Resolution No. 10-58 CITY OF TIGARD, OREGON
TIGARD CITY COUNCIL
RESOLUTION NO. 10-5-0
A RESOLUTION ADOPTING THE WATER RATE STUDY WHICH PROVIDES A LONG-TERM
FINANCING STRATEGY TO FUND THE LAKE OSWEGO-TIGARD WATE-R PARTNERSHIP AND
OTHER WATER CAPITAL IMPROVEMENTS
WHEREAS, the City of Tigard is the managing authority and water provider for the Tigard Water Service Area
(I"WSA). The TWSA includes the residents of Durham, King City, two-thirds of Tigard, and the Tigard Water
District; and
WHEREAS, the Tigard Municipal Code, Chapter 12.10, defines the authority of the City to operate and
maintain water utility services within the Tigard Water Service Area;and
WHEREAS, the Intergovernmental Agreements for Delivery of Water Service, Sections 8.B., state that Tigard
City Council has the authority to modify, alter or repeal the Rules, Rates and Regulations for Water Service
within the Tigard Water Service Area;and
WHEREAS, on October 13, 2010, the Intergovernmental Water Board recommended the Tigard City Council
approve the Water Rate Study and the corresponding adjustments to water fees and charges; and
WHEREAS, on August 6, 2008, following extensive analysis of various long-term water supply options, the
City Council entered into the Lake Oswego-Tigard Water Partnership whereby the cities would jointly develop
a shared water system;and
WHEREAS, the Council may approve the use of bonds, secured with water utility revenues, as funding source
for water partnership projects and other capital improvements;and
WHEREAS, a water rate studl7 was necessary to support die issuance of bonds for the Lake Oswego Tigard
Water Partnership;and
WHEREAS, the City's consultant completed a comprehensive water financial plan which included a Water
Rate Study and Water System Development Charge Update. The report provides an analysis of the additional
revenue requirements needed for water-related operation and maintenance costs, and for projects associated
with die Lake Oswego-Tigard Water Partnership and other capital improvements; and
WHEREAS, the City's financial planner has reviewed the findings from the Water Rate Study and provided
approval of recommended revenue bond strategy contained therein; and
WHEREAS, the Water Rate Study provides Council with five major recommendations to improve revenue
stability, provide equity among ratepayers, and continue water conservation efforts. These recommendations
are:
1. Increase fixed rates based on increasing meter size.
2. Enhance water conservation by using a three-tiered inclining block rate.
3. Enhance water conservation by increasing the uniform water rates for industrial and irrigation users.
4. Implement monthly billing.
RESOLUTION NO. 10 -
Page 1
NOW,THEREFORE,BE IT RESOLVE7D by the Tigard City Council that:
SECTION 1: The City Council hereby adopts the Water Rate Study,Exhibit A, dated October 25,2010.
SECTION 2: This resolution is effective immediately upon passage.
PASSED: This q67day 44o�p X2010.
Mayor-City of Tigard
ATTEST:
City Recorder-City of Tigard
RESOLUTION NO. 10 -
Page 2
Exhibit A
D• t b-
n
REDOA REDOK CONSULTING MEMORANDUM
A DIVISION OF MALLOLM PINKIE
To: John Goodrich, City of Tigard Date: October 25, 2010
From: Joe Healy, Red Oak Consulting
Re: Water Rate Study Executive Summary
Introduction
The City of Tigard engaged Red Oak Consulting to update the City's water user charges.
Among other goals, the City desired that fees encourage conservation while meeting the
needs of its capital improvement plan.
In August 2008, the cities of Lake Oswego and Tigard formally endorsed a partnership
agreement for sharing drinking water resources and costs. Lake Oswego's water supply
system is near capacity, and key.facilities need expansion and upgrades. Tigard
residents need a secure, dependable water source. Both cities want to keep water
affordable for their customers and sharing the cost of new infrastructure to serve both
communities does that.
