City of Petersburg
Water and Sewer Rates
April 26, 2011
Background
• Water and sewer rates were last revised in July 2007.
• In 2007, the rate structure was revised and simplified.
• Analysis of FY2011 revenue and expenses and
FY2012 budget indicates rate increase is needed.
Overview of FY 2012 - 2016 Projections
(using Current Rates)
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
WATER
Projected Operating Revenue
$ 2,737,915
Projected Operating Expense
(including debt service)
2,837,036
Net Income (Deficit)
$
% Increase in Revenue Needed to
Eliminate Deficit
(99,121)
$
$
4.2%
2,745,601 $
2,762,287 $
2,778,973 $
2,795,659
2,939,847
2,989,036
3,044,976
3,076,915
(194,246) $
(226,749)
8.2%
$
9.5%
(266,003)
$
11.1%
(281,256)
11.6%
SEWER
Projected Operating Revenue
$
4,489,628
$
4,518,581 $
4,550,285
$
4,581,988 $
4,613,692
Projected Operating Expense
(including debt service)
$
4,784,337
$
4,907,005 $
4,975,341
$
5,087,441 $
5,096,614
(294,709)
$
(388,424)
(425,056)
$
(505,453)
(482,923)
Net Income (Deficit)
% Increase in Revenue Needed to
Eliminate Deficit
$
7.0%
9.2%
$
10.0%
11.8%
$
11.2%
0
Annual Average
Monthly Average
11/1/2010
9/1/2010
7/1/2010
5/1/2010
3/1/2010
1/1/2010
11/1/2009
9/1/2009
7/1/2009
5/1/2009
3/1/2009
1/1/2009
11/1/2008
9/1/2008
7/1/2008
5/1/2008
3/1/2008
200,000,000
1/1/2008
11/1/2007
9/1/2007
7/1/2007
5/1/2007
3/1/2007
1/1/2007
11/1/2006
Water Purchases – 2006 - 2010
Water Purchased from ARWA
180,000,000
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
Factors Influencing Rate Increase
• Rates adopted in 2007
• Overall, operating costs have increased over past
four years
– Cost to purchase water, distribute water
– Cost of wastewater collection and treatment
• Operating deficits in both water and sewer operations
in FY 2011
• Proposed rates will likely need to be adjusted upward
in subsequent years
Proposed Increases for FY 2012
Water Rate Increase – 5.0%
Sewer Rate Increase - 7.25%
Proposed Increases Provide Revenues that
Cover Projected Expenses
Current and Proposed Water / Sewer Rates and Fees
(Bi-Monthly)
Current Rates and Fees
Proposed Rates and Fees
Commodity Charges
Commodity Charges
Water
($ / CCF)
Sewer
($ / CCF)
Water
($ / CCF)
Sewer
( % /CCF)
0 to 6 CCF
$0.300
$0.570
0 to 6 CCF
$0.320
$0.610
7 – 250 CCF
$1.290
$2.451
7 – 250 CCF
$1.350
$2.630
Over 250 CCF
$0.825
$1.5675
Over 250 CCF
$0.870
$1.6800
Capacity Charges
Meter Size
Residential
Non-Residential
5/8
1
1.50
2
3
4
6
8
10
12
Capacity Charges
Water
$9.00
Sewer
$17.10
$9.00
$22.50
$39.40
$72.00
$144.00
$225.00
$450.00
$900.00
$1,395.00
$1,800.00
$17.10
$42.75
$74.85
$136.80
$277.60
$427.50
$855.00
$1,710.00
$2,650.50
$3,420.00
Meter Size
Residential
Non-Residential
5/8
1
1.50
2
3
4
6
8
10
12
Water
$9.45
Sewer
