Water & Wastewater Rate Study 2009-2013
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ENGINEERING REPORT
The City of Salina, Kansas
WATER and WASTEWATER RATE STUDY
(2009-2013)
City Commissioners
John K. Vanier II, Mayor
Luci Larson, Vice-Mayor
Alan E. Jilka
Aaron Peck
R. Abner Pemey
City Manager
Jason Gage
Director of Utilities
Martha Tasker
Director of Finance and Administration
Rod Franz
Address all communication
regarding this work to:
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Wilson & Company, Inc., Engineers & Architects
P.O. Box 1640
Salina, Kansas 67402-1640
(785) 827-0433
June 2008
WCI File No. 07-200-520-00
1111'150111
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TABLE OF CONTENTS
SECTION 1 - EXECUTIVE SUMMARY
1.1. PROPOSED WASTEWATER RATE SCHEDULE.................................................. 1.1
1.2. PROPOSED WATER RATE STRUCTURE............................................................. 1.3
1.3. PROPOSED WATER RATE SCHEDULE................................................................ 1.6
1.4. EFFECTS ON WATER USERS................................................................................. 1.8
1.5. ESTIMATED WATER AND WASTEWATER MONTHLY BILLS ....................... 1.9
1.6. APPROVED BY CITY COMMISSION .................................................................. 1.10
SECTION 2 - GENERAL
2.1. PURPOSE ................... ........... ....... ....................... ......... ........ ....... ..... ....... ...... ............. 2.1
2.2. SCOPE ................. ....... .................. .................. ....................... ....... ............ ................... 2.1
2.2.1. Wastewater Rate Evaluation ..........................................................................2.1
2.2.2. Water Rate Structure Evaluation ................................................................... 2.1
2.2.3. Water Rate Evaluation.. ............ ......... ..... ........ ......... ...... ........... .......... ........... 2.1
2.2.4. Project Approach.......... ..... .................. .................... ...... ..... ........ ................... 2.2
2.2.5. Historic and Projected Water and Wastewater Expenses and Required
Revenue......................................................................................................... 2.2
SECTION 3 - W ASTEW A TER RATE EV ALVA TION
3.1. PROJECTED WASTEWATER EXPENSES ............................................................ 3.1
3.2. REVENUE GENERATED AT CURRENT W ASTEW ATER RATES.................... 3.5
3.3. PROPOSED WASTEWATER RATE SCHEDULE .................................................3.7
3.4. ESTIMATED MONTHLY WASTEWATER CHARGES........................................ 3.9
SECTION 4 - WATER RATE EV ALVA TION
4.1. PROJECTED WATER EXPENSES....................................................,..................... 4.1
4.2. REVENUE GENERATED AT CURRENT WATER RATES ................................. 4.5
4.3. WATER RATE STRUCTURE EV ALUA nON ....................................................... 4.8
4.3.1. Types of Water Rate Structures....................................................................... 4.8
4.3.2. Water Conservation and Rate Structures ......................................................4.11
4.3.3. Water Rate Structure Comparison................................................................. 4.12
4.3.4. Water Rate Structure Recommendation ........................................................ 4.14
4.4. PROPOSED WATER RATE SCHEDULE .;........................................................... 4.17
4.5. EFFECTS ON WATER USERS ..............................................................................4.19
4.6. ESTIMATED MONTHLY WATER CHARGES ................................................... 4.21
APPENDIX A - Resolution No. 08-6523
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SECTION 1 - EXECUTIVE SUMMARY
This study evaluates existing and future revenue requirements for the City's Water and
Wastewater Utilities and makes recommendations for adjustments to the current rate schedules.
These adjustments will be required to finance the anticipated operation, maintenance,
replacement, and capital improvement costs of the Water and Wastewater Utilities for the next
five years (2009-2013). The water and wastewater rates proposed in this study should be
reviewed annually and adjusted as necessary to assure adequate revenue is being generated. An
evaluation of the water rate structure was also completed as part of this study.
Several trial allocations utilizing a targeted annual reserve balance of $3,000,000 (for water and
wastewater combined) to establish the proposed water and wastewater rates were reviewed. The
trial allocations tested various levels of increases for both the customer charges and the
consumption charges. The development of the water and wastewater rates discussed in this
review is based on the trial allocations which best match the general goals of the Water and
Wastewater Rate review. In general, these goals include:
. Generate adequate revenues for the Water and Wastewater Utility
. Maintain equitability among user classes
. Minimize percent increase in rates
. Minimize percent increase in rates to smaller volume, fixed income customers
. Strategic use of available reserves in excess of target fund balance
. Maintain reserves within the Water and Wastewater Utility at target fund balances
established by the City
1.1. PROPOSED W ASTEW A TER RATE SCHEDULE
The latest change in the wastewater rates was in October 2007. This wastewater rate will
generate an adequate revenue for the remainder of 2008, but will not generate adequate revenue
for the period from 2009-2013. It is recommended that the wastewater rate schedule be adjusted
as shown in Table 1-1.
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Table 1-1: Proposed Wastewater Rate Schedule
Existing
2008 2009 2010 2011 2012 2013
Customer Charae
Monthly Customer Charge, $ 3.51 6.31 "6.42 6.57 6.73 6.89
Consumption Charae
Unit Cost, $Ieef 2.63 2.88 3.08 3.35 3.64 3.90
In addition to increased expenses, one reason for the increase in wastewater charges from 2008
to 2009 is due to the fact that the number of wastewater accounts didn't increase as much as
previously projected. The wastewater volume actually decreased and is projected to continue to
decrease. This rate increase stabilizes from 2009 to 2012 with an almost zero increase required
in 2013 due to current debt service payoff on past wastewater projects. Even though the total
annual revenue required stabilizes in 2013, it is recommended to continue to increase wastewater
rates. It is known that additional revenue will be required for proposed nutrient removal
improvements at the wastewater treatment plant with debt repayments starting around 2015.
Any surplus revenue acquired in 2013 can be utilized to reduce future debt repayments, thus
possibly eliminating the need for a substantial wastewater rate increase after 2013.
Table 1-2 shows the estimated monthly wastewater charges for customers based on the proposed
rate schedule. The table is broken down into different average usages.
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Table 1-2: Estimated Monthly Wastewater Charges for Typical Customers Based on Proposed
Rate Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage" Existing Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range. (cu. ft.) 2008 2009 gQ1Q 2011 2012 ~
Residential !Inside Citvl
0-300 8,465 (39%) 300 $11.40 $14.95 $15.67 $16.61 $17.65 $18.59
301-500 2,864 (13%) 400 $14.03 $17.83 $18.76 $19.96 $21.28 $22.49
501-800 3,736 (17%) 700 $21.92 $26.48 $28.01 $30.00 $32.20 $34.19
801-1,100 2,450 (11 %) 1,000 $29.81 $35.12 $37.27 $40.04 $43.12 $45.89
1,101-1,500 1,n3 (8%) 1,300 $37.70 $43.76 $46.52 $50.08 $54.04 $57.59
1,501-2,000 1,064 (5%) 1,700 $48.22 $55.29 $58.86 $63.47 $68.60 $73.19
>2,000 1,573 (7%)
Commercial !Inside Citvl
2,000-5,000 3,500 $95.56 $107.15 $114.39 $123.73 $134.11 $143.39
5,001-10,000 7,500 $200.76 $222.39 $237.78 $257.62 $279.69 $299.39
10,001-50,000 30,000 $792.51 $870.64 $931.88 $1,010.n $1,098.58 $1,176.89
50,001-100,000 75,000 $1,976.01 $2,167.13 $2,320.07 $2,517.07 $2,736.36 $2,931.89
Laroe Users
Inside City 100,000 $2,633.51 $2,887.40 $3,091.29 $3,353.91 $3,646.24 $3,906.89
Inside City 600,000 $15,783.51 $17,292.84 $18,515.63 $20,090.59 $21,843.78 $23,406.89
Outside City 100,000 $3,294.52 $3,613.98 $3,868.92 $4,197.31 $4,562.84 " $4,888.78
Outside City 600,000 $19,732.02 $21,620.79 $23,149.35 $25,118.16 $27,309.n $29,263.78
· Based on July 2006 usage
.. Residential usage is based on the average monthly metered water consumption for January, February,
and March. Commercial and Large User usage is based on monthly metered water consumption.
1.2. PROPOSED WATER RATE STRUCTURE
The current decreasing block water rate structure has been in place since at least 1987, if not
prior to then. This current water rate structure typically does not aid in water conservation which
is the direction the City and state is moving towards.
Relevant factors to be considered in selecting the appropriate rate structure include:
. Financial stability (does the rate structure yield required revenue in a stable and predictable
manner?)
. Social equity (is the rate structure fair and equitable within its customer class?)
. Environmentally sound (does the rate structure reflect the scarcity of water and discourage
wasteful use?)
. Administratively manageable (can the utility explain the rate structure to its citizens and
administer the program?)
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However, although one rate structure may meet one factor, it may not meet another. Thus, one
must balance different factors in developing the appropriate rate structure for their community.
Municipal water rates may be variously structured. The most common rate structures include:
flat rate, decreasing block rate, uniform rate, seasonal rate, increasing block rate and excess use
rate.
A flat tate structure is where a customer is charged a flat fee each month regardless of the
amount of water consumed.
A decreasing block rate structure is where the unit price for water decreases as the volume
consumed increases.
A uniform rate structure is where the unit price for water is constant regardless of the amount
of water consumed.
A seasonal rate structure is where the unit price for water is set to vary from season to
season.
An increasing block rate structure is where the unit price for water increases as the volume
consumed increases.
An excess use rate structure is where the unit price for water increases after a specified
volume consumed is exceeded.
Financially Socially Environmentally Administratively
Type of Rate Structure Stable Equitable Sound Manageable
Flat Rate +++ - - - - - - +++
Decreasing Block Rate ++ - - - - - -
Uniform Rate + + " ++
- -
Seasonal Rate - + + +
Increasing Block Rate - - - - +++ - -
Excess Use Rate - +++ +++ - --
+ means the rate structure scores positive in this criterion
- means the rate structure scores negative in this criterion
Based on the information given about rate structure types and how they meet the relevant factors,
it is recommended that the City of Salina change to an excess use water rate structure. The two
negatives regarding this type of rate structure are the administrative manageability and that it can
create a substantial economic impact on some high volume industrial users.
The effect on administrative manageability should be minimal due to the fact that the City of
Salina currently utilizes the average winter consumption concept for means of wastewater utility
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billing. Therefore individual average winter consumption is already calculated for all customers,
which in turn shouldn't create much more additional billing work.
The excess use water rate structure does create a substantial economic impact on a few (3-4) high
volume industrial users which have higher water consumption due to periods of increased
production and not outdoor water use. The excess use water rate structure is meant to decrease
wasteful outdoor water use by creating a financial impact for those who don't conserve water per
year. Therefore the excess use water rate structure, which is based on average winter
consumption, would need to be modified for those high volume industrial users which have
higher water consumption in the summer months due to increased production. It is
recommended that this modification be made for any user that uses more than 3,000,000 cubic
feet of water. This volume has been chosen because it is a substantial amount of water which is
most likely utilized for production and not outdoor water use. It is proposed that these high
volume users be charged the same block rate as all other users but not be subjected to an excess
use block rate. Because of this it is also proposed that these users submit a current water
conservation plan to the Director of Utilities for review and approval.
It is recommended that the current water rate structure be adjusted to an excess use rate structure
as shown in Table 1-2. There shall be a minimum monthly customer charge and all water use
exceeding 120% of the customer's winter average consumption shall be billed at 200% of the
unit block rate.
The 120% of Average Winter Consumption was recommended for several reasons. First of all,
for simplicity and equality reasons, it needs to be the same percentage for all types of users,
including residential, commercial, and industrial. Second of all the percentage needs to allow for
some fluctuation in usage as fluctuations in water usage are typical for all types of users.
According to the 2005 and 2006 average and peak water usage for all customers, anything below
the 120% of the Average Winter Consumption line doesn't allow for much fluctuation in usage.
Also, anything above the 120% of the Average Winter Consumption line hinders from trying to
cut back the peaks that are currently being seen in the summer months of May through
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September which works against the ultimate goal of the excess water rate structure which is
water conservation.
It is recommended that the unit block rate for all usage exceeding 120% of Average Winter
Consumption be 200% of the unit block rate. The 200% increase in the unit block rate should
provide enough of an incentive price signal to users to wisely use water which is the rationale
behind water conservation rate types. Also, this proposed 200% increase is in line with the other
area utilities that utilize the excess use rate structure.