The Lake Oswego—Tigard Water Partnership (Partnership) is expanding the City of
Lake Oswego's existing water infrastructure to serve both the City of Lake Oswego and
the City of Tigard. The Partnership will upgrade, upsize, and expand six existing
facilities:
1. Raw Water Intake
2. Raw Water Pipeline
3. Water Treatment Plant
4. Treated Water Pipeline(s)
5. Treated Water Reservoir
6. Bonita Road Pump Station
Given the size and scope of Partnership project costs, the City of Tigard (City) engaged
Red Oak to complete a comprehensive financial planning and water rate study. Red Oak
assisted the City in four main tasks, or phases, described below:
a Phase 1. Develop the City's revenue requirements for the next ten years using a
formal financial planning model.
"Introducing the Partnership";Lake Oswego-Tigard Water Partnership;
http://"vww.lotil ardwater.ora/?u=project-information;accessed 10/20/2010.
12670 NW Barnes Road • Suite 104 . Portland,OR 97229 • T 503-352-0900 • F 503-644-2414 • mvw.redoakconsulting.com
Page 2
• Phase 2. Analyze the costs of service that will ensure the City collects its required
revenues and meets the needs of stakeholders.
• Phase 3. Analyze alternative conservation-oriented rate structures and provide the
City with the right information to select the best rate structure for the City. Once
the rate structure alternative is selected, conduct an affordability analysis to
highlight the impact on customers.
• Phase 4. Conduct an analysis of the City's non-recurring water charges,
specifically fire line fees and charges.
The results for each phase are provided below. Also attached to this Executive Summary
memorandum are select results of Red Oak's analyses that have been delivered to the
City throughout the execution of the water rate study. The attachments include:
➢ A—Financial Planning Technical Memorandum
➢ B—Financial Planning Summary Information
➢ C— Water Financial Plan Detailed Results
For this study, generally accepted industry standards were followed in conducting the
analyses. These industry standards were developed so that the results are proportionate to
the cost the City incurs to serve its customers.
Financial Plan Development
Financial planning is an integral part of a comprehensive process of establishing the cost
of service for a utility that incorporates a longer term perspective. A finance plan looks
at a utility's long-term capital needs, typically from a master plan or similar document,
along with other assumptions to calculate an overall level of rate adjustments and
additional debt requirements for a five- to ten-year period.
The portion of annual system revenue requirements to be recovered through rates is
referred to as a utility's user charge revenue requirements (UCRR). The determination of
a utility's UCRR depends on its financing policy and its other sources of income.
Financial Planning Cost Components
All of the City's expenditures can be classified as one of the following three cost
components:
• Capital Improvements
• Debt Service
• Operations and Maintenance (O&M) Costs
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Each is briefly described below
Capital Improvements
Capital improvements consist of those large and costly additions to utility facilities that
oftentimes occur infrequently and at irregular intervals. Capital improvement projects are
designed to fulfill a range of needs including:
• Compliance with new state and federal regulations,
• Enhancement of the level and reliability of the service provided,
• Meet ongoing demands of system growth and economic development, and
• Replacement and refurbishment of existing system infrastructure.
Debt Service Costs
Utilities frequently finance major capital improvements by issuing long-term financial
instruments for two primary reasons. First, the financial resources required for these
types of projects typically exceed the utility's available resources from the normal
operation of its system. Second, spreading the debt service costs for the project over the
repayment period effectively spreads the financial burden of financing large
improvements to both existing and future users of the system. This burden sharing
allows the utility to better match the cost of improvements with those customers using the
improvements.
Operations and Maintenance Costs
O&M costs account for most of the day-to-day expenditures for operating a water utility.
O&M costs include, for example, labor, benefits, insurance, utilities, etc.
Financial Policies
Provisions of the City's bond covenants will require it to maintain minimum ratios for
debt service coverage and meet other coverage requirements before it can issue additional
debt.
Debt Service Coverage
Debt service coverage (DSC) is the ratio of the City's net revenues to its annual debt
service subject to coverage requirements. With input from the City's financial advisor,
Red Oak assumed that the City must maintain a minimum 1.15 DSC ratio if SDCs are
included in the calculation of net revenues.2 In other words, the City's net revenue must,
at a minimum, exceed its annual debt service by 15%.
a If SDCs are excluded from the calculation of net revenue,a 1.05 DSC ratio is required.
