HomeMy WebLinkAbout1993-05-12; Municipal Water District; 0512-01; Water RatesCARLSBAD MUNICIPAL WATER DISTRICT - AGENDA BILL
AB#- TITLE: ~ WATER RATES
MTG, 05/12/93
DEPT. CMWD I CITY ATTY' I CITY MGR.
RECOMMENDED ACTION:
Staff requests that the Commission review the alternative proposed water rates for the 1993-1994 Fiscal
Year with the intent of recommending a specific rate structure to the Board of Directors for adoption.
The proposed 1993-1994 Operating Budget for CMWD will be presented in draft form to the Board of
Directors at the May 25, 1993, Board meeting.
The proposed budget shows $16,877,622 in total expenditures for water, sewer and reclaimed water
operations. The water operations budget shows a proposed expenditure of $11,744,566 for 1993-1994
compared to an $11,586,223 figure for 1992-1993.
The single most significant change in the FY '93 - '94 budget increase is the Purchased Water account.
This is due to the rate increases from both the San Diego County Water Authority and the Metropolitan
Water District. The total percentage increase is 20%. Because Purchased Water comprises the majority
of the Water Operations budget, this increase has a significant impact. However, we are anticipating
lower purchases, based on FY 92-93, so the actual dollar amount does not differ significantly. There
are two main reasons for this projection: 1) Continued conservation by water customers who have
become accustomed to using less water; and 2) a cooler weather pattern with increased precipitation.
The projected water sales revenue for the 1993 - 1994 Fiscal Year is $10,020,000 based upon sales of
13,500 acre feet of water. This equates to a base water rate of $1.70 per unit (1 unit = 100 cu. ft. or
748 gallons). This compares to the present base rate of $1.30 per unit and represents a $.40 increase
(or 31% increase) over the 1992 - 1993 Fiscal Year water rate.
As you may recall from the last Commission meeting, the reasons for the rate increase are several, First,
the Metropolitan Water District has increased the cost of treated water from $322 per acre foot to $385
per acre foot or by $0.15 per unit. The County Water Authority also increased its cost of water to the
District. The price went from $62.00 per acre foot to $78.00 per acre foot an increase of $0.03 per
unit. Therefore, these two increases by MET and CWA total $0.18 per unit.
The remaining increase of $0.22 per unit is a result of the reduction in water sales due to conservation
and weather conditions. Most of the operational costs of delivering water from the aqueducts to the
customers are fixed costs. These costs do not vary with the sale of water and, therefore, a reduction
in water sales increases the per unit cost. Budget items such as vehicle maintenance, insurance, heat
and light, data processing, pipeline maintenance and repair, building maintenance, postage and printing
are a few of the examples of expenditures that do not vary with water sales.
As previously stated, a water rate of $1.70 per unit should be established to balance the proposed
budget for 1993 - 1994.
There are, however, alternatives to raising the rate the full $0.40 per unit. Presently, there exists a
"ready-to-serve" fee that is shown on the water bills. This fee is based on meter size and is presently
$5.50 for a 5/8" meter. This fee is made up of two components, a "base" portion and a "meter
replacement" portion. The base fee reflects the general operations and maintenance and customer
service expenses, and is distributed evenly amongst all meter customers. The meter replacement,
however, distniutes the cost of the meter replacement according to size of meter. This is done to
insure that each customer pays a fair share of the cost of water service.
Page 2 of Agenda Bill No. 0512-01
The present "ready-to-serve" fee is set at $5.50 for a 5/8" meter and progresses upward to $29.70 for
an 8" meter. These rates were last reviewed in May of 1990 and were not revised to reflect the
District's operational budget upon the District becoming a subsidiary district.
There are three exhibits attached to this agenda bill that reflect the existing ready-to-serve charge and
a proposed or revised ready-to-serve charge.
Details of these charges and a review of their effect on revenue and the proposed rate of $1.70 will be
discussed in further detail by staff during the meeting.
