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HomeMy WebLinkAbout07/23/2024 03.D. Rate Studies for Refuse, Wastewater and Stormwater r `y � ljl t I!/ • l'. J...-.:t; BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 3.D. For Meeting of: July 23, 2024 ITEM TITLE: Rate Studies for Refuse, Wastewater and Stormwater SUBMITTED BY: Scott Schafer, Public Works Director SUMMARY EXPLANATION: Public Works has prepared Rate Study presentations for Refuse, Wastewater and Stormwater for 2025- 2028. • Refuse -Trace Bradburn, Solid Waste Manager with Chris Bell of Bell &Associates • Wastewater and Stormwater- Mike Price, Wastewater/Stormwater Manager with Tage Aaker of FCS Group In developing and setting rates, it is important to base it on actual costs to ensure the rate structure properly supports the cost of providing the essential services but is also fair and equitable to the users. ITEM BUDGETED: N/A STRATEGIC PRIORITY: Fiscal Sustainability RECOMMENDATION: No action is needed. The Rate Studies are to inform the City Council and will be discussed further as part of the 2025/2026 Budget process later this fall. ATTACHMENTS: Yakima Refuse Division Collection Rate Presentation2.pdf Yakima Wastewater& Stormwater Rate Study B&W.pdf 108 Yakima Refuse Division Collection Rate Presentation Presented by Chris Bell Bell & Associates July 23, 2024 's Refuse Division Background Residential Customers 25,977 Driver FTEs 13 32 gallon cart — 4,212 Support FTEs 5 96 gallon cart - 21 ,765 Managers FTEs 3 Yard Debris Customers 6,655 Container Customers 306 Daily Collection Routes Residential 10 Collected Waste in 2023 Container 2 Solid Waste 30,407 tons Yard Debris 3 Yard Debris 3,654 tons Clean City 1 0 Rate Setting Process Line item expenses from the 2024 Refuse Division Fund Budget were summarized by the following categories and escalated to increase from 2025 to 2028 by the following amounts: Expense Group Escalator Disposal Actual Labor 3.5% Operational 3.5% Insurance 5.0% Truck Replacement 7.5% Division / City Admin 3.5% Yakima County Landfill Disposal Increase Yakima County controls waste Date iiillimi muRate JR disposal within Yakima County January to May 2023 $ 36.68 June to December 2023 $ 42.47 January 1 , 2025 $ 44.40 The County has two landfills: January 1 , 2027 $ 46.33 Terrace Heights east of Yakima Average % A 4.8% Cheyne north of Zillah The County adjusted rates in 2023 and are effective till December 2027 N Collection Revenues • Annual Increase of 3% for all services • Customer growth combined with assumed costs increase is expected to maintain adequate fund balances • The following table are the residential rates escalated at 3% annually Residential Rates 2024 2025 2026 2027 2028 Res SW 32 gal $ 22.30 $ 22.95 $ 23.65 $ 24.35 $ 25.10 Res SW 96 gal $ 25.70 $ 26.45 $ 27.25 $ 28.05 $ 28.90 Yard Debris 96 gal $ 19.95 $ 20.55 $ 21 .15 $ 21 .80 $ 22.45 Financial Summary of SW Division from 2024 to 2028 Year FY24 BDT FY25 EST FY26 EST FY27 EST FY28 EST Revenue $ 9,701 ,136 $10,353,702 $10,651 ,359 $10,957,707 $11 ,273,001 Expense $ 9,665,677 $10,076,734 $10,461 ,918 $10,912,225 $11 ,335,706 Net to Fund g 35,459 $ 276,968 $ 189,440 $ 45,482 $ (62,705) Balance A Bulky Waste Collection • Fully utilize the collection assets to provide on-call bulky waste collection to residents and businesses within Yakima • Rates are based on the cost of disposal • Rates are set to provide customers a low cost method to self- hauling or illegal dumping • Materials would be collected by either a rear load refuse truck, flatbed cart/container delivery truck, or grapple truck Item Cost Couch $20.00 Bulky Waste Rates Sectional (piece) $20.00 Recliner or Similar Size Chair $15.00 Accent Chair $10.00 Table (Over 5 foot in length) $15.00 Item Cost Table (Under 5 foot in length) $10.00 * Refrigerator (residential size) $38.00 Book Shelf $10.00 * Freezer (residential size) $38.00 Dresser $10.00 * Air Conditioner (portable) $38.00 Office Chair $10.00 * Assumed to be picked up with Freon/Refrigerants File Cabinet $10.00 Dining Chair $5.00 Lawn Mower (fluids drained) $25.00 Hide-A-Bed $25.00 Water Heater (drained) $15.00 Twin/Double $10.00 Stove $15.00 Queen $10.00 Washer or Dryer $15.00 King Mattress $15.00 Dishwasher $15.00 King Box Spring $10.00 BBQ (no tank) $15.00 Hot Tub Cover $20.00 Microwave $5.00 Toilet (2 pieces) $10.00 Shower Doors (set) $10.00 Car Tire (no rim) $4.00 Bike $10.00 Car Tire and Rim $5.00 Pallets (each) $5.00 Truck Tire (no rim) $6.00 Playpen/Crib $5.00 Truck Tire and Rim $11 .00 Vacuum $5.00 8 Questions ___...4r,,,4-... ', Wastewater and Stormwater ,J . j Rate Study `' ' - •►sr•- � _ _ .