HomeMy WebLinkAboutCommittee of the Whole Minutes 02.18.1997 MINTJTES
CITY COUNCIL COMMITTEE OF THE WHOLE
FEBRUARY 18, 1997 6:00 P.M.
COUNCIL CHAMBERS
MEMBERS PRESENT:
Chairman- Chuck Rodgers
Dirk Kroll Norman Orr (late)
Miles Walton William Staudinger
Bud Johnson Donna Kilpatrick
OTHERS PRESENT:
V. Joe Leckie
Andy Loebe
Dave Michael
Mike Zuhoski (late)
D.L. McGillen
Jim Flisrand
Don Hackmann
(late)
Jim gave a presentation regarding the proposed improvements to the
Laurel Water Treatment Plant and distribution system.
Jim also presented a DPW Update of 2-18-97.
The meeting was adjourned at 6:56 p.m.
Respectfully submitted,
Don Hackmann
City Clerk
FROM: Jim Flisrand, Director of Public Works
TO: Mayor and City Council
DATE: February 18, 1997
SUBJECT: Public Works- UPDATE
STREET & ALLEY
1. Pothole patching (weather permitting).
2. Sign replacement as needed.
3. SID 110 final inspections to be completed.
4. Plowing of emergency routes, and sanding as needed.
5. Sweeping as weather permits.
PARKS & CEMETERY
1. Equipment and building maintenance as needed.
WATER & SEWER
1. Plants continuing with normal treatment and maintenance
activities.
2. Water Improvements Project continuing with final design.
Working with consultant on proposed water rates.
3. Meter replacement program continuing through winter months.
10 SOLID WASTE
1. Proceeding with collection and container site operation as
required.
2. Tree trimming in alley's over the past few weeks.
ADMINISTRATION
1. Construction planning and building activity is typical of this
time of the year, with continual commercial activity.
2. Underpass project is still in progress. Project completion to
be this month.
3. Working with COP Construction regarding installation of water
lines associated with the bridge project. Water Plant will be
shut down for short periods of time throughout project. Major
tie-ins at the plant have been completed.
4. Received 3 proposals on replacement of rotary phones in City
Hall. Staff will review 2/19/97 and recommend to Building
Committee.
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TO: Mayor/Council
FROM: Jim Flisrand, Director Public Works
DATE: February 18, 1997
SUBJECT: Proposed Improvements to the Laurel Water
Treatment Plant and Distribution
The primary modifications proposed are specifically designed
to meet the Federal contact disinfection requirements,
assist in the treatment of the plants peak capacity of 10
MGD, automation of the plant to develop consistency in
chemical treatment, enlarge two primary water distribution
trunk lines to improve mid--town fire protection and future
development, and to paint and repair the existing reservoirs
to increase capacity to 5.5 MG.
g a Improvements and provide construction,
administrative, and training services as necessary to
complete this project. MMI will also prepare a plant
operation and maintenance manual for operators, near
completion of the project.
Morrison Maierle is under contract with the City of Laurel
to deli n II
The following improvements are described as follows:
a. New clearwell to meet federally mandated CT
requirements. The City of Laurel currently has no
clearwell except for the 250,000 gallon tank used
for filter backwash, which provides no contact
time when the high surface pumps are
operating(pumping water uptown). The new
clearwell has approximately 380,000 gallons
capacity.
b. Chemical handling and pump building. This
building, which is attached to the clearwell, will
house the new chemical feed systems and the
pumping equipment required for the clearwell. The
building will house the new chlorination
equipment, which will allow immediate contact
following the filters and prior to the clearwell.
The liquid fluoridation system will replace the
current dry system. The sodium hydroxide chemical
feed system will be installed to control PH. The
pumps to be housed include two backwash pumps and
two lift pumps to lift the water into the
clearwell.
