water and sewer
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Water and Sewer Water and Sewer
City Council MeetingCity Council Meeting
July 18, 2011July 18, 2011
2011/2012 Budget with increase2011/2012 Budget with increase
City of BrisbaneCity of BrisbaneCity Council MeetingCity Council Meeting
July 2011July 2011
Today’s Goals:Today’s Goals:
Protest Meeting regarding Protest Meeting regarding Increase for Water and SewerIncrease for Water and Sewer
Water and Sewer Program
1) Provide a safe and secure water system for personal use and fire protection and an environmentally-friendly wastewater disposal system at a fair rate.
2) Ensure coverage of bond rate covenants.
2011/2012 Water & Sewer Budget
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
4,300,000
4,400,000
4,500,000
4,600,000
Expenditures Revenues
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
4,300,000
4,400,000
4,500,000
4,600,000
Expenditures Revenues
HistoryHistory
2000 – City Engaged Consultant to 2000 – City Engaged Consultant to Review Rate Structure and Infrastructure, Review Rate Structure and Infrastructure, Consultant began public review processConsultant began public review process
2001- Consultant continued public review 2001- Consultant continued public review process, Council had 5 meetings for public process, Council had 5 meetings for public hearings, reviewed and adopted ordinancehearings, reviewed and adopted ordinance
FCS Group’s Rate RecommendationFCS Group’s Rate Recommendation 200% - 300% to cover on-going maintenance 200% - 300% to cover on-going maintenance
and capitaland capital
History (cont.)History (cont.)
2002 – Council reviews the rate ordinance, 2002 – Council reviews the rate ordinance, holds meetings concerning criteria for holds meetings concerning criteria for master plans and awards contractsmaster plans and awards contracts
2003 – Council reviews water and Sewer 2003 – Council reviews water and Sewer Master plans as well as set date for Master plans as well as set date for workshop in 2004workshop in 2004
2004 – Council reviewed master plans. 2004 – Council reviewed master plans.
History (cont’d)History (cont’d)
FY 09-10 projected only a cost of living FY 09-10 projected only a cost of living increase in water and sewer rates. Given increase in water and sewer rates. Given that the prior year was a 17% increase, it that the prior year was a 17% increase, it was decided to leave the rates alone.was decided to leave the rates alone.
FY 10-11 staff recommended a 3% FY 10-11 staff recommended a 3% increase which the sub-committee sent to increase which the sub-committee sent to the council. Because of the economic the council. Because of the economic climate, the full council declined to raise climate, the full council declined to raise rates.rates.
Rate increase since 2001/02Rate increase since 2001/02Water Sewer
FY 01-02 18% 18%FY 02-03 20% 20%FY 03-04 6% 6%FY 04-05 45% 45%FY 05-06 3% 0%FY 06-07 3% 6%FY 07-08 6% 1%FY 08-09 17% 17%FY 09-10 0% 0%FY 10-11 0% 0%Cumulative Total 186% 173%
Proposed FY 11/12 24.9% 4%
Enterprise FundsEnterprise Funds
Definition: A fund that provides goods or Definition: A fund that provides goods or services to the public for a fee that makes services to the public for a fee that makes the entity self-supporting. It basically follows the entity self-supporting. It basically follows Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP), as does a commercial enterprise. (GAAP), as does a commercial enterprise. An example is a government-owned utility.An example is a government-owned utility.
What’s behind the Cost?What’s behind the Cost?
