HomeMy WebLinkAbout10 WATER RATES 10-20-09• Agenda Item 10
REPORT Reviewed:
AGENDA
City Manager
Finance Director
MEETING DATE: OCTOBER 20, 2009
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
DOUGLAS S. STACK, ACTING PUBLIC WORKS DIRECTOR/
CITY ENGINEER
SUBJECT: ADOPTION OF RETAIL WATER RATES
SUMMARY:
At the September 1, 2009 meeting City Council directed staff to provide additional water
rate options. Staff presented two options at prior council meetings and developed four
additional options. Water rate increase Option 1 was presented at the August 4, 2009
meeting and Option 2 was presented at the September 1, 2009 meeting. Options 3
through 5 reduce the water rate increase, delays debt financing for the construction of
the Rawlings Reservoir, Tustin Avenue well, the Simon Ranch Reservoir and Booster
Station and the Beneta Well; delays pay-as-you-go capital projects; and delays the
replenishment of cash reserves. Option 6 is a 1 -year rate increase that eliminates
operating loss while meeting existing bond covenants.
RECOMMENDATION:
Pleasure of the City Council:
1. Adopt Option 1 water rate increase resolution as presented on August 4, 2009.
2. Adopt Option 2 water rate increase resolution as presented on September 1,
2009
3. Adopt Option 3 water rate increase resolution.
4. Adopt Option 4 water rate increase resolution.
5. Adopt Option 5 water rate increase resolution.
6. Adopt Option 6 water rate increase resolution.
If any rate option is approved, the corresponding rate increase will be effective October
21, 2009.
ADOPTION OF RETAIL WATER RATES
RESOLUTION NO. 09-41
OCTOBER 20, 2009
Page 2
FISCAL IMPACT:
Option 1: This water rate increase would provide an adequate revenue stream to proceed
with the debt issuance for construction of the Rawlings Reservoir and Tustin Avenue Well
to February 2010 and construction of the Simon Ranch Reservoir and Booster Station and
Beneta Well to fiscal year 12/13; completes pay-as-you-go capital improvements; meets
existing bond covenants; and replenishes cash reserves within five years.
Option 2: The smoothed or flattened water rate increase will delay debt issuance for
construction of the Rawlings Reservoir and Tustin Avenue Well to October 2010 and
construction of the Simon Ranch Reservoir and Booster Station and Beneta Well to fiscal
year 13/14; defers pay-as-you-go capital improvements for two years; meet existing bond
covenants; and replenishes cash reserves within four years.
Option 3: This water rate increase will delay debt issuance for the construction of the
Rawlings Reservoir and Tustin Avenue Well to October 2010 and construction of the
Simon Ranch Reservoir and Booster Station and Beneta Well to fiscal year 13/14; defers
pay-as-you-go capital improvements for three years; meets existing bond covenants; and
delay replenishing cash reserves to five years.
Option 4: This water rate increase will delay debt issuance for construction of the
Rawlings Reservoir and Tustin Avenue Well to July 2011; eliminates the second debt
issuance to pay for the construction of the Simon Ranch Reservoir and Booster Station
and Beneta Well; defers pay-as-you-go capital improvements for three years; meets
existing bond covenants; and delays replenishing cash reserves to five years.
Option 5: This is a 3 -year water rate increase that delays debt issuance construction of
the Rawlings Reservoir and Tustin Avenue Well to October 2010; eliminates the second
debt issuance to pay for the construction of the Simon Ranch Reservoir and Booster
Station and Beneta Well; defers pay-as-you-go capital improvements; meets existing bond
covenants; and eliminates the replenishment of cash reserves.
Option 6: This is a 1 -year water rate increase that eliminates the operating loss and meets
existing bond covenants.
BACKGROUND:
The City Council held a public hearing on the proposed water rate increases at its
meeting on August 4, 2009. The rate increases presented to the City Council were
based on the City's adopted 2000 Water Master Plan. The adopted 2000 Water Master
Plan is one of four pillars of the City's "Water Business Plan," the other three include the
Urban Water Management Plan, Seven-year Capital Improvement Plan, and the annual
Operating & Maintenance Budget. The Water Master Plan essentially serves as the
short and long-term strategic planning document that gives the basis and assurance
that capital dollars/investment are prioritized in the most effective fashion. The Water
Master Plan contains very detailed and descriptive evaluations of demand, supply,
ADOPTION OF RETAIL WATER RATES
RESOLUTION NO. 09-41
OCTOBER 20, 2009
Page 3
storage, distribution/production, system analysis, and water capital improvement. The
Master Plan as well as previous engineering studies in evaluating the Foothill, Rawlings,
and Simon Ranch reservoirs noted that these reservoirs have not and will not ever
completely comply with current seismic code requirements due to age, condition, and
dated construction/design practices. Seismic tends to be overshadowed by the threat of
fire only until there is an earthquake.
At the public hearing and September 1, 2009 City Council meeting the City Council
directed staff to return to Council with additional rate options; Option 1 (attachment 1) is
the original water rate increase presented on August 4, 2009. This option has higher
increases for the first two years (10.83% and 10.49% for 40 units) and significantly
lower increases for the last three years for the five year rate cycle (6.94% to 6.95% for
40 units). Option 2 (attachment 2) is the water rate increase presented on September
1, 2009. This option is a smoothed water rate increase with increases of 9.57% to
9.59% for the first two years and 8.70% to 8.07% for the last three years of the rate
cycle. Option 3 (attachment 3) is reduced water rate increase with increases of 2.88%,
11.57°/x, 3.64%, 3.84%, 8.10%, respectively. Option 4 (attachment 4) is a water rate
increase with increases of 3.86%, 3.69%, 10.73%, 3.83%, 4.04%, respectively. Option
5 (attachment 5) is a 3 -year water rate increase with increases of 2.88%, 11.57%, and
3.64%, respectively. Option 6 (attachment 6) is a 1 -year water rate increase of 6.78%.
All options have the pass through provision to offset the increasing costs of purchasing
and pumping water imposed by third party agencies. The pass-through is restricted to
not exceed 7% of the annual water charges to a "typical" residential user in any given
fiscal year. Customers will be notified in advance on their bill of the pass-through and
the charge will be a separate item on the bill.
Option 2 and 3 would reduce the Water Enterprise ability to expeditiously obtain debt
financing for the construction of Rawlings Reservoir and Tustin Avenue Well and the
constructions of the Simon Ranch Reservoir and Booster Station and Beneta Well and
delays non -debt finance capital improvement projects. Option 4 reduces the Water
Enterprise ability to expeditiously obtain debt financing for the construction of Rawlings
Reservoir and Tustin Avenue Well and eliminates the construction of the Simon Ranch
Reservoir and Booster Station and Beneta Well due to the lack of revenues needed for
debt financing. Pay-as-you-go capital improvement projects will also be delayed.
Option 5 would reduce the Water Enterprise's ability to expeditiously obtain debt
financing for the construction of Rawlings Reservoir and Tustin Avenue Well and
eliminates the construction of the Simon Ranch Reservoir and Booster Station and
Beneta Well and delays non -debt finance capital improvement projects. Option 6
eliminates the construction of any capital projects or major repairs due to lack of
available funding sources.
The delay in the Water Enterprise's ability to proceed with critical capital infrastructure
could lead to higher operating costs in terms of more expensive purchased water should
the City's wells fail. The increased costs to provide water might also increase the pass
through charges.
ADOPTION OF RETAIL WATER RATES
RESOLUTION NO. 09-41
OCTOBER 20, 2009
Pamela Arends-King
Finance Director
Sean TrAn
Senior rinancial Analyst
Page 4
S. Stack
ublic Works Director/City Engineer
Attachment(s): Attachment 1 — Water Rate Increase Option 1
Attachment 2 — Water Rate Increase Option 2
Attachment 3 — Water Rate Increase Option 3
Attachment 4 — Water Rate Increase Option 4
Attachment 5 — Water Rate Increase Option 5
Attachment 6 — Water Rate Increase Option 6
Attachment 7 — August 4, 2009 Agenda Report
Attachment 8 — September 1, 2009 Agenda Report
Attachment 9 — August 4, 2009 PowerPoint Presentation
Attachment 10 — September 1, 2009 PowerPoint Presentation
Revenues (a)
Fixed Charges
Consumption Charges
Other Revenues
Total Operating Revenues
Operating Expenses (b)
Salaries and Benefits
Maintenance and Operations
Miscellaneous Capital
Depreciation Expense
Sources of Supply Costs
Production Costs
Energy Costs
Total Operating Expenses
Net Operating Revenue
Non -Operating Revenue (Expense)
Interest Income (@ 2%) (c)
Water Capital Facility Charges (e)
Debt Service - Interest Expense
Proposed Debt Service - Interest Expense
Subtotal Debt Service Interest Expense
Total Non -Op Revenues/Expenses
NetRevenues(Loss)
Beg. Retained Earnings Net of Fixed Assets
(Available for Captial Outlay 8 Debt -Principal Payments)
Capital Fee
Capital Outlay
Non -Debt Financed Capital Improvement Projects
Capital Financing
Existing Debt Service Principal Payments
Proposed Debt Service Principal Payments
Subtotal
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
Target Reserve Balance(g)
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
Annual Debt Service Coverage
Net Revenue (h)
Total Annual Debt Service Requirements
Annual Debt Service Coverage
Attachment 1- Option 1
Actual
FY 07-08
$3,815,957 $3,940,000 $4,749,966 $5,224,963 $5,747,459 $6,322,205 $6,954,425
$6,947,610 $6,480,000 $8,453,937 $9,510,679 $10,081,320 $10,686,199 $11,327,371
$246,129 $230,000 $235,750 $241,644 $247,685 $253,877 $260,224
$11,009,696 $10,650,000 $13,439,653 $14,977,286 $16,076,464 $17,262,281 $18,542,021
09/29/2009 3:50 PM
$2,139,505
$2,220,188
$2,286,793
$2,355,397
$2,426,060
$2,498,842
$2,573,807
$2,937,385
$3,200,274
$3,396,283
$3,498,171
$3,603,116
$3,711,209
$3,822,545
$11,211
$14,500
$14,500
$14,500
$14,500
$14,500
$14,500
$1,263,653
$1,260,000
$1,265,000
$1,265,000
$1,270,000
$1,275,000
$1,275,000
$3,910,529
$4,397,499
$4,011,379
$4,011,379
$4,011,379
$4,011,379
$4,011,379
$895,564
$861,414
$1,014,600
$1,014,600
$1,014,600
$1,014,600
$1,014,600
$11,157,847
$11,953,875
$11,988,555
$12,159,047
$12,339,655
$12,525,530
$12,711,831
($148,150) ($1.303,875) $1,451,098 $2,818,239 $3,736,809 $4,736,752 $5,830,190
$231,145
$125,700
$40,800
$33,800
$42,000
$70,300
$111,600
$0
$0
$0
$0
$0
$0
$0
($604,351)
($591,385)
($571,105)
($543,705)
($515,305)
($485,705)
($422,908)
$0
$0
($431,968)
($849,140)
($833,717)
($1,130,862)
($1,554,382)
($604,351)
($591,385)
($1,003,073)
($1,392,845)
($1,349,022)
($1,616,567)
($1,977,290)
($373,206)
($465,685)
($962,273)
($1,359,045)
($1,307,022)
($1,546,267)
($1,865,690)
($521.356) ($1,769,560) $488,825 $1,459,194 $2,429,787 $3,190,485 $3,964,500
$6,983,895 $6,282,539 $2,039,562 $1,687,824 $2,098,861 $3,517,010 $5,579,219
$0 $0 $1,018,914 $1,025,592 $1,107,534 $1,114,212 $1,140,990
$0 $1,953,417 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000
$180,000 $520,000 $685,000 $710,000 $740,000 $770,000 $800,000
$0 $0 $174,476 $363,749 $379,173 $472,488 $610,850
$180,000 $520,000 $859,476 $1,073,749 $1,119,173 $1,242,488 $1,410,850
$6,282,539
$2,039,562
$1,687,824
$2,098,861
$3,517,010
$5,579,219
$8,273,859
$5,578,923
$5,976,938
$5,994,278
$6,079,524
$6,169,828
$6,262,765
$6,355,915
$703,615
($3,937,376)
($4,306,453)
($3,980,662)
($2,652,817)
($683,546)
$1,917,944
$1,166,648
$81,825
$3,775,812
$5,142,631
$6,156,343
$7,196,264
$8,357,780
$898,351
$1,111,385
$1,862,550
$2,466,594
$2,468,194
$2,859,055
$3,388,140
130%
7%
203%
208%
249%
252%
247%
Page 1 of 3
Attachment 1- Option 1
Bi -Monthly Bill for 5/8 & 3/4 size
meters (includes Capital Fee)
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
FY 09/10
$79.59
$98.69
$120.79
$145.89
$170.99
FY 10/11
$87.94
$109.44
$134.34
$162.54
$190.74
FY 11/12
$94.04
$116.84
$143.24
$173.14
$203.04
FY 12/13
$100.62
$124.82
$152.72
$184.42
$216.12
FY 13/14
$107.61
$133.21
$162.81
$196.41
$230.01
Page 2 of 3
09/29/2009 11:38 AM
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
10.82%
11.49%
14.80%
18.01%
20.40%
FY 10/11
10.49%
10.89%
11.22%
11.41%
11.55%
FY 11/12
6.94%
6.76%
6.62%
6.52%
6.45%
FY 12/13
1 7.00%
6.83%
6.62%
6.51%
6.44%
FY 13/14
6.95%
6.72%
6.61%
6.50%
6.43%
Total
42.19%
42.69%
45.87%
48.97%
51.27%
Page 2 of 3
09/29/2009 11:38 AM
Attachment 1- Option 1
09/29/2009 11:38 AM
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
10/11
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
11/12
$0.69 1
$1.21
$1.56
$1.92
1 $2.28 1
$2.64
$2.99
12/13
$0.73
$1.28
$1.66
$2.04
$2.42
$2.79
$3.17
13/14
$0.78
$1.35
$1.76
$2.16
$2.56
$2.96
$3.36
09/29/2009 11:38 AM