C. A mechanical mixer and mixing basin is designed at
the head of the plant to provide flash mixing of
alum and polymer with the raw water increasing the
sedimentation of turbidity in the water. The
mixing box, if turbidities are low, can allow
direct filtration with flash mixing.
d. Plant automation is being incorporated to provide
for adjustment of chemical feed rates, flow
control through the filters, and backwash of
the filters, adjustments to the operating
hydraulics, and the general operation of flow
controlling valves and alarm features. This will
upgrade all manual controls in the plant. The
plant can be operated manually if the automated
system shuts down.
e. Filter modifications being incorporated include
constant TBU monitors on the filter influent and
effluent, automatic filter backwash initiation,
filter to waste piping, and individual filter
metering (flow and head loss).
f. The concrete flocculation and sedimentation basins
will receive some structural modification, and the
discharge from the basin to the filters will be
changed to improve flow.
g. A second sludge/backwash basin will be added to
provide the City with a second pond for storing
backwash water and filter to waste flows from the
plant. The new basin will allow the plant to
alternate the operation, allowing the drying out
and cleaning of the other pond.
h. Plant basement area will be increased to house
necessary clearwell piping. In addition a small
storage and training room will be built over the
increased basement area. The current
lab./office/storage area will need to be cleared
to accomodate additional lab. stations and
computerize equipment.
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i. Emergency generator will be proposed to allow
minimal operation during electrical outage. The
plant normally experiences 2 or 3 outages each
year. If the reservoirs where down or low during
an outage the City may be restricted in fire
protection and/or normal consumption, without the
use of a generator.
j. The 4 MG Steel Reservoir is the existing reservoir
in use at this time. The outside and inside
ceiling has not been painted since the original
construction in 1968. The inside walls and floor
were repainted in 1983. Industrial standards
would recommend resurfacing every 5 to 10 years.
To correct any corrosive damage and to assure
additional use of this tank the entire structure
needs to be sandblasted and painted.
k. The 1.5 MG Concrete Reservoir-has not been in
service for a number of years. By resurfacing the
concrete walls and constructing a roof the
reservoir can be placed back into service, giving
us additional storage and the ability to take the
4 MG Reservoir out of service for maintenance and
resurfacing.
1. Correct restrictions in two water trunk lines.
Currently the City of Laurel has two 18-inch water
trunk lines transmitting water from the water
plant. Both trunk lines decrease in size at South
1st Ave. and South 4th Street, which causes
problems and concerns in transmitting water
throughout the City and in-maintaining the proper
level in the reservoir. The west trunk line is
reduced to an 8-inch water line as it traverses
through the south side residential area, and then
increases to a 12-inch at 5th Ave. and West Main
Str. The east trunk line is also reduced to an fl-
inch water line as it passes through the downtown
business area, and then increases is size at 1st
Str. and 1st Ave. The intent is to remove the
restriction of flow in both areas to increase fire
protection, allow reservoir volumes to be
transmitted evenly throughout the city, and
provide adequate peak flows when needed.
In summary, the Federal and State regulations continually
require increased quality in water treatment with no
financial assistance or guidance in obtaining funding for
the improvements. The City of Laurel has made minimal
improvements in the water treatment and distribution systems
over the years, to maintain one of the lowest water rates in
the state. The residents have benefited from the tight
budgets over the past years, however, the City of Laurel can
not continue that path and still meet State and Federal
mandates, increased fire protection needs, and operate a
system that is in need of repair and upgrading.
Enclosures:
Improvement cost sheet
Water Utility Cost of Service (Rate Analysis)
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WATER RATE INCREASE WOULD INCLUDE PROPOSED
IMPROVEMENTS TO THE LAUREL WATER TREATMENT
PLANT AND DISTRIBUTION SYSTEM
The primary modifications proposed are specifically designed
to meet the Federal contact disinfection requirement; assist
in the treatment of the plants peak capacity of 10 MGD;
automation of the plant to develop consistence in chemical
treatment; replace two primary water distribution trunk
lines, due to condition of existing lines, and to improve
fire protection throughout the city; and to paint and repair
the existing reservoirs, giving a needed capacity of 5.5 MG.
