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Home My WebLink About08-29-1989 i m f G AGENDA I CITY OF DENfON CITY COUNCIL August 29, 1989 , Work Seselon of the City of Denton City Council on Tuesday, August 29, 1989, at 5:30 p.m. in the Civil Defense Room of City Nall, 215 E. McKinney, Denton, Texas at which the following items will be considered: I 5:30 p.m. 1. 1989-90 Budget Workshop and Presentations A. Introduction B. utilities overview hlectric,Water & Wastewater Rates Budget CiP Modification Review Revenue Bond Requirements & Sale ' C. Summary and Discussion Period 2. Executive Session: A. Logil Matters Under Sec. 2(e), Art. 6252-17 V.P.T.S. 1. Consider action in Denton County vs. City and In Re: Flow Reaionat Medical Center. 2. Consider action in L►li A1-Khaf&11 vs. City. B. Real Estate Under Sec. 2(f), Art. 6252-17 i V.A.T.S. 1 f C. Personnel/Board Appointments Under See. 2(g), 1 Art 6252-17 V.A.T.S. C E R T I V I C A T E I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the _ day of 1989 at _ o'clock (a.m.) (p.m.) CITY SECRETARY 3145C I I LJ F T I pp } August 29, 1989 CITY COUNCIL WORK SESSION ON RATES TO: MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Lloyd Harrell, City Manager RLPORTS ON ELECTRIC, WATER AND SUBJ. DISCUSS WATER AND R RATE SlUDIES. RECOMMENDATION: Receive, discuss, and provide Staff input regarding subject rate studies. Th19SPublic tilities 9, recommended Board thet Cityr Council of August 23, approval of the e proposed rates. ' I i i SUMMARY/ BACKGROUND: Rate Studies have been performed for the Electric, Water and Wastewater Departments in order to establish cost based i rates that will collect revenues commensurate with the cost r to serve the respective customer classes. Dlpa Dutia, Financial Analyst in the Utility Administration Department, performed the rate studies for the Water and Wastewater Departments with Paul 6 Rachael Reese, o allocation ater Company, reviewing the methodology performed the costs. C.tl, Guernsey 6 Company, Consultants, Electric Rate Study. Both C.H. Gu~escnt atd then Council Company representatives will be p meeting to present the respective studies. The 1990 Etocthec,Board ronnAuguste4atand RAugusttu23, 1989• M proposed changes would result in a 1,61 or $887,491 8.51 $934,68 nd rate, an s, an reduction i electric ine reaseeain in water rates, a wastewater rates. The studies were based on the 1990 budget and proposed 1990 ling capital expansions ofmthe ber respective or determinants, i.e „ nu water/wastewater demands and volumes, are based on 1990 forecasted values. 3 1 i S i t F ~ 1 I' A "Financial Analysis" of all input data was performed, and after minor adjustments, served as the input information I for the "Cost of Service" part of the study. Two revenue ' requirement methodologies were used in the cost of service part of the study. They were the equalized debt service coverage ratio (DSCR) methodology, and the equalized rate of return (ROR) on invested capital methodology, Generally, the DSCR method is the "cash basis", which assures that each customer class provides sufficient cash to cover their share of the debt service. The ROR method is the "utility", or accrual method, and assures that each customer class provides a sufficient return on investment to cover all expenses associated with their share of investments in facilities serving their respective class. Upon developing the revenue requirements of each customer class, a "target revenue" was developed for each customer r class. The target revenue may differ from the cost of service report of either the DSCR or ROR methodology when major shifts are occurring in cost allocations and it is ' M deemed inappropriate to Implement rate change that either E methodology may indicate is required. In the rate design phase, the facility charge, demand charge, volume charge, summer/winter rate differential, volume block arrangements, ftc., are developed. In the rate study this year, the rates for the wholesale water customers, Corinth and Lake Cities, and the wholesale wastewater customer, Corinth, were developed on the "utility" basis. This was done in the manner prescribed by the Texas Water Commission. In this method, all O&M costs are allocated on the basis of their share of O&M costs, which is the same as for Denton's "in City" retail customers. However, Instead of allocating debt service as is done for retail customers, depreciation and return on investment is allocated. To determine the asset amount upon which depreciation and return on investment is applied, it is necessary to first determine the wholesale customer's utilization of Denton's facilities, The wholesale customers utilization of Denton's facility investment is based on their peak, relative to Denton's peak multiplied times total facility cost for such facilities that they use. For example, in the water rates, they use 3.721 of Denton's raw water lines, water plant and J water transmission lines. Water transmission lines are J considered to be all lines over 12". 1 The depreciation amount is their 3.721 share of the total depreciation. The return on investment amount is 9.51 times their 3.721 of asset base. The 9.51 was derived from the addition of Denton's overall 81 embedded interest rate plus 1.51 which represents Denton's risk for making investments on their behalf. All raw water furnished to E the wholesale customers was assumed to be purchased from Dallas at 44,240/1000 gallons. I I i Ir low R' Electric The Electric Study was based on a 1,64 rate reduction, which will produce total 1990 revenues of $54,756,780, with total expenses of $53,868,000, which results in a 1.221 margin or $680,000, The rate design is based upon 27,776 customers, 7579SS21000 K%H of sales, a demand of 186 MW, and an asset base of $44,043,863. Due to Jowering costs of purchased power from TMPA, and continued reasonably priced natural gas for the cities own generators, an overall $887,491 rate reduction is possible. This represents a 1.61 rate reduction. The Cost of Service Study reflects that large industrial customers under the present rates are carrying a greater than their proportionate share of costs and should therefore, receive a larger reduction in rates, Smaller and medium sized commercial and City, County and School district customers' are conversely not presently paying their proportionate share, and should therefore, actually receive a slight increase in their rates. See Exhibits 14 Residential electric rates are to be reduced by an average i 21 for small usage R1 classification customers and to be i reduced by an average 1,11 for all other residential customers, Churches will receive an average 1.4% reduction. Large industrial customers (LP) will receive an average 141 reduction and medium sized industrial (GP) customers will receive an average 3.91 reduction. All other commercial customers (GS) will receive an average 3,61 increase and City, County and School district (G1) customers will receive a 3,S1 increase, (See Exhibit 1). The reductions and increases listed above are average ' changes for the entire customer class and will vary j depending upon usage and load factor because of the fixed i facility charges and demand charge factors. 3 For GS classification commercial customers, there will be no demand charge for the first 20 KW of demand. However, the energy charge will be increased to 6.56L/KBH vs the normal 3.5E/KWH for the first 2500 KWH. All Wils, over 2500 would be 3,5E/KhH. This change will greatly help small customers who have been concerned about paying a demand charge but use only very small amounts of energy. A typical small residential customer using 500 KWH per month would experience a monthly bill reduction from $38.25 to $37.1S. A typical summertime larger residential customer using 2000 kWH per month would experience a bill reduction from $157.50 to $154.50. In the winter time for 750/KWH/mo, the bill would reduce from $59,37 to $58.81. i I t 'z A Avery small commercial customer with a small office, 1000 square feet, and minimal air co,hditioning who is open 5 days a week, using 10 KW of demand and 1000 KWH of energy, will experience a reduction from $122.75 to $99.60. Their rate per KW'H would be reduced from 12.30/KWH to 10!/KWH. Larger usage customers using SUKW demand and 10,000 KWH/mo (27.4% load factor) would receive a slight increase from $838.7S to $841.50, with the rate increasing from 8.39OKWH to 8.42E/KW11. In addition to the standard electric rates, C.11. Guernsey also reviewed the following rates: 1. IED - Industrial Economic Development kate 2. TS - Thermal Storage Rate 3. TSS - Standby and Supplemental Service Rate 4. TOU - Time of Use Rates Due to changing costs, these rates are modified slightly from a similar study C.H. Guernsey prepared in December 1988. The Industrial Development Rate provides a 501 reduction in demand charges or t e rst year a new or expanding + (greater than 200 KWH) industry begins use of the rate, 40% in the second year, 301 in the third year, 201 in the fourth year, and 101 in the fifth and final year, The Thermal Storage Rate proposed allows an up-front customer incentive payment of $150/KW for each KW the customer can reduce their peak demand on Denton's system. The customer would then be required to receive service on the Time-of-Use rate for an least five years, with the addition of $2.50/KW added to the lime-of-Use demand charge for those five years. Thereafter, the customer would be allowed to go on the regular Time-of-Use rate or an i applicable rate if they no longer were using their Thermal Storage system. J The Standby and Su l2m,ntal Service Rate is for customers who pan to Install t eir own generation for their base load requirements, but still need a standby electrical supply for emergencies and a supplemental supply for non-emergency maintenance requirements. This proposed rate would have a $121.204hil/yr demand charge, payable in 12 equal monthly payments, for any KW demand occurring during f Denton's peak hours of 1:00 and 8:00 p.m. during June, 9 July, Auggust and September. Plus, there is also a j $47.00/KW/yr demand charge, payable in 12 equal monthly payments, for any KW demand occurring during Denton's non-peak hours. Energy costs would be .3E/KWH for