'Net revenue is gross revenues less operating expenses. Operating expenses do not include depreciation
expense.
Page 4
Based on recommendations frorn Red Oak and the City's financial advisor, the City
chose to set its minimum debt ratio targets higher than the minimum required. This is a
matter of prudent financial policy, in which the City will strive to achieve a higher
standard than the minimum requirements set forth in its bond covenants.
Utilities commonly adopt higher standards to achieve better financial performance, and
thereby, a higher bond rating. Additionally, by achieving target net revenue higher than
its minimum requirements, the City will provide itself a degree of safety from technical
default on its bonds in the case of unforeseen expenditures or revenue shortfalls in the
future.
For the purposes of this analysis, the target DSC ratio is 1.35 for all years if SDCs are
included in the calculation of net revenues.4
Additional Bonds Test
Similar to the DSC ratio requirements described above, the additional bonds test(ABT) is
the ratio of the City's net revenues to its additional annual debt service for future bond
issues after the initial projected issue in FY2012. With input from the City's financial
advisor, Red Oak assumed that the City must maintain a minimum 1.15 ABT ratio. In
other words, the City's net revenues must, at a minimum, exceed its additional total debt
service by 15%. For the purposes of this analysis, the target ABT ratio is 1.25 for all
years.
Overview of Selected Financial Planning Alternative
Red Oak developed several alternative financial plan scenarios for review by the City.
Based on guidance from the City, the scenario presented in this report provides the City
with a projection of the optimal mix of rate adjustments and additional debt financing to
meet its capital requirements.
The first annual rate increase under the selected scenario is scheduled to be completely
effective in January 2011. This rate increase is based on need by utility, and will provide
sufficient rate revenue for the remainder of FY2011 and half of FY2012. Beginning in
January 2012 and every January thereafter, additional rate adjustments are projected
dependent on need.
Capital Improvements
Table 1 presents individual examples of the City's largest planned capital expenditure
projects over the course of the ten-year projection period used in this analysis (inflation
included).
41f SDCs are excluded from the calculation of net revenue,a DSC ratio of 1.25 is targeted.
s Net revenue is gross revenues less operating expenses. Operating expenses do not include depreciation
expense.
Page 5
Table 1: Largest Planned Capital Expenditures
ASR Well 3Deszgn&Ecjuip� ( Muli� le U $2,736,000
ASR We114i;t Siting Study LL 1 FY2Q11 {„=3.0,000'
E1SRWe114=—DesiDrll&Eui + ears ° °z
'' F1'20172�°�
� _, � ,2':84;810''
ASk Well*4 DrilLLy&Equip,Y `2 (50%) Multiple 4 1;42'w5,210
Pipelneconriecting5 SOG and 530Zo e De g FY20i17k242,124
Pipeline o ectingrt550G and 530 Zones .Constructioi{, Multiple $�' 2 262 442.>
PS8 Construction• p T 24 8 6'10
_ 3. 1VTulti le.. .x,
550-:6270 755827x 550'Zone IOIvi�It M _ `;'W ��_Mult�ple 4' v 1!--, 69;043
, M
;WiEllamette SherwoodPipeline €g` � e r:., u tiple4400,000i
Jomtt_ e Su 1 Pro ects* `x & Multi le c 112'057 883 f'
Total
*Note: Joint Water Supply total does not include$6 million already spent.
The total cost for Joint Water Supply Projects shown in Table 1 is a summary project cost
estimate for all projects included in the Lake Oswego—Tigard Water Partnership
(Partnership). The Partnership will upgrade, upsize, and expand six existing facilities:
1. Raw Water Intake
2. Raw Water Pipeline
3. Water Treatment Plant
4. Treated Water Pipeline(s)
5. Treated Water Reservoir
6. Bonita Road Pump Station
Table 2 presents a summary of the City's annual capital program costs used in this
analysis (inflation included).