SFPUCSFPUC InfrastructureInfrastructure DepreciationDepreciation Indirect CostsIndirect Costs Community demands/expectationsCommunity demands/expectations
The water journeyThe water journey
Water InfrastructureWater Infrastructure
PipesPipes Check ValvesCheck Valves Pressure Reducing ValvesPressure Reducing Valves Water MainsWater Mains Water TanksWater Tanks Pump StationsPump Stations MetersMeters Cost of Water Capital Assets $15,500,000Cost of Water Capital Assets $15,500,000
SFPUC RatesSFPUC Rates
January 13, 2011 January 13, 2011 expect a 31.0% expect a 31.0% increaseincrease
April 13, 2011 expect a April 13, 2011 expect a 47.4% increase47.4% increase
May 10, 2011 authority May 10, 2011 authority to raise rates by 38.4% to raise rates by 38.4% effective July 1, 2011effective July 1, 2011
Every water agency Every water agency served by SFPUC served by SFPUC has the same has the same increase.increase.
Cost of retrofitting Cost of retrofitting Hetch Hetchy pipelineHetch Hetchy pipeline
Conservation led to Conservation led to the increase!the increase!
Sewer InfrastructureSewer Infrastructure PipesPipes Lift StationsLift Stations Sewer MainsSewer Mains Force MainsForce Mains Manhole coversManhole covers Cost of Sewer Capital Assets $5,400,000Cost of Sewer Capital Assets $5,400,000
Other Capital AssetsOther Capital Assets
VehiclesVehicles Sewer Monitoring cameraSewer Monitoring camera Fire HydrantsFire Hydrants
DepreciationDepreciation
The historic cost of the asset The historic cost of the asset (infrastructure) divided by the life (infrastructure) divided by the life expectancy of the asset.expectancy of the asset.
Our water and sewer system has a life Our water and sewer system has a life expectancy of 65 years.expectancy of 65 years.
Current annual depreciation: $632,416.Current annual depreciation: $632,416. Unfunded accumulated depreciation Unfunded accumulated depreciation
through June 2010: $11,681,421.through June 2010: $11,681,421.
Capital Improvements SummaryCapital Improvements SummaryWater Sewer
CIP Expenditures 2002 - present $4,151,395 $4,421,695
Unfunded CIPs 12,773,000 8,516,200
CIPs to be Developer Funded 4,206,720 392,000
Total 21,131,115 13,329,895
Completed Water Capital ProjectsCompleted Water Capital ProjectsCIP Name Year
ClosedTotal Expensed Funding Source
Chloraminated Water Mixing System
2003/4 $390,306 Connection fees
Water System Circulation 112,772 Connection fees
Glen Parkway Fire Main & PRV
2006/7 399,524 Connection fees
Lake Street Booster Pump Station Replacement
2005/6 896,294 Bond issue
Glen Park Tank Construction & Upgrade
2007/8 1,747,422 Bond Issue458,000 Grant
Seismic Upgrades to Pump Stations & Tanks
2004/5 9,161 Connection fees
Crystal Springs Aqueduct Flow Control Vault Stns
In progress Federal grantRates
Seismic Upgrades to Water Storage Tanks
2009/10 595,916 Connection FeesRates
Unfunded Water CIPUnfunded Water CIPCIP Name 2003 Master Plan
Priority Ranking2003 Cost Estimate
Fire Main Improvements & Annis PRV 2 $1,710,240
Glen Park Pump Station Upgrade 2 1,758,400
Seismic Upgrades – Studies/plans 2 78,400
SCADA System Replacement 2 336,800
2013 Water Master Plan 2 145,000
North Hill Pump Station Upgrade 3 616,000
Water Main Replacement – Headloss Reduction
3 776,160
Crocker Tank Replacement 3 1,792,000
Pipeline Replacement – Beyond Design Life 3 5,000,000
Golden Aster Pump Station Addition 3 560,000
Potential Developer Funded Water CIPPotential Developer Funded Water CIP
CIP Name 2003 Water Master Plan Priority
Ranking
2003 Cost Estimate
Water Main Installation – Aqueduct Zone
4 $1,462,720
Storage Tank Installation – Aqueduct Zone
4 2,744,000
Completed Sewer Capital ProjectsCompleted Sewer Capital Projects
CIP Name Year Closed Total Expensed Funding Source
Valley Drive Lift Station
2004/5 $2,792,300 Bond IssueRedevelopment