non-emergency energy and 5.3t/KWH for emergency/on peak energy, plus the normal energy costs adjustment. See Exhibit 111. I 1 j I 4 rt { S I1~ I The Time-of-Use Rates reflect nearly the same rate as the Standby an Supplemental Service rate. For General Service customers, the rate would be $10.20/KW/mo, for on peak KW usage and $4.20/KW/mo, for off peak KW, with an energy charge of .3E/KW'H, plus the energy cost adjustment. For residential customers, the rate would be 26,1¢/KWH for peak energy, 1.70/KWH for off peak KWH, plus the normal energy cost adjustment. Water The Water Study was based on a 8.271 rate increase, which will produce total 1990 revenues of $10,932,789, with total expenses of $10,916,548, which results in a .151 margin or $16,241. The rate design is based upon 17,416 customers, 4,504,226,000 gallons of water sales, and an asset base of $300854,060, The Water Department ;ould experience an 8.111 revenue shortfall, primarily due to the requirement to meet the Lake Ray Roberts obligation without the rate , increase, The Cost of Service Study reflects that the wholesale, commercial, and government customers are carrying less than I their proportionate share of costs and should therefore, receive an increase in rates. Raw water and residential customers need a lesser rate increase. See Exhibits IV & V. Residential water rates are proposed to be increased by an average of 5,3S1. Commercial customers will receive an average 101 increase, while wholesale customers will receive an average 19, increase. The increases listed above are average changes for the entire customer class and will vary depending upon usage, A typical residential customer using 15,000 gallons of water per month during the summer will experience a monthly bill increase from $33.50 to $34.50, or an increase of $1,00, During the winter, with an average water consumption of 7,500 gallons, a residential customer's bill will increase from $20.00 under the present rate, to $20.63 with the proposed rate increase. A typical commercial customer using 40,000 gallons of water per month would experience a change in their monthly bill from $88.00 to $95.50. This represents an increase of $7.S of an 8,521 increase. Wastewater The Wastewater Study is based on a S.S1 rate increase, which will produce total 1990 revenues of $6,327,IS6 with total expenses of $6,271,578, which results in a margin of .91 or $55,578. The rate design Is based upon 17,193 customers, 3,182,733 gallons of effluent, and an asset base of $28,117,272. f Ji Y } I Without the rate increase, the wastewater department will experience a revenue shortfall or $432,890, or 7.531 The Cost of Service Study indicates that residential customers are presently paying their proportionate share of the wastewater system costs and therefore, an 1 increase is not necessary for residential customers. However, the study indicates that hating Places, Equipment Services, and Pretreatment Customers impose major demands on the wastewater system for which present rates are not recovering their proportionate share of the costs. Therefore, a substantial rate increase is required for these customers followed by lesser increases for wholesale, regular commercial, and government customers. See Exhibits vi 6 vll. 1 While the rate study actually indicated that Latin& Places need a rate increase of 781, an average 401 rate increase is recommended as a first step in phasing in the actual costs to this customer class. Similarly, while the Equipment Facilities class indicated that a 774 increase would be necessary to recover actual costs, an average 401 t is recommended. Finally, pretreatment customers will receive a 301 rate increase, wholesale customers will receive a 24.611 ` increase, and government customers will receive a 3.51 increase. As mentioned above, residential customers will not experience a rate change. The increases listed above are average changes for the entire customer class and will vary depending upon usage. A typical commercial customer using 40,000 gallons of water per month will experience a change in their monthly bill from $57.70 to $64.21. This represents an increase of $6.51, or 11.281 A typical hating Place with an average monthly consumption of 248,320 gallon effluent will experience an increase in their bill from $403.81 to $553.55, representing $149.74, or $37.981. Similarly, an Equipment Facility's monthly bill will -1 increase from $50.01 to $67.08 for an average consumption of 17,193 gallon effluent. This represents an increase of $17.07, or 33.131. The reason for the major increases in hating Places and Equipment Services is the greater strength of wastewater that such customers discharge to the wastewater system and the greater costs incurred to treat that wastewater. Eating Places discharge large amounts of organic products / I Ir low t a a ~ a that raises the biological Oxygen Demand (bOD) at the w wastewater treatment plant and require much more equipment, facilities, electrical power, and chemicals to treat. A typical Eating Place may discharge wastewater with a BOD value of 1000 parts per million, whereas, the average home may have a HOD value of only 180 parts per million. Similar effects are caused by Equipment Service customers, i.e., car washes and garages, except the major component may be the total suspended solids and in some customers, the BOD as a result of oil and grease being washed into the sanitary sewer. After presenting the rates to the Public Utilities Board on August 4, the PUB asked the Staff to explore optional rates for eating establishment and equipment service customers who have taken extensive steps to keep high strength wastewater from entering the City's system. The staff developed an option that would place such customers on the regular commercial wastewater rate Q $1.78/1000 gallons vs the $2.20/1000 gals., but then have a surcharge add on (or reduction) the same as the pretreatment customers for any wastewater that had strengths greater or less than 250 BOD and 2SU TSS. 'fhe customer would also have to enter into a separate agreement to pay for a quarterly test of their wastewater strength. Each such customer would also have to build a sampling manhole. Another option that is proposed to be handled administratively is to allow eating establishment customers who do not process food or discharge foodladen wastewater at their facility to remain on the standard commercial rate. ~f II FISCAL IMPACT: The proposed changes in rates are a 1.61 reduction in electric, an 8.271 increase in water, and an 8.51 increase in wastewater, which results in an increase of .81 In total Utility revenues. 1 Amount Prom To Decrease in Elect 1.601 $887,491 $55,4360780 $54,5490289 Increase in Wtr 8.271 (8349680) 1000970498 100932,178 Increase In %stwtr 8.501 (4Pd9468) 5,746,688 6,235.156 I Overall Change .601 $4359657 $71,2800966 $71,7160623 I I C@ M PROGRAMS, DEPARTMENTS OR GROUPS AFFECTED: Denton Municipal Utilities, Public Utilities Board, Ci Customer Slrvice Department, Data Processing, Legal Lepartment, and Citizens of the Community. 4Respec ly subm t ed,L arre er Prepared/Approved by, R. E. Nelson, Executive Director Department of Utilities Exhibit I Summary of Proposed Rate Change I II Existing vs Proposed Electric Rates III Standby, Supplementary and Maintenance Service Rate I IV Development of Revenue Targets for Water V Current vs Proposed Water Rates VI Development of Revenue Targets for Wastewater VII Current vs Proposed Wastewater Rates VIII Minutes PUB Meeting of 8/4 and 8/23/89 4 I i f J 6495U:1-8 . EXHIBIT I , DENTON MUNICIPAL UTILITIES SUM RY OF PROPOSED RATE CHANCE ei FY90 (a) (b) (o) (d) I Revenues Change I . ....g......... .Existing •.•..Proposed 1. R1 • Residential 1,474,962 1,445,087 (29,873) (2.03) 2. R2 • Residential 18,772,035 18,554,722 (217,333) (1.16) 3. CS • Central service 19,080,403 19,765,453 685,050 3.59 I+ 4. CP • Central Service Fri. 2,586,230 2,468,003 (100,227) (3.87) S. LF • Large favor 9,665,970 8,307,362 (1,356,566) (14.06) 6, kW • Religious Worship 473,962 469,297 (6,665) (1.40) ' 7. T1 • Temporary Service 55,632 60,832 51200 9.35 J 8. Ci • Local Covtrnme nt 2,760,95S 21858,683 97,710 3.54 `f 9. 02 • Street Lights 320,530 332,936 12,426 3.88 1 I 1 i 10. 03 • Signal Lights 76,024 76,707 2,683 3.53 1 11. D1 • Dusk to Dawn Lights 156,036 178,165 22,129 14.16 j 12, AT • Athletic Field Lea. 10,000 10,000 0 .00 J 1 13. DM7 Totsl Denton 55,436,780 34,349,289 (887,491) (1.60) I I I i i I' ~ I 1 i ♦~aM r I i Exhibit II i ELECTRIC RATES EXISTING VS PROPOSED EXISTING I'HI)F09EU RESIDENTIAL IR1) FACILITY CHARGE $5.50/MON'1'II S~i.SU/!IONTII ENERGY CIIARGE 4.650/KWH 4.23c/KWX RESIDENTIAL (R2) FACILITY CHARGE $6.5U/MONTI1 51.50/MONTH ENERGY CHARGE SUMMER - FOR 3000 KW'11 5.650/KWH 5.45o/KWII ADDITIONAL K1411 6.150/KWI{ 6.Oc/KWH WINTER - FOR 1000 KW'H 5.150/KWH 4.950/KWH ADDITIONAL KWH 4.650 KI01 4.450/KWH GENERAL SERVICE 108) FACILITY CHARGE !10.001MONT11 916.00/MONTH DEMAND lot - 6KW - 0 - - 20 KW - 0 - ADDITIONAL. KW $5.76/KW $7.00/KW ENERGY 1ST 700 KWH 7.50/KWH - 29500 kwh 6.560/kwh ADDITIONAL KWH 3.6c/KWH 3.5c/KWH j i RELIGIOUS WORSHIP IRW) $17.001MONTH 416.00/MONTH I FACILITY CHARGE DEMAND lot - 5KW - 0 - - 20 KW - 0 - (NO RATCHET) ADDITIONAL KW 93.76/KW 93.75/KW ENERGY 1ST 750 KWH 7.60/KWH 7.50/KWH ADDITIONAL KWH 3.250/KWH 2.920/KWH LOCAL GOVERNMENT 011 FACILITY CHARGE 110.0/MONTH $1$.0/MONTH DEI4AND CHARGE $4.6/KW 16.0/KW -'I ENERGY CHARGE 3.25e/KWH 2.98o/KWH GENERAL PRIMARY (OP) FACILITY CHARGE $45.0/MONTH $50.0/MONTH DEMAND CHARGE $5.75/KW $8.0/KW F,'"-. ENERGY CHARGE 3.1c/KWH 2.030/KWH LARGE PRIMARY ILP) FACILITY CHARGE $45.0/MONTH $60.0iMONTH DEMAND CHARGE $6.50/KW $9.0/KW ENERGY CHARGE 2.950/KWH 1.360/KWH ALL ABOVE RATES ALSO WOULD PAY THE PRESENT 1.9 c/HdH ENERGY COST ADJUSTMENT ON ALL KWH USFD EXHIBIT III SCHEDULE ES 31-Jul-89 03:09 PM SJTAN 8Y SUPPLEMENTARY AND MAINTENANCE SERVICE APPLICATION Applicable in all areas served by the City to customers who (1) own and/or operate an electric power generation facility mainly used for nonemergency uses and which has a total nameplate or effrctlve capacity (whichever 1s lesser) of fifty (50) kW or morf in parallel with the City's electric system for the purpose purpose of generating power for the