It is anticipated that recommendations would be forthcoming from the Commission to the Board
regarding the proposed water rate and/or a confirmation of the new water rate and "ready-to-serve"
charge.
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1990-11 mu
$ 2,635,007
10,543,726
567,284
$13,165,931
51.9
8 2,513,825 I NAI”ANCE ‘IsRsoHNEL OPERATIOI ’ 1 9,71:,372
CAPITAL OUTLAY
GRAND ’IDTAL 612,228,197
8 3,091r981 $ 2,896,255
13,684,332 13,948,167
141,600 32,600
$16,837,913 $16,877,622
56 55 I 52.9
1990-91 1991-92 1992-93 1993-94
ACNU BUWR -ET Bumrc
GRAND mu
POSITIW
Pm I $ 2,129,617 1 $ 2,2151441 I $ 2,290,091 I $ 2,286,586
5 8,385,109 S 9,143,426 $11,586,223 $11,144,566
44.5 44.5 43 43
6,255,492 6,450'279 9,104,932 9,437,760 1 0 I 477,704 1 101,200 I 21,200
To mido potablo ntor and sorvico to tbo mutomora of tho City ud District. This profram provid.. adniatration, billing, motor roading, OpOratiOnS, uintcnanco, arginooring, public infomt M and vatu aanaorvation.
Pm ACTMTIBBfi
aoordirutiaa uith other b.wtu at. OM h88 brk with San Di .(10 count Y Wtor Wtho riW. urd othr outsib a&n<ir and 6 that UI h-v~lvod with water. Coordinate with oxr City Departwnts and Divisions. ~eep curront on Podoral and Stat. Legislative issues aa tby pertain to tho vator .ugplY
~~volop continu4sly -to ~AIO coclpl er aed mapping systr. Review mid c0-t plana tor new developont. Preparr and specifications for projocts to replaco old vator linea and otbr facilitiu. Adminiator major capital improvement projects designed by outsido engineers.
.tu mint.- .Id nam ira Caplet. P7.mtatlve aaintmmco an tlw vator facilitiem to prevent a major vatu outago. *is includ.. maintaining valvoa, pmps, reservoirs. and tolemetering facilitioa. Repair all 1- i~diatoly to rdaco vator losa, and porforr tho repair with a rinimr of vator aervico disruption.
Forform monthly reading of mom Ew3l!&ers.
-tor Bill Maintain 8 high levo1 of -tau d' continuing to got water bills out om tin. Idontify prograu to increaao efficiency.
1. Pr.pur staff report..
2. P-t both vrittrn and oral roports to City -, City council, corittm, camiasions and othor .gancioa.
3. Identity .cbool ab for implaontation of .cbool program, &lapod in conjunction with San Di.go Camty Water Authority.
4. Maintain mmroness of Carlabad Wator Sthic thmq% activitiu &ring Watu AwaXun0.a mtb, public appearan- at carrmity md .cbl faira, and distribution of information.
1. Updato 55 District Atlas sbeeto.
2. Maintain plan check turn around tin of 10 days.
3. Thoroughly and ~Lficiently stop all capital projects. Deaign major design projocts in- hauo.
1. Maintain all valvea and otbr appurtenances.
2. Repair a11 I& vith rinhl ahut down tho, on 24 boui. notico.
1. Ilrrintonanco of 800 meters p.r month.
1. Wih uater bill into an ouy-to-read forut, whilo provfding mom lnforution.
2. Purcbaso and implaant vatu billing syatam equipent upgrade..
SIONIFIC.ANT CRANGES I
Maintenance and -ration costs reflect the water rate increaaes froa both the San Diego County Water Authority and the Hetropolitan Water Diatrict.
