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Improving Service—Investing in Infrastructure

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Improving Service—Investing in Infrastructure. 777 North Capitol Street, NE 1 st Floor Wednesday, June 13, 2007 6:30pm – 9:00pm. WASA—Providing Essential Services 24 Hours a Day. Water treatment provided by the Washington Aqueduct. Potomac River. Distribution System. - PowerPoint PPT Presentation
40
1 Improving Service—Investing in Infrastructure 777 North Capitol Street, NE 1 st Floor Wednesday, June 13, 2007 6:30pm – 9:00pm
Transcript
Water and Sewer Infrastructure Investment In The Nation’s Capital1st Floor
Distribution System
Wastewater Collection System
WASA is one of the largest
water and sewer utility on the East Coast
Retail water and sewer services
to 580,000 in the District
Water is purchased wholesale from the U.S. Army Corps of Engineers Washington Aqueduct
WASA provides wholesale wastewater treatment services
to 1.6 million in counties in
Virginia and Maryland
for use of facilities/services
Delivers estimated 87 million
to the District
36,000 valves; five pump
Treatment Plant treats 370 mgd.
from the District and Montgomery, Prince George’s, Fairfax and Loudoun counties
1,800 miles of sewer lines;
nine wastewater and 16 stormwater pumping stations—in the District of Columbia
Historic underinvestment in District water and sewer infrastructure
*
and Sewer Authority
Created in 1996 as an independent agency of District government (by the District and Congress)
Board of Directors—
11 principal members
rate-setting authority)
Board has adopted a policy of gradual
and predictable rate increases
*
Over 1,500 authorized positions
Lost revenue due to inaccurate readings
Now—2007
AA- bond rating
Authorized positions reduced to 1,128 (26% decrease)
Overtime reduced to 7% of total payroll
Automated Meter Reading (AMR); real-time,
accurate readings
Then—1996-7
42% rate increase in FY 1997 after 10 years of none
Less than 50% of fleet operable
Over 15% meter readings estimates
Customers had to mail requests for service/transfers
Now—2007
Rate stabilization fund established to mitigate rate shock -$58.5 million current balance will be utilized through FY 2012.
95% fleet vehicles operable; WASA listed in Fleet Equipment Magazine’s Top 100
Consolidated Call Center and Voice Recognition Technology
*
Budgets held steady from FY 1998 – 2005.
*
FY 2008 Operating Budget continued
WASA is the largest single source electricity user in the District
Electricity cost is a large portion of WASA’s budget
Electricity expenditures have doubled since FY 1998 – 2008 from $14.6 mil to $29.5 mil.
Historical Electricity Expenditures
WASA uses a large amount of chemicals for its processing
Chemical expenditures have almost triple since FY 1998 – 2008 from $7.2mil to $19.7mil.
Historical Chemical Expenditures
FY 2007 - $304.4 m
FY 2008 - $332.8 m
$20.7 million or 34% of increase is for increased debt service costs for WASA’s capital program
$6.6 million and $1.1 million or 3% and 6% are for increases in O&M and PILOT/ROW costs respectively
Chart1
232279
6596
0.0292268359
81938
20735
0.3387905822
18569
1055
0.0602375243
$ (251,093)
PILOT/ROW, $18.6 million, 6%
Sheet3
FY 2007 - $305.0 m
FY 2008 - $336.4 m
$15.3 million projected increase in use of RSF; planned use of:
$2.5 million in FY 2007
$17.8 million in FY 2008
$13.7 million projected increase in retail revenues
from proposed rate increase of 7.5%
$1.5 million increase in wholesale revenues – tied to projected increase in joint use facilities
$0.9 million in projected fees and other revenues increase
Chart2
Retail Revenues $218.9million 65%
218876
6596
0.0292268359
57245
20735
0.3387905822
42434
1055
0.0602375243
17800
$ (251,093)
Fees & Other Revenues, $42.4 million, 13%
Wholesale Revenues, $57.2 million, 17%
Sheet3
The Rate-Making Process
Annual, detailed review of the capital (construction) and operating budgets to determine funding needs and revenue projections
The District members of the Board receive a staff recommendation for rate adjustment based on revenue requirements
The Board (DC members) proposes new
rates—January
Rates posted in DC Register—February
Public meetings held—February–May
Public hearing held—June
Rates become effective—October
Current Rate Proposal
To maintain and improve the water and sewer infrastructure, WASA’s Board is considering the following rate actions, effective October 1, 2007:
A 7.5 percent water and sewer
rate increase
Sewer services—$3.06/Ccf to $3.29/Ccf
*
Why a Rate Increase is Needed
primarily the increasing debt service cost for WASA’s $2.2 billion ten-year capital program (CIP)
Debt service cost projected to increase on average by 14.3 percent annually
Operations and maintenance costs have remained flat since 1998 and will increase on average by 3.5 percent annually (or less than CPI).
