Proposals to Change Water and
Sewer Rates & Rate Structure
Presented to:
Avon Lake Board of Municipal Utilities
Presented by:
Todd Danielson
December 23, 2010
Outline
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Current Rates and Structure
Current Revenues and Expenses
Additional CIP Needs
Water Structure & Rate Changes
Sewer Rate Changes
Anticipated Additional Revenues
Average Bills
2
Current Rates and Structure
• 5 Tier Declining Block Water Rate, last
changed 1/1/08
– Tier 1
– Tier 2
– Tier 3
– Tier 4
– Tier 5
First 20,000 gal
Next 30,000 gal
Next 200,000 gal
Next 250,000 gal
Over 500,000 gal
$1.19 / 1,000 gal
$1.10 / 1,000 gal
$1.02 / 1,000 gal
$0.93 / 1,000 gal
$0.84 / 1,000 gal
• Sewer Rate, last changed 4/1/08
– $8.25 /qtr + $2.18 / 1,000 gal
3
Current Annual Revenues and Costs
• Water
2010 Antic.
2009
2008
Average
Costs
$7,600,000
$8,300,000
$7,400,000
$7,750,000
Revenues
$7,800,000
$7,600,000
$7,800,000
$7,750,000
$1,000,000
Add’nl CIP
• Wastewater
2010 Antic.
2009
2008
Average
Costs
$3,100,000
$3,600,000
$4,000,000
$3,600,000
Revenues
$3,500,000
$3,300,000
$3,700,000
$3,500,000
Add’nl CIP
$2,500,000
4
Additional CIP Needs
• Water
– WTP Sludge Treatment Improvements (~$3M)
– WTP Capacity Improvements (~$2.5M)
– Main Replacements (~$6M in 5 yrs)
– Water Tank(s) (~$2.5M)
• Wastewater
– WPCC Upgrades (~$12M)
– Sewer Rehabilitations (~$2M)
– Combined Sewer Separations (~$15M in 8 yrs)
5
Water Structure & Rate Changes
• Collapse existing 5 tier system to 3 tier system
and phase in rate changes
• Phase I – tier collapse & initial change 7/1/11
– Tier 1: First 50,000 gal
– Tier 2: Next 200,000 gal
– Tier 3: Over 250,000 gal
$1.37 / 1,000 gal
$1.15 / 1,000 gal
$0.95 / 1,000 gal
• Tier 1 – Recovers all expenses
• Tier 2 – Recovers all, except 10% of salaries & benes
• Tier 3 – Recovers all, except 20% of salaries & benes
6
Water Structure & Rate Changes –
cont’d
• Phase II – rate change
7/1/12
– Tier 1: First 50,000 gal
$1.55 / 1,000 gal
– Tier 2: Next 200,000 gal $1.28 / 1,000 gal
– Tier 3: Over 250,000 gal $1.06 / 1,000 gal
7
Sewer Rate Changes
• Phase I
7/1/11
– Administrative fee $8.25 / bill
– Rate
$2.51 / 1,000 gal
• Phase II
7/1/12
– Administrative fee $ 8.25 / bill
– Rate
$2.84 / 1,000 gal
• Phase III
7/1/13
– Administrative fee $ 8.25 / bill
– Rate
$3.17 / 1,000 gal
8
Anticipated Additional Revenue
(over current revenue)
Water
Sewer
Year 1
$435,000
$340,000
Year 2
$1,325,000
$680,000
Year 3
$1,325,000
$1,025,000
9
Average Annual Water Bills
Current
Phase I
Increase
Phase II
Increase
Residential
$
96.72
$
111.34
$
14.62
$
125.83
$
14.49
Commercial
$
222.18
$
267.38
$
45.19
$
302.18
$
34.80
Industrial
$
473.71
$
551.20
$
77.49
$
617.89
$
66.69
Ind - Monthly
$ 13,648.86
$ 15,163.89
$ 1,515.03
$ 16,916.52
$ 1,752.63
Bulk Contracts
$ 578,612.94
$ 653,838.32
$ 75,225.37
