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Home My WebLink AboutCity Council-Agenda Packets-12/8/2011CZT 1' pF ~ COLL~YVYLLE t- F. ~ a ti City of Colleyville Agenda City Council Worksession City Hall 100 Main Street Colleyville, Texas 76034 817. 503.1000 www.colleyville.com Thursday, December 8, 2011 Colleyville Library, 110 Main Street, 2nd floor 1. CALL TO ORDER 2. PRESENTATION AND DISCUSSION 2a Presentation and Discussion of Infrastructure Management 2b Presentation and Discussion of tiered water rates 3. ADJOURNMENT I hereby certify this agenda was posted on City Hall bulletin boards December 3, 2011, by 12: 00 p, m. Cynthia Singleton, TRMC, CMC City Secretary 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 817.503.1133, and reasonable accommodations will be made to assist you. ~'T Y ~F City of Colleyville '~'r City Hall C4LLEYVILLE C~ty CQU~"'~C~~ 100 Main Street Colleyville, Texas 76034 r ~. ~ ,~ ~ Agenda Briefing www.colleyville.com Agenda Number Za Agenda Date 12/08/2011 Type Presentation and Discussion Department Public Works Title Presentation and Discussion of Infrastructure Management Explanation Staff will give a detailed presentation in regard to Infrastructure Management, as well as, Capital Improvement Programs. Attachments 1. A Strategic Approach to Infrastructure Management ,, ~ < ~~ C[)LL~YVILLE ~ r~ ^ Since 1988 the American Society of Civil Engineers (ASCE) has been preparing a report card on the condition of the nation's infrastructure ^ The most recent report card (2009) gives an overall rating of ~~D" and estimates that $2.122 trillion will be needed over the next five years to bring the nation's infrastructure to an acceptable level ^ While Colleyville's infrastructure may not be a"D" right now (we don't really know! ), it will not be long before it gets that way unless we begin to develop and execute a long range program to renew it ,~~ ~ CC]~.LEYVILI.E ~ ,~ ,~. • What We Have ^HowWeTakeCareofIt • What Staff Does ^ Ca pita I Projects ^ Capital Improvement Program ^ The Strategy ^ The Cost ^ The Plan ,,, , ~~ C[)LL~YVILLE ~ r~ ^ Roads, Sidewalks and Bridges ^ Buildings ^ Water and Sewer Lines ^ Storm Water Collection System (pipes, inlets, etc.) ^ Parks and Playgrounds ^ Trails ^ Signs and Signals ~~ Technology (computers, servers, video cameras, etc.) ~.; r. ~ +;~ ~ ~/~'\ CC]~.LEYVILI.E ~ ,~ ,~. ^ 282 lane miles of streets - 144.5 lane miles of concrete streets w/ curbs and gutters - 137.5 lane miles of asphalt streets ~~ T :~. _ .,~ ^ 130 miles of sidewalks ^ 16 bridges ^ 2 traffic signals ^ 2,575 signs ^ 1,163 storm water inlets ^ 58 miles of storm sewers ~ ^ 195 miles of water lines ~~ ^ 1,362 fire hydrants ~~ ~ . ~as~ ~ ~ 3 elevated water storage tanks ^ 9,200 water meters ^ 264 Computers and servers (plus cables, switches, cameras, etc.) ~ ,~} f ~ ~ti ~COLL~YVILLE - , ,~. ^ 162 miles of sewer lines ^ 2 sewage lift stations ^ 20 buildings (administrative/operations) ^ 3 historic buildings ^ 87 park structures (concession stands, restrooms, pavilions, maintenance building and shelters) ^ 6 playgrounds ^ 14 sport courts (basketball/tennis/volleyball) ^ 45 athletic fields (baseba I I/softba I I/soccer) ^ 14.6 miles of trails ^ 232.2 acres of parks ~~ ~ ~~ I ~ ~ ~ ~ ,,~ < ~~ C[)LL~YVILLE ~ r~ City staff (primarily Public Works and Parks) is trained and equipped to do operations and maintenance (O & M) work only. Operations and maintenance includes: ^ Fixing an asset when it is out of order or broken (breakdown maintenance) ^ Taking routine actions to keep the asset in working order and minimize or prevent breakdowns (preventive maintenance) It does NOT include construction or rehabilitation work. That is best done by contractors. ,,, , ~~ C[)LL~YVILLE ~ r~ The Streets Division, comprised of eight crew members, is responsible for: ^ Pothole Repair • Crack Sealing ^ Ice and Snow Removal ^ Sign Maintenance • Sidewalk Repair Capital 0% Salaries 30% Resurfacing 47% ~' ~5 Contractural ' Services 16% ~'>'.' Supplies 7% ~,, +~ < ! ~\ C[)LL~YVILLE ~ r~ The Drainage Division, comprised of five crew members, is responsible for: Capital 2% ^ Storm sewer inlet and pipe cleaning • Ditch maintenance ^ Curb and outfall inspections ^ Street sweeping • Storm water sampling Supplies 7% Contractural Services 22% Salaries 69% ~,,+ ~< ! ~\ C[)LL~YVILLE ~ r~ The Water Division, comprised of eight maintenance crew members (and three meter workers), is responsible for: ^ Water line inspections, flushing, repairs and cleaning ^ Water valve inspection ^ Pump, storage tank and water tower operations ^ Fire hydrant flushing and maintenance Capital ~ Z~io .~z~ r~.~,,. Salaries 12% Contractural Services 5% , "' ipplies 1% Trinity River Authority 80% ~~ +.~ CC]~.LEYVILI.E ~ ,~ ,~. The Waste Water Division, comprised of five maintenance crew members, is responsible for: ^ Sewer line inspections, repairs and cleaning ^ Access point inspections and maintenance (manholes and cleanouts) Capital 0% , Salaries 18% Contractural -° Services ~ 3% ~Supplies 2% rinity River Authority 77% ~,,+ ~< ! ~\ C[)LL~YVILLE ~ r~ The Parks Division, comprised of seven maintenance crew members, is responsible for: ^ Litter Control • Restroom Cleaning ^ Park Facility Maintenance ^ Playground Maintenance • Irrigation Maintenance Supplies 3% Salaries 48% Contractural Services 49% ,,, < ~~ C[)LL~YVILLE ~ r~ The Athletics Division, comprised of four maintenance crew members, is responsible for: ^ Sports Turf Management • Mowing ^ Athletic Field Maintenance ^ Athletic Field Game Preparation ^ Litter Control ^ Irrigation System Maintenance Supplies 7% Contractural Services 30% Salaries 63% ,~~ ~ CC]~.LEYVILI.E ~ ,~ ,~. ^ A properly designed and constructed street (asphalt or concrete) should last at least 50 years if it is properly maintained ^ The incremental cost to build a street that will last 50 years (if properly maintained) is approximately 18% more than the cost of a street that will last 25 years ^ Water and sewer lines should last about 50 years ^ Concrete storm sewer pipe should last more than 50 years ^ Signs have to be replaced every 7-10 years • Parks facilities generally have a useful life of 5 to 25 years, depending on the type of asset (shade structures vs. shelters) All of this is dependent upon proper design, quality construction, good inspection and adequate maintenance! ~Ih F ~ C~LLEYVILLE ,~ Maintenance Strategies for Life Cycle Extensian 1oa 90 80 aXi 70 ~ c a 50 ~ ~ ~ 50 ~ r m 4 [} ~ a ~ a 3a 20 io 0 Pa~ement Age ~Years) -Routine Mafntenance ~nly -Sealcoatanci Overlay ~,, +~ < ! ~\ C[)LL~YVILLE ~ r~ a io za 3a ao ~o Heritage Avenue ~ . Cliffwood Drive < ~'~~ +C~LLEYVILLE ,~ Brentwood Drive Brown Trail _~ , ~_. ~~ Ct]LLEYVILI.E ~ ,~ ~ ,~. So what? ,~ ~ CC]~.LEYVILI.E ~ ,~ ,~. Ca pita I Project ^ A new construction, expansion, renovation, or replacement project for an existing facility or facilities ^ A major maintenance or rehabilitation project for infrastructure with a useful life of at least 10 years (20 years if debt-funded) ,~~ ~ CC]~.LEYVILI.E ~ ,~ ,~. ~ ~~~ ~~I - ~r ~;~ ~' ~ I ~ ~ , ~ ~~- ~'~~~: .~?= - ~ , . ~_. ~~ fl ~ ~~ --- --- - ~i ~-.~_ City of Colleyville City Hall ,. ~~ COA,LEYVILLE ,, _ ,- -~. . _. ~: ~ ~` - ~ ~ . :~ ,. ~ , = . "s" ~. . ~ , Heritage Avenue ,,, , ~~ C[)LL~YVILLE ~ r~ ,, ~ < ~~ C[)LL~YVILLE ~ r~ ,, ~ < ~~ C[)LL~YVILLE ~ r~ Capital Improvement Plan (CIP) A short-range, rolling plan, usually three to five years out, which identifies capital projects and equipment purchases, provides a planning schedule and identifies options for financing the plan. Essentially, the plan provides a link between the comprehensive and strategic plans and the City's annual budget. The benefits of a CIP include: ^ Allows for a systematic evaluation of all potential projects at the same time • Has the ability to stabilize debt and consolidate projects to reduce borrowing costs • Serves as a public relations and economic development tool ^ Supports the City's comprehensive plan ^ Focusing on preserving the City's infrastructure while ensuring the efficient use of public funds ~ ~r~\ CC]~.LEYVILI.E ~ ,~ ,~. -,~^ ~~ 4~ ~ ^ Develop asset inventory (underway) ^ Assess condition of assets (underway) ^ Determine residual life ^ Determine life cycle and replacement costs ^ Set targets for level of service ^ Determine business risk ^ Optimize operations and maintenance investment ^ Optimize capital investment • Determine funding strategy ^ Build infrastructure management plan ,~~ ~ CC]~.LEYVILI.E ~ ,~ ,~. ^ Acquire asset management software in which to record inventory and condition assessments - Inventory - Condition assessment - Maintenance and cost tracking ^ Develop data col lection pla n - What do we own? - Where is it? - What condition is it in? - What is the remaining useful life ~~ ,,, , ~~ C[)LL~YVILLE ~ r~ Streets: $282,000,000 Water Lines: $151,707,000 Sewer Lines: $121,861,000 Storm Sewer Pipes: $ 38,605,000 Public Buildings: $28,500,000 Sidewalks: $13,728,000 Parks and Playgrounds: $8,676,000 Technology: $1,757,800 Traffic Signs: $258,000 ,,, , ~~ C[)LL~YVILLE ~ r~ Approxi mately $647 M i I I ion ~- ~.~~ ~~ ,~~ , ~--~ C[)LL~YVILLE ~ r~ ^ If an asset, such as a water line, has a useful life of 50 years, it would be prudent to plan on renewing 2% of the system every year • The same logic applies to other infrastructure components like streets, sewer lines, and storm sewer pipes ,,, , ~~ C[)LL~YVILLE ~ r~ Cost Scenarios _ _ ___ _ __ _ _ _ _ _ _ Roads @ 0.5% _ $1,410,000 @ 1% _ $2,820,000 @ 2% _ $5,640,000 es r l ~ . n @ 0.5% _ $758,535 @1% _ $1,517,070 @ 2% _ $3,034,140 @ 0.5% _ $609,305 @ 1% _ $1,218,610 @ 2% _ $2,437,220 s+~w+~r5 @ 0.5% _ $193,025 @ 1% _ $386,050 @ 2% _ $772,100 @ 1% _ $86,760 @ 3% _ $260,280 @ 5% _ $433,000 $3,057,625 $6,202,010 $12,316,460 ,.