HomeMy WebLinkAboutWater and Wastewater Rate Advisory Committee Agenda Packet - October 16, 2017City of Colleyville Page 1
Water and Wastewater
Rate Advisory Committee
AGENDA
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
Monday, October 16, 2017
6:00 p.m.
Executive Conference Room
Third Floor – City Hall
1.CALL TO ORDER
2. APPROVAL OF MINUTES
October 2, 2017
3.REGULAR AGENDA ITEMS
3a Discussion of future CIP base rate options
4.ADJOURNMENT
I hereby certify this agenda was posted on City Hall bulletin boards Friday,
October 13, 2017 by 5:00 p.m.
Adrienne Lothery
Assistant City Manager/Strategic Services Manager
A quorum of the City Council or any Colleyville Board, Commission, or Committee
may be in attendance at this meeting.
Any matter on this agenda may, at the discretion of the governing body, be
opened for public comment and discussion.
If you plan to attend this public meeting and have a disability that requires special
accommodations, please advise the City Secretary at least 48 hours in advance at
817.503.1130, and reasonable accommodations will be made to assist you.
City of Colleyville Page 1
Water and Wastewater
Rate Advisory Committee
MINUTES - DRAFT
City Hall
100 Main Street
Colleyville, Texas 76034
817.503.1000
www.colleyville.com
October 2, 2017
6:00 p.m.
Executive Conference Room
Third Floor – City Hall
Chair Susan Mathisen called the Water and Wastewater Rate Advisory Committee
meeting to order on October 2, 2017, at 6:05 p.m.
ROLL CALL: Chair Susan Mathisen, Vice Chair Gerald Gibson, and Committee
members Raymond Allee, Claudia Bevill, James Dove, Jeff Gilstrap, Anthony Seris,
and Samuel van Bever were present.
Assistant City Manager Adrienne Lothery and Chief Financial Officer Shereen
Gendy were also present.
2. APPROVAL OF MINUTES
Minutes from the August 22, 2017 meeting were approved unanimously as
submitted, with a motion made by Samuel van Bever and a second from Claudia
Bevill.
3. REGULAR AGENDA ITEMS
3a Update on Utility Fund and Utility Capital Projects Fund available
resources
Assistant City Manager Lothery presented the presentation included with the
agenda packet, reviewing the cash and investment balances in the Utility Fund and
the Utility Capital Projects Fund as of August 31, 2017, as well as projections for
balances as of September 30, 2017.
Vice Chair Gerald Gibson asked how the 100 day reserve in the Utility Operating
Fund was calculated. Assistant City Manager Lothery explained that is based on
the FY 2018 Utility Fund operating budget, divided by 365 days, multiplied by 100.
She further explained that the City Council has recently provided direction that
their desire is to maintain 100 days of operating reserves in both the General Fund
and Utility (operating) Fund, which is above the 90 day reserve required in the
City’s financial policies.
3b Discussion of future CIP base rate options
Chair Mathisen provided an introduction of the goals for the discussion of future
CIP base rates, including the importance of determining the desired level of
reserves to have available in the Utility Capital Projects Fund (i.e. how many years
of CIP expenditures should be available).
City of Colleyville Page 2
Water and Wastewater Rate
Advisory Committee Minutes October 2, 2017
Chair Mathisen then introduced the two sets of options for future CIP base rates.
Options 1 through 4 provide for annual increases to be the same dollar amount for
all water meter sizes. Options 1a through 4a provide for annual increases that
maintain the percent differential in price between meter sizes that presently
exists. Chair Mathisen expressed a desire to maintain the percent differential, as
larger water meters place a greater burden on the system. Vice Chair Gerald
Gibson concurred. Upon discussion, the Committee unanimously agreed that the
percent differential should be maintained, and that the discussion on future CIP
base rate options should solely focus on options 1a through 4a.
Assistant City Manager Lothery provided a walk-through of funding option 1a,
explaining the charts, graph, and notes on the handouts (included as attachments
to the agenda item).