WASA’S proposed rate increase will fund projected increases in operating expense:
ds_cht_2041
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
2019
2019
2020
2020
2021
2021
2022
2022
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2029
2029
2030
2030
2031
2031
2032
2032
2033
2033
2034
2034
2035
2035
2036
2036
2037
2037
2038
2038
2039
2039
2040
2040
2041
2041
2042
2042
2043
2043
2044
2044
&C&10VI - 10
Outstanding Debt Service
Proposed Debt Service
OUTSTANDING & PROPOSED DEBT SERVICE FY 2006 - 2044 Based on FY 2006 - 2015 Financial Plan
45988146.2884
0
51910947.2884
6746753
51274634.2884
23098150
49910203.2884
44376400
51279149.2884
54027425
51209029.2884
61784950
51085979.2884
74011850
51089295.2884
88094100
51047673.2884
104329725
50954682.2884
119585025
50911686.2884
119572600
50814649.2884
119556750
50725000.2884
119546575
50602904.2884
119535375
50634275.2884
119521450
50455724.2884
119507775
50418051.2884
119486525
50329204.2884
119480200
51578854.2884
119463875
50227908.2884
119438950
50106283.7884
119426175
49977881.1584
119399350
49794148.4384
119377950
49621661.8084
119360000
49421587.0284
119342550
49046736.58
119317175
48812173.54
119284825
48577611.68
119255975
48322726.2
119224000
669171.23
119192125
669171.23
119166650
669171.23
97384625
669171.23
97382225
669171.23
79622850
669171.23
69962050
669172.19
62193575
0
49958951
35866602
19620453
Operating Expenditures
Debt Service
DEBT SERVICE AS PERCENTAGE OF TOTAL OPERATING EXPENDITURES FY 2006 - 2015 (In $000's)
35%
34%
32%
30%
29%
17%
19%
22%
28%
26%
230406
45988.1462884
249947
58657.7002884
259248
74372.7842884
265699.299
94286.6032884
272221.133
105306.5742884
277329.609
112993.9792884
287024.189
125097.8292884
297035.339
139183.3952884
301377.73
155377.3982884
311185.523
170539.7072884
ds_cht_10
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
2013
2014
2014
2015
2015
45988.1462884
0
51910.9472884
6746.753
51274.6342884
23098.15
49910.2032884
44376.4
51279.1492884
54027.425
51209.0292884
61784.95
51085.9792884
74011.85
51089.2952884
88094.1
51047.6732884
104329.725
50954.6822884
119585.025
230406
45988.1462884
249947
58657.7002884
259248
74372.7842884
265699.299
94286.6032884
272221.133
105306.5742884
277329.609
112993.9792884
287024.189
125097.8292884
297035.339
139183.3952884
301377.73
155377.3982884
311185.523
170539.7072884
out_prop_ds
TOTAL
TOTAL
OPERATING
TOTAL
PROPOSED
PROPOSED &
2002 based on b/f comm proj as of sept 02
2006 based on b/f comm projections presented in sept 06- except d/s
2007 & 2008 based on revised & proposed budget
2009 - 2015 based on final 10 year plan
everything includes transfer to capital - just so numbers match total operating budget adopted by board
- kept capital transfer at $8.4 mm annually - doesn't inflate by projected salary increase per year
&L&"Arial,Italic"&8&D &T&R&"Arial,Italic"&8&F &A
level ds
AS OF SEPTEMBER 30, 2006
SENIOR LIEN
U.S. TREASURY
OUTSTANDING
1999
14,892,250.00
600,807.10
25,754,631.99
805,191.29
901,802.00
42,954,682.38
42,954,682.38
2000
14,892,250.00
240,171.00
14,580,927.87
805,191.29
657,419.00
31,175,959.16
31,175,959.16
2001
14,892,250.00
76,193.00
16,839,946.79
805,191.29
- 0
32,613,581.08
- 0
32,613,581.08
2001