CITY OF CARLSBAD
1993-94 BUDGET
MAINTENANCE AND OPERATION DETAIL
FUND: Water Enterprise WOQ: Water Operations
ACCT
NO ACCOUNT DESCRIPTION
1 100 Regular Salaries
1200 Overtime Salaries
1300 Part-Time Salaries
131 0 Elected Officials' Salaries
1910 Employer Disab & UnemQ
1920 Employer Cont Retirement
1930 Employer Coot Work amp 1940 Employer w#fi'& Ufe lrr~
1970 Employer Soc SecA4edicare
1990 Misc Employer Benefits
- 1830 Auto Allowance
21 11 Vehicle Maintenance
21 12 Vehicle Replacement
2130 Insurance
2170 Data Processing
2180 Legal Services 21 90 Misc Sew from Other Depts
2210 Heat & Light
2220 Tele & Communications
2230 Waste Disposal Services
2240 Water
2330 Other Mach & Equip Rental
241 2 Asphaft Repairs
2420 Office Equip Maintenance
2430 Laundry & Uniform Mntnce
2440 Auto & Truck Maintenance
2451 Communication Equip Mntce
2461 Routine Building Mntce
2479 Mlsc Professional Services
2485 Temporary Help 2489 Misc Contract Sewices
2490 Misc Outside Services
2493 Hazardous Waste Disposal
251 0 Advertising & Publications
2520 Dues & Subscriptions
2530 Postage
2540 Printing
2550 office Supplies
2551 Office Furniture & Equipment
261 0 Building Mntnce Supplies
2640 ExpendaMe Tools
2641 Safety Equipment
1992-93
CURRENT
1,462,100
70,~
5,000 16,000
6,OOo 11,009
258,240
16,Ooo 243,442
7 4,300
90,Ooo
152,400 131,507
37,883
73,900
7,000 550,000
35,000
32,500
1,250
2,400 400
15,000
8,500
4,025
2,000
5,400
6,500 98000
=,OOo 1 l0,OOO
30,000
0 29,000 12,500
65,000 45,000
30,000
6,250 11,500
10,Ooo
7,500
ACCT NO: 501-6310 EXP AS
01/01/93 ESTIMATE REQUEST
OF 1992-93 1993-94
562,577
20,388
9,063
5,152 2,100
20,611
95,716
21,654 76,018
3,777 25,699
86,680
51,853
0
33,240
0
275,000
15,773
12,012
401
2,805
0
3,715
4,770
1 ,583
1,630 1,081
1,l 17
40,476
37,948 60,192
16,532
0
4,179
4,508
21,772
9,326
6,870
692
2,785
5,900
' 283
1 , 1 95,575
43,925
19p33 10,548
4m 34,103 190,273
43,354 1~3,419 7-,907
56,249
192,007
91,629
0 73,900
0
550,000
31 ,ooO
30,000
1,250
4,000 400
7,400
9,200
3,200
2,oOo
3,000
2,OOo WOO0
82,890 t 15,117 29,915
0 20,000
14,000 50,000
37,000
15,500
2,ooo 1,000 10,Ooo
12,000
1,562,000 70,000
0
18,000
4,200
2o,430 243,653 21,060 255,247
10,996
155,528
80,487
42,740
95,000
0
550,000
44,900
30,500
1,250
4,000
4,000
15,000
6,500
4,025
2,000
4,000
4,500 so,OOo
4,500 73,300
44,600
1,000
20,000 11,100
53,900 34,500 16,700
3,000 3,000
11,m
15,000
I
2660 spec Departmental supplies
2661 Purchased Water
2668 Water Meters & Fittings 2671 Books & Publications
2673 Computer Software
2691 Pub lnformation/Promotional Material 2910 Depredation Expense 2921 Fiscal Agent Fees 2930 Taxes
2940 Travel Expense
2951 Bad Debt Expense - Water Bills
2971 Insurance Premlums
2980 TraInlng & Education
2983 Education
2984 Training
2995 Interest on Deposits .
3900 Capital Equipment
44,000
6,170,ooO 200,000 2,000
81,000
20,000 1,600
6,200
0
79,117
0
6,000.