Table 2: Annual Capital Program Costs
W
E TIF Y201sLa $9;91 147
MR
FY2013 b 23;865;900. "6
,, M FY2014 ! 43;44 7;985
e
3�,�. s�325�4. ;p�FY2Q&1749;06658N4•
FY2018 6 935 477
* i FY2020 �. 909,01.?u
�� f
Totals r $,151,871363A =
Page 6
Funding Sources
Under this scenario, Red Oak's analysis assumes that the City will finance these
improvements with a combination of cash from rate adjustments and by issuing over
$125 million of additional long-term debt through FY2017. The sizing and timing of the
projected long-term debt issues is shown in Table 3 below.6
Table 3: Projected Bond Issues
e i ,
'2012=1" Revenue"Bonds
2014 w _Revenue Bonds _ 40.00,
201 5 ] 'Bond AntcipatzorNofes , t
l
2016 Bond Anticipation Notes-",'-- _
2017 � Revenue Bonds' " ' ��"'
41 34:
r T9141160. ng-Term,Debt 11,141^1S,125-49 V
Projected Revenue Requirements
In this scenario, the majority of the City's revenue requirement is related to O&M and
capital. Debt service for Lake Oswego Partnership capital is projected to represent a
majority of the City's revenue requirement in the future. The projected annual debt
service associated with the proposed bonds present an increasing percentage of the
revenue requirements.
Projected Revenues
The first proposed annual rate increase is projected to be completely effective January
2011 (FY2011).' Based on this increase, the average residential customer's water bill
would increase by $9.50 per month beginning in January 2011, when compared to bills
prior to October 2010. The next rate adjustment would not be effective until January
2012.. At that time, the next adjustment is estimated to increase the average bill by $5.19
per month. Rate adjustments would continue to occur in January for each of the
remaining projected years. The projected annual rate adjustments are summarized in
'The projected annual bond issues include estimates for issuance costs and the funding of reserve
requirements. Issuance costs were assumed to be 2%of proceeds,and the reserve requirement is 10%. All
projected bonds are assumed as 25-year term. FY2012 revenue bonds projected interest rate of 5.5%. All
other bonds projected with 6.0%interest rate.
'The City implemented a 7.0%rate adjustment in October 2010. The remainder of the proposed FY2011
rate increase will be implemented January 2011.
Page 7
Table 4 below. Projected annual rate adjustments, debt service coverage ratios, and
additional long-term debt are summarized in Appendix B.8
Table 4: Total Annual Rate Adjustments
—gin -�----�--------
�,,FY20.Ll E 345% -EI'2016 x ^4.3%o .
_. ._ . -
FY2012 14.0% FY2017 1� 4.3.0/o
FY2014 - 14 0% FY2019. 0.0%
F1'2015 4 3% Y202Q
Impact on Fund Balances
Typical financial management strategies include the maintenance of a minimum cash
balance large enough to provide adequate working capital and meet future contingencies.
The selected scenario maintains a minimum of 3 months of O&M in the operating fund
balance, along with other minimum fund balance requirements related to future bond
issues. By incorporating these fund balance requirements into the financial plan, the
impacts of inflation are mitigated.
Financial Planning Summary
Conclusions
The City is in a large investment cycle, and will need to fund large portions of its capital
improvements with a combination of rate increases and long-term debt. The balance
between rate increases and long-term debt protect the financial health of the City while
maintaining the lowest possible user charges. Also, the use of long-term debt improves
the equity among current and future rate payers since the improvements, specifically the
Partnership projects, being constructed and financed by debt will provide service for
more than 25 years.
Findings and Recommendations
Key findings of the financial planning analysis include:
1. The projections presented in this section are based on many assumptions that will
inevitably vary over time. Red Oak recommends the City closely monitor its
revenues and expenses and make necessary adjustments to its rates in the future.
2. Additionally, an increasing reliance on debt will require the City to closely
examine its future financial performance. Specifically, the City's ending cash
$The actual rate increases required to properly fund the City will likely vary from the estimates presented
here. Future capital requirements,O&M expenditures,customer demands,etc.,will impact the accuracy of
the estimates. The City should regularly review its revenue and expenses and recommend adjustments as
necessary.
Page 8
balances may need adjustment to account for the natural fluctuations in revenue
that are not controllable by the City.