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10 1
11-20
1 21-30
1 31-40
1 41-50
1 51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.70
$1.22
$1.59
$1.95
$2.31
$2.67
$3.04
09/10
Normal
$0.64
$1.11
$1.44
$1.77
$2.10
$2.43
$2.76
Low
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
High
$0.79
$1.38
$1.78
$2.19
$2.60
$3.01
$3.42
10/11
Normal
$0.72
$1.25
$1.62
$1.99
$2.36
$2.74
$3.11
Low
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
High
$0.84
$1.46
$1.89
$2.32
$2.76
$3.19
$3.62
11/12
Normal
$0.76
$1.33
$1.72
$2.11
$2.51
$2.90
$3.29
Low
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
High
$0.89
$1.55
$2.00
$2.46
$2.92
$3.38
$3.84
12/13
Normal
$0.81
$1.41
$1.82
$2.24
$2.66
$3.07
$3.49
Low
$0.73
$1.28
$1.66
$2.04
$2.42
$2.79
$3.17
High
$0.94
$1.64
$2.12
$2.61
$3.10
$3.58
$4.07
13/14
Normal
$0.86
$1.49
$1.93
$2.37
$2.82
$3.26
$3.70
Low
1 $0.78
$1.35
$1.76
$2.16
$2.56
$2.96
$3.36
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Attachment 2 - Option 2
09/29/2009 3:50 PM
Description
Actual
FY 07-08
FY 08-09
FY 09-10
Projected
FY 10-11
FY 11-12
FY 12-13
FY 13-14
Notes
Revenues (a)
5 years - 44.22% Increase,
Fixed Charges
$3,815,957
$3,940,000
$4,479,977
$5,224,963
$5,747,459
$6,322,205
$6,954,425
2 Bond Issuances (FY 10/11 &
Consumption Charges
$6,947,610
$6,480,000
$7,649,831
$9,165,273
$9,990,148
$10,809,340
$11,695,706
FY 13/14),
Other Revenues
$246,129
$230,000
$235,750
$241,644
$247,685
$253,877
$260,224
Delay pay-as-you-go Capital
Total Operating Revenues
$11,009,696
$10,650,000
$12,365,559
$14,631,880
$15,985,292
$17,385,422
$18,910,355
program to FY 11/12,
Operating Expenses (b)
Salaries and Benefits
$2,139,505
$2,220,188
$2,286,793
$2,355,397
$2,426,060
$2,498,842
$2,573,807
Maintenance and Operations
$2,937,385
$3,200,274
$3,396,283
$3,498,171
$3,603,116
$3,711,209
$3,822,545
Miscellaneous Capital
$11,211
$14,500
$14,500
$14,500
$14,500
$14,500
$14,500
Depreciation Expense
$1,263,653
$1,260,000
$1,265,000
$1,265,000
$1,270,000
$1,275,000
$1,275,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
$4,011,379
$4,011,379
$4,011,379
$4,011,379
Energy Costs
$895,564
$861,414
$1,014,600
$1,014,600
$1,014,600
$1,014,600
$1,014,600
Total Operating Expenses
$11,157,847
$11,953,875
$11,988,555
$12,159,047
$12,339,655
$12,525,530
$12,711,831
Net Operating Revenue
($148,150)
($1,303,875)
$377,004
$2,472,833
$3,645,637
$4,859,892
$6,198,525
Non -Operating Revenue (Expense)
Interest Income 1@ 2%)(c)
$231,145
$125,700
$40,800
$44,400
$72,000
$99,100
$151,200
Water Capital Facility Charges (e)
$0
$0
$0
$0
$0
$0
$0
Debt Service- Interest Expense
($604,351)
($591,385)
($571,105)
($543,705)
($515,305)
($485,705)
($422,908)
Proposed Debt Service- Interest Expense
$0
$0
$0
($647,953)
($849,140)
($833,717)
($1,643,539)
Subtotal Debt Service Interest Expense
$604,351
$591,385
$571,105
$1,191,658
$1,364,445
$1,319,422
$2,066,447
Total Non -Op Revenues/Expenses
($373,206)
($465,685)
($530,305)
($1,147,258)
($1,292,445)
($1,220,322)
($1,915,247)
Net Revenues(Loss)
($521,356)
($1,769,560)
($153,301)
$1,325,576
$2,353,192
$3,639,571
$4,283,277
Beg. Retained Earnings Net of Fixed Assets
$6,983,895
$6,282,539
$2,039,562
$2,220,175
$3,599,628
$4,956,604
$7,561,214
(Available for Captial Outlay & Debt -Principal Payments)
Capital Fee
$0
$0
$1,018,914
$1,025,592
$1,107,534
$1,114,212
$1,140,990
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$1,953,417
$0
$0
$1,000,000
$1,000,000
$1,000,000
Capital Financing
Existing Debt Service Principal Payments
$180,000
$520,000
$685,000
$710,000
$740,000
$770,000
$800,000
Proposed Debt Service Principal Payments
$0
$0
$0
$261,715
$363,749
$379,173
$569,362
Subtotal
$180,000
$520,000
$685,000
$971,715
$1,103,749
$1,149,173
$1,369,362
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282,539
$2,039,562
$2,220,175
$3,599,628
$4,956,604
$7,561,214
$10,616,119
Target Reserve Balance(g)
$5,578,923
$5,976,938
$5,994,278
$6,079,524
$6,169,828
$6,262,765
$6,355,915
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
$703,615
($3,937,376)
($3,774,103)
($2,479,896)
($1,213,223)
$1,298,449
$4,260,204
Annual Debt Service Coverage
Net Revenue (h)
$1,166,648
$81,825
$2,701,718
$4,807,825
$6,095,171
$7,348,204
$8,765,715
Total Annual Debt Service Requirements
$898,351
$1,111,385
$1,256,105
$2,163,372
$2,468,194
$2,468,594
$3,435,810
Annual Debt Service Coverage
130%
7%
215%
222%
247%
298%
2551
Page 1 of 3
Attachment 2 - Option 2
Bi -Monthly Bill
for 5/8 & 3/4 size
meters (includes Capital Fee)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
FY 09/10
$78.69
$97.29
$118.79
$143.19
$167.59
FY 10/11
$86.24
$106.94
$130.84
$157.94
$185.04
FY 11/12
$93.74
$116.24
$142.24
$171.84
$201.44
FY 12/13
$101.52
$125.92
$154.12
$186.12
$218.12
FY 13/14
1 $109.71
$136.11
$166.61
$201.21
$235.81
Page 2 of 3
09/29/2009 11:43 AM
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
9.57%
9.91%
12.90%
15.83%
18.00%
FY 10/11
9.59%
9.92%
10.14%
10.30%
10.41%
FY 11/12
8.70%
8.70%
8.71%
8.80%
8.86%
FY 12/13
8.30%
8.33%
8.35%
8.31%
8.28%
FY 13/14
8.07%
8.09%
8.10%
8.11%
8.11%
Total
44.22%
44.94%
48.21%
51.35%
53.67%
Page 2 of 3
09/29/2009 11:43 AM
Attachment 2 - Option 2
09/29/2009 11:44 AM
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
10/11
$0.64
$1.10
$1.42
$1.74
$2.07
$2.39
$2.71
11/12
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
12/13
$0.76 1
$1.30
$1.68
$2.06
$2.44
$2.82
$3.20
13/14
$0.82 1
$1.40
$1.81
$2.23
$2.64 1
$3.05
$3.46
09/29/2009 11:44 AM
High > 110% of prior year consumption
Normal 90% -110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
11-20
1 21-30
1 31-40
41-50
1 1-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.70
$1.19
$1.55
$1.90
$2.25
$2.60
$2.95
09/10
Normal
$0.63
$1.09
$1.40
$1.72
$2.04
$2.36
$2.68
Low
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
High
$0.78
$1.33
$1.72
$2.11
$2.50
$2.89
$3.28
10/11
Normal
$0.71
$1.21
$1.56
$1.92
$2.27
$2.63
$2.98
Low
$0.64
$1.10
$1.42
$1.74
$2.07
$2.39
$2.71
High
$0.85
$1.45
$1.87
$2.30
$2.73
$3.15
$3.58
11/12
Normal
$0.77
$1.32
$1.70
$2.09
$2.48
$2.87
$3.25
Low
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
High
$0.92
$1.57
$2.03
$2.49
$2.95
$3.41
$3.87
12/13
Normal
$0.83
$1.43
$1.84
$2.26
$2.68
$3.10
$3.52
Low
$0.76
$1.30
$1.68
$2.06
$2.44
$2.82
$3.20
High
$0.99
$1.70
$2.19
$2.69
$3.19
$3.69
$4.19
13/14
Normal
$0.90
$1.54
$2.00
$2.45
$2.90
$3.35
$3.81
Low
1 $0.82
$1.40
$1.81
$2.23
$2.64
$3.05
$3.46
High > 110% of prior year consumption
Normal 90% -110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Attachment 3 - Option 3
09/29/2009 3:51 PM
Description
Actual
FY 07-08
FY 08-09
FY 09-10
Projected
FY 10-11
FY 11-12
FY 12-13
FY 13-14
Notes
Revenues(a)
5 year -30.04% Increase,
Fixed Charges
$3,815,957
$3,940,000
$4,479,977
$5,224,963
$5,747,459
$6,322,205
$6,954,425
2 bond issuance (FY10/11 & FY
Consumption Charges
$6,947,610
$6.480,000
$7,250,411
$8,858,595
$9,059,208
$9,274,919
$10,016,912
13/14),
Other Revenues
$246,129
$230,000
$235,750
$241,644
$247,685
$253,877
$260,224
Delay Pay-as-you-go capital
Total Operating Revenues
$11,009,696
$10,650,000
$11,966,139
$14,325.202
$15,054,352
$15,851,000
$17,231,561
program to FY 12/13,
Does not meet reserve goal
Operating Expenses (b)
Salaries and Benefits
$2,139,505
$2,220,188
$2,286,793
$2,355,397
$2,426,060
$2,498,842
$2,573,807
Maintenance and Operations
$2,937,385
$3,200,274
$3,396,283
$3,498,171
$3,603,116
$3,711,209
$3,822,545
Miscellaneous Capital
$11,211
$14,500
$14,500
$14,500
$14,500
$14,500
$14,500
Depreciation Expense
$1,263,653
$1,260,000
$1,265,000
$1,265,000
$1,270,000
$1,275,000
$1,275,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
$4,011,379
$4,011,379
$4,011,379
$4,011,379
Energy Costs
$895,564
$861,414
$1,014,600
$1,014,600
$1,014,600
$1,014,600
$1,014,600
Total Operating Expenses
$11,157,847
$11,953,875
$11,988,555
$12,159,047
$12,339,655
$12,525,530
$12,711,831
Net Operating Revenue
($148,150)
($1,303.875)
($22.416)
$2,166,155
$2,714,697
$3,325,471
$4,519,731
Non -Operating Revenue (Expense)
Interest Income (@ 2%)(c)
$231,145
$125,700
$40,800
$36,400
$57,700
$85,900
$107,100
Water Capital Facility Charges (e)
$0
$0
$0
$0
$0
$0
$0
DebtService- Interest Expense
($604,351)
($591,385)
($571,105)
($543,705)
($515,305)
($485,705)
($422,908)
Proposed DebtService - Interest Expense
$0
$0
$0
($647,953)
($849,140)
($833,717)
($1,643,539)
Subtotal Debt Service Interest Expense
$604,351
$591,385
$571,105
$1,191,658
$1,364,445
$1,319,422
$2,066,447
Total Non -Op Revenues/Expenses
($373,206)
($465,685)
($530,305)
($1,155,258)
($1,306,745)
($1,233,522)
($1,959,347)
Net Revenues(Loss)
($521,356)
($1,769.560)
($552,721)
$1,010,897
$1,407,951
$2,091,949
$2,560,383
Beg. Retained Earnings Net of Fixed Assets
$6,983,895
$6,282,539
$2,039,562
$1,820,754
$2,885,529
$4,297,265
$5,354,253
(Available for Captial Outlay & Debt -Principal Payments)
Capital Fee
$0
$0
$1,018,914
$1,025,592
$1,107,534
$1,114,212
$1,140,990
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$1,953,417
$0
$0
$0
$1,000,000
$1,000,000
Capital Financing
Existing Debt Service Principal Payments
$180,000
$520,000
$685,000
$710,000
$740.000
$770,000
$800.000
Proposed Debt Service Principal Payments
$0
$0
$0
$261,715
$363,749
$379,173
$569,362
Subtotal
$180,000
$520,000
$685,000
$971,715
$1,103,749
$1,149,173
$1,369,362
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282,539
$2,039,562
$1,820,754
$2,885,529
$4,297,265
$5,354,253
$6,686,264
Target Reserve Balance(g)
$5,578,923
$5,976,938
$5,994,278
$6,079,524
$6,169,828
$6,262,765
$6,355,915
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
$703,615
($3,937,376)
($4.173,523)
($3.193,995)
($1,872,563)
($908.511)
$330,349
Annual Debt Service Coverage
Net Revenue (h)
$1,166,648
$81,825
$2,302,298
$4,493,147
$5,149,931
$5,800,583
$7,042,821
Total Annual Debt Service Requirements
$898,351
$1.111,385
$1,256,105
$2,163,372
$2,468,194
$2,468,594
$3,435,810
Annual Debt Service Coverage
130%
7%
183%
208%
209%
235%
205%
Page 1 of 3
Attachment 3 - Option 3
Bi -Monthly Bill for 5/8 & 3/4 size meters (includes
Capital Fee)
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
FY 09/10
$73.89
$91.09
$111.49
$135.09
$158.69
FY 10/11
$82.44
$102.24
$125.64
$152.74
$179.84
FY 11/12
$85.44
$106.04
$130.34
$158.44
$186.54
FY 12/13
$88.72
$110.12
$135.32
$164.52
$193.72
FY 13/14
$95.91
$119.01 1
$146.31
$177.91
$209.51
Page 2 of 3
09/29/2009 11:49 AM
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
2.88%
2.90%
5.96%
9.28%
11.74%
FY 10/11
11.57%
12.24%
12.69%
13.07%
13.33%
FY 11/12
3.64%
3.72%
3.74%
3.73%
3.73%
FY 12/13
3.84%
3.85%
3.82%
3.84%
3.85%
FY 13/14
8.10%
8.07%
8.12%
8.14%
8.15%
Total
30.04%
30.78%
34.33%
38.05%
40.79%
Page 2 of 3
09/29/2009 11:49 AM
Attachment 3 - Option 3
09/29/2009 11:50 AM
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
10/11
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
11/12
$0.64 1
$1.02 1
$1.29
$1.57
$2.06
$2.43
1 $2.81
12/13
$0.64 1
$1.02 1
$1.29
$1.57
$2.14
$2.52
$2.92
13/14
$0.69 1
$1.10 1
$1.39
$1.70
$2.31
$2.73
$3.16
09/29/2009 11:50 AM
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
11-20
21-30
1 31-40 1
41-50
1 51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.68
$1.08
$1.35
$1.66
$2.08
$2.47
$2.85
09/10
Normal
$0.61
$0.98
$1.23
$1.51
$1.89
$2.24
$2.59
Low
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
High
$0.78
$1.24
$1.56
$1.90
$2.39
$2.84
$3.28
10/11
Normal
$0.71
$1.12
$1.42
$1.73
$2.17
$2.58
$2.98
Low
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
High
$0.78
$1.24
$1.56
$1.90
$2.49
$2.95
$3.40
11/12
Normal
$0.71
$1.12
$1.42
$1.73
$2.26
$2.68
$3.09
Low
$0.64
$1.02
$1.29
$1.57
$2.06
$2.43
$2.81
High
$0.78
$1.24
$1.56
$1.90
$2.59
$3.05
$3.54
12/13
Normal
$0.71
$1.12
$1.42
$1.73
$2.35
$2.78
$3.21
Low
$0.64
$1.02
$1.29
$1.57
$2.14
$2.52
$2.92
High
$0.84
$1.34
$1.68
$2.06
$2.79
$3.30
$3.82
13/14
Normal
$0.76
$1.21
$1.53
$1.87
$2.54
$3.00
$3.47
Low
1 $0.69
$1.10
$1.39
$1.70
$2.31
$2.73
$3.16
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Attachment 4 - Option 4
09/29/2009 3:51 PM
Description
Actual
FY 07-08
FY 08-09
FY 09-10
Projected
FY 10-11
FY 11-12
FY 12-13
FY 13-14
Notes
Revenues (a)
5 Year - 26.14% Increase,
Fixed Charges
$3,815,957
$3,940,000
$4,479,977
$5,224,963
$5,747,459
$6,322,205
$6,954,425
1 bond issuance (FY11/12),
Consumption Charges
$6,947,610
$6,480,000
$7,178,600
$7,943,162
$9,027,280
$9,263,958
$9,518,413
Delay pay-as-you-go capital
Other Revenues
$246,129
$230,000
$235,750
$241,644
$247,685
$253,877
$260,224
program to FY 12/13,
Total Operating Revenues
$11,009,696
$10,650,000
$11,894,328
$13,409,768
$15,022,424
$15,840,040
$16,733,062
Operating Expenses (b)
Salaries and Benefits
$2,139,505
$2,220,188
$2,286,793
$2,355,397
$2,426,060
$2,498,842
$2,573,807
Maintenance and Operations
$2,937,385
$3,200,274
$3,396,283
$3,498,171
$3,603,116
$3,711,209
$3,822,545
Miscellaneous Capital
$11,211
$14,500
$14,500
$14,500
$14,500
$14,500
$14,500
Depreciation Expense
$1,263,653
$1,260,000
$1,265,000
$1,265,000
$1,270,000
$1,275,000
$1,275,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
$4,011,379
$4,011,379
$4,011,379
$4,011,379
Energy Costs
