funds Required" Definition • Historical Reasons for Having Reserves • Calculation Process — Budgeted Expense and Revenue, and Actual Expense and Revenue — Actual Revenue vs. Expense — Five Years of Historical Expense and Revenue • Current Budget Information FY 2013 -14 • Projected Expenses &Revenue • Reserve Trend • Scenarios: Assumptions, Discussion &Rate Increase Rationale • Scenarios • Moving Forward Summary Historical Budget Information Basic Rate - Setting Approach Since 2001 • Smooth annual rate increases going forward • 10 -Year financial scenarios used as planning tool • Pay -as- you -go philosophy except for large, unexpected capital projects using bond funding • Model foal to draw down reserves so Funds Required equals Funds Available • Reserves allow for rate subsidy — (draw on reserves +smaller rate increase) • No shot -term borrowing for cash flow • The model funds in this order: Debt Service annual payment, then O&M., and then Capital. Self- Insurance Funds are separate from the model Why is Funds Required Calculation Needed? • District's pay -as- you -go philosophy with no short -term borrowing • Large prepayments in July (CCCERA - $16.2 million in 2013 -14; Projected 2014 -15 - $19.5 million) • Debt Service payment in August • Revenue stream is volatile - Largest revenue source (SSC &Property Tax) is received twice a year (December and April); Concord bill income in August; Capacity Fees fluctuate Funds Required Definition • Funds Required (CCCSD term for Cash Reserves Guideline) Used in the 10 -Year planning process, this is the amount of money held in cash and investments (liquid assets) that is needed on June 30th of any fiscal year to meet our cash flow needs through mid - December, when we receive our first sewer service charge and property tax payment from Contra Costa County. • This includes O &M and Sewer Construction Fund cash and temporary investments; it does not include GASB 45 /OPEB Trust, Debt Service cash or reserve investments, and Self - Insurance Fund cash and investments. This is also the definition of Funds Available. • Debt Service payments are made from O &M or Sewer Construction. Historical &Current Reasons for Cash Reserves • Allows for year -to -year rate stabilization /smoothing. Total District budget typically plans for draw from cash reserves to subsidize rate increases • Able to prefund CCCERA (7.75% earnings minus what we could earn in LAIF = $600,000 in 2012 -13; CCCERA 7.25% assumed rate in 2013 -14 still substantial) • Allows for monthly payments (Dollar Cost Averaging) on PARS GASB 45 Trust Payment • Coverage for unexpected events (accelerated projects, revenue shortfalls ...) • Possibility of State taking Ad Valorem Tax — again ... • Not Easy to build back reserves once spent — Drawing down to avoid SSC rate increase is a one -time use of funds • Avoids potential annual short -term borrowing fees and staff time and helps maintain excellent bond rating for emergencies or large non - routine projects • Allows for greater Interest Income (when interest rates rise again) Funds Required Calculation Process • Cash Flow is monitored weekly. Cash Flow in and out is summarized monthly and is used to determine how much net cash goes out the doer from July 1st through Mid - December, just prior to our first SSC and property tax installment from Contra Costa County via the tax rolls. • The amount spent in this timeframe