The following improvements are listed as follows:
Water Plant
Chlorine contact basin
(Federally Mandated)
Chemical feed
(Meet State requirements)
(PH Control -- corrosion)
(Consistency)
Sedimentation/Flocculation
(Structural Repairs)
Emergency Generator
(Provide fire protection)
Reservoirs
Renovate 1.5 MG Reservoir
(Alternate reservoir use)
(Operational/volume needs)
Paint 4 MG Steel Tank
(Paint - corrosion concerns)
Water Distribution Trunk Lines
Replace existing Trunk Lines
(Improve fire protection)
(Provide adequate summer flows)
Proposed total. Cost
Water Plant $ 2,758,135.00
Reservoirs 550,688.00
Water Trunk Lines 812,277.00
Total 4,121,000.00
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WATER UTILITY
COST OF SERVICE
RATE ANALYSIS
CITY OF LAUREL
FEBRUARY, 1997
N MORRISON
¦NN' MAIERLE, INC.
2020 GRAND AVENUE
BILLINGS, MT 59102
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TABLE OF CONTENTS
1. EXECUTIVE SUNIlVIARY ................................................. 1
1.1 Introduction .......................................................1
1.2 Study Findings and Recommendations .................................. 2
Tablet-1 ......................................................3
2. FINANCIAL PLAN ......................................................4
2.1 Operation and Maintenance Fund ....................................... 4
2.1.1 Current Revenue ............................................ 4
2.1.2 Revenue Requirements ....................................... 4
2.2 Capital Fund ......................................................4
2.2.1 Source of Funds ............................................ 4
2.2.2 Use of Funds ............................................... 5
2.3 Bond Reserve Fund ................................................. 5
2.4 Depreciation Fund ................................................... 5
3. RATE ANALYSIS ...........................:............ ...............5
3.1 Existing Revenues and Revenue Requirements ............. ............... 5
3. 1.1 Current Revenues/ Revenue Requirements ........ ............... 6
Table 3-1 ....................................... ............... 7
3.1.2 1996-1997 Revenue Requirements ............... ............... 9
3.2 Cost of Service Analysis .............................. ........ 9
3.2.1 Total Cost of Service .......................... ............... 9
Table 3-2 ....................................... ..............10
3.2.2 Allocation to Functional Cost Components ......... .............. 11
3.2.3 Distribution of Costs to Customer Classes ......... .............. 12
3.3 Design of Rates ............. . ....................... .............. 12
3.3.1 Existing Rates ............................... .............. 12
3.3.2 Cost of Service Water Rates ................... ............... 12
3.3.3 Typical Monthly Water Bills ................... ............... 13
0
4. STUDY RECOMMENDATIONS ............................................ 13
4.1 Council Adoption .................................................13
4.2 Biannual Update ..................................................13
Appendix ..................................................... 14
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A MORMON-XkMRLE.wc WATER UTILITY COST' OF SERVICE RATEANAL ISIS
0 1. EXECUTIVE SUMMARY
1.1 Introduction
The City of Laurel provides water service to a population of approximately 6,200 people served
by 2,450 meters. The City's water utility is expected to operate as a self-supporting utility.
A treatment plant located to the south of the City provides water treatment. The existing water
treatment facility is a conventional system consisting of coagulation, flocculation, sedimentation,
filtration, and disinfection of water from the Yellowstone River. Water is pumped from the river
intake structure to the water treatment plant using a combination of three low service pumps. In
addition to the three low service pumps which supply the water treatment plant, two other low
service pumps are used to pump water to the Cenex Refinery.
The low service pumps lift the water to a Parshall flume for flow measurement. From the
Parshall flume, water flows by gravity in a 24" pipe to a series of six flocculation basins. From
the basins, the water flows into two presedimentation basins, each is approximately 100' by 100'.
One of the basins is open while the other basin has a concrete cover. Water from the
presedimentation basins flows to two mixed media filters. Water collection in the filter
underdrain effluent channel is pumped to a 250,000 gallon head tank located outside the filter
building. Each filter has a dedicated transfer pump and control valve. The transfer pump
conveys water from the filters to the 250,000 gallon head tank. The plant currently has 5 high
service pumps that supply water to the distribution system and also provide the head required to
fill a 1.5 million gallon concrete reservoir and a 4 million gallon steel storage reservoir in the
distribution system.