~~ .~ COLL~YVILLE ,~ General Fund Utility Fund Drainage Fees Impact Fees Escrow Funds G ra nts CEDC Funds Park Land Dedication Fund County Bond Program Tx DOT N CTCOG General Obligation Bonds Certificates of Obligation Park Tomorrow Fund Tomorrow Fund Voluntary Park Fund , ~ , ~, ~ ~~~ ca~.~.~~vir~.~ '~. ^ Complete the asset inventory and condition assessment for each of the infrastructure components starting with streets ^ Develop a prioritized list of projects based on severity of need and impact of postponing the projects ^ Look at alternatives for funding the program • Come back to City Council with program options to consider ,,, , ~~ C[)LL~YVILLE ~ r~ ^ The City's infrastructure is aging and we need to start replacing it ^ Staff is working on an inventory and condition assessment of the City's existing infrastructure ^ Once the inventory and condition assessment is complete, an Infrastructure Management Plan needs to be developed that includes: - A maintenance program, and - A Capital Improvement Program (CIP) ^ Funding must be identified for the plan ,,, , ~~ C[)LL~YVILLE ~ r~ Questions and Discussion ,~ ~ CC]~.LEYVILI.E ~ ,~ ,~. G'~ Y~ City of Colleyville City Hall C(JLLEYVILLE C~ty CDU~"'~C~~ 100 Main Street Colleyville, Texas 76034 r F 4.a ~ Agen(~a B~"~ef~ng www.colleyville.com Agenda Number 2b Agenda Date 12/08/2011 Number Type Presentation and Discussion Department City Manager Title Presentation and Discussion of tiered water rates Explanation Annually, staff updates the utility rate study to include changes in consumption patterns, incorporation of Trinity River Authority rate increases and the rate effect of future bond sales. As part of the FY 2011 update process, staff provided information regarding the feasibility of implementing a tiered water rate structure during the FY 2011 budget workshop. At the November 1, 2011 Pre Council meeting, staff presented the FY 2012 update of the utility rate study to the City Council. At that time, the City Council requested that staff provide an update to the feasibility of incorporating a tiered rate structure into the current water rate structure. Currently, the City charges the same rate per 1,000 gallons charged for water regardless of the gallons used in the billing period. The following information about tiered rate structures is provided on the American Water Works Association web site: Definition The term "tiered" typically refers to a"block" type of rate structure where the unit price of water changes with each of several preset consumption blocks for each billing period. For example, from 0 to 10 units [generally units are either stated in terms of thousands of gallons (Mg) or hundreds of cubic feet (Ccf)] is one unit price, from 11 to 100 units a different unit price, from 101 to 1,000 units a third unit price, etc. Measure With an Aim Toward Conservation Most commonly in such rate structures, there are typically three to five different tiers or rate blocks. Also, the term is most often used in reference to a rate structure where the unit price increases with each higher level, or tier, of consumption. This type of "increasing tier rate" is most