1.3. PROPOSED WATER RATE SCHEDULE
The latest change in water rates was in October 2007. This current water rate will generate
adequate revenue for the remainder of 2008, but will not generate adequate revenue for the
period from 2009-2013. It is recommended that the water rate schedule be adjusted as shown in
Table 1-3.
Table 1-3: Proposed Water Rate Structure and Schedule
. Average Winter Consumption equals the average usage from January through March
.. If any user of water shall use more than three million cubic feet (3,000,000 CF) of water in any year, then they shall be charged the 0 - 120% block
rate for all consumption. The user must have a current water conservation plan in place and submit a copy of the water conservation plan to the
Director of Utiltles for review and approval.
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In addition to increased expenses, one reason why there is a rate increase for the customer charge
from 2008 to 2009 is due to the fact that the number of water accounts (and therefore the amount
of billed water volume) didn't increase as much as previously projected. A second reason is due
to the fact that the water rate structure changed from a decreasing block rate type to the excess
use rate type.
Table 1-4 shows the estimated monthly water charges for customers based on the proposed rate
schedule. The table is broken down into different average usages.
Table 1-4: Estimated Monthly Water Charges for Typical Customers Based on Proposed Rate
Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage.. Meter Existing Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range. (cu. ft.) Size 2008 2009 2010 2011 2012 2013
Residential {Inside CiM
0-300 8,465 (39%) 300 5/8" $11.37 $11.45 $12.17 $13.07 $14.06 $15.28
301-500 2,864 (13%) 400 5/8" $13.91 $13.79 $14.72 $15.89 $17.18 $18.77
501-800 3,736 (17%) 700 518" $21.53 $20.80 $22.38 $24.35 $26.54 $29.24
801-1,100 2,450 (11%) 1,000 5/8" $29.15 $27.80 $30.04 $32.82 $35.89 $39.72
1,101-1,500 1,773 (8%) 1,300 518" $36.77 $34.81 $37.70 $41.28 $45.25 $50.19
1 ,501-2,000 1,064 (5%) 1,700 5/8" $46.93 $44.16 $47.91 $52.56 $57.73 $64.15
>2,000 1,573 (7%)
Commercial (Inside CiM
2,000-5,000 3,500 5/8" $89.20 $86.21 $93.87 $103.35 $113.88 $126.99
5,001-10,000 7,500 2" $198.16 $199.27 $215.89 $236.52 $259.41 $287.85
10,001-50,000 30,000 2" $669.91 $724.92 $790.34 $871.30 $961.25 $1,073.35
50,001-100,000 75,000 4" $1,657.44 $1,842.59 $2,006.57 $2,209.63 $2,435.17 $2,716.12
Laroe Users
Inside City 100,000 4" $2,174.94 $2,426.65 $2,644.84 $2,914.95 $3,214.99 $3,588.90
Inside City 600,000 6" $12,590.27 $14,185.11 $15,488.80 $17,101.38 $18,893.28 $21,128.07
Outside City 100,000 4" $2,775.93 $3,101.13 $3,374.87 $3,713.95 $4,090.52 $4,559.47
Outside City 600,000 6" $15,844.09 $17,857.25 $19,488.71 $21,507.14 $23,749.82 $26,546.21
* Based on July 2006 usage
** Assumes all usage is in the 0 - 120% of Average Winter Consumption
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1.4. EFFECTS ON WATER USERS
The new proposed excess use water rate structure is significantly different than the existing
decreasing block rate and therefore the new rate structure will have a financial effect on water
users. The following tables show the annual cost difference that users will see based on existing
2008 water rates versus the proposed 2009 water rates. "These tables are based on actual 2006
water usage.
FOR RESIDENTIAL METERS (Based on 2006 Usage and not including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
s $0.00
$0.00 - $20.00
$20.00 - $50.00
$50.00 - $100.00
$100.00 - $150.00
$150.00 - $200.00
$200.00 - $300.00
$300.00 - $400.00
$400.00 - $500.00
$500.00 - $600.00
$600.00 - $700.00
$700.00 - $800.00
$800.00 - $900.00
$900.00 - $1,000.00
> $1,000.00
TOTAL
No. of Meters
8,866
5,992
2,998
2,076
810
428
362
159
99
49
20
16
12
8
30
21,925
% of Meter:
40.44%
27.33%
13.67%
9.47%
3.69%
1.95%
1.65%
0.73%
0.45%
0.22%
0.09%
0.07%
0.05%
0.04%
0.14%
FOR COMMERCIAL METERS (Based on 2006 Usage and not including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
s $0.00
$0.00 - $20.00
$20.00 - $50.00
$50.00 - $100.00
$100.00 - $150.00
$150.00 - $200.00
$200.00 - $300.00
$300.00 - $400.00
$400.00 - $500.00
$500.00 - $600.00
$600.00 - $700.00
$700.00 - $800.00
$800.00 - $900.00
$900.00 - $1,000.00
> $1,000.00
TOTAL
No. of Meters
554
543
177
97
51
37
39
36
15
16
12
13
6
6
52
1,654
% of Meter:
33.49%
32.83%
10.70%
5.86%
3.08%
2.24%
2.36%
2.18%
0.91%
0.97%
0.73%
0.79%
0.36%
0.36%
3.14%
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FOR INDUSTRIAL METERS (Based on 2006 Usage and not including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
s $0.00
$0.00 - $100.00
$100.00 - $500.00
$500.00 - $1,000.00
$1,000.00 - $2,000.00
No. of Meters
11
8
6
3
5
* This does not include any high user over 3,000,000 cf annually which will get the block rate without an excess
use charge
1.5. ESTIMATED WATER AND W ASTEW A TER MONTHLY BILLS
Table 1-5 shows the estimated monthly water and wastewater charges combined for customers
based on the proposed rate schedules. The table is broken down into different average usages.
Table 1-5: Combined Monthly Water and Wastewater Charges for Typical Customers Based on
Proposed Rate Schedules
Approx.
Customer Type Number of Average
and Usage Customers in Usage.. Meter Existing Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range. (cu. ft.) Size 2008 2009 2010 2Q11 2012 2013
Residential {Inside CiM
0-300 8,465 (39%) 300 5/8" $22.n $26.40 $27.84 $29.68 $31.70 $33.87
301-500 2,864 (13%) 400 5/8" $27.94 $31.62 $33.48 $35.85 $38.46 $41.26
501-800 3,736 (17%) 700 5/8" $43.45 $47.27 $50.39 $54.35 $58.74 $63.43
801-1,100 2,450 (11%) 1,000 5/8" $58.96 $62.93 $67.30 $72.86 $79.02 $85.61
1,101-1,500 1,n3 (8%) 1,300 5/8" $74.47 $78.58 $84.22 $91.36 $99.29 $107.78
1,501-2,000 1,064 (5%) 1,700 5/8" $95.15 $99.45 $106.n $116.04 $126.33 $137.34
>2,000 1,573 (7%)
Commercial {Inside CiM
2,000-5,000 3,500 5/8" $184.76 $193.36 $208.25 $227.07 $247.99 $270.38
5,001-10,000 7,500 2" $398.92 $421.67 $453.68 $494.14 $539.10 $587.24
10,001-50,000 30,000 2" $1,462.42 $1,595.56 $1,722.22 $1,882.07 $2,059.83 $2,250.24
50,001-100,000 75,000 4" $3,633.45 $4,009.72 $4,326.64 $4,726.71 $5,171.53 $5,648.01
Larae Users
Inside City 100,000 4" $4,808.45 $5,314.04 $5,736.13 $6,268.85 $6,861.22 $7,495.79
Inside City 600,000 6" $28,373.78 $31,477.95 $34,004.43 $37,191.97 $40,737.07 $44,534.96
Outside City 100,000 4" $6,070.45 $6,715.11 $7,243.79 $7,911.26 $8,653.36 $9,448.25
Outside City 600,000 6" $35,576.11 $39,478.04 $42,638.05 $46,625.30 $51,059.59 $55,809.99
* Based on July 2006 usage
** Residential wastewater usage is based on the average monthly metered water consumption for January, February,
and March. Commercial and Large User usage is based on monthly metered water consumption.
** Assumes all water usage is in the 0 - 120% of Average Winter Consumption
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1.6. APPROVED BY CITY COMMISSION
The above recommendations were presented to the City Commission during a study session on
April 28, 2008. Based on comments received from the City Commission, the following revisions
were made to the recommended water and rates:
. To accommodate low water consumption customers a minimum winter quarter
average (MWQA) of 800 cubic feet was established along with an excess use
baseline. This excess use baseline shall be equal to the greater of (1) 120% of the
established minimum winter quarter average or (2) 120% ofthe customer's winter
quarter average. All customers exceeding the excess use baseline shall be charged
the excess use rates that were recommended.
. To accommodate customers that are gone during the winter months where no water
consumption data exists for the calculation of a winter quarter average, the Director
of Utilities or designated representative shall determine the most appropriate method
of establishing the winter quarter average. Utilizing the excess use baseline will
provide customers that are gone during the winter months with a winter quarter
average that is similar to the citywide average.
. The excess use rate of $4.68 per 100 cubic feet proposed for 2009 will be
implemented in July 2008 with the current declining rate structure. The water rates
for the years of 2009-2013 will be based on the excess use rate structure.
Refer to Appendix A for the resolution that was adopted by the City Commission that establishes
water and wastewater rates for the years of 2009-2013.
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SECTION 2 - GENERAL
2.1. PURPOSE
This water and wastewater rate study has been prepared for the City of Salina's Utilities
Department to evaluate the revenue requirements of both the Water and Wastewater Utilities.
This report will make recommendations for rate adjustments that will be required to finance
anticipated administration, customer services, debt retirement, operational, maintenance and
capital improvement costs during the next five years (2009-2013). An evaluation ofthe current
water rate structure will also be completed and a recommendation of a proposed water rate
structure will be made.
2.2. SCOPE
2.2.1. Wastewater Rate Evaluation
The wastewater rate evaluation included a review of current Wastewater Utility revenues
and expenditures and the development of anticipated revenue requirements for the 5-year
period from 2009 through 2013. A schedule of proposed wastewater rates consisting of a
customer charge for administrative costs and customer services and a consumption
charge for wastewater flows was developed which will provide the revenue to meet the
projected revenue requirements throughout the study period.
2.2.2. Water Rate Structure Evaluation
The current decreasing block rate structure, which provides for a decreasing unit cost of
water with increasing usage, was developed in 1987, if not prior to then, and will be
evaluated for it's sensibleness in today's water conservation approach within the state of
Kansas.
2.2.3. Water Rate Evaluation
The water rate evaluation included a review of current Water Utility revenues and
expenditures and the development of anticipated revenue requirements for the 5-year
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period from 2009 through 2013. A schedule of proposed water rates consisting of a
customer charge for administrative costs and customer services and a consumption
charge for water use was developed which will provide the revenue to meet the projected
revenue requirements throughout the study period.
2.2.4. Project Approach
Several trial allocations utilizing a targeted annual reserve balance of $3,000,000 (for
water and wastewater combined) to establish the proposed water and wastewater rates
were reviewed. The trial allocations tested various levels of increases for both the
customer charges and the consumption charges. The development of the water and
wastewater rates discussed in this review is based on the trial allocations which best
match the general goals of the Water and Wastewater Rate review. In general, these
goals include:
. Generate adequate revenues for the Water and Wastewater Utility
. Maintain equitability among user classes
. Minimize percent increase in rates
. Minimize percent increase in rates to smaller volume, fixed income customers
. Strategic use of available reserves in excess of target fund balance
. Maintain reserves within the Water and Wastewater Utility at target fund balances
established by the City
2.2.5. IDstoric and Projected Water and Wastewater Expenses and Required
Revenue
Table 2-1 is a summary of historic revenue and expenditures in the Water and
Wastewater Utilities for the years 2004 through 2008. The years 2004 through 2006 are
based on actual figures from the audits and years 2007 and 2008 are estimated based on
current budgets. The 5-year historic review provides a glance at the trends that have
occurred in the utilities to assist in making projections of expenditures and revenue needs
for future years. Line items should be self-explanatory and miscellaneous revenue
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includes revenue from sources other than charges for water or wastewater services,
primarily interest on reserve accounts.