The water treatment plant currently uses a liquid alum system for coagulation and flocculation.
A cationic polymer is also fed into the system to help in the flocculation process. Sodium
silicoflouride is added to help prevent dental caries. A settling pond located west of the
flocculation basins is used to store backwash water from the filters and sludge collected in the
flocculation basins and presedimentation basins.
The water distribution system consists primarily of PVC, asbestos cement, and cast iron pipe
varying in size from 6" to 18". There is a total of 32 miles of waterline and 223 fire hydrants in
the City of Laurel.
The water treatment facility is one of the greatest concern for the City of Laurel. It currently is
under mandate from the State of Montana to correct chlorine detention problems. A project has
been planned and a funding package proposed to improve the situation. In general, the project
will consist of construction of a new concrete clearwell, a new chemical feed building, a new
filter backwash pumping system, and a new sludge holding pond. Other plant improvements
include major piping renovations, repair of the flocculation and sedimentation basins, and
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.6 MORRISON-MAIERLE m WATER UTILITY COST OF SER PKE RA TE ANAL YSIS
converting the plant from manual operation to automatic. Also included are installation of
approximately 4,500 linear feet of 18" waterline, the repair to a 1.5 million gallon concrete water
storage reservoir, and the repainting of the existing 4 million gallon steel reservoir. The project,
scheduled for construction in 1997-98, will cost $4.1 million.
The water distribution system was constructed over the last 80 years. While it is. in good
condition, an ongoing rehabilitation program has been proposed to insure its continued service.
The same is proposed for water equipment that becomes worn out, obsolete, or inoperable.
The City of Laurel, recognizing the importance of financial planning, authorized Morrison-
Maierle, Inc. to perform a rate analysis. This is one step in a comprehensive study that includes:
(1) revenue and expense projections, (2) analysis of the cost of service to customer classes, and
(3) design of rates.
1.2 Study Findings and Recommendations
The primary findings and recommendations of the water study are as follows:
(1) Revenue under existing rates is inadequate to meet projected revenue
requirements.
(2) A comprehensive $4.1 million, one-time project and capital improvement
program are projected.
(3) Based on a existing information, a schedule of proposed rates has been developed
and is shown in Table 1-1 (Proposed New Water Rates).
(4) The proposed rates have been developed from data compiled for fiscal year 1996-
97. The rates should be approved by the city council in March, 1997 for
implementation immediately.
(5) A comprehensive operations study financial plan should be completed for the
water utility.
(6) A biannual review of the water rates should be conducted to insure that adequate
revenues are being generated.
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2
Table. 1 - 1
proposed Water Rates
--------------------
General service - metered
-------------------------
R-
Monthly service charge:
3/4-inch meter - $ 19.60
1-inch meter - $ 24.50
1-1/4-inch meter - $ 36.26
1-1/2-inch meter - $ 49.00
2-inch meter - $ 70.40
3-inch meter - $ 147.00
4-inch meter - $ 245.00
10-inch meter - $1176.00
volume charge:
FirstOver 0 cubic feet used each month - $1.10 per 100 cubic feet
General service - unmetered
---------------------------
The unmetered customers will be billed $9.80 each month. s •
Co"-+
Schedule 12
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A MORMSON-MAIERLE m WATER UTILITY COST OFSERVICERATEAIVALYSIS
0 2. FINANCIAL PLAN
The City of Laurel chose to base this rate study on current practices rather than a new financial
plan. Based on this decision, the financial plan is summarized by category in the below sections.
These sections discuss both current and projected levels of revenues and expenditures.
2.1 Operation and Maintenance Fund
2.1.1 Current Revenue
The water fund currently generates $674,254 annually. Nearly all of this is from user fees. The
study assumes that the water fund carries its appropriate share of personnel, equipment, internal
charges, and other expenses. In. addition, it is assumed that it carries its fair burden of any major
capital improvements.