#.,•�" """' I.. -. -{` .. ,O.� 'T` a l+�. `{ ~ 'AI IfI�.- • • ~a Malice _ It , '�a t . � —{ .: i Fes= li �• T' , ir•r - .. �'t , ...------ ,_ ' •- •:> FCS GROUP Solutions-Oriented Consulting 118 +. Introduction I Background • Contracted in 2021 to complete the Wastewater Financial Plan » Largely focused on changes needed just to the Ready-to-Serve charges • Contracted in 2022 to complete comprehensive Wastewater and Stormwater rate studies • Focus of discussion today » Analysis of all rates and charges related to Wastewater » Update revenue needs assessment based on Stormwater level of service options FCS GROUP Slide 2 119 *'+ Introduction to Utility Rate Making •• • Utility rates are set to recover cost of providing service Example » All utilities are self-supporting • Operating costs (regular 1 ongoing) » Employee salaries and benefits » Supplies and materials » Routine inspections and maintenance » Utilities taxes » Fleet replacement contributions » Interfund charges for services IlL , • Capital costs Year 1 Year 2 Year 3 Year 4 Year 5 » Infrastructure replacement » Facility upgrades ■Operating ❑Capital FCS GROUP Slide 3 120 •':� Rate StudyOverview • Policy Framework Revenue Requirement Fiscal Policies Operations & Fiscal Policies j it Maintenance Utility rates are set to recover the Capital s Debt Service annual cost of Capital Funding Expenditures (if applicable) providing service. Options Revenue Requirement Connection Charges V FCS GROUP Slide 4 121 **+ Sturdy Data and Assumptions * 4 Study Foundation Operating Costs 2023 and 2024 budgets; further informed by historical actuals and staff input Fund Balance 2023 starting fund balances Capital Expenditures 2023-2042 Capital Improvement Plan Revenues Validated customer billing statistics Forecast Assumptions General Cost Inflation WA State Revenue and Economic Forecast Council, Staff input (3.0%) Construction Cost 20-City Average Construction Cost Index, Updated estimates (4.0%) Wages In line with General Cost Inflation (3.0%) Benefits Employment Cost Index 5-year average (5.0%) City Utility Taxes Remaining at current rates (20% for Wastewater, 15% for Stormwater) Customer Growth Yakima Comprehensive Plan data (0.7% to 0.9% per year) FCS GROUP Slide 5 122 • •*• Fiscal Policies Summary • Policy Purpose Policy Target Operating Reserve Cushion to accommodate cash flow Wastewater: 60 to 90 days fluctuations Stormwater: 90 to 120 days Capital Reserve To meet emergency repairs, unanticipated Minimum balance 1% of capital assets capital, and project cost overruns Debt Service Compliance with existing debt covenants Target: 2.0 or higher Coverage(DSC) and maintain credit worthiness for future Legal Minimum: 1.25 debt Rate Setting A multi-year financial plan Main Focus: Through 2030-32 Considering: Full 20-year plan Set rates to meet the total annual financial Rates set to cover O&M, debt service, fiscal Revenue Sufficiency obligations of the utility and be self policy achievement supporting FCS GROUP Slide 6 123 I_ - Wastewater Utility Rates : I ir .16 . _ � � re rea men ron 4 _ ,_•�C, _ _ __ , • 'em _ _ .... . : / ■,.. : All as e u rc ar es y �, Industrial ., f ,6.14 IU F - — •_ o r I :,_,L. . .„.., -- - 1 v . .yam ^p — .rr�..� - -jy� •� aG .i.,v.-.2 r r ti- I L a A I 'LL L I I i , f.{ ., g ice.! y �j. ;.‘i a 0.1 124 ****> Revenue Requirement Overview • All rate components last analyzed in 2014 2024 Revenue Breakdown (Millions) Pre-Treatment, Strong Waste, • Pre-treatment, strong waste, industrial wastewater, $1.4M $0.8M and wholesale evaluated on cost to serve Industrial, » Currently -20% of overall utility revenue $1.3M _Wholesale, $1.3M • Retail rates adjusted to cover remaining utility Misc. obligations -evenue, $0.5M » Currently -80% of overall utility revenue Retail Rates, $20.4M FCS GROUP Slide 8 125 ..4 MIU Pre-Treatment Rates Background 046‘ .