0.0461131577
2002
14,892,250
1,100,822
17,554,049
805,191
470,487
34,822,799
34,822,799
2002
0.0677392098
2003
14,892,250
1,210,004
1,670,235
18,093,584
805,191
212,544
36,883,809
36,883,809
2003
0.0591856296
2004
14,880,000
8,889,825
1,289,000
19,034,357
805,191
62,598
44,960,971
- 0
44,960,971
2004
0.2189893888
2005
14,892,250
8,889,825
6,242,012
15,180,402
805,191
62,046
46,071,726
- 0
46,071,726
2005
0.0247048711
2006
14,892,250
8,889,825
12,748,179
8,600,272
805,191
52,429
45,988,146
- 0
45,988,146
2006
-0.0018141278
2007
23,367,250
8,889,825
12,748,212
6,048,302
805,191
52,167
51,910,947
6,746,753
58,657,700
2007
0.2754960794
2008
23,366,125
8,889,825
12,807,589
5,354,681
805,191
51,223
51,274,634
23,098,150
74,372,784
2008
0.2679116966
2009
23,369,425
8,889,825
12,748,179
4,046,611
805,191
50,972
49,910,203
44,376,400
94,286,603
0.1197907381
2010
23,370,500
8,889,825
16,785,440
1,380,055
805,191
48,138
51,279,149
54,027,425
105,306,574
2011
23,367,975
8,889,825
17,805,719
292,514
805,191
47,805
51,209,029
61,784,950
112,993,979
2012
23,370,475
8,889,825
17,973,005
805,191
47,483
51,085,979
74,011,850
125,097,829
2013
23,366,075
8,889,825
17,983,182
805,191
45,022
51,089,295
88,094,100
139,183,395
2014
23,369,975
8,889,825
17,959,443
805,191
23,239
51,047,673
104,329,725
155,377,398
2015
23,371,575
8,889,825
17,888,091
805,191
50,954,682
119,585,025
170,539,707
2016
23,368,475
8,889,825
17,848,195
805,191
50,911,686
119,572,600
170,484,286
2017
23,363,275
8,889,825
17,756,358
805,191
50,814,649
119,556,750
170,371,399
2018
23,367,025
8,889,825
17,662,959
805,191
50,725,000
119,546,575
170,271,575
2019
23,365,950
8,889,825
17,541,938
805,191
50,602,904
119,535,375
170,138,279
2020
23,367,850
8,889,825
17,571,409
805,191
50,634,275
119,521,450
170,155,725
2021
23,364,975
8,889,825
17,395,733
805,191
50,455,724
119,507,775
169,963,499
2022
23,364,850
8,889,825
17,358,185
805,191
50,418,051
119,486,525
169,904,576
2023
23,369,450
8,889,825
17,264,738
805,191
50,329,204
119,480,200
169,809,404
2024
8,110,475
33,889,825
8,773,363
805,191
51,578,854
119,463,875
171,042,729
2025
8,114,200
21,338,575
19,969,942
805,191
50,227,908
119,438,950
169,666,858
2026
8,113,950
21,234,913
19,952,230
805,191
50,106,284
119,426,175
169,532,459
2027
8,113,900
18,355,500
22,703,290
805,191
49,977,881
119,399,350
169,377,231
2028
8,112,950
18,356,250
22,519,757
805,191
49,794,148
119,377,950
169,172,098
2029
22,681,500
26,134,971
805,191
49,621,662
119,360,000
168,981,662
2030
22,681,000
25,935,396
805,191
49,421,587
119,342,550
168,764,137
2031
22,678,000
25,699,565
669,171
49,046,737
119,317,175
168,363,912
2032
22,678,500
25,464,502
669,171
48,812,174
119,284,825
168,096,999
2033
22,680,000
25,228,440
669,171
48,577,612
119,255,975
167,833,587
2034
47,653,555
669,171
48,322,726
119,224,000
167,546,726
2035
669,171
669,171
119,192,125
119,861,296
2036
669,171
669,171
119,166,650
119,835,821
2037
669,171
669,171
97,384,625
98,053,796
2038
669,171
669,171
97,382,225
98,051,396
2039
669,171
669,171
79,622,850
80,292,021
2040
669,171
669,171
69,962,050
70,631,221
2041
669,172
669,172
62,193,575
62,862,747
2042
- 0
- 0
49,958,951
49,958,951
2043
35,866,602
35,866,602
2044
19,620,453