Committee member Seris asked about the assumptions made in the various
options. Assistant City Manager Lothery stated that the options assume a need for
$2 Million annually for expenditures on utility capital projects, not including
projects funded with impact fees. This amount was determined by considering the
average amount of CIP expenditure planned for the 5-Year CIP (FY 2018-FY 2022),
and was also an amount that was discussed in the recommendations from the
2014 Water and Wastewater Master Plan. Additionally, an inflation factor of
1.25% has been included. The goal in each option was to reach a point where
annual revenue from the CIP base rate is supporting annual utility CIP
expenditures. Ms. Lothery further explained that these assumptions and options
are all intended to be starting points for discussion, and can be adjusted based on
the desire of the Committee. As Chair Mathisen mentioned at the beginning of the
discussion, the options also vary in the amount of cash on hand (i.e. number of
years of future CIP expenditures) in a given year, and can adjusted to
accommodate the Committee’s preferred reserve amount.
Committee member Bevill asked whether there were any other available funding
sources such as grants for utility capital projects. Assistant City Manager Lothery
replied that staff is not aware of any grants the City could apply for. The only
additional funding source other than the CIP base rate and surpluses from the
Utility (operating) Fund would be water or wastewater impact fees, which have
some restrictions on use. Staff looks at projects to determine if any of these more
restrictive funds can be used first, before spending available utility capital projects
funds. Chair Mathisen added that the grants that are available typically require a
City to have tiered water rates in order to be eligible to apply.
The Committee discussed the advantages and disadvantages of maintaining
different levels of reserves, varying from one year of reserves up to five years.
Considering that capital expenditures are planned, and can be adjusted each year
or at any time to accommodate new priorities or emergencies, the Committee felt
City of Colleyville Page 3
Water and Wastewater Rate
Advisory Committee Minutes October 2, 2017
comfortable narrowing down the options to look at future CIP base rates that
provide for either one year or two years of reserves. The Committee directed staff
to bring back options depicting those two scenarios at the next meeting.
The Committee also discussed the advantages and disadvantages of how to
transition to a CIP base rate that provides annual revenue to support annual utility
CIP expenditures. One priority discussed was spending down remaining reserves
as quickly as possible and not collecting more revenue in early years that would
not be spent until years 6+, which would result in a low CIP base rate for the next
several years and then more significant increases closer to the time the cash was
needed for projects. Another priority discussed was not having any single year
with significant CIP rate increases and providing for a gradual increase of the CIP
base rate, which would result in a CIP base rate that increases by a fairly standard
amount each year until such time that annual revenues support annual utility CIP
expenditures. While the Committee felt strongly that it was important to spend
down current reserves quickly, the need to provide rate stability and gradual
increases emerged as the most important factor, anticipating that gradual
increases would be more preferred by customers even if it spends down reserves
at a slightly slower pace.
The Committee directed staff to bring back two scenarios to the next Committee
meeting that narrow down options for future CIP base rates. The two options will
avoid substantial increases in a single year, provide for a gradual increase of the
CIP base rate in relatively equal increments, and achieve self-funding (annual
revenues support annual expenditures) as quickly as possible. Option 1 will be
based on maintaining one year of CIP expenditures in reserves, and Option 2 will
be based on maintaining two years of CIP expenditures in reserves. For both
options, staff will add information to show the running balance of reserves in the
Utility Capital Projects Fund (not including impact fees). The Committee also
requested general information for these options that help them understand what
percent of the total utility bill the annual increase amounts are.
3. ADJOURNMENT
There being no further business before the Committee, Chair Mathisen adjourned
the meeting at 8:07 p.m.
Minutes taken and prepared by:
Adrienne Lothery
Assistant City Manager
City of Colleyville Page 1
Water and
Wastewater Rate
Advisory Committee
Agenda Briefing
City Hall
100 Main Street
Colleyville, Texas 76034
www.colleyville.com
Agenda Number 3a Agenda Date 10/16/2017
Type Presentation and Discussion
Department City Manager
Title
Discussion of future CIP base rate options
Explanation
While the current 5-Year CIP is fully funded, the Committee has expressed a
desire to begin planning funding options for utility capital projects beyond the next
five years. Staff prepared several options for future CIP base rates for the
Committee to consider that were reviewed at the October 2, 2017 Committee
meeting.
Based on feedback and direction from the Committee, staff has prepared the two
attached options for future CIP base rates with the elements notes below.
Each option reflects gradual annual increases of a steady amount, until a
sustaining amount has been reached. One option reflects maintaining cash
for 1 year of CIP project expenditures on hand, the other 2 years.
The running fund balance has been added, and it also reflects revenues from
the anticipated annual year-end transfer of operating fund surplus in the
cash available for CIP projects. By extending the assumption that this
surplus will be available, the final/maximum CIP base rate in each option
has decreased by a few dollars.