• .o, .�P�R PR r�EANENrpAcrSHE • Program goal °pro,,°�4a+:," _ Er rro y �mec, �'�:.yy. Pa,�:asp.,,,c.,o.yk 4 „,, » Protect the sewer system and treatment plant from pollutants 4, �` az „,,, b 4 .,CPR ��cy� °i� saw f''ey rPo�'ai that may be discharged by local industries �g ' Z,: p,., 8'w+»�aa �Y3 Pony `'V95er ,� ?� ncc "0 zr,*,,�ha °w.4' 'yr 5:14 e;:(s 444, ar4)Z Terse » Some pollutants can upset the wastewater treatment plant, r .�t n.. �, ,` ux , « � including fats, oils, and grease (FOG) 4�rn i a , »R ) "4 • Cost recovery . i » Charges imposed on Minor Industrial Users (MIUs) for the cost - `- = - to inspect facilities and test and monitor wastewater from _,---,•dr 1: ) 1 businesses #-:-s.-- '- t• ;\ ipia ,, . :-':_ • Approximately 460 customers in program -' = "' , , *e •y G r .. Source: City of Yakima's website FCS GROUP Slide 9 126 • . . MIU Pre-Treatment Rates Findings v • Findings » Current rates are under-collecting the cost to provide service • Rate Plan Scenarios » Phase-in recommended, 5.3% increase per year Consider for adoption Pretreatment: Monthly Fixed Rate per Account 2024 2025 2026 2027 2028 2029 2030 2031 Monthly Rate I Acct (immediate) $170.56 $189.12 $197.59 $206.37 $215.48 $224.93 $234.73 $244.90 10.9% 4.5% 4.4% 4.4% 4.4% 4.4% Monthly Rate I Acct (2025-31 Phase) $170.56 $179.61 $189.13 $199.16 $209.73 $220.85 $232.56 $244.90 5.3% 5 3% 5.3% 5 3% 5.3% 5 3% FCS GROUP Slide 10 127 4,4* Strong Waste Surcharge Background 8• Strong Waste urcharge.For customers dischar • To recover costs equitably between its residential and (PPm,of biochemical oxygen grog wastewater which cont greases ygen demand ) ains rr commercial customers, wastewater utility charges must: (FOG),there shah be a surcharge,(SOD and/or total suspended solids(TSS)and/c » Differentiate based on scale of the service (RTS, flow) caiculaced Utilizing the na rge,in addition to , arge and » Differentiate based on the characteristics (strength) of - � = f - u s typical t the wastewater flow (surcharges) -= - r rhnncpc — 4- • Charges imposed on customers contributing high r „ ' _ concentrations of the following: -- - - - �.-... » BOD - Biochemical Oxygen Demand -- . _ ,i �_ ��' �'�{� » TSS - Total Suspended Solids » FOG - Fats, Oils, and Greases • High concentrations more costly to treat Source:City of Yakima's website,Yakima Regional Wastewater Treatment Plant FCS GROUP Slide 11 128 •• Strong Waste Surcharges - WWTP Capital Plans Annualized WWTP CIP Figures $8,000,000 $7,000,000 - I I i I I I $6,000,000 uu • i • iiiuiiuiuull $5,000,000 $4,000,000 11111111111111111 $3,000,000 iiiuiiiuiuuiiilll $2,000,000 11IIiuIIuIuIuIIuI $1,000,000I 11111 LI1IIII1IIIItItI $- bc (o (o ro rNcoo co (o ro ro (o `o ro ryo �o (o (o ro (o `o `o (o (o (o 'o �o (o (19 �o •Annualized WWTP 2014-24 CIP Annualized WWTP 2023-2040 FCS GROUP Slide 12 129 •! Strong Waste Surcharge Findings • Findings » Significant portion of CIP is related to WWTP projects (roughly 2/3), much higher than last study » BOD and TSS surcharges under collect costs; FOG surcharges slightly over collect • Recommendation: Adjust BOD and TSS surcharges faster than inflationary levels, FOG slower • Rate Plan Scenarios: Consider for adoption Phase-in recommended Strong Waste Surcharges 2024 2025 __ MIL_ 2027 2028,___e 2029 2030 2031 BOD $/lb.(immediate) $0.6552 $1.1023 $1.1218 $1.1414 $1.1622 $1.2396 $1.2620 $1.2851 68 2% 1 8% 1 8% 1 8% 6 7% 1 8% 1 $/lb.(2025-31 phase) $0.6552 $0.7214 $0.7943 $0.8745 $0.9628 $1.0601 $1.1672 $1.2851 101% 101% 101% 101% 101% 101% 101°h TSS $/Ib.(immediate) $0.6075 $0.8850 $0.8882 $0.8913 $0.8950 $0.9415 $0.9453 $0.9493 457% 04% 04% 04% 52% 04% $/I b.(2025-31 phase) $0.6075 $0.6475 $0.6901 $0.7355 $0.7839 $0.8355 $0.8905 $0.9493 66% 66% 66% 66% 66% 66% FOG $/lb.(immediate) $0.4292 $0.3943 $0.4072 $0.4204 $0.4342 $0.4495 $0.4642 $0.4795 -81% 33% 33% 33% 35% 33% $/lb.