Water

1
Water Sewer Rates for 2007 to 2009

• City of Portage la Prairie
• November 1, 2006

2
Presentation

• Current status
• Plans
• Rate Increase
• Rationale
• Specifics

3
About us

• City of Portage la Prairie provides water sewer
  services
• Within the City limits
• Outside the City limits
• The Public Utility Board regulates the rates
  charged by all water and sewer utilities outside
  Winnipeg.

4
Utility System

• Accounts for all water and sewer related
  activities
• Significant upgrades
• increase water production and capacity
• improve water quality
• enhanced wastewater treatment
• increased wastewater treatment capacity
• Water Pollution Control Facility
• most dynamic function in utility services
• accommodates large industrial users

5
Utility System

• Over 92 million has been invested in the water
  and sewer plants systems since 1996
• Financial Assistance
• all 3 levels of government
• Private industries
• Debentures

6
Citys Rate Structure

• 4 step declining block scale for water
• 2 step declining block scale for wastewater
• Public Utilities Board (PUB) guideline for
  municipalities with large users.
• City services 2 large industries (McCain and
  Simplot)
• Must provide sufficient revenue to recover all
  maintenance and operating costs.

7
4 Step Rate - Water

• Step 4
• primarily variable costs, debentures, reserve
  transfers
• Step 3
• Step 4 reservoir, admin costs
• Step 1 2
• Step 3 4 distribution, metering

8
(No Transcript)
9
(No Transcript)
10
2005 Revenues Per Group
11
Regional Growth

• Service beyond city limits while still reserving
  capacity for city growth
• Premium revenue source (rate structure freezes at
  3rd step)
• Raises demand for Portage water, accessing more
  funds from other sources for capital projects
  that improve quality and efficiencies of
  processes.
• Spreads costs beyond city users

12
City Finances 2006

• Utility Reserve Surplus
• Ending 2006 2.4M (2 of Capital)
• Debenture payments
• 494,709 on taxes (6 of municipal mill rate)
• 657,218 on rates (13 of total rate revenues)

13
City Finances 2006

• Capital projects 4 M
• Operating Fund 0.2 M
• Reserves 2.9 M
• Grants 0.9 M

14
2007 to 2009Major Capital Projects

• Wastewater recirculation pumps .24 M
• SBR Influent lift stations .2 M
• Expansion of WPCF lab .15 M
• Biosolids mixing system .25 M
• Water Plant upgrades 1 M
• Watermain and system upgrades 1 M
• Sanitary sewer renewals 1.3 M
• Sask. Ave. water sewer 1.9 M

15
2007 to 2009

• Capital projects of 6.5 M
• Sources of funding
• 3.8 M from the Operating Fund
• 1.1 M from Reserves
• 1.6 M by Debenture

16
Rate Increase
why?
17
Last Year.

• City proposed 5 year rate increase
• 1 year (2006) was approved
• PUB report
• Raise reserve levels
• Incorporate contingencies
• Review rate structure differential between
  domestic and industry rates

18
Also..

• Nutrient Removal made up part of the previous
  rate increase proposal
• PUB advised further discussions with the province
  and industry are required prior to any rate
  increases due to nutrient removal
• Meeting with PUB executive
• Nutrient Removal is not part of these rate
  increases
• waiting for mandate to remove nutrient is
  definite and cost sharing from Province is
  committed

19
To Raise Reserve Levels

• PUB Quote (p.12) With a system of Portages
  complexity, magnitude and age, utility reserves
  should be considerably higher. In the absence of
  much higher reserves, future rates are
  vulnerable to the risk of large increases as
  capital plant enhancements and major repair and
  renovation needs unfold.

20
Incorporate Contingencies

• PUB Quote (p.46)
• annual contingency provisions of 0.5 to 1.5
  of capital costs are not out of step with
  industry norms,
• contingency provisions are generally not
  considered part of reserve building.

21
Rate Structure Differential

• PUB expressed interest in revisiting the 4 step
  rate structure
• (p. 33) Portages four block water rate and two
  block sewer design should be reviewed for
  adherence to the principles of customer class
  equity, financial sustainability, and
  conservation

22
Rate Increase Proposal

• 2007 to 2009
• Water
• Step 1 2 - 6 for each year (lower volume
  levels)
• Step 3 4 8 for each year (higher volume
  levels)
• Sewer
• Step 1 - 6 for each year (lower volume levels)
• Step 2 - 8 for each year (higher volume levels)

23
Rate Increases

• Narrows gap between steps
• Raises Reserve to 3.15 M by 2009 (from 1.9 M in
  2006
• Meets capital requirements
• Contingencies of .5 to 1 of capital (within
  industry norm)
• Do not include nutrient removal costs

24
Impact - family with consumption of 15,000
gallons per quarter

25
Impact - mid -sized industry with consumption of
1,000,000 gallons per quarter
26
Impact - Large Industry based on 90,000,000
gallons per quarter
27
How do we compare?
28
How do we compare in 2009?(domestic level)

• close to Winkler and Brandon
• higher than Morden
• lower than Winnipeg (chart assumption is 3/year
  for Wpg)
• Also - Winnipeg forecasts an increase of 54 in
  sewer and water rates over the next decade due to
  their upgrades, which include nutrient removal.

29
How do we compare?
30
How do we compare in 2009?(industry level)

• Citys costs shown include industry overstrength
  charges
• Less than Wpg, Brandon and Winkler
• Winnipeg comparison table is 3/year Also -
  Wpg forecasts an increase of 54 in sewer and
  water rates over the next decade due to their
  upgrades, which include nutrient removal.

31
Summary

• Rates meet demands on the Utility system
• Domestic rates remain in line with Brandon Wpg
• Reserve Funds continues to build and support
  other utility projects
• Rate gaps are narrowing
• Nutrient Removal is not included

32
Process

• By-Law first reading July 10, 2006
• Public Hearing Nov. 1, 2006
• PUB approval
• By-Law 2nd/3rd reading
• Public notification
• Rates change effective January 1, 2007

33
Questions?