customer's own consumption, and I (2) employs equipment which is compatible with the City's electric system at the customer's delivery point and which will cause no damage to the City's electric system or equipment or present undue hazards to City personnel, and (3) execute an agreement for interconnection and parallel operation with the City, INTERCONNECTION COSTS { The customer shall reimburse the City for any equipment or facilities required as a result of the installtion by the customer of generation In parallel with the City's electric system. ` The customer shall pay all costs of the City to extend its facilities or modify then at the time of Interconnection, or at some future time in order to permit parallel operation of the customer's facility. i IY~E OF SERVICE The City shall supply alternating current, sixty (60) cycles at the voltage and phase of the City's electric system most available to the location of the customer. The ph mary voltage customer shall own, operate and maintain all facilities nece:isary to receive three phase primary voltage service and all transformation facilities required for conversion to utilization voltage. The City shall own, operate and maintain all metering facilities, either at primary or ` secondary voltage, at the City's option. Where the City elects to meter at secondary voltage, the secondary energy and on peak demand charges shall apply. M4NTHuY RAC Primary Secondary Service Service (1) Facilities Charge $60.00/30 days $26.00/30 days (2) Demand Charges: On Peak Demand $10.10/kW f10120AW System Demand $ 3.50/kW 4 3.70AW (3) Energy Charges: Non Emergency Energy $ 0.0020/kWh 50.0030/kWh Emergency Energy $ 0.0520/kWh =0.0530/kWh (4) Energy Cost Adjustment Per E.C.A. Schedule f k SCHEDULE ES 31-Jul-89 03:09 PM STANDBY. SUPP EMENTARV AND MAINTENANCE SERVICE (Continued) MINIM 4 MONTHLY BILLItG The miminum monthly billing shall be the highest of the following: (1) The sum of the Customer Facilities Charge, the On-Peak Demand Charge and the System Demand Charge; or (2) A charge of $1.00 per KVA of installed transformer capacity. DETERMINATION OF ON-PEAK DEMAND The on-peak demand shall be the maximum kW demand supplied by the City during the fifteen (15) minute period of maximum use during the on-peak hours as recorded by the City's demand meter and adjusted for power factor, but not less than one hundred percent (100%) of the maximum on-peak demand which occurred during the previous billing months of June through September in the, twelve (12) months ending with the current month. DETERMINATION OF ON-PEAK DEMAND COGENERATION UNITS NOT OPERATING AND CUSTOMERS PEAK 010 NOT CONTRIBUTE TO CITY'S ANNUAL SYSTEM PEAK u If a customer's cogeneration unit(s) is/are off during peak hours, and the customer's peak did not contribute to the City's annual system peak, and the co-generation unit is one (1) MW or larger, then the nameplate rating of the i customer's unit(s) shalt be deducted from the peak demand. The customer shall be charged the appropriate on-peak demand charges for the kW supplied by the City for the succeeding twelve (12) months. I DETERMINATION ;OF SYSTEM DEMANip The system demand shall be the sum of the maximum kW demand supplied during the fifteen (15) minute period of maximum use as recorded by the City's demand meter plus the kW nameplate rating(s) of the customers generator(s). In no event shall the system demand be less than seventy percent (70%) of the maximum on-peak demand similarly determined during the previous billing months of June through September in the twelve (12) months ending with the current month. DETERMINATION OF NON-EMERGENCY ENERGY All energy supplied to customers whose generating units are less than one (1) KW capacity. 2 I L1 x i i F SCHEDULE ES 31-Jul-89 03:09 PM STANDBY. SUPPLEMENTARY AND MAINTENANCE SERVICE (Continued) DETERMINATION OF EMEPGENCY ENERGY Emergency energy is all energy supplied by the City during peak hours of operation to displace energy normally supplied by customers one (1) MW or larger unit. POWER FACTOR PENALT/ The City reserves the right to determine the power factor of the customer's installation served during periods of maximum demand or by measurement of the average power factor for the monthly billing period. If the power factor is below ninety percent (90%) during on-peak hours, the demand fur billing purposes will be ' determined by multiplying the uncorrected KW billing demand by 90% and dividing by the determined power factor. The formula is as iallows: i Unadjusted billing demand X .9 Determined power factor DEFINITION OF ON-PEAK HOURS j The City's on-peak hours, for the purpose of this rate schedule, are designated as being from 1:00 PM to 8:00 PM each Monday through Friday, starting on June 1 and continuing through September 30 each year. { } DEFINITION OF OFF-PEAK HOURS The City's off-peak hours, for the purpose of this rate schedule, shall be all hours not designated as on-peak hours. i SPECIAL FACILITIES All services which require special facilities in order to most customers's service requirements shall be provided subject to the special facilities rider. PRORATION OF UTILITY BILLS (a) Billing for demand shell be calculated on a 30 day per month basis and prorated for longer or shorter billing periods using the following formula: Actual days in reading period X Customer Charge 30 3 J i F SCHEDULE ES 31-Jul-89 03:09 PM STANDBY. SUPPLEMENTARY AND MAINTENANCE SERVICE (Continued) PRORATION OF UTILITY BILLS (Continued) (b) Billing for demand shall be calculated on a 30 day per month basis and prorated for longer or shorter billing periods using the following formula: Actual days in reading period X kW Billing Demand X Rate 30 j CREDIT FOR ENERGY DELIVERED INTO CITY'S SYSTEM DURING ON-PEAK HOURS If Customer-produced energy 1s fed back into the City's system during on-peak hours, an amount equal to fuel cost calculated in accordance with Schedule E.C.A., as applicable to such energy is credited monthly, provided that Customer has paid the City for necessary added metering, protective and other equipment as determined by the City. j CREDIt FOR ENERGY DELIVERED INTO CITY'S SYSTEM DURING OFF-PEAK HOURS If Customer-produced energy is fed back into the City's system during off-peak hours, an amount equal to $0.01241 per kWh (for each kWh delivered back into the City's system) will be credited monthly, provided that Customer has paid the City for necessary added metering, protective and other equipment as determined by the City. ENERGY COST ADJUSTMENT 1 A charge per kWh of energy taken for fuel cost calculated in accordance with Schedule E.C.A.. PAYMENT Bills are due when rendered, and become past due if not paid within twenty (20) calendar days from date of issuance. LATE PAYMENT CHARGES M Bills are considered past due if not received within twenty (20) calendar days and shall be accessed a late payment charge of one and one-half percent (1.5%) per I; month on any unpaid balance. f 4 j i i 5....; r<.r r _n City of Deatoa later Utility Derelopseet of teresae Targets Descripliom Resideatial Coosercials Corerueat Resale - total taw Misled 9Tstes FT 1190 Rereaaes 4,161,111 41591,142 1,115 1!2,!21 5411011 tD,091,4lB I Proposed x lacrease 5,25E !0.001 0.121 IAIIII 19.001 i.21x 1910 ter 1 Proposed Rates 60006,211 5,051,126 fail 211,f43 653,220 10,472,111 s For the purpose of this laamarl tie Cossercial late class ~I iaclades tie rate clue Word later from fire Rfdrantm x x m + H C i I ir low a EXHIBIT V 31-Jul-89 City of Denton Water Utility Current vs. Proposed Rates Rate Schedule Proposed Current Rates Rates Residential Rate WR 3/4" Meter 16.75 $6.50 1" Meter 8.00 7.75 1 1/2" Meter 11.50 11.00 2" Meter 12.75 12.25 First 15,000 gal 1.85 1480 15,000 - 300000 gal Summer 2.75 2.55 All over 30,000 gal Summer 3.30 3.10 15,000 - 300000 gal Winter 1.85 1.85 All over 30,000 gal Winter 1.85 1.90 Commercial/Industrial Rate WC 3/4" Meter $14.25 $12.75 1" Meter 15.50 14.00 1 1/2" Meter 18.00 16.26 2" Meter 20.00 18.00 3" Meter 56.00 53.50 4" Meter 95.00 90.00 j 6" Meter 120.00 115.00 8" Meter 137.00 130.00 Commodity Charge/1000 gal Commodity Charge/1000 gal 2.00 1.85 Sales for Resale Rate WW1/WW2 Minimum Charge WWI $165.00 $150.00 Minimum fhaKge WW2 $170.00 164.25 W3 Demand Charge per 1,000gal 20.00 16.00 W3A Demand Charge per 1,000ga1 27.40 21.88 Commodity Charge 0.85 0.73 Over 31000,000gal NA NA Intra-Govt Finished Water Rate WO 3/4" Meter $11.25 $11.25 1" Meter 12.50 12.50 1 1/2" Meter 15.50 15.50 + 2" Meter 17.50 17.50 3" Meter 53.50 53.50 4" Meter 85.00 85.00 6" Meter 107.00 107.00 814 Meter 125.OU 125.00 Commodity Charge/1000 gal Commodity Charge/1000 gal 1.90 1.80 J Intra-Govt Raw Water Rate WGU Minimum Charge $115.00 $115.00 Commodity Charge/1000 gal 1.10 1.05 Standby Fire Service Rate WF ti" Line $23.00 $20.80 8" Line 35.25 32.06 Metered Hydrants Rate WFH Customer Charge Minimum $22.00 $20.00 Commodity Charge/1000gal 2.00 1.90 t I 1 . ! 4.rr y 5 a ti y i~ I City or 0eelee Ooeteeter Otilily lerelopaet of lereeee lulete 1 011CIIPIIOM WIN111iL aalleteueeauueurruerlsetutuueetteir 10111, NO COAIt P1111111 t11yiO n1C11 pull 111Y WOOLI11LI COY1 111M ~ l1 ll30 kreeeee 1,1l1,fi1 },111,111 Ifl,1l2 I11,}}I~ i1,30} y1i1,000 -fi,ill---S,110,i1i l Propoeel I [lefties 1.101 11.101 }1,011 11,101 11.001 ILil1 7.101 1.1lt I Il10 te► 1 Propose! Mee 1,!11,11! 