1. Proposed Water & Sewer Rates FY2014 Department of Utilities & General Services April 1, 2013 1

2. Budget Challenges Our water supplier Chesterfield County is proposing increases to both the commodity and capacity fees (3.52% and 9.72% respectively). –This increased expense will add $8,900.00 to our operational budget. DEQ has increased requirements for effluent testing at both WWTPs. –This increased expense will add $6,100.00 to our operational budget. Department of Utilities & General Services 2

3. Budget Challenges Total minimum increase to the Utilities operational budget for FY2014 will be $15,000.00. Evaluated two options for raising user fees which would minimize the impact of these increased operational expenses. –Option 1: Mimic Chesterfield’s proposed increases; generates approximately $11,000. –Option 2: Pass the increased expenses proportionally to the appropriate users; generates approximately $15,000. Department of Utilities & General Services 3

4. Bi-Monthly User Charges The bi-monthly user charge consists of the following components: The commodity charge is the cost for the flow of water and/or wastewater; it is charged at a rate per 1,000 gallons of flow. The capacity charge is the minimum charge assessed based on the size of the connection to “reserve space” on the system; these funds are used to maintain the infrastructure already in place. Department of Utilities & General Services 4

5. Proposed Option 1 Increase both our commodity and capacity fees by the same percentages that Chesterfield has proposed raising the fees they charge their customers. Department of Utilities & General Services5

6. Commodity Charges – Proposed Option 1 Department of Utilities & General Services UtilityWater ($/1,000 gallons)Wastewater ($/1,000 gallons) Powhatan$2.87$4.52 Powhatan (Proposed)$2.97$4.68 Aqua Virginia (first 60,000 gallons)$3.71- Aqua Virginia (over 60,000 gallons)$3.00- Chesterfield (Proposed)$1.97$2.15 Goochland – Residential (Proposed)$5.50$6.02 Goochland – Commercial (Proposed)$7.71$11.56 Henrico (first 10,000 CCF)$3.48$3.69 Henrico (next 70,000 CCF)$2.37$2.63 Henrico (over 80,000 CCF)$1.71$2.37 Average (other systems)$3.68$4.78 6

7. Water Capacity Charges – Proposed Option 1 Water Meter Size Powhatan*PowhatanChesterfield^GoochlandHenrico* Average (other localities) 5/8”$21.63$23.73$12.64$25.00$11.35$16.33 3/4”$32.45$35.60---- 1”$54.08$59.33$31.60$50.00$26.80$36.13 1 1/2”$94.64$103.84$63.20$100.00$49.20$70.80 2”$173.04$189.86$101.12$135.00$75.65$103.92 3”$346.08$379.72$202.24$220.00$124.70$182.31 4”$540.75$593.31$315.99$400.00$200.35$305.45 6”$1,081.50$1,186.62$631.99$725.00$395.30$584.10 8”$1,730.40$1,898.59$1,011.18$1,325.00$757.50$1,031.23 Department of Utilities & General Services ^Approximate proposed rate*Locality’s current rates 7

8. Sewer Capacity Charges – Proposed Option 1 Water Meter Size Powhatan*PowhatanChesterfield*GoochlandHenrico* Average (other localities) 5/8”$27.26$29.91$23.04$37.50$22.85$27.80 3/4”$40.88$44.85---- 1”$68.13$74.76$57.60$55.00$37.80$50.13 1 1/2”$119.24$130.83$115.20$87.00$55.45$85.88 2”$218.03$239.23$184.32$126.00$80.05$130.12 3”$436.07$478.45$368.44$220.00$135.40$241.28 4”$681.35$747.57$576.00$360.00$214.10$383.37 6”$1,362.69$1,495.14$1,152.00$700.00$426.25$759.42 8”$2,180.30$2,392.23$1,843.20$1,225.00$729.65$1,265.95 Department of Utilities & General Services *Locality’s current rates (no changes for Chesterfield in FY2014) 8

9. Comparison of Bi-Monthly Rates – Option 1 Average Residential Bill $7.35 Increase (Approximately 6%) 5/8” connection – 10,000 gallons usage Service Powhatan (Existing) Powhatan (Proposed) ChesterfieldGoochlandHenrico* Average (other systems) Water$50.33$53.44$42.10$80.00$46.15$58.78 Sewer$72.46$76.70$56.70$96.20$59.75$70.88 Total$122.79$130.14$98.80$176.20$105.90$129.66 Department of Utilities & General Services Bi-monthly rates calculated using the following formula: [(# Gallons/1,000) x Commodity Charge] + Capacity Charge *Locality’s current rates 9