Table 2-1: Historic Water and Wastewater Expenses and Revenue
2004 2005 2006 2007 2008
Actual Actual Actual Actual Estimated
Cash Balance 1/1 $ 6,454,722 $ 6.089,126 $ 5,358.091 $ 4,902,175 $ 6,384,567
Water Expenditures $ 6,822,740 $ 7,302,198 $ 7,407,816 $ 7,130,213 $ 9,036,317
Wastewater Expenditures $ 5,985,523 $ 6,319,060 $ 6,369,585 $ 6,295.215 $ 7,947,591
Total Expenditures $ 12.808,263 $ 13,621,258 $ 13,777,401 $ 13,425,428 $ 16,983,908
Miscellaneous Revenue $ 405,419 $ 431,768 $ 600,773 $ 639,937 $ 606,000
Water Charges $ 6,646,327 $ 6,923,593 $ 7,061,099 $ 7,461,552 $ 8,026,250
Wastewater Charges $ 5,341,225 $ 5,487,145 $ 5,574,245 $ 6,281,534 $ 6,740,000
Total Revenues $ 12,392,971 $ 12,842,506 $ 13,236,117 $ 14,383,023 $ 15,372,250
Cash Balance 12/31* $ 6,089,126 $ 5,358,091 $ 4,902,175 $ 6,384,567 $ 4,165,833
Balance Goal $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000
*Cash Balances do not calculate exactly due to unencumbered cash from previous years
Annual revenues are derived primarily from the charges for water and wastewater
services. Total revenues generated from all sources have increased by approximately
24.0 percent over the 5-year historic period.
Annual expenditures for the Water and Wastewater Utilities are for administration,
customer services, and operations and maintenance, including debt service for the "
facilities required to serve the utility customers. These facilities include the water
distribution system, water supply and treatment facilities, wastewater collection system,
and wastewater treatment facilities. Expenditures for administration services and
customer accounting services have been and will continue to be split equally (50% and
50%) between the Water and Wastewater Utilities budgets. Total expenditures for all
services and facilities have increased by approximately 32.6 percent during the 5-year
historic period.
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Annual fluctuations of both revenue generated and expenditures occur due to monthly
and annual precipitation patterns, total usage amounts and unexpected needs for
extensions, improvements and maintenance of the utilities. The Water and Wastewater
Utilities maintain a reserve balance that may be used annually to supplemenUower than
expected revenues from charges for services that could occur in a wet year when water
consumption and sales may be diminished. The reserve balance may also be used if
unforeseen extensions, improvements or maintenance of water or wastewater facilities
are required. The reserve balance is also available to minimize the revenue required from
charges for services and to level out the fluctuation in rate increases from year to year.
The reserve balance has constantly decreased during the 5-year historic period and by the
end of year 2008 is estimated to be slightly below the target reserve balance that the City
has set of $3,000,000 annually (for water and wastewater combined).
Table 2-2 is a projection of the total expenses and the projected revenue (projected
required revenue based on projected total expenses) of the Water and Wastewater
Utilities for the 5-year study period 2009 through 2013.
Table 2-2: Projected Water and Wastewater Expenses and Required Revenue
2009 2010 2011 2012 2013
Proiected Proiected Proiected Proiected Projected
Cash Balance 1/1 $ 4,165,833 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000
Water Expenditures $ 8,136,060 $ 8,579,578 $ 9,120,393 $ 9,703,907 $ 10,432,128
Wastewater Expenditures $ 7,470,754 $ 7,806,211 $ 8,233,062 $ 8,700,091 $ 8,446,378
Total Expenditures $ 15,606,814 $ 16,385,789 $ 17,353,455 $ 18,403,998 $ 18,878,506
Miscellaneous Revenue $ 606,000 $ 606,000 $ 606,000 $ 606,000 $ 606,000
Water Charges $ 7,250,143 $ 8,276,578 $ 8,817,393 $ 9,400,907 $ 10,129,128
Wastewater Charges $ 6,584,838 $ 7,503,211 $ 7,930,062 $ 8,397,091 $ 8,143,378
Total Revenue Required $ 14,440,981 $ 16,385,789 $ 17,353,455 $ 18,403,998 $ 18,878,506
Cash Balance 12/31 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000
Balance Goal $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000
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Total expenditures for the Water Utility for the 5-year period are projected to increase
approximately 28.2 percent. Total expenditures for the Wastewater Utility for the 5-year
period are projected to increase approximately 13.1 percent. The main reason for the
smaller increase for the Wastewater Utility is due to payoff of some current debt services
on wastewater projects.
In order to keep a reserve balance at the target of $3,000,000 annually (for water and
wastewater combined), a total projected required revenue of water and wastewater
charges was determined. Water Charges for the Water Utility for the 5-year period are
projected to increase approximately 39.7 percent. Wastewater Charges for the
Wastewater Utility for the 5-year period are projected to increase approximately 23.7
percent.
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SECTION 3 - W ASTEW A TER RATE EV ALVA TION
3.1. PROJECTED W ASTEW A TER EXPENSES
Detailed projections of expenses for the Water and Wastewater Utility are shown in Table 3-1.
Projected expenses are based on information provided by the City which were developed based
on historical Water and Wastewater Utility expenses from 2004-2008. Brief descriptions of the
line items included are shown below.
1. Administration Costs: Includes administrative and general costs which are equally
allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
2. Customer Accounting Costs: Includes customer accounting and collection costs equally
allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
3. Capital Outlay Costs: Includes expenses for materials or services to add or expand
buildings, vehicles and equipment, and computers and technology, with the expectation
that they will benefit the City over a long period of time (more than one year). These costs
are equally allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
4. Water Distribution Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's water distribution system.
5. Water Treatment Costs: Includes personal services and benefits, supplies, services, capital
outlay expenses and operation and maintenance expenses associated with the operation of
the City's water treatment facilities.
6. Wastewater Collection Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's wastewater collection system.
7. Wastewater Treatment Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's wastewater treatment facilities.
8. Debt Services and Capital Reserve Transfers: Includes the following current debt services
2005-A GO Bond (Water), 2002-A GO Bond (Wastewater), 2002-A Revenue Bond
(Wastewater), 2001-A GO Bond (Water), 1998-B Refunding Bond (80% Water and 20%
Wastewater), Kansas Public Water Supply Loan Fund (KPWSLF) 2153 (Water), and
KPWSLF 2259 (Water). Includes future debt services for the following projects:
wastewater pump rehabilitation, MarkleylMagnolia water & wastewater systems, East
Salina water & wastewater systems, manhole & pump station reconstruction,
miscellaneous waterline projects, and wastewater treatment plant improvements. Also
includes transfer of funds to Environmental Protection Agency (EP A) reserve and a capital
project reserve.
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Table 3-1: Projected Water and Annual Annual
Wastewater Expenses % %
change change
2004 2005 2006 2007 2008 2004- 2009- 2009 2010 2011 2012 2013
(Actual) (Actual) (Actual) (Actual) (Estlmatedl 2008 2013 (Prolected) (ProJected) (PrOlected) (Prolectedl (ProJected)
1. Administration (50% Wsterl50% Wastewater)
Personal Services $214,257 $287,454 $277,682 $235,637 $359,749 17% 4% $374,139 $389,105 $404,669 $420,855 $437,690
Benefits $43,874 $120,490 $73,290 $64,748 $85,700 39% 6% $90,842 $96,293 $102,070 $108,194 $114,686
Supplies $4,132 $2,097 $3,893 $6,375 $4,450 17% 3% $4,584 $4,721 $4,863 $5,009 $5,159
Services $164,558 $94,282 $75,968 $91,788 $132,900 1% 5% $139,545 $146,522 $153,848 $161,541 $169,618
Capital Outlay $220 $0 $0 $0 $0 $0
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $1,782,843 $1,511,193 $1,586,851 $1,604,528 $1,571,980 -3% 3% $1,619,139 $1,667,714 $1,717,745 $1,769,277 $1,822,356
Total $2,209,664 $2,015,516 $2,017,904 $2,003,076 $2,154,779 0% 3% $2,228,249 $2,304,354 $2,383,195 $2,464,876 $2,549,508
2. Customer Accounting (50% Waterl50% Wastewster)
Personal Services $331,925 $337,021 $353,689 $365,815 $419,980 6% 4% $436,779 $454,250 $472,420 $491,317 $510,970
Benefits $111,258 $102,830 $123,959 $121,541 $141,783 7% 6% $150,290 $159,307 $168,866 $178,998 $189,738
Supplies $105,347 $85,630 $108,785 $105,238 $104,000 1% 3% $107,120 $110,334 $113,644 $117,053 $120,565
Services $76,965 $79,877 $170,428 $62,727 $148,850 48% 0% $148,850 $148,850 $148,850 $148,850 $148,850
Capital Outlay $3,102 $4,877 $11,377 $92,331 $23,000 207% 0% $23,000 $23,000 $23,000 $23,000 $23,000
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers, Other $694,623 $834,426 $820,118 $821,185 $788,802 4% 0% $788,802 $788,802 $788,802 $788,802 $788,802
Total $1,323,220 $1,444,661 $1,588,356 $1,568,837 $1,626,415 5% 2% $1,654,841 $1,684,543 $1,715,582 $1,748,020 $1,781,924
3. Capital Outlay (50% Waterl50% Wastewater)
Services (Planning) $54,951 $120,385 $25,500 $50,000 $50,000 $50,000 $50,000 $50,000
Vehicles and Equipment $75,513 $494,525 $271,535 $339,448 $918,000 $400,000 $400,000 $400,000 $400,000 $400,000
Buildings $58,461 $13,376 $119,608 $6,749 $276,000 $60,000 $60,000 $60,000 $60,000 $60,000
System Enhancements $496,710 $1,378,978 $749,295 $169,813 $2,216,600 $1,200,000 $1,300,000 $1,500,000 $1,700,000 $1,900,000
Computers and Technology $2,816 $7,433 $75,575 $45,257 $65,000 $52,000 $52,000 $52,000 $52,000 $52,000
Total $688,451 $2,014,697 $1,216,013 $586,767 $3,475,600 $1,762,000 $1,862,000 $2,062,000 $2,262,000 $2,462,000
4. Water Distribution (100% Water)
Personal Services $485,631 $508,911 $497,914 $495,487 $576,040 5% 4% $599,082 $623,045 $647,967 $673,885 $700,841
Benefits $163,987 $173,672 $176,592 $173,030 $201,446 5% 6% $213,533 $226,345 $239,925 $254,321 $269,580
Supplies $408,492 $485,682 $485,453 $369,126 $477,450 6% 3% $491,774 $506,527 $521,723 $537,374 $553,495
Services $59,625 $34,339 $28,536 $31,019 $71,450 20% 6% $75,737 $80,281 $85,098 $90,204 $95,616
Capital Outlay $6,138 $9,000 0% $9,000 $9,000 $9,000 $9,000 $9,000
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $52,822 $57,068 $62,993 $64,558 $71,339 8% 5% $74,906 $78,651 $82,584 $86.713 $91,049
Total $1,170,557 $1,259,672 $1,251,488 $1,139,356 $1,406,725 5% 4% $1,464,031 $1,523,849 $1,586,296 $1,651.497 $1,719,581
5. Water Treatment (100% Water)
Personal Services $625,535 $624,252 $643,700 $665,259 $724,050 4% 4% $753,012 $783,132 $814,458 $847,036 $880,918
Benefits $191,777 $195,702 $208,179 . $218,417 $256,354 8% 6% $271,735 $288,039 $305,322 $323,641 $343,059
Supplies $963,182 $1,016,630 $1,239,136 $1,336,250 $1,391,415 10"'{' 7% $1,488,814 $1,593,031 $1,704,543 $1,823,861 $1,951,532
Services $378,792 $382,612 $424,359 $401,702 $499,040 8% 7% $533,973 $571,351 $611,345 $654,140 $699,929
Capital Outlay $790 $6,501 $3,823 $0 $4,450 0% $4,450 $4,450 $4,450 $4,450 $4,450
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $4,181 $6,757 $3,914 $37,343 $7,400 198% 5% $7,770 $8,159 $8,566 $8,995 $9,444