(2025-31 phase) $0.4292 $0.4360 $0.4430 $0.4501 $0.4573 $0.4646 $0.4720 $0.4795 1 6% 16% 16% 16% 16% 1.6% FCS GROUP Slide 13 130 • •' Industrial Wastewater (1W) Background 4,40 • IW line is a system specifically built to treat high-sugar industrial wastewater » UASB process depends on high-sugar wastewater to operate effectively; pretreatment not desired » Originally forecasted to removed 80% of BOD • Charges first developed via the 2014 rate study » At the time, the IW line /facilities was under construction ■ Currently serves Del Monte, Seneca, and Jewel » Customers pay 60% of the Ready-to-Serve meter and flow rates » Customers also pay an additional IW specific flow rate • Total bill for any given IW customer capped at the amount that would be paid by that customer if its wastewater were going through the normal treatment process with retail rates; incentive to connect FCS GROUP Slide 14 131 • •': Industrial Wastewater Rates Findings •* • Findings » Recent performance records show approximately 91% BOD removal » However, cost per pound of treated BOD over double previously forecasted cost » Current IW charges are under-collecting the cost to serve • Recommendation: Adjust IW rate faster than inflationary levels • Rate Plan Scenarios: » Phase-in recommended Consider for adoption Industrial Wastewater 2024 2025 20 `F ` 20211V 2028 2029 2030 2031 Cost per CCF (immediate) $8.08 $10.47 $10.72 $10.97 $11.24 $11.51 $11.79 $12.08 29.5% 2.4% 2.4% 2.4% 2.4% 2.4% 2.5 %c Cost per CCF (2025-31 phase) $8.08 $8.56 $9.06 $9.60 $10.17 $10.77 $11.40 $12.08 5.9% 5.9% 5.9% 5.9% 5.9% 5.9% 5 9% FCS GROUP Slide 15 132 - - --- - r , { - ri „ 19.E- -=_' _ : -••••,. ,,y - ,--.., , Wastewater Utility Rates : .__ --,n'- -- -...-. ,. , wr _ . _ _ _ , ..., _ _ .• ___ __. _ olt ir, . . .. r_ �iFilW f Retail i i wf�. a es ,,,, _ . ,, _ ._ ._ . ., .,....... , . .. • , ,_ . . . ..,.. , 7 • LLe .4�- . 4- - - ' • ��Ir '_ _�. �I -t w ;. a it1 1:�. �� 1. j .--- 3 �"Yi r�. Z I f- _ - '- • • . ,fit f'IIIIIn' +01 _• ' ;ti�6_r; - {. ew •t9!�r - - .. . ,.,; ...u: ,..... i '4 'a% i T • is _ - - 133 •' Ready-to-Serve Rates Background ,_ /i f AIL- .,1 • Largest revenue stream for the Wastewater utility N. -- Accounts for -80% of utility revenue ;—„sc` ' �,; ., ; _ Ill ' - ,,,,-...d , - - 1 • After evaluating the cost to serve other customers, ' ` , - i ' • :... these charges fund the remaining utility needs 7 ' I t `'`--• - - ' . • ply • Monthly rates by meter size, volume (per CCF) _- 4 _ 4"14110 Water Meter Size(Inches) MonthlyIto- 3/4" $ 24.62 'Y 11/2 " $ 3774" $ 58.24 t 3" $ 209.10 4" $ 265.07 Source:City of Yakima's website 6" $ 395.63 8" $ 544.49 10" $ 1,084.80 Multiple Unit Residential Customer Per Account Ready to Serve Charge-Multiple Unit $ 14.78 Volume Charge-per hundred cubic feet(ccf) $ 3.59 FCS GROUP Slide 17 Source:City of Yakima's 2024 Fee Schedule 134 ***.> Wastewater Capital Plan Through 2031 .* System Development Debt, $121.8m$4.2M $121.8m of capital identified $22 OM _Wholesale Assumes 90% completion factor co $30 0. —&-Q-t-her, o $2.4M $25 Rate- its, Funded $4.0M Capital, $20 $77.0M $15 $10 5 $- - -- 2025 2026 2027 2028 2029 2030 2031 Executed Delayed FCS GROUP Slide 18 135 • .44 Wastewater Revenue Requirement • • 1 Data labels: . $40 Average SFR Monthly Bill $52.38 o $50.85 $49 Increase in Monthly Bill .37 $1.53 $35 Annual % Increase $46.53 $47.93 $144 $1.48 'BOO_°/4 $45.17 $1.40 ° 3.00/o $43.85 $1.32 $1.36 3.00% 3.00/0 ,.... ....... -•••.. 3.00% 3.00% ......•...•' . a $42.57* 3.00% ............_. . $20 - 1 - $15 $10 - - $5 - • $- - — 2024 2025 2026 2027 2028 2029 2030 2031 ismi O&M Expense mimi Existing Debt Service New Debt Service FCS GROUP Rate Funded Capital —Revenue @ Current RTS Rates Revenue After RTS Increases Slide 19 *Assumes%"meter and 5 ccf water usage 136 *44 2023 Residential Wastewater Rate Survey • Cle Elum Roslyn West Richland Yakima (Proposed 2025) $43.85 I I I I Yakima (Current) $42.57 Wenatchee Ellensburg - -- - - - - - - - - — - — Moses Lake Pullman - _ Pasco Kennewick Richland _ -- __ ---- _ - . $- $10 $20 $30 $40 $50 $60 FCS GROUP Survey completed May 2023 *Assumes%"meter and 5 ccf water usage Slide 20 137 • ***) Ready to Serve Rate Schedule • • Consider for adoption Retail Rates 2024 2025 2026 2027 2028 2029 2030 2031 lt 0, ', ftr101. Non-Multi-Unit Meter Size(per month) 3/4" $24.62 $25.36 $26.12 $26.90 $27.71 $28.54 $29.40 $30.28 1" $30.15 $31.05 $31.99 $32.95 $33.93 $34.95 $36.00 $37.08 1 1/2" $37.74 $38.87 $40.04 $41.24 $42.48 $43.75 $45.06 $46.42 2" $58.24 $59.99 $61.79 $63.64 $65.55 $67.52 $69.54 $71.63 3" $209.10 $215.37 $221.83 $228.49 $235.34 $242.40 $249.68 $257.17 4" $265.07 $273.02 $281.21 $289.65 $298.34 $307.29 $316.51 $326.00 6" $395.63 $407.50 $419.72 $432.32 $445.29 $458.64 $472.40 $486.57 8" $544.49 $560.82 $577.65 $594.98 $612.83 $631.21 $650.15 $669.65 10" $1,084.80 $1,117.34 $1,150.86 $1,185.39 $1,220.95 $1,257.58 $1,295.31 $1,334.17 Multi-Unit(per month) per Account $14.78 $15.22 $15.68 $16.15 $16.64 $17.13 $17.65 $18.18 per Unit $9.84 $10.14 $10.44 $10.75 $11.08 $11.41 $11.75 $12.10 Rate(per ccf) $3.59 $3.70 $3.81 $3.92 $4.04 $4.16 $4.29 $4.42 FCS GROUP Slide 21 138 �'�` Wastewater Rate Summary - Phased Approach • Charge 2025 2026 2027 2028 2029 2030 2031 Retail Rates 3.0% 3.0% 3.0% 3.0% I 3.0% 3.0% 3.0% MIU Rate 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% BOD Surcharge 10.1% 10.1% 10.1% 10.1% 10.1% 10.1% 10.1% TSS Surcharge 6.6% 6.6% 6.6% 6.6% 6.6% 6.6% 6.6% FOG Surcharge 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% IW Rate 5.9% 5.9% 5.9% 5.9% 5.9% 5.9% 5.9% Total annual rate revenues increase by 4% per year on average during this period FCS GROUP Slide 22 139 • : Other Miscellaneous Fees • • For example, can include sampling, septage disposal, laboratory testing fees, etc. • Background » Evaluating these fees was not a part of the rate study » The City should occasionally review the cost to provide these services to ensure fees cover costs • Recommendation » Absent that occasional cost-based review, an inflationary adjustment would be reasonable » May 2024 over May 2023 Consumer Price Index for All Urban Consumers (CPI-U) West was 3.33% » April 2024 over April 2023 Consumer Price Index for All Urban Consumers (CPI-U) Sea-Tac-Bell was 4.44% FCS GROUP Slide 23 140 - • '••I 4.• r , =. •- 'Isi-3•4_!...71e, •- ' f -—.:: .. : • : ' •• • .... • :-,i 1 .%' "- • . . -1:. "' ••,.., • •- . ...1,i.=1 _-.,,_ u , .---.„ :4. ,-.4.„:,-...k.„,,,T. s•.-. - , t •,,..'.,. „,. ,.•'-%.,.i. •...,. : —• • . , - •. . - - - •- ' - - .- ' ' . .•'--44 11: • .7..."4" ----,awl '--.t-. . 7*-? , - . - - ...:L.,•—: ' .,:. ._---- - - - '' . - • 0 ' , I . ..., Wastewater Utility _ ... ,,... , . , .,..„. ... _ . ... . ,.: P •,. . l •tl. 31` • A" , - -...' —. V . m eirej41P4 ,. Ali'. I f.t : -,. , .'" 4.1..i.... '41, , •tr. '." ... , .1....' 111111111111,110'''• onnection Charges _ . .•_...., ..t,. . .. ., k.- -.....•••••. • -••... el REMO - . ' • Witt-- _-' .•'''.. ,_ --........ •f .- . , , ... . . a( . k. a . system , 41i development charges) i .. ....4 4140 „.. ..07.. 41111144--.441111AN . , - -. ... 1 / .2 r...:- ---• - , • • , . i 4,54- - p.;„14 • p...a - ' • - _ . - - , i 0 I LI, F. , , 1 _ --t — • ' 11•• eliViai i ,. . ,• Mt M • '4 t , 141 • * Characteristics of Connection Charges c --, One-time charges, not _ .' - ,♦ For general facilities, not ongoing rates -- ,.' ,. . - _ "local" facilities Provide revenue for .,, -1.;.; - • Recover proportionate capital asgrowth occurs == "' -. - share of cost of capacity p F, • -.7,-:::'--' -''':-.'JO) ' Include future & existing F For capital only, in both infrastructure costs 'x - • calculation and in use L .1 I J Properties which are already developed do not pay connection charges unless they redevelop to more intense use FCS GROUP Slide 25 142 • A04 Current Wastewater Connection Charges •• For most developments For certain "high impact" developments Water Meter Size Current Charge Wastewater Component Current Charge (per day) 3/4" $2,377 Flow (gallons) $4.67 1" $3,969 BOD (pounds) $375.68 1 1/2" $7,915 TSS (pounds) $509.19 2" $12,669 3" $25,362 4" $39,624 6" $79,223 8" $126,762 10" $182,240 FCS GROUP Slide 26 143 + + ► Connection Charge State Law for Cities • L-A4: V /ASHING'I'C)N S'`J .vrL LEGISLATURE: Revised Code of Washington (RCW) 35.92.025 Cities and towns are authorized to charge property owners seeking to connect ✓ Equitable share to the water or sewerage system of the city or town as a condition to granting the right to so