each year is set as a percent of total expense in the 10 -Year Financial Plan model and changes with the models total annual expense projections. Total (Budgeted)Revenue vs. (Budgeted) $120,000,000 $100,000,000 $80,000,000 $50,000,000 $40,000,000 $20,000,000 Pj Expense 5 -Year Historical Budgeted Revenue and Expense 5 -Year Average 2012 -2013 2011 -2012 2010 -2011 2009 -2010 2008 -2009 ■ Total District Budgeted Expense : Total District Budgeted Revenue 9 $120,000,000 $100,000,000 $80,000,000 i $60,000,000 $40,000,000 i $20,000,000 i $_ I Total (Actual) vs. (Actual) E 1 ..3 1, f 5 -Year Average Revenue xpense 5 -Year Historical Actual Revenue and Expense 2010 -2011 2009 -2010 Total District Actual Revenue 2008 -2009 $4,000,000 $2,000,000 5 -Year Average $(2,000,000) $(4,000,000) $(6,000,000) $(8,000,000) Total Revenue Less Expense 5 -Year Historical Revenue Less Expense Comparison All Funds - Budget to Actual 2012 -2013 2011 -2012 2010 -2011 2009 -2010 2008 -2009 s(10,000,000) Budgeted Draw from Reserves in 4 out of 5 years. Actual Draw From Reserves 3 out of 5 years ($15.7 million). $(12,000,000) Average Draw from Reserves is $2.5 million. $(14,000,000) Total District Budget Total District Actual Current Budget Information FY 2013 -14 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 Budgeted Revenue vs. Expense with Breakdown of Revenue Source Breakdown of Revenue & Draw From Reserves of $7.3 Million $7,286,102 2013 -2014 2013 -14 Total ■ Total District Budgeted Expense a Total District Budgeted Revenue Draw From Reserves ■ All Other ■ City of Concord Property Tax N Sewer Service Charge Rate Increase ■ Sewer Service Charge (Existing) 13 Breakdown of Budgeted Expenses (FY 2013 -14) 1.34% 7.45% "% \ 4.91% \ 8.29% \ -- -mower 17.40% Fn r70/ Expenses /Capital Expenditures Total Labor (Salaries & Benefits) Capital Projects (less Labor) Utilities, Chemicals, Repairs & Maint. Debt Service All Other O &M Self- Insurance Costs Total O &M $ 59,292,167 $ Capital Self- Insurance Debt Service 9,759,930 19,820,070 Total Labor (Salaries & Benefits) 60.62% • Capital Projects (less Labor) 17.40% Utilities, Chemicals, Repairs & Maint. 8.29% • Debt Service 4.91% • All Other 0 &M 7.45% Self- Insurance Costs 1.34% Total % of Total Top 4 $ 69,052,097 60.62% 19,820,070 17.40% 9,444,177 9,444,177 8.29% 5,588,816 5,588,816 4.91% 8,488,608 8,488,608 7.45% 600,000 922,500 1,522,500 1.34% $ 77,824,952 $ 29,580,000 $ 922,500 $ 5,588,816 $ 113 916,268 100.00% 91.21% M 0 &M Expense Summary (FY 2013 -14) Outside Services 3.6% Repairs & Maintenance 4.8% Chemicals & Utilities 7.3% FY 2013 -14 Budgeted O &M Expenses Total Labor $ 59,292 Chemicals & Utilities 5,679 Repairs & Maintenance 3,766 Outside Services 2,802 All Other 2,092 Materials & Supplies 2,017 Hauling & Disposal 1,101 Self- Insurance Contribution 600 Professional & Legal 477 77 76.2% 7.3% 4.8% 3.6% 2.7% 2.6% 1.4% 0.8% 0.6% 100.0% Materials & Supplies 2.6%_ Hauling & Disposal 1.4% Self- Insurance Contribution 0.8% Professional & Legal 0.6% Total Labor 76.2% 1") Breakdown of Budgeted Revenues Including Draw 3.08% .N From Reserve (FY 2013 -14) n c'7oi Sewer Service Charge 58.08% Property Tax 12.00% City of Concord 14.99% Capacity Fees (Reg. & Pump Zone) 4.87% Debt Service Interest on Reserve 0.02% Self- Insurance ($600,000 from O &M) 0.57% All Other 3.08% Draw From Reserves 6.40% Revenue O &M Capital Self- Insurance Debt Service