Logistics. At the top right corner of your screen: Control Panel: Attendee List

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1 Logistics At the top right corner of your screen: Show your control panel to submit questions and see answers All phones/microphones are muted for the duration of the webinar. Toggle between full screen/window screen view Control Panel: Attendee List Audio: please choose between speakers and telephone. If you do not hear audio right now, please check your speaker volume or enter #[audio pin]# if using phone. Submit questions in the Questions box at any time, and press [Send]. To undock and increase the size of the box, click on top right corner icon.

2 Benchmarking Rates and Financial Health in Virginia Sheryl Stephens Draper Aden Associates David Tucker UNC Environmental Finance Center sog.efc.unc.edu October 17, 2013 Webinar

3 Established in 1972, Draper Aden Associates, Inc. is a leading Virginia-based consulting engineering firm with experience in facilities planning and engineering design for municipalities, government agencies, cultural institutions, and private clients. We provide civil, environmental, geotechnical, solid waste, and structural engineering; surveying and subsurface utility engineering; site planning and engineering; and construction inspection services throughout the Southeastern United States. Offices Located In Blacksburg, Richmond, Charlottesville and Newport News, Virginia

4 efc.sog.unc.edu Dedicated to enhancing the ability of governments and other organizations to provide environmental programs and services in fair, effective and financially sustainable ways. How you pay for it matters!

5 Smart Management for Small Water Systems under a Cooperative Agreement with the US EPA The EFCN provides training and technical assistance to small public water systems in all fifty states and five territories to help local water systems achieve and maintain compliance with the Safe Drinking Water Act. Workshops, trainings and direct assistance: Asset Management Water Loss Reduction Water System Collaboration Fiscal Planning and Rate Setting Energy Management Funding Coordination, and Managerial and Financial Leadership Sign up for direct assistance at

6 Objectives become familiar with the features and benefits of our Virginia water and wastewater rates dashboard learn how to compare one water systems' rates with those of other systems learn how to apply several useful financial benchmarks to your system(s).

7 Geographic representation: All Registrants

8 Poll Question 1

9 Draper Aden s 25 th Annual Virginia Water and Wastewater Report Mail survey to 268 utilities in Virginia Include all municipally-owned water and wastewater systems 57% response rate

10 Response Breakdown Largest Smallest (based on # of residential customers) 38 Authorities Fairfax Water Ferrum WSA 67 Towns Town of Leesburg Town of Glyn Lyn 24 Counties Chesterfield Co. Powhatan Co. 24 Cities City of VA Beach City of Norton 44% 16% 25% 16% Authorities Cities Counties Towns

11 Control Group 20 utilities in control group 7 Authorities 2 Cities 3 Counties 8 Towns Large and Small Utilities Rural and Urban From across Virginia

12 $17.97 $18.25 $19.52 $19.94 $21.59 $22.50 $23.58 $25.00 $25.70 $27.25 $28.34 $19.96 $20.91 $22.01 $22.83 $25.32 $27.74 $29.56 $31.03 $32.88 $35.34 $37.00 $70.00 Control Group Residential Water and Wastewater Charges - 5,000 gallons/month $ % increase water rates 4.7% increase sewer rates $50.00 $40.00 $30.00 $20.00 $10.00 $ Average Water Rate Average Wastewater Rate

13 Water Rates (from all respondents) Water Replies Average Median # Residential Connections ,227 2,053 # Non-Residential Connections Monthly Residential Charge - 5,000 gallons (Inside of Municipal Boundaries) 150 $30.98 $29.70 Monthly Residential Charge - 5,000 gallons (Outside of Municipal Boundaries) 65 $45.07 $40.03 Monthly Non-Residential Charge - 1,000,000 gallons (Inside of Municipal Boundaries) 126 $5,394 $4,907

14 $32.75 $27.62 $23.87 $46.09 $42.81 Average Residential Water Rates by System Size $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- Inside Municipal Boundaries Outside Municipal Boundaries < 5,000 Connections 5,000-50,000 Connections > 50,000 Connections