connect, in addition to the cost of such connection, such ✓ Can include up to 10 years reasonable connection charge as the legislative body of the city or town shall of interest determine proper in order that such property owners shall bear their equitable share of the cost of such system. The equitable share may include interest charges applied from the date of construction of the water or ✓ No stated limit on timeline sewer system until the connection, or for a period not to exceed ten years, at a for future facilities rate commensurate with the rate of interest applicable to the city or town included in the charge at the time of construction or major rehabilitation of the water or sewer system, or at the time of installation of the water or sewer lines to which the ✓ No mention of excluding property owner is seeking to connect but not to exceed ten percent per year: grant funded or donated PROVIDED, That the aggregate amount of interest shall not exceed the facilities (conservatively equitable share of the cost of the system allocated to such property owners. excluded) Connection charges collected shall be considered revenue of such system. FCS GROUP Slide 27 144 4. Connection Charge Methodology Existing Cost Basis + Future Cost Basis _ Charge per Capacity Unit Equivalent Units of Capacity FCS GROUP Slide 28 145 • •`'> Connection Charge Calculation - Functionalized • Flow Component Flow Component 11.117 (Collection) (Treatment) BOO Compone TSS Component 40 ree ,� - Existing Future Existing Future Existing Future ; Existing . Future Cost Basis + Cost Basis Cost Basis + Cost Basis Cost Basis + Cost Basis Cost Basis + Cost Basis $85.0m $69.2m $15.5m $12.4m $41.0m 0 $32.9m $36.4m $29.2m City's Share of Capacity City's Share of Capacity City's Share of Capacity City's Share of Capacity 36,000 equivalents 58,000 equivalents 60,000 equivalents 39,000 equivalents ) $4,277 $481 $1,230 $1,675 per equivalent unit + per equivalent unit + per equivalent unit - + per equivalent unit Pi $7,664er e unit11 igitigu 4.411116. FCS GROUP *Components of calculation are rounded. Overall charge shows calculated amount Slide 29 146 • Calculated Wastewater Connection Charges 40. / Water Meter Size Current Charge Maximum Charge 3/4" $2,377 $7,664 • Represent maximum 1" $3,969 $12,796 allowable charges 1 1/2" $7,915 $25,518 2" $12,669 $40,845 • City can phase-in to 3" $25,362 $81,768 any level up to these amounts 4" $39,624 $127,749 6" $79,223 $255,417 • Top table for most 8" $126,762 $408,684 development types; 10" $182,240 $587,547 lower table for "high impact" development Wastewater Component Current Charge Maximum Charge (per day) Flow (gallons) $4.67 $12.11 BOD (pounds) $375.68 $1,746.76 FCS GROUP TSS (pounds) $509.19 $2,231.44 Slide 30 147 • Partial Phase-in Approach - Example Only 4v/ • Example, if City phased towards half of max by 2030; 9% increase per year (same (Y0 applied to components) Water Meter 2024 2025 2026 2027 2028 2029 2030 Current Size Charge Phase Phase Phase Phase Phase Phase 3/4" $2,377 $2,592 $2,827 $3,084 $3,363 $3,668 $4,000 1" $3,969 $4,329 $4,721 $5,149 $5,615 $6,124 $6,679 11/2" $7,915 $8,632 $9,414 $10,268 $11,198 $12,213 $13,319 2" $12,669 $13,817 $15,069 $16,435 $17,924 $19,548 $21,319 3" $25,362 $27,660 $30,167 $32,900 $35,882 $39,133 $42,679 4" $39,624 $43,215 $47,130 $51,401 $56,059 $61,139 $66,679 6" $79,223 $86,402 $94,231 $102,770 $112,083 $122,239 $133,316 8" $126,762 $138,249 $150,776 $164,439 $179,340 $195,591 $213,314 10" $182,240 $198,754 $216,764 $236,406 $257,828 $281,192 $306,672 Wastewater 2024 2025 2026 2027 2028 2029 2030 Component Current Phase Phase Phase Phase Phase Phase (per day) Charge Flow (gallons) $4.67 $5.09 $5.55 $6.06 $6.61 $7.21 $7.86 BOD (pounds) $375.68 $409.72 $446.85 $487.34 $531.50 $579.67 $632.19 FCS GROUP TSS (pounds) $509.19 $555.33 $605.65 $660.53 $720.39 $785.67 $856.86 Slide 31 148 • �' *r 2023 Wastewater Connection Charge Survey g — Single-Family Yakima (Maximum) I I $7, 64 Richland Ellensburg Walla Walla Wenatchee Spokane Cle Elum West Richland Yakima (Phase Plan 2025) $2,5=2 Yakima (Current) , $2,377 Pullman Roslyn Pasco Moses Lake Kennewick $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 FCS GROUP Survey completed May 2023 *Assumes%"meter Slide 32 149 • !:: Industrial Wastewater connection Charge ■ Separate connection charge » Sanitary sewer connection charge applies to nearly all developments in the City (previously covered) » Industrial wastewater connection charge would apply to subset of potential developments — "High impact" developments that are located adjacent to the City's industrial wastewater collection line — Industrial wastewater customers are a subset of high impact customers » IW customers use a different group of assets than other customers » The City recognized the need to have a separate type of connection charge • Costs allocated between two components » IW Line — related to collection and flow » Up-Flow Anaerobic Sludge Blanket (UASB) Reactor— related to BOD removal • Same general methodology applies FCS GROUP Slide 33 150 • industrial Wastewater Connection Charge Calculation IW Line IJSAB-111 Existing Future Existing Future Cost Basis + Cost Basis ost Basis + Cost Basis $4.4m $- $8.71 $2.1 484,000 25,40 Gallons per Day $9.17 ..98 per gallon per day p., a + • FCS GROUP *Components of calculation are rounded. Overall charge shows calculated amount Slide 34 151 - _ -,I ,ram-. l ,A_1-1_ ._ - - r . - 1 -.^ y ` r sp w.• _. _ _ Y r: -�•.� ...:a1C�A —1". aa7l Tr i.116 !'F"�` {"_4 1 . 4. --i._ I— _ �-- •... ,r - • - _ •1 . . 11, .-r, — '� tf. . ' I- '••" i— 1.3 ,: i"._ • �I + ii i. + .• + R +r Sri% -r' Apr,- C si -i' 1 .I - .. Y . is • ... ___, .i! :11r11.1. - --, - v "7 , -'� . - I T�/ !�lt/ - ►- _ ram- - , - IF PR 152 ...% Stormwater UtilityBack round . _ .. , • Two priority levels modeled r 1 . it Priority Pipelines Retention Basins Annual Costs .: ;' (2022 Dollars) Recommended improvements to Recommended new pipes to meet .T 1 the 10-year, 3-hour design storm existing surface water bodies and $2.6 million ,"= `- y g designate them as retention � ' r requirements. g . facilities. - Recommended new retention Recommended upgrades to the facilities to hold stormwater runoff. Priority 1 + 2 existing system to meet the 10-year, The facilities will require siting and $2.7 million 3-hour design storm requirements. land purchase. FCS GROUP Slide 36 153 •'•> Stormwater Priority Level Capital Scenarios 40. $9 C 0 $8 $7 $6 II II $5 — $4 — _ $2 . A 1 • $1 liw__ $- ' 41 110 i * 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 FCS GROUP • City Budget Priority 1 Priority 2 Slide 37 154 '+.* Stormwater Revenue Requirement — Priority 1 0 $15 0 Data labels: Average SFR Annual Bill Increase in Annual Bill $12 Annual % Increase $143.31 $147.61 $135.09 $139.14 $4 17 $4.30 $9 $123.62 $12?33 $,3,.15 $3.9405 ° 3% $3.82 ° 3 is $106.57 $17.05 $3%1 3% 3% , .... 3/o .. ..�,................ $14.70 16% . .............. $6 $116/ $79.20 16% ""s++ — $3 - - --. _ i 1 — 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 FCS GROUP - O&M Expense Rate Funded Capital Slide 38 —Revenue @ Current Rates Revenue After Rate Increases 155 •♦ Stormwater Revenue —Requirement PriorityI Phased • o $15 Data labels: . Hypothetical phase-in plan Average SFR Annual Bill • Provides equal percentage increases ... but, Increase in Annual Bill $12 Annual % Increase • Funds less capital (about $5 million less) $147.61 $137.74 $9.87 $9 $119.95 —$128.54 $9.21 7% $104.45 $111.93 $8.02 $7% .. ..?°�0............ $90.95 $97.47 $6.98 $7.48 7% ., , $84.87 $6.51 '1% 7% , , , . .. $6 $6.08 ... ... .....$5.67 Tor© 7��°, .. .. .... .., $79.20 7% . ... . .. ..... ....... $3 I; jj i 2024 2025 2026 � 2027 2028 2029 2030 2031 2032 2033 FCS GROUP ®O&M Expense Rate Funded Capital Slide 39 —Revenue @ Current Rates Revenue After Rate Increases 156 •.: Stormwater Revenue Requirement — Priority2 • o $15 Data labels: $224.47 $231.21 Average SFR Annual Bill 3% $217.93 $6.54 $6.74 $6 Increase in Annual Bill $205.42 $$ .17 79 $6.34 3% 3% ,, $12 Annual % Increase $35.65 3% ....... ••................... «•••••• ... $169.77 21%.............. ••• $29.21%46 ..... . $9 $140.31 $24.35 • I' $115.96 21% $20.131 i $95.83 21% '$6 $15 .•• - $79.20 ..