111,110 Ii1,0S! 111101 111,100 518111 i,1}I,i11 a 1 1 ~ bd rr I 1 I EXHIBIT Vii City of Denton Wastewater Utility Current vs. Proposed Rates Rate Schedule Proposed Current Rates Rates RESIDENTIAL SEWER Facility Charge $3.00 $3.00 Commodity Charge/1000 gal 1.50 1.50 REGULAR COMMERCIAL SEWER Facility Charge 67.25 $6.50 Commodity Charge/1000 gal 1.78 1.60 PRETREATMENT SEWER Facility Charge $7.25 $6.50 Volume Charge/1000 gal 1.90 1.60 Surcharge - BOD $/ppm > 250 0.000743 0.000590 - TSS $/ppm > 250 0.000761 0.000596 EATING PLACES Facility Charge $7.25 $6.60 Volume Charge/1000 gal 2.20 1.60 EQUIPMENT SERVICES Facility Charge $7.25 $6.50 f Volume Charge/1000 gal 2.20 1.60 WHOLESALE SEWER Faoility Charge $125.00 $125.00 Commodity Charge/1000 gal 1.95 1.55 INTRA-GOVERNMENTAL SEWER Facility Charge $7.60 66.60 Commodity Charge/1000 gal 1.60 1.60 RESIDENTIAL SEWER SERVICE TO USERS WITHOUT DENTON WATER SERVICE Fac Char Corporate Lmts 62.25 $2.26 Fac Char 0 Corporate Lmts 3.35 3,35 Commodity Charge/1000 gal CL 1.60 1.50 Commodity Charge/1000 gal OCL 2.25 2.25 SCHEDULE UPS UNINTERRUPTIBLE POWER SUPPLY APPLICATION Applicable to any customer who, by written agreement, receives service for ininterruptible power supply for a computer or other electrical equipment, i Not a livable for resale service In any event, nor to temporary or Stan y serv ce except in conjunction with applicable rider. NET MONTHLY RATE r (1) Customer Facility Charge: 2S0 W Power Standby Unit 7.5S/30 days 1,200 W Power Standby Unit 30.95/30 days (2) Installation Charge $25.00 For any W Power Standby Unit other than above, the monthly customer charge will be based on the following formula: (1) Monthly Charge: St of Annual Maintenance Cost PLUS N Wont s I 61 Annual Return of Investment PLUS aont s 81 Interest on a S Year Life TYPE OF SERVICE 1 L The City shall furnish, install, maintain an automatically controlled alternating current power backup unit conforming to the City's standards and subject to its published rules and regulations. PAYMENT Bills are due when rendered, and become past due if not paid h within 1S calendar days from date of Issuance. SPECIAL FACILITIES All services which require special facilities in order to meet customer's service requirements shall be provided subject to the special facilities rider. E I PRORATION OF UTILITY BILLS {a} Billings for the Facility charge shall be based on 12 billings annually. Formula: Actual days in reading period x customer charge ` 30 days SECTION II. That if any section, subsection, paragraph, sentence, clause, phrase or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of :ompetent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of Denton, Texas, hereby declares it would have enacted such 1 remaining portions despite any such invalidity. SECTION III, That the Schedule of Rates adopted by Ordinance No. shall continue to be effective, charged and applied to t e asi regular billing cycle which begins prior to SECTION IV. , I That the Schedule of Rates herein adopted shall be effective, charged and applied to the first regular billing cycle on or after j PASSED AND APPROVED this day of , 1989. i RAI j CITY OF DENTON, TEXAS ATTEST: RETARY`- CITY OF DENTON, TEXAS APPROVED AS TO LEGAL FORM: DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY CITY OF DENTON, TEXAS By: I 646SU:1-2 1 I t IMPACT OF PATE CHANGE ON VARIOUS ELECTRIC CUSTOMER CLASSES CHANGE CURRENT PROPOSED IN DOLLARS IN-PERCENT GENERAL SERVICE CLASS $225.59 3218,80 0 15 KW, 22% L.F., & 2,409 KWH 156.781 2. GENERAL SERVICE CLASS 341.92 321.67 (320,251 0 30 KW, 22% L,F., t 4,818 KWH -4.38X 3. GENERAL SERVICE CLASS 3,873,35 6,190.60 317,25 0 300 KW, 35% L,F., t 76,630 KWH 5.4UX I E LARGE PRIMARY 0 1000 KW, 60% L.F., t 438,000 KWH 16'188.00 23,938.80 13,449.20) -12,88% ~ I I 3, GOVERNMENT 3,307.48 6,553.52 0 300 KW, 35% L.F,, t 780650 KwH 238,06 4.67% 6, RELIGIOUS WORSHIP 0 50 KW, 8% L.F., t 2,920 KWH 358.88 358,84 (0.011 i i ' ~ I . i J I J -Ir low t: F i r lBSI08NTlaL SBlY1Cl f~ar~JOCCt MOM Of JULY, 1989 (linked in order of bilkest to lowest) UTILITY CO. 500 Iwo UTILITY CO. . 1000 BNB City of Garland 17.82 BI Peso Blectric 91111 11 Palo Blectric 17.96 City of Gsrlsad 87191 Gulf state utilities 11.79 Boustop Power I Lilltia6 86,11 City of Brim 11.07 CITY of DINTON (current) 82,00-4 Houston Power I Lilbtiel 10.66 CIfY OF OBNTON i tc Died} 81,003 $ I oc Bluebonnet Blectric 39.21 ulf BtL~ et~lities 76.52 Terse Utilities 39,13 City of Bryan 76,11 CITY Of DINTON (current) 38.25 Terse Utilities 72,26 ubbock Power a Light 37.17 51(0 Bluebonnet Blectric co-op 69.98 CITY Of DBNTON (propcled) 37,15 Lubbook Power I Li61t 69,67 ity o Corpus Clr st 35.95 t City of Austin 68.38 Lower Colorado lifer lstloeity 32.69 it City of IIA Antonio 66,21 Pederaales Ilectelo Co-op 31,66 City of Corpus Cbtisti 61,93 1 City of San Aetoeio 32.31 Pederaales Blectric co-op 60.92 City of Brownsville 32.25 City of Brownsville 60.50 City of Austin 21.82 Lower Colorado liver Autb 17,19 11 I UTILITY CO, 2000 Iwo UTILITY Coo $000 Iwo 11 Peso Ilectric 118.12 Houston Power I Liekt 266,16 loustoa Power I LiBlt 117,30 11 Paso Blectric 265133 City of Garlaad 168.19 City of Austin 251,61 Citt of .Auntie 161.51 City of GitIaod 218,11 CITY OP OINTON Icatreltl 167,60 -1 S 3 co CITY OP OINTON (currier) 233,00 SS CITY OP DINTON R➢to need) 151,10 IT1 OP N N oro➢ae 1 III:N City of Bryas 116,26 Clty of Bryan 216,12 Gulf States utilities 115.96 Gulf Stites utilities 215,11 Terse Utilities 131.51 City of Bea Antonio 207.61 p City of lie Antonio DIM liter Utilities 201.78 1 Lubbock Power I Lilkt 131.68 Lubbock Power I Llebt 199.69 Blueboaset Ilectric Co-op 131,16 Blueboanet Blectric Coop 112,91 City of Corpus Citisti 126,89 1 City of Corpus Clristi 185.16 1 City of lrowasville 117.00 City of Brownsville 173,50 Pedernales Ilectric Coop 112,33 Pedernales Ilecttic Co-op 113.11 Lower Colorado liver letkority 101.21 is Lovet Colorado Rivet Autb 111,66 11 i Ixpeoted to increase rates by 18.111 Ispected to iscreaee rates by 11.11, 1 r ~ F i 4#5 R MINUTES Public Utilities Board August 4, 1989 1. CALL TO ORDER The Public Utilities Board of Denton, Texas, convened with Chairman Robert LaForte presiding at 7:25 a.m. on Friday, August 4, 1989, in the Civil Defense Room of Denton Municipal Building, Denton, Texas. Board Members in Attendance: Roland Laney Robert LaForte John Thompson Kenneth Frady Mark Chew R. E. Nelson Lloyd Harrell Staff in Attendance: ! David Ham Ernie Tullos Ivor Weiner Oipa Dutia Lloyd McClendon Monte Mercer Ann Bingman Others in Attendance: C. H. Guernsey d Company, represented by Suhas Patwardhan Texas Water Company, represented by Paul 3 Rachael Reese 2. DISCUSS AND RECEIVE REPORTS ON ELECTRIC, WATER AND WASTEWATER RATE STUDIES. LaForte called on Nelson to briefly inform the Board concerning the rate studies and presentation proceedings. Nelson discussed the utility wide impact of the rates on revenue. Nelson also mentioned a 1.6% decrease in electric, an 8.27% increase in water, and an 8.5% increase in tt,e wastewater rates with the larger increases for Eating Places and Equipment Services. Dipa Dutia Introduced Suhas Patwardhan to present the electric rates; and, Paul and Rachael Reese to present tt.e water and wastewater rates. Suhas briefly outlined the purpose of the study and explained the rate making determination or process, Basically, the 1989 Electric Rate Study called for a reduction in all rate classes. The dollar amount would be $900,000, or 1.6% overall. The consultants were confident that the proposed rate decrease would still satisfy financial goals of the Utility. i J 7 F I t PUB Minutes Page 2 Suhas then referred to Exhibit 1, page 22, and Exhibit ES-1 of the electric rate study, explaining that the reductions pertaining to all customer classes. Nelson intersected that the rate study was based on coincident peak; whereas past studies had been based on probability of dispatch. Nelson also mentioned that coincident peak was the method used by most of our competition and the PUC. In his concluding remarks, Suhas mentioned four basic points: 1. The rate study called for a 1.6t decrease/reduction in rates. 2. The study was an attempt to bring those above the system production average to the system average, and bring those below the system average to the system average. 3. Raise the demand and customer charge. 4, lower the energy charge so that the "tilt" between demand and energy charge would 'balance" out. Suhas then spoke about the Industrial /Economic Development Rate. This rate would allow a percentage discount over the first five years for an industry locating in Denton. After five years, this rate would go back to the normal rate. Suhas also mentioned that the Time of Use Rate was based on an on-peak to off-peak usage. Under this rate, a customer could install a thermal storage unit and use the unit to provide energy in the off-peak hours, and then shut down during the peak hours, between 1:00 p.m, and 8:00 p.m. Nelson asked Suhas to talk about the Standby Supplementary Rate iSSR). Suhas stated that this rate was designed for those that decided to go with self or cogeneration. In case their units failed, the City would have to supply the power to those customers. In essence, the City would be the customer's "insurance" if the unit did fail. The drawback to this type of customer is that the City cannot predict the times these customers would demand services. Two components were involved in this cost. First, the system cost of the City, and second, the TMPA costs. Frady asked about the load management program and if it had saved the City money. Suhas replied, "yes', stating that it had delayed some of our future costs. La Forte questioned the amount of savings to a commercial customer on the load management program. Nelson replied that a 500 KW savings on the load management program could save the commercial customer up to $75,000. LeForte also questioned Nelson on the TNU cogeneration rate and the customer's position on this matter. i 1 k f I - i n PUB Minutes Page 3 I Nelson commented that TWU was not appeased with the charges they would pay on the Standby rate. Laney asked Suhas if our position was defensible. Suhas was confident that it would be defensible and he felt that it would stand under a PUC ruling. With no further questions, the presentation was then handed over to Dips Dutia. Dipa compared the electric rates at certain KWHs. For instance, the savings would be: 500 KHW - $3,10 1,000 KHW - $1.00 2,000 KWH - $3.00 3,000 KWH - $5.00 The floor was then opened for discussion and questions. After no further questions, Dips Introduced Paul A Rachael Reese, with Texas Water Company, to present the Water and Wastewater Rate Studies. Rachael Reese presented the water study and briefly introduced the topic. She stated that $835,000 additional revenues were required to cover costs. This worked out to be an 8.27% increase in water rates. Rachael then discussed the methodology used, stating that this year's study differed from last year's because the utility basis of calculating costs was used. Last year's study used the cost basis. This was done to accurately allocate the cost and