15 Wastewater Rates (from all respondents) Wastewater Replies Average Median # Residential Connections ,870 1,652 # Non-Residential Connections Monthly Residential Charge - 5,000 gallons (Inside of Municipal Boundaries) 142 $ $ Monthly Residential Charge - 5,000 gallons (Outside of Municipal Boundaries) 52 $ $ Monthly Non-Residential Charge - 1,000,000 gallons (Inside of Municipal Boundaries) 120 $ 6,731 $ 6,016

16 $40.58 $36.75 $37.81 $51.73 $63.09 Average Residential Wastewater Rates by System Size $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $- Inside Municipal Boundaries Outside Municipal Boundaries < 5,000 Connections 5,000-50,000 Connections > 50,000 Connections

17 Connection Fees charges for tapping into the water main and running a line to the water meter or tapping into a sewer line and installing a service line to the property line Capital Recovery Charges charges for buying into the existing system or charges that recognize the cost of adding capacity to the system Also called facility fees, system development charges, etc.

18 $2,193 $2,427 $2,784 $2,284 $3,339 $4,511 $4,038 $4,730 $4,375 $3,823 $5,324 $6,333 Water Connection and CRC Fees $7,000 $6,000 $5,000 Connection Fee Capital Recovery Charge Connection and CRC Combined $4,000 $3,000 $2,000 $1,000 $- < Connections 5,000-50,000 Connections > 50,000 Connections All Responses

19 $2,607 $3,185 $3,161 $3,881 $4,766 $4,988 $5,733 $5,693 $5,900 $5,583 $5,131 $6,493 Wastewater Connection and CRC Fees $7,000 Connection Fee Capital Recovery Charge $6,000 Connection and CRC Combined $5,000 $4,000 $3,000 $2,000 $1,000 $- < Connections 5,000-50,000 Connections > 50,000 Connections All Responses

20 Residential Demands What is the average monthly water consumption of your residential customers? 18% 5% 5% 13% 24% 34% More than 5,000 gallons Approximately 4,000 gallons Less than 3,000 gallons Approximately 5,000 gallons Approcimately 3,000 gallons Don't Know

21 Residential Demands How has the average residential consumption changed over the past 10 years? 15% 13% 34% 38% Increased Stayed the Same Decreased Don't Know

22 Residential Demands Do you think declining demands are a temporary pattern or the new normal? 4% 7% 89% Temporary New Normal Don't Know

23 Residential Demands If average residential consumption has decreased, which of the following contributed to the decrease? Other Don't Know Rainwater Harvesting Utility has Encouraged Customers to Reduce Water Use Customers have Changed Outdoor Water Use Patterns Concerned Customers are Conserving Resource Economic Downturn Customers are Cost-Conscious Installation of Low-Flow Fixtures/More Efficient Appliances 0% 10% 20% 30% 40% 50% 60% 70% 80%

24 Benchmarking Rates

25 Rates in Virginia Check out our Virginia Rates Dashboard On the Draper Aden Website: On the EFC Website Go to and search for Virginia Water and Wastewater Rates Dashboard

26 Source of pride

27 Comparing rates the old way Source: NC Triangle J Council of Government

28 What s wrong with it? Poor sample selection (number, types of systems) Comparing only one bill amount Comparing nothing besides rates pressure to keep rates low regardless of financial condition of utility ignores customers ability to pay ignores price signals and utility s policies

29 Solution: provide more information? 185 pages of wonderful tables, full of data you can use!

30 Demonstrate the Dashboards

31 Rates Dashboards Created for VA, CO, GA, NC, NJ, and TX. AZ coming soon! Free, online, open to the public Compares rates against multiple characteristics: Utility finances; System characteristics; Customer base socioeconomic conditions; Geography; History Compare to similar utilities (large samples): All utilities; same size (accounts); same ownership type; same river basin; same customer income levels; within 50 miles; same planning districts

32 Some EFCN Resources Tools, trainings, assistance and resources for small water systems:

33 Poll Questions 2, 3 and 4; and Qualtrics survey link

34 Thank you! David Tucker EFC at University of North Carolina, Chapel Hill Sheryl Stephens Draper Aden Associates Lexi Kay EFC at University of North Carolina, Chapel Hill Cathy Hanks Draper Aden Associates