A section with the various components of a residential utility bill have been
added, along with the percent of the total bill that each component
comprises.
Staff seeks direction from the Committee on the preferred plan for future CIP base
rates, to be presented to the City Council.
Attachments
1.Future CIP base rate options- 1 yr vs 2 yr reserves
Notes:- Gradual annual rate increases of a steady amount
- Maintain a reserve to provide for a one year contingency
- Reliant upon annual transfer of operating surplus, as CIP base rate revenues do not fully cover CIP expenditures
Inflation Factor 1.25%
CIP Drainage Garbage*Tax TOTAL
Base Rate Vol. Rate ($3.86)** Base Rate Vol. Rate ($2.81)**
13.76 71.02 11.22 25.29 1.57 7 13.1 1.08 144.04
%10%49%8%18%1%5%9%1%100%
*November rates
** Rates to be approved by council in Novemeber
Proposed Rate Increase Approved 2.85$ 2.85$ 2.85$ 2.85$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
1" or less 8951 1.57$ 4.42$ 7.27$ 10.12$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$ 12.97$
1.5"128 1.81$ 5.10$ 8.38$ 11.67$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$ 14.95$
2"189 2.10$ 5.91$ 9.72$ 13.54$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$ 17.35$
3"11 2.79$ 7.85$ 12.92$ 17.98$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$ 23.05$
4"1 3.77$ 10.61$ 17.46$ 24.30$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$ 31.14$
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
REQUIRED CIP FUNDING 1,913,000 714,000.00 1,955,720.00 3,078,000.00 - 2,000,000 2,025,000 2,050,313 2,075,941 2,101,891 2,128,164 2,154,766 2,181,701 2,208,972 2,236,584
1" or less 8951 168,637$ 474,761$ 780,885$ 1,087,009$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$ 1,393,134$
1.5"128 2,780$ 7,827$ 12,874$ 17,921$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$ 22,967$
2"189 4,763$ 13,409$ 22,054$ 30,700$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$ 39,346$
3"11 368$ 1,037$ 1,705$ 2,374$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$ 3,042$
4"1 45$ 127$ 209$ 292$ 374$ 374$ 374$ 374$ 374$ 374$ 374$ 374$ 374$ 374$ 374$
ANNUAL CIP RATE REVENUES 176,593$ 497,161$ 817,728$ 1,138,296$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$ 1,458,863$
($1,736,407)($216,839)($1,137,992)($1,939,704)$1,458,863 ($541,137)($566,137)($591,449)($617,078)($643,027)($669,301)($695,903)($722,838)($750,109)($777,721)
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Fund Bal 5,000,184 5,000,184 3,654,058 3,937,219 3,299,227 1,859,523 3,818,387 3,777,250 3,711,113 3,619,664 3,502,586 3,359,558 3,190,257 2,994,354 2,771,517 2,521,408
Prior YE 9/30
Transfer In 390,281 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
CIP
Revenues - 176,593 497,161 817,728 1,138,296 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863 1,458,863
Available
Funding 5,000,184 5,567,058 4,651,219 5,254,947 4,937,523 3,818,387 5,777,250 5,736,113 5,669,976 5,578,527 5,461,449 5,318,422 5,149,121 4,953,218 4,730,380 4,480,271
CIP Budget 1,913,000 714,000 1,955,720 3,078,000 - 2,000,000 2,025,000 2,050,313 2,075,941 2,101,891 2,128,164 2,154,766 2,181,701 2,208,972 2,236,584
Ending Fund
Bal 5,000,184 3,654,058 3,937,219 3,299,227 1,859,523 3,818,387 3,777,250 3,711,113 3,619,664 3,502,586 3,359,558 3,190,257 2,994,354 2,771,517 2,521,408 2,243,687
CIP Fund Balance Roll Forward
FY18 MIN BILL
Water
(18,400 Gallons average usage)
Wastewater
(9,000 Gallons average usage)
Meter size (Excludes the city's accounts)
METER
SIZES
NUMBER OF
METERS
PROPOSED MONTHLY RATES
CIP Revenues
METER
SIZES
NUMBER OF
METERS
PROJECTED CIP RATE REVENUES
CIP RATE REV OVER (UNDER)
EXP
CIP Rate - CIP FUNDING OPTION - 1 Yr Reserves