Total $2,164,257 $2,232,454 $2,523,111 $2,658,971 $2,882,709 7% 6% $3,059,754 $3,248,162 $3,448,685 $3,662,123 $3,889,332
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Table 3-1: Projected Water and Annual Annual
Wastewater Expenses % %
change change
2004 2005 2006 2007 2008 2004- 2009- 2009 2010 2011 2012 2013
(Actuall (Actuall (Actuall {Actuall (Estimated) 2008 m! (Prolected) (ProJected) (ProJected) (ProJected) (ProJecteell
6. Wastewater Collection (100% Wastewater)
Personal Services $299,228 $333,400 4% $346,736 $360,605 $375,030 $390,031 $405,632
Benefits $113,595 $121,870 6% $129,182 $136,933 $145,149 $153,858 $163,090
Supplies $584,662 $554,947 3% $571,595 $588,743 $606,406 $624,598 $643,336
Services $143,n3 $153,250 5% $160,913 $168,958 $ln,406 $186,276 $195,590
Capital Outlay $12,008 $18,300 0% $18,300 $18,300 $18,300 $18,300 $18,300
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $73,540 $67,971 3% $70,010 $72,110 $74,274 $76,502 $78,797
Total $0 $0 $0 $1,226,806 $1,249,738 4% $1,296,736 $1,345,650 $1,396,564 $1,449,565 $1,504,744
7. Wastewater Treatment (100% Wastewater)
Personal Services $955,195 $912,027 $960,086 $729,245 $809,720 -3% 4% $842,109 $875,793 $910,825 $947,258 $985,148
Benefits $314,868 $297,259 $327,378 $250,867 $289,540 -1% 6% $306,912 $325,327 $344,847 $365,538 $387,470
Supplies $582,524 $567,848 $725,726 $283,789 $292,270 -8% 3% $301,038 $310,069 $319,371 $328,952 $338,821
Services $504,558 $517,963 $565,542 $402,697 $473,200 0% 5% $496,860 $521,703 $547,788 $575,178 $603,936
Capital Outlay $20,441 $32,292 $31,097 $5,276 $12,500 27% 0% $12,500 $12,500 $12,500 $12,500 $12,500
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $84,125 $153,649 $94,696 $32,012 $44,596 4% 3% $45,934 $47,312 $48,731 $50,193 $51,699
Total $2,461,711 $2,481,038 $2,704,525 $1,703,886 $1,921,826 -4% 4% $2,005,353 $2,092,704 $2,184,062 $2,279,619 $2,379,574
8. Debt Services and Capital Reserve Transfers
Transfer to EPA Reserve $60,302 $60,302 $60,302 $60,302 $60,302 $60,302
Transfer to Capital Project Reserve $0 $0 $0 $249,999 $549,115 $1,100,000
Current Debt Services:
2005-A GO (Water) $35,764 $34,684 $33,819 $32,916 $32,004 $31,052
2002-A GO (Wastewater) $219,730 $228,100 $225,514 $227,534 $229,034 $229,900
2002-A Revenue (Wastewater) $823,500 $826,300 $831,450 $834,070 $844,424 $0
2001 A GO (Water) $26,144 $25,313 $24,843 $23,652 $22,821 $21,990
1998-B (80% Water) $522,000
KPWSLF 2153 (Water) $269,722 $269,722 $269,722 $269,722 $269,722 $269,722
KPWSLF 2259 (Water) $369,256 $369,256 $369,256 $369,256 $369,256 $369,256
Future Debt Services Issues:
WW Pump Station Rehabilitation
($2M) First Pay 2009 $174,369 $174,369 $174,369 $174,369 $174,369
Markley/Magnolia Water & Sewer
Systems ($2.1 M) First Pay 2010
(50% Water/50% Wastewater) $187,447 $187,447 $187,447 $187,447
East Salina Water & Sewer Systems
($3.1 M) First pay 2014 (50%
Water/50% Wastewater) $0
Manhole & Pump Station
Reconstruction ($1.0M) First pay
2009 (Wastewater) $87,200 $87,200 $87,200 $87.200 $87,200
Misc. Waterline Projects (North St-
$270k, Hein Ave $300k, Airport
$125k) First pay 2009 (Water) $60,604 $60,604 $60,604 $60,604 $60,604
WW Plant Enhancements ($12M)
First pay 2015 ($1,046,215 Annually)
Water Debt $1,3n,258 $1,072,635 $1,222,080 $1,252,546 $1,118,486 $759,579 $851,968 $849,874 $848,131 $846,348
Wastewater Debt $1,413,145 $1,100,585 $1,253,924 $1,285,183 $1,147,630 $1,315,969 $1,412,257 $1,416,897 $1,428,751 $585,193
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Table 3-1: Projected Water and
Wastewater Expenses
2004
(Actual)
Total P&I $2,790,403
Total Reserves (50% Water/5O% Wastewater)
Total P& I plus Reserves $2,790,403
2005 2006
(Actual) (Actual)
$2,173,220 $2,476,004
2007 2008
(Actual) (EstJmated)
$2,537,729 $2,266,116
$60,302
$2,173,220 $2,476,004 $2,537,729 $2,326,418
Annual
%
change
2004-
2008
Total Water Expense
Total Wastewater Expense
Total Fund Expense
$6,822,740 $7,302,198 $7,407,816 $7,130,213 $9,066,468
$5,985,523 $6,319,060 $6,369,585 $6,295,215 $7,977,742
$12,808,263 $13,621,258 $13,777,401 $13,425,428 $17,044,210
Annual
%
change
2009-
2013
2009
(Projected)
$2,075,548
$60,302
$2,135,850
2010
(Projected)
$2,264,224
$60,302
$2,324,526
2011
(ProJected)
$2,266,770
$310,301
$2,577,071
2012 2013
(Prolected) (Prolected)
$2,276,881 $1,431,540
$609,417 $1,160,302
$2,886,298 $2,591,842
$8,136,060 $8,579,578 $9,120,393 $9,703,907 $10,432,128
$7,470,754 $7,806,211 $8,233,062 $8,700,091 $8,446,378
$15,606,814 $16,385,789 $17,353,455 $18,403,998 $18,878,506
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As shown previously in Table 2-2, total projected required revenues, which are based on the
projected total expenses and maintaining a balance goal of $3,000,000 annually (for water and
wastewater combined), for the Wastewater Utility are shown in Table 3-2.
Table 3-2: Total Projected Required Revenue for the Wastewater Utility
2009 2010 2011 2012
Total $6,584,838 $7,503,211 $7,930,062 $8,397,091
2013
$8,143,378
3.2. REVENUE GENERA TED AT CURRENT W ASTEW A TER RATES
The current system of wastewater charges divides the costs of collecting and treating wastewater
equitably among all users by means of a minimum monthly customer charge plus a consumption
charge.
The following is the current wastewater rates which became effective on 10/1/2007:
Customer Charge (0 CF) = $3.51
Consumption Charge $2.63 per ccf
The minimum monthly customer charge allocates all administrative costs (i.e. administration,
and customer accounting costs which 50% is allocated to the Wastewater Utility and 50% is
allocated to the Water Utility) equally among all users regardless of the user's wastewater flow
volume. For this review the administrative and customer costs for theWastewater Utility is
projected to remain at 50 percent of total (Water and Wastewater) administrative and customer
costs. Adjustments to the existing minimum monthly customer charge are required to cover
increased administrative costs. The minimum monthly customer charge is calculated as follows:
C . Ch $ Annual Admin. Costs
ustomer arge, = .
(No. of Accounts)(12 months)
The consumption charge in dollars per hundred cubic feet ($/ccf) allocates all operation,
maintenance and replacement costs for wastewater collection and wastewater treatment (i.e.,
O&M costs, capital improvements, debt service, and capital reserve transfers) proportionally to
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all users based on theuser's volume of wastewater flow. For a residential user, the consumption
charge is based on the average monthly metered water consumption for the winter months of
January, February and March. Commercial and industrial charges are based on actual monthly
metered water consumption. The unit consumption charge is calculated as follows:
C . Ch ($ / f) Annual 0 & M, Capital Improvement, and Debt Service Costs
onsumptlon arge, cc =
Annual Wastewater Volume
Historical and projected number of wastewater accounts and billed wastewater volume are given
in Table 3-3. It was assumed that the number of wastewater accounts would increase by 0.44%
each year which is the calculated average from actual 2002 - 2006 data. It was assumed that the
billed wastewater volume would decrease by the 1.93% each year which is the calculated
average from actual 2002 - 2006 data.
Table 3-3: Historical and Projected Number of Wastewater Accounts and Billed Volume
Actual Actual Actual Actual Actual Actual
2002 2003 2004 2005 2006 2007
Number of Accounts 18,931 19,039 19,145 19,224 19,265 19,348
% Increase 0.57% 0.56% 0.41% 0.21% 0.43%
Average = 0.44%
Total Billed Wastewater Volume, 1000 ccf 2,271.27 2,223.45 2,217.12 2,138.42 2,100.35 2,059.81
% Increase -2.11% -0.28% -3.55% -1.78%
Average = -1.93%
Projected Projected Projected Projected Projected Projected
2008 2009 2010 2011 2012 2013
Number of Accounts 19,433 19,519 19,605 19,691 19,777 19,864
Total Billed Wastewater Volume, 1000 ccf 2,020.06 1,981.07 1,942.84 1,905.34 1,868.57 1,832.50
The projected revenue requirements shown in Table 3-2 were compared to the revenue to be
generated at the current rates with the projected number of wastewater accounts and billed
wastewater volume. As shown in Table 3-4 the revenue generated at current rates will fall short
of the projected revenue required and there will be a revenue deficit for 2009 - 2013. Therefore
the current rates need to be increased in order to meet the projected revenue requirements.
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3.3. PROPOSED W ASTEW A TER RATE SCHEDULE
Utilizing the projected revenue requirements and the projected number of wastewater accounts
and billed wastewater volume, Table 3-5 shows the proposed customer charge and consumption
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charge for 2009 through 2013. This proposed wastewater rate schedule would meet the
projected revenue requirements and still allow for the $3,000,000 (for water and wastewater
combined) carry over for each year.
Table 3-5: Revenue Generated at Proposed Wastewater Rates
Projected Projected Projected Projected Projected
2009 2010 2011 2012 2013
Customer Charae
Number of Accounts 19,519 19,605 19,691 19,777 19,864
Monthly Customer Charge, $ 6.31 6.42 6.57 6.73 6.89
Projected Annual Revenue, $ 1,478,004 1,509,820 1,552,252 1,596,428 1,642,427
Current Year Balance Shortfall, $ 8,945 0 0 0 0
Miscellaneous Revenue, $ (151,500) ( 151,500) (151,500) (151,500) (151,500)
Administration (50% intemal services & transfers), $ 709,340 735,249 762,161 790,119 819,165
Customer Accounting (50"10 intemal services & transfers), $ 630,220 645,071 660,590 676,809 693,762
Capital Outlay (less system enhancements), $ 281.000 281.000 281.000 281.000 281.000
Annual Revenue Required, $ 1,478,004 1,509,820 1,552,252 1,596,428 1,642,427
Surplus/(Deficit), $ 0 0 0 0 0
Consumotion Charae
Total BilledWastewater Vol, 1000 ccf 1,981.07 1,942.84 1,905.34 1,868.57 1,832.50
Unit Cost, $/ccf 2.88 3.08 3.35 3.64 3.90
Projected Annual Revenue, $ 5,707,639 5,993,391 6,377,810 6,800,662 7,146,760
Current Year Balance Shortfall, $ 8,945 0 0 0 0
Miscellaneous Revenue, $ (151,500) (151,500) (151,500) (151,500) (151,500)
Internal Services and Transfers 5O"Io(Admin. & Cus!. Acct.), $ 601,985 614,129 626,637 639,520 652,789
Debt Service and Capital Reserve Transfers, $ 1,346,120 1,442,408 1,572,047 1,733,459 1,165,344
Capital Outlay (system enhancements), $ 600,000 650,000 750,000 850,000 950,000
Wastewater Treatment, $ 2,005,353 2,092,704 2,184,062 2,279,619 2,379,574
Wastewater Collection, $ 1.296.736 1.345.650 1.396.564 1.449.565 1.504.744
Annual Revenue Required, $ 5,707,639 5,993,391 6,377,810 6,800,662 6,500,952
Surplus/(Deficit), $ 0 0 0 0 645,808
Total Annual Revenue
Customer Charge, $ 1,478,004 1 ,509,820 1,552,252 1,596,428 1,642,427
Consumption Charge, $ 5.707.639 5.993.391 6.377.810 6.800.662 7.146.760
Total Revenue, $ 7,185,643 7,503,211 7,930,062 8,397,091 8,789,186
Total Annual Revenue Required, $ 7,185,643 7,503,211 7,930,062 8,397,091 8,143,378
Total Surplus/(Deficit), $ 0 0 0 0 645,808
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As shown in Table 3-5, even though the total annual revenue required decreases in 2013, it is
recommended to not decrease wastewater rates. It is known that additional revenue will be
required for proposed nutrient removal improvements at the wastewater treatment plant with debt
repayments starting around 2015. Any surplus revenue acquired in 2013 can be utilized to
reduce future debt repayments.