$18.34
$9.45
$23.65
$41.35
$75.60
$151.20
$236.25
$472.50
$945.00
$1,464.75
$1,890.00
$18.35
$45.85
$80.30
$146.70
$297.75
$458.50
$917.00
$1,834.00
$2,842.70
$3,667.95
Impacts on Bi-Monthly Bill – Residential
Consumption
(CCF)
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Current
Water
$9.00
$9.30
$9.60
$9.90
$10.20
$10.50
$10.80
$12.09
$13.38
$14.67
$15.96
$17.25
$18.54
$19.83
$21.12
$22.41
$23.70
$24.99
$26.28
$27.57
$28.86
Total Current
Current
Bi-Monthly
Sewer
Bill
$17.10
$26.10
$17.67
$26.97
$18.24
$27.84
$18.81
$28.71
$19.38
$29.58
$19.95
$30.45
$20.52
$31.32
$22.97
$35.06
$25.42
$38.80
$27.87
$42.54
$30.32
$46.28
$32.78
$50.03
$35.23
$53.77
$37.68
$57.51
$40.13
$61.25
$42.58
$64.99
$45.03
$68.73
$47.48
$72.47
$49.93
$76.21
$52.38
$79.95
$54.83
$83.69
Total
Proposed
Proposed Proposed BiWater
Sewer
Monthly Bill $ Increase % Increase
$9.45
$18.34
$27.79
$1.69
6.47%
$9.77
$18.95
$28.72
$1.75
6.49%
$10.09
$19.56
$29.65
$1.81
6.50%
$10.41
$20.17
$30.58
$1.87
6.51%
$10.73
$20.78
$31.51
$1.93
6.52%
$11.05
$21.39
$32.44
$1.99
6.53%
$11.37
$22.00
$33.37
$2.05
6.54%
$12.72
$24.63
$37.35
$2.29
6.53%
$14.07
$27.26
$41.33
$2.53
6.51%
$15.42
$29.89
$45.31
$2.77
6.50%
$16.77
$32.52
$49.29
$3.01
6.49%
$18.12
$35.15
$53.27
$3.24
6.49%
$19.47
$37.78
$57.25
$3.48
6.48%
$20.82
$40.41
$61.23
$3.72
6.47%
$22.17
$43.04
$65.21
$3.96
6.47%
$23.52
$45.67
$69.19
$4.20
6.46%
$24.87
$48.30
$73.17
$4.44
6.46%
$26.22
$50.93
$77.15
$4.68
6.46%
$27.57
$53.56
$81.13
$4.92
6.45%
$28.92
$56.19
$85.11
$5.16
6.45%
$30.27
$58.82
$89.09
$5.40
6.45%
Comparison to Neighbors
Bi-Monthly Water and Sewer Charges - Residential Users
Based on Consumption of 12 CCF over 2 months
Locality
Water Charge Sewer Charge
Total
Petersburg - Existing Rates
$
18.54
$
35.23
$
53.77
Petersburg - Proposed Rates
$
19.47
$
37.78
$
57.25
Chesterfield County
$
30.52
$
43.64
$
74.16
Chesterfield County - Proposed
$
32.02
$
45.52
$
77.53
Henrico County
$
38.62
$
50.70
$
89.32
City of Richmond
$
55.50
$
83.69
$
139.19
City of Richmond - Proposed
$
56.74
$
87.34
$
144.08
Prince George
$
39.90
$
55.95
$
95.86
Colonial Heights
$
19.31
$
44.52
$
63.83
Average in Virginia
$
49.57
$
60.12
$
109.69
12 ccf = 8,976 US Gallons
Future Increases
• Incremental increases will likely be needed over next
5 years
• Consider frequent, but small, rate adjustments
• Improvements to wastewater treatment plant will
impact sewer budget in next few years – exact impact
not known
• Assumption is that connection fees will generate
revenue for much of CIP
Summary Comments
• Proposed increases are moderate
• All customers receive the same % increase
• Proposed rates are very reasonable when
compared to neighbors’ rates
• Very reasonable compared to rates in other
areas of Virginia