2.1.2 Revenue Requirements
The revenue requirements identified are based on an assessment of water needs as well as
including the internal costs. The 1994 Water Master Plan identified expenses associated with the
new treatment facility including power, personnel, and liner replacement. The City does not
have any current debt obligation so all debt service will be for new projects.
2.2 Capital Fund
A capital improvement financing plan is necessary to construct projects as identified by the City
of Laurel. $98,150 in ongoing revenue is generated by the proposed rate structure. An
additional $101,800 will be generated once the debt service reserve is funded and in place.
2.2.1 Source of Funds
Capital project needs can be met by a number of sources.
a. Funds on Hand.
b. Transfers from operating Fund.
c. Bond Proceeds.
d. Grants.
e. Interest Income.
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A MORRISON-MAIERLE m WATER UTILITY COST OFSERWCERATEANAL YSIS
0 2.2.2 Use of Funds
a. Major Capital Improvements. $4.1 million is needed to construct a new water
treatment facility. The City of Laurel also identifies an ongoing water rehabilitation program.
b. Bond Reserve Fund Requirements. Bond covenants require a reserve of 25 percent of
the annual debt service payment. This is projected to total $101,800.
c. Capital Financing Issuance Expense. Issuance expenses for bond sales are projected to
be $35,000. (Reference: D.A. Davidson & Co. Memorandum authored by Aaron Rudio- "City of
Laurel Preliminary Sizing and Debt Service Estimates - Bond Financing")
2.3 Bond Reserve Fund
As a condition of issuing revenue bonds, a bond reserve fund must be established and
maintained. This money provides security to the bondholders. It cannot be spent during the life
of the bond. Interest income on reserves, when not needed, can be transferred to the operating
fund.
2.4 Depreciation Fund
i A depreciation fund is used to generate revenues to systematically replace worn out or obsolete
items in the water utility. The objective is to set aside sufficient funds to replace items (ie. pipes,
hydrants, pumps, motors, equipment) on a scheduled basis (Appendix A - Plant in Service and
Depreciation Accrual).
3. RATE ANALYSIS
A cost of service rate analysis is intended to distribute the costs of providing utility service to
each customer class in accordance with their service requirements. Further, its goal is to develop
rates which produce revenues from each customer class equal to the costs incurred. This analysis
consists of three basic steps:
Step 1. Determination of revenues and revenue requirements
Step 2. Cost of service analysis
Step 3. Cost of service rate design
3.1 Existing Revenues and Revenue Requirements
As previously mentioned, existing water revenues are inadequate to pay for needed capital
projects and ongoing operating expenses.
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A MORRISON-MAIERLE,=
WATER UTILITY COST OFSERVICE RATEANA,LYSIS
9 3.1.1 Current Revenues/ Revenue Requirements
Table 3-1 (Comparative Income and Expense) summarizes the revenue and expense data.
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Table 3-1
Schedule 2
(1 of 2)
Comparative Income And Expenses
-------------------------------
Estimated
Test Year
1996
Total operating revenues $749,235
OPERATING EXPENSES
SOURCE OF SUPPLY EXPENSES
Operation supervision & eng. $3,000
Operation labor & exp. 44,498
Miscellaneous exp. 2,000
Maint. supervision & eng. 2,225
PUMPING EXPENSES
Operation supervision & eng. 3,000
Fuel, power purchased for pump 66,500
Pumping labor & exp. 44,495
Miscellaneous exp. 7,868
Maint. supervision & eng. 2,225
Maint. structure & improvement 500
Maint. of pumping equipment 23,000
WATER TREATMENT EXPENSES
Operation supervision & eng.: 3,000
Chemicals 25,000
Operation labor & exp. 88,997
Miscellaneous exp. 21,760
Maint. supervision & eng. 2,225
Maint. structure & improvement 50,000
Maint. water treatment equip. 4,000
TRANSMISSION AND DISTRIBUTION EXPENSES
Storage facilities exp. 700
Transmiss & distrib lines exp. 20,000
Meter exp. 11000
Customer installations exp. 15.596
Operations supervision & eng. 5.225
Miscellaneous exp. 19.942
Maint. transmiss & distri main 47.500
Maint. of services 20,000
Maint. of meters 14.000
Maint. of hydrants 14.000
Maint. supervision & eng. 5,225
(continue on next page)
Table 3 -1 (cont.)