3.4. ESTIMA TED MONTHLY W ASTEW A TER CHARGES
Estimated total monthly wastewater charges resulting from the proposed rates are shown in
Table 3-6 for typical customers and selected usage ranges. Table 3-7 shows the percent increase
from the previous year for the same customers. In addition to increased expenses, one reason for
the increase in wastewater charges from 2008 to 2009 is due to the fact that the number of
wastewater accounts (and therefore the amount of billed wastewater volume) didn't increase as
much as previously projected. The wastewater volume actually decreased and is projected to
continue to decrease. This percentage increase stabilizes from 2009 to 2012 with an almost zero
percentage increase in 2013 due to current debt service payoff on past wastewater projects.
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Table 3-6: Estimated Monthly Wastewater Chargesfor Typical Customers Based on Proposed
Rate Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage** Existing Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range* (cu. ft.) 2008 2009 2010 2011 2012 2013
Residential (Inside City)
0-300 8,465 (39%) 300 $11.40 $14.95 $15.67 $16.61 $17.65 $18.59
301-500 2,864 (13%) 400 $14.03 $17.83 $18.76 $19.96 $21.28 $22.49
501-800 3,736 (17%) 700 $21.92 $26.48 $28.01 $30.00 $32.20 $34.19
801-1,100 2,450 (11%) 1,000 $29.81 $35.12 $37.27 $40.04 $43.12 $45.89
1,101-1,500 1,773 (8%) 1,300 $37.70 $43.76 $46.52 $50.08 $54.04 $57.59
1,501-2,000 1,064 (5%) 1,700 $48.22 $55.29 $58.86 $63.47 $68.60 $73.19
>2,000 1,573 (7%)
Commercial (Inside City)
2,000-5,000 3,500 $95.56 $107.15 $114.39 $123.73 $134,11 $143.39
5,001-10,000 7,500 $200.76 $222.39 $237.78 $257.62 $279.69 $299.39
10,001-50,000 30,000 $792.51 $870.64 $931.88 $1,010.77 $1,098.58 $1,176.89
50,001-100,000 75,000 $1,976.01 $2,167.13 $2,320.07 $2,517.07 $2,736.36 $2,931.89
Laroe Users
Inside City 100,000 $2,633.51 $2,887.40 $3,091.29 $3,353.91 $3,646.24 $3,906.89
Inside City 600,000 $15,783.51 $17,292.84 $18,515.63 $20,090.59 $21,843.78 $23,406.89
Outside City 100,000 $3,294.52 $3,613.98 $3,868.92 $4,197.31 $4,562.84 $4,888.78
Outside City 600,000 $19,732.02 $21,620.79 $23,149.35 $25,118.16 $27,309.77 $29,263.78
* Based on July 2006 usage
** Residential Usage is based on the average monthly metered water consumption for January, February,
and March. Commercial and Large User usage is based on monthly metered water consumption.
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Table 3-7: Monthly Wastewater Charge Percent Increasesfor Typical Customers Based on
Proposed Rate Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage" Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range* (cu. ft.) 2009 2010 2011 2012 2013
Residential (Inside City)
0-300 8,465 (39%) 300 31.17% 4.81 % 5.99% 6.22% 5.36%
301-500 2,864 (13%) 400 27.12% 5.17% 6.40% 6.64% 5.66%
501-800 3,736 (17%) 700 20.79% 5.79% 7.10% 7.34% 6.17%
801-1,100 2,450 (11 %) 1,000 17.82% 6.11% 7.45% 7.69% 6.42%
1,101-1,500 1,773 (8%) 1,300 16.09% 6.30% 7.66% 7.90% 6.57%
1,501-2,000 1,064 (5%) 1,700 14.66% 6.46% 7.84% 8.07% 6.69%
>2,000 1,573 (7%)
Commercial {Inside Citvl
2,000-5,000 3,500 12.13% 6.76% 8.16% 8.39% 6.92%
5,001-10,000 7,500 10.77% 6.92% 8.34% 8.57% 7.04%
10,001-50,000 30,000 9.86% 7.03% 8.47% 8.69% 7.13%
50,001-100,000 75,000 9.67% 7.06% 8.49% 8.71 % 7.15%
Laroe Users
Inside City 100,000 9.64% 7.06% 8.50% 8.72% 7.15%
Inside City 600,000 9.56% 7.07% 8.51 % 8.73% 7.16%
Outside City 100,000 9.70% 7.05% 8.49% 8.71% 7.14%
Outside City 600,000 9.57% 7.07% 8.50% 8.73% 7.15%
* Based on July 2006 usage
** Residential usage is based on the average monthly metered water consumption for January, February,
and March. Commercial and Large User usage is based on monthly metered water consumption.
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SECTION 4 - WATER RATE EV ALUA TION
4.1. PROJECTED WATER EXPENSES
Detailed projections of expenses for the Water and Wastewater Utility are shown in Table 4-1
(this is the same as Table 3-1). Projected expenses are based on information provided by the City
which were developed based on historical Water and Wastewater Utility expenses from 2004-
2008. Brief descriptions of the line items included are shown below.
1. Administration Costs: Includes administrative and general costs which are equally
allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
2. Customer Accounting Costs: Includes customer accounting and collection costs equally
allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
3. Capital Outlay Costs: Includes expenses for materials or services to add or expand
buildings, vehicles and equipment, and computers and technology, with the expectation
that they will benefit the City over a long period of time (more than one year). These costs
are equally allocated to the Water and Wastewater Utilities (50% Water/50% Wastewater).
4. Water Distribution Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's water distribution system.
5. Water Treatment Costs: Includes personal services and benefits, supplies, services, capital
outlay expenses and operation and maintenance expenses associated with the operation of
the City's water treatment facilities.
6. Wastewater Collection Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's wastewater collection system.
7. Wastewater Treatment Costs: Includes personal services and benefits, supplies, services,
capital outlay expenses and operation and maintenance expenses associated with the
operation of the City's wastewater treatment facilities.
8. Debt Services and Capital Reserve Transfers: Includes the following current debt services
2005-A GO Bond (Water), 2002-A GO Bond (Wastewater), 2002-A Revenue Bond
(Wastewater), 200l-A GO Bond (Water), 1998-B Refunding Bond (80% Water and 20%
Wastewater), Kansas Public Water Supply Loan Fund (KPWSLF) 2153 (Water), and
KPWSLF 2259 (Water). Includes future debt services for the following projects:
wastewater pump rehabilitation, MarkleylMagnolia water & wastewater systems, East
Salina water & wastewater systems, manhole & pump station reconstruction,
miscellaneous waterline projects, and wastewater treatment plant improvements. Also
includes transfer of funds to Environmental Protection Agency (EP A) reserve and a capital
project reserve.
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Table 4-1: Projected Water and Annual Annual
Wastewater Expenses ok %
change change
2004 2005 2006 2007 2008 2004- 2009- 2009 2010 2011 2012 2013
(Actual) (Actual) (Actual) (Actual) (EstJmated) ~ 2QJA (ProJected) (ProJected) (ProJected) (ProJected) (ProJected)
1. Administration (50% WaterlSO% Wastewater)
Personal Services $214,257 $287,454 $2n,682 $235,637 $359,749 17% 4% $374,139 $389,105 $404,669 $420,855 $437,690
Benefits $43,874 $120,490 $73,290 $64,748 $85,700 39% 6% $90,842 $96,293 $102,070 $108,194 $114,686
Supplies $4,132 $2,097 $3,893 $6,375 $4,450 17% 3% $4,584 $4,721 $4,863 $5,009 $5,159
Services $164,558 $94,282 $75,968 $91,788 $132,900 1% 5% $139,545 $146,522 $153,848 $161,541 $169,618
Capital Outlay $220 $0 $0 $0 $0 $0
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $1,782,843 $1,511,193 $1,586,851 $1,604,528 $1,571,980 -3% 3% $1,619,139 $1,667,714 $1,717,745 $1,769,2n $1,822,356
Total $2,209,664 $2,015,516 $2,017,904 $2,003,076 $2,154,n9 0% 3% $2,228,249 $2,304,354 $2,383,195 $2,464,876 $2,549,508
2. Customer Accounting (50% WaterlSO% Wastewater)
Personal Services $331,925 $337,021 $353,689 $365,815 $419,980 6% 4% $436,n9 $454,250 $472,420 $491,317 $510,970
Benefits $111,258 $102,830 $123,959 $121,541 $141,783 7% 6% $150,290 $159,307 $168,866 $178,998 $189,738
Supplies $105,347 $85,630 $108,785 $105,238 $104,000 1% 3% $107,120 $110,334 $113,644 $117,053 $120,565
Services $76,965 $79,8n $170,428 $62,727 $148,850 48% 0% $148,850 $148,850 $148,850 $148,850 $148,850
Capital Outlay $3,102 $4,8n $",3n $92,331 $23,000 207% 0% $23,000 $23,000 $23,000 $23,000 $23,000
Debt Services $0 $0 $0 . $0 $0
Internal Services and Transfers, Other $694,623 $634,426 $820,118 $821,185 $788,802 4% 0% $788,802 $788,802 $788,802 $788,802 $788,802
Total $1,323,220 $1,444,661 $1,588,356 $1,568,837 $1,626,415 5% 2% $1,654,841 $1,684,543 $1,715,582 $1,748,020 $1,781,924
3. Capital Outlay (50% WaterlSO% Wastewater)
Services (Planning) $54,951 $120,385 $25,500 $50,000 $50,000 $50,000 $50,000 $50,000
Vehicles and Equipment $75,513 $494,525 $271,535 $339,448 $918,000 $400,000 $400,000 $400,000 $400,000 $400,000
Buildings $58,461 $13,376 $119,608 $6,749 $276,000 $60,000 $60,000 $60,000 $60,000 $60,000
System Enhancements $496,710 $1,378,978 $749,295 $169,813 $2,216,600 $1,200,000 $1,300,000 $1,500,000 $1,700,000 $1,900,000
Computers and Technology $2,816 $7,433 $75,575 $45,257 $65,000 $52,000 $52,000 $52,000 $52,000 $52,000
Total $688,451 $2,014,697 $1,218,013 $588,767 $3,475,600 $1,762,000 $1,862,000 $2,062,000 $2,282,000 $2,462,000
4. Water Distribution (100% Water)
Personal Services $485,631 $508,911 $497,914 $495,487 $578,040 5% 4% $599,082 $823,045 $647,967 $673,885 $700,841
Benefits $163,987 $173,672 $176,592 $173,030 $201,446 5% 6% $213,533 $226,345 $239,925 $254,321 $269,580
Supplies $408,492 $485,682 $485,453 $369,126 $4n,45O 6% 3% $491,n4 $506,527 $521,723 $537,374 $553,495
Services $59,625 $34,339 $28,536 $31,019 $71,450 20% 6% $75,737 $80,281 $85,098 $90,204 $95,616
Capital Outlay $6,138 $9,000 0% $9,000 $9,000 $9,000 $9,000 $9,000
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $52,822 $57,068 $62,993 $64,556 $71,339 8% 5% $74,906 $78,651 $82,584 $86,713 $91,049
Total $1,170,557 $1,259,672 $1,251,488 $1,139,356 $1,408,725 5% 4% $1,464,031 $1,523,849 $1,586,296 $1,651,497 $1,719,581
5. Water Treatment (100% Water)
Personal Services $625,535 $624,252 $643,700 $665,259 $724,050 4% 4% $753,012 $783,132 $814,458 $847,036 $880,918
Benefits $191,777 $195,702 $208,179 $218,417 $256,354 8% 6% $271,735 $288,039 $305,322 $323,641 $343,059
Supplies $963,182 $1,016,630 $1,239,136 $1,336,250 $1,391,415 10% 7% $1,488,814 $1,593,031 $1,704,543 $1,823,861 $1,951,532
Services $378,792 $382,612 $424,359 $401,702 $499,040 8% 7% $533,973 $571,351 $611,345 $654,140 $699,929
Capital Outlay $790 $6,501 $3,823 $0 $4,450 0% $4,450 $4,450 $4,450 $4,450 $4,450
Debt Services $0 $0 $0 $0 $0
Internal Services and Transfers $4,181 $6,757 $3,914 $37,343 $7,400 198% 5% $7,nO $8,159 $8,566 $8,995 $9,444
Total $2,164,257 $2,232,454 $2,523,111 $2,658,971 $2,882,709 7% 6% $3,059,754 $3,248,162 $3,448,685 $3,662,123 $3,889,332
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Table 4-1: Projected Water and
Wastewater Expenses
2004
(Actual)
Total P&I $2,790,403
Total Reserves (50"~ Water/500/0 Wastewater)
Total P& I plus Reserves $2,790,403
2005 2006
(Actual) (Actual)
$2,173,220 $2,476,004
2007 2008
(Actual) (estimated)
$2,537,729 $2,266,116
$60,302
$2,173,220 $2,476,004 $2,537,729 $2,326,418
Annual
%
change
2004-
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Total Water Expense
Total Wastewater Expense
Total Fund Expense
$6,822,740 $7,302,198 $7,407,816 $7,130,213 $9,066,468
$5,985,523 $6,319,060 $6,369,585 $6,295,215 $7,9n,742
$12,808,263 $13,621,258 $13,7n,401 $13,425,428 $17,044,210
Annual
%
change
2009-
2013
2009
(Prolected)
$2,075,548
$60,302
$2,135,850
2010
(Prolected)
$2,264,224
$60,302
$2,324,526
2011
(Prolectedl
$2,266, no
$310,301
$2,5n,071
2012 2013
(Prolected) (Prolected)
$2,276,881 $1,431,540
$609,417 $1,160,302
$2,886,298 $2,591,842
$8,136,060 $8,579,578 $9,120,393 $9,703,907 $10,432,128
$7,470,754 $7,806,211 $8,233,062 $8,700,091 $8,446,378
$15,606,814 $16,385,789 $17,353,455 $18,403,998 $18,878,506
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As shown previously in Table 2-2, total projected required revenues, which are based on the
projected total expenses and maintaining a balance goal of $3,000,000 annually (for water and
wastewater combined), for the Water Utility are shown in Table 4-2.