19,620,453
2045
TOTAL
467,601,200
- 0
395,480,738
574,123,577
- 0
40,902,837
28,295,858
480,524
1,506,884,734
3,595,502,559
5,102,387,293
Note: Numbers shown as presented in ten-year plan. Series 2004 debt service (auction rate securities) assumes 4% annual interest rate, not higher rate assumed for appropriations purposes.
&C&10II - &P
Michelle G. Cowan: Based on actual amount of accrued int on wad treas notes prior to prepmt of outstanding 99 notes
Michelle G. Cowan: based on actuals
Michelle Cowan: based on actual cash - less than master schedules and reflecting true-up of 00 vari rate d/s and fiscal costs
DCWASA: from bob's ars report - interest payments since beg of year
SUMMARY
Series 2005
Dated Date
Series 2006
Dated Date
Series 2007
Dated Date
Series 2008
Dated Date
Series 2009
Dated Date
Series 2010
Dated Date
Series 2011
Dated Date
Series 2012
Dated Date
Series 2013
Dated Date
Series 2014
Dated Date
Series 2015
Dated Date
Replace aging infrastructure–improve reliability and service quality
Meet regulatory requirements
Environmental stewardship–help clean up the Anacostia and Potomac rivers and
Rock Creek
Chart1
Sanitary Sewer
Stormwater
Water
Stormwater 0.8%
Water 30.1%
Capital Equipment 4.4%
Washington Aqueduct 7.2%
585,524
559,946
Stormwater
18,040
Water
663,045
Sheet1
Sanitary Sewer
Stormwater
Water
Sanitary Sewer $121,795 6%
Stormwater $18,040 1%
Water $663,045 30%
FY 2006 – 2015 Capital Improvement Program Sources of Funds
Approximately 67% of CIP will come from bond issuance over next 10 years
Balance will come from:
25,210,820
1.1%
14352818
Data for pie cht
Based on final board-adopted ten year plan (Revised Plan dt. 1-19-07)
Revenue Bonds/Commercial Paper
1,488,836,726
proj new debt per ten year plan plus proceeds as of beginning of 2006
Wholesale Capital Payments
25,210,820
pie_cht
Pay-Go Financing (1)
Revenue /Bonds Commercial Paper $1.5million 67%
& EPA Grants CSO Appropriations $276.1million 13%
Interest Income on Bond Proceeds $25.2million 1%
Pay-Go Financing $57.2million 3%
99,324
137,879
212,124
$191,283
$225,929
$319,551
(1) Remaining Series 2004 bond proceeds will fund non-grant or IMA-funded capital spending requirements into the first quarter of FY 2007, based on current capital spending projections. WASA will then use its $100 million commercial paper program, with
(2) Pay-go financing is cash available after meeting the six month operating reserve requirement, which totals $111.9 million in FY 2007.
(3) Reflects spenddown of a portion of already-received FY 2003 - FY 2006 Congressional appropriations for the CSO LTCP.
&C&10VI - 3
Lead line replacement program
Digesters
Nitrification/Denitrification
Filtration
LTCP and Nine Minimum Control (NMC) projects
$159.0 million in Washington Aqueduct projects
Residuals disposal
and stormwater projects
Sewer system assessment
Pumping station improvements
*
Replacement of all known lead service lines in public space
Programs to encourage lead
service line replacement on
grant program
*
Potential Rates Impact of Eliminating the Lead Service Line Replacement (LSR) Program
Between FY 2008 – 2015 the authority plans to spend approximately $300 million for Lead Service line Replacements.