debt risk of the plant. Also, the PUC approves of this method as the most reliable, commonly used method. Rachael briefly discussed the allocation factors and customer classes. She stated that the Cost of Service reflected that the wholesale commercial and government customers were carrying less than their proportionate share of costs, and should therefore, receive an increase in rates. Rachael recommended the following rate increases: 1. Residential water rates - 5.35% 2. Commercial water rates - 10.00% 3. Wholesale water rates - 19.00% La Forte expressed some concern regarding the proposed rate increase for Corinth. Rachael explained that the Corinth increase was definitely needed and if Corinth were to be charged for some of the Ray Roberts expense, their rate increase would be far greater than 19%. Harrell asked if the City had spoken with lake Cities or Corinth concerning these rate increases. Nelson replied that Corinth had been approached, but not Lake Cities. I Y Ir low 1 i PUB Minutes Page 4 After no further discussion, Rachael handed the presentation over to Paul Reese. Paul briefly discussed the wastewater study. He stated that the wastewater study was based on an 8.5% rate increase in order to produce total 1990 revenues of $6,327,156. The Cost of Service Study indicated that residential customers were presently paying the proportionate fair share of the wastewater system costs. Paul commented that the 'significant rate increase was for Eating Places and Equipment Services. A 40% increase was recommended, however, an actual 78% increase was needed to accurately allocate their share of the costs. The reason for the - maJor increase in Eating Places and Equipment Services was the ' greater strength of wastewater that such customers discharged into tle wastewater system and the greater costs incurred to treat the wastewater. Paul further explained that Eating Places discharged large amounts of organic products that raises the Biological Oxygen Demand (BOO) at the wastewater treatment plant and require much more equipment, facilities, electrical power,' and chemicals to treat. Similar effects are caused by Equipment Services customers. LaForte and other Board members expressed concern about the dramatic proposed rate increases. Nelson remarked that the methodology was fair and defensible. Nelson also stated that perhaps an alternative rate could be made available if the customer could prove that their business was not discharging these products into the system. As an example, Nelson mentioned the City of Irving's alternative rate that allow the customer a special charge if they installed manholes and paid for testing. LaForte stated that some restaurants might not be contributing waste to the system as others may be. Nelson stated that this may be correct and should be investigated further. Dutia handed out comparisons of other utility providers. On the whole, Denton's rates looked very competitive. Nelson then thanked the Board for their review and input and asked that they might consider the rates carefully and approve them as recommended next PUB meeting. The next Board meeting was set for August 23, 1989 at 6:00 p.m. f Chairman LaForte adjourned the meeting at 9:00 a.m. I 6467U:12.16 I f r a u I EXHIBIT_ 10R EXCERPT ~ PUBLIC UTILITIES BOARD MINUTES OF 8/23/89 I 6. CONSIDER APPROVAL OF PROPOSED ELECTRIC, WATER AND WASTEWATER RATE ORDINANCES. LaForte called on Nelson to briefly give an overview of the proposed rate changes. Nelson reiterated the proposed rate changes and their overall impact. A 1.68 or $887,491 reduction in electric, an 8.27% or $834,680 increase in water, and an 8.5% or $480,468 increase in wastewater, r Nelson called special attention to the wastewater rate ordinances. Nelson stated that since the August 4th meeting, when the rates were first proposed, staff had been exploring optional rates j for eating establishment and equipment service customers. These optional rates specifically address those eating place/equipment service customers who had taken extensive steps to keep high strength wastewater from entering the city's system. The option would be to place such customers on the regular commercial wastewater rate at $1.78/1000 gallons vs the $2.20/1000 gallons, but then have a surcharge addon for reduction), the same as the pretreatment customers for any wastewater that had strengths greater or less than 250 BOD and 250 TSS. The customer would also have to build a sampling manhole and enter into an agreement to pay for a quarterly test of their wastewater strength. Nelson estimated the cost of a sampling manhole to be $800 and $100-$150 for each test performed. As an example of such a customer, Nelson used Lone Star Car Wash. When Lone Star Car Wash was built, the owner took steps to reduce the strength of the wastewater discharge by installing numerous filtering devices and a sampling manhole. Lone Star's bill would be increased by $1700 per year if this optional rate was not available. Thompson expressed some concern about this increase and the impact on the consumers. Nelson explained that if this additional cost was passed on to the consumer, it would result in a few cents increase per car. lielson also mentioned an optional rates for eating I p establishments. These restaurants that did not process food or discharge foodladen wastewater at their facility would be expemted from the proposed rate and would remain on the standard commercial rate. Those restaurants that did process food and discharge foodladen wastewater would have the same option as the equipment service customers, i.e., these customers could install a manhole and pay for a quarterly testing. This option would be handled the City's environmental administratively health with the hel from service department. en I Thompson questioned Dutia on the amount of money the proposed equipment service/eating place increase would bring in. Dutia stated that it was $22,201 for Equipment Services and $46,000 for Eating places. LaForte added that he felterhatrthe justification for raising these d were isagreed equitable and that githeatproposedw rates aamantly unfair to the small business owner. He felt that the small business owner was always left with the greatest burden, and this type of increase could put many out of business. LaForte disagreed stating that these customers had not been paying their full share and that it was the policy of the I Board to move in the direction of equitable rates. E Thompson agreed, reiterating LaForte's point and adding that if these customers were charged the full equitable rate increase of 7840 these customers would have a far greater bill. He felt I that a gradual move toward more equitable rates for this rate class was the prudent decision. Chew continued to express his concern that the small commercial customers were carrying more than their fair share and that residentialsandmaaskedt for carrying their full share, explanation of the rate determination process for these customer. Some confusion arose as to which II class was subsidizing the equipment service and eating establishments. Nelson advised that the Cost of Service indicated that their the fair residential share, payingestvery close to and equipment services were underpaying their fair comthe mercial proposed customers share by increase, and,0 that the n other with were picking up the underfunding portion. After r j checking the cost allocation summary schedule, Nelson corrected this, noting that, in fact, the residential customers were paying $70,000 more than their fair share, that regular commercial customers were paying nearly their fair share and that, with eating establishment/equipment service customers being undercharged by $68,000, it is apparently the residential class that is subsidizing the eating establishment/equipment services. Dutia noted that I ~ this $70,000 extra represented approximately 3% of the residential class revenue. Nelson directed the Board's attention to Page 30 of the Cost of Service Wastewater Study. Nelson explained the increased rate and the rate determination process. The Board felt that the rate increase was legitimate and Chew was satisfied with the rate determination process. LaForte directed Nelson to continue with his presentation. Nelson briefly discussed the Thermal Storage rate, stating that thermal storage customers would receive $150 for every KW that they saved. LaForte was concerned about the city giving a potential customer some money upfront to install the system. Nelson acknowledged LaForte's concern and stated that the costs could be recovered quickly due to the TMPA rate structure, and that the savings for the city would be very beneficial. Both Tullos and Nelson felt that the thermal storage rate would require a minimum of 12,000 sq. ft.to be cost effective for a customer to purchase a system. This markst was fairly limited. They also felt that there would not be a hugh demand for this rate. Thompson felt that the board should pass this rate because the thermal storage technology would become feasible and, perhaps, the way of the future. j Laney commented that Texas Utilities had built some office buildings with thermal storage units and that these buildings were currently vacant. LaForte felt that this rate was conducive to fostering more incentives for economic development. Nelson brought to the attention of the Board the 20 Kw load factor minimum. (Time of Use Rate) He noted that in order to address a concern voiced to many city officials from small businesses about demand charges, that this proposed rate ordinance expands from 5 KW to 20 KW the exemption for demand _ charges, but to help recover the lost revenue from this exemption, the first 2,500 KW of energy would be priced at 6.564 per KWH, vs the 3.54 per KWH. It was noted that this would cause some higher load factor customers to pay more for their first 2,500 KWH, in the range of 8.54 per KWH vs 7 to 7.54 per KWH, but would hold the cost for the smaller, low load factor customers down to 8.54 per KWH, vs the 11 to 144 per KWH they have been paying. Nelson also pointed out that in this case, the higher load factor commercial customers were subsidizing the lower load factor commercial customers, but that the 4/KWH rate, bath customers were paying in the first 2,500 KWH was the same. 1 --Ir low eb 7 i I E I fi i With no further discussion or questions, LaForte called for a motion to recommend the proposed rate ordinances as recommended by staff. Motion by Laney, second by Thompson, four ayes (Laney, LaForte, Thompson, Frady), one nay (Chew), motion l carried four to one. I, ~r r ` I I f I 1 E II 1 I MINPUB.RAT 905 f ~ i 1 z ~ s' f -ti 1 1 ~ j I I 11 u I III i 1 1 August 29, 1989 CITY COUNCIL WORK SESSION ON BUDGET TO. MAYOR AND MEMBERS OF THE CITY COUNCIL FROM. Lloyd V. Harrell, City Manager SUBJ: CONSIDER PROPOSED 1989-90 UTILITY DEPARTMENT OPERATING BUDGET. RECOMMENDATION: The Public Utilities Board and Utility Staff recommend approval of the 1989-90 Utility Department Operating Budget. r SUMMARY/BACKGROUND: Attached is the budget that was presented to the Public Utilities board on May 2 and approved on May 8, 1989. This document was presented to the Finance Department who used the Utility Budget numbers to develop the City Master Budget. There are Blighty different numbers for "Administrative Transfer" and "Bad Debt" due to updated f, numbers being available by the time the Finance Department presented their budget document. Otherwise all operating j budget numbers of each of the respective divisions are as j given. 