$895,564
$861,414
$1,014,600
$1,014,600
$1,014,600
$1,014,600
$1,014,600
Total Operating Expenses
$11,157,847
$11,953,875
$11,988,555
$12,159,047
$12,339,655
$12,525,530
$12,711,831
Net Operating Revenue
($148,150)
($1,303,875)
($94,227)
$1,250,721
$2,682,769
$3,314,510
$4,021,231
Non -Operating Revenue (Expense)
Interest Income (@ 2%)(c)
$231,145
$125,700
$40,800
$35,000
$56,100
$83,700
$104,600
Water Capital Facility Charges (e)
$0
$0
$0
$0
$0
$0
$0
DebtService- Interest Expense
($604,351)
($591,385)
($571,105)
($543,705)
($515,305)
($485,705)
($422,908)
Proposed DebtService - Interest Expense
$0
$0
$0
$0
($863,937)
($849,140)
($833,717)
Subtotal Debt Service Interest Expense
$604.351
$591,385
$571,105
$543,705
$1,379242
$1334845
$1256625
Total Non -Op Revenues/Expenses
($373,206)
($465,685)
($530,305)
($508,705)
($1,323,142)
($1,251,145)
($1,152,025)
Net Revenues(Loss)
($521.356)
($1,769.560)
($624,532)
$742,016
$1,359,627
$2,063,365
$2,869,206
Beg. Retained Earnings Net of Fixed Assets
$6,983,895
$6,282,539
$2,039,562
$1,748,944
$2,806,552
$4,184,760
$5,228,588
(Available for Captial Outlay & Debt -Principal Payments)
Capital Fee
$0
$0
$1,018,914
$1,025,592
$1,107,534
$1,114,212
$1,140,990
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$1,953,417
$0
$0
$0
$1,000,000
$1,000,000
Capital Financing
Existing Debt Service Principal Payments
$180,000
$520,000
$685,000
$710,000
$740,000
$770,000
$800,000
Proposed Debt Service Principal Payments
$0
$0
$0
$0
$348,953
$363,749
$379,173
Subtotal
$180,000
$520,000
$685,000
$710,000
$1,088,953
$1,133,749
$1,179,173
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282,539
$2,039,562
$1,748,944
$2,806,552
$4,184,760
$5,228,588
$7,059,612
Target Reserve Balance(g)
$5,578,923
$5,976,938
$5,994,278
$6,079,524
$6,169,828
$6,262,765
$6,355,915
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
$703,615
($3,937,376)
($4,245,334)
($3,272,971)
($1,985,067)
($1,034,177)
$703,696
Annual Debt Service Coverage
Net Revenue (h)
$1,166,648
$81,825
$2,230,487
$3,576,313
$5,116,403
$5,787,422
$6,541,821
Total Annual Debt Service Requirements
$898,351
$1,111,385
$1,256,105
$1,253,705
$2,468,194
$2,468,594
$2,435,797
Annual Debt Service Coverage
130%
7%
178%
285%
207%
234%
269%
Page 1 of 3
Attachment 4 - Option 4
Bi -Monthly Bill for 5/8 & 3/4 size
meters (includes Capital Fee)
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
FY 09/10
$74.59
$91.99
$112.39
$135.79
$159.19
FY 10/11
$77.34
$95.44
$116.64
$140.94
$165.24
FY 11/12
1 $85.64
$106.64
$130.84
1 $158.54
$186.24
FY 12/13
1 $88.92
$110.82
$136.02
$164.92
$193.82
FY 13/14
1 $92.51
$115.31
$141.61
$171.81
$202.01
Page 2 of 3
09/29/2009 11:51 AM
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
3.86%
3.92%
6.81%
9.84%
12.09%
FY 10/11
3.69%
3.75%
3.78%
3.79%
3.80%
FY 11/12
10.73%
11.74%
12.17%
12.49%
12.71%
FY 12/13
1 3.83%
3.92% 1
3.96%
4.02%
4.07%
FY 13/14
4.04%
4.05%
4.11%
4.18%
4.23%
Total
26.14%
27.38%
30.84%
34.33%
36.89%
Page 2 of 3
09/29/2009 11:51 AM
Attachment 4 - Option 4
09/29/2009 11:52 AM
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.56
$0.91
$1.15
$1.39
$1.74
$2.04
$2.34
10/11
$0.56
$0.91
$1.15
$1.39
$1.81
$2.12
$2.43
11/12
$0.64
$1.03
$1.30
$1.57
$2.10
$2.42
1 $2.77
12/13
$0.64
$1.03
$1.30
$1.57
$2.19
$2.52
$2.89
13/14
$0.64 1
$1.03
$1.30
$1.57
$2.28
$2.63
$3.02
09/29/2009 11:52 AM
High > 110% of prior year consumption
Normal 90% -110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
1 11-20
1 21-30
1 31-40 1
41-50
1 51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.68
$1.11
$1.40
$1.69
$2.11
$2.47
$2.84
09/10
Normal
$0.62
$1.00
$1.27
$1.53
$1.92
$2.25
$2.58
Low
$0.56
$0.91
$1.15
$1.39
$1.74
$2.04
$2.34
High
$0.68
$1.11
$1.40
$1.69
$2.19
$2.57
$2.94
10/11
Normal
$0.62
$1.00
$1.27
$1.53
$1.99
$2.34
$2.68
Low
$0.56
$0.91
$1.15
$1.39
$1.81
$2.12
$2.43
High
$0.77
$1.25
$1.58
$1.91
$2.54
$2.93
$3.35
11/12
Normal
$0.70
$1.14
$1.43
$1.73
$2.31
$2.66
$3.05
Low
$0.64
$1.03
$1.30
$1.57
$2.10
$2.42
$2.77
High
$0.77
$1.25
$1.58
$1.91
$2.65
$3.05
$3.50
12/13
Normal
$0.70
$1.14
$1.43
$1.73
$2.41
$2.77
$3.18
Low
$0.64
$1.03
$1.30
$1.57
$2.19
$2.52
$2.89
High
$0.77
$1.25
$1.58
$1.91
$2.76
$3.18
$3.65
13/14
Normal
$0.70
$1.14
$1.43
$1.73
$2.51
$2.89
$3.32
Low
$0.64
$1.03
$1.30
$1.57
$2.28
$2.63
$3.02
High > 110% of prior year consumption
Normal 90% -110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Attachment 5 - Option 5
09/29/2009 3:52 PM
Description
Actual
FY 07-08
FY 08-09
Projected
FY 09-10
FY 10-11
FY 11-12
Notes
Revenues (a)
3 Years - 18.09% increase,
Fixed Charges
$3,815,957
$3,940,000
$4,479,977
$5,224,963
$5,747,459
1 bond issuance (FY 10/11),
Consumption Charges
$6,947,610
$6,480,000
$7,250,411
$8,858,595
$9,059,208
Delay pay-as-you-go capital
Other Revenues
$246,129
$230,000
$235,750
$241,644
$247,685
program,
Total Operating Revenues
$11,009,696
$10,650,000
$11,966,139
$14,325,202
$15,054,352
Operating Expenses (b)
Salaries and Benefits
$2,139,505
$2,220,188
$2,286,793
$2,355,397
$2,426,060
Maintenance and Operations
$2,937,385
$3,200,274
$3,396,283
$3,498,171
$3,603,116
Miscellaneous Capital
$11,211
$14,500
$14,500
$14,500
$14,500
Depreciation Expense
$1,263,653
$1,260,000
$1,265,000
$1,265,000
$1,270,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
$4,011,379
$4,011,379
Energy Costs
$895,564
$861,414
$1,014,600
$1,014,600
$1,014,600
Total Operating Expenses
$11,157,847
$11.953,875
$11,988,555
$12,159,047
$12,339,655
Net Operating Revenue
($148.150)
($1.303,875)
($22,416)
$2,166,155
$2,714,697
Non -Operating Revenue (Expense)
Interest Income (@ 2%)(c)
$231,145
$125,700
$40,800
$36,400
$57,700
Water Capital Facility Charges (e)
$0
$0
$0
$0
$0
DebtService- Interest Expense
($604,351)
($591,385)
($571,105)
($543,705)
($515,305)
Proposed DebtService - Interest Expense
$0
$0
$0
($647,953)
($849,140)
Subtotal Debt Service Interest Expense
$604,351
$591,385
$571,105
$1,191,658
$1,364,445
Total Non -Op Revenues/Expenses
($373.206)
($465,685)
($530,305)
($1,155,258)
($1,306,745)
Net Revenues(Loss)
($521,356)
($1,769,560)
($552,721)
$1,010,897
$1,407,951
Beg. Retained Earnings Net of Fixed Assets
$6,983,895
$6,282,539
$2,039,562
$1,820,754
$2,885,529
(Available for Captial Outlay & Debt -Principal Payments)
Capital Fee
$0
$0
$1,018,914
$1,025,592
$1,107,534
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$1,953,417
$0
$0
$0
Capital Financing
Existing Debt Service Principal Payments
$180,000
$520,000
$685,000
$710,000
$740,000
Proposed Debt Service Principal Payments
$0
$0
$0
$261,715
$363,749
Subtotal
$180,000
$520,000
$685,000
$971,715
$1,103,749
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282,539
$2,039,562
$1,820,754
$2,885,529
$4,297,265
Target Reserve Balance(g)
$5,578,923
$5,976,938
$5,994,278
$6.079,524
$6,169,828
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
$703,615
($3,937,376)
($4.173.523)
($3,193,995)
($1,872,563)
Annual Debt Service Coverage
Net Revenue(h)
$1,166,648
$81,825
$2,302,298
$4,493,147
$5,149,931
Total Annual Debt Service Requirements
$898,351
$1,111,385
$1,256,105
$2,163,372
$2,468,194
Annual Debt Service Coverage
130%
7%
183%
208%
209%
Page 1 of 3
Attachment 5 - Option 5
Bi -Monthly Bill
for 5/8 & 3/4 size
meters (includes Capital Fee)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
FY 09/10
$73.89
$91.09
$111.49
$135.09
$158.69
FY 10/11
$82.44
$102.24
$125.64
$152.74
$179.84
FY 11/12
$85.44
$106.04
$130.34
1 $158.44
1 $186.54
Page 2 of 3
09/29/2009 11:53 AM
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
2.88%
2.90%
5.96%
9.28%
11.74%
FY 10/11
11.57%
12.24%
12.69%
13.07%
13.33%
FY 11/12
3.64%
3.72%
3.74%
3.73%
1 3.73%
Total
1 18.09%
1 18.86% 1
22.39%
26.08%
1 28.79%
Page 2 of 3
09/29/2009 11:53 AM
Attachment 5 - Option 5
09/29/2009 2:44 PM
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10 $0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
10/11 $0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
11/12 $0.64 1
$1.02
$1.29
$1.57
$2.06 1
$2.43
$2.81
09/29/2009 2:44 PM
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
1 11-20
1 21-30
31-40
1 41-50
51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.68
$1.08
$1.35
$1.66
$2.08
$2.47
$2.85
09/10
Normal
$0.61
$0.98
$1.23
$1.51
$1.89
$2.24
$2.59
Low
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
High
$0.78
$1.24
$1.56
$1.90
$2.39
$2.84
$3.28
10/11
Normal
$0.71
$1.12
$1.42
$1.73
$2.17
$2.58
$2.98
Low
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
High
$0.78
$1.24
$1.56
$1.90
$2.49
$2.95
$3.40
11/12
Normal
$0.71
$1.12
$1.42
$1.73
$2.26
$2.68
$3.09
Low
$0.64
$1.02
$1.29
$1.57
$2.06
$2.43
$2.81
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
Attachment 6 - Option 6
Description
Actual
FY 07-08
Projected
FY 08-09
FY 09-10
NOTES
Revenues(a)
1 year -6.8% Increase
Fixed Charges
$3,815,957
$3,940,000
$4,479,977
Meets bond covenants
Consumption Charges
$6,947,610
$6,480,000
$7,806,813
Eliminates operating at a loss
Other Revenues
$246,129
$230,000
$235,750
Total Operating Revenues
$11,009,696
$10,650,000
$12,522,540
Operating Expenses (b)
Salaries and Benefits
$2,139,505
$2,220,188
$2,286,793
Maintenance and Operations
$2,937,385
$3,200,274
$3,396,283
Miscellaneous Capital
$11,211
$14,500
$14,500
Depreciation Expense
$1,263,653
$1,260,000
$1,265,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
Energy Costs
$895,564
$861,414
$1,014,600
Total Operating Expenses
$11,157,847
$11,953,875
$11,988,555
Net Operating Revenue
($148,150)
($1,303,875)
$533,985
Non -Operating Revenue (Expense)
Interest Income (@ 2%)(c)
$231,145
$125,700
$40,800
Water Capital Facility Charges (e)
$0
$0
$0
Debt Service- Interest Expense
($604,351)
($591,385)
($571,105)
Proposed Debt Service - Interest Expense
$0
$0
$0
Subtotal Debt Service lnterest Expense
$604,351
$591,385
$571,105
Total Non -Op Revenues/Expenses
($373,206)
($465,685)
($530,305)
Net Revenues(Loss)
($521,356)
($1,769,560)
$3,680
Beg. Retained Earnings Net of Fixed Assets
$6,983,895
$6,282,539
$2,039,562
(Available for Captial Outlay 6 Debt -Principal Payments)
Capital Fee
$0
$0
$1,018,914
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$1,953,417
$0
Capital Financing
Existing Debt Service Principal Payments
$180,000
$520,000
$685,000
Proposed Debt Service Principal Payments
$0
$0
$0
Subtotal
$180,000
$520,000
$685,000
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282,539
$2,039,562
$2,377,156
Target Reserve Balance(g)
$5,578,923
$5,976,938
$5,994,278
Retained Earnings Available for Captial Outlay
& Principal Payments Net of Target Reserves
$703,615
($3,937,376)
($3,617,122)
Annual Debt Service Coverage
Net Revenue(h)
$1,166,648
$81,825
$2,858,699
Total Annual Debt Service Requirements
$898,351
$1,111,385
$1,256,105
Annual Debt Service Coverage
130%
7%
228%
Page 1 of 3
09/29/2009 11:54 AM
Attachment 6 - Option 6
Bi -Monthly Bill for 5/8 & 3/4 size meters (includes Capital Fee)
40 Units 50 Units 60 Units 70 Units
80 Units
FY 08/09 $71.82 $88.52 $105.22 $123.62
$142.02
FY 09/10 $76.69 $95.59 $117.69 $142.99
$168.29
% Change From Previous Year
40 Units 50 Units
60 Units
70 Units 80 Units
FY 08/09
FY 09/10
6.78% 7.99%
11.85%
15.67% 18.50%
Page 2 of 3
09/29/2009 11:55 AM
Attachment 6 - Option 6
Tier Structure & Charges (Small Meters)
0-10
11-20 21-30
1 31-40 41-50
51-60 61+
1st Tier
2nd Tier 3rd Tier
4th Tier 5th Tier
6th Tier 7th Tier
09/10 $0.57
$0.95 $1.21
$1.49 $1.89
$2.21 $2.53
09/29/2009 11:56 AM
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
1 11-20
1 21-30
1 31-40
1 41-50
51-60
61+
1st Tier
2nd Tier
3rd Tier
I 4th Tier
I 5th Tier
6th Tier I
7th Tier
High $0.69
09/10 Normal $0.63
Low $0.57
$1.15
$1.04
$0.95
$1.46
$1.33
$1.21
$1.80
$1.64
$1.49
$2.29
$2.08
$1.89
$2.67
$2.43
$2.21
$3.06
$2.78
$2.53
High > 110% of prior year consumption
Normal 90% - 110% of prior year consumption
Low < 90% of prior year consumption
Page 3 of 3
ATTACHMENT 7
Agenda Item
AGENDA REPORT Reviewed:
City Manager
Finance Director
MEETING DATE: AUGUST 4, 2009
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
DOUGLAS S. STACK, ASSISTANT PUBLIC WORKS DIRECTOR
SUBJECT: ADOPTION OF RETAIL WATER RATES — PUBLIC HEARING
RESOLUTION NO. 09-41
SUMMARY:
The purpose of the public hearing, under the California Constitution ("Proposition 218")
is to permit the property owners to comment upon or present objections to the proposed
water rate increases. The proposed rate increases expand the current rate structure
from four to seven tiers, see attachment 1; establishes a capital project fee solely
dedicated for non -debt financed capital improvement projects; provides for a new pass-
through adjustment to account for unanticipated third party charges related to the
purchase of electricity and/or imported water; and establishes Water Demand Reduction
Stages (WDRS) that would enable the City to comply with wholesale water use
restrictions in response to regional water shortage conditions as necessary. The WDRS
was included within the official Proposition 218 notice of Public Hearing to ensure
proper noticing and compliance. Only upon specific City Council authorization can a
WDRS be declared and put into action.