Table 4-2: Total Projected Required Revenue for the Water Utility
Total
2009
$7,250,143
2010
$8,276,578
2011
$8,817,393
2012
$9,400,907
2013
$10,129,128
4.2. REVENUE GENERA TED AT CURRENT WATER RATES
The current system of water charges divides the costs of supplying and treating water equitably
among all users by means of a minimum monthly customer charge plus a consumption charge.
The following is the current water rates which became effective on 10/1/2007:
Customer Charge (0 CF) for 5/8" Meter = $3.75
Consumption Charge: First 2,000 CF = $2.54 per 100 CF
Next 8,000 CF = $2.31 per 100 CF
All over 10,000 CF = $2.07 per 100 CF
The minimum monthly customer charge allocates all administrative costs (i.e. administration,
and customer accounting costs which 50% is allocated to the Wastewater Utility and 50% is
allocated to the Water Utility) among all users based on the size of water meter installed. For
this review the administrative and customer costs for the Water Utility is projected to remain at
50 percent of total (Water and Wastewater) administrative and customer costs. Adjustments to
the existing minimum monthly customer charge are required to cover increased administrative
costs. The minimum monthly customer charge is calculated as follows:
C Ch $ Annual Admin. Costs
ustomer arge, =
(No. of Accounts)(12 months)
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The consumption charge in dollars per hundred cubic feet ($/cct) allocates all operation,
maintenance and replacement costs for water distribution and water treatment (i.e., O&M costs,
capital improvements, debt service, and capital reserve transfers) proportionally to all users
based on the user's consumption of water.
Historical and projected number of water accounts and billed water volume are given in Table 4-
3. It was assumed that the number of water accounts would increase by 0.60% each year which
is the calculated average from actual 2002 - 2006 data. It was assumed that the billed water
volume would decrease by the 2.84% each year which is the calculated average from actual 2002
- 2006 data.
Table 4 -3: Historical and Projected Number of Water Accounts and Billed Water Volume
Actual Actual Actual Actual Actual Actual
2002 2003 2004 2005 2006 2007
Number ot Accounts 19,305 19,368 19,532 19,730 19,789 19,968
% Increase 0.33% 0.85% 1.01% 0.30% 0.90%
Average = 0.68%
Total Billed Water Volume, 1000 cct 3,045.18 2,810.06 2,688.32 2,792.16 2,703.79 2,627.00
% Increase -7.72% -4.33% 3.86% -3.17%
Average = -2.84%
Projected Projected Projected Projected Projected Projected
2008 2009 2010 2011 2012 2013
Number ot Accounts 20,104 20,240 20,378 20,517 20,656 20,797
Total Billed Water Volume, 1000 cct 2,552.39 2,479.90 2,409.47 2,341.04 2,274.56 2,209.96
The projected revenue requirements shown in Table 4-2 were compared to the revenue to be
generated at the current rates with the projected number of water accounts and billed water
volume. As shown in Table 4-4 the revenue generated at current rates will fall short of the
projected revenue required and there will be arevenue deficit for 2009 - 2013. For simplicity it
will be assumed that all water accounts are the smallest 5/8" meter with all billed water volume
at the block rate for the first 2,000 cubic feet. Therefore the current rates need to be increased in
order to meet the projected revenue requirements.
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4.3. WATER RATE STRUCTURE EV ALUA TION
Before determining the proposed water rates necessary to meet the projected revenue
requirements, it is necessary to evaluate the current water rate structure. Relevant factors to be
considered in selecting the appropriate rate structure include:
. Financial stability (does the rate structure yield required revenue in a stable and predictable
manner?)
. Social equity (is the rate structure fair and equitable within its customer class?)
. Environmentally sound (does the rate structure reflect the scarcity of water and discourage
wasteful use?)
. Administratively manageable (can the utility explain the rate structure to its citizens and
administer the program?)
However, although one rate structure may meet one factor, it may not meet another. Thus, one
must balance different factors in developing the appropriate rate structure for their community.
Municipal water rates may be variously structured. The most common rate structures include:
flat rate, decreasing block rate, uniform rate, seasonal rate, increasing block rate and excess use
rate.
4.3.1. Types of Water Rate Structures
Flat Rate
A flat rate structure is where a customer is charged a flat fee each month regardless of the
amount of water consumed. This rate structure is predominantly used where individual meters
do not exist. This type of rate structure is rarely used today as most all municipalities meter
individual water consumption.
Decreasing Block Rate
A decreasing block rate structure is where the unit price
for water decreases as the volume consumed increases.
The structure consists of a series of "price blocks,"
which are set quantities of water sold at a given unit
t
I
Unit
Price
1
.
Consumption Volume -+
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price. The unit prices for each block decreases as the block quantity increases. This type of rate
structure requires adequate customer class consumption records but once it's implemented it is
administratively manageable and does provide stable revenue. The decreasing block rate
structure is not socially equitable as it subsidizes large families and penalizes small families. It
also conflicts with water conservation goals. The City of Salina is currently utilizing this type of
rate structure.
Uniform Rate
A uniform rate structure is where the unit price for
water is constant regardless of the amount of water
consumed. This type of rate structure is very easy to
implement as customers can easily understand it and is
very simple to manage administratively. The uniform Consumption Volume-+
rate structure does provide stable revenue but does not encourage water conservation.
t
Unit
Price
Seasonal Rate
A seasonal rate structure is where the unit price for
water is set to vary from season to season. Summer
water rates are typically higher than winter rates in
order to reflect the fact that water is more valuable,
and costs more to provide, in the summer. This type
of rate structure is very applicable in communities
where there is known to be large seasonal demands (i.e. high peak summer demands from
irrigating, filling of swimming pools, etc.). The seasonal rate structure is very conservation-
oriented but can be difficult to implement at first until the customers become use to the seasonal
rates. Because this type of rate structure promotes water conservation, it can result in revenue
instability. This type of rate structure neither penalizes nor subsidizes families based on their
sizes.
t
Summer Rate
Unit
Price
Winter Rate
Consumption Volume -+
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Increasing: Block Rate
An increasing block rate structure is where the unit
price for water increases as the volume consumed
increases. This structure consists of a series of price
blocks, where the unit prices for each block increase
as the block volumes increase. Those who use low or
average volumes of water will be charged a modest unit price; those using excessive volumes
will pay higher unit prices. This increasing block rate structure is conservation-oriented and
sends out a strong price signal but it is not generally applicable to large industrial customers that
have consistent high use for production purposes and not irrigation purposes. Because customers
will likely start to conserve water, this type of rate structure can result in revenue instability
which may require some sort of Rate Stabilization Reserve Fund. The increasing block rate
structure can be difficult to implement because it penalizes large families and subsidizes small
families.
t
Unit
Price
Consumption Volume --+-
Excess Use Rate
An excess use rate structure is where the unit price for water increases after a specified volume
consumed is exceeded. Typically this specified volume consumed is based on each individual
customer's winter average usage and not a set range of volume like the block rate structures.
Basically any usage above the previous winter average usage, which would not include typical
summer peak uses such as irrigation, would be charged at a higher rate. This type of structure is
therefore very fair and socially equitable as it does not subsidize or penalize customers based on
family size. This type of structure only penalizes those that use more waterin the summer
months which is most likely used for irrigation, filling of swimming pools, etc. Therefore the
excess use rate is very conservation-oriented and in turn can result in revenue instability. The
excess use rate is also the most difficult structure type to administratively manage as it requires
detailed consumption data to be referenced. This rate structure also may be difficult to
implement as it may be hard for customers to understand. The excess use rate may create a
substantial economic impact on high volume industrial users which have increased product
production during the spring, summer, and fall months.
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Table 4 -5: Summary of Types of Water Rate Structures
Financially Socially Environmentally Administratively
Type of Rate Structure Stable Equitable Sound Manageable
Flat Rate +++ - -- - - - +++
Decreasing Block Rate ++ - - - - - -
Uniform Rate + + - - ++
Seasonal Rate - + + +
Increasing Block Rate - - - - +++ - -
Excess Use Rate - +++ +++ - --
+ means the rate suucture scores positive in this criterion
- means the rate suucture scores negative in this criterion
4.3.2. Water Conservation and Rate Structures
In the summer of 2006, central and western Kansas experienced extreme drought conditions
which decreased the City's water supplies from both surface water and groundwater. These
quickly declining water supplies prompted the City of Salina to enforce water watches and water
warnings to customers to promote water conservation. With these types of drought conditions
occurring not only in Kansas but across the country, conservation structured water rates are
becoming increasingly prevalent across the state and the country. Conservation-oriented rates
are rates that provide an incentive price signal to wisely use water. Conservation rates should be
adopted to promote efficient use of a limited resource and to recognize that future sources of
water are more expensive than past sources of water.
The increasing block rate structure most effectively encourages efficient water use. An
increasing block rate structure is set up to charge higher unit prices to customers who use more
water and charge lower unit prices to customers who use less. In other words, the unit prices
reflect the strain or demand a customer places on the water supply system. This design is
fundamentally fair; customers are charged on the basis of the costs they impose on the utility.
Because high-volume users expedite the need for infrastructure upgrades and new supply
procurement, these high-volume customers are more expensive for the utility to maintain. It
would be unfair to pass the costs generated by these relatively few customers on to those who
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The seasonal rate structure also provides a conservation price signal when moving from winter to
summer. This design charges a higher unit rate in the summer, when outdoor and other
discretionary water uses are the highest. Most often, this design applies to a uniform rate
structure that varies in price from season to season. Thus, on a day-to-day basis within a
particular season, the seasonal rate structure does not provide a price incentive for conservation
because the unit price is constant regardless of the amount of water consumption each month.
An exception to this rule occurs when the seasonal rate changes incorporate increasing block
rates(i.e. uniform winter rate and increasing block summer rates).
The excess rate structure definitely provides a price incentive for water conservation. This
design charges a higher unit rate for all use that exceeds a winter average, which is usually
calculated during the months of January through March. As opposed to the seasonal rate
structure the excess rate structure does provide a price incentive for conservation throughout a
majority of the year and on a day-to-day basis rather than just during the summer season,
The uniform rate structure and the decreasing block rate structure provide no price incentive for
water conservation. Although a customer's overall bill will increase as water consumption
increases in both of these rate structures, the unit price for water remains constant or decreases,
respectively. Thus, the consumer has little or no incentive to conserve and, in the case of the
decreasing block rate structure, the consumer actually has a price incentive to use more water.
This can encourage wasteful water use.
4.3.3. Water Rate Structure Comparison
The City of Salina's current decreasing block rate structure for water rates has been in place
since at least 1987, if not prior to then. This type of water rate structure was widely used back
then by many municipalities because it was designed to recover the cost of serving different
classes of customers while maintaining equity between the customer classes. Table 4-6 shows
current water rate structures for area utilities within the state of Kansas.
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Table 4 -6: Water Rate Structures for Area Utilities (as of July 2007)
Water Rate .