1 FISCAL IMPACT i See attached Executive Summary, Exhibit I. PROGRAMS, DEPARTMENT OR GROUPS AFFECTED City of Denton, Denton Municipal Utilities, Other City Departments, Citizens of the community. ResL41 , loy Harrell, ty Manager PREPAR /APPROVU BY: v Executive Director of Utilities s Exhibit 1: Executive Summary 1989-90 Utility Operating Budget 64950:9 I J y EXCERPT MINUTES PUBLIC UTILITIES BOARD MAY 8, 1989 2. CONSIDER 1989-90 UTILITY DEPARTMENT OPERATING BUDGET Nelson introduced this item advising that upon Board approval, the Staff will submit the budget to the Finance Director. Nelson directed the Board's attention to page ES-2 of the executive Summary, indicating a typographical error needed to be corrected $1.41/month, other than this correction, Staff is requesting approval of the budget as submitted. The Board discussed briefly of a possible salary increase to personnel of 4% cost of living adjustment, the topping out of higher levels of supervision, and other miscellaneous issues. Chew made a motion to recommend to the City Council approval of the ' Utility Department 1989-90 Operating Budget for inclusion in the overall City Budget. Second by Thompson. All ayes, no nays, motion carried. i i ~ i i f I f EXECUTIVE SUMMARY GENERAL The Proposed Utility Operating Budget for 1990 is $82,2180000 which compares with $780870,000 estimated expenditures for 1989 and $73,787,000 actual expenditures for 1988. Estimated total revenues are $83,855,000 resulting in a net gain of $1,637,000. This compares with $385,000 estimated net gain for 1989 and an actual net gain of $580,000 in 1988. These revenues and net gains are based on present electric rates, an 8.5% increase In water rates and a 8.55 increase in wastewater rates. A rate decrease of 51 is anticipated in the i Energy Coat Adjustment portion of the electric ratesi these rate I changes have been incorporated in the pro formas included herein. RATES 1 j Electric I In 1988, the Electric Department had a I pro forma cash flow deficit of $502,000 which indicates a need for a rate increase. j N.iwever, effective may 1, 1989, TNpA reduced the demand charge to Denton from $31.51/KW/Month based on 390,000 KN to $27.85/XW/month based on 105,000 KW which results in a reduction of $20561,280 for 1990. In balancing this reduction in cost with some escalation of { basic electric system costs such as natural gas, personnel and maintenance the Electric Department is projecting a net gain of $1,537,000 for 1990, This does not0 however, take into consideration any revenue loss that may result from loss of load due to cogeneration developments in Denton, Some restructuring of the rates is necessary, In particular# knergy Cost Adjustment is estimated to be closer to 1,75je/KWH than the present 2.0[/KWH, but some of the fixed cost component of the rate such as the demand charge will need to be Increased, Several alternatives need to be explored such as: i I ES-1 4 a g, I. A present across-the-board decrease on a percent basis; or 2. A present across-the-board decrease on a fixed cents per KWH basis. Either alternative would need to be followed by a cost of service stteV which could require an increase to some customer classes on October 1. 3. Delay any change in rates at present and conduct a comprehensive cost of service study and implement on October 1. All of the above alternatives should be considered in light of the possible loss of $500,000 or more per year of net revenue in the event Texas Woman's University decides to withdraw from Denton's system as their primary source of electricity. i Water I An 8.5% increase in water rates is projected effective in October 1989. A water rate study is presently underway to determine I ii the cost allocations and rate design for specific customer classes. aJ li This increase would result in the average water bill for 10,000 ~ gallons per month, which is normal for a family of four in an average sized house during non-irrigation months, increasing by $1.70/month or from $22.50/mo. to $24.20/mo. Sewer 1 An 8.5% increase in sewer rates is projected effective in October 1989. A wastewater rate study is presently underway to determine cost allocations and rate design for specific customer classes. 3 This increase would result in the average residential sewer bill increasing by $1.414/month or from $11.34/mo. to $12.15/mo. i i ES- 2 t 1 ~t a I I RETURN ON INVESTMENT i ' The six percent return on investment to the General Government ' is projected to be $3,550,000, up from $3,315,000 estimated in 1989 and $2,758,000 actual in 1988. This represents $1,940,000 from the Electric Department or 3.5% of gross Electric Revenue, down from $1,955,000 estimated in 1989 and $1,890,000 actual in 1988, $966,000 from Water or 8.8% of gross Water Revenue, up from $748,000 estimated in 1989 and $521,000 actin in 1988 and $644,000 from the Wastewater Department or 10.1% of grriss Wastewater Revenue, up from $612,000 estimated in 1989 and $347,000 actual in 1988. he decreases in the electric return on investment are due to depreciation being greater than new investment because of TMPA's ` role in providing the major capital investment for generation facilities amt also, the fact that with reduced growth, new distribution aid substation facility installations are reduced. The increase in water return on investment has been primarily due to the placing into service the $3,500,000 water plant expansion plus several new large water lines. i The increase in the wastewater return on investment is due to some increases in new facilities, but is largely due to a previous oversight in calculating return on investment wherein capital contributed by others (primarily the Federal Government's $7,500,000 grant for the sewer plant), was not included in the assets subject to return on investment calculation, but each year, the balance of the assets were being reduced by depreciation based on all assets, rather than having depreciation of contributed capital removed from the total depreciation value. ELECTRIC DEPARTMENT BUDGET The Electric Department currently has budgeted for two (2) new additional fulltime positions and increasing two parttime positions to full time. This brings total equivalent fulltime positions to 147.92. Total additional cost for these positions 1s $80,424. i ES-3 I i ,i t The positions are: 89 # 90 Proposed Depart. Position Cost Emp.. 89 Equiv• E_quiv• Admin. Existing $4039158 12 11.630 11.63 Secty 24,831 (N) 0 Ele.Prod Existing 1,410,718 37 36.29 36.29 0 0 0 Hydro Existing 81,091 2 2 2 Spe.Pro3. Existing 51 Elec,Dist. Existing 1,841,353 51 52 2 Existing 68,821 2 St.Ltg I . 6 606,202 19 19 19 Meterg Existing 2179554 6 6 SubSta Existing 193,735 5 5 5 Comm. Existing 329,315 9 9 9 E1.Eng. Existing 30,000(N) 0 0 1 G1S Tech. 105,628 5 3.5 3 En.Cons. Existing 25,59310 0 0 1 Adm.Asst. 3 TOTAL New (N) $ 80,424 j TOTAL Existg $5,257,575 148 145.42 147.92 TOTAL $5,337,999 I The proposed Electric Budget is based on sales of 757,549,000 KWH which is 5.04% over the estimated 721.206,000 KWH estimated for I 1989. I Average revenue per W in 1990 is estimated to be 7.31 cents per KWH, down slightly from 7.39 cents per KWH in 1989. These estimates are prior to any consideration for a possible rate decrease. Net to System (energy provided to the transmission system) increased 2.6% over 1989. Net losses are expected to be at the norm OT 6% of net to system load. The Electric Department Revenue Budget is $66,790,000 with expenditures of $65,704,000, resulting in a net gain of $1,086,000. Natural gas and economy purchases will provide 38.20% of Denton's energy at an average cost of 2.8 cents per KWH. Denton's plant will provide 14.8% of the energy, the Lewisville Hydro will provide .75%, and 22.6% will be obtained from TMPP members as a result of economic dispatching or economy purchases from ERCOT systems. Gas costs ars estimated to average S2.20 per 1,000 cubic foot. 011 will provide an estimated .2% of the energy at 8.3 cents per KWH. ES-4 1 f 1 r FFi Gibbons Creek will provide 61.81 of the energy at a gross cost of $36,125,040 representing 561158,330 for variable fuel costs and ~i $23,803,600 for net fixed costs, after an estimated rebate of $6,163,110 from legally required bond debt coverage collected as part of the fixed coats. An additional 56,4950344 KWH's of Gibbons Creek power allotted to Denton is estimated to be sold to other utilities at-times when Denton does not have sufficient loads to use the power. The variable coats of this power will be $701,110 or 1.241 cents per KWH, and it is estimated to be sold for approximately 1.65 cents per KWH resulting in net profit of $228,240. These amounts result in net TMPA costs of $29,733,690 or 5.99 cents per KWH. All TMPA allocations are based upon Denton gets 3 21.451 of 7MPA's energy and 22.141 of TMPA's fixed coats. Under a contract for sales of excess gas generating capacity to Texas-New Mexico Power (TNP) and Brazos Electric Power