Municipal & Financial Services Group Village of Downers Grove Water Rate Study Rate Study Overview...

Municipal & Financial Services Group

Village of Downers GroveVillage of Downers GroveWater Rate StudyWater Rate Study

Rate Study Overview and RecommendationsRate Study Overview and Recommendations

September 21, 2010

Presented by:David Hyder


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AgendaAgenda

Rate Requirements Overview

Rate Structure Alternatives Overview

Recommendations


Rate Requirements OverviewRate Requirements Overview

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Contributions to Reserves

Outstanding Debt(Annual Principal and Interest Payments)

Planned Capital Improvement Projects

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Total Annual Revenue RequirementsTotal Annual Revenue Requirements

Operating and Maintenance Expenses(Day to Day Operations)

Annual

Revenue Requirement


Projected Cash Flow with Current RatesProjected Cash Flow with Current Rates

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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

2010 2011 2012 2013 2014 2015

Net Revenue Requirements Total Revenues under Current Rates


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Rate Requirements - Current Rate Rate Requirements - Current Rate Structure Structure

2010 Current

Rates2011 2012 2013 2014 2015

Inside Village – Rate per CCF* $3.31 $3.77 $4.30 $4.90 $5.39 $5.88

Outside Village – Rate per CCF* $3.85 $4.39 $5.00 $5.70 $6.27 $6.84

Required Rate Increase 14.0% 14.0% 14.0% 10.0% 9.0%

* Current Minimum Bill of 2 CCF


Rate Structure Alternative OverviewRate Structure Alternative Overview

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Water Rate Structure Alternatives

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• Alternative A - Current Rate Structure with Updated Costs

• Alternative B - Fixed Charge Based on Meter Size with Unit Rate Volume Charge

• Alternative C - Fixed Charge Based on Meter Size with Multiple Class Inclining Block Rates

*Each Alternative Produces the Same Amount of RevenueWater Increases will produce 14% more revenue for each alternative


RecommendationsRecommendations

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Water Rate Recommendation

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• Alternative B rate structure is recommended for implementation in 2011

• Alternative B will accomplish the following objectives:

Generate a 14% increase in revenues.

Increase revenue stability within the Water Fund.

Impose the fixed charge based on meter size resulting in greater equity among users of the system.

Minimizes the impact on most customer due to limited change in structure (compared to Alternative C)


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Recommended Water RatesRecommended Water Rates

Bi-Monthly Fixed Charge per Meter Size

2011 2012 2013

5/8” $8.25 $9.31 $10.50

1” $12.40 $13.96 $15.75

1 ½” $41.25 $46.53 $52.52

2” $66.00 $74.45 $84.02

3” $123.70 $139.59 $157.55

4” $206.15 $232.66 $262.58

6” $412.30 $465.31 $525.15

10” $989.50 $1,116.75 $1,260.36

Bi-Monthly Volume Charge (per CCF) 2011 2012 2013

Inside Village $3.30 $3.73 $4.25

Outside Village $3.80 $4.34 $4.95

% of Total Revenue from Fixed Charge 14% 14% 14%


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Alternative B Phase In Alternative B Phase In

Bi-Monthly Fixed Charge per Meter Size

2011 2012 2013

5/8” $5.65 $7.71 $10.50

1” $8.47 $11.57 $15.75

1 ½” $28.23 $38.57 $52.52

2” $45.18 $61.72 $84.02

3” $84.70 $115.72 $157.55

4” $141.17 $192.87 $262.58

6” $282.35 $385.74 $525.15

10” $677.63 $925.78 $1,260.36

Bi-Monthly Volume Charge (per CCF) 2011 2012 2013

Inside Village $3.50 $3.85 $4.25

Outside Village $4.00 $4.45 $4.95

% of Total Revenue from Fixed Charge 9.5% 11.5% 14%


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Residential Sample Bi-Monthly BillResidential Sample Bi-Monthly Bill5/8” Meter - 5 CCF (Small User)5/8” Meter - 5 CCF (Small User)

$17

$25 $23

$-

$5

$10

$15

$20

$25

$30

Current Bill Alternative B 2011 Alternative B Phased 2011


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Residential Sample Bi-Monthly BillResidential Sample Bi-Monthly Bill5/8” Meter - 15 CCF (Average User)5/8” Meter - 15 CCF (Average User)

$50

$58 $58

$44

$46

$48

$50

$52

$54

$56

$58

$60



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Residential Sample Bi-Monthly BillResidential Sample Bi-Monthly Bill5/8” Meter - 40 CCF (High User)5/8” Meter - 40 CCF (High User)

$132

$140

$146

$125

$130

$135

$140

$145

$150



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Commercial Sample Bi-Monthly BillCommercial Sample Bi-Monthly Bill1 ½” Meter - 100 CCF (Average User)1 ½” Meter - 100 CCF (Average User)

$331

$371 $378

$300

$310

$320

$330

$340

$350

$360

$370

$380

$390



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Industrial / School Sample Bi-Monthly Industrial / School Sample Bi-Monthly BillBill

2” Meter - 200 CCF (Average User)2” Meter - 200 CCF (Average User)

$662

$726

$745

$620

$640

$660

$680

$700

$720

$740

$760



Recommended Tap Fees

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• Fees imposed to recover the cost of labor and materials incurred while taping the water main for a new connection.

• Tap fees should be increased annually due to inflation.

Line Size Current - Tap Fee 2011 - Tap Fee

1" $200 $230

1 1/2" $250 $370

2" $325 $425

Over 2" $400 $590


Recommended Meter Charges

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• Charges imposed on new customers to recover cost of meter and meter installation.

• Meter charges should be increased annually due to inflation.

Meter Size Current - Meter Charge 2011 - Meter Charge

5/8” or 3/4" $250 $260

1" $325 $370

1 1/2" $400 $1,500

2" $500 $1,780

3” - $2,940

4” - $3,900

6” - $6,240


Recommended Capacity Fees

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• Fees imposed on new customers to recover capital cost of providing system capacity.

• We recommend that capacity fees for 4” lines and larger be evaluated on a case by case basis.

LineCurrent Proposed

Connection Fee Capacity Fee Total Capacity Fee

1" $1,900 $600 $2,500 $2,100

1 1/4" $- $- $- $2,300

1 1/2" $2,200 $600 $2,800 $5,200

2" $2,400 $600 $3,000 $10,300

4" $2,900 $600 $3,500 $16,500

6" $6,500 $600 $7,100 $31,000

8" $11,800 $600 $12,400 $51,600

10" $18,300 $600 $18,900 $103,200

12" $26,300 $600 $26,900 $247,600


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Next StepsNext Steps

Final Report and Vote on Rate Change - October

Municipal & Financial Services Group Village of Downers Grove Water Rate Study Rate Study Overview...

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