$1.57
$4.42
$7.27
$10.12
$12.97 $12.97 $12.97 $12.97 $12.97 $12.97 $12.97 $12.97 $12.97 $12.97 $12.97
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Notes:- Gradual annual rate increases of a steady amount
- Maintain a reserve to provide for a two year contingency
- Reliant upon annual transfer of operating surplus, as CIP base rate revenues do not fully cover CIP expenditures
Inflation Factor 1.25%
CIP Drainage Garbage*Tax TOTAL
Base Rate Vol. Rate ($3.86)** Base Rate Vol. Rate ($2.81)**
13.76 71.02 11.22 25.29 1.57 7 13.1 1.08 144.04
%10%49%8%18%1%5%9%1%100%
*November rates
** Rates to be approved by council in Novemeber
Proposed Rate Increase Approved 3.25$ 3.25$ 3.25$ 3.25$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
1" or less 8951 1.57$ 4.82$ 8.07$ 11.32$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$ 14.57$
1.5"128 1.81$ 5.56$ 9.30$ 13.05$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$ 16.80$
2"189 2.10$ 6.45$ 10.79$ 15.14$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$ 19.49$
3"11 2.79$ 8.57$ 14.34$ 20.12$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$ 25.89$
4"1 3.77$ 11.57$ 19.38$ 27.18$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$ 34.99$
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
REQUIRED CIP FUNDING 1,913,000 714,000.00 1,955,720.00 3,078,000.00 - 2,000,000 2,025,000 2,050,313 2,075,941 2,101,891 2,128,164 2,154,766 2,181,701 2,208,972 2,236,584
1" or less 8951 168,637$ 517,726$ 866,815$ 1,215,904$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$ 1,564,993$
1.5"128 2,780$ 8,535$ 14,290$ 20,045$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$ 25,801$
2"189 4,763$ 14,622$ 24,481$ 34,341$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$ 44,200$
3"11 368$ 1,131$ 1,893$ 2,655$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$ 3,418$
4"1 45$ 139$ 233$ 326$ 420$ 420$ 420$ 420$ 420$ 420$ 420$ 420$ 420$ 420$ 420$
ANNUAL CIP RATE REVENUES 176,593$ 542,153$ 907,712$ 1,273,272$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$ 1,638,831$
($1,736,407)($171,847)($1,048,008)($1,804,728)$1,638,831 ($361,169)($386,169)($411,481)($437,110)($463,060)($489,333)($515,935)($542,870)($570,141)($597,753)
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32
Fund Bal 5,000,184 5,000,184 3,654,058 3,982,211 3,434,203 2,129,475 4,268,306 4,407,137 4,520,968 4,609,486 4,672,376 4,709,316 4,719,983 4,704,048 4,661,178 4,591,036
Prior YE 9/30
Transfer In 390,281 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
CIP
Revenues - 176,593 542,153 907,712 1,273,272 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831 1,638,831
Available
Funding 5,000,184 5,567,058 4,696,211 5,389,923 5,207,475 4,268,306 6,407,137 6,545,968 6,659,799 6,748,317 6,811,207 6,848,147 6,858,814 6,842,879 6,800,009 6,729,867
CIP Budget 1,913,000 714,000 1,955,720 3,078,000 - 2,000,000 2,025,000 2,050,313 2,075,941 2,101,891 2,128,164 2,154,766 2,181,701 2,208,972 2,236,584
Ending Fund
Bal 5,000,184 3,654,058 3,982,211 3,434,203 2,129,475 4,268,306 4,407,137 4,520,968 4,609,486 4,672,376 4,709,316 4,719,983 4,704,048 4,661,178 4,591,036 4,493,283
CIP Fund Balance Roll Forward
CIP Revenues
METER
SIZES
NUMBER OF
METERS
PROJECTED CIP RATE REVENUES
CIP RATE REV OVER (UNDER)
EXP
FY18 MIN BILL
Meter size (Excludes the city's accounts)
METER
SIZES
NUMBER OF
METERS
PROPOSED MONTHLY RATES
Water
(18,400 Gallons average usage)
Wastewater
(9,000 Gallons average usage)
CIP Rate - CIP FUNDING OPTION - 2 Yrs Reserves
$1.57
$4.82
$8.07
$11.32
$14.57 $14.57 $14.57 $14.57 $14.57 $14.57 $14.57 $14.57 $14.57 $14.57 $14.57
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32