Cooperative i it is estimated Denton will receive $329,290 and $1,168,160 j respectively for a total of $1,497,470. `I If this capacity sales revenue were considered as a net benefit I j of the availability of Gibbons Creek, the net TMPA cost would be $28,2360220 or 5.691/KWH. Major Electric Department expenses for 1990 are: 1. Removal of asbestos from piping of Turbine 11 and #2 $110,000 2. Chemically clearing 4 possibly some boiler tube re- placement in #4 and #5 $1100000 3. Repair 4,160 volt switchgear $ 600000 4. Heat rate enhancement Eng. Studies $ 30,000 54 Ovetbeao Conductor conv. to Underground $300,000 6. Special'Studies: A. Facility, space $ 501000 b. Gf5 S 2$,000 C, Rates $ 25,000 7. Energy Management Incentives 5:501000 S. Economic Development $ 36,000 i i i ES-S r ~ k WATER DEPARTMENT BUDGET I The Water Department Budget is based on sales of 4,1720000,000 gallons of water, which is a 2.11 increase over estimated 1989. Total water expenditures are proposed to be $10,998,000 which compares to $ 9,386,000 estimated for 1989 and 581780,000 actual for 1988. The large increase in expenditures is due to Ray Roberts payments increasing from $1,383,000 in 1968 to $1,864,000 for 1990. Revenues, including an anticipated 8.51 increase, are projected to be $11,017,000 in 1990 resulting in a net gain of $19,000. Revenues 4 for 1969 are estimated to be $100003,000 and were $8,848,000 in 1988. The average coat of water will go from $2.25 per 1,000 gallons in 1989 to $2.42 per 1,000 gallons in 1989. i WASTEWATER DEPARTMENT BUDGET I The Wastewater Department Budget to based upon an average 16,763 customers for 1990 which is a 1.91 increase over estimated 1989. The 1990 net income is estimated to be $81,000 as compared to an estimated net income of $60,000 in 1989. Total expenditures for 1. 1990 are proposed to be $6,274,000 as compared to $5,488,000 in 1989. Total revenues are estimated to be $6,355,000 in 1990 as i compared to $5,548,000 estimated for 1989. WATER/WASTSWATER PERSONNEL CHANGES i The Water and Wastewater Departments currently have budgeted for four (4) additional fulltime positions and one (1) half-time position, two downgrades in classification from two part time to seasonal positions. This brings total positions from 117.2 to 121.7, Total additional costs for these positions is $118,296. ES-6 J .9y 1 1 ~ J Y E These positions are: Depart. Fosition 89 t 90 Proposed Cost EmP. 89 Equiv. Equivalent Wtr Adm. Existing $145,054 4 4 4 WW Adm. Existing S 97,140 3 3 3 1 Wtr Plt Existing $619,292 240• 22.2 22.2 1 Wtr Dist. Lt.Eq. Op(N) $ 22#028 0 0 1 Existing $847,560 24 24 24 Wtr Mtr Existing $264,193 8 8 8 J 1 Wtr Eng. Existing $ 72#425 3• 2.5 2.5 WWTP Maint.Mec(N) S 23,221 0 0 1 Existing $7800686 27•• 24.5 24.5 Swr Coll. Existing $482,196 14 14 14 WW Eng. Existing $265,356 9•• 6 8 i WW Lab PT Pro.Coo(N)5 38#193 0 0 1 I I Tech.ASet(N) $ 10,836 0 0 .5• Existing $22l#533 5 5 5 a Wtr Lab Secretary(N) $ 24#018 0 0 1 Existing $ 69,573 2 2 2 TOTAL NEW WTR/WW $118#296 0 0 4.5 I TOTAL EXISTING WTR/WW $3,909#028 123 117.2 121.7 i • This involves one part tine employee. I j This involves two part time employees. + MAJOR IAT"ASTRWATER PROJECTS During the Utility Administration staff review of the Water/Wastewater Department, approximately $670#000 was removed from the Water Department budgets and approximately $700000 from the Wastewater Department. Included In those reductions were four i positions, $250,000 from new water main construction, $80#000 from service line construction, $51,000 from sewer maintenance, $76,000 from sewer services line construction and $33,000 from new and I i replacement water meters, I ES-7 I jr low k 1~ .C I The major new or ongoing items in the Water/wastewater/Lab expenditures are: i 1. Paint 'High School Water Tank' 2. A n increase from 5.801000 gallons for chemicals $157,400 In 198) 3. Decisionbmadetnot to4spendO$1gallons in 000000 1990 71,000 V furbishing of wells in 1990 4. Upper Trinity Regional Water District 5. Economic Development $ 20,000 V $ 38,000 LABORATORY The majority of new positions proposed for 1990 are in the Municipal Laboratory area. This area is requesting a 'Pretreatment Program Coordinator' and a 'Technical Assistant' in the Industrial M Pretreatment area and a 'Secretary' to be shared by this area and t Laboratory area. The EPA gave this division a I f flood review in 1,. in tll areas except they listed a requirement for more personnel to medt regulatory functions. ~ I ! i The workload on this area also increased due to the City of Denton taking over the health Department function from the County. ` I ` Other major expendit,are issues are; Ir V le Increased costa to perform bioaseaye $ 20,000 2. PC Computer I $ 7,500 j REVSNDE PROJECTION MODEL i Actual revenues for the first six months of fiscal Year 1988 were obtained. Original budget data for the remaining six months was added. This total data was reviewed and analyzed. The forecast was then used to determine increases in customers and consumption. formulas are derived and input into the various worksheets to take last years' numbers (in some cases the last two or three years' data was used) and applied to the percentage increase to obtain forecasted data, i I ES-8 I 9 4 i; GENERAL EXPENDITURE INFORMATION Expenditures were obtained from the attached operating Budgets, Capital Improvements Budgets, Finance, Accounting, TMPA and the Staff. Salaries were escalated for anticipated actual satisfactory performance evaluation increases, but no amount was included for general salary adjustment. Administrative Transfers and Return on Investment figures were obtained from Accounting. + Bad Debt was projected to be one percent of customer based revenue. This is higher than the rate used on the 1988 budget (.0051) and is the result of meetings with the staff and Mince. Debt Service (the amount of interest and principal due annually as a result of bond sales) is also included in the proformas. Detailed sheets of the amount, date and interest rates are included I with the proEormas. The bond interest rate used for future bondsales is 81 with a twenty-five year payout. A 114,000,060 Don issue is planned for September 1989. Payment of principal is based r on 71 for the first five (5) years and 4.51 principal payout thereafter. Previous years' bond interest and principal are a direct input with records obtained from the Accounting Department. . Respectfully submitted, E. Nelson, Executive Director 4 Department of Utilities I 549BUt1-9 I ES-9 J 03-May-89 UTILITY SYSTEM PROFORMA 10:33:06 X. 1000) ACTUAL ACTUAL EST/ACT FY 1987 1988 1989 1990 REVENUES 1 Electric Sales $529344 $48,946 $53,688 $55,405 2 Electric Misc 11371 1,344 1,239 11278 3 TMPP 8 0th Off Sys 4,085 10,302 80779 9,800 4 Water 8 W/W Sales 10,368 13,286 15,048 18,878 5 Water d W/W M1sc 459 489 503 494 6 TOTAL REVENUES $73,627 $74,367 $79,255 $83,855 EXPENDITURES 7 Payroll $00769 $6,187 $7,726 $9,213 8 Supplies 583 882 964 1,041 9 Prod Power W/W 1,046 1,037 10157 1,207 10 Maintenance 2,034 21294 2,884 31349 11 Services 921 840 1,216 11571 12 Purchase Water 829 844 ' 364 135 ] 13 Insur 8 Sundry 325 552 11041 820 14 Bed Debt 11163 878 878 713 15 Admin Trans 2,450 21221 21357 2,641 18 Ray Roberts Pmts -----0 0 11383 1,864 - ! i 17 TOTAL OPERAT $16,120 $16,335 $19,770 $22,654 18 Pur Pwr 6 Fuel $47,139 $47,060 $47,908 $46,117 19 NET OF OPERAT $10,388 $10,972 $li,677 $15,184 NON OPER EXPENDITURES 20 Oebt Service $5,775 $5,453 $5$95 $7,001 21 Fixed Assets 10028 11122 1,493 2,213 21 Other 3,060 11059 789 444 23 Rat on Investment 2,537 21158 31315 30550 24 Incr in Work Cap 0 0 0 339 26 TOT NON-OPER EXP $12,400 $101392 $11,192 $13,647 25 TOTAL EXPENDIT $75,859 $13,787 $780870 $82,218 :zzzz:z -:zzzz: 27 NET GAIN (LOSS) ($2,032) $580 - $385 $1,637 f 28 DEBT SERV COVER 1.80 2.01 2.07 2.17 ES- 10 I i 03-May-89 UTILITY SYSTEM PRO FORMA CHANGES 10:33:28 .7% 2.2%-----2.8----- 3.0% ----3.0% ----2.9% ' ------°-2.0% -----------------------1994 PROJECTED GROWTH 1 - 1988 1989 1990 1991 1992 1993 ~ REVENUES .5% 2.6% 5. 5.4% 2.9% i% 0.9% 2.0% Electric Sates _-63.3% _21,5% 14.4% -8.8% ,.7% Electric Misc 11.8% 1.4% 2.9% -0.1% 0.7% TMPA & Other off 13.4% ; 13.3% 12.2% 11.0% 11.1% 5.6% hater a M/M Sales 28 -1,8% 7.it 9.6% 4.61 6.2% Water a ii/W 1415c 8..1% 1% S 2.2% 6.2% 6-. --3.9% -6.4% 4.8% 3. 0% ~ TOTAL REVS ' EXPENDITURES , 19.2% 7.0% 7.0% 7.0% 6.0% Payroll ' 9.3% 8,0% 4.4% 4.0% 4.7% 4.7% 51.3% 4.8% 4.4.8% 5.4% Supplies -0.2% 3.9% Pur Power 3 Fuel ; p g% 11.6% 4.3% 3.9% 3.8% 3.9% 6.3% Prod Power k/ii ' _ 25.6% 16.1% 4.6% 4.6% 4.9% Maintenance 12.8% ` -g,8% 44.8% 29.2% 4.6% 4.0% 4.4% 4.6% Services ' 1.8% -56.9% -62.9% -39.3% 0.0% 0.0% 0,O% % Purchase water ; 69.8% 68.6% -21.2% 4.8% 3.6% 4.0% 4.0X Ins 5 Sundry ' -24. -22.8% 6.2% -3.8% 6.3% 5.6% Bad Debts _9.3% 3X s .i% 12.0% 4.4% 4.4% 4.4% 4.4% Admin Trans 34.8% 3.2% 2.0% 5.2% 6.2% NA KA Rey Roberts Pats 5.2% 5.6% TOTAL OPER EXP i 3.7% 16.2% 14.i% m ---.8% - NON OPER EXPEN 9.2% ---12.1% 6.2% Debt Service -5.8% 2.6% 3% 18 46.2% 34.9% 26.% -1.X 19.4% -15.3% Capital Other Improv , - 966..i% 4% -26.6% 62.3% -63.111 0.0% 0.0% 0 0% Return on Invest ; 8.7% 20.2% 1.1% 5.6% 18.9% 10.0% 14.0% EXP i --_--3.9% -----4.3% ---2.2%-----2.7% ----2.6% 3.2%---2.4% TOT OP 8 NON OP i ES-11 E 03-May-89 UTILITY SYSTEM BOND FUND ANALYSIS 10:33:06 (s X 1000) F Y BEGINNING Bonds Bonds Ending -BALANCE Sold Available Bonds BALANCE 1987 $16,871 $0 3161871 $6,992 $9,879 1988 91879 3,500 13,379 5,449 7,930 1989 7,930 0 10,727 61781 3,946 1990 3,946 14,000 17,946 16,933 1,013 1991 11013 119100 120113 111168 957 1992 967 14,500 (3,457 16 ,044 413 1993 113 13,760 140163 13414 349 1994 549 91250 91799 90161 638 03-May-69 10:33:06 DFBT SERVICE PAYMENTS - UTILITY (s X 1000) Bond BNO % EST/ACT FY FY FY Sales -TERM FY Series - 1989 1990 1991 1992 1993 1994 1983 $25,280 Act $3,181 $3, 1985 0 Act 040 $2,815 $2,112 $2 , 035 1984 6,100 1,094 1,OS0 1,171 1 356 1,212 1,127 1986 p 0 0 0 0 0 p 0 0 1987 17,486 O 0 0 0 155 1986'. 