3. Given that the projected Partnership costs are estimates, Red Oak recommends
that the City conduct an additional rate study three years from now. By FY2014,
the City will have a record of Partnership expenditures to that point, and a much
clearer forecast of remaining costs. An additional financial planning analysis and
rate study will ensure that the City's rate revenue collections meet its
requirements.
Cost-of-Service Methodology
The water cost-of-service (COS) methodology used in this study follows the industry
standard approach called the base/extra-capacity approach described by the American
Water Works Association (AWWA) in its Manual of Water Supply Practices: Principles
of Water Rates, Fees, and Charges. This approach includes the following basic steps:
1. Establish customer characteristics.
2. Calculate revenue requirements.
3. Allocate costs.
4. Design rates.
Each is briefly described below.
Customer Characteristics
Customers of a water utility are often identified according to customer class. Each
customer class has unique water demand and usage characteristics. Because cost-of-
service is based on the concept of proportionality, customer service characteristics for
each customer class must be analyzed to allocate the system revenue requirements
equitably.
Revenue Requirements
The portion of annual system revenue requirements to be recovered through rates
depends on a utility's financing policy and its other sources of income. To determine the
amount of revenue that rates must generate annually, the total revenue requirements must
be reduced by non-rate or other system revenues. These non-rate revenues may include,
but are not limited to, miscellaneous charges and interest earnings on unrestricted fund
balances. Capital reserve funds may also provide revenue to offset costs of capital
improvements.
Page 9
Cost Allocations
This study relies on the base/extra-capacity cost allocation methodology to allocate costs
among customer classes. This methodology is more fully described in the AWWA
Manual M1.
Water systems are designed to meet both the average and peak demands of their
customers. Therefore, data on total annual consumption and contributions to system peak
demands, as mentioned in the section on customer characteristics, are needed to allocate
costs fairly among customer classes. Data on the number of customers with meters of
various sizes must also be available to allocate customer-related and meter-related costs.
Rate Design
Red Oak developed a rate design model (RDM) for the City that allowed it to measure
the likely conservation and revenue impacts of various increasing block rate designs.
Based on direction from the City, Red Oak developed a number of alternative rate
analyses using the RDM. After discussions with the City, Red Oak identified a proposed
solution which is presented below.
Proposed Rate Design
During the water rate study process, the City identified three primary goals for its new
rate design and rate revenue collections. The goals are:
1. Equity,
2. Conservation, and
3. Financial Stability.
Red Oak conducted a rate design workshop at the City's offices to develop a new rate
design alternative for recommendation to the City Council and Intergovernmental Water
Board (IWB). During the workshop, Red Oak and City Staff used Red Oak's RDM to
run multiple scenarios and quickly assess alternative results.
Source of Data
The City provided its billing data for the study. The billing data consisted of individual
customer accounts for the utility from FY2005 through FY2009. The FY2005 data had
significant data deficiencies, but the other four historical years were sufficient for the
analysis.
Historically, the City's customers were billed a fixed bi-monthly charge and a uniform
volume rate which varied by customer class. Currently, the City's fixed charge does not
vary by meter size, and therefore does not accurately reflect the cost of maintenance
system capacity for larger meters. Various meter equivalency schedules are published by
the American Water Works Association (AWWA). Additionally, Red Oak calculated a
meter equivalency schedule for the City based on actual use data developed using the
Page 10
City's customer billing database. A summary of the meter equivalency schedules used in
this analysis is provided in Table 5 below.
Table 5: Meter Equivalency Schedules
e
1.40,
I-1/2P 00
2" 2.90 12.99 .
p
4" ' 1.4.00 . 46.97.
6" _ 21.00 - ._50 00
8" 29.0080 00`
1 43.50 ' 225.07
The A W WA M 1 schedule in Table 5 represents the average cost to maintain meters of
varying sizes by comparison to the smallest meter size shown. As an example to interpret
the numbers provided in Table 5, AWWA estimates it costs a utility approximately 1.8-
times as much to maintain a 1'/z-inch meter versus a%x 3/4-inch meter. Additionally, the
City's actual billing data shows that customers with 1%-inch meters use eight-times as
much water, on average, as customers with %x3/4-inch meters. These two equivalency
schedules were applied to different components of the City's costs to develop alternative
fixed charges as part of this analysis.