often found where the utility desires to send a strong conservation message to its customer base. However, it should be noted that this type of rate structure itself, without a significant accompanying customer information program, will generally not produce the desired conservation, simply because the vast majority of customers do not understand rates and do not have any idea that the more they use, the higher the unit price becomes. City Council Agenda Briefing 2b Currently, Colleyville charges same water rate per thousand regardless of the gallons used in the billing period. Per "Exhibit A", the surrounding cities of Euless, Keller, North Richland Hills, and Southlake have a tiered water rate structure, where the greater number of gallons used, the greater the cost. Euless and North Richland Hills implemented their tiered rate structure in October 2009 and October 2010, respectively. Additionally, the majority of cities with a population over 20,000 in Collin, Denton, Dallas and Tarrant counties utilize a tiered rate structure. A tiered rate structure enables a city to meet its water debt service commitments, higher repair and replacement costs, and third party water and sewer treatment costs from the demands that high usage customers place on the water system. Reviewing the surrounding cities, the highest usage breakpoint with the highest water rate is 35,000 gallons for Euless and 40,000 gallons for Keller and Southlake. Exhibit "B" is a five year projection of utility fund expenses and coverage for FY 2012- 2016 under the tiered water rate structure with implementation of the tiered rate structure in FY 2013. Included in the model is the assumption that overall annual usage will decrease by 5 percent in FY 2014 and stay at that level throughout FY 2015 and 2016. The tiered water rate option has water rates set at $3.25 for 2,000-10,000 gallons, $3.90 for 10,001-25,000, $4.55 for 25,001-40,000 and $5.20 over 40,000 gallons with the first 2,000 gallons of usage continuing to be included in the minimum bill. The differential between the lowest rate and the highest rate is 60%. The average differential between Keller and Southlake's lowest rate and highest rate is 59%. These two cities were utilized as comparison cities for the development of the rate structure because of their similarity in terms of residential lot size. The monthly effect on customer's bills for varying usage is 10,000 gallons: ($3.92) decrease; 20,000 gallons: ($2.32) decrease; 30,000 gallons: $2.53 increase; 40,000 gallons: $10.63 increase; and 50,000 gallons: $25.23 increase. The rates were set using the monthly average of the six years of usage (FY 2005 - 2010), which included periods of drought and record breaking rainfall. FY 2011 was not included in the average because the average monthly usage during this period of record drought and heat was over 4,000 gallons greater than the average monthly usage of the past six years. Additionally, a few area cities such as Arlington charge a significantly higher rate for water used in construction meters and for gas drilling operations. The rate is often double the existing water rate for metered connections. As a part of implementing tiered water rates, a higher rate for construction