The proposed rate increases would be effective August 5, 2009 for fiscal year 2009-
2010 and July 1st in subsequent fiscal years. The typical residential customer would
experience an increase of 10.8% in FY 2009-10, 10.5% in FY 2010-2011, and 7% in FY
2011-2012 through FY 2013-2014. Additionally, the pass-through adjustment is
restricted to -not -exceed 7% of the annual water charges.
RECOMMENDATION:
It is recommended that City Council take the following actions:
1. Conduct a public hearing to receive testimony on the proposed water rate increases
for fiscal year 2009-2010 through fiscal year 2013-2014; and
2. Adopt Resolution No. 09-41 approving the proposed water rate increases and
changes if there is no majority protest.
ADOPTION OF RETAIL WATER RATES — PUBLIC HEARING
RESOLUTION NO. 09-41
August 4, 2009 Page 2
FISCAL IMPACT:
The proposed water rate increases will generate the necessary revenue to meet ongoing
operations and maintenance expenses; existing debt service payments and bond
covenants; pay -as -you capital improvement; major capital debt financing; establish and
maintain reserves; assurance from unanticipated third party increases; and eliminate
General Fund subsidy to the Water Enterprise Fund to cover projected revenue shortfalls.
BACKGROUND:
The City of Tustin's water rates were last adjusted in January 2008. The most recent
rate increases were adopted on May 1, 2006, and did not generate sufficient revenues
to meet operational and capital needs. Attachment 2 shows the history of rate
increases since 1980.
During Fiscal Year 2008-2009 budget development, it became evident that revenues
derived from existing rates would be inadequate to meet the operating and capital
needs of the system and a rate adjustment would be required. In order to provide for
the continued operation of a water system on a sound financial basis, revenues must be
sufficient to meet the cash requirements of operation, maintenance, capital needs,
administrative, debt service payments and ensure necessary debt coverage ratios
pursuant to the 2003 Water Refunding bond. In addition, revenues in excess of
expenses should be sufficient to provide and maintain cash reserves in the event of
emergencies and short term fluctuations in revenue due to drought and other factors
affecting water supplies and sales.
Projected operating and maintenance expenses are driven by various costs including
personnel, utilities, customer billing, meter reading, purchased water, ground water
replenishment assessments, water treatment, routine maintenance, production and
various materials and supplies. Attachment 3 illustrates the current financial status of
the Water Enterprise fund and the projected financial status with the implementation of
the proposed rate increases. The Water Enterprise is currently operating at a loss.
The factors used to develop the revenue requirements for the Water Enterprise are:
➢ Imported and ground water costs
➢ Electrical costs
➢ Operation and maintenance costs
Debt service coverage
➢ New debt service issuance
➢ Rebuilding the reserve
➢ Capital improvement program
The proposed water rates and charges will yield adequate revenues to cover operating
expenses; repairs; capital improvement program costs; debt service payments and
depreciation of water facilities owned and operated by the City in providing water
service to its customers; and establish and maintain cash reserves.
ADOPTION OF RETAIL WATER RATES — PUBLIC HEARING
RESOLUTION NO. 09-41
August 4, 2009 Page 3
In the notice of Public Hearing sent to all Water Service customers and property
owners, several tables were included which shows the proposed consumption tiers and
charges, service capacity charges, and capital charge. The impact of the proposed rate
increase on the "typical" residential user with a 5/8 x 3/4 inch meter and consuming
about 40 units (one unit = one hundred cubic -feet = 748 gallons) is 10.8% in FY 09/10,
10.5% in FY 10/11, and 7% in FY 11/12 through FY 13/14.
The pass-through charge has been added to the proposed rate increase to offset the
increasing costs of purchasing and pumping water imposed by third party agencies.
Imported water rates are established by Metropolitan Water District of Southern
California (MWD) and additional fees are added to those rates by wholesale water
purveyors, MWDOC and East Orange County Water District (EOCWD). Ground water
rates are established by the Orange County Water District (OCWD) and electricity rates
are established by Southern California Edison. The proposed pass-through would allow
the Water Enterprise to assess and recoup the costs of providing water beyond current
budget appropriation. The pass-through is restricted to -not -exceed 7% (approximately
$0.14 per unit in FY 09-10) of the annual water charges to a "typical" residential user in
any given fiscal year. The pass-through charge could be added to or subtracted from
(when the production cost is less than estimated) the consumption charge. All water
customers would receive a notification prior to the assessment of these charges.
The Water Demand Reduction Stages (WDRS) has been added to the proposed rate
increase to enable the City to comply with wholesale water use restrictions in response
to regional water shortage conditions, as necessary. The WDRS would only be
declared and put into action by specific City Council direction. The WDRS reduces the
unit allocation of each tier at different stages. Stage 1 reduces the allocation by 10%;
Stage 2 reduces the allocation by 20%; Stage 3 reduces the allocation by 30%; and
Stage 4 reduces the allocation by 40%.
According to the 2008 Water Rate Survey conducted by the Municipal Water District of
Orange County (MWDOC), approximately 20 of the 31 water service providers within
the County utilize a tiered rate structure. Attachment 4 is from the MWDOC rate survey
that shows that the City's 2008 water rates were below the median rates at the time the
survey was conducted. The City's proposed rate for FY 2009-2010 would still be below
the countywide median.
The Water Enterprise's Capital Improvement Program is designed to reduce its reliance
on imported water, and improve the water system's storage, production, treatment, and
distribution capabilities. The Water Service will continue its program objectives of
proactively managing the quantity and the quality of its groundwater supplies, and to
rehabilitate or replace older facilities as needed. The proposed rates would enable the
Water Enterprise to obtain $30 million in debt financing for the construction of the
Rawlings Reservoir, Tustin Avenue Well, Simon Ranch Reservoir and Booster Station,
and Beneta Well. The new capital charge will be dedicated to non -debt financed capital
projects. The capital charge was previously a component of the consumption charges
that has now been separated to provide a dedicated funding source for capital projects.
ADOPTION OF RETAIL WATER RATES — PUBLIC HEARING
RESOLUTION NO. 09-41
August 4, 2009 Page 4
On May 28, 2009, the Audit Commission received a presentation on the proposed water
rate increase. The commission made the unanimous recommendation that the water
rate increase be forwarded to City Council for consideration.
Staff is recommending that the City Council adopt five consecutive rate increases at one
time in order to address short term reserves, debt service coverage, and enable the
Water Enterprise to obtain debt financing. If approved the first increase would be
effective August 5, 2009, with subsequent increases going into effect July 1St of each
fiscal year.
Z'j. - a,,, 4 -,/= -
Pamela Arends-King
Finance Director
S n Tran
Senior Financial Analyst
�. Stack
Public Works Director
Attachment(s): Attachment 1 — Change in tier structure
Attachment 2 — History of rate increase
Attachment 3 — Water Enterprise's financial status
Attachment 4 — 2008 MWDOC rate survey
Attachment 1
Change in Tier Structure
Current Tier Structure:
Residential / Commercial
Tiers Units
1 g' Tier
0-12
2" Tier
13-40
To Tier
41-60
-7 Tier
61 +
New Tier Structure:
Residential / Commercial
Tiers
Units
1 s'
Tier
0-10
2 no
Tier
11-20
To
Tier
21-30
-4ffi
Tier
31-40
5
Tier
41-50
e
Tier
51-60
7
Tier
61 +
Multiple Unit
Tiers Units
1 s
Tier
0-10
2ndTier
2"
11-32
3ro
Tier
33-48
4
Tier
49+
Multiple Unit
Tiers
Units
1 S
Tier
0-8
2"
Tier
9-16
3`
Tier
17-24
4
Tier
25-32
5
Tier
33-40
P
Tier
41-48
7
Tier
149+
ATTACHMENT 2
SUMMARY OF TUSTIN WATER RATE INCREASES: 1980-2008
DATE OF
RESOLUTION
PERCENTAGE
AVERAGE SINGLE
NOTES
RESOLUTION
NO.
INCREASE
FAMILY USAGE*
7/6/81
81-82
Consumption charge: 12%
$24.15
Adopted single year increase.
3/15/82
82-25
No increase to rates. Added multiple
residential service charges.
1/17/83
83-7
Consumption charge: 17%
$29.94
Adopted single year increase.
Service capacity charge: 54%
Decreased service capacity charge,
and added customer service and
debt service charge-.
No Increase from
1984 tol992
9/21/92
92-110
1992/Consumption charge:6%
Adopted three year rate increase.
1992/Service capacity charge:100%
1992/$42.00
1993/Consumption charge://%
1993/Service capacity charge:18%
1993/$48.08
1994/Consumption charge:ll%
1994/Service capacity charge:23%
1994/$56.18
5/1/06
06-054
2006/Consumption charge:13%,
Adopted a three year rate increase.
2006/Service capacity charge:14%
2007/Consumption charge:12%
2006/$58.52
2007/Service capacity charge:12%
2008/Consumption charge:10%
20071$65.28
2008/Ser ice capacity charge:10%
2008/$71.82
*NOTE: Average single family usage is 40 units bi-monthly, based on a bia" meter.
ATTACHMENT 3
PROJECTED REVENUE EXPENDITURE PLAN - Proposed Rates
Actual
FY 07-08
07!21,'2009 5:54PM
Revenues (a)
Fixed Charges
$3,815,957
$3.940,000
$4,749,966
$5,224,963
$5,747,459
$6.322,205
$6,954,425
Consumption Charges
$6,947,610
$6,480x;000
$8,453,937
$9,510,679
$10,081.320
510.686.199
$11,327.371
Other Revenues
$246,129
$230.000
$236,750
$241,644
$247,685
$253.877
$260,224
Total Operating Revenues
$11,009,696
$10.650.000
$13,439,653
$14.977,286
$16,076,464
$17.262,281
$18.542.021
Operating Expenses (b)
Salaries and Benefits
$2.139,505
$2.220,188
$2,286,793
$2,355,397
$2.426,060
$2,498,842
$2,573,807
Maintenance and Operations
$2.937,385
53,200,274
$3.396.283
$3.498,171
$3.603,116
$3,711,209
$3,822,545
Miscellaneous Capital
$11211
$14,500
$14,500
$14,500
$14.500
$14,500
$14,500
Depreciation Expense
$1,263.653
$1,260,000
$1.265.D00
$1.265,000
$1.270.000
$1.275.000
$1,275,000
Sources of Supply Costs
Production Costs
$3,910,529
$4,397,499
$4,011,379
$4,082,679
$4,082,679
$4,082,679
$4,082.679
Energy Costs
$895.564
$861,414
$1,014,600
$1,080,600
$1.080,600
$1,080,600
$1,080,600
Total Operating Expenses
$11,157.847
$11,953.875
$11,988,555
$12.296.347
$12.476,955
$12.662,630
512.849,131
Net Operating Revenue
iS'48150)
1$1 3038751
$1,451,098
$2,680,939
$3,599.509
$4,599,452
$5.692,890
Non -Operating Revenue (Expense)
Interest income (@ 2%) (c)
$231.145
$125.700
$38,700
$31.600
$37,500
$62.500
$100.800
Water Capital Facility Charges (e)
$0
$0
$0
$0
$0
$0
$0
Debt Service - Interest Expense
$604.351 i
($591 385)
1$571,105)
($543 705)
($515 3051
!S485705)
($422,908)
Proposed Debt Service- Interest Expense
$0
$0
($431.9681
;$849140)
$833717)
(S1,13C.862)
(51554,382)
Subtotal Debt Service Interest Expense
i$604,351)
($591 385)
�$1 003 0731
'$i 392 8451
� V 349 022)
$1.616,5671
(51,977,2901
Total Non -Op Revenues/Expenses
$373.2061
;$465,685)
$964,373)
$1 361 245)
(S' 311.522)
IS1,554 0671
tSi 8+6.490;
Net Revenues(Loss)
'$521.356)
)$1 769 560;
5486,725
$1.319,694
32,287,987
$3.045,385
$3,816.400
Beg. Retained Earnings Net of Fixed Assets
$6.983.895
$6,282.539
$1.933,805
$1.579,967
$1.875.394
$3,125.210
$5,041,606
(Available for Captial Outlay S Debt -Principal Payments(
Capital Fee
$0
$0
$1.018.914
$1049,481
$1,081,002
$1.113.499
$1.146.956
Capital Outlay
Non -Debt Financed Capital Improvement Projects
$0
$2,059,174
51,000,000
$1.000.000
$1.000,000
$1,000.000
$1.D00,000
Capital Financing
Existing Debt Service Principal Payments
$180.000
$520.000
$685,000
$710,000
$740,000
$770,000
$800.000
Proposed Debt Service Principal Payments
$0
$0
$174,476
$363.749
$379,173
$472.488
$610,850
Subtotal
$180.000
$520,000
$859,476
$1.073,749
$1,119.173
$1,242.488
$1,410,850
Ending Retained Earnings Available for
Captial Outly, Principal Payment & Reserves
$6,282.539
$1.933,805
$1,579,967
$1.875,394
$3,125.210
$5,041.606
$7.594.112
Target Reserve Balance(g)
$5.578,923
$5,976,938
$5,994,278
$6,148,174
$6,238.478
$6,331.415
$6,424,565
Retained Earnings Available for Captial Outlay
h Principal Payments Net of Target Reserves
$703,615
($4,043 133)
($4 414.310)
($4172.780;
($3.113,267)
;$1,289 809)
$1,169.547
Annual Debt Service Coverage
Net Revenue (h)
$1,166,648
$81,825
$3,773,712
$5.027,021
$5.988,011
$7.050.450
$8,215,646
Total Annual Debt Service Requirements
$898,351
$1.111,385
$1.862,550
$2466.594
$2.468.194
$2.859,055
$3,388.140
Annual Debt Service Coverage
130%
7%
203%
204%
243%
247%
242%
ATTACHMENT 4
2008 MUNICIPAL WATER DISTRICT OF ORANGE COUNTY SURVEY
OCWD Basin Agency
10 cd
20 ccf
Anaheim; City of
$19.90
$34.80
Buena Park, City of
$21.89
$35.43
East Orance CWD Retail
$35.40
$51.80
Fountain Valley, City of
$20.22
$37.51
Garden Grove, City of
$25.54
$46.04
Golden State WC
$32.92
$54.83
Huntington Beach, City of
$26.47
$42.04
Irvine Ranch WD High ET
$17.08
$29.92
Irvine Ranch WD Low ET
$17.24
$34.36
La Palma, City of
$23.20
$43.60
Mesa Consolidated WD
$32.50
$57.50
Newport Beach, City of
$25.30
$46.10
Orange, City of
$16.35
$24.53
Orange Pk Acres Mut. WC
$39.84
$63.02
Santa Ana, City of
$26.34
$49.18
Seal Beach, City of
$31.56
$57.96
Serrano WD
$34.05
$55.75
Tustin, City of
$20.31
$35.91
Westminster, City of
$19.82
$42.39
Yorba Linda WD
$26.25
$44.15
Non -Basin Agency
Brea, City of
$24.65
$47.11
EI Toro WD
$24.55
$40.25
Emerald Bay Services Distr
$37.80
$66.20
La Habra, City of
$26.33
$44.53
Laguna Beach CWD
$41.00
$72.55
Moulton Niguel WD
$15.20
$24.80
San Clemente Summer
$24.68
$46.72
San Clemente Winter
$25.50
$66.25
San Juan Capistrano July
$37.34
$63.44
San Juan Capistrano Jan
$37.34
$82.64
Santa Margarita WD
$20.26
$35.86
South Coast WD
$36.59
$67.57
Trabuco Canyon WD Warm
$27.25
$47.15
Trabuco Canyon WD Cool
$27.55
$47.63
Median: $25.90 $46.41
Tustin's Proposed Rates:
FY 2009-2010
FY 2010-2011
FY 2011-2012
FY 2012-2013
FY 2013-2014
* does not include pass-through
$25.20
$39.80
$27.42
$43.82
$29.82
$47.22
$31.85
$50.35
$34.08
$53.68
ATTACHMENT 8
AGENDA REPORT Agenda Item
Reviewed:
City Manager
TV Finance Director
MEETING DATE: SEPTEMBER 1, 2009
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR
DOUGLAS S. STACK, ACTING PUBLIC WORKS DIRECTOR/CITY
ENGINEER
SUBJECT: ADOPTION OF RETAIL WATER RATES
SUMMARY:
At the August 4, 2009 meeting City Council directed staff to provide additional water
rate options. To meet the current and future needs of the Water Enterprise System staff
has developed one additional water rate increase option. Option 1 remains the same
water rate increase as presented at the August 4, 2009 meeting. Option 2 flattens the
water rate increases more uniformly over the proposed five year period. Each option
essentially produces the same results after five years. However, Option 2 will delay,
even further, needed capital improvement by 18-24 months.