Limitations
Many assumptions, including price elasticity assumptions, are employed in an analysis
like this. For this reason, results are not concrete in nature but are necessarily estimates.
Red Oak assumes that the customer data it received from the City is accurate and
representative of the number and types of customers that are actually in the City's service
areas. Due to all of the variables involved when changing rates, it will likely take a
significant amount of time to get a reliable projection of the results (i.e., more than 3
years).
Fixed Charges
Currently, the City's fixed bi-monthly charge is $6.86 regardless of meter size. The City
also assesses a booster charge to customers in higher elevations that require additional
pumping. Red Oak recommends a COS-based rate structure for two reasons:
1. Fixed charges that accurately reflect costs associated with larger meters will
enhance equity among the City's customers, and ensure that customers with larger
meters are paying their fair share of the water system's costs.
Page 11
2. Increasing the revenue collected from fixed charges will improve the City's
financial stability, as the City will be less dependent on volume rate revenues
which vary due to weather, rate adjustments, and conservation efforts, among
other reasons.
Based on the needs identified in the financial planning phase of the water rate study, the
City may choose to implement the fixed monthly charges shown in Table 6 and Table 7
in January of FY2011. The proposed fixed charges include two or three components,
depending on the amount of pumping required to serve a customer.
Table 6: Proposed Fixed Charges -Non-Boosted Customers
1�0 r
M_-
01
$l. 7s s
- 1 N
7.39 r 28.01 35.40
5Q 83 '9 '93 49
2 - - F,, 15.31 i; 136.37 ;— 151.68
7,7
382404�8 X4; .29 856
4" 73.92 493.19 567.12
80 8525 s00
81t: { 153.12 840.00 993:12
l.p 191 40` }1,8�
229.69' ; 2,363.26 2,592.94
12" C
Table 7: Proposed Fixed Charges -Boosted Customers
P1 ii0 C
I + ' + + ' 1
___J�._�. . _ 7 39_•x, . ._':28 01: I ___,.__a ___._� � ��.... �_a._._
L1 ;9,50 38 98 n 32 6Q] ,126;8
..u<...wMT.'4.'.�,____'u._m4 ao�
2'' �15 31 136.37 �� 529 1
3 204:6°1
3;" �� _,-58.08: _240.48 ; .. 93.33391: 8u9
3-Tier Volume Rates
Currently, the City charges a uniform volume rate that varies by customer class. In other
words, customers are charged the same unit rate regardless of the amount of water
consumed. Using the RDM, Red Oak and City Staff developed an increasing 3-tier
volume rate structure for recommendation to the City Council.9
9 The 3-tier rate structure is proposed for the City's residential,multi-family,and commercial customers.
Industrial and irrigation customers will maintain a uniform volume rate structure.
Page 12
The RDM was designed to propose volume rates and tier thresholds for an increasing tier
rate structure. Table 8 contains the proposed tier thresholds, per equivalent dwelling unit
(EDU)10, used in the analysis.
Table 8: Proposed Tier Thresholds per EDU
Moloomoffik 1".
0 .
Tier-2 7 15
^, .. Tier Over 15 w
The upper limits for Tier 1 and Tier 2 are based on the City's billing data. On a per-EDU
basis, 6 CCF represents average winter monthly consumption. Similarly, 15 CCF
represents average peak-season monthly consumption per EDU.
Similar to the way the proposed fixed charges for larger meter sizes are increased by the
City's actual use equivalency schedule, the proposed tier thresholds for larger meter sizes
are increased using the same equivalency ratios. For volume rate billing, the tier
thresholds are multiplied by the number of EDUs each meter size represents to establish
the amount of water each customer will be charged for at each tier. Table 9 presents the
proposed tier thresholds for all meter sizes.
Table 9: Proposed Tier Thresholds (CCF)
5/8"x 3/4" r0
-,40 1, Over 40
1°U2" u 0 48 ' � 49 - 120, Over 1A20
2" 0 - 78 79 195 „r Over 19.5
138 =:3.44 3Over 3'4 _
_ 4 _.
