Water and Wastewater Rate Study

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Falfurrias Utility Board Falfurrias, Texas

• Water and Wastewater Rate Study
• and Long-Term Financial Plan
• Presented
• October 10, 2013
• Capex Consulting Group
• Email jsnowden_at_capexconsulting.com
• Web site www.capexconsulting.com

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Water and Wastewater Rate Study Objectives

• Review operating history, debt obligations, and
  prepare forecasts
• Review billing system data and identify issues
• Evaluate impact of existing debt restructuring
  and planned TWDB debt issuances
• Benchmark revenue sources and capital and
  operating expenditures
• Evaluate current rate structure
• Does each customer class contribute an equitable
  share of revenue based on demand?
• Are revenues generated at appropriate levels of
  consumption for each customer class
• Do rates generate revenue sufficient to pay
  current and forecast operating and capital costs?
• Develop and assist with implementation of an
  improved rate structure
• Eliminate cross customer-class subsidies
• Reduce revenue declines related to weather events
• Compare current recommended rates to relevant
  peer group
• Provide multi-year rate restructuring option
• Generate revenue sufficient to fund operating and
  capital costs in a variety of consumption
  scenarios

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Wholesale and Retail Water and WW Flows
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Current Water Rate Structure by Customer Class
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Current Wastewater Rate Structure by Customer
Class
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History of Account Growth
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Revenue and Expense History
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Benchmarking Non Rate Revenue
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Benchmarking Personnel Expense
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Benchmarking Operating Expenses
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Benchmarking Transfers Out
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Benchmarking Capital Outlays
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Benchmarking Debt
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Current Proposed Water and Wastewater Debt
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Pro Forma Cash Flow under Current Rates Avg.
Consumpt
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Water Revenue Distribution of Metered Water
Consumption and Billed Revenue by Customer Class
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Wastewater Identifying Cross Customer Class
Subsidies
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Residential Trends in Consumption Revenue
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Residential Water Average Monthly Consumption
Comparison
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Meter Size and Capacity Utilization
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Proposed Water Rates Residential ICL
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Proposed Wastewater Rates Residential ICL
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Combined Cost of Proposed Rates Residential ICL
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FYE 2018 Residential 10K Gallon Comparison
Assumed 3 Annual Escalator for Peer Group
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Combined Cost of Proposed Rates Residential OCL
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Commercial Water Consumption and Revenue
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Proposed Water Rates Commercial ICL
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Proposed Wastewater Rates Commercial ICL
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Cost of Proposed Rates Commercial ICL
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Cost of Proposed Rates Commercial OCL
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Proposed Restructured Water Rates Apartments ICL
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Proposed Restructured Wastewater Rates
Apartments ICL
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Cost of Proposed Rates Apartments ICL
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Proposed Restructured Water Rates Hotel / Motel
/ RV Park ICL
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Proposed Restructured WW Rates Hotel / Motel /
RV Park ICL
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Cost of Restructured WW Rates Hotel / Motel / RV
Park ICL
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FYE 2018 Non Residential Peer Group Comparison
50K Gal, Assumed 3 Annual Escalator for Peer
Group
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FYE 2018 Non Residential Peer Group Comparison
200K Gal, Assumed 3 Annual Escalator for Peer
Group
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BCDC Metered Consumption and Revenue
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Proposed Water Rates BCDC
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Proposed Wastewater Rates BCDC
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Cost of Proposed Rates BCDC
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Pro Forma Cash Flow under Restructured Rates
Average Consumption
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Recommended Next Steps

• Evaluate no-charge water accounts and schedule of
  non rate fees and charges
• Consider revising / expanding line-items used for
  budget process
• Pursue grant and loan forgiveness programs with
  the TWDB
• Formalize pending debt restructuring
• Incorporate Staff, Board, and Council comments
  into study
• Advise ratepayers of proposed increases
• Draft rate ordinance