Standby Generator
2003/4 39,200 Connection fees
Sewer Replacement
2004/5 1,152,804 Connection feesFederal Grant
Glen Parkway pipes
2007/8 264,931 Connection feesFederal Grant
Addition to Public Sewer (Kings Rd)
2005/6 111,109 Rates
Bayshore South Sewer (DESIGN ONLY)
61,351 Connection fees
Unfunded Sewer CIPUnfunded Sewer CIPCIP Name 2003 Master Plan
Priority Ranking2003 Cost Estimate
2013 Sewer Master Plan 2 $262,000
Bayshore South Sewer – CONSTRUCTION ONLY
3 257,600
Television Inspection & Evaluation 3 472,000
North Hill Pump Station Upgrade 3 616,000
Pipeline Replacement – Beyond Design Life 3 5,000,000
Bayshore Blvd North 4 1,713,600
Terminal Sewer Replacement 45,000
Trinity Sewer Replacement 150,000
Potential Developer Funded Sewer Potential Developer Funded Sewer CIPCIP
CIP Transferred to Private CIP Transferred to Private Property OwnersProperty Owners
CIP Name 2003 Sewer Master Plan Priority Ranking
2003 Cost Estimate
Sierra Point Lift Station Improvement (LS#4)
3 $392,000
CIP Name 2003 Sewer Master Plan Priority Ranking
2003 Cost Estimate
Hitachi Lift Station Abandonment (LS #3)
3 $112,000
Indirect CostsIndirect Costs
Services from:Services from: City CouncilCity Council City ManagerCity Manager City ClerkCity Clerk FinanceFinance Human ResourcesHuman Resources City AttorneyCity Attorney Building and Grounds Building and Grounds
Based on ratio of budgetBased on ratio of budget
Community ExpectationsCommunity Expectations
Assistance with high water bills & tracking Assistance with high water bills & tracking the source of any leaksthe source of any leaks
Due date notification on sign boardsDue date notification on sign boards Hand delivered late noticesHand delivered late notices Special envelopes for late noticesSpecial envelopes for late notices Low income assistance (LIRA)Low income assistance (LIRA)
Components of the Utility BillComponents of the Utility Bill
Service Readiness charge for waterService Readiness charge for water Water usageWater usage Service Readiness charge for sewerService Readiness charge for sewer Sewer processing charge Sewer processing charge
based on water usage based on water usage winter average for residentswinter average for residents
Water Readiness Costs ChargeWater Readiness Costs Charge
Certain costs are constant. The fewer the Certain costs are constant. The fewer the number of customers, the higher that number of customers, the higher that price.price.
Each customer class must pay for itself.Each customer class must pay for itself. Often referred to as Pipelines and People.Often referred to as Pipelines and People.
I cut back on my water!I cut back on my water!
Conservation efforts mean less revenueConservation efforts mean less revenue
Less revenue means higher rates needed Less revenue means higher rates needed to cover fixed costs.to cover fixed costs.
Other considerationsOther considerations
Have Cal-Water take overHave Cal-Water take over Rates set by California Public Utilities Rates set by California Public Utilities
CommissionCommission Earns a modest return on the funds it invests in Earns a modest return on the funds it invests in
infrastructureinfrastructure Major costs to operate a water system include Major costs to operate a water system include
purchased electric power, purchased water, purchased electric power, purchased water, treatment costs, groundwater pumping fees, treatment costs, groundwater pumping fees, labor and chemicalslabor and chemicals
Shared service with neighboring citiesShared service with neighboring cities
Reduced Rate ContractsReduced Rate Contracts
GVMID $0.125 per unit up to 12,000 units GVMID $0.125 per unit up to 12,000 units a month (Turnout #2). Maxed out in a month (Turnout #2). Maxed out in summer, managed in winter for best summer, managed in winter for best possible results.possible results.