Comparative Income And Expenses
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(continue)
Estimated
Test Year
1996
CUSTOMER ACCOUNTS EXPENSES $5,225
Supervision 16,896
Meter reading exp.
record & ,collect exp. 19,430
•500
Customer
Uncollectible accounts 150
Miscel. customer accounts exp.
ADMINISTRATIVE AND GENERAL EXPENSES 17,672
Administrat & general salaries 28,519
Office supplies & exp.
Outside service employed 8,000
;3,18,8
property insurance
Employee pensions & benefits 880
141 141,,200 40
7,2
Annual debt service 00
10
Debt service reserve 50,000
Miscellaneous general exP. 30,450
Transportation expenses
Total operation & maintenance expenses $1,399,391
98,150
Depreciation expense i
Amortization expense 1
Taxes
X1,496,543
Total operating expenses
-$747,308
Net operating income
Schedule 2
(2 of 2)
A MORRISON-MAIERLE de WATER UTILITY COST OF SERVICE RATE ANALYSIS
0 a. User Charge Revenue. Current user charge revenue totals $658,854.
b. Interest Income. Interest income earned on all funds available to the utility is
estimated to be $13,000.
c. Miscellaneous Revenue. This revenue, estimated from proposed System Development
charges, equipment rental, hydrant charges, and other miscellaneous income, totals $26,222.
d. Raw Water Sales. The rate for the sale of raw water is doubled and estimated to
generate $122,319.
3.1.2 1996-1997 Revenue Requirements
a. Operation and Maintenance Expense. Operating expenses are based on 1996-1997
budget figures.
b. Bond Debt Service. Future annual bond debt service is estimated to be $407,200.
This is anticipated to fund $4.1 million for 20 years at 6.0%.
c. Cash Financed Capital Improvements. This level of cash financed improvements is
approximately equal to 25 percent of future debt plus depreciation accrual.
IS 3.2 Cost of Service Analysis
3.2.1 Total Cost of Service
The total cost of service equals $1,335,003. This total cost equals the total revenue requirements
less interest income, miscellaneous revenue, and raw water sales. (Table 3-2, Comparison of
Present Revenue, Revenue Required, and Proposed Revenue from Customers).
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Table 3-2
Schedule 13
9
-------Comparison of Present Revenue, Revenue Required and Proposed Revenue-from Customers
----- ---------------------------------
Commercial
Industrial
Public authority
public fire-protection
Total
present Revenue
---------------
$365,105
25,451
177,198
17,567
0
$585,321
Revenue Required
----------------
$683,507
66,408
340.213
35,728
207,067
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$1,335,003
Proposed Revenue
----------------
$925,901
80,855
289,288
40 ¦388
X1,336,432.
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A MORR1sON-MAIERLG,pr_
W, ITF.R UTILITYCOST OFSF.RI WE 91TF, ANA YSlS
3.2.2 Allocation to Functional Cost Components
The cost of service analysis allocates the revenue requirements to functional cost components.
a. Functional Cost Components- Table 3-3 graphically depicts the relationship between
revenue requirements, functional allocation, and customer allocation.
Table 3-3
100%
80%
60%
40%
20%
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Max Day Storage
Distribution Base
Eq. Meter Billing
Fire
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O&M Dep Res. Comm Ind PA Fire
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A0 MORMSON-KNERLE,wc. WATER UTILITY COST OFSERVICERATEANALYSIS
b. Allocation of Cost. The total cost of service is allocated to cost components as shown
in Table 3-3.
