2015 Willdan Rate Study Analysis

About Your 2016 Rates: Reliable Infrastructure = Reliable Service

In 2015, the Utilities Division hired Willdan Financial Services to determine whether our rates were adequate for funding our operating and capital expenses. The study revealed the need for rate adjustments to keep up with inflation and increased capital improvement costs associated with aging infrastructure, treatment plant upgrades, and upsizing of stormwater infrastructure. Based in this study, Willdan proposed that the following increases for the next 5 years:

4.4% annual revenue increase for water, of which 0.1% would be dedicated to a new position for our water conservation program
7% annual revenue increase for sewer
6% annual increase for stormwater

The City of Flagstaff Water Commission — a seven-member, citizen-based, advisory group — reviewed the findings of the study and provided recommendations to utilities staff. After a lengthy planning and public input process, the City Council approved the 2016 rate increases to provide funding for the rehabilitation and replacement of the pipes, treatment plants, pumps, reservoirs, and wells that ensure the reliable delivery of our drinking water. Reclaimed water rates require further review by Council and are to remain constant for through 2016.

Download a copy of the Water, Sewer and Stormwater Rate and Capacity Fee Study.

Timeline

July 2016: New rates go into effect
Apr 2016: Final reading of the ordinance and resolution to adopt rate adjustments to City Council
Oct–Nov 2015 / Feb 2016: Additional City Council public hearings on proposed rates
Oct 2015: Public hearing to receive input concerning a proposal to increase water, reclaim water, wastewater, and stormwater rates
Aug 2015: Council asked to adopt a Notice of Intention to increase water, reclaimed water, wastewater, and stormwater rates, initiating the required timeline for public input and discussion
Jul–Sep 2015: Public presentations by staff to various stakeholder groups on proposed rates and capacity fees adjustments
Jul 2015: Willdan's final report completed and presented to the Water Commission and made available with City Clerk and online
Jan–Jul 2015: Willdan and staff presentations to water commission
Nov–Dec 2014: Willdan conducted rate analysis / capacity fee analysis
Sep–Oct 2014: Willdan conducted rate analysis / revenue requirements
Apr 2014: Willdan Financial Services selected to conduct rate study

Public Presentations to the Water Commission

Capital Improvement Projects

The rate increases were determined in part based on the need for various CIPs.

2016–2020 Utility Rates

Note that the "energy component" changes each year. It is not a fixed charge set at $0.96/1,000 gallons for all 5-years.

How do we compare?

For the average residential customer using less than 4000 gallons of water per month, this equates to $3.09 per month increase or approximately $37 per year in the total utility bill.