RECOMMENDATION:
It is recommended that City Council take the following action:
1. Adopt Option 1 water rate increase resolution as presented on August 4, 2009.
ALTERNATIVE RECOMMENDATION:
The City Council may consider and take the following action:
2. Adopt Option 2 water rate increase resolution.
If either recommendation is approved, rates will be effective September 2, 2009.
FISCAL IMPACT:
Option 1: The water rate increase would provide an adequate revenue stream to proceed
with the debt issuance for major capital projects February 2010 and fiscal year 12/13;
complete pay-as-you-go capital improvements and meet existing bond covenants.
Option 2: The smoothed or flattened water rate increases will delay debt issuance for
major capital projects to October 2010 and fiscal year 13/14, and defer pay-as-you-go
capital improvements for two years.
ADOPTION OF RETAIL WATER RATES
RESOLUTION NO. 09-41
SEPTEMBER 1, 2009
Page 2
BACKGROUND:
The City Council held a public hearing on the proposed water rate increases at its
meeting on August 4, 2009. The rate increases presented to the City Council were
based on the City's adopted 2000 Water Master Plan. The adopted 2000 Water Master
Plan is one of four pillars of the City's "Water Business Plan", the other three include the
Urban Water Management Plan, Seven-year Capital Improvement Plan, and the annual
Operating & Maintenance budget. The Water Master Plan essentially serves as the
short and long term strategic planning document that gives the basis and assurance
that capital dollars/investment are prioritized in the most effective fashion. The Water
Master Plan contains very detailed and descriptive evaluations of demand, supply,
storage, distribution/production, system analysis, and water capital improvement. The
Master Plan as well as previous engineering studies in evaluating the Foothill, Rawlings,
and Simon Ranch reservoirs noted that these reservoirs have not and will not ever
completely comply with current seismic and code requirements due to age, condition
and dated construction/design practices. Seismic tends to be over shadowed by the
threat of fire only until there is an earthquake.
At the public hearing the City Council directed staff to return to Council with additional
rate options; Option 1 (Attachment 1) is the original water rate increase presented on
August 4, 2009. This option has higher increases for the first two years (10.83% and
10.49% for 40 units) and significantly lower increases for the last three years for the five
year rate cycle (6.94% to 6.95% for 40 units). Option 2 (Attachment 2) is a smoothed
water rate increase with increases of 9.57% and 9.59% for the first two years and
8.70% to 8.07% for the last three years of the rate cycle. Both options have the pass
through provision to offset the increasing costs of purchasing and pumping water
imposed by third party agencies. The pass through is restricted to not exceed 7% of the
annual water charges to a "typical" residential user in any given fiscal year. Customers
will be notified in advance on their bill of the pass through and the charge will be a
separate item on the bill.
Option 2 would reduce the Water Enterprise's ability to expeditiously obtain debt
financing for the construction of Rawlings Reservoir and Tustin Avenue Well.
Additionally, the reduced revenue capacity in the first two years necessitates the delay
of non -debt finance capital improvement projects by two years to build the necessary
cash reserves. The delay in the Water Enterprise's ability to proceed with critical capital
infrastructure could lead to higher operating costs in terms of more expensive
purchased water should the City's wells fail. The increased costs to provide water might
also increase the pass through charges.
ADOPTION OF RETAIL WATER RATES
RESOLUTION NO. 09-41
SEPTEMBER 1, 2009
diz-� 2��5Pamela Arends-King
Finance Director
Page 3
II#sJ S. Stack
gkPublic Works Director/City Engineer
Attachment(s): Attachment 1 - Water Rate Increase Option 1
Attachment 2 - Water Rate Increase Option 2
Attachment 3 - Construction Dates of Water Storage and Well Facilities
Attachment 4 - Water Capital Projects Completed
Attachment 5 — August 4, 2009 Water Rate PowerPoint Presentation
ATTACHMENT 3
WATER STORAGE AND WELL FACILITIES
RESERVOIRS
CONSTRUCTION DATE
Foothill
1959
Rawlings
1971
Simon Ranch
1960
Newport Avenue (new roof in 1985)
1926
John Lyttle
1975
Main Street
2001
WELLS
CONSTRUCTION DATE
Newport Avenue
1926
Walnut Avenue
1930
Tustin Avenue
1952
Prospect Avenue
1955
Yorba Avenue
1961
Main Street (#3)
1972
Main Street (#4)
1999
17t Street (#2)
1972
17t Street (#4)
2002
Beneta Way
1977
Columbus Tustin
1985
Vandenberg
1993
Pasadena Avenue
2008
Replacement of facilities is based on capacity needs, condition, system analysis and seismic code
requirements
Attachment 4
Water Capital Projects Completed Between Fiscal Years 06/07 and 08/09
CIP 6161 - Hewes Avenue water main replacment (793 ft)
CIP 6130 - Pasadena Avene Well
CIP 6147 - Edinger Avenue water main replacment
CIP 6151 - Prospect Avenue water main replacement (1,450 ft)
CIP 6154 - Liane, Valhala, water main replacement (2,620 ft)
CIP 6157 - Main Street Treatment Plant Well #4 rehabilitation
Repair of 17th St. treatment plant, Well#4 Pump
Repair Pumps at Walnut, Prospect, Yorba, and Beneta Wells; and Simon Booster Station
Repair Motors at Columbuts-Tustin, Vandenberg, Prospect,
and Newport Wells; and Simon Booster Station
Project Cost
147,155.07
4,313,553.91
604,932.93
582,955.96
677,053.29
142,890.09
131,854.70
275,992.83
21,149.43
Total Project Costs $ 6,897,538.21
USTIN
BUILDING OUR FUTURE
Attaclinient 9
CITY OF TUSTIN
PUBLIC WORKS & FINANCE
DEPARTMENT
[:d
CIL PRESE
I
CURRENT SERVICES &
FACILITIES
♦ 1 4,106 Water Meter Services
♦
170 Miles of Pipeline Distribution
♦ 13 Water Wells & 2 Treatment Plants
♦ 80% ground water & 20% purchase water
♦ 4 Booster Pump Stations
♦ 7 Import Supply Connections - EOCWD
♦ 6 Storage Reservoirs (7.8 MG w/o Rawlings)
♦ 5 Emergency Interconnections
♦ Over $40 million in fixed assets
REASON FOR PROPOSED
WATER RATE INCREASE
$12,000,000
$11,500,000
$11,000,000
$10,500,000
$10,000,000
$9,500,000
$9,000,000
$ 8,500,000
$8,000,000
Actual and Estimated Operating Revenue & Expenditures
FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10
—*—Revenue
--*—Expenditure
•Purchase & Production of water increased an average of 10% per year
FINANCIAL STATUS
Actual Pro
Description FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14
Operating Revenues ($M)
$ 11.01
$ 10.65
$ 13.44
$ 14.98
$ 16.08
$ 17.26
$18.54
Operating Expenses ($M)
(11.16)
(11.95)
(11.99)
(12.29)
(12.48)
(12.66)
(12.84)
Non -Operating Rev/Exp ($M) (0.37) (0.46) (0.96) (1.36) (1.31) (1.55) (1.88)
Net Income/Loss ($M) (0.52) (1.76) 0.49 1.33 2.29 3.05 3.82
Beg. Cash Reserves ($M) 6.98 6.28 1.93 1.57 1.85 3.12 5.04
Capital Fee ($M) 1.01 1.02 1.10 1.11 1.15
Non -Financed Capital Outlay ($M) t , _) (1.00) (1.00) (1.00) (1.00) (1.00)
Principal Debt Payments ($M) f0.2) (0.86)
4
Ending Cash Reserves ($M) $6.28 $1.94 $1.57 $1.85 $3.12 $5.04 $7.60
UNFUNDED WATER CAPITAL
IMPROVEMENT PROJECTS
... the water capital improvement program is designed with the strategy to increase the
systems reliability and minimize the dependence on imported water ... 2000 Water Master
Plan
♦ Storage:
♦ Production:
♦ Distribution:
♦ Treatment:
♦ Security:
Total CIP:
$23.5M
$12.6 M
$4.7M
$3.0M
$2.OM
$45.8M
✓ Supply, Reliability and Redundancy
a� -
CONVERSION FACTORS
Helpful conversions factors for water..
1 cubic foot... 7.48 gallons of water...... 62.4 pounds of water
100 cubic feet OcO......... 748 gallons... 1 ,billing unit of water
1 ac -ft............ 325,900 gallons .................. 43',560 cubic feet
1 MG .................. 3.07 ac -ft
An acre-foot covers one acre of land one foot deep
INCREASE COST
WATER SUPPLY
♦ Groundwater Import, 80:20 Rule
♦ 14,100 acre-ft/year, 12.6 MGD
• Imported/Purchased Water
✓ East Orange County/MWDOC/MWD
$603 /AF w/rate increase 2009-2011
14% & 20% & 16%
Includes Delta Surcharge of 12%
(regulatory drought)
• Ground Water/Pumped
✓ Orange County Water District (OCWD)
$350 /AF w/ra
7%S, 5%4
PROPOSED WATER RATES
♦ 5 year rate increase including increase in
cost of water purchase pass-through
♦ Rate increase to cover annual operations
and maintenance expenses
♦ Rebuild cash reserves from $1.9 million
to $6 million plus (50°0 of expenditures)
♦ $45.8 million capital projects funded
from issuance of debt and pay as you go
♦ Outstanding capital projects completed
within 14 years (2 Cycle, 7 -yr CIP)
8
n
DEBT ISSUANCE WITH
CERTIFICATES OF PARTICIPATION
Issuance No. 1
Rawlings Reservoir
Tustin Avenue Well
net debt proceeds
Issuance No. 2
Simon Ranch Reservoir & Booster Station
Beneta Well
net debt proceeds
$14,000,000
$4,000,000
$1 81000,000
$8,000,000
$4,000,000
$129000,000
CAPITAL PROJECTS - PAY as You co
Storage: 519500,000 - $150K/yr
.John Lytle Reservoir Rehabilitation
$500,000
Foothill Reservoir Rehabilitation
$500,000
Hydraulic Modeling & Master Plan Update
$500,000
♦ Production: $41600,000 - $200K/yr
Yorba
1 71h St. No. 4
Vandenberg
Columbus -Tustin
6 Distribution: $41700,000 N $350K/yr
Annual Main & Valve Replacement
$500,000
Tustin Well Main Extension/Secondary Connection
$550,000
MWD Turnout Improvements - OC 43
$600,000
Browning Avenue Main Upgrade
$750,000
Fire Flow Main Improvements
$1,300,000
SCADA Study & Upgrade
$1,000,000
CAPITAL PROJECTS - PAY As you co
• Treatment: $3,0001000 — $1 50K/yr
Main Street Rehabilitation
7tn Street Rehabilitation
♦ Security: $2,0009000 — $1 50K/yr
System Wide Vulnerability Improvements
14 yr (2 cycle) Capital Improvement Program - $45,800,000
CURRENT RATE STRUCTURE
There are two standard water service charges.
♦ Service Capacity Charge- Assessed on
all meters regardless of consumption,
which is a flat rate based on the size
of the water meter.
♦ Water Consumption Charge - This
charge is based on water usage.
PROPOSED RATE STRUCTURE
Service Capacity Charqe
Water Consumption Charqe
♦ Automatic pass-through to adjust rates for
MWD, OCWD and energy increases.
♦ New 7 Tier Structure w/Large Meter
Conservation Program
Capital Fee -New, dedicated to pay-as-you-
go Capital Facility Improvements;
assessed on all meters regardless of
consumption
Regional Water Storage Conservation T.ie
METERED SERVICES
14,106I METERED SERVICES CONNECTIONS
Meter Size (inches)
No. of meters
Distribution
5/8& 3/4
91956
710//6-
1�1
1
21959
21%
1-112
391
3%
2
578
4%
3
38
0.27%
4
55
0.39%
6
129
1%
Total
underI.
141106 1000
•4'.