30600 Est 11176 f'34~ 1186 1,414 10416 19410 1989 0 82/26 yr p 0 340 333 328 394 ~...I 1990 149000 8%/26 yr p 0 0 0 0 1991 11,100 8%/26 yr 0 11400 1,372 19344 1,316 19288 1992 14,500 8%/26 yr 0 0 1,110 1,088 1,066 1,043 1993 13,760 8%/26 yr p 0 11450 10421 1,392 1991 9,260 8%126 yr p 0 0 0 1,376 1,348 l99S 1,860 $%/28 yr 0 0 0 0 0 926 1996 7,$00 8%126 yr 0 0 0 0 0 Q 1997 7:900 8%/26 yr 0 0 0 1996 7,850 8%/25 yr p 0 0 0 0 0 TOTAL $1460165 $6,595 $7,001 NOTE: Beginning in 1969, all bonds ere 7, r $8,333 $9,096 $10,196 $100828 fat thru Sth years and remaining principalgis ad Y paidtatpthe2rateiofl4.6%iforhe the next 20 years. Prior to 1989, all bonds are programmed to pay It principal in the 1st year, 2% in the 2nd thru 6th years and the remaining principal is paid at the rate of 4.5% for the next 20 years. ES12 1 I`!{r 1 1 V I ' 03-May-89 UTILITY DEPARTMENT 10:33:28 CUSTOMERS, CONSUMPTION 6 FINANCIAL DATA ELECTRIC DEPARTMENT (3 x 1000 Expctd F Y Avg 1----Total Sales--- Avg Rev Avg D S Rate Ending Cust MWH Revs /KWH Cnts/KWH Change - ' 1988 27,106 724,486 3480946 $0.0676 0.43 N/A 1989 27,809 726,378 3530686 0.0139 0.42 0.00% 1990 28,349 751,549 3550405 0.0131 0.52 0.00% 1991 299167 7769942 3569824 0.0131 0.68 0.00% 1992 29,977 8009483 $59,953 0.0749 0.57 2.60% 1993 30,821 8249257 $63,220 0.0767 .0.59 2.60% ` 1994 31,680 848,243 $65,061 0.0767 0.60 0.001 I WATER DEPARTMENT (GAL 6 $ X 1000) ` Expctd F Y Avg s ---Total Sales--- Avg Rev Avg D S Rate Ending Cust GAL Rev /1000 gal/1000 gal Change 1988 17,690 41012 389749 $2.18 $0.33 8.5% 1969 179746 41086 9 90902 2.42 0.36 8.5% 1990 180081 4,112 10,916 2.62 0.44 8.5% 1991 180620 40351 12,178 2.80 0.63 7.0% 1992 198173 41533 13,684 3.02 0.51 8.6% 1903 19,748 4,698 14,191 3.02 0.66 0.0% 1994 20,336 4,838 150196 3.14 0.66 4.01 I Ih , WASTEWATER DEPARTMENT x 1000) I` F Y ---Residential--- Monthly Monthly Expctd F Ending Avg 6 Total Avg Rev Debt Ser Rate Cust Rev's /Ras Cus /Res Cus Change M t 1988 13,939 319946 $11.63 $6.24 N/A 1989 141148 19925 11.34 5.61 0.0% 1990 140417 2,206 12.76 5.88 8.6% 1991 140846 21426 13.62 6.17 7.0% 1992 16,287 21644 14.41 T.45 6.0% 1993 16,746 2,882 16.25 8.13 6.0% 1994 169215 3,170 16.29 9.90 7.0% I 4 f ES-13 I 14 d 03-May-89 UTILITY DEPARTMENT ANTICIPATED BONO SALES 10:33:06 (3 X 1000) r i Electric Mater Wastewater Total F Y Bonds Bonds Bonds Bonds Ending sales sales Sales Sales 1988 s $0 $2,500 $1,000 $3,600 1989 0 0 0 0 1990 10,000 31600 500 14,000 1991 4,600 4,800 2,000 119100 ~ 1992 50600 8,600 21500 110600 1993 41600 5,000 4,260 139760 1994 40000 10600 3,750 91250 Total 3280600 $21,100 3130000 3629800 j a Not lnpluded in totals. I I, r • I J ES-14 i 03-May-89 10:33:06 DEBT TO FIXED ASSETS ANALYSIS X 1000) ELECTRIC MATER 6 WASTEWATER Fiscal Year Dollars Ratio Dollars Ratio Ending Debt : Assets Debt : Assets 1988 $23,955 : $68,435 35.00 $270921 $650942 42.35 k 1989 $22,555 : $719264 31.65 $26,932 : $67,065 40.16 E 1990 $310092 : $79,668 39.03 $29,930 : $73,319 40.82 1991 $33,768 : $82,779 40.79 $35,171 : $790687 44.14 I 1 1992 $37,645 : $86,815 43.36 $42,744 : $889652 48.21 1993 $400407 : $90,132 44.83 $500372 : $97,399 61.72 1 1994 $43,429 : $92,260 47.08 $53,778 : $1021434 62.50 i I SYSTEM TOTAL Year Dollars Ratio Ending Debt Assets 1988 $51,882 : $134,377 38.61 1989 $49,487 : $138,319 36.78 i 1990 $61,022 : $162,987 39.89 1991 $66,936 : $162,466 42.43 1992 $80,389 : 1176,477 45.81 1993 $90,780 : $187,631 48.41 1 1994 $97,205 : $194,684 49.93 1 ~ 1 i J ES-15 ' -Ir low 03-key-89 UTILITY DEPARTMENT - TOTAL SOURCE OF FU74DS 10:33:28 x 1000) Year Bonds Curr AIC Other Total Funds Revenue 1990 Electric $10,057 $1,206 $66 $165 $110494 Mater 4,702 591 3 927 6,223 Mstewtr 2,174 416 6 1P9 21785 1990 TOTAL =16,933 $2,213 $76 ;1,281 5200602 1991 Electric $4,311 31,649 $56 $136 46,152 Mater 41702 725 4 11453 6,864 wstewtr 2 064 426 6 30 29618 1991 TOTAL $11,061 $2,802 $56 $196i9 $16,554 ; 1992 Electric $5,650 $18235 $60 $190 $7,135 Meter 6,449 761 5 11988 9,183 Wstewtr 29945 449 10 50 3s454 i i 1992 TOTAL $159044 $2,445 $75 $2,208 $190772 1993 Electric $49521 $1,645 $65 $15 $6,307 Meter 41946 $00 6 11291 71043 Mctewtr.' ' 41147 474 15 106 1093 TOTAL $13,614 $2,919 $86 $1,472 $181091 1994 Electric $3,829 $1,138 $69 $79 $5,115 Mater 10472 848 8 18 2,346 Mstewtr 31860 485 116 70 40431 - 1994 TOTAL $9,161 $2,471 $93 $167 $110892 i i i F ZS 16 i 3-May-89 SOURCE OF FUNDS 10:33:28 X 1000) -----------------BOND FUNDS----------------- ---------------CURRENT REVENUES--------- F Y FY ll Ending Electric Water Wastewtr Total Ending Electric Water Wastewt Total 1988 = 6957 $2,494 $1,998 $5,449 1988 t 6648 $349 6125 61,122 1989 s 41671 11427 683 6,781 1989 a 997 471 172 11640 1990 10,057 41702 2,174 16,933 1990 11206 591 416 2,213 1991 41311 4,791 20054 111156 1991 18649 725 428 2,802 1992 6,660 61449 29945 15,044 1992 1,235 781 449 2,445 1993 41621 41946 4,147 130614 1993 1,846 800 474 2,919 1994 31829 1,472 39860 9,t61 1994 1,138 848 485 20471 Total for Total for 90-94 628,368 622,360 616,180 6650908 FY 90-94 66,873 630726 620252 6121850 43.0% 33.9% 23.0% 100.0% 63.6% 29.0% 17.6% 100.0% I ------------AID IN CONSTRUCTION-------------- ---------------OTHER FUNDS FY F Y Ending Electric Water Westewtr Total Ending Electric Water Wastewtr Total 1988 • 663 62 61 666 1988 s 6110 691 655 6256 1989 = 192 3 1 105 1989 i 44 17 52 113 1990 86 3 6 76 1990 155 927 189 10281 1991 66 4 6 65 1991 136 1,463 30 11619 1992 50 5 10 76 1192 190 19968 50 2,208 1993 65 6 16 86 1193 T6 19291 105 10472 1994 69 8 16 93 1994 T9 18 70 167 Total for Total for FY 90-94 6316 626 653 6395 FY 90-94 6646 65,667 6444 669747 80.0% 6.6% 13.4% 100.0% 9.6% 83.8% 6.6% 100.0% = Not included in totals. ES-17 1 V I 9 03-May-89 ELECTRIC SERVICE PROFORMA 10:33:06 X 1000) ACTUAL ACTUAL EST/ACT FY 1987 1988 1969 1990 1 NET SALES (MWH) 695,240 724,486 728,378 757,549 2 Rev cents/KWH 7.53 6.76 7.39 7.31 REVENUES 3 Residential $19,536 $18,587 $20,140 $21,468 4 Commercial 29,725 27,359 29,935 30,668 6 0overnmemt 20709 2,560 3,112 21768 ' 6 St/Highway light 238 273 334 7 D-D Fees 89 118 105 1333 12 8 Temporary Service 47 49 60 56 9 SUBTOTAL - CUST REV $52,344 $48,948 $530886 $55,405 10 Off Sys Sales 1,585 21674 1,887 21139 11 Wholesale Capacity 351 0 650 11498 12 Other E1 Charges 318 48 15 i0 13 THPP Coverage Ret 5,624 81061 6,242 6,163 ` 14 TMPP Surplus 1,526 11567 0 0 15 Reconnect Fees 18 23 20 20 16 Aid in Construction 101 63 102 66 17 Cust Connect Fees 200 205 216 221 i 19 Meter Tampering 8 17 16 20 Service Center Rents 164 156 156 2116 3 21 Sale of Scrap 1 22 Misc Income 1 5 6 143 56 30 31 23 Interest (Oper) 4 18 776 679 896 24 Interest (Non-op) = 456 421 147 307 25 TOTAL REVENUES $620800 $60,592 .$63,704 14 EXPENDITURES $68,183 26 Payroll $4,071 =3,912 27 Supplies $4,430 $5,329 1 28 Maintenance 234 356 354 415 29 Services 11064 11157 1,652 2,013 492 602 30 Ins 6 Sundry 263 434 677 983 31 Bad Debt 685 694 32 Admin Transfers 555 7 532 544 11447 1,2228 8 1,329 1,692 SUBTOT O&M 340 $9 $8,116 $8 $69 S11576 33 Purchase Pow & Fuel -47,139 47,0 I 60 47,908 46,117 34 NET OPER REVENUES t $70545 $5092 $5,927 $8,791 CAP AND OTHER NON OPER EXPENSES 35 Fixed Assets $564 $848 36 Debt Service $860 $1,206 37 Other/ECA Reduction 1,jpp 3'160 3'365 3,987 38 Rot On Inv Trans 345 O 39 Inc in Work Cap 1'7601 19890 10955 1,940 P _ - 141 40 TOT NON OPER EXP $6,945 $5,694 $8,219 $7,264 41 TOTAL EXPENDITURES 62,200 61,094 830996 61,946 42 NET (IAIN/LOSS(26-41) -$600 ($502) ($292) $1,537 43 DEBT SER (Cents/KWH) 0.464 0.429 0.423 0.624 44 DEBT SER COV (34/36) 2.34 1.67 1.93 2.22 Not included in totals as per accounting standards. ES. 18 11 J i T- 03-May-89 ELECTRIC SERVICE PRO FORMA 10:33:28 4--------'--'--"-------°° PROJECTED GROWTH(%) ' 1.3% 2.4% 2.5% 2.6% 3.0% 3.0% 2.9% 1988 S 1989 1990 1991 1992 1993 1994 REVENUES Residential i 0.0% 0.0% 0.0% 0.0% 2.6% 2.5% 0.0% 1 Commercial ; 0.0% 0.0% 0.0% 0.0% 2.5% 2.6% 0.0% I Governs ; 0.0% 0.0% 0.0% 0.0% 2.5% 2.6% 0.0% Other E1 Sales ; 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Inter (earnod) ' 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% F Other ; 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% TOTAL REVENUES ; 0.0% 0.0% 0.011 0.0% 2.6% 2.5% 0.0% { 1988 1989 1990 1991 1992 1993 1994 EXPENDITURES Payroll s ; 5.0% 5.0% 5.0% 6.0% 5.0% 6.0% 5.0% Supplies ; 1.0% 1.0% 3.0% 6.0% 4.0% 4.0% 4.0% y Purch Power and Fuel ; -0.2% 1.8% -3.7% 4.8% 4.9% 4.8% 5.4% Maintenance ; 1.0% 1.0% 3.0% 6.0% 4.0% 4.0% 4.0% Services ; 1.0% 1.0% 3.0% 6.0% 4.0% 4.0% 4.0% Ins. 8 Sundry ; 1.0% 1.0% 3.0% 5.0% 4.0% 4.0% 4.01 Bad Debts S ; 40.7% -31.9% 3.2% 2.6% 6.6% 6.6% 2.9% Adis Trans S i -15.1% 8.2% 19.8% 4.0% 4.0% 4.0% 4.0% TOTAL OPER EXP 1.8% 2.2% 6.0% 4.3% 4.3% 4.4% I 1988 1989 1990 1991 1992 1993 1994 CAP S 0TH NON 09R Fixed Assets 80.0% 53.9% 21.0% 36.7% -26.1% 33.21 -30.8% Debt Service -4.8% 29.3% 13.2% 2.0% 6.7% 4.3% 10.0% Other i -96.4% 590.0% 119.7% -100.0% N/A N/A N/A Rat on Inv Trans s ; 7.0% 3.4% -0.8% 9.7% 22.6% 6.4% 6.1% TOTAL EXP i 27.4% 28.9% 11.1% 16.1% 1.4% 14.6% -4.2% s Represents percent increase or dicreass j over previous year. I ES-19 i I i 03-Flay-89 ELECTRIC BOND FUND ANALYSIS 10:33:28 (s % 1000) F Y BEGINNING Bonda Bonds Bonds ENDING Ending BALANCE Sold Avail Used BALANCE $7,890 $0 >I7,890 $2,026 =5,861 1988 6,864 0 5,864 957 4,907 1989 41907 0 4,907 41671 236 1990 236 10,000 10,236 10,057 179 i~ 1991 179 4,500 4,679 49311 368 1902 368 5,600 5,868 50650 218 1993 218 4,500 4,710 11621 197 1994 197 4,000 4,19? 3,829 368 03-Ney-89 DEBT SERVICE PAYMENTS - ELECTRIC 10:33:28 (s X 1000) I Bond TNT % EST/ACT FY FY FY FY FY Series Sales Term 1989 1990 1991 1992 -1993 1991 11983 984 2 516,,7132 Act X2,051 2,706 Act 480 $1-976 $1,889 $1,373 =1,323 $1,236 1985 p 0 450 6501 600 555 504 1986 p 0 0 0 0 1987 8,025 Act 535 635 b'~ 5 649 850 0 1988 p 0 817 1989 0 8%/25yr p 0 0 0 0 0 1990 14,000 8%/25yr 0 1000 0 0 0 0 1991 4,500 81/25yr 0 0 450 441 132 492023 ' 980 960 940 1992 6,600 8%/25yr p 1993 41600 8%/25yr p 0 0 b50 539 528 1994 4,000 8%/25yr p 0 0 0 450 400 1995 4,850 8%/26yr 0 0 0 0 0 100 1998 5,000 8%/26yr 0 0 0 0 1997 4,760 8%/26yr p 0 0 0 0 0 1998 6,000 8%/25yr p 0 0 0 0 0 0 0 0 TOTAL 576,265 »30089 X30987 NOTE: Beginning In 1989, all bonds are programmed t4-491 2%pri 81,888 65 099 1st thru 6th years and remaining principal is paid t at ptheratenc11.5%1for~ ' the next 20 years. Prior to 1989, all bonds are programmed to pay 1% principal to the 1st year, 2% in the 2nd thru 6th years and the remaining principal is paid at the rate of 4.6% for the next 20 years, i ES20