City of Flushing. Water and Sewer Rates

Transcription

1 City of Flushing Water and Sewer Rates

2 Current Water Rates $10.00 per month readiness to serve fee (billed on a quarterly basis at $30.00) 5.40 per 1,000 gallons used The City of Flushing s last water rate increase was October 2009 almost 6 years ago

3 Expense of Water The City of Flushing receives treated water from the City of Detroit through an agreed contract with Genesee County October 2, 2014 (51 cent increase) $4.45 per 100 cubic feet March 2, 2015 (30 cent increase) $4.75 per 100 cubic feet Anticipated increase of 16%* $5.51 per 100 cubic feet (76 cent increase) *Mlive.com article on April 14, 2015

4 Expense of Water The City of Flushing s water bill from Genesee County includes the following: - Cost of water used billed at Detroit s price - Readiness to serve fee* - Usage and county s resident readiness to serve fee for 35 homes along Elms Road** * The City of Flushing is charged a meter equivalent of 50 ** These homes are tapped directly into Genesee County s water main

5 Water Usage 2012: 599,041 gallons per day 2013: 508,451 gallons per day 2014: 587,612 gallons per day Average: Average: 565,035 gallons per day 206,237,775 gallons per year

6 Water Cost at Anticipated Price 206,237,775 gallons / 748 gallons = 275,719 at 100 cubic feet 275,719 cubic feet X 5.51 per 100 cubic feet = $1,519,212 Anticipated cost of Water from City of Detroit Note: 100 cubic feet = 748 gallons

7 Water Cost at Anticipated Price Cost of Water: $1,519,212 Readiness to Serve: $55,416* Readiness to Serve (Elms): $6,300** Total: $1,580,928 *50 meter equivalent = $4,618 per month (actual cost) ** 35 homes at $15 per month = $1,575 (actual cost)

8 Other Water Fund Expenses Based on Fiscal Year 2016 projection: Water Division Cost of Water $1,580,928 Remaining Expenses $652,829* Billing Dept. $40,747 Total $2,274,504 * Includes debt payment associated with two DWRLs

9 Determining City of Flushing Water Rate Chapter 53 of city ordinances does not give direction on what percentage of Water Fund Revenue should come from a fixed fee (readiness to serve) and water usage (per 1,000 gallons) In a 2015 Detroit Free Press article, the City of Detroit indicated it was going to a ratio of 60/40 for its revenue. 60% of revenue would be collected through a flat readiness to serve fee and 40% of revenue would be collected through water usage. City of Detroit s previous ratio was 40% from readiness to serve and 60% from water usage.

10 Determining City of Flushing Water Rate Using a 60/40 split Readiness to Serve $2,274,504 X.60 = $1,364,702 $1,364,702 / 4235* water users = $ per yr $ / 12 months = $26.85 per month OR $80.56 per quarter * Number of water accounts

11 Determining City of Flushing Water Rate Using a 60/40 split Water Usage per 1,000 gallons $2,274,504 x.40 = $909,802 $909,802 / 206,237,775 = x 1000 gallons = $4.41 per 1,000 gallons

12 Change in Quarterly Residential Bill Using the assumption of 6,645 gallons per month usage / 19,935 gallons per quarter usage: Current Rate: $30 + $ = $ Scenario 1 (60/40): $ = $ (18% increase)

13 Water System Capital Improvements There are no direct capital improvements budgeted in Fiscal Year 2016 The city needs to replace 4 inch water mains along with street repairs at: - Beatrice - Marguerite - Walnut - Mildred - Luce - Francis - Leland - Thomas - Crescent Place - Iola Court - Orchard - Melody - Warren This budget indirectly includes $50,000 that could go towards capital improvements. ($30,000 is in the depreciation line as a result of using the average principal payment for the remaining debt. In addition, credit is not given for revenues received from other sources, such as hydrant charges and penalties.)

14 Rates adopted 4 years ago Current Sewer Rates Without water in City $84.59 per quarter* Twp. with sewer $84.59 per quarter* (* (19,935 gallons/1000 X 3.11) Sewer Rate $3.11 per 1,000 gallons Flat Fee ($17.59) / ($5.00) Debt Service Residential $22.59 per quarter 1.25 inch meter $28.24 (1.25 x 22.59) 1.50 inch meter $33.89 (1.5 x 22.59) 2 inch meter $45.18 (2 x 22.59) 3 inch meter $67.77 (3 x 22.59) 4 inch meter $90.36 (4 x 22.59)

15 Expense of Sewage The Fiscal Year 2015/2016 Budget has the following expense projections: Sewer Lines: $290,561* Waste Water Treatment: $791,497** Billing Department: $40,747 *These expenses will be the responsibility of the city even if treatment was provided by Genesee County. There are no capital improvements, such as pump station upgrades, budgeted even though they are needed ** 1. $108,950 has been budgeted for one capital improvement project at the WWTP ** 2. Personnel at the plant is budgeted at 2 full time employees and contracted lab services with the county

16 Billable Sewage Flow Billable flow as measured by the customer s water meters and other pertinent records ,111,833 gallons ,414,000 gallons ,590,166 gallons Average 162,705,333 gallons* * Water billed for separate irrigation meters are removed from flow calculations

17 Sewer Rate Calculations per Ordinance User Service Charge Operation / Maintenance & Repair = $1,122,805 Flow (billable) = 162,705,333 gallons / 1000 $1,122,805 X 1000 /162,705,333 = $6.90 per 1,000 gallons Debt Service Charge $80,000 X 1000 / 162,705,333 = $0.491 per 1,000 gallons Sewer rate with no flat fee and dependent on usage is $7.391 per 1,000 gallons

18 Sewer Rate Similar to Water Rate Scenarios 60 / 40 split Flat Fee $1,122,805 X.60 = $673,683 $673,683 / 4287* = $ per year $157.15/12 = $13.10 per month $39.29 per quarter *There are more sewer users than water users in order to account for the larger meters

19 Sewer Rate Similar to Water Rate Scenarios 60 / 40 split Usage Rate $1,122,805 X.40 = $449,122 $449,122 / 162,705,333 = X 1000 = $2.76 per 1,000 gallons

20 Change in Quarterly Residential Bill Using the assumption of 6,645 gallons per month usage / 19,935 gallons per quarter usage: Current Rate: $ $62.00 = $84.59 All Usage: $ (74.1% increase) Scenario 1 (60/40): $ = $94.31 (11.4% increase)

21 Overall Change on Residential Bill Using the assumption of 6,645 gallons per month usage / 19,935 gallons per quarter usage: Current Rates: = $ ($74.08 per month) New Rates (60/40) = $ ($85.60 per month) (15.5% increase OR $11.52 per month OR.384 per day)

22 Staff Recommendations Water Adopt rate increases using a 60/40 split Sewer Adopt rate increases using a 60/40 split Include an additional $50,000 in WWTP expenses to pay for one additional employee* (equates to an additional $1.75 on flat quarterly fee &.12 on per 1,000 gallons used) *in response to 9/10/2014 letter sent to MDEQ regarding WWTP staffing levels