Proposed Rates and Proposition 218
Customer Notification
March 7, 2017
District Mission
To manage our natural resources in a
sustainable manner and to provide our
customers with reliable, high-quality water at
a reasonable price.
Bon Tempe Reservoir
Lake Lagunitas
Mt. Tamalpais Watershed
Alignment with MMWD Strategic Plan
Strategic Goal 2:
Financial Stewardship – We will prudently
manage the public resources entrusted to us
Strategy 1:
Ensure financial planning is sufficient to address
MMWD needs and risks
Delivering Safe, Reliable Water for 100 Years
•Manage /Operate / Maintain
– 7 reservoirs / 3 treatment plants / 900 miles
of pipeline / 125 storage tanks / 95 pump
stations
–1 Water quality laboratory
– 24/7/365 operation (live dispatch center)
–21,000 acre watershed
–Environmental stewardship (fish habitat
$16M/20 years)
Long-Term Budgetary Objectives
•
Exemplary Levels of Service to Customer &
Community
•
Maintain fiscal stability
•
Making critical infrastructure investments
•
Healthy balance of PAYGO and bond funding
•
Debt coverage ratio of 1.5+
•
Operating reserves of 6 months
•
AA+ or above bond ratings
Significance of Pay Go
•
•
•
•
•
•
Healthy balance for CIP funding between
borrowing and own sources
Provides internal source for capital funding
Reduced interest payments ($8M/$13M PG)
Source of emergency funding, if needed
Results in higher Debt Coverage Ratio
Results in better credit rating
Aging Facilities
Facility
Dams
Storage Tanks
Pipelines
Potable Water
Treatment
Plants
Total Amount
In Service 50 Years
or More
7
5 (71%)
138
41 (30%)
900 miles
415 miles (46%)
San Geronimo
& Bon Tempe
100%
(treat 75% of water)
5-Year CIP (FY 18 – 22)
$45
Budget $38.4
Capital Investment ($M)
$40
Future $40.3
Total = $175 Million
Future $35.4
$35
$30
Future $31.1
Budget $29.4
$25
$20
$15
$10
$5
$0
FY 17-18
FY 18-19
Total $67.8 Million
FY 19-20
FY 20-21
FY 21-22
Total $106.8 Million
5-Year CIP (FY 18 – 22)
Total = $175 Million
Other, $5.6
Fire Flow,
$22.5
Watershed,
$21.5
Storage
Facilities,
$23.2
Treatment
Plants, $22.3
Transmission
& Distribution,
$79.5
2-Year CIP (FY 18 – 19)
Category
Two-Year CIP Total
($millions)
Transmission & Distribution
29.9
Pipe replacement (12.2)
Other replacement (17.7)
Treatment Plants
9.1
Storage Facilities
Watershed
Fireflow
Other
Total
5.7
10.2
9.0
3.9
67.8
2-Year CIP (FY 18 - 19)
Upgrade Plants ($9.1M, $62M over 18 years)
Photo of Current Project to Upgrade Filters at San Geronimo
Treatment Plant, built in 1962
2-Year CIP (FY 18 - 19)
Replace 8 miles of pipe
($12.2M)
E. Blithedale Rd Pipeline Replacement
Project, 1920s, 5,800 feet
Sir Francis Drake Pipeline Replacement
Project, 1920s, 5,300 feet
2-Year CIP (FY 18 - 19)
Replace 5 Storage
Tanks ($5.8M)
Replace Ross Reservoir (1927)
Replace Bolsa Tank (1978, shown above)
and three other redwood tanks
2-Year CIP (FY 18 - 19)
• Funding Plan ($67.8M):
Bond Funding
: $40.8
PAYGO
: 13.0
Grants/Other Revenue : 14.0
• 2-Year Rate Adjustments Will:
Generate an additional $10.1M
To be used entirely towards $13M PAYGO
Recommended rates remain $0.01/gallon
Proposed Rate Adjustments Will Also:
• Ensure progress toward PAYGO
•Year 1 - 39% PAYGO / 61% Debt Service
•Year 2 - 40% PAYGO / 60% Debt Service
• DCR of 1.5 & 3 months of operating reserves
• Meets S&P AA+ criteria
• Full funding for BIFFIP ($3.57M)
• Maintain Exceptional Levels of Service
Recommended rates remain $0.01/gallon
MMWD Cost Containment
• Employee head count 7% down (from 263 to
245)
• Filling of positions approved by the board
• Judicious filling of vacant positions without
sacrificing existing levels of service
• Optimized use of imported water purchases
• Actual operating expenses kept steady for
three years at $65M (FY 14-16)
– Secured an S&P rating upgrade from AA to AA+ in
2016
Profile of a Typical Single Family
• Average bi-monthly water use
= 12,716 gallons
• Daily water use per Household
= 212 gallons
• Daily water use per person = 53
gallons (4 person household)
For a Typical Single Family
5/8” water meter (69% of customers)
Item
Current Rate
Proposed Rates
July 2017
July 2018
Service Charge
33.85
36.79
39.41
Watershed Mgt. Fee
8.80
9.78
10.41
Commodity charge
67.32
69.19
74.12
2-month bill
109.97
115.76
123.94
1-month bill
54.99
57.88
61.97
2.90
4.09
Monthly Difference
Monthly Usage (gals)
6,358
6,358
6,358
Cost per gallon
$0.01
$0.01
$0.01
Cost remains one
per gallon
For a Typical Single Family
1” water meter (21% of customers)
Item
Current Rate
Proposed Rates
July 2017
July 2018
Service Charge
60.95
66.28
70.97
Watershed Mgt. Fee
14.00
15.50
16.49
Commodity charge
67.32
69.19
74.12
2-month bill
142.27
150.97
161.58
1-month bill
71.14
75.49
80.79
4.35
5.30
Monthly Difference
Monthly Usage (gals)
6,358
6,358
6,358
Cost per gallon
$0.01
$0.01
$0.01
Cost remains one
per gallon
MMWD Bonus: 22,000 Acres of Watershed
Special Assistance Programs
1. Service Charge Waiver for Low-Income Customers
– Waiver of all fixed charges for qualifying customers
2. Medical Disability Discount Program
– Receive additional 9 CCFs in Tier 1 based on documented
and eligible medical conditions
– Waiver of all fixed charges
Rate setting governed by state law
(Proposition 218)
• Prepare detailed cost of service analysis
(COSA):
– Revenue must be sufficient to ensure proper
operation and maintenance of utility and
preservation of utility’s financial integrity
– Amount charges shall not exceed proportional cost of
service
• Written notice of proposed charge shall be
mailed 45 days prior to public hearing
Schedule
Date
March 7th
April 11th
May 16th
June 6th
July 1st
Action
Seek Board authorization to issue Prop
218 notices
Conduct public workshop on proposed
rates (Corte Madera Community
Center)
Board consideration of new rates
Board Adoption of FY 18 and 19
Budgets
Effective date of new rates
220 Nellen Avenue
Corte Madera, CA 94925
marinwater.org
(415) 945-1455
Questions /comments?
Thank you.
Value of Water
60
$50.39
Cost per Gallon
50
40
$31.60
30
20
10
-
$0.01
MMWD
$2.94
$3.78
$4.35
Gasoline
Milk
Gatorade
$7.80
Bottled
Water
Latte
Wine