Rate Study Overview and Update

Study Area OverviewStaff Name, Department (DEPT ACRONYM)

2019-20 Arlington CountyWater and Wastewater Utility Rate Study

March 5, 2020

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Presentation Overview1. Arlington’s Current Rate Structure2. Rate Study Overview and Status3. Questions and Answers

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Arlington’s Current Rate Structure

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Some Basic Definitions

Rate Structure Rate

A rate structure concerns how customers are charged for

services.

The rate is what amount of money is charged.

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Current Water-Sewer Rate Structure

• Current rate structure –– Bill based solely on 100% water consumption (in

Thousand Gallons (TG))– Always been Arlington County’s rate structure

• 2004 Rate Study– Proposed Changes –

• Base fee plus consumption - stabilize revenue to better reflect actual cost categories

• Irrigation rate - higher water rate & lower sewer rate for peak summer irrigating

– Based on public feedback, County Manager rejected proposed changes and remained with the current rate structure

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Rate Study Overview and Status

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Rate Study Goals and Scope

• Study will help Arlington County identify rate and fee structures aligned with the County’s financial objectives and the community’s values

• Study involves – financial planning and modeling – cost of service analysis– review of the rate structure

• Periodic rate studies (every 5-7 years) are considered industry "best practice"– Arlington's last rate study was completed in 2004

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Rate Setting Process

STEP 1: IDENTIFY FINANCIAL OBJECTIVES & CORE VALUES

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How Values Inform a Rate Structure

• Core Values included in all rate structures proposed:

– Revenue Sufficiency– Administratively Viable– Legally Defensible

• Inclusion and prioritization of Community's values affect rate structure

Equity Across Customer Categories

Rate Stability & Minimize Impacts

Simple to Understand &

Implement

Affordability

Conservation

Economic Development

Revenue Stability

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Rate Study Community Advisory Group (RSCAG)• Represent identified

Stakeholder interests and concerns

• Provide feedback and perspective on the Study

• Liaise between community groups and the County project team

• Encourage participation and communication through project engagement opportunities (e.g., pop-ups and community workshops)

Public Engagement

Multi-family Family Residential

Fiscal MattersEnvironmental

Vulnerable Populations(Low-Moderate Incomes, Seniors)

Development Community Large and Small

Businesses

Property Management

Single Family Residential

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Early Engagement Events• Kick-Off Event: Latino American Festival (10/4)• Community Progress Network (10/17)• Pop-ups: Immunization Clinics - DHS (10/22,11/5)• Arlington Premiere (12/4)

Community Values (Online Engagement Initiative)• Launched – December 16, 2019, Closed – January 17, 2020• Channels of Promotion - GovDelivery, NextDoor, Social Media, Website,

Inside Arlington, ArlNow• Feedback collected Simplicity, Conservation, Economic Development,

Affordability, Equity Across Customer Categories, Revenue Stability (Fixed Charges)

• Conservation - 82% of those who completed the conservation questionnaire agreed (strongly agree and agree) that conservation should be a top consideration in the rate setting process

Public Engagement

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RSCAG Prioritization and Facilitated Discussion• Meeting #3 – January 14, 2020• Not a voting exercise• Conservation and Affordability were

the most highly prioritized values

Future Engagement Events• Water and Wastewater Open House

(Community Forum)• Online Engagement Initiative on

proposed rate alternative

Public Engagement

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Timeframe Project Milestone/Deliverable Engagement

Q2:2019(Apr-Jun)

Project Initiation

Q3:2019(Jul-Sep)

Financial Review and Cost of Service Analysis

Q4:2019(Oct-Dec)

Pop-up events and round-table forum, RSCAG Meetings 1 (10/21) & 2 (11/14)

Values Feedback from Community Online Engagement Initiative: “How Should Arlington County Charge for Water and Wastewater Services?” (12/16-1/17)

Q1:2020(Jan-Mar)

Values Prioritization and Discussion RSCAG Meeting #3 (1/14)

Development of Alternative Rate Structures

RSCAG Meeting #4 (3/9)

Q2:2020(Apr-Jun)

Development of Alternative Rate Structures

RSCAG Meeting #5, Community Open House, Online Engagement Initiative, Pop-ups, Briefings

Q3:2020(Jul-Sep)

Recommendation Development and Reporting

RSCAG Meeting #6, Pop-ups, Briefings

Q4:2020(Oct-Dec)

Q1:2021(Jan-Mar)

Presentation to Arlington County Board

Project Timeline & Engagement

Q & Awater.arlingtonva.us/water-and-wastewater-utility-rate-study/

For more project information visit:

Stay engaged at:

https://engage.arlingtonva.us/