3.2.3 Distribution of Costs to Customer Classes
Historically, water customers have been separated into five classes in Laurel. The rates,
however, have been the same for all classes.
a. Units of Service. The units of service for the classes have been broken into 100 cu. ft.
units. Historical data was used to estimate units of service.
b. Customer Class Costs of Service. Customer class costs of service are not utilized.
3.3 Design of Rates
The primary consideration in designing rate schedules is to establish rates to customers that are
reasonably close to the cost of providing water service. Practicality, however, dictates that
grouping of costs and customers be done.
3.3.1 Existing Rates
The schedule of existing rates is shown below. As previously mentioned these rates are
obsolete, and do not reflect the actual cost of service or any needed capital improvements.
All Customer Classes $4.36/mo
$0.72/100 cu. ft.
Raw Water $0.17/1000g
3.3.2 Cost of Service Water Rates (1996-1997)
The cost of service allocations described in previous sections of this report provide the basis for
designing water rates. The allocations are an attempt to fairly recover the cost of service as well
as provide the total revenue required.
The base charge is designed to recover fixed costs related to meter reading, billing and collection,
and debt service. The volume charge is designed to recover variable costs associated with the
source, treatment, and distribution of water volume.
This study considered a number of variables in determining the rate structure. The proposed rate
structure is one that, following national trends, keeps the rate structure simple and easy to
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Al MORRISON-MAMRLE,cre WATER UTILITY COST OFSERMERATEANALMrS
understand and implement.
3.3.3 Typical Monthly Water Bills
A few examples of typical residential monthly bills produced by the new rates is shown below.
On the average, a residence is billed for 800 cu.ft. of water each month.
TYPICAL RESIDENTIAL_MONTHLY_ BILLS
BILLED METER SIZE AVERAGE
VOLUME, CU.FT. INCHES BILL, $
300 3/4 $22.90
500 3/4 $25.10
800 3/4 $28.40
1100 3/4 $31.70
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4. STUDY RECOMMENDATIONS
4.1 Council Adoption
The cost of service rates should be adopted by the City and implemented as soon as possible.
These rates will equitably recover the costs of providing service and will insure revenues that are
adequate to operate the utility.
4.2 Biannual Update
The utility's financial plan and rates should be updated biannually to reflect current estimates of
revenues, operating expenses, capital improvement costs, and financing requirements. These
reviews will help with planning ahead and avoiding any financial dilemmas.
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Appendix A
Schedule 5
Plant In Service And Depreciation Accrual For The Test Year 1996
----------------------------------------------------------------
Normal Add- Depreciable 1996
12/31/1995 Major ition Minus Balance Test Balance Test Deprec Depreciation
Plant Accounts
------------------------------ ---------- Balance
------------- Addition Retirement
----------- ----------- Year 1996
------------- Year 1996
----------- rate-t
------ Accrual
-----------
SOURCE OF SUPPLY PLANT
Lake. river, and other intakes $500,000 $500,000 $500,000 1.00 $5,000
Supply mains 500,000 500,000 500,000 1.00 5,000
WATER TREATMENT PLANT
Land and land rights 11000,000 1,000,000 1.000,000 0.00
Structure and improvements 1.500,000 $2.360,000 3,880,000 39880,000 1.00 38,800
Water treatment equipment 500,000 500,000 500.000 1.33 6.650
TRANSMISSION AND DISTRIBUTION PLANT
Distrib reservoir 6 standpipes 1,500,000 470,000 1,970.000 1,970.000 1.00 19.700
Transmission 3 distributi main 1,800,000 700,000 2,500,000 2,500,000 0.67 16,750
Meters 225.000• 225.000 225,000 1.00 2,250
Hydrants 225,000 225,000 225.000 1.00 2,250
GENERAL PLANT
Transportation equipment 50,000 50,000 50,000 0.00
Tools, shop & garage equipment 50,000 50.000 50.000 1.50 750
Miscellaneous equipment 100.000 100.000 100,000 1.00 1,000
Total utility plant in service $7,950,000 $3,550,000 $11.500,000 $11,500.000 $98.150
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