10. Option 1 Analysis ItemCurrentProposedAnticipated Increase Capacity Fees$67,497.72$74,056.33$6,558.61 Commodity Fees$128,016.86$132,523.06$4,506.19 Subtotal$195,514.58$206,579.39$11,064.80 Additional Cost of Purchased Water (rounded)$8,900.00 Additional Cost of Testing Requirements (rounded)$6,100.00 Subtotal$15,000.00 Net Loss$(3,935.20) Department of Utilities & General Services10

11. Proposed Option 2 Raise our water commodity fee proportionally across that customer base to cover the increased expense for purchasing water from Chesterfield. Raise our sewer commodity fee proportionally across that customer base to cover the increased expense for effluent testing. Department of Utilities & General Services 11

12. Commodity Charges – Proposed Option 2 Department of Utilities & General Services UtilityWater ($/1,000 gallons)Wastewater ($/1,000 gallons) Powhatan$2.87$4.52 Powhatan (Proposed)$3.44$4.84 Aqua Virginia (first 60,000 gallons)$3.71- Aqua Virginia (over 60,000 gallons)$3.00- Chesterfield (Proposed)$1.97$2.15 Goochland – Residential (Proposed)$5.50$6.02 Goochland – Commercial (Proposed)$7.71$11.56 Henrico (first 10,000 CCF)$3.48$3.69 Henrico (next 70,000 CCF)$2.37$2.63 Henrico (over 80,000 CCF)$1.71$2.37 Average (other systems)$3.68$4.78 12

13. Water Capacity Charges – Proposed Option 2 Water Meter Size Powhatan*Chesterfield^GoochlandHenrico* Average (other localities) 5/8”$21.63$12.64$25.00$11.35$16.33 3/4”$32.45---- 1”$54.08$31.60$50.00$26.80$36.13 1 1/2”$94.64$63.20$100.00$49.20$70.80 2”$173.04$101.12$135.00$75.65$103.92 3”$346.08$202.24$220.00$124.70$182.31 4”$540.75$315.99$400.00$200.35$305.45 6”$1,081.50$631.99$725.00$395.30$584.10 8”$1,730.40$1,011.18$1,325.00$757.50$1,031.23 Department of Utilities & General Services ^Approximate proposed rate*Locality’s current rates (no changes for Powhatan in FY2014 13

14. Sewer Capacity Charges – Proposed Option 2 Water Meter SizePowhatan*Chesterfield*GoochlandHenrico* Average (other localities) 5/8”$27.26$23.04$37.50$22.85$27.80 3/4”$40.88---- 1”$68.13$57.60$55.00$37.80$50.13 1 1/2”$119.24$115.20$87.00$55.45$85.88 2”$218.03$184.32$126.00$80.05$130.12 3”$436.07$368.44$220.00$135.40$241.28 4”$681.35$576.00$360.00$214.10$383.37 6”$1,362.69$1,152.00$700.00$426.25$759.42 8”$2,180.30$1,843.20$1,225.00$729.65$1,265.95 Department of Utilities & General Services *Locality’s current rates (no changes for Chesterfield or Powhatan in FY2014) 14

15. Comparison of Bi-Monthly Rates – Option 2 Average Residential Bill $8.90 Increase (Approximately 7%) 5/8” Connection – 10,000 gallons usage Service Powhatan (Existing) Powhatan (Proposed) ChesterfieldGoochlandHenrico* Average (other systems) Water$50.33$56.07$42.10$80.00$46.15$58.78 Sewer$72.46$75.62$56.70$96.20$59.75$70.88 Total$122.79$131.69$98.80$176.20$105.90$129.66 Department of Utilities & General Services Bi-monthly rates calculated using the following formula: [(# Gallons/1,000) x Commodity Charge] + Capacity Charge *Locality’s current rates 15

16. Option 2 Analysis ItemCurrentProposedAnticipated Increase Capacity Fees$67,497.72 - Commodity Fees$128,016.86$164,385.13$14,838.48 Subtotal$195,514.58$231,882.85$14,838.48 Additional Cost of Purchased Water (rounded)$8,900.00 Additional Cost of Testing Requirements (rounded)$6,100.00 Subtotal$15,000.00 Net Loss$(161.52) Department of Utilities & General Services16

17. Recommendation Option 2 Maintain current capacity charge (minimum fee); increase commodity charge (cost per gallon). Minimize impact to Utilities Fund. No increase to supplemental transfer from the General Fund. Encourage water conservation by users. Department of Utilities & General Services 17

18. Questions or Comments? Department of Utilities & General Services18