2,OOo 89,700
5,500
1 ,3~1~*
4,600
29,574
2,882,528
14,882
672
1,323
1,484
0
8,115
1,456 3,546 4,568 42,344
0
61
18630 558
* 35,528
52,000
150,000
1 loo0 2,600
81,000
20,000
1,600
6,200
9,100
117,000
0
1 ,m
5,000 1,100
8O,OOO
5,568,~o
1,3~,060
67,950
6,699 ,O00
221 ,OOo
1 3,200 39,000
950,OOO
20,000
1,600
10,100 10,Ooo 0
8,400 0
0
2,m 21,200
TOTAL MAINTENANCE & OPERATION 11,779,223 4,574,1# 10,642,794 11,744,566
REVENUE
8321
8325 841 1
0420
8802 8881
8882 8803 8885
8924
8994
8999
Reconned Fees
Water Late Charge
Interest
Property Rental
Sales of Plans & Specs Ready-to-Senre Charges New Account Charges
Fire Protection Charges
Plan Check & Inspection
Meter/Service Connections
Water Sales
Miscellaneous
TOTAL
10,Ooo
200,000
~IOOO 0
0
f,~,OOo 0
0
20,000
9,9oo,o0o
110,o0O
1 1,8O5,OOO
125,000
Rj3 AS OF
02/01/93
4,960 10,000 10,Ooo
20,000 40,Ooo 40,Ooo 8,550 16,550 20,000
506 1 1
828,683 1,420,599 1,400,000
24,188 48,188 40,000 30,987 53,987 53,000
22,384 44,768 ~,OOo 33,835 67,670 40,OOO 4,471,685 6,879,515 10,020,000
21,230 42,000 5,000
.41,347 86,347 85,m
5,508,355 8,710,624 11,754,000
May 18,1993
TO: WATER COMMISSIONERS
FROM: GENERAL MANAGER
PROPOSED WATER RATES FOR 1993 - '94 FISCAL YEAR
At the most recent meeting on May 12th, the proposed water rates were reviewed and discussed
in order to determine the best course of action to offset the proposed $11,744,566 water fund
budget.
It was determined that if the entire water budget was funded through the water rate with the
present $5.50 "ready-to-serve" charge unchanged, the proposed rate would be $1.70 per unit.
Alternative increases were also discussed. Generally, the alternative is to increase the ready-to-serve
charge which results in a lesser increase in the water rate.
It was explained that the rate study undertaken in 1989 showed that the general rule of thumb is
to cover approximately 60% of the "operating" budget with the ready to serve charge, while the
remaining portion of the "operating" budget is incorporated into the water rate. That was the
method utilized in the 1989 rate study to set the ready-to-serve charge at the present $5.50 (for a
5/8" meter).
During the discussions regarding the alternatives, it was requested that staff determine what the
water rate would need to be if the ready-to-serve charge was increased from $5.50 to $8.25, which
is half of the increase needed to attain the $11.00 charge. Eleven Dollars reflects the goal of 60%
of the "operating" budget through the ready-to-serve charge.
The operating budget is explained as follows:
Total Water Budget
Less Water Purchases (from CWA)
Less Depreciation
$1 1,744,566
6,699,000
950.000
"Operating" Budget $4,095,566
If 60% of the "operating" budget is covered through the ready-to-serve charge, that charge would
need to be approximately $1 1.00 (for a 5/8" meter). An increase to $8.25 (for a 5/8" meter) would
generate $1,899,000 towards the "operating" budget (about 45%). As a result, the water rate would
need to be increased from the present $1.30 per unit to $1.62 per unit. This is shown as follows:
May 18,1993 Page 2
I. Total Water Budget $11,744,566
Less miscellaneous revenues 334,000
Less revenue from ready-to-serve charge 1,899.000
Amount to be financed thru water rate $ 9,511,566
11. $ 9.4 11.566 = $1.62 per unit
13.500 a.f. x 435.6 units/acre
* 13,500 a.f. indicates amount of water sales in acre feet 435.6 indicates number of units in
1 acre foot.
ROBERT J. GREANEY
GENERAL MANAGER
RJG:mg