Total Sewer Service Charge $ 59,531,700 6,628,000 $ 66,159,700 Property Tax - 8,102,000 5,563,816 13,665,816 City of Concord 12,800,000 4,277,000 17,077,000 Capacity Fees (Reg. & Pump Zone) 5,545,000 5,545,000 Debt Service Interest on Reserve 25,000 25,000 Self- Insurance ($600,000 from 0 &M) 646,350 646,350 All Other 2,820,300 691,000 3,511,300 Draw From Reserves 2,672,952 4,337,000 276,150 7,286,102 Total $ 77, 824, 952 $ 29, 580, 000 $ 922,500 $ 5,588,816 $ 113, 916, 268 of Total Top 4 58.08% 12.00% 89.93% 14.99% 4.87% 0.02% 0.57% 3.08% 6.40% 100.00% Distribution of Revenue (FY 2013 -14) (Excluding Draw From Reserve) Self- Insuram 1% Debt Service 5% Operations & Maintenance $ 75,152,C Debt Service 5,588,8 Self- Insurance 646,3 Capital Revenue 25,243,0 Total District Revenue 106,630,1 Summary of O &M Revenue (FY 2013 -14) Sewer Service Charge 79.2% FY 2013 -14 Budgeted O &M Revenu Sewer Service Charge $ 59,532 City of Concord 12,800 All Other 2,820 $ 75,152 100.0% )f Concord 17.0% Other 3.8% '.8 F'rojected Expenses and Revenues Central Contra Costa Sanitary District Projections From 10 -Year Plan 70 Projected Expense 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 Running Expense (0&1VY $ 77,824,952 84,738,805 88,040,109 95,753,915 96,741,461 Sewer Construction (Capital) * 28,935,400 24,889,000 27,667,860 32,273,639 33,720,462 Self- Insurance (S /1) Projections Not in Model -3 %yr h 922,500 950,175 978,680 1,008,041 1,038,282 Debt Service (Debt) 5,588,816 5,546,218 2,077,785 3,782,051 3,809,926 TOTAL DISTRICT EXPENSE $ 113,271,668 116,124,198 118,764,434 132,817,646 135,310,131 %Increase 2.52% 2.27% 11.83% 1.88% 'Capital Expense amount in the 10 -year Plan model (above) is $644,600less than budget. Projected Revenue 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 Running Expense (O &IVY $ 75,152,000 83,953,947 88,053,470 95,999,235 96,915,820 Sewer Construction (Capital) 25,266,588 22,912,272 30,566,996 29,658,664 35,555,450 Self- Insurance (S/1) Projections Not in Model -3 %yrh 646,350 665,741 685,713 706,284 727,473 Debt Service (Debt) 5,588,816 5,546,218 2,077,785 3,782,051 3,809,926 TOTAL DISTRICT REVENUE $ 106,653,754 113,078,178 121,383,964 130,146,234 137,008,669 %Increase 6.02% 7.35% 7.22% 5.27% Total Projected District Revenue Minus Expense Revenue Less Expense 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 Running Expense (O &k� $ (2,672,952) (784,858) 13,361 245,320 174,359 Sewer Construction (Capital) (3,668,812) (1,976,728) 2,899,136 (2,614,975) 1,834,988 Self- Insurance (S /1) Projections Not in Model (276,150) (284,435) (292,968) (301,757) (310,809) Debt Service (Debt) - - _ _ _ TOTAL DISTRICT DRAW FROM RESERVE $ (6,617,914) (3,046,021) 2,619,529 (2,671,412) 1,698,538 SSC Annual Rate Increase $ 34 34 39 37 34 Total SSC $ 405 439 478 515 549 %Increase each year 9.16% 8.40% 8.88% 7.74% 6.60% 70 Reserve Trend 21 Reserve and Funds Required Trend (Funds Available are Being Drawn Down Funds Required Increases as Expenses Increase) FUNDS AVAILABLE Unrestricted Cash and Investments Adjusted for Receivables and Payables @ June 30th $100,000,000 Darker Blue Bars indicate there was no SSC rate increase that year $90,000,000 Lost approx $6.2 million in Ad Valorem tax $80,000,000 1 in Arl Val rpm TnY Increased Ca Planned for but didn't lose Ad Valorem Tax $70,000,000 2QQ2 Bevenue BQnd Proceeds- million net Deferral of Capital Projects $60,000,000 M- T I - 11-1 - I — \ - $50,000,000 G. 41 1 11 1 11 00,000,000 1 1 $20,000,000 $10,000,000 endinq and OPEB contribution Bonds - $30 million net proceeds The State Borrowed $1.0 million of the District's Property Tax in 2009 -10 and repaid it plus 8% interest in FY 2012 -13 00 A� OS A6, .9j X90 `99 00 07 O� 00 OQ D, . 