Water, Wastewater Rate Study Item R5CCity of Miami Beach
Water, Wastewater Rate Study
Budget Hearing
September 30, 2015
Milian, Swain & Associates, Inc.
2025 S.W. 32 nd Avenue
Miami, Florida 33145
www.MilianSwain.com
Milian, Swain & Associates, Inc.
(305) 441-0123
Scope of Work
MSA Conducted a water, wastewater and wholesale rate studyMSA Conducted a water, wastewater and wholesale rate study
Based on historic and budgeted financial information
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Projected sales and purchased volumes by the City,
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We estimated the needed water, wastewater and wholesale rate adjustments
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Recommending course of action to the City
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Milian, Swain & Associates, Inc. 1
Rate Case Assumptions
Our rate study was based on the following assumptions:
Proposed FY16 budget for water and wastewater
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Announced WASD water rate decrease of 2.7% and sewer increase of 8.9%
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Proposed FY16 –FY 20 CIP of $53.6 million
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•$34.98 million for water projects (65.7%)
•$18.27 million for wastewater projects (34.3%)
Proposed $50 million bond issuance in FY16 and associated debt service
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Anticipated sales and purchased volumes in the FY16 budget
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Summary of Findings
Wastewater rates should be increased 9% from $7.55 per thousand gallons to $8.23
•Mostly due to cover the 8.9% increase in WASD rates
•Rate increases since 2009 -46% compared to 65% for WASD
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Summary of Findings -Wastewater
The proposed 9% increase in wastewater rates is designed to produced an additional $3.7 mm in
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revenues
The table below shows the items driving the need for the wastewater rate increase
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•8.9% increase in WASD rates is the most significant item
•Make up current deficit of $2.5 million (Higher WASD cost due to volume, rate& non-recurring credit)
•Assumes recommended wholesale rates for Satellite Cities are implemented
•Debt service on $50mm new bond issuance is offset by a reduction existing bonds scheduled debt service
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Summary of Findings
Water rates should be increased 5% from $4.43 per thousand gallons to $4.65
•Debt service associated with FY16 $50 million debt issuance
•Increases in other operating and maintenance cost (inflation)
•Offset partly by the decrease in WASD rates
•Rate increases since 2009 -20% compared to 18% for WASD
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Summary of Findings -Water
The proposed 5% increase in water rates is designed to produced an additional $1.5 mm in revenues
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The table below shows the items driving the need for the water rate increase
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•Debt service associated with the proposed $50 mm bond issuance in FY16 is the most significant item
•Contract maintenance is budgeted to increase by $339,000 in FY16
•DERM, revenue allowance, renewal & replacement and contingency are driven by the increase in revenues
•2.7% decrease in WASD rates
•Debt service on existing bonds is scheduled to decrease by $445,949 in FY16 (Series 2006)
•Make up current deficit of $617,155
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Summary of Rate Increases since FY09
City of Miami Beach RatesWASD Wholesale Rates
YearWater%Sewer%Water%Sewer%
FY09 3.88 5.62 1 .4649 1 .6869
FY10 4.3612.4% 6.047.5% 1 .714217.0% 2 .043621.1%
FY11 4.360.0% 6.040.0% 1 .71420.0% 2 .04360.0%
FY12 4.360.0% 6.040.0% 1 .71420.0% 2 .15285.3%
FY13 4.360.0% 6.345.0% 1 .71420.0% 2 .452313.9%
FY14 4.360.0% 6.340.0% 1 .71420.0% 2 .45230.0%
FY15 4.431.6% 7.5519.1% 1 .78163.9% 2 .56004.4%
FY16 (Proposed) 4.655.0% 8.228.9% 1 .7341-2.7% 2 .78798.9%
Increase since 2009120%146%118%165%
Total combined increase since FY2009
Miami Beach35%
WASD43%
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Summary of Findings –Wholesale
The City provides wholesale sewer services to the neighboring cities of Bal Harbor, Bay
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Harbor and Sunrise
The surcharge charged should be increase from $0.167 to $0.3168 per thousand gallons
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•To reflects O&M inflation since 2007
•To include a 1.5% administrative charge not previously included
•Revise renewal and replacement cost recovery to be consistent with retail rates (5% of revenues)
•Wholesale rates for FY16 should be increased by 13.8% to $3.105 per thousand gallons
•WASD FY16 rate of $2.7879 plus surcharge of $0.3168 per thousand
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