Published on November 26, 2007
City of Elephant Butte Wastewater Utility: City of Elephant Butte Wastewater Utility Financial Analysis and Sewer User Rates Presentation Workshops February 8 and 9, 2007 Introductions: Introductions Mayor Bob Barnes, City of Elephant Butte Julie P. Samora, P.E., J. Samora & Associates Inc. Summary of Presentation: Summary of Presentation Presentation Outline Introduction & Background Financial Plan Sewer User Rates Other Fees & Charges What Will it Cost Me? Next Steps? Introduction & Background: Introduction & Background CEB is implementing a brand new sewer system. The new system will have substantial costs associated with it. The new sewer system must be financially sound – revenues need to cover expenses. Financial PlanOverview: Financial Plan Overview 20-year financial plan Cash based approach: “Collect revenue to cover cash expenses” Increase rates gradually over time to keep up with expenses Allow for future capital expenditures – expansion to accommodate growth Financial PlanAssumptions: Financial Plan Assumptions Future customer growth – 2.7% Sewer System is constructed in phases Expenses based on projected inflation and system growth Basic O&M expenses Utility Administrative Costs Utility Billing Utility Expense and Contingency Reserves – debt/loan service and repair and replacement (RR) Debt Payment Sewer User RatesObjectives: Sewer User Rates Objectives Revenue Adequacy – Rates should be sufficient to generate revenues required. Rate Stability – Rates should be as stable as possible. Equity – Rates among user categories should be “fair” and equitable and reflect cost of providing service. Implementing – Rate Structure should be easy to implement, ie., billing systems, etc. Sewer User RatesObjectives (Cont): Sewer User Rates Objectives (Cont) Simplicity – Structure of customer fees should allow for simple bill calculation. Public Understanding and Acceptance - Rates should be presented clearly and openly and be consistent with similar utilities. Rates should be examined once a year for adequacy. Sewer User RatesApproaches: Sewer User Rates Approaches Cost recovery approach – fixed and variable costs. Fixed costs: Associated with system operation regardless of flows. Variable costs: Vary depending on level of use or amount of wastewater generated. Base monthly fee based on fixed and variable costs for the system. Sewer User RatesProposed Sewer Rates: Sewer User Rates Proposed Sewer Rates Comparison of User Rates: Comparison of User Rates Other Fees and Charges: Other Fees and Charges Administrative Charges Administrative Set-up Charge - $75/$100 Installation Charges Actual costs to connect sewer line from home to property line and decommissioning existing septic tank (see following figure) Connection Schematic: Connection Schematic House/ Commercial Building Leach Lines (Abandoned In-Place) Septic Tank Collapsed and Filled w/Sand Property Line Property Line Property Line Sewer Collection Line Roadway Connection Point To Sewer Line Disconnection Point From Septic/Onsite System Connection From Home Plumbing to New Sewer Service Line New Sewer Service Line All work within property boundary is responsibility of property owner. CEB responsible for connection “outside” property Boundary Other Fees and Charges“One-Time Charges”: Other Fees and Charges “One-Time Charges” Applicable to all new construction connecting to CEB system after March 31, 2006 Considers hook-up costs and allows for capacity for future development Amounts (Proposed): Residential - $2,250 Commercial - $3,000 For large customers – case by case basis depending on volume and characteristics of customer Bottom LineWhat Will It Cost Me?: Bottom Line What Will It Cost Me? Existing (Prior to March 31, 2006) Administrative Connection Fee $75 Residential/$100 Commercial Monthly Sewer Rate $22, Commercial Varies (Note - Rates will increase over time) Installation Costs - $1,000 to $2,000 range? Bottom LineWhat Will It Cost Me? (cont.): Bottom Line What Will It Cost Me? (cont.) New Construction (After March 31, 2006) Administrative Connection Fee $75/$100 plus any increases depending on when you connect. Monthly Sewer Rate $22 or higher depending on when you connect, Commercial Varies. Installation Costs - $1,000 to $2,000 One-Time Charge $2,250 (Residential) $3,000 (Commercial) Next Steps: Next Steps Legal Review Hold Public Meeting(s) as required Make Revisions Based on Public Input as Appropriate Finalize User Study Adopt Rates & Ordinance Develop Billing System Implement System Monitor the system Annual Updates of Financial Plan and Processes Questions?: Questions?