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Home My WebLink About11.a. (Handout) PowerPoint - Cost of Service StudyItem No. 11.a. Comprehensive Wastewater Cost of Service Study June 4, 2015 Central Contra Costa Sanitary District Cost of Service Study Conducted by a Consultant Raftelis Financial Consultants zw R�ARY p� 00-p CQ37 g�,Ya'...irsr Corr M CD_ MandoO) To match the costs of providing service to customer classes and to design rates to equitably recover costs. 6/4/2015 N Why do a Cost of Service Study? • Cost of Service is the fundamental benchmark used for establishing public utility rates in the United States • Ensure fair and equitable rates for user groups • Ensure compliance with Proposition 218 and recent court decisions MEMO a- 6/4/2015 3 Cost of Service Process • Determine revenue requirements from rates MAI • Conduct mass balance based on customer loadings • Example: Collection, Treatment, Customer, General, etc. • Allocate functional costs to cost components • Example: Flow, BOD, TSS, Customer, and General W7-Develop unit costs • Allocate costs to customer class based on unit costs MI 6/4/2015 4 1 1 Steps Taken to Control O &M Costs • Proposed O &M Budget is flat • Staffing Needs Assessment • Strategic purchase of natural gas • Use of landfill gas • Savings on chemicals purchased through Bay Area Chemical Consortium (BACC) 6/4/2015 5 Steps Taken to Control Pension Costs • Full share of employee contribution expenses by the end 2017 contract. • District was the only one of 17 CCCERA employers to file briefs with the court in defense of newly - passed pension reform. • $15M in additional payments towards UAAL by FY 2016 -17. • Pension contributions decreased by $5.8M in FY 2015 -16. Historic Capital Improvement Program Infrastructure Investments Totaled over $300 Million 54, M E E 540 M � E E E E E SnM E ° ° E E S•rM •t1 5.M $1'1M 51M 56 A, 0107 0701 0101 0405 0660 0607 6706 6601 6410 1611 1111 11 1) 1) H FWw" 6/4/2015 0 Capital Improvement Program Looking Forward • We are a large, capital- intensive operation requiring long -term planning for significant future infrastructure replacement: — Comprehensive Master Plan — Condition Assessments — Asset Management sdl�C�� Projected Infrastructure Investments Twenty Year Capital Improvement Program May Exceed $1.5 Billion $413 million •RRR ■Capacity [apanslon ."gVatory • Sustanaba.ry/OptJrrk n 6/4/2015 7 O &M and Capital Assumptions • Updated CCCERA five year contribution rate projections — AB 197 impacts included — Two additional UAAL contributions of $2.5M • FY 2016 -2025 ten -year CIP total of $413 million (unescalated) • Pay -as- you -go capital funding CD_ W., Reserve Policy • 5 months of next year's O &M expenses • 100% of next year's debt service • 50% of next year's capital expenses • $6,500,000 in self- insurance and emergency reserves Reserve Targets met by Fiscal Year 2020 6/4/2015 NO Revenue Requirements 1� FY 2015 -16 Revenue Requirements Debt .. Sewer Service Charge 70,390,000 8,110,000 0 78,500,000 64% City of Concord 13,700,000 3,15Q000 0 16,85Q000 14% Recycled Water 0 257,000 0 257,000 0% Property Tax 0 1Q060,000 3,779,654 13,839,654 11% Capacity Fees 0 6,634,000 0 6,634,000 5% All Other 3,402,300 556,500 42,676 4,001,476 3% Draw from Funds Available 0 