SMALL METER RATES
Meters: 5/8" - 1 '/2" (94% are under 2")
Current Tier Structure
0-12
13-40
41-60
60+
41-50
1st Tier
2nd Tier
3rd Tier
4th Tier
08/09
$0.49
$1.56
$1.67
$1.84
New Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
10/11
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
11/12
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
12/13
$0.73
$1.28
1 $1.66
$2.04
$2.42
1 $2.79
$3.17
13/14
$0.78
$1.35
1 $1.76
$2.16
$2.56
1 $2.96
$3.36
AVERAGE CUSTOMER
Bi -Monthly Bill for 5/8 & 3/4 size meters (Current rates)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
Bi -Monthly Bill for 5/8 & 3/4 size meters (New rates, Incl. Cap Fee)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 09/10
$79.59
$98.69
$120.79
$145.89
$170.99
FY 10/11
$87.94
$109.44
$134.34
$162.54
$190.74
FY 11/12
$94.04
$116.84
$143.24
$173.14
$203.04
FY 12/13
$100.62
$124.82
$152.72
$184.42
$216.12
FY 13/14
1 $107.61
1 $133.21
$162.81
1 $196.41
$230.01
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
10.82%
11.49%
14.80%
18.01%
20.40%
FY 10/11
10.49%
10.89%
11.22%
11.41%
11.55%
FY 11/12
6.94%
6.76%
6.62%
6.52%
6.45%
FY 12/13
7.00%
6.83%
6.62%
6.51%
6.44%
FY 13/14
1 6.95%
1 6.72%
6.61%
6.50%
6.43%
LARGE METER RATES
Current Tier Structure
0-12
13-40
41-60
60+
1st Tier
2nd Tier
3rd Tier
4th Tier
08/09
$0.49
$1.56
$1.67
$1.84
Meters: 2" thru 6"
(6% are 2" & greater)
High > 110% of prior year conswnption
Non -nal 90% - 110% ofprior year consumption
Low < 90% of prior year conswnption
New Tier Structure & Charges (Large Meters )
0-10
1 11-20
21-30
31-40
41-50
51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.70
$1.22
$1.59
$1.95
$2.31
$2.67
$3.04
09/10
Normal
$0.64
$1.11
$1.44
$1.77
$2.10
$2.43
$2.76
Low
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
High
$0.79
$1.38
$1.78
$2.19
$2.60
$3.01
$3.42
10/I1
Normal
$0.72
$1.25
$1.62
$1.99
$2.36
$2.74
$3.11
Low
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
High
$0.84
$1.46
$1.89
$2.32
$2.76
$3.19
$3.62
11/12
Normal
$0.76
$1.33
$1.72
$2.11
$2.51
$2.90
$3.29
Low
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
High
$0.89
$1.55
$2.00
$2.46
$2.92
$3.38
$3.84
12/13
Normal
$0.81
$1.41
$1.82
$2.24
$2.66
$3.07
$3.49
Low
$0.73
$1.28
$1.66
$2.04
$2.42
$2.79
$3.17
High
$0.94
$1.64
$2.12
$2.61
$3.10
$3.58
$4.07
1 x,14
Normal
$0.86
$1.49
$1.93
$2.37
$2.82
$3.26
$3.70
Low
$0.78
$1.35
$1.76
$2.16
$2.56
$2.96
$3.36
High > 110% of prior year conswnption
Non -nal 90% - 110% ofprior year consumption
Low < 90% of prior year conswnption
LARGE METER CUSTOMER
Bi -Monthly Bill for Large Meters - 2" (Current rate)
60 Units
120 Units
180 Units
240 Units
300 Units
FY08/09
High
$261.07
$371.47
$481.87
$592.27
$702.67
Bi -Monthly Bill for Large Meters - 2" (includes Cap. Fee)
60 Units
120 Units
180 Units
240 Units
300 Units
FY 09/10
High
$322.39
$504.66
$686.94
$869.21
$1,051.48
Normal
$312.89
$478.60
$644.30
$810.00
$975.70
Low
$304.26
$454.90
$605.54
$756.18
$906.82
FY 10/11
High
$355.70
$560.76
$765.81
$970.87
$1,175.93
Normal
$345.01
$531.43
$717.85
$904.26
$1,090.68
Low
$335.30
$504.77
$674.24
$843.71
$1,013.18
FY 11/12
High
$384.98
$602.34
$819.70
$1,037.06
$1,254.42
Normal
$373.66
$571.26
$768.86
$966.46
$1,164.06
Low
$363.36
$543.00
$722.63
$902.27
$1,081.91
FY 12/13
High
$416.87
$647.27
$877.67
$1,108.07
$1,338.48
Normal
$404.86
$614.32
$823.77
$1,033.23
$1,242.69
Low
$393.95
$584.36
$774.78
$965.19
$1,155.61
High
$451.59
$695.82
$940.04
$1,184.27
$1,428.50
FY 13/14
Normal
$438.86
$660.89
$882.91
$1,104.94
$1,326.96
Low
$427.30
$629.14
$830.98
$1,032.82
$1,234.66
18
LARGE METER CUSTOMER
% Change From Previous Year
60 Units
120 Units
180 Units
240 Units
300 Units
FY 08/09
FY 09/10
High
23.49%
35.86%
42.56%
46.76%
49.64%
Normal
19.85%
28.84%
33.71%
36.76%
38.86%
Low
16.54%
22.46%
25.66%
27.67%
29.05%
FY 10/11
High
10.33%
11.11%
11.48%
11.70%
11.84%
Normal
10.27%
11.04%
11.42%
11.64%
11.78%
Low
10.20%
10.96%
11.35%
11.58%
11.73%
FY 11/12
High
8.23%
7.42%
7.04%
6.82%
6.68%
Normal
8.30%
7.49%
7.11%
6.88%
6.73%
Low
8.37%
7.57%
7.18%
6.94%
6.78%
FY 12/13
High
8.28%
7.46%
7.07%
6.85%
6.70%
Normal
8.35%
7.54%
7.14%
6.91%
6.75%
Low
8.42%
7.62%
7.22%
6.97%
6.81%
FY 13/14
High
8.33%
7.50%
7.11%
6.88%
6.73%
Normal
8.40%
7.58%
7.18%
6.94%
6.78%
[-Low
8.47%
7.66%
7.25%
7.01%
6.84%
NEW - CAPITAL FEE
Capital Fee
FY 09/10
FY 10/11
Size:
Size:
$ / Meter
Total
$ / Meter
Total
A
5/8 & 3/4
$10
$597,360
$10
$615,281
B
1"
$12
$213,048
$12
$219,439
C
1-1/2"
$16
$371536
$16
$3802
D
2"
$22
$76,296
$23
$78,585
E
3"
$33
$7,524
$34
$7,750
F
4"
$53
$171490
$55
$18,015
G
6"
$90
$69,660
$93
$71,750
Total:
F
4"
$1,018,914
$181556
$1,049,481
Capital Fee
FY 11/12
FY 12/13
FY 13/14
Size:
$ / Meter
Total
$ / Meter
Total
$ / Meter
Total
A
5/8 & 3/4
$11
$6331799
$11
$6521914
$11
$672,627
B
1"
$13
$226,008
$13
$232,755
$14
$239,679
C
1-1/2"
$17
$39,812
$17
$41,008
$18
$421228
D
2"
$23
$80,943
$24
$83,371
$25
$851868
E
3"
$35
$75982
$36
$8,222
$37
$8,468
F
4"
$56
$181556
$58
$19,114
$60
$1908
G
6"
$95
$73,902
$98
$76,115
$101
$781398
Total:
$1,081,002
$1,1131499
$1,146,956
20
PASS THROUGH CALC.
Sample Pass -Through Calculations
Estimated Production Costs:
$51025,979
Actual Production Costs:
$512371979
Annual Cost diff. (Pass -Through):
($212,000)
Tot. Annual Consumption (Unit):
4,315,310
Cost/Unit:
$0.05
Bi Mon. Cost - Avg Cust. (40 Unit):
$2.00
Proposed BI -Mon. Bill - FY 09/10
$79.59
Adjusted Bi -Mon Bill - FY 09/10
$81.59
% Change from previous:
1 2.51%
Pass-through charge is capped at 7% annually 21
WATER CONSERVATION
WATER DEMAND REDUCTION STAGES
STAGES
1 11 Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 - Water Watch
Voluntary Compliance
10-20% Reduction
0-9
10-18
19-27
28-36
37-45
46-54
55+
STAGE 2 - Water Alert
Mandatory Compliance
20-30% Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
STAGE 3 - Water
Warning
Mandatory Compliance
0-7
8-14
15-21
22-28
29-35
36-42
43+
30-40% Reduction
STAGE 4 - Water
Emergency
Mandatory Compliance
0-6
7-12
13-18
19-24
25-30
31-36
37+
40%+ Reduction
22
RATE COMPARISON
Monthly Residential Water Bill with 20 Unit Usage
1 billing unit = 100 cubic feet(hcj) = 748 gallons of water
$72.55
Irvine Ranch Mesa
WD Conslidated
ORANGE COUNTY COMPARISON
6
6
6
Rate Increase in late 2008
Laguna Beach WD
Golden State
Mesa Consolidated WD
Rate Increase in 2009
City of Anaheim
City of Brea
City of Buena Park
City of Fullerton
City of Garden Grove
City of Orange
City of Westminster
Irvine Ranch Water District
Rate Study in Progress
City of Fountain Valley
City of Huntington Beach
City of La Habra
City of La Palma
City of Newport E
City of San Clem(
Tier Change
Tier Change
15%
2%;
6/1/09
Tier Change;
5/1/09
20%;
2/1/09
6%;
1/1/09
7.5%;
7/1/09
4%;
6/1/09
15%;
1/1/09
10%;
7/1/09
PROPOSED TIMELINE
Audit Commission - Recommendation to
forward for City Council for Consideration
Set Public Hearing & Authorize Notification
(Twice - at least five days apart - 45 day
comment period)
Public Hearing & Resolution Adoption
Rate Effective
May 2009
,June 2, 2009
August 4, 2009
August 5, 2009
IMPLICATIONS OF NOT ENACTING
PROPOSED RATES
♦ Financial
♦ Negative cash flow
♦ No ability to complete critical system improvements
through debt financing
♦ No ability to finance improvements through internal
borrowing ($9.1 million in state takeaways and 20%
decline in sales tax)
♦ High cost to purchase water
♦ City's fiduciary responsibility to manage the water
utility as an enterprise fund
-s r
IMPLICATIONS OF NOT ENACTING
PROPOSED RATES
♦ Drought conditions
♦ Could get worse
♦ Could be long term
♦ Public safety
♦ Water wells, pumps and storage capacity are critical
components of fire fighting
27
F
Ail`5`
OUR MOST PRECIOUS
NATURAL RESOURCE
♦ It pays to be smart about water and use water
wisely.
- Fix leaks
- Shorten showers by 1 or 2 minutes
- Shut water off when brushing
- water the yard Tess often_.LL______
- Use a broom instead of a hose.
For money saving tips or rebate information to
help make water saving changes, visit:
USTIN
CITY OF TUSTIN
PUBLIC WORKS & FINANCE
H, DEPARTMENTS
BUILDING OUR FUTURE
HO I C OUR PAST
nsrnl ()nLrur bet
wise
e .�
n
29
USTINj
�AmikI
ATTACHMENT 10
CITY OF
.y
..i,
7,7;, PUBLIC WORKS & FINANCF
ICY COUNCIL PR
TION
September
SUMMARY OF AUG. 4r"
COUNCIL MEETING
• Water Services is operating at a loss
• FY 08/09 approx. — ($1.8 M)
• Water Services reserves have been depleted
• $45.8 M in unfunded capital improvement projects
• Proposed Rate Increase:
• 7 -Tier rate structure
• Establishes new Capital Fee
• Establishes aPass-Through charge
• Establishes Large Meter conservation program
• City Council asked for more water rate options
THE 1LI'' .OWl NG ARE SOME IE <; OF
CURRENT CONDITION OF
WATER SYSTEM
RAWLINGS
U/
V,
'01
a.
Moms!
,islz -1
ONDITION OF
J7EM
SzI
:i111MIfL'
3
JRRENT CONDITION OF
kTER SYSTEM
T RNCH RE§ERVOIR - BL ILT 1960
e ri*ir-�� rrrrri
CURRENT CONDITION OF
WATER SYSTEM
iiiiii qq1I 111 11 1 R
I
OUILT
,ZV,m
:URKt
VATEF
DC 43
ol 0 19111 m 0 90
lu
CURRENT CONDITION OF
WATER SYSTEM
MAINST. PLANT - BUILT 2001
.a.
71
p
s&'
AdL
14
;.
OPTION 1
Actual Projected
Description FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14
Total Operating Revenues ($M)
$11.01
$10.65
$13.44
$14.98
$16.08
$17.26
$18.54
Total Operating Expenses ($M)
$11.16
$11.95
$11.99
$12.30
$12.48
$12.66
$12.85
Net Operating Revenue ($M)
($0.15)
($1.30)
$1.45
$2.68
$3.60
$4.60
$5.69
Total Non -Op Revenues/Expenses ($M)
($0.37)
($0.47)
($0.96)
($1.36)
($1.31)
($1.55)
($1.87)
Net Revenues(Loss) ($M)
($0.52)
($1.77)
$0.49
$1.32
$2.29
$3.05
$3.82
• Eliminate General Fund subsidy
• Enables the timely issuances of debt financing (2 issuances)
• Establishes the Pay-as-you-go capital improvement program
• Reestablishes a $6 M reserves over 5 years
• Rate increase of 42.19% over 5 years
• Decreases dependency on imported water
• The reduction of pass-through charges as imported water dependency 10
decreases
SMALL METER RATES
Meters: 5/8" - 1 1/2" (94% are under 2")
Current Tier Structure
0-12
13-40
41-60
60+
41-50
1st Tier
2nd Tier
3rd Tier
4th Tier
08/09
$0.49
$1.56
$1.67
$1.84
New Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
l s t Tier
2nd Tier
3rd Tier
4th Tier
5th Tier,
6th Tier
7th Tier
09/101
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
10/11
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
11/12
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
12/13
$0.73
$1.28
$1.66
$2.04
$2.42
$2.79
$3.17
13/14
$0.78
$1.35
$1.76
$2.16
$2.56
$2.96
$3.36
AVERAGE CUSTOMER
Bi -Monthly Bill for 5/8 & 3/4 size meters (Current rates)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
Bi -Monthly Bill for 5/8 & 3/4 size meters (New rates, Incl. Cap Fee)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 09/10
$79.59
$98.69
$120.79
$145.89
$170.99
FY 10/11
$ 87.94
$109.44
$134.34
$162.54
$190.74
FY 11/12
$94.04
$116.84
$143.24
$173.14
$203.04
FY 12/13
$100.62
$124.82
$152.72
$184.42
$216.12
FY 13/14
$107.61
$133.21
$162.81
1 $196.41
$230.01
Includes
• Fixed charge
• Capital Fee
• Consumption
charges
% Change From Previous Year
40 Units
50 Units
60 Units70
Units
80 Units
FY 08/09
FY 09/10
10.82%
11.49%
14.80%
18.01%
20.40%
FY 10/11
10.49%
10.89%
11.22%
11.41%
11.55%
FY 11/12
6.94%
6.76%
6.62%
6.52%
6.45%
FY 12/13
7.00%
6.83%
6.62%
6.51%
6.44%
FY 13/14
6.95%
6.72%
6.61%
6.50%
6.43%
Total:
42.19%
42.69%
45.87%
48.97%
51.27%
12
1
OPTION 2
Actual Projected
Description FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14
Total Operating Revenues ($M)
$11.01
$10.65
$12.37
$14.63
$15.99
$17.39
$18.91
Total Operating Expenses ($M)
$11.16
$11.95
$11.99
$12.30
$12.48
$12.66
$12.85
Net Operating Revenue ($M)
($0.15)
($1.30)
$0.38
$2.34
$3.51
$4.72
$6.06
Total Non -Op Revenues/Expenses ($M)
($0.37)
($0.47)
($0.53)
($1.15)
($1.30)
($1.23)
($1.92)
Net Revenues(Loss) ($M)
($0.52)
($1.77)
($0.15)
$1.19
$2.21
$3.50
$4.14
• Delays all capital improvement projects
• Delays Pay-as-you-go capital improvement program by 2 years
• May potentially increase project costs as they are delayed
• Delays the issuance of debt financing
SMALL METER RATES
Meters: 5/8" - 1 '/2" (94% are under 2")
Current Tier Structure
0-12
13-40
41-60
60+
41-50
1st Tier
2nd Tier
3rd Tier
4th Tier
08/09
$0.49
$1.56
$1.67
$1.84
Tier Structure & Charges (Small Meters)
0-10
11-20
21-30
31-40
41-50
51-60
61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
09/10
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
10/11
$0.64
$1.10
$1.42
$1.74
$2.07
$2.39
$2.71
11/12
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
12/13
$0.76
$1.30
$1.68
$2.06
$2.44
$2.82
$3.20
13/14
$0.82
$1.40
$1.81
$2.23
$2.64
$3.05
$3.46
14
AVERAGE CUSTOMER
Bi -Monthly Bill for 5/8 & 3/4 size meters (Current rates)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
$71.82
$88.52
$105.22
$123.62
$142.02
Bi -Monthly Bill for 5/8 & 3/4 size meters (includes Capital Fee)
40 Units
50 Units
60 Units
70 Units
80 Units
FY 09/10
$78.69
$97.29
$118.79
$143.19
$167.59
FY 10/11
$86.24
$106.94
$130.84
$157.94
$185.04
FY 11/12
$93.74
$116.24
$142.24
$171.84
$201.44
FY 12/13
$101.52
$125.92
$154.12
$186.12
$218.12
FY 13/14
1 $109.71
$136.11
$166.61
$201.21
$235.81
Includes
• Fixed charge
• Capital Fee
• Consumption
charges
% Change From Previous Year
40 Units
50 Units
60 Units
70 Units
80 Units
FY 08/09
FY 09/10
9.57%
9.91%
12.90%
15.83%
18.00%
FY 10/11
9.59%
9.92%
10.14%
10.30%
10.41%
FY 11/12
8.70%
8.70%
8.71%
8.80%
8.86%
FY 12/13
8.30%
8.33%
8.35%
8.31%
8.28%
FY 13/14
1 8.07%
1 8.09%
8.10%
8.11%
8.11%
Total
144.22%
1 44.94%
48.21%
51.35%
53.67%
15
LARGE METER RATES
Current Tier Structure
0-12
13-40
41-60
60+
lst Tier
2nd Tier
3rd Tier
4th Tier
08/09
$0.49
$1.56
$1.67
$1.84
Meters: 2" thru 6"
(6% are 2" & greater)
Tier Structure & Charges (Large Meters - 2" & Greater)
0-10
11-20
21-3031-40
41-50
51-60
1 61+
1st Tier
2nd Tier
3rd Tier
4th Tier
5th Tier
6th Tier
7th Tier
High
$0.70
$1.19
$1.55
$1.90
$2.25
$2.60
$2.95
09/10
Normal
$0.63
$1.09
$1.40
$1.72
$2.04
$2.36
$2.68
Low
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
High
$0.78
$1.33
$1.72
$2.11
$2.50
$2.89
$3.28
10/11
Normal
$0.71
$1.21
$1.56
$1.92
$2.27
$2.63
$2.98
Low
$0.64
$1.10
$1.42
$1.74
$2.07
$2.39
$2.71
High
$0.85
$1.45
$1.87
$2.30
$2.73
$3.15
$3.58
11/12
Normal
$0.77
$1.32
$1.70
$2.09
$2.48
$2.87
$3.25
Low
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
High
$0.92
$1.57
$2.03
$2.49
$2.95
$3.41
$3.87
12/13
Normal
$0.83
$1.43
$1.84
$2.26
$2.68
$3.10
$3.52
Low
$0.76
$1.30
$1.68
$2.06
$2.44
$2.82
$3.20
High
$0.99
$1.70
$2.19
$2.69
$3.19
$3.69
$4.19
13/14
Normal
$0.90
$1.54
$2.00
$2.45
$2.90
$3.35
$3.81
Low
$0.82
$1.40
$1.81
$2.23
$2.64
$3.05
$3.46
LARGE METER CUSTOMER
% Change From Previous Year
60 Units
120 Units
180 Units
240 Units
300 Units
FY 08/09
FY 09/10
High
22.47%
33.70%
39.79%
43.61%
46.23%
Normal
18.92%
26.88%
31.19%
33.90%
35.75%
Low
15.70%
20.68%
23.38%
25.07%
26.23%
FY 10/11
High
9.93%
10.42%
10.65%
10.79%
10.87%
Normal
9.89%
10.37%
10.61%
10.75%
10.84%
Low
9.85%
10.32%
10.56%
10.71%
10.81%
FY 11/12
High
9.23%
9.14%
9.11%
9.08%
9.07%
Nonml
9.23%
9.15%
9.11%
9.09%
9.08%
Low
9.24%
9.16%
9.12%
9.10%
9.08%
FY 12/13
High
9.00%
8.71%
8.58%
8.50%
8.45%
Nonml
9.02%
8.74%
8.60%
8.52%
8.47%
Low
9.04%
8.77%
8.63%
8.54%
8.49%
FY 13/14
High
9.02%
8.73%
8.59%
8.51%
8.46%
Nonoral
9.05%
8.76%
8.62%
8.53%
8.48%
Low
9.07%
8.79%
8.64%
8.55%
8.50%
17
RATE COMPARISON
(OPTION 1)
Monthly Residential Water Bill with 20 Unit Usage
1 billing unit = 100 cubic feet(hcj) = 748 gallons of water
$54.83
$57.50
$39.