WASA’s board is considering the financial impact of continuing or modifying the program.
Elimination of the LSR program will lower projected rate increases by an estimated 6.9%* to 7.9%* over an eight year period (FY 2008 – 2015).
Modification of the LSR program with planned disbursements of $35 m – $50 m for LSR tied to water infrastructure improvement projects will lower projected rates increases by an estimated 6.6%* to 7.0%* over an eight year period (FY 2008 – 2015).
In order to accommodate the LSR program several water infrastructure projects were deferred and may need to be reconsidered if the LSR program is eliminated or modified.
*
Twenty year program totaling $1.9 billion ($2.2 billion including inflation)
Consent decree executed in March 2005
Facility planning & geotechnical work has begun
Projected to reduce 96% of combined sewer overflows
98% reduction on Anacostia
Low impact development projects
Nine Minimum Control (NMC) improvements (totaling $140 million) on track to be completed by 2008
NMC projects alone will reduce overflows by 40%
Received federal funding of about $98 million to date
Future additional federal funding anticipated but amounts unknown
$7m proposed in FY 2008 federal budget
*
To resolve water pressure issues east of the Anacostia.
*
and Completed Improvements*
*Does not include costs for work East of the Anacostia River associated with Lead Service Replacements, Small & Large Diameter Valve Replacements, improvements to WSSC Interconnec-tions, Joint Seal Installations, Elimination of Dead End Water Mains, Cross Connection Eliminations and some Small Diameter Water Main Replacements Project Locations.
Project
Completed
$3
Hydrant upgrade program to address mutual aid response in the District
2007 – 2012
$26.5
6,100 LF of 20” Water main Replacement with new 20” & 30” Mains – Minn. Ave from Penn Ave. to W St., SE
2006 – 2008
$5.1
5,300 LF of 20” Water main Replacement – MLK Ave. from Milwaukee Pl. to Upsal St., SE
Completed
$2.8
4,800 LF of new 24” Water main W Street from Fort Stanton Reservoir to MLK Avenue, SE
2006 – 2008
$6.7
3,600 LF of New 24” Water main from Anacostia Pumping Station to W Street, SE
2006 – 2007
2006 – 2008
3,500 LF of 12” Water main Replacement – Livingston Road, SE
Completed
$1.6
2006 – 2008
2009 – 2010
New Baseball District Improvements
Improvements required to water and sewer infrastructure around the new baseball district estimated at approximately $20 million
Cost of improvements would not be passed on to water and sewer customers
City is exploring the following options for financing these costs
Special assessment District
Projected Rate
Rate increases ranging from 8.0 to 9.5 percent thereafter.
worst case chart
All Requests
Projected Rate Increases Worst Case Scenario If all CIP & Department Requests Filled
0.05
0.05
0.06
0.055
0.065
0.105
0.075
0.115
0.075
0.09
0.075
0.08
0.08
0.08
0.08
0.07
0.065
0.07
recommended
Proposed Plan with Reductions
0.05
0.05
0.06
0.055
0.065
0.07
0.075
0.075
0.075
0.085
0.075
0.08
0.08
0.08
0.08
0.08
0.065
0.08
0.065
0.08
Chart2
With Lead Through 2014
rsf_chart
Water & Sewer rates will increase in FY 2008 by 7.5%
PILOT/ROW fee will increase in FY 2008 by 6.8%
Chart2
District Stormwater Rate
2.09
2.08
3.17
3.87
4.70
5.14
5.34
5.49
5.61
6.06
43.55
5.2%
4.9%
7.1%
8.1%
9.1%
9.2%
8.7%
8.2%
7.8%
7.8%
76.2%
3.00
3.50
3.67
3.92
4.27
4.66
5.08
5.53
6.03
6.57
7.17
0.58
0.58
1.48
1.18
0.58
0.58
0.58
0.58
0.58
0.58
0.58
$ 3.58
$ 4.08
$ 5.15
$ 5.10
$ 4.85
$ 5.24
$ 5.66
$ 6.11
$ 6.61
$ 7.15
$ 7.75
$ 43.82
$ 46.41
$ 49.56
$ 52.68
$ 56.31
$ 61.39
$ 66.95
$ 72.74
$ 78.73
$ 84.89
$ 91.53
2.59
3.15
3.12
3.63
5.08
5.56
5.79
5.99
6.15
6.65
47.71
4.04%
5.91%
6.79%
6.30%
6.88%
9.03%
9.06%
8.65%
8.24%
7.81%
7.83%
80.54%
100
0.7954
0.8455
0.9036
0.9852
1.0745
1.1674
1.2636
1.3623
1.4690
CCF, or 6,231 gallons
District Stormwater Rate
Dollars
Percentage
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
DCWASA Rate Analysis
3.67
0.58
0.58
4.25
48.66
2.25
4.8%
7.0%
$
(1) Assumes average monthly consumption of 8.33 Ccf, or 6,231 gallons.