meter use could be charged on a per 1,000 gallon basis regardless of the amount used. The current non-tiered water rate per 1,000 gallons is $3.74 and a rate that is double that amount would be $7.48 per 1,000 gallons. With a tiered rate structure, there is a risk of not meeting coverage ratio in a year with heavy rainfall. An adequate reserve fund would need to be maintained to fund items such as equipment replacement payments to the Colleyville Tomorrow Fund. For years with significant usage due to drought conditions, revenue received in excess of City Council Agenda Briefing 2b coverage ratio requirements could be reserved for future infrastructure replacement. Additionally, with tiered rates, there is the need for a major public education effort to inform citizens that greater water usage will increase their utility bill at an exponential rate. If a tiered rate structure was adopted, it would be planned that future TRA rate increases would be passed along on an annual basis. Attachments 1. Water and sewer rate comparison of surrounding-includes tiered rates for Colleyville 2. FY 2012-2016 rate study with FY 2013 tiered water rate implementation 3. Tiered water rate presentation WATER AND SEWER RATE COMPARISON OF SURROUNDING CITIES EXHIBIT A WATER RATE COMPARISON OF SURROUN DING CITIES MINIMUM # OF GALLONS BILL FOR RATE PER CUSTOMER CUSTOMER CUSTOMER CITY BILL IN MINIMUM 2,000 GALS 1,000 GALS BILL BILL BILL 10,000 GALS 15,000 GALS 20,000 GALS BEDFORD $18.37 0 $24.15 $2.89 $47.27 $61.72 $76.17 EULESS " $7.95 0 $12.91 $3.54 ^^ $40.19 $61.23 $83.03 GRAPEVINE $9.75 2,000 $9.75 $2.74 $31.67 $45.37 $59.07 HURST $14.18 2,000 $14.18 $5.70 $59.78 $88.28 $116.78 KELLER *` $16.88 0 $20.44 $2.99 ^^ $44.04 $60.39 $76.74 NORTH RICHLAND HILLS " $9.75 2,000 $9.75 $3.94 ^^ $41.27 $60.97 $80.67 SOUTHLAKE" $27.00 2,000 $27.00 $3.45 ^^ $52.36 $70.71 $89.06 AVERAGE $14.84 $16.88 $3.61 $45.23 $64.10 $83.07 COLLEYVILLE CURRENT $12.52 2,000 $12.52 $3.74 $42.44 $61.14 $79.84 VARIANCE IN RATES ($z.32) ($4.36) $0.13 ($2.79) ($2.96) ($3.23) AVERAGE $14.84 $16.88 $3.61 $45.23 $64.10 $83.07 COLLEYVILLE TIERED RATE - $12.52 2,000 $12.52 ~3.61 ^^ $38.52 $58.02 $77.52 VARIANCE IN RATES ($2.32) ($4.36) $0.00 ($6.71) ($6.08) ($5.55) '* TIERED WATER ARE IN EFFECT IN THE FOLLOWING CITIES: " EULESS' WATER RATE IS $2.48 FOR 0 TO 2,000 GALLONS, $3.41 FOR 3,001 TO 8,000 GALLONS, $3.98 FOR 9,000 TO 15,000 GALLONS, $4.36 FOR 16,000 TO 35,000 GALLONS, AND $4.96 FOR ALL USAGE ABOVE 35,000 GALLONS '" KELLER'S WATER RATE IS $178 FOR 0 TO 2,000 GALLONS, $2.95 FOR 2,000 TO 10,000 GALLONS, $3.27 FOR 10,001 TO 20,000 GALLONS, $370 FOR 20,001 TO 25,000 GALLONS, $4.81 FOR 25,000 TO 40,000 GAILONS, AND $5.24 FOR ALL USAGE ABOVE 40,000 GALLONS " NORTH RICHLAND HILLS' WATER RATE IS $3.94 FOR 2,000 TO 22,440 GALLONS AND $4.02 FOR ALL USAGE ABOVE 22,440 GALLONS " SOUTHLAKE'S WATER RATE IS $3.17 FOR 2,000 TO 10,000 GALLONS, $3.67 FOR 10,001 TO 25,000 GALLONS AND $3.92 FOR 25,000 TO 40,000, AND $4.42 FOR ALL USAGE ABOVE 40,000 GALLONS - COLLEYVILLE'S PROPOSED WATER RATE IS $3.25 FOR 2,000 TO 10,000 GALLONS, $3.90 FOR 10,001 TO 25,000 GALLONS AND $4.55 FOR 25,000 TO 40,000, AND $520 FOR ALL USAGE ABOVE 40,000 GALLONS ^^ RATES SHOWN ARE THE AVERAGE OF