$49.15
Golden
State WD
Irvine Ranch Mesa
WD Conslidated
WD
Newport Orange
Beach
Santa Ana
$72.55
Tustin EI Toro WD Laguna
Beach WD
MWDOC 2008 Rate Comparison Survey
* IR WD rate includes 10% Increase & Property Tar 18
RATE COMPARISON
(OPTION 2)
Monthly Residential Water Bill with 20 Unit Usage
1 billing unit = 100 cubic feet(hcj) = 748 gallons of water
$72.55
Golden Irvine Ranch Mesa Newport Orange Santa Ana Tustin EI Toro WD Laguna
State WD WD Conslidated Beach Beach WD
WD
MWDOC 2008 Rate Comparison Survey
*IRWD rate includes 10% Increase 8 Property Tai 19
ORANGE COUNTY COMPARISON
♦ Rate Increase in late 2008
Laguna Beach WD
7%
Golden State
14%
Mesa Consolidated WD
15%
♦ Rate Increase in 2009
City of Anaheim
2%; 6/1/09
City of Brea
9%; 5/1/09
& Another Increase in Oct.
10%; 10/1 /09
City of Buena Park
20%; 2/1/09
City of Fullerton
6%; 1 /1 /09
City of Garden Grove
19%;8/25/09
City of Orange
4%; 6/1/09
City of Santa Ana
17%; 7/1 /09
City of Westminster
15%; 1 / 1 /09
Irvine Ranch Water District
10%; 7/1/09
Santa Margarita Water District
14%;7/8/09
♦ Rate Study in Progress
City of Fountain Valley
City of Huntington Beach
City of La Habra
City of La Palma
City of Newport Beach
City of San Clemente
City of Seal Beach
20
r
USTIN
CITY OF TUSTIN
1 PUBLIC WORKS &FINANCE
CRY DEPARTMENTS
BUILDING OuR FUTum
Jill K*twise.
21
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 1)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial Multiple Unit
Tiers
Units
1 S
Tier
0-10
2"
Tier
11-20
3w
Tier
21-30
4
Tier
31-40
5
Tier
41-50
6
Tier
51-60
7
Tier
61 +
FIXED CHARGE:
Tiers
Units
1S
Tier
0-8
2"
Tier
9-16
3o
Tier
17-24
4'5 --Tier
1"
25-32
5 th
Tier
33-40
6 th
Tier
41-48
7 1h
Tier
49+
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"
$24.50
$26.94
$29.64
$32.60
$35.86
1"
$61.24
$67.36
$74.08
$81.50
$89.64
1 1/2"
$122.46
$134.70
$148.18
$163.00
$179.28
2"
$195.92
$215.52
$237.06
$260.78
$286.86
3"
$367.36
$404.08
$444.50
$488.94
$537.84
4"
$612.24
$673.46
$740.82
$814.90
$896.38
6" or Larger
$1224.48
$1346.92
$1481.64
$1629.80
$1792.76
Multiple Unit
$19.60
$21.56
$23.72
$26.08
$28.68
CAPITAL CHARGE:
Meter Size
10/7/2009
7/11/2010
7/11/2011
7/11/2012
7/1/2013
5/8" x 3/4"
$10
$10
$11
$11
$11
1"
$12
$12
$13
$13
$14
11/2"
$16
$16
$17
$17
$18
2"
$22
$23
$23
$24
$25
3"
$33
$34
$35
$36
$37
4"
$53
$55
$56
$58
$60
6" or Larger
$90
$93
$95
$98
$101
Multiple Unit
$8
$8
$9
$9
$9
CONSUMPTION CHARGE:
Small Meter Consumption Char a under 2" meter size
Consum
tion Char a
Tiers
1S Tier
2ndTier
3` Tier
4 Tier
5 Tier
6 Tier
7 Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
10/07/2009
$0.58
$1.01
$1.31
$1.61
$1.91
$2.21
$2.51
07/01/2010
$0.65
$1.14
$1.47
$1.81
$2.15
$2.49
$2.82
07/01/2011
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
07/01/2012
$0.73
$1.28
$1.66
$2.04
$2.42
$2.79
$3.17
07/01/2013
$0.78
$1.35
$1.76
$2.16
$2.56
$2.96
$3.36
Large Meter
Consum
tion Char a
2" meter size &greater)
Tiers
1 St
Tier
2"
Tier
3`
Tier
4 th5th
Tier
Tier
6 th7
Tier
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.70
$1.22
$1.59
$1.95
$2.31
$2.67
$3.04
10/07/2009
Normal
$0.64
$1.11
$1.44
$1.77
$2.10
$2.43
$2.76
Low
$0.58
$1.01
$1.31
$1.61
1$1.91
$2.21
$2.51
High
$0.79
$1.38
$1.78
$2.19
$2.60
$3.01
$3.42
07/01/2010
Normal
$0.72
$1.25
$1.62
$1.99
$2.36
$2.74
$3.11
Low
$0.65 $1.14 $1.47 $1.81
$2.15 $2.49
$2.82
07/01/2011
High
$0.84
$1.46
$1.89
$2.32
$2.76
$3.19
$3.62
Normal
$0.76 $1.33 $1.72 $2.11
$2.51 $2.90
$3.29
Low
$0.69
$1.21
$1.56
$1.92
$2.28
$2.64
$2.99
High
$0.89'
$1.55
$2.00.
$2.46
$2.92
$3.38
$3.84
07/01/2012
Normal
$0.81
$1.41
$1.82
$2.24
$2.66
$3.07
$3.49
Low
$0.73 $1.28 $1.66 $2.04
$2.42 $2.79
$3.17
High
$0.94
$1.64
$2.12
$2.61
$3.10
$3.58
$4.07
07/01/2013
Normal
$0.86
$1.49
$1.93
$2.37
$2.82
$3.26
$3.70
Low
$0.78
$1.35
$1.76
$2.16
$2.56
$2.96
1$3.36
High
Greater than 110% of prior year consumption
Normal
90% - 110% of prior year consumption
Low
Less than 90% of prior year
consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
(Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
1S
2 na
3 rd
4tn5
th
6tn7
tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
15
2 na
3rd4
tn5
tn6
tn
7 tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 —Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 201h day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN 1
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 2)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial Multiple Unit
Tiers
Units
1 st
Tier
0-10
2
Tier
11-20
3rdTier
Ti e F
21-30
4
Tier
31-40
5
Tier
41-50
-6'5-Tier
--T- ier
51-60
7
Tier
61 +
FIXED CHARGE:
Tiers
Units
1 s'
Tier
0-8
0
Tier
9-16
3�
Ti e F
17-24
4
Tier
25-32
5
Tier
33-40
6'F
--T- ier
41-48
7 1h
Tier
49 +
Meter Size
10/7/2009
7/1/2010
7/11/2011
7/11/2012
7/1/2013
5/8" x 3/4"
$24.50
$26.94
$29.64
$32.60
$35.86
1"
$61.24
$67.36
$74.08
$81.50
$89.64
1 1/2"
$122.46
$134.70
$148.18
$163.00
$179.28
2"
$195.92
$215.52
$237.06
$260.78
$286.86
3"
$367.36
$404.08
$444.50
$488.94
$537.84
4"
$612.24
$673.46
$740.82
$814.90
$896.38
6" or Larger
$1224.48
$1346.92
$1481.64
$1629.80
$1792.76
Multiple Unit
1 $19.60
$21.56
$23.72
$26.08
$28.68
CAPITAL CHARGE:
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"
$10
$10
$11
$11
$11
1"
$12
$12
$13
$13
$14
11/2"
$16
$16
$17
$17
$18
2"
$22
$23
$23
$24
$25
3"
$33
$34
$35
$36
$37
4"
$53
$55
$56
$58
$60
6" or Larger
$90
$93
$95
$98
$101
Multiple Unit
$8
$8
$9
$9
$9
CONSUMPTION CHARGE:
Small Meter Consumption Char a under 2" meter size
Consumption
Charge
Tiers
1s' Tier
2 nd Tier
3 Id Tier
4 Tier
5 Tier
6 nTier
7 th Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
10/07/2009
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
07/01/2010
$0.64
$1.10
$1.42
$1.74
$2.07
$2.39
$2.71
07/01/2011
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
07/01/2012
$0.76
$1.30
$1.68
$2.06
$2.44
$2.82
$3.20
07/01/2013
$0.82
$1.40
$1.81
$2.23
$2.64
$3.05
$3.46
Large Meter
Consumption
Charge
2" meter size &greater)
Tiers
1 S
Tier
2nd
Tier
3 rd
Tier
4 th
Tier
5th
Tier
6 th
Tier
7 th
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.70
$1.19
$1.55
$1.90
$2.25
$2.60
$2.95
10/07/2009
Normal
$0.63
$1.09
$1.40
$1.72
$2.04
$2.36
$2.68
Low
$0.58
$0.99
$1.28
$1.57
$1.86
$2.15
$2.44
07/01/2010
High
$0.78
$1.33
$1.72
$2.11
$2.50
$2.89
$3.28
Normal
$0.71 $1.21 $1.56 $1.92
$2.27 $2.63
$2.98
Low
$0.64 $1.10 $1.42 $1.74
$2.07 $2.39
$2.71
High
$0.85
$1.45
$1.87
$2.30
$2.73
$3.15
$3.58
07/01/2011
Normal
$0.77
$1.32
$1.70
$2.09
$2.48
$2.87
$3.25
Low
$0.70
$1.20
$1.55
$1.90
$2.25
$2.60
$2.96
07/01/2012
High
$0.92
$1.57
$2.03
$2.49
$2.95
$3.41
$3.87
Normal
$0.83 $1.43 $1.84 $2.26
$2.68 $3.10
$3.52
Low
$0.76 $1.30 $1.68 $2.06
$2.44 $2.82
$3.20
High
$0.99
$1.70
$2.19
$2.69
$3.19
$3.69
$4.19
07/01/2013
Normal
$0.90
$1.54
$2.00
$2.45
$2.90
$3.35
$3.81
Low
$0.82
$1.40
$1.81
$2.23
1$2.64
$3.05
$3.46
High
Greater than 110% of prior year consumption
Normal90%
- 110%
of prior year consumption
Low
I Less than 90% of
prior year
consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
(Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
15
2"
3 rd
4
5 th6
th7
th
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
1S
2 no
3 ra
4tn5tn6tn7
th
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 —Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 20th day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 3)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial
Tiers
Units
1 S
Tier
0-10
2
Tier
11-20
3rcl
Tier
21-30
4
Tier
31-40
5
Tier
41-50
6
Tier
51-60
7 1h
Tier
61 +
FIXED CHARGE:
Multiple Unit
Tiers
Units
1 S
Tier
0-8
2"
Tier
9-16
TTier
$29.64
17-24
4
Tier
25-32
5
Tier
33-40
6 1h
Tier
41-48
7
Tier
49 +
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"
$24.50
$26.94
$29.64
$32.60
$35.86
1"
$61.24
$67.36
$74.08
$81.50
$89.64
11/2"
$122.46
$134.70
$148.18
$163.00
$179.28
2"
$195.92
$215.52
$237.06
$260.78
$286.86
3"
$367.36
$404.08
$444.50
$488.94
$537.84
4"
$612.24
$673.46
$740.82
$814.90
$896.38
6" or Larger
$1224.48
$1346.92
$1481.64
$1629.80
$1792.76
Multiple Unit
$19.60
$21.56
$23.72
$26.08
$28.68
CAPITAL CHARGE:
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"
$10
$10
$11
$11
$11
1"
$12
$12
$13
$13
$14
11/2"
$16
$16
$17
$17
$18
2"
$22
$23
$23
$24
$25
3"
$33
$34
$35
$36
$37
4"
$53
$55
$56
$58
$60
6" or Larger
$90
$93
$95
$98
$101
Multiple Unit
$8
$8
$9
$9
$9
CONSUMPTION CHARGE:
Small Meter Consumption Char a under 2" meter size
Consumption
Charge ( 2" meter size &greater)
Tiers
1st Tier
2 nd Tier
3rdTier
4 Tier
5 Tier
6,n Tier
7 Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
10/07/2009
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
07/01/2010
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
07/01/2011
$0.64
$1.02
$1.29
$1.57
1$2.06
$2.43
$2.81
07/01/2012
$0.64
$1.02
$1.29
$1.57
$2.14
$2.52
$2.92
07/01/2013
$0.69
$1.10
$1.39
$1.70
$2.31
$2.73
$3.16
Large Meter
Consumption
Charge ( 2" meter size &greater)
Tiers
1 St
Tier
ON3rd4
Tier
Tier
th
Tier
Sth
Tier
6 th
Tier
7 th
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.68
$1.08
$1.35
$1.66
$2.08
$2.47
$2.85
10/07/2009
Normal
$0.61
$0.98
$1.23
$1.51
$1.89
$2.24
$2.59
Low
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
High :.
