1. Town of Wrentham DPW Water Department
FY 2020-FY2022
Water Rate Study
Findings and Recommendations
Presented By:
Douglas W. Gardner, President
Pioneer Consulting Group, Inc.

2. Water Enterprise Analysis Objectives (Completed)
Completed a full cost of service study
Determined equitable rates by customer
Prepared rate structures that fund 100% of expenses, debt & capital
Designed rates to strengthen the financial health of the enterprise fund
Water Enterprise Analysis Objectives (Completed)

3. Water Division Rate Study Findings
Water rates will not generate sufficient revenue to meet FY 20 expenses
$300,000 – Transmission & Distribution Line (FY 2021)
$245,000 – Water Meters, Radios & Fixed Network (FY 2022)
New debt will be driving the water rates in FY 2021 and beyond
Water Minimum charge should be implemented (guaranteed revenue)
Eliminate Consumption Range Based Assessment
Implement a per 1,000 Gallon Charge
Capital Assessment Charge is Inequitable
Fund through combination of retained earnings, new debt and rates
Must continue to fund capital improvements to improve the systems
Proposed rates will fund 100% of water budget
Certified Free Cash 4/30/2019 +/- $900,000
Continue to build reserves
Water Division Rate Study Findings

6. Water Meters Water Meters are your Cash Register!
Most meters are at least 15 years old
Meters slow down as they age
Result: Higher revenue, accurate readings
Quarterly readings

7. Fire Protection Public Fire Protection Hydrants
Cost built into the rates
Private Fire Protection
Dedicated line off main
Unmetered
Readiness to serve charge
Mainly commercial customers (117 connections)

9. Why Are Water Rates Increasing?
Operating costs continue to rise
Debt Service is increasing in FY 2021 and beyond
Water reserves are being slowly depleted
Must fund capital improvements
Water - FY $836,000 (funded by reserves)
Rates should have been raised in prior years

10. Base Charge
Base Charge is designed to recover ongoing costs regardless of flow (costs include meters, meter reading, personnel costs, portion of debt, indirect costs, etc.)
Base charge should increase as meter size increases
Most communities have a base charge
(WWD base charge was eliminated in FY 2012)
Guaranteed revenue

11. Average customer uses 45,000 gallons every 6 months
Water Consumption

12. Metered Consumption Rates
Present: 2 step increasing block rate
Recommend: 3 Step Increasing rate
Lower initial rate
Benefit elderly consumers
Higher 2nd & 3rd Step
Metered Consumption Rates

13. Capital Assessment Charge
Present range based charge is inequitable
Recommended: Per 1,000 gallon charge
Based on project cost
Likely decrease each year until maturity
Charge is eliminated when debt is paid off

15. Average Residential Customer
45,000 gallons every 6 Months
Current Bill: $286.20
Proposed Rates: $344.65
Semi-Annual Increase $58.45
Yearly Increase $ $9.75/month
Average Residential Customer

17. What does a gallon of Wrentham Water Cost?
Less than $0.01
cent

18. Recommendations Implement FY 2020 Rates Beginning July 1, 2019
Continue to build reserves to offset future capital costs