«..21% III I U I $3 � � ii � I I I - 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 FCS GROUP BM O&M Expense - Rate Funded Capital Slide 40 —Revenue @ Current Rates Revenue After Rate Increases 157 • • 2023 Stormwater Annual Single-FamilyRate Survey • Wenatchee Ellensburg Walla Walla Roslyn College Place Yakima (2025, Priority 2) $99 Yakima (2025, Priority 1) - �� $92 West Richland Pullman Yakima (2025, Priority 1 Phased) $85 Pasco Moses Lake Yakima (Current) , $79 Kennewick Sunnyside Leavenworth Spokane Valley Richland East Wenatchee Yakima County $- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 FCS GROUP Slide 41 Survey completed May 2023 158 + w. �� r � ( `,' y~- • .ram.- 't .'. ..'- -+ C .�. k r�rti • s - `x= 1 - �+ .,—...—..-..� •s•. 5--. J• - ,t., I'. ti} i R 4. �_ .d. i1 Sr ._�: +lei^ I c.i• . .. _ .+ h .a, "fit s. e. }�1C� is ' --_. _ �' k ; !• `: ti • L; . ; _ - _ • 1114;' " OW FM'FM lit -., - , - , r +� ` � :'�.. } ilo I �3 a v! �• ��1gi�1UI',, �, J AM-�i ` �i .. '�'a' x .,,. , ' _ 1. ''.1 , a ,. -or .-Ir. Summary , , .,.„, ,-.. ...,_,..:.,. , ..,. .i_.:, „,_,.... ... . . . i iL1 I. i ' t - - II G; ' .- 1 111 1RE. IL 1.10PF i 159 • **.> Conclusion - Rates • • • Wastewater Rate Adjustments Charge _ 2025 2026 2027 2028 2029 2030 2031 Retail Rates 3.0% 3.0% 3.0% 3.0% I 3.0% 3.0% 3.0% MIU Rate 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% BOD Surcharge 10.1% 10.1% 10.1% 10.1% 10.1% 10.1% 10.1% TSS Surcharge 6.6% 6.6% 6.6% 6.6% 6.6% 6.6% 6.6% FOG Surcharge 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% 1.6% IW Rate 5.9% 5.9% 5.9% 5.9% 5.9% 5.9% 5.9% • Stormwater Scenario Alternatives '_Scenario 2025 2026 IH 2027 2028. _ 2029 2030 2031 2032 2033 Priority 1 16% 16% 16% 3% I 3% 3% 3% 3% 3% Priority 1 (Phased) 7% 7% 7% 7% I 7% 7% 7% 7% 7% Priority 2 21% 21% 21% 21% 21% 3% 3% 3% 3% FCS GROUP Slide 43 160 • .4•,4 Conclusion - Connection Charges • • Wastewater Sanitary Connection Charges • Industrial Wastewater Connection Charges Water Meter Current 2025 Phase Maximum » Calculated Daily Rates Size Charge Example Charge — Per Gallon: $9.17 3/4" $2,377 $2,592 $7,664 — Per Pound of BOD: $346.98 1" $3,969 $4,329 $12,796 1 1/2" $7,915 $8,632 $25,518 2" $12,669 $13,817 $40,845 3" $25,362 $27,660 $81,768 4" $39,624 $43,215 $127,749 6" $79,223 $86,402 $255,417 8" $126,762 $138,249 $408,684 10" $182,240 $198,754 $587,547 Component Current 2025 Phase Maximum (per day) Charge Example Charge Flow (gallons) $4.67 $5.09 $12.11 BOD (pounds) $375.68 $409.72 $1,746.76 TSS (pounds) $509.19 $555.33 $2,231.44 FCS GROUP Slide 44 161 Thank you ! Questions? Tage Aaker, Project Manager (425) 615-6487 TageA FC Group.com wruvw.fcsgroup.com •:;> FCS GROUP Solutions-Orknred Consulting 162 •*: Appendix: Sanitary Sewer SDC Capacity • Description Flow BOD TSS Capacity Design Capacity(Max Month Average Daily) 21.5 MGD 53,400 lb./day 38,600 lb_/day Capacity Reserved for Wholesale Customers 12.10% 12.10% 12.10% Capacity Reserved for City of Yakima 87.90% 87.90% 87.90% Capacity Reserved for City of Yakima 18.9 MGD 46,939 lb. /day 33,929 lb. /day Existing Flows&Strength Existing Sanitary Influent Flow and Loading (Max Month) 10.66 MGD 24,200 lb. /day 26,000 lb./day Estimated Portion Attributable to City of Yakima 84% 89% 92% Estimated Portion Attributable to City of Yakima 8.95 MGD 21,517 lb. /day 23,865 lb. /day Remaining Capacity Multiplier Yakima Capacity+ Existing Yakima Utilization 2.11 2.18 1.42 FCS GROUP Slide 46 163 •`• N Appendix: Sanitar] Sewer SDC Ca acitY• Description Treatment Flow BOD TSS Existing MCEs 27,518 27,518 27,518 Remaining Capacity Multiplier 2.11 2.18 1.42 Estimated MCE Capacity by Function 58,113 60,029 39,124 FCS GROUP Slide 47 164 +'+ Appendix: Sanitary Sewer SDC Capacity • Description Collection Flow Treatment Flow BOD Existing Annual Average Daily 8.5 MGD 21,800 lb. I day 22,500 lb. /day Existing Max Month Daily 10.7 MGD 24,200 lb. I day 26,000 lb.I day Max Month +Average Ratio 1.26 1.11 1.16 Design Max Month 21.5 MGD 53,400 lb. I day 38,600 lb. I day Max Month+Average Ratio 1.26 1.11 1.16 Average Annual Conversion (Design + Ratio) 17.1 MGD 48,104 lb. /day 33,404 lb. /day City of Yakima Share 87.9% 87.9% 87.9% New Denominator 15.0 MGD 42,284 lb. I day 29,362 lb. /day FCS GROUP Slide 48 165