$0.78
$1.24
$1.56
$1.90
$2.39
$2.84
$3.28
07/01/2010
Normal
. $0.71
$1.12
$`1.42
$1.73
$2.17
$2.58
$2.98
Low
$0.64 $1.02 $1.29 $1.57
$1.98 $2.34
$2.71
High
$0.78
$1.24
$1.56
$1.90
$2.49
$2.95
$3.40
07/01/2011
Normal
$0.71
$1.12
$1.42
$1.73
$2.26
$2.68
$3.09
Low
$0.64
$1.02
$1.29
$1.57
1$2.06
$2.43
$2.81
Hifi
$0.78
$1.24
$1.56
$1.90
$2.59 ,
$3.05
$3.54
07/01/2012
Normal
$0.71
$1.12
$1.42
$1.73
$2.35
$2.78
$3.21
Low
$0.64 $1.02 $1.29 $1.57
$2.14 $2.52
$2.92
High
$0.84
$1.34
$1.68
$2.06
$2.79
$3.30
$3.82
07/01/2013
Normal
$0.76
1$1.21
$1.53
$1.87
1$2.54
$3.00
$3.47
Low
$0.69
1$1.10
$1.39
1 $1.70
1$2.31
1$2.73
$3.16
High
Greater than 110% of prior year consumption
Normal
90% - 110% of
prior year consumption
Low
Less than 90% of prior year
consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
(Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
15
2 no
3 rd
4 th
5 th
6 tn7
tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
15
2 no
3`
4
5th
6 th
7 th
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 —Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 20th day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 4)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial
Tiers
Units
1 S
Tier
0-10
2"
Tier
11-20-
1-203r
3rd
Tier
21-30
4
Tier
31-40
5
Tier
41-50
6
Tier
51-60
7
Tier
161 +
FIXED CHARGE:
Multiple Unit
Tiers
Units
1't
Tier
0-8
2"
Tier
9-16
3 rd
Tier
17-24
4
Tier
25-32
5
Tier
33-40
6 th
Tier
41-48
7 1h
Tier
49+
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"$24.50
$10
$26.94
$29.64
$32.60
$35.86
1"
$61.24
$67.36
$74.08
$81.50
$89.64
11/2"
$122.46
$134.70
$148.18
$163.00
$179.28
2"
$195.92
$215.52
$237.06
$260.78
$286.86
3"
$367.36
$404.08
$444.50
$488.94
$537.84
4"
$612.24
$673.46
$740.82
$814.90
$896.38
6" or Larger
$1224.48
$1346.92
$1481.64
$1629.80
$1792.76
Multiple Unit
1 $19.60
$21.56
$23.72
$26.08
$28.68
CAPITAL CHARGE:
Meter Size
10/7/2009
7/1/2010
7/1/2011
7/1/2012
7/1/2013
5/8" x 3/4"
$10
$10
$11
$11
$11
1"
$12
$12
$13
$13
$14
11/2"
$16
$16
$17
$17
$18
2"
$22
$23
$23
$24
$25
3"
$33
$34
$35
$36
$37
4'$
$53
$55
$56
$58
$60
6" or Larger
$90
$93
$95
$98
$101
Multiple Unit
$8
$8
$9
$9
$9
CONSUMPTION CHARGE:
Small Meter Consumption Char a (under 2" meter size
Consumption
Char a
Tiers
1S Tier
2 nd Tier
3 Id Tier
4 Tier
5 Tier
6 Tier
7 Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
10/07/2009
$0.56
$0.91
$1.15
$1.39
$1.74
$2.04
$2.34
07/01/2010
$0.56
$0.91
$1.15
$1.39
$1.81
$2.12
$2.43
07/01/2011
$0.64
1$1.03
Isi.30
$1.57
$2.10
$2.42
$2.77
07/01/2012
$0.64
1 $1.03
1 $1.30
1$1.57
$2.19
$2.52
$2.89
07/01/2013
$0.64
1 $1.03
1 $1.30
1$1.57
$2.28
$2.63
$3.02
Large Meter
Consumption
Char a
2" meter size &greater)
Tiers
1 St
Tier
2 na
Tier
3rd4
Tier
th
Tier
5 th
Tier
6 th
Tier
7
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.68
$1.11
$1.40
$1.69
$2.11
$2.47
$2.84
10/07/2009
Normal
$0.62
$1.00
$1.27
$1.53
$1.92
$2.25
$2.58
Low
$0.56
$0.91
$1.15
$1.39
$1.74
$2.04
$2.34
High
$0.68
$1,.11
$1.40
$1.69
$2.19
$2.57
$2.94
07/01/2010
Normal
$0.62
$1.00
$1.27
$1.53
$1.99
$2.34
$2.68
Low:
$0.56 $0.91 $1.15 $1.39 $1.81 $2.12
$2.43-
2.43Hi
High
h
$0.77
$1.25
$1.58
$1.91
$2.54
$2.93
$3.35
07/01/2011
Normal
$0.70
$1.14
$1.43
$1.73
$2.31
$2.66
$3.05
Low
$0.64
$1.03
$1.30
$1.57
$2.10
$2.42
$2.77
07/01/2012
High
$0.77
$1.25
$1.58
$1.91
$2.65
$3.05
$3.50
Normal
$0.70 $1.14 $1.43 $1.73 $2.41 $2.77
$3.18
Low
$0.64 $1.03 $1.30 $1.57 $2.19 $2.52
$2.89
$0.77
$1.25
$1.58
$1.91
$2.76
$3.18
1$3.65
07/01/2013
-High
Normal
$0.70
$1.14
$1.43
$1.73
$2.51
$2.89
1$3.32
Low
$0.64 1$1.03
1$1.30
$1.57
$2.28
$2.63
1$3.02
High
Greater than 110% of prior year consumption
Normal
90% - 110%
of prior
year
consumption
Low
Less than 90% of
prior year
consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
(Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
15
2 na
3 rd
4
5 In6th
7 tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
15
2 nd
3rd&n
5tn6tn7tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 —Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 20th day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 5)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial Multiple Unit
Tiers
Units
1 S
Tier
0-10
2"
Tier
11-20
3rdTier
Tier
21-30
4
Tier
31-40
5
Tier
41-50
6
Tier
51-60
7
Tier
61 +
FIXED CHARGE:
Tiers
Units
1 s'
Tier
0-8
2"
Tier
9-16
3`
Tier
17-24
4
Tier
25-32
5
Tier
33-40
6
Tier
41-48
7
Tier
49+
Meter Size
10/7/2009
7/1/2010
7/1/2011
5/8" x 3/4"
$24.50
$26.94
$29.64
ill
$61.24
$67.36
$74.08
1 1/2"
$122.46
$134.70
$148.18
2"
$195.92
$215.52
$237.06
3"
$367.36
$404.08
$444.50
4"
$612.24
$673.46
$740.82
6" or Larger
$1224.48
$1346.92
$1481.64
Multiple Unit
$19.60
$21.56
$23.72
CAPITAL CHARGE:
Meter Size
10/7/2009
7/1/2010
7/1/2011
5/8" x 3/4"
$10
$10
$11
1"
$12
$12
$13
11/2"
$16
$16
$17
2"
$22
$23
$23
3"
$33
$34
$35
4"
$53
$55
$56
6" or Larger
$90
$93
$95
Multiple Unit
$8
$8
$9
CONSUMPTION CHARGE:
Small Meter Consumption Char a under 2" meter size
Consumption
Charge
Tiers
1" Tier
2 nd Tier
3 Id Tier
4 Tier
5 Tier
6 nTier
7 Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
10/07/2009
$0.56
$0.89
$1.12
$1.37
$1.72
$2.04
$2.36
07/01/2010
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
07/01/2011
$0.64
$-1-.021
$1.29
$1.57
$2.06
$2.43
$2.81
Large Meter
Consumption
Charge
2" meter size &greater)
Tiers
1 St
Tier
2"
Tier
3`
Tier
4 th5
Tier
th6
Tier
th7
Tier
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.68
$1.08
$1.35
$1.66
$2.08
$2.47
$2.85
10/07/2009
Normal
$0.61
$0.98
$1.23
$1.51
$1.89
$2.24
$2.59
Low
$0.56
$0.89
$1.12
$1.37
$1.72
1$2.04
$2.36
High
$0.78
$1.24
$1.56
$1.90
$2.39
$2.84
$3.28
07/01/2010
Normal
$0.71
$1.12
$1.42
$1.73
$2.17
$2.58
$2.98
Low
$0.64
$1.02
$1.29
$1.57
$1.98
$2.34
$2.71
High
$0.78
1$1.24
$1.56
1$1.90
$2.49
$2.95
$3.40
07/01/2011
Normal
$0.71
1$1.12
$1.42
11 $1.73
$2.26
$2.68
$3.09
Low
$0.64
1$1.02
$1.29
1 $1.57
$2.06
$2.43
1$2.81
High
Greater than 110% of prior year consumption
Normal
90% - 110% of prior
year consumption
Low
Less than 90% of prior year
consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
(Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
15
2 na
3 ra4
th
5 th
6 tn7
tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
1S
2"
3rd4
th
5th
6 th
7 th
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 —Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 20th day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk
RESOLUTION NO. 09-41
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, ADJUSTING WATER SERVICE
RATES (OPTION 6)
WHEREAS, the City Council of the City of Tustin finds and determines as follows:
1. An analysis of the Tustin Water Enterprise's water supply, storage, and
distribution system improvements has been completed; and
2. The analysis revealed that major storage system improvements are required to
maintain system reliability; and
3. The analysis determined that additional funding will be required in order to
complete the necessary improvements; and
4. The Tustin Water Enterprise has experienced increase operational costs; and
5. A study of the Tustin Water Enterprise Rate Structure and Financing Plan has
been completed; and
6. The study has determined that it has become necessary to adjust water service
rates to maintain operations, meet bond covenants, and to finance the
recommended capital improvements; and
7. It will be necessary to increase rates for next five years; and
8. The revised rates as set forth herewith are reasonable and are necessary to
cover the costs of operations of the Tustin Water Service delivery for the next five
years.
NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve as
follows:
The bi-monthly water usage tiers, rates, charges, and water demand reduction
stages are hereby established as follows:
WATER CONSUMPTION TIERS:
Residential / Commercial Multiple Unit
Tiers
Units
1 S
Tier
0-10
2nd
Tier
11-20
3 rd
Tier
21-30
4
Tier
31-40
5
Tier
41-50
6
Tier
51-60
7
Tier
61 +
FIXED CHARGE:
Meter Size
10/7/2009
5/8" x 3/4"
$24.50
ill
$61.24
1 1/2"
$122.46
2"
$195.92
3"
$367.36
4"
$612.24
6" or Larger
$1224.48
Multiple Unit
$19.60
CAPITAL CHARGE:
Meter Size
10/7/2009
5/8" x 3/4"
$10
1"
$12
1 1/2"
$16
2"
$22
3"
$33
4"
$53
6" or Larger
$90
Multiple Unit
$8
Tiers
Units
1s
Tier
0-8
2"
Tier
9-16
T
Tier
17-24
4
Tier
25-32
5
Tier
33-40
6
Tier
41-48
7
Tier
49+
CONSUMPTION CHARGE:
Small Meter Consumption Char a under 2" meter size
Tiers I Ist Tier 12" Tier 13rTier 4 Tier 15 nTier 16 inTier 7 Tier
Units 0-10 11-20 21-30 31-40 41-50 51-60 61 +
10/07/2009 1 $0.57 1 $0.95 1 $1.21 1$1.49 1 $1.89 1$2.21 $2.53
Large Meter
Consumption
Char a
2" meter size &greater)
Tiers
1S
Tier
2 na
Tier
3 rd4
Tier
th
Tier
5th
Tier
6 th
Tier
7 th
Tier
Units
0-10
11-20
21-30
31-40
41-50
51-60
61+
High
$0.69
$1.15
$1.46
$1.80
$2.29
$2.67
$3.06
10/07/2009
Normal
$0.63
$1.04
$1.33
$1.64
$2.08
$2.43
$2.78
Low
$0.57
$0.95
$1.21
$1.49
$1.89
$2.21
$2.53
High
Greater than 110% of prior year consumption
Normal
90% - 110% of prior year consumption
Low
Less than 90% of
prior year consumption
PASS-THROUGH CHARGE:
The pass-through charge is cost per unit charge calculated based on the difference
between the projected base production cost and the actual production costs, which is
divided by total annual consumption. The pass-through charge would not exceed 7% of
the annual water charges. See projected production cost table and formula below:
The projected base production cost used for the pass-through calculations is
$5,025,979
Formula:
Actual Production Cost) — (Projected Base Production Cost)
Total Annual Consumption
WATER DEMAND REDUCTION STAGES:
Residential / Commercial
STAGES
1S
2 no
3 rd
4 th
5th
6 tn7
tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-10
11-20
21-30
31-40
41-50
51-60
61+
in units
STAGE 1 —Water Watch
0-9
10-18
19-27
28-36
37-45
46-54
55+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-8
9-16
17-24
25-32
33-40
41-48
49+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-7
8-14
15-21
22-28
29-35
36-42
43+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Emergency
Mandatory Compliance
40%+ Reduction
Multiple Unit
STAGES
1S
2 no
3 rd
4 tn
5 tn
6 tn
7 tn
Tier
Tier
Tier
Tier
Tier
Tier
Tier
No Mandatory
Reduction
0-8
9-16
17-24
25-32
33-40
41-48
49+
in units
STAGE 1 — Water Watch
0-7
8-14
15-21
22-28
29-35
36-42
43+
Voluntary Compliance
10-20% Reduction
STAGE 2 — Water Alert
0-6
7-12
13-18
19-24
25-30
31-36
37+
Mandatory Compliance
20-30% Reduction
STAGE 3 — Water
0-6
7-12
13-18
19-24
25-30
31-36
37+
Warning
Mandatory Compliance
30-40% Reduction
STAGE 4 — Water
0-5
6-10
11-15
16-20
21-25
26-30
31 +
Emergency
Mandatory Compliance
40%+ Reduction
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin,
California, held on the 20th day of October, 2009.
DOUG DAVERT,
Mayor
ATTEST:
PAMELA STOKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN
I, Pamela Stoker, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council
of the City of Tustin is five; that the above and foregoing Resolution No. 09-41 was duly
assed and adopted at a regular meeting of the Tustin City Council, held on the 20th day
of October, 2009, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
City Clerk