Turnout #3 also a reduced rate and always Turnout #3 also a reduced rate and always maxed out. Same reduce rate, variable maxed out. Same reduce rate, variable cap depending on month.cap depending on month.
Reduced rates are included in our Reduced rates are included in our projected water costs.projected water costs.
Bond CovenantsBond Covenants
2002 Bond for $4,450,000 used for 2002 Bond for $4,450,000 used for financing capital improvement projectsfinancing capital improvement projects
Debt service paid by water and sewer Debt service paid by water and sewer ratesrates
Rate covenant – produce sufficient Gross Rate covenant – produce sufficient Gross Revenues that net revenue is at least 1.25 Revenues that net revenue is at least 1.25 times the installment payment coming due.times the installment payment coming due.
Bond Covenants (cont’d)Bond Covenants (cont’d)
If insufficient, must notify the Trustee and If insufficient, must notify the Trustee and employ an independent consultant to employ an independent consultant to make recommendations to produce the make recommendations to produce the required revenuesrequired revenues
Required to implement recommendationsRequired to implement recommendations
Our neighbors’ ratesOur neighbors’ rates
Agency Water Readiness
Usage Rate Water Sewer Readiness
Usage Rate Sewer
Westborough Water District
12.70 3.32 5.73 min. of 12 units yr on tax bill
CWS-SSF 20.32 3.1679 - 7 units3.5457 -124.3853 – over 12
88.67 532.00 annual on tax bill
CWS-Mid Peninsula 20.32 3.1679-7 units3.5457-12 units4.3853-over 12
93.64 561.84 annual on tax bill
Brisbane 21.59 4.94-3units6.67-8 units8.28-16 units10.52-over 16
64.36 2.63-8 units7.16 over 8Based on winter average
Daly City 23.28 0-6 free4.39 7-104.49 11-144.60 15-204.69 21-504.80 51-704.91 71-100
4.82 per unit based on water on tax bill
Millbrae 24.80 4.53 83.40 4.91 based on winter average
San Bruno 25.44 4.29 0-186.50 over 18
33.32 5.72 based on winter usage
Burlingame 62.20 5.08 8.06 based on winter average; converted from gallons
Agency Water Readiness
Usage Rate Water Sewer Readiness
Usage Rate Sewer
San Francisco 14.00 3.50 0-64.60 over 6
? 7.16 per unit
5/8 inch meters 2002-2003
2003-2004
2004-2005-1
2004-2005-2
2004-2005-3
2005-2006
2007-2008
2008-2009
Proposed 2011-2012
Residential Base
10.26
10.88
12.51
14.39
15.83
16.27
17.25
20.18 21.59 Residential 10
units
31.81
33.74
38.80
44.63
49.09
50.47
53.50
62.59 78.13 Residential Max
(over 16 ccf)
3.98
4.21
4.84
5.56
6.11
6.28
6.66
7.79 10.52
Commercial Base
15.88
16.83
19.35
22.26
24.48
25.17
26.68
31.21 33.40 Commercial Max
(over 16 ccf)
3.98
4.21
4.84
5.56
6.11
6.28
6.66
7.79 10.52
Irrigation Base
15.88
16.83
19.35
22.26
24.48
25.17
26.68
31.21 33.40 Irrigation Max
(over 16 ccf)
4.75
5.03
5.78
6.64
7.30
7.50
7.95
9.30 12.56
Water Rates HistoryWater Rates History
Sewer Rate HistorySewer Rate History
Sewer 2002-2003
2003-2004
2004-2005-1
2004-2005-2
2004-2005-3
2005-2006
2007-2008
2008-2009
Proposed 2011-2012
Residential Base
32.10
34.02 39.12
44.99
49.49
52.36
52.88
61.88 64.36
Residential Max (over 20 ccf)
3.56
3.78
4.35
5.00
5.50
5.82
5.88
6.88 7.16
Commercial Base Standard
32.10
34.02
39.12
44.99
49.49
52.36
52.88
61.88 64.36
Commercial Max (over 20 ccf)
3.56
3.78
4.35
5.00
5.50
5.82
5.88
6.88 7.16
Increase from S.F. PUCIncrease from S.F. PUC
Increase in water purchase will be 41.2% Increase in water purchase will be 41.2% from S.F. PUC.from S.F. PUC.
