1. City of Petersburg Water and Sewer Rates April 26, 2011

2. Background Water and sewer rates were last revised in July 2007.
In 2007, the rate structure was revised and simplified.
Analysis of FY2011 revenue and expenses and FY2012 budget indicates rate increase is needed.

3. Overview of FY 2012 - 2016 Projections (using Current Rates)
WATER
Projected Operating Revenue
$ 2,737,915
$ 2,745,601
$ ,762,287
$ ,778,973
$ ,795,659
Projected Operating Expense (including debt service)
2,837,036
2,939,847
2,989,036
3,044,976
3,076,915
Net Income (Deficit)
$ (99,121)
$ (194,246)
$ (226,749)
$ (266,003)
$ (281,256)
% Increase in Revenue Needed to Eliminate Deficit
4.2%
8.2%
9.5%
11.1%
11.6%
SEWER
$ 4,489,628
$ 4,518,581
$ ,550,285
$ ,581,988
$ ,613,692
$ 4,784,337
$ ,907,005
$ ,975,341
$ ,087,441
$ ,096,614
$ (294,709)
$ (388,424)
$ (425,056)
$ (505,453)
$ (482,923)
7.0%
9.2%
10.0%
11.8%
11.2%

4. Water Purchases –

5. Factors Influencing Rate Increase
Rates adopted in 2007
Overall, operating costs have increased over past four years
Cost to purchase water, distribute water
Cost of wastewater collection and treatment
Operating deficits in both water and sewer operations in FY 2011
Proposed rates will likely need to be adjusted upward in subsequent years

6. Proposed Increases for FY 2012
Water Rate Increase – 5.0%
Sewer Rate Increase %
Proposed Increases Provide Revenues that Cover Projected Expenses

7. Current and Proposed Water / Sewer Rates and Fees (Bi-Monthly)
Current Rates and Fees
Proposed Rates and Fees
Commodity Charges
Water
($ / CCF)
Sewer
( % /CCF)
0 to 6 CCF
$0.300
$0.570
$0.320
$0.610
7 – 250 CCF
$1.290
$2.451
$1.350
$2.630
Over 250 CCF
$0.825
$1.5675
$0.870
$1.6800
Capacity Charges
Meter Size
Residential
$9.00
$17.10
$9.45
$18.34
Non-Residential
5/8
$18.35 1
$22.50
$42.75
$23.65
$45.85
1.50
$39.40
$74.85
$41.35
$80.30 2
$72.00
$136.80
$75.60
$146.70 3
$144.00
$277.60
$151.20
$297.75 4
$225.00
$427.50
$236.25
$458.50 6
$450.00
$855.00
$472.50
$917.00 8
$900.00
$1,710.00
$945.00
$1,834.00 10
$1,395.00
$2,650.50
$1,464.75
$2,842.70 12
$1,800.00
$3,420.00
$1,890.00
$3,667.95

8. Impacts on Bi-Monthly Bill – Residential
Consumption (CCF)
Current Water
Current Sewer
Total Current Bi-Monthly Bill
Proposed Water
Proposed Sewer
Total Proposed Bi-Monthly Bill
$ Increase
% Increase
$9.00
$17.10
$26.10
$9.45
$18.34
$27.79
$1.69
6.47% 1
$9.30
$17.67
$26.97
$9.77
$18.95
$28.72
$1.75
6.49% 2
$9.60
$18.24
$27.84
$10.09
$19.56
$29.65
$1.81
6.50% 3
$9.90
$18.81
$28.71
$10.41
$20.17
$30.58
$1.87
6.51% 4
$10.20
$19.38
$29.58
$10.73
$20.78
$31.51
$1.93
6.52% 5
$10.50
$19.95
$30.45
$11.05
$21.39
$32.44
$1.99
6.53% 6
$10.80
$20.52
$31.32
$11.37
$22.00
$33.37
$2.05
6.54% 7
$12.09
$22.97
$35.06
$12.72
$24.63
$37.35
$2.29 8
$13.38
$25.42
$38.80
$14.07
$27.26
$41.33
$2.53 9
$14.67
$27.87
$42.54
$15.42
$29.89
$45.31
$2.77 10
$15.96
$30.32
$46.28
$16.77
$32.52
$49.29
$3.01 11
$17.25
$32.78
$50.03
$18.12
$35.15
$53.27
$3.24 12
$18.54
$35.23
$53.77
$19.47
$37.78
$57.25
$3.48
6.48% 13
$19.83
$37.68
$57.51
$20.82
$40.41
$61.23
$3.72 14
$21.12
$40.13
$61.25
$22.17
$43.04
$65.21
$3.96 15
$22.41
$42.58
$64.99
$23.52
$45.67
$69.19
$4.20
6.46% 16
$23.70
$45.03
$68.73
$24.87
$48.30
$73.17
$4.44 17
$24.99
$47.48
$72.47
$26.22
$50.93
$77.15
$4.68 18
$26.28
$49.93
$76.21
$27.57
$53.56
$81.13
$4.92
6.45% 19
$52.38
$79.95
$28.92
$56.19
$85.11
$5.16 20
$28.86
$54.83
$83.69
$30.27
$58.82
$89.09
$5.40

9. Comparison to Neighbors
Bi-Monthly Water and Sewer Charges - Residential Users
Based on Consumption of 12 CCF over 2 months
Locality
Water Charge
Sewer Charge
Total
Petersburg - Existing Rates $ $ $
Petersburg - Proposed Rates $ $ $
Chesterfield County $ $ $
Chesterfield County - Proposed $ $ $
Henrico County $ $ $
City of Richmond $ $ $
City of Richmond - Proposed $ $ $
Prince George $ $ $
Colonial Heights $ $ $
Average in Virginia $ $ $
12 ccf = 8,976 US Gallons

10. Future Increases
Incremental increases will likely be needed over next 5 years
Consider frequent, but small, rate adjustments
Improvements to wastewater treatment plant will impact sewer budget in next few years – exact impact not known
Assumption is that connection fees will generate revenue for much of CIP

11. Summary Comments Proposed increases are moderate
All customers receive the same % increase
Proposed rates are very reasonable when compared to neighbors’ rates
Very reasonable compared to rates in other areas of Virginia