2,022,500 0 2,022,500 2% TOTAL REVENUE 87,492,300 30,790,000 3,822,330 122,104,630 100% FY 201516 Budget Final Pass Revenue - -, 6/4/2015 E Cost of Service Analysis "OCD_ Existing Customer Profile Accounts Sewer Service Charge Revenue ;3ens:a! 3 114,745 Total Accounts D 6/4/2015 10 Proposed Customer Profile Accounts Sewer Service Charge Revenue Non Residential 3r� MFR 17% lop IV 114,745 Total Accounts Based Customer Loadings Developed Through Cost of Service Study D Proposed New Multi- family Rates • US Census data for the District shows lower density for multi - family structures • Based on census data and a mass balance analysis, adopt lower rate for multi - family, mobile homes, 2nd units, and condos E-A Me -1 6/4/2015 11 Cost of Service Results for Schools Elementary Schools Intermediate Schools High Schools Table 4.2 Cost of Service Report 5 gallons per student perschoolday 5.3 gallons per student perschoolday 5.6 gallons per student per school day 5 gallons per student per school day 10 gallons per student perschoolday 15 gallons per student perschoolday Cost of Service Results for Non - Residential Standard Commercial 150 165 150 165 Hotels /Motels 150 165 310 120 Automotive 150 165 180 280 Supermarkets 150 165 700 360 Table 4 -1 Cost of Service Report �dOPCD_ 6/4/2015 12 M Recommended Adjustment Schedule Fiscal Year Revenue Adjustments 2016 7.24%* 2017 7.30% 2018 5.57% 2019 5.35% 2020 4.97% weighted average of all user groups Table 1 .1 Cost of Somme Report 13 Current and Proposed Rates 4YbndalMnuY [lama IvrReddennY Urvl ERmuaknr: Rare Group YR Slntle iamilY P•<IIinU N)Im $mJm S5.» [RMmninium, MUlll famlr Motile Names LAW N63m 5aR)m SS RI [•mmprdYMemlMUaWaI leer N[I are Group XD XN Rasenea $111) 51131 S13x2 are Group XF 5661 NC) X)1 XH S)l3 Rare Gaup•i $)% Sle.)e 111.7 5)05 R<auunnra X 31 X 11 X H 5611 Narela /Ibni� NC) XW XN —1 Rme Group FN ammlre N[) Ss.la Ss Xas SuMala CwnmerYY N[) NN N% Xll IMurtaY Rare Group Yl 1171 to suer na. larncl SIX Slal are Wpup YF B00 Inerlmal6. %i sLlia 5I 35 s II fla.11 I. 5!67 sS SN) Sla.1R MIVa UV loe - ateer XA Xa; N% 55 31 Rare Group YR NRJ X X S5.» Wre fueup XC ss IS SS RI 56.11 are Group XD XN 5631 X.fi) are Group XF 5661 XN S)l3 Rare Gaup•i Xax 5)05 f)X Y Rare D 5611 5)a) Xal —1 Rme Group FN 5)n 51. Xas Rare Group Yl $)6a Xll X.91 Rare Group Yl 1171 X9) s1069 are Wpup YF $9 aR X61 fla.11 Are Group Xl 59)9 Sla.1R slag; Role Graua FM MIs $ ID_Sa SII }6 Rare Group XN slasl 5w)6 SIIN Role Group YD Slo)a SID% $1169 ImYUaeMI tar nail Cnwrnea Nm NN N% sUieala lDarRare nnuMq UrvvenllRl • 11 1.31 14 Stltppla lFlememaryl larawaenrl SS fi} 55» X.19 SNatlallnrermMlatel lurDUaeml X.96 511. 51}16 I!�` SNeaIalNiln Ynmll 1o<r atuaenll X1) 516.91 5X If J ztY 9mue R•ppn Mnimum annuY[ra NX Sotto SSN _ I Sewer Service Charge Comparison With Other Agencies 2615.16 Rd vdanm, ssephi. Agmey SIC Ift— Rd,Rlarvm Santa Rosa $1,212 WA 51.212 - _ Petaklma $1,075 WA $1075 Rodeo Sankary Diseict $962 _ $57 Berkeley JEBMUD brtrealmen0 $769 _51019 WA $769 Oakland {EBMUDbrrearnero $698 WA 5698 Crockett Santry District $698 $219 ' $917 Benicia $665 WA $665 Brentwood $643 WA $643 _ konhouse Sanitary Risurt $637 $10 $647 Richmond $633 WA $633 2015.16 Mean Rate of Agencies Surveyed $571 WA $571 Novato $552 $64 —f616 VaMOp $520 WA $520 Mountain View Sankary District $516 $27 $543 Pittsburg lDDSD brtreaunenq 5491 _ 519 5510 LNemuore $489 WA $489 br1 e-anem: $489 $20 $509 A&= 20Y16 Rate $471 S79 $550 Napa Sanitation Distinct $470 WA $470 Pleasanton 5448 WA 5448 t •1 9 S78 516 Antioch lDDSObrtreatrnent) $426 S2U $446 Bay Point JDDSD br treatment) $421 $62 5483 West County Wasbwaier District $407 $20 $427 Concord �CCCSDb_rtreatneny $402 WA $402 Fairfield IFSSD) $393 WA $393 Dublin San Ramon Sernces District $373 $13 ' $386 Union Sanitary District $357 WA 5357 D pdated May 27 2015 Om Loma Sanitary Distrct $206 WA $206 6/4/2015 14 Residential Annual Wastewater Bill Impacts Proposed Proposed Proposed Proposed Effective Effective July 1, 2015 July 1, 4 Current July 1, 2015 July 1, ,. Increase Increase Single Family Residence $439 $471 $503 $32 $32 Multi - Family Residence $439 $463 $487 $24 $24 Tab la 1.3 rL Cost of Service Report Typical Non - Residential Annual Wastewater Bill Impacts Average Annual Usage July 1. 2014 Customer Class Average Bill Hotels /Motels 5,959 $24,252 July 1, 2015 July 1, 2016 July Average Bi I I Average Bill DifferenteDiff. $48,027 $51,483 1, 2015 Ju $23,775 2016 July 1, 2015 J.lyl,2016 ii ence Difference Difference $3,456 98.0% 7.2% Supermarkets 2,932 $11,931 $25,534 $27,381 $13,602 $1,847 114.0% 7.2% Standard Commercial 722 $2,937 $3,348 $3,593 $411 $245 14.0% 7.3% Restaurants 799 $6,647 $6,958 $7,462 $312 5503 4.7% 7.2% Automotive 294 $1.197 $1,571 $1,686 $374 $115 31.2% 7.3% Tablet -4 Cost of Service Report _,14 7 7 �� 6/4/2015 15 School Wastewater Schools (Daycare, Preschool, University) (per HCF) Schools (Elementary) (per student) Schools (Intermediate) (perstudent) Schools (High School) (per student) Table 1.2 (portion( Cost of Servke Report Annual Bill Impacts Current Proposed Proposed Effective Effective Effective July 1, 2014 July 1, 2015 July 1, 2016 r A CD_ School Rates • CCCSD unable to use "winter quarter" estimates of water consumption due to student breaks • Cost of Service study recommended increasing per- student wastewater flow rates • CCCSD will review actual water consumption and adjust bill based on lower use, if applicable c a. 6/4/2015 16 Customer Outreach • Mailed April 15, 2015: • 106,519 Sewer Notices • 313 Letters to Impacted Customer Classes • 251 Recycled Water Notices • Spring 2015 Cover of Pipeline Newsletter advertised Rate Hearing • Acalanes USD • Athenian School • Bentley School • De La Salle High School • Martinez School District • Mt. Diablo USD • San Ramon Valley USD • No response from 10 remaining Schools /District • 8 properly noticed regularly scheduled Public Board Meetings • 2 offsite Public Board Workshops (6- hours) • 10 Total Meetings 6/4/2015 17 Recycled Water Retail Rates Potable Water $3.28/1,000 gal $3.38/1,000 gal $3.48/1,000 gal Customers Canal (Raw) $1.56 /1,000 gal $1.61 /1,000 gal $1.66/1,000 gal Water Customers Raftelis Financial Consultant has done an assessment and determined that recycled water retail rates do not exceed cost of service. _l�`D Recycled Water - Wholesale • Raftelis Financial Consultant has reviewed our recycled water program and has established wholesale rate • Proposed wholesale rate of $308 /AF will be reviewed by the REEP Committee on June 5, 2015 6/4/2015 18 6/4/2015 19