Utility Population Structure Current Rate Details (monthy)
Abilene 6,456 Seasonal Residential Inside City
o - 2,250 gals $12.75
2,251 - 7,500 gals 0.3267289 per 100 gals
7,501 -15,000 gals 0.3600481 per 100 gals
15,001 - 30,000 gals 0.7867192 per 100 gals
30,001 - 52,500 gals 0.8533715 per 100 gals
52,501 - 225,000 gals 0.5333366 per 100 gals
225,001 - 9,999,999 gals 0.4000000 per 100 gals
Conservation Rates (for July, Aug, Sept Only) = Rates Doubled for Residentail only for
anything over 15,000 gals
Hays 19.915 Excess Use Minimum Meter Charge with 100 CF $9.18
$1.60 per 100 CF through Average Winter Use
All usage exceeding Average Winter Use billed an additional
$1.60 per 100 CF
Hutchinson 40.783 Decreasing Block Minimum Meter Charge $8.12
0- 500 hundred cubic feet $1.64 per 100 CF
501 - 5,000 hundred cubic feet $1.48 per 100 CF
Above 5,000 hundred cubic feet $1.34 per 100 CF
Water One --- Excess Use Block I (up to 125% Average Winter Consumption)
(Johnson County $2.81 per 1,000 gals
Water District No.1) Block II (all water used in excess of 125% Average Winter
Consumption)
$3.73 per 1,000 gals
Junction City 17.667 Increasing Block Minimum Meter Charge with 200 CF $9.50
200 CF to 1,000 CF $1.15 per 100 CF
Over 1,000 CF $1.45 per 100 CF
Lawrence 82.120 Uniform Minimum Monthly Meter Charge $2.65
Plus $2.92 per 1,000 gals
Manhattan 44.733 Decreasing Block Minimum Monthly Charge with 200 CF $7.02
Next 1,800 CF $2.05 per 100 CF
Next 38,000 CF $1.38 per 100CF
Allover 40,000 CF $1.12 per 100 CF
McPherson 13,731 Increasing Block Minimum Monthly Meter Charge $8.00
o to 2,600 CF $1.20 per 100 CF
2,700 to 5,200 CF $1.40 per 100 CF
5,300 to 7,800 CF $1.60 per 100CF
Over 7,800 CF $1.95 per 100 CF
Newton 17.977 Uniform Minimum Monthly Charge with 300 CF $10.50
Over 300 CF $3.35 per 100 CF
Olathe 105,274 Increasing Block Minimum Monthly Charge $3.35
Less than 1,000 CF $2.25 per 100 CF
1,001 to 2,500CF $2.85 per 100 CF
2,501 to 5,000 CF $3.70 per 100 CF
Greater than 5,000 CF $4.50 per 100 CF
Topeka 122.008 Uniform First 1,500 gals $8.82
Each 1,000 gals after that:
Single Family $3.18 per 1,000 gals
Muhifamily $2.59 per 1,000 gals
Commercial $2.35 per 1,000 gals
Industrial $2.00 per 1,000 gals
Wichita 354.617 Excess Use Minimum Monthly Meter Charge $5.75
$0.81 per 1,000 gals (0-110% of Average Winter Consumption)
$2.90 per 1,000 gals (the next 200% of Average Winter Consumption)
$4.36 per 1,000 gals (in excess of 310% of Average Winter Consumption)
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4.3.4. Water Rate Structure Recommendation
Based on the information given about rate structure types and how they meet the relevant factors,
it is recommended that the City of Salina change to an excess use water rate structure. The two
negatives regarding this type of rate structure are the administrative manageability and that it can
create a substantial economic impact on some high volume industrial users.
The effect on administrative manageability should be minimal due to the fact that the City of.
Salina currently utilizes the average winter consumption concept for means of wastewater utility
billing. Therefore individual average winter consumption is already calculated for all customers,
which in turn shouldn't create much more additional billing work.
The excess use water rate structure does create a substantial economic impact on the high
volume industrial users which have higher water consumption in the summer months than the
winter months due to increased production and not outdoor water use. The excess use water rate
structure is meant to decrease wasteful outdoor water use by creating a financial impact for those
who don't conserve water. Therefore the excess use water rate structure, which is based on
average winter consumption, would need to be modified for those high volume industrial users
which have higher water consumption in the summer months due to increased production. It is
recommended that this modification be made for any user that uses more than 3,000,000 cubic
feet of water. This volume has been chosen because it is a substantial amount of water which is
most likely utilized for production and not outdoor water use. It is proposed that these high
volume users be charged the same block rate as all other users but not be subjected to an excess
use block rate. Because of this it is also proposed that these users submit a current water
conservation plan to the Director of Utilities for review and approval.
It is recommended that the City enact the following proposed water rate structure:
. Minimum Monthly Customer Charge $X.XX
. $X.XX per 100 CF through 120% of Average Winter Consumption
. $X.XX per 100 CF for all usage exceeding 120% of Average Winter Consumption
. Minimum monthly customer charge for meters outside city shall remain at double the
inside city rate.
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. Unit rates for consumption by meters outside city shall remain at 125% of the inside
city rate.
. All irrigation meters shall be billed at the excess use unit rate
*** If any user of water shall use more than three million cubic feet (3,000,000 CF) of
water in any year, then they shall be charged the 0-120% block rate for all consumption.
The user must have a current water conservation plan in place and submit a copy of the
water conservation plan to the Director of Utilities for review and approval.
The 120% of Average Winter Consumption was recommended for several reasons. First of all,
for simplicity and equality reasons, it needs to be the same percentage for all types of users,
including residential, commercial, and industrial. Second of all the percentage needs to allow for
some fluctuation in usage as fluctuations in water usage are typical for all types of users.
According to the 2005 and 2006 average and peak water usage for all customers (see Graphs 4-1
and 4-2), anything below the 120% of the Average Winter Consumption line doesn't allow for
much fluctuation in usage. Also, anything above the 120% of the Average Winter Consumption
line hinders from trying to cut back the peaks that are currently being seen in the summer months
of May through September which works against the ultimate goal of the excess water rate
structure which is water conservation. As shown on the graphs, the 120% of Average Winter
Consumption line would also help hit those users that aren't conserving water in the spring and
fall months of April and October which should be higher moisture months in which irrigation
isn't necessary.
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Graph 4 -1: Average Water Use for 2005 and 2006
2005 and 2006 Average Water Use.
10,000,000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
o
120% of Average Winter
Consumption
...
CD
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"-
CD
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CD
C;)
<D
C
112005 Averaoe .2006 Averaae
Graph 4 -2: Peak Water Use for 2005 and 2006
2005 and 2006 Peak Water Use
14,000,000
12,000,000
10,000,000
120% of Average Winter
Consumption
I . 2005 Peak [] 2006 Peak I
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It is recommended that the unit block rate for all usage exceeding 120% of Average Winter
Consumption be 200% of the unit block rate through 120% of Average Winter Consumption.
The 200% increase in the unit block rate should provide enough of an incentive price signal to
users to wisely use water which is the rationale behind water conservation rate types. Also,
based on Table 4-6 this proposed 200% increase is in line with the other area utilities that utilize
the excess use rate structure. (Hays = 200%, Water One = 133%, Wichita = 350%) Several
iterations were completed utilizing 150% and 300% of the unit block rate through 120% of
Average Winter Consumption. It was found that utilizing the recommended 200% of the unit
block rate through 120% of Average Winter Consumption is the most equitable for all users.
4.4. PROPOSED WATER RATE SCHEDULE
Utilizing the recommended excess use rate structure, the projected revenue requirements and the
projected number of water accounts and billed water volume. Table 4-7 shows the proposed
customer charge and consumption charge for 2009 through 2013. This proposed water rate
schedule would meet the projected revenue requirements and still allow for the $3,000,000 (for
water and wastewater combined) carryover for each year. The proposed water rate schedule
would still be an excess use rate schedule but for simplicity it will be assumed that all water
accounts are the smallest 5/8" meter with 90% of all billed water volume at the 0 - 120 % of
Average Winter Consumption block rate and 10% of all billed water volume at the over 120%
Average Winter Consumption block rate. The 90% and 10% split is based on 2005 and 2006
usage shown on Graphs 4-1 and 4-2. Assuming this should allow for a conservative projected
revenue since there may be some revenue instability from water users conserving water. With
the possible revenue instability in mind, it is necessary for the City to re-evaluate the proposed
water consumption charge annually, especially after the first year of the new excess use rate.
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Table 4 -7: Revenue Generated at Proposed Water Rates
Projected Projected Projected Projected Projected
2009 2010 2011 2012 2013
Customer Charae
Number of Accounts 20,240 20,378 20,517 20,656 20,797
Monthly Customer Charge, $ 4.44 4.51 4.60 4.70 4.80
Projected Annual Revenue*, $ 1,478,004 1,509,820 1,552,252 1 ,596,428 1,642,427
Current Year Balance Shortfall, $ 8,945 0 0 0 0
Miscellaneous Revenue, $ (151,500) (151,500) (151,500) (151,500) (151,500)
Administration (50% Internal services & translalS), $ 709,340 735,249 762,161 790,119 819,165
Customer Accounting (50% Internal services & translelS), $ 630,220 645,071 660,590 676,809 693,762
Capital Outlay (less system enhancements), $ 281.000 281 .000 281.000 281.000 281.000
Annual Revenue-Required, $ 1,478,004 t,509,820 1,552,252 1,596,428 1,642,427
Surplus/(Deficit), $ 0 0 0 0 0
Consumotion Charae
Total Billed Water Vol, 1000 ccf 2,479.90 2,409.47 2,341.04 2,274.56 2,209.96
Unit Cost through 120% AWC**, $/oof 2.34 2.55 2.82 3.12 3.49
Unit Cost over 120% AWC**, $/ccf 4.67 5.11 5.64 6.24 6.98
Projected Annual Revenue***, $ 6,372,945 6,766,758 7,265,142 7,804,479 8,486,702
Current Year Balance Shortfall, $ 8,945 0 0 0 0
Miscellaneous Revenue, $ (151,500) (151,500) (151,500) (151,500) (151,500)
Internal Services and Transfers 50% (Admln.&CusI.AccI.), $ 601,985 614,129 626,637 639,520 652,789
Debt Service and Capital Reserve Transfers, $ 789,730 882,119 1,005,024 1,152,839 1,426,499
Capital Outlay (system enhsncements), $ 600,000 650,000 750,000 850,000 950,000
Water Treatment, $ 3,059,754 3,248,162 3,448,685 3,662,123 3,889,332
Water Distribution, $ 1.464.031 1.523.849 1.586.296 1.65t.497 1.719.581
Annual Revenue Required, $ 6,372,945 6,766,758 7,265,142 7,804,479 8,486,702
Surplus/(Deficit), $ 0 0 0 0 0
Total Annual Revenue
Customer Charge, $ 1,478,004 1,509,820 1,552,252 1 ,596,428 1 ,642,427
Consumption Charge, $ 6.372.945 6.766.758 7.265.142 7.804.479 8.486.702
Total Revenue, $ 7,850,949 8,276,578 8,817,393 9,400,907 10,129,128
Total Annual Revenue Required, $ 7,850,949 8,276,578 8,817,393 9,400,907 10,129,128
Surplus/(Deficit), $ 0 0 0 0 0
* Assumes 73% of projected annual revenue from customer charge comes from 5/8" meters
** A WC = Average Winter Consumption = average usage from January through March
*** Assumes 90% of all usage is in the 0 - 120% of Average Winter Consumption and 10% of all usage is over the 120% of Average
Winter Consumption
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Table 4-8 shows the current and proposed customer charge for each meter size for 2009 through
2013. The customer charge for each meter size is increased based on the percent increase of the
proposed customer charge shown in Table 4-7 (for the 5/8" meter).
Table 4-8: Proposed Customer Charge (0 CF) by Meter Size
Existing Proposed Proposed Proposed Proposed Proposed
Meter Size 2008 2009 2010 2011 2012 2013
5/8" Meter $3.75 $4.44 $4.51 $4.60 $4.70 $4.80
3/4" Meter $5.97 $7.07 $7.18 $7.33 $7.48 $7.65
1" Meter $8.10 $9.60 $9.74 $9.94 $10.16 $10.38
1-1/2" Meter $12.57 $14.89 $15.11 $15.43 $15.76 $16.10
2" Meter $20.31 $24.06 $24.41 $24.93 $25.46 $26.02
3" Meter $53.31 $63.15 $64.07 $65.43 $66.84 $68.30
4" Meter $76.34 $90.43 $91.75 $93.70 $95.71 $97.80
6" Meter $141.67 $167.82 $170.27 $173.88 $177.62 $181.50
8" Meter & Above $298.11 $353.14 $358.30 $365.88 $373.75 $381.93
Percent Increase 18.46% 1.46% 2.12% 2.15% 2.19%
4.5. EFFECTS ON WATER USERS
The new proposed excess use water rate structure is significantly different than the existing
decreasing block rate and therefore the new rate structure will have a financial effect on water
users. The following tables show the annual cost difference that users will see based on existing
2008 water rates versus the proposed 2009 water rates. These tables are based on actual 2006
water usage. As shown, approximately 80% of the total residential meters would see an annual
cost increase of $50.00 or less, approximately 77% of the total commercial meters would see an
annual cost increase of $50.00 or less, and 19 of the 33 industrial meters would see an annual
cost increase of $100.00 or less.