06, O, 00 09 70 77 7� 70� 7Q� AA �9�. X96, �9j t90 99 00 07 0� 00 OQ O,,. 06, -0, -00 -09 -10 X17 -72 70 7Q 7S 22 Scenarios: Assumptions, M)iscussion and Rate Increase Rationale 23 Rate Scenarios • 5 rate scenarios are provided: • Baseline refers to the Prior Year scenario used in in 2013 for Rate - Setting (from June 2013) • Scenarios 1A and 1B updates 2013 Baseline with new known information and has reduced CIB due to removal of nitrification • Scenario 2 cuts capital by 20 % in 2014 -15 and defers the amount into the remaining 9 years • Scenario 3 shows no rate increase in 2014 -15, makes up the rate in 2015 -16 Discuss Scenarios /Rates Needed • $32 -$39 annual rate increases in the next 4 years looking at Scenarios 1A, 1B, and 2 • Largest expense driver is benefits, especially pension cost through 2016 -2017; then starts to decline in 2017 -2018 • No rate increases in out years due to reduced /deferred capital program and CCCERA declining annual pension amounts due to advanced funding of UAAL Key Assumptions &Impacts to Data • CIP cut by 20% for some scenarios • Nutrient removal project is delayed for some scenarios • Adjustment to commercial accounts for drought impact (2014 -15 & 2016 -17) Key assumptions compared to prior year follow: Scenarios Summary of Scenarios 2014 -15 2015 -16 - 2016 -17 2017 -18 2018 -19 2019 -20 2020 -21 2021 -22 2022- ,v 2023 -24 10 -Year Scenario ID Description Rate Rate Rate Rate Rate Rate Rate Rate 23Rate Rate Ending Increase Increase Increase Increase Increase Increase Increase Increase Increase Increase Total Prior Year 2013 -14 Scenario Baseline used for Rate - Setting (June $ 34 $ 37 $ 36 $ 35 $ 34 $ 33 $ 20 $ - $ N/A $ 634 013) Updated 2013 with New 1 A Known Rates, 'Reduced CI B $ 37 $ 36 $ 36 $ 36 $ - $ - $ - $ - $ - $ - $ 550 Due to Removal of Nitrification Scenario #1 with $34 SSC 1 B increase in Year 1 (2014 -15) $ 34 $ 39 $ 37 $ 34 $ - $ - $ - $ - $ - $ - $ 549 1 with 20% Cut to Capital Year 1 (2014 -15); Defer Cut 2 Amounts into Remaining 9 $ 32 $ 32 $ 32 $ 32 $ 21 $ - $ - $ - $ - $ - $ 554 Years 1 with No SSC Increase Year 3 1 and made up in Year 2 $ $ 91 $ 36 $ 36 $ - $ - $ - $ - $ - $ - $ 568 Comparison of Scenario Assumptions 2014 Current Scenario (1 B) Fiscal Year 2014 -15 2015 -16 2016 -17 2017 -18 2018 -19 1 2019 -20 2020 -21 2021 -22 1 2022 -23 2023 -24 Interest % 0.75% 0.75% 1.25% 1.00% 2.00% 1.25% 3.00% 1.50% 4.00% 2.00% Capital Inflation % 2.50% 3.0% 3.00% 3.0% 3.50% 3.0% 3.50% 3.0% 3.50% Capital Inflation % # of New Connections 0.0% 900 3.0% 1,000 3.0% 1,100 3.0% 1,200 3.0% N/A 3.0% 0.0% 3.0% 1.0% 3.0% 2.0% 3.0% 3.0% 3.0% # of New Connections N/A 955 $ 439 975 $ 512 995 $ 581 1,015 $ 634 1,035 $ 634 1,055 SSC O &M Component 1,075 $ 433 1,100 $ 444 1,100 $ 466 1,100 Ad Valorem Tax Escalation" $ 437 0.0% SSC Capital Component 1.0% $ 66 1.0% $ 103 1.5% $ 152 2.0% $ 155 2.5% N/A 3.0% $ 34 3.0% $ 36 3.0% $ 34 3.0% Total Sewer Service Charge (SSC) $ 439 $ 478 $ 515 $ 549 $ 549 $ 549 $ 549 $ 549 $ 549 $ 549 SSC O &M Component $ 413 $ 433 $ 473 $ 473 $ 482 $ 486 $ 490 $ 504 $ 456 $ 463 SSC Capital Component $ 26 $ 45 $ 42 $ 76 $ 67 $ 63 $ 59 $ 45 $ 93 $ 86 Total SSC Annual Rate Increase $ 34 $ 39 $ 37 $ 34 $ - $ - $ - $ - $ - $ - 2013 Final Scenario Used for Rate- Settin June 2013 Fiscal Year 2014 -15 2015 -16 2016 -17 2017 -18 2018 -19 2019 -20 2020 -21 2021 -22 2022 -23 2023 -24 Interest % 0.75% 1.00% 1.25% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% N/A Capital Inflation % 2.