4" _._ _... _._ 0 - 282 -- —283 =705 �i-- Over 705
6" 00 5 0 a3' a A 301 =750 ,Over 750
p 8" j'_ 0 i. __-481 - 1x,200 Over 1,200
TO" " O : 3'8 x93.9. 2;;5Over 2,345 :¢J
12" 0 1.;350 1;351 - 3;3:76 �" Over 3,376'.
These thresholds represent a shift towards conservation-oriented rates from the City's
current uniform rate structure. The proposed tier thresholds are based on meter size only.
These thresholds apply to residential, multi-family, and commercial customers uniformly.
10 A 5/8 x'/4-inch meter represents one EDU. EDUs for larger meter sizes are assessed based on the City's
actual use equivalency schedule shown in Table 5.
Page 13
The proposed 3-tier volume rates from the RDM are shown in Table 10. Table 11
presents the uniform volume rates for the City's industrial and irrigation customer
classes.
Table 10: Proposed 3-Tier Volume Rates(per CCF)
Multi i
.Family 1.70 2.48 2.84
C,onmercial n. 2.;323:87
Table 11: Proposed Uniform Volume Rates
Industrial $3 23
Irrigation 4.59
The volume rates presented above are based on the results of the COS analysis. As a
starting point, Red Oak used the average cost of water by class, as calculated in the COS
analysis, to establish the Tier 2 rates and uniform volume rates. The RDM set the Tier 1
and Tier 3 rates, and adjusted the meter and account component of the fixed charge as
necessary to meet the City's overall revenue requirement.
Cost-of-Service Rate Design Conclusions
Calculating cost-of-service rates requires that both the use of the system and the cost of
operations be estimated. In ratemaking, the costs of operating the utility are referred to as
the utility's revenue requirements.
Customer Demands
One of the key elements to any cost-of-service analysis is an estimate of the likely
customer demands. Estimating these demands, and subsequently, rates, is complex and
subject to uncertainty. The forecast of demands in this analysis is based on recent water
sales trends that may change due to external factors. External factors that impact water
demands for the City include weather, economic growth or recession, and public
attitudes.
Rate Design Findings and Recommendations
Key findings from the RDM include:
1. Due to the nature of the revenue adjustments proposed in this study, the City will
need to closely watch its revenues from year to year. Many variables can alter a
utility's revenue stream, including changes in weather, the local and regional
economy, and customers' reaction to rate adjustments.
2. One of the challenges in adjusting rates is accurately predicting a revenue neutral
rate design, where revenues earned after a rate adjustment equal those prior to the
Page 14
rate adjustment. Without a precise count of customers and EDUs, it is more
difficult to project a utility's total revenues.
Although the City appears to have a solution for conservation-oriented residential rates,
the City should take great care to mitigate risk by following prudent management
practices. This includes reviewing rates and revenues at least annually to see if additional
adjustments are necessary.
D
City of Tigard
Water Rate Study Executive Summary v.
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Financial Planning Technical
Memorandum
•. :: REBDA K
• • •• CONSULTING
• • A DIVISION 0( MALCOLM PIRNIE
6812001 / POR
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RE4iGA K.CONSULTTISG
PfW$51014 OF MALG44M P,flWtE MEMORANDUM
To: John Goodrich, City of Tigard Date: September 28, 2010
From: Joe Healy, Red Oak Consulting
Re: Summary of Recommended Financial Planning Scenario
Introduction
The cost of service for the City includes both near-term and long-term capital
expenditures. Financial planning is an integral part of a comprehensive process of
establishing the cost of service for a utility that incorporates a longer term perspective. A
finance plan looks at a utility's long-term capital needs, typically from a master plan or
similar document, along with other assumptions to calculate an overall level of rate
adjustments and additional debt requirements for a five- to ten-year period.
Broad Overview of Financial Planning
The financial plan is a useful tool. Actually, it may be described as four tools in one.
The four main functions that a financial plan serves are for the following:
1. Planning
2. Communication
3. Information
4. Policy Assessment
As relevant for the purposes of this memo, the policy assessment aspect of financial
planning is described more fully below.