Proposed
WASA Metering Fee 2.01 2.01
Subtotal WASA Rates & Charges 44.41$ 47.58$
Increase / Decrease 2.08$ 3.17$
Percent Increase 4.9%7.1%
District of Columbia Right of Way / PILOT Fee (1) 3.67$ 3.92$
District of Columbia Stormwater Fee 0.58 0.58
Subtotal District of Columbia Charges
4.25$ 4.50$
Increase / Decrease Over Prior Year 2.25$ 3.42$
Percent Increase in Monthly Bill 4.8%7.0%
Total Bill
Cost per Hundred Gallons 0.7810$ 0.8358$
(1) Assumes average monthly consumption of 8.33 Ccf, or 6,231 gallons.
MBD00139806.unknown
(Based on Sept. 2006 rates for other utilities)
District Charges
*
Impact of Allocating Some of the PILOT to WASA's Wholesale Customers
WASA’s board is considering the impact of allocating a portion of this bill to Wholesale customers (surrounding jurisdictions).
Since FY 1997 the District has assessed WASA a Payment In Lieu Of Taxes
The FY 2008 amount is $13.3 million
Currently this amount is included as a separate line item on the retail (DC) customer bill.
FY 2008 proposed rate for this fee is $0.47/Ccf
Using the current indirect cost allocation methodology.
An estimated 24% of total PILOT may be allocated to wholesale customers.
resulting in a projected rate reduction of approximately 14.25%* over the remaining eight years of the ten year plan.
*
*
Monthly billing
Budget billing
Customer Service Improvements
First utility in the country to provide customers with advance notice of possible leaks before the account bills using the High Use Notification Application (HUNA) developed and licensed by WASA.
First water utility in the country to implement a fixed network automated meter reading system to improve billing accuracy and also provide meter reading data and consumption trends to customers on the web.
*
month for water or about
$97 per year.
Serving People by
Lending A Supporting
in SPLASH grants in 2006.
Customers may contact the DC Energy Office at (202) 673-6750 to determine CAP eligibility
*
Contact WASA with your comments
E-mail at [email protected]
Fax WASA at (202) 787-2795
Mail to Board Secretary at 5000 Overlook Ave., SW, Washington, DC 20032
OPERATING BUDGET HISTORY
FY 2007FY 2008
WASA Retail Rates (1)
District of Columbia Right of Way / PILOT Fee (1)
District of Columbia Stormwater Fee
$ 3.67
.58
$ 3.92
.58
0.25
Subtotal District of Columbia Charges 4.25$ 4.50$ 0.25
(1) Assumes average monthly consumption of 8.33 Ccf, or 6,231 gallons.
8.5%
9.0%
9.5%
9.5%
8.5%
8.0%
8.0%
5.5%
7.5%
5.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012FY 2013FY 2014FY 2015
$52.08
0.00
10.00
20.00
30.00
40.00
50.00
60.00
District Right of Way / PILOT FeeDistrict Stormwater Rate
Debt Service
Operating ExpendituresDebt Service

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