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% N/A # of New Connections 850 900 950 1,000 1,050 1,100 1,150 1,200 1,250 N/A Ad Valorem Tax Escalation` 0.0% 1.0% 1.0% 1.5% 2.0% 2.5% 3.0% 3.0% 3.0% N/A Total Sewer Service Charge (SSC) $ 439 $ 476 $ 512 $ 547 $ 581 $ 614 $ 634 $ 634 $ 634 N/A SSC O &M Component $ 372 $ 433 $ 443 $ 444 $ 460 $ 466 $ 464 $ 508 $ 437 N/A SSC Capital Component $ 31 $ 66 $ 66 $ 103 $ 122 $ 152 $ 171 $ 155 $ 206 N/A Total SSC Annual Rate Increase $ 34 $ 37 $ 36 $ 35 $ 34 $ 33 $ 20 $ - $ - N/A Sewer Service Charge, Assumes sufficient SSC rate increases to fully fund the capital component needed. vein service is runaea rnrst, ary remaining property tax funds Capital. Key Assumptions —What Has Changed? Variance - 2M 4 to 2(113 Sennnrinc Fiscal Year 2014 -15 2015 -16 2016 -17 2017 -18 2018 -19 2019 -20 2020 -21 2021 -22 2022 -23 2023 -24 Interest % 0.00% 0.00% 0.00% 0.00°/ 0.00% 0.00% 0.00% 0.00% - 0.50% N/A Capital Inflation % - 2.00% 0.00% 0.000/ 0.00% 0.00% 0.000/ 0.00°/ 0.00% 0.00% N/A # of New Connections 105 75 45 15 15 45 75 100 150 N/A Ad Valorem Tax Escalation* 0.00% 0.00% 0.00% 0.00°/ 0.00% 0.00% 0.00°/ 0.00% 0.00% N/A Total Sewer Service Charge SSC $ - $ 2 $ 3 $ 2 $ 32 $ 65 $ 85 $ 85 $ 85 N/A SSC O &M Component $ 41 $ - $ 30 $ 29 $ 22 $ 20 $ 26 $ 4 $ 19 N/A SSC Capital Component $ 5 $ 21 $ 24 $ 27 $ 55 $ 89 $ 112 $ 110 $ (113)N/A Total SSC Annual Rate Increase $ - $ 2 $ 1 $ 1 $ 34 $ 33 $ 20 $ - $ - N/A Sewer Service Charae. Assumes suffiriPnt ��C' rata inrraacac to hilly fiinrl tho nonitol + 14 14 .. .- —P.—, � i.P U n i iccucu. SSC Rate Increase Summary Average Annual Rate Increase = $12.63 HISTORY OF CENTRAL SAN SEWER SERVICE CHARGE RATES $450 2014 -15 Based on Scenario 1 B • $400 District loss of Property Tax , • •' $350 • • A yeracie Rate Increase = 12.63 ear 5.12 • •' • • • $300 • . • 000 District loss of Property Tax • •' $250 •. • • • • • • • • The State Borrowed $1.0 million $200 • • • of the Dis rict's Pr perty Tax • • • in 2009 -10 and repaid it plus • • 8% interest in FY 2012 -13 $150 $100 $50 $0 I 90/91 91/92 192193 1 93/94 94/95 95/96 96/97 97/98 1 98/99 99/00 00/01 I 01/02 02/03 03/04 05/06 06/07 07/08 1 08/09 109/10 10/11 11/12 1 12113 113114 14/15 04/05 OCapitaMebt 0 0 5 25 28 31 31 31 1 31 31 15 20 41 54 1 76 1 46 1 76 58 51 19 11 39 27 1 40 26 MO &M 136 151 1 160 1 160 1 160 157 157 157 1 157 157 185 204 207 218 1 204 1 234 1 213 242 260 292 300 302 344 1 365 413 31 MOVING FORWARD SUMMARY Moving Forward Summary 2/06 - Preliminary discussion • Receive Board input and scenario requests for 3/6 2/20 - Provide 10 -Year Plan materials to Board Members 2/24 - Finance Committee Meeting to discuss 10 -Year Plan Materials 3/06 - 10 -Year Plan Workshop 6/05 -Last date to set rates Long -Term: Strategic Planning outcomes and Cost of Service Study will go to Board to aid with Board policy issue decisions — Reserve Policy — Pay -As- You -Go & Bond Financing — Short -term Financing — Rate - Setting QUESTIONS?.