THE TIERED RATE USAGE OF 0-20,000 GALLONS SEWER RATE COMPARISON OF SURROUNDING CITIES CITY MINIMUM # OF GALS BILL FOR RATE PER WINTER CUSTOMER BILL IN MINIMUM 2,000 GALS 1,000 GALS AVERAGE BILL BILL BILLED 10,000 GALS BEDFORD $10.88 0 $14.32 $1.72 Y $28.08 EULESS $6.75 0 $12.15 $2.70 N $33.75 GRAPEVINE $7.80 2,000 $7.80 $3.26 Y $33.88 HURST $10.27 0 $16.85 $3.29 Y $43.17 KELLER $11.85 0 $17.69 $2.92 Y $41.05 N RICHLAND HILLS $8.12 0 $11.92 $1.90 Y $27.12 SOUTHLAKE $26.16 2,000 $26.16 $3.00 N $50.16 AVERAGE $11.69 $15.27 $2.68 Y $36.74 COLLEYVILLE CURRENT $8.80 2,000 $8.96 $2.35 Y $27.76 VARIANCE IN RATES ($2.89) ($6.31) ($0.33) ($8.98) FIVE YEAR PROJECTION OF UTILITY FUND EXPENSESICOVERAGE FY 2012 - FY 2016 EXHIBIT B IMPLEMENTATION OF TIERED WATER RATES AND PASS THROUGH OF TRA RATE INCREASES ASSUMPTIONS: 70 NEW WATER/SEWER CUSTOMERS ANNUALLY 5% WATER REDUCTION BEGINNING IN FY 20141 NO ADDITIONAL REDUCTION IN FY 2015 AND 2016 FISCAL YEAR 2012 2013 2014 2015 2016 AVERAGE ANNUAL WATER CUSTOMERS 9,128 9,198 9,268 9,338 9,408 AMOUNT DERIVED FROM MINIMUM BILL $1,325,386 $1,335,550 $1,345,714 $1,355,878 $1,366,042 AMOUNT DERIVED FROM VOLUME CHARGE $7,423,912 $8,180,552 $7,829,311 $7,888,534 $7,947,698 AVERAGE ANNUAL SEWER CUSTOMERS AVERAGE MONTHLY USAGE AMOUNT DERIVED FROM MINIMUM BILL AMOUNT DERNED FROM VOLUME CHARGE 3,512 8,582 8,652 3,722 8,792 10,100 10,100 10,100 10,100 10,100 $398,867 $906259 $913,651 $921,043 $928,435 $1,878,122 $1,893,567 $1,909,012 $1,924,457 $1,939,902 OPERATING REVENUE WATER SALES CUMULATNE TRA PASS-THROUGH WATER RATE INCREASE WATER MINIMUM BILL TRA PASS THROUGH ON 2,000 GALLONS SEWER CHARGES CUMULATNE TRA PASS-THROUGH SEWER RATE INCREASE SEWER MINIMUM BILL TRA PASS THROUGH ON 2,000 GALLONS WATER INSTALLATION SEWER INSTALLATION ENGINEERING AND DEVELOPMENT PENALTY SEWER TIE ON REVENUE MISC REVENUE $8,749,298 $9,516,102 $364,207 $545,257 $38,338 $57,396 $2,776,989 $2,799,326 $65,372 $189,491 $16,343 $47,373 $21,000 $21,000 $7,000 $7,000 $5,000 $5,000 $180,158 $195,760 $5,000 $5,000 $13,000 $13,000 $9,175, 524 $802,980 $84,524 $2,822,663 $398,684 $99,671 $21,000 $7,000 $5,000 $197,998 $5,000 $13,000 $9,244,412 $9,313,740 $351,626 $900,910 $89,645 $94,833 $2,845,500 $2,868,337 $519,133 $633,024 $129,783 $158,256 $21,000 $21,000 $7,000 $7,000 $5,000 $5,000 $201,910 $205,740 $5,000 $5,000 $13,000 $13,000 TOTAL OPERATING REVENUE OPERATING EXPENSES: ADMINISTRATION BILLING OPERATIONS TRA WATER TRA SEWER OPERATING TRANSFER TOMORROW FUND REPAYMENT TOTAL OPERATING EXPENSES OPERATING INCOME PLUS NON-OPERATING REVENUE QNT INCI NETINCOME CALCULATION OF AMOUNT AVAILABLE FOR DEBT COVERAGE ANNUAL DEBT SERVICE 2002 REFUNDING SERIES 2004 REFUNDING SERIES 2010 REFUNDING BOND ISSUE ANNUAL DEBT SERVICE AMOUNT AVAILABLE FOR COVERAGE RATIO AMOUNT NEEDED FOR COVERAGE RATIO AMOUNT AVAILABLE FOR CIP/REHAB TARGET COVERAGE RATIO ACTUAL COVERAGE RATIO PASS THROUGH TRA RATE INCREASES $12,241,705 $13,402,204 $13,633,044 $13,533,009 $14,225,340 $223,405 $227,373 $232,431 $237,079 $241,821 $356,883 $364,021 $371,301 $378,727 $386,302 $1,930,026 $1,934,381 $1,973,069 $2,012,530 $2,052,781 $6,078,7G8 $6,402,667 $6,422,492 $6,471,000 $6,519,508 $1,695,078 $1,968,046 $2,261,124 $2,423,216 $2,585,740 $901,829 $956,469 $1,044,054 $1,055,988 $1,076,854 $44,286 $44,286 $44,286 $44,286 $44,286 $11,230,274 $11,897,743 $12,348,756 $12,627,326 $12,907,291 $1,011,431 $1,504,461 $1,284,289 $1,305,183 $1,318,549 $20,300 $20,300 $20,300 $20,300 $20,300 $1,031,731 $1,524.761 $1,304,589 $1,325,483 $1,338,849 $249,288 $0 $202,624 $195,723 $381,100 $632,100 $833,012 $827,823 $1,031,731 $1,524,761 $999,G14 $993,338 $32,116 $531,373 1.20 1.20 1.24 1.84 $0 $198,673 $620,500 $819,173 $1,304,589 $983,003 $321,581 1.20 1.59 $0 $0 $0 $0 $490,100 $365,325 $490,100 $365,325 $1,325,483 $1,333,849 $588,120 $438,390 $737,363 $900,459 1.20 1.20 2.70 3.66 ANNUAL PASS THROUGH TRA WATER INCREASE - PER 1,000 GALLON $0.21 $0.05 $0.12 $0.02 $0.02 CUMULATIVE TRA RATE INCREASE FROM CURRENT RATES $0.21 $0.26 $0.38 $0.40 $0.42 ANNUAL PASS THROUGH TRA SEWER INCREASE - PER 1,000 GALLON $0.08 $0.15 $0.25 $0.14 $0.13 CUMULATIVE TRA RATE INCREASE FROM CURRENT RATES $0.08 $0.23 $0.48 $0.62 $0.75 Tiered Water Rate Presentation City Cou nci I Worksession Decem ber 8, 2011 Considerations i n Setti ng Water a nd Sewer Rates • Meet debt coverage ratio covenant - 1.20 times • Include future projected annual rate increases from Trinity River Authority (TRA) for treated water and sewer • Funding of infrastructure needs (new or replacement) ~ `' `,~`~ CdLLEYVILLE ~ Tiered Water Rates ( H ig her Cost Per 1,000 gallons for Higher Usage) • Encourages water conservation by customers • Customers with greater usage pay a greater portion of the capital cost of providing treated water • Tiered rates i n effect i n Eu less, Kel ler, North Richland Hills and Southlake • In high rainfall years, there is a risk of not meeting coverage ratio ~ `' `,~`~ CdLLEYVILLE ~ Cities Uti I izi ng Tiered Water Rates - Ta rra nt Cou nty Arl i ngton Euless Keller North Richland Hills Southlake Benbrook Fo rt W o rt h Mansfield Sag i naw ~ `' `,~`~ CdLLEYVILLE ~ Cities Uti I izi ng Tiered Water Rates - Dallas County Coppell DeSoto Garland Highland Park Mesq u ite Rowlett Dallas Farmers Branch Grand Prairie Irving Richardson University Park ~ `' `~~ ~~LLEYVILLE ~ Cities Uti I izi ng Tiered Water Rates - Col I i n a nd Denton Cou nties Allen Corinth Flower Mou nd Carrollton Denton Frisco Highland Village McKinney Plano The Colony Roanoke Trophy Club ~ `' `,~`~ CdLLEYVILLE ~ Comparison Cities - Tiered Rates • Keller - Lowest rate: $2.95 (0 - 10,000 gallons) - Highest rate: $5.24 (over 40,000 gallons) - Rate differential: 78% • Southlake - Lowest rate: $3.17 (0 - 10,000 gallons) - Highest rate: $4.42 (over 40,000 gallons) - Rate differential: 39% ~ `' `~~ ~~LLEYVILLE ~ Proposed Tiered Water Rates Current rate per 1,000 gallons -$3.74 Differential of lowest to highest rate - 60% First 2,000 gallons of usage continues to be included in the minimum bill Tiered rate break points (20% increase between tiers): 2,000 - 10,000 gallons $3.25 10,001 - 25,000 gallons $3.90 25,001 - 40,000 gallons $4.55 Over 40,000 gallons $5.20 ~ ` t ~~`~`~ CdLLEYVILLE ~ Effect of Tiered Water Rates Water Current Tiered Difference Usage Rates Rates 10,000 $42.44 $38.52 ($3.92) 20,000 $79.84 $77.52 ($2.32) 30,000 $117.24 $119.77 $2.53 40,000 $154.64 $165.27 $10.63 50,000 $192.04 $217.27 $25.23 ~ ` t ~~`~`~ CdLLEYVILLE ~