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FOR RESIDENTIAL METERS (Based on 2006 Usage and not Including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
:S $0.00
$0.00 - $20.00
$20.00 - $50.00
$50.00 - $100.00
$100.00 - $150.00
$150.00 - $200.00
$200.00 - $300.00
$300.00 - $400.00
$400.00 - $500.00
$500.00 - $600.00
$600.00 - $700.00
$700.00 - $800.00
$800.00 - $900.00
$900.00 - $1,000.00
> $1,000.00
TOTAL
No. of Meters
8,866
5,992
2,998
2,076
810
428
362
159
99
49
20
16
12
8
30
21 ,925
FOR COMMERCIAL METERS (Based on 2006 Usage and not Including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
:S $0.00
$0.00 - $20.00
$20.00 - $50.00
$50.00 - $100.00
$100.00 - $150.00
$150.00 - $200.00
$200.00 - $300.00
$300.00 - $400.00
$400.00 - $500.00
$500.00 - $600.00
$600.00 - $700.00
$700.00 - $800.00
$800.00 - $900.00
$900.00 - $1,000.00
> $1,000.00
TOTAL
FOR INDUSTRIAL METERS (Based on 2006 Usage and not Including meter charges)
Annual Cost Difference from 2008 to 2009 Rates
:S $0.00
$0.00 - $100.00
$100.00 - $500.00
$500.00 - $1,000.00
$1,000.00 - $2,000.00
No. of Meters
11
8
6
3
5
% of Meter:
40.44%
27.33%
13.67%
9.47%
3.69%
1.95%
1.65%
0.73%
0.45%
0.22%
-0.09%
0.07%
0.05%
0.04%
0.14%
% of Meter.
33.49%
32.83%
10.70%
5.86%
3.08%
2.24%
2.36%
2.18%
0.91%
0.97%
0.73%
0.79%
0.36%
0.36%
3.14%
* This does not include any high user over 3,000,000 cf annually which will get the block rate without an excess
use charge
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4.6. ESTIMA TED MONTHLY WATER CHARGES
Estimated total monthly water charges resulting from the proposed rates are shown in Table 4-10
for typical customers and selected usage ranges. Table 4-11 shows the percent increase from the
previous year for the same customers. In addition to increased expenses, one reason why there is
a rate increase for the customer charge from 2008 to 2009 is due to the fact that the number of
water accounts (and therefore the amount of billed water volume) didn't increase as much as
previously projected. A second reason is due to the fact that the water rate structure changed
from a decreasing block rate type to the excess use rate type. This percentage increase stabilizes
from 2009 to 2013.
Table 4 -10: Estimated Monthly Water Chargesfor Typical Customers Based on Proposed Rate
Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage'. Meter Existing Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range. (cu. ft.) Size 2008 2QQ2 2010 2.Qll gQ!g 2013
Residential (Inside CiM
0-300 8,465 (39%) 300 5/8' $11.37 $11.45 $12.17 $13.07 $14.06 $15.28
301-500 2,864 (13%) 400 5/8" $13.91 $13.79 $14.72 $15.89 $17.18 $18.n
501-800 3,736 (17%) 700 5/8" $21.53 $20.80 $22.38 $24.35 $26.54 $29.24
801-1,100 2,450 (11%) 1,000 5/8" $29.15 $27.80 $30.04 $32.82 $35.89 $39.72
1,101-1,500 1,n3 (8%) 1,300 5/8" $36.n $34.81 $37.70 $41.28 $45.25 $50.19
1,501-2,000 1,064 (5%) 1,700 5/8" $46.93 $44.16 $47.91 $52.56 $57.73 $64.15
>2,000 1,573 (7%)
Commercial (Inside CiM
2,000-5,000 3,500 5/8" $89.20 $86.21 $93.87 $103.35 $113.88 $126.99
5,001-10,000 7,500 2" $198.16 $199.27 $215.89 $236.52 $259.41 $287.85
10,001-50,000 30,000 2" $669.91 $724.92 $790.34 $871.30 $961.25 $1,073.35
50,001-100,000 75,000 4" $1,657.44 $1,842.59 $2,006.57 $2,209.63 $2,435.17 $2,716.12
Laroe Users
Inside City 100,000 4" $2,174.94 $2,426.65 $2,644.84 $2,914.95 $3,214.99 $3,588.90
Inside City 600,000 6" $12,590.27 $14,185.11 $15,488.80 $17,101.38 $18,893.28 $21,128.07
Outside City 100,000 4" $2,775.93 $3,101.13 $3,374.87 $3,713.95 $4,090.52 $4,559.47
Outside City 600,000 6" $15,844.09 $17,857.25 $19,488.71 $21,507.14 $23,749.82 $26,546.21
* Based on July 2006 usage
** Assumes all usage is in the 0 - 120% of Average Winter Consumption
WIlSON
&COMPANY
4.21
weI File No. 07-200-520-00
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Table 4 -11: Monthly Water Charge Percent Increasesfor Typical Customers Based on
Proposed Rate Schedule
Approx.
Customer Type Number of Average
and Usage Customers in Usage** Meter Proposed Proposed Proposed Proposed Proposed
Range (cu. ft.) This Range* (cu. ft.) Size 2009 2010 2011 2012 2013
Residential (Inside City)
0-300 8,465 (39%) 300 5/8n 0.71% 6.25% 7.40% 7.60% 8.67%
301-500 2,864 (13%) 400 5/8n -0.88% 6.76% 7.94% 8.13% 9.26%
501-800 3,736 (17%) 700 5/8" -3.41 % 7.61% 8.81% 8.97% 10.20%
801-1,100 2,450 (11%) 1,000 5/8n -4.62% 8.03% 9.24% 9.38% 10.65%
1,101-1,500 1,773 (8%) 1,300 5/8n -5.32% 8.29% 9.50% 9.63% 10.91 %
1,501-2,000 1,064 (5%) 1,700 5/8n -5.91 % 8.50% 9.71% 9.83% 11.13%
>2,000 1,573 (7%)
Commercial (Inside City)
2,000-5,000 3,500 5/8n -3.35% 8.88% 10.10% 10.19% 11.52%
5,001-10,000 7,500 2" 0.56% 8.34% 9.56% 9.68% 10.96%
10,001-50,000 30,000 2n 8.21% 9.02% 10.24% 1 0.320~ 11.66%
50,001-100,000 75,000 4n 11.17% 8.90% 10.12% 10.21% 11.54%
Laroe Users
Inside City 100,000 4" 11.57% 8.99% 10.21 % 10.29% 11.63%
Inside City 600,000 6n 12.67% 9.19% 10.41% 10.48% 11.83%
Outside City 100,000 4n 11.72% 8.83% 10.05% 10.14% 11.46%
Outside City 600,000 6n 12.71% 9.14% 10.36% 10.43% 11.77%
* Based on July 2006 usage
** Assumes all usage is in the 0 -120% of Average Winter Consumption
WIlSON
&COMPANY
4.22
weI File No. 07-200-520-00
APPENDIX A
Resolution No. 08-6523
WlISOItI
&COMPANY
Appendix A
WCI File No. 07-200-520-00
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RESOLUTION NUMBER 08-6523
A RESOLUTION ESTABLISHING WATER AND WASTEWATER RATES IN THE
COMPREHENSIVE FEE SCHEDULE OF THE CITY OF SALINA, KANSAS. '
WHEREAS, the City of Salina provides many specific services for the Citizens of Salina;
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and
WHEREAS, specific individuals benefit from said services; and
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. WHEREAS, it is appropriate public policy to require specific individuals benefiting from
specific services to pay all or a portion of the cost of such services; and
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WHEREAS, Salina Code Section 2-2 provides that the Board of Commissioners shall
determine, by resolution, all license fees, permit fees and other user related fees or chargers
established by ordinances of the City; SO NOW, THEREFORE
BE IT RESOLVED by the Governing Body of the City of Salina, Kansas:
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Section 1. That the following Utilities fees of. Article XI of the City of Salina
Comprehensive Fee Schedule are hereby amended to read as follows:
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Effective Julv 1. 2008
WASTEWATER
Inside City Limits
Customer Charge (0 C.F.)
Consumption Charge per 100 C.F.
Per Month
$3.51
$2.63
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WATER
Inside City Limits
Customer Charge (0 C.F.)
5/8" Meter
%" Metter
1 " Meter
1 W' Meter
2" Meter
3" Meter
4" Meter
6" Meter
8" Meter & Above
$3.75
$5.97
$8.10
$12.57
$20.31
$53.31
$76.34
$141.67
$298.11
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Consumption Charge per 100 C.F.
First 2,000 C.F.
Next 8,000 C.F.
All over 10,000 C.F.
$2.54
$2.31
$2.07
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Excess Use Charge
Metered Consumption Above
Excess Use Baseline
Metered Consumption All
Irrigation Meters
$4.68
$4.68
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Aptutment Rate: When three or more units are placed on a master meter, usage is charged at the
JlTst 2,000 cubic feet rate for all consumption.
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RATE OUTSIDE CITY:
Customer Charge
Consumption Charge
Double Inside Rate
125% Inside Rate
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Effective November 1. 2008
WASTEWATER
Year 2009 Year 2010 Year 2011 Year 2012 Year 2013
Effective Effective Effective Effective Effective
Inside City Limits 11-1-2008 11-1-2009 11-1-2010 11-1-2011 11-1-2012
Customer Charge (0 C.F.) $6.31 $6.42 $6.57 $6.73 $6.89
Consumption Charge per 100 C.F. $2.88 $3.08 $3.35 $3.64 $3.90
WATER
Inside City Limits
Customer Charge (0 C.F.)
5/8" Meter $4.44 $4.51 $4.60 $4.70 $4.80
%" Meter $7.07 $7.18 $7.33 $7.48 $7.65
1 " Meter $9.60 $9.74 $9.94 $10.16 $10.38
I Yz" Meter $14.89 $15.11 $15.43 $15.76 $16.10
2" Meter $24.06 $24.41 $24.93 $25.46 $26.02
3" Meter $63.15 $64.07 $65.43 $66.84 $68.30
4" Meter $90.43 $91.75 $93.70 $95.71 $9~.80
6" Meter $167.82 $170.27 $173.88 $177.62 $181.50
8" Meter and above $353.14 $358.30 $365.88 $373.75 $381.93
Consumption Charge per 100 C.F.
Unit Block Rate
Metered Consumption
Through Excess Use
Baseline $2.34 $2.55 $2.82 $3.12 $3.49
Excess Use Charge
Metered Consumption Above
Excess Use Baseline $4.68 $5.10 $5.64 $6.24 $6.98
Metered Consumption All
Irrigation Meters $4.68 $5.10 $5.64 $6.24 $6.98
RATE OUTSIDE CITY:
Customer Charge Double Inside Rate
Consumption Charge 125% Inside Rate
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1
Winter Quarter Average (WQA) shall be defined by adding the metered water consumption on bills
rendered during the months of January. February and March and then dividing this sum by the
number of billings (three). Each customer's WQA shall be recalculated in April of each year. This
WQA shall be utilized for the following months of May through April.
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Minimum Winter Quarter Average (MWQA) sllDll be defined as 800 cubic feet.
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In those instances where no water consumption data exists for the calculation of a WQA for a
customer. the Director of Utilities or designated representative shall determine the most appropriate
method of establishing the WQA. .
Excess Use Baseline shall equal the greater of 120% of the WQA or J 20% of the MWQA.
Excess Use Charge shall apply to: (I) all irrigation meters (2) any use in excess of the excess use
baseline.
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A customer with metered water consumption greater lhan three million cubicfeet (3.000,000 cf) per
year sllDll be charged at the Tier r rale for all consumption. This customer must have a Water
Conservation Plan and the plan mUSI be approved by the Director of Utilities.
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Section 2. That this Resolution shall be in full force and in effect after its adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 91h day of June, 2008.
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John K. Vanier IT Mayor
[SEAL]
ATIEST:
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Lieu Ann Elsey, CMC, City Clerk