Increase in waste water processing will be Increase in waste water processing will be 5%5%
SFPUC’S Wholesale Water Rate SFPUC’S Wholesale Water Rate Proposal Changed Over TimeProposal Changed Over Time
1.1. February—the SFPUC proposed changing the rate February—the SFPUC proposed changing the rate structurestructure – – That proposal was droppedThat proposal was dropped
2. February—SFPUC states historical rate structure would require wholesale rate increase between 42 to 60%
3. April—SFPUC proposed a 47.4% rate increase to $2.80 per Ccf, increased mid-year if sales drop below 130 mgd
4. May—SFPUC proposed a 38.4% rate increase to $2.63 per Ccf, increase mid-year if sales drop below 135 mgd-- This proposal was adopted
BAWSCABAWSCA
Raising rates this yearRaising rates this year
Increase from SFPUC is for water usageIncrease from SFPUC is for water usage Need to capture the 15.2% from prior yearNeed to capture the 15.2% from prior year
Sewer increase of 5% for next yearSewer increase of 5% for next year Need to capture 6% from prior yearNeed to capture 6% from prior year
Raising rates this year (cont’d)Raising rates this year (cont’d)
Increase water readiness charge 7%Increase water readiness charge 7%
Increase water usage rates by 35%Increase water usage rates by 35%
Increase sewer by 4%Increase sewer by 4%
How the Costs Stack UpHow the Costs Stack Up
WaterProposed Current Proposed Current
Bimonthly 5/8" 5/8" 3/4" 3/4"Usage (ccf) Meter Meter Meter Meter
0 21.59 20.18 21.59 20.181 21.59 20.18 26.53 23.842 22.86 21.70 31.47 27.483 28.22 25.67 36.41 31.144 34.89 30.61 43.08 36.085 41.56 35.53 49.75 41.016 48.23 40.47 56.42 45.947 54.90 45.40 63.09 50.878 61.57 50.34 69.76 55.819 69.85 56.47 78.04 61.94
10 78.13 62.59 86.32 68.0611 86.41 68.72 94.60 74.1912 94.69 74.85 102.88 80.3213 102.97 80.97 111.16 86.4414 111.25 87.10 119.44 92.5815 119.53 93.23 127.72 98.7116 127.81 99.36 136.00 104.83
17 or more 127.81 99.36 136.00 104.83 plus 10.52 7.79 10.52 7.79
per unit over 16
Residential Sewer
Bimonthly Proposed CurrentFlow (ccf)
0 64.36 61.881 66.99 64.412 69.62 66.933 72.25 69.464 74.88 71.995 77.51 74.526 80.14 77.057 82.77 79.578 85.40 82.109 92.56 88.98
10 99.72 95.8611 106.88 102.7312 114.04 109.6113 121.20 116.4814 128.36 123.3615 135.52 130.2316 142.68 137.1117 149.84 143.9818 157.00 150.8619 164.16 157.7320 171.32 164.61
21 or more 171.32 164.61 plus 7.16 6.88
per unit over 20
FY 2011/2012 FY 2011/2012
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
4,300,000
4,400,000
4,500,000
4,600,000
Expenditures Revenues
$410,112
FY 2011/2012 w/ increaseFY 2011/2012 w/ increase
3,800,000
3,900,000
4,000,000
4,100,000
4,200,000
4,300,000
4,400,000
4,500,000
4,600,000
Expenditures Revenues
$111,870
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