$ 729,301.29
$ 75,462.97
Schools
$
482.17
$
560.73
$
78.56
$
628.49
$
67.76
Apartments
$
1,774.13
$
1,938.81
$
164.67
$
2,163.42
$
224.61
Apts - Monthly
$
1,166.83
$
1,367.24
$
200.41
$
1,535.26
$
168.01
Condos
$
176.33
$
210.35
$
34.02
$
237.73
$
27.38
Condos - Monthly
$
802.64
$
957.15
$
154.51
$
1,079.26
$
122.11
City
$
4,305.84
$
4,867.62
$
561.78
$
5,429.40
$
561.78
10
Average Annual Sewer Bills
Current
Phase I
Increase
Phase II
Increase
Phase III
Increase
Residential
$
174.84 $
196.35 $
21.51 $
217.86 $
21.51 $
239.37 $
21.51
Commercial
$
492.13 $
561.75 $
69.62 $
631.37 $
69.62 $
700.99 $
69.62
Industrial
$
1,757.04 $
2,018.46 $
261.42 $
2,279.89 $
261.42 $
2,541.31 $
261.42
Ind - Monthly
$ 75,350.86 $ 86,761.57 $ 11,410.71 $ 98,172.28 $ 11,410.71 $ 109,582.99 $ 11,410.71
Bulk Contracts
$ 76,614.95 $ 88,217.34 $ 11,602.39 $ 99,819.73 $ 11,602.39 $ 111,422.12 $ 11,602.39
Schools
$
1,016.03 $
1,165.10 $
149.06 $
1,314.16 $
149.06 $
1,463.22 $
149.06
Apartments
$
4,560.69 $
5,247.24 $
686.55 $
5,933.79 $
686.55 $
6,620.34 $
686.55
Apts - Monthly
$
2,564.92 $
2,938.84 $
373.92 $
3,312.76 $
373.92 $
3,686.68 $
373.92
Condos
Condos Monthly
$
349.11 $
397.05 $
47.93 $
444.98 $
47.93 $
492.91 $
47.93
$
3,262.05 $
3,741.68 $
479.62 $
4,221.30 $
479.62 $
4,700.93 $
479.62
City
$
208.84 $
235.50 $
26.66 $
262.17 $
26.66 $
288.83 $
26.66
11
Average Total Water & Sewer Bills
Current
Phase I
Incr.
Phase II
Incr.
Phase III
Incr.
Residential
$
271.56 $
307.69 $
36.13 $
343.69 $
36.00 $
365.20 $
21.51
Commercial
$
714.31 $
829.12 $
114.81 $
933.55 $
104.42 $
1,003.17 $
69.62
Industrial
$
2,230.75 $
2,569.67 $
338.91 $
2,897.78 $
328.11 $
3,159.20 $
261.42
Ind - Monthly
$ 88,999.72 $ 101,925.46 $ 12,925.74 $ 115,088.80 $ 13,163.34 $ 126,499.51 $ 11,410.71
Schools
$
1,498.21 $
1,725.83 $
227.62 $
1,942.64 $
216.82 $
2,091.71 $
149.06
Apartments
$
6,334.83 $
7,186.05 $
851.22 $
8,097.21 $
911.16 $
8,783.76 $
686.55
Apts - Monthly
$
3,731.75 $
4,306.08 $
574.33 $
4,848.02 $
541.93 $
5,221.93 $
373.92
Condos
$
525.44 $
607.39 $
81.95 $
682.71 $
75.31 $
730.64 $
47.93
Condos - Mnthly $
4,064.69 $
4,698.83 $
634.13 $
5,300.56 $
601.73 $
5,780.18 $
479.62
City
4,514.68 $
5,103.12 $
588.44 $
5,691.57 $
588.44 $
5,718.23 $
26.66
$
12
Average Residential Water and Sewer Rates
2009 Ohio EPA Rate Survey
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$Avon Lake Avon Lake Bay Village Lorain
Existing - Proposed
Cleveland Amherst
Water
North
Olmsted
Elyria
Vermilion Oberlin
Sewer
13
Requested Motions
• I move to adopt the proposed modifications to
ALMU’s water rates and structure as
presented, which will be implemented in two
phases beginning 7/1/11.
• I move to adopt the proposed modifications to
ALMU’s sewer rate as presented, which will be
initially implemented in three phases
beginning 7/1/11.
14