Financial Plan as a Policy Assessment Tool
Policy assessment means a wide-variety of things to different people. A utility's
stakeholders may use financial plan results to assess how its policies and goals for the
utility stand the tests of time. A utility's management may use financial plan information
to assess the cost effectiveness of operations or infrastructure replacement.
First and foremost, a utility may use the plan to assess the long-term implications of
capital decisions. Topics related to capital decisions include:
• Scenario analysis,
• Sensitivity analysis,
• Financing options,
• Operating costs,
• Matching revenues with expenditures, and
- 12670 NW Barnes Road - Suite 104 - Portland,OR 97229 - T 503-352-0900 - F 503-644-2414 - www.redoakconsulting.com
A-2
• Managing rate adjustments over time.
As mentioned above, a financial plan is a tool used for alternatives analysis. Regarding
its financing options, a utility can use the financial plan to assess its plans for the use of
additional long-term debt and capital reserves. Questions surrounding this issue include:
• What is an appropriate level of debt?
• How much can we afford?
• Should we accumulate and use capital reserves to mitigate the need for debt in the
future?
• Will certain capital additions also affect our O&M projections?
• How will we best match our need to recover costs with the available revenue
sources?
• How can we avoid rate shock to our customers or send them price signals to
influence conservation goals?
Along with all of these questions, the financial plan can be used to assess the impacts of
legal, institutional, and regulatory requirements. The lists of questions above reinforce
the idea of a financial plan as a broadly focused planning tool. If it were designed to
meet more narrowly focused needs, such as budgeting or auditing, it would lose its ability
to capture and address these wide-ranging issues. Side effects of a utility's failure to plan
properly may include system deterioration or failure, higher financing costs, rate and
revenue instability, limited choices, rate shock, and unhappy customers.
Summary of Assumptions for Recommended Financial
Planning Scenario
Red Oak analyzed alternative financial planning scenarios. The results were presented to
the City in a previous technical memorandum. Presented below are the assumptions
underlying the financial planning scenario selected by City Staff for recommendation to
the City Council,
Table 1: Recommended Financial Plan Scenario - General Assum tions
e oSalim
Financ►,ng Schedule„, „ 2012��Renue�Bonds �_;,, .; �a � � ��_�„FMLL _,
2016 Bond Anticipation Notes s
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4 � f
TargetRat�o � Total!DebtSerCo ear gls � YG
Min Re aired Ratios AdditonalBoTest#�1 25xfor 201`2 Revenue Bonds
i Additio al Bonds Test ILSz for all',other Revenue Bonds
Total_Debt Seruce 110x8 ,
Interests ates ��'k �� �”�5�5%for�201�2�Revenue Bonds 0%oAfor all other finan"cmg
Term �m ,u �S�year term for all ficiancmg, ,w. ;,,, ,. =t
A-3
Summary of Results
Presented below are the summary results of the recommended financial planning
scenario.
Table 2: Recommended Financial Plan Scenario - Summary Results
F011 37 OS Mi, 3.4.5% _., $2097;054
FY2012 42 24 �T.T14 0%{� F 44147;727
FY2013 4816 ;t
FY2014 54 90=s.;� 1.4,.0%� ,,-4000,0000
FY2015 0
FYN 6 j 59 2 p:
.5 m
FY2017 62.29 j 4 3%, i 41 341,374
-- - - - - -
FY20,f .F � - �64 97 4 3%0
FY2019 64.97 a 0.0% Q
$127 586,1.55
* Residential example monthly bill. Monthly use assumed at 9 CCF.
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City of Tigard
Water Rate Study Executive Summary
SECTION
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Financial Planning Summary 0
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• • •' CONSULTING
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Water Financial Plan
City of Tigard
Water Financial Plan Results - Summary of Financial Metrics
0 • � � I 1 1 1 I 1 �
Increased Revenues Required 34.5% 14.0% 14.0% 14.0% 4.3% 4.3%
Financial Ratios
DSC (w/ SDCs) 40.30 3.35 2.22 1.79 1.49 1.56
Add'l Bonds Test(w/ SDCs) 20.15 1.75 2.22 1.36 1.49 1.56
DSC (w/o SDCs) 40.30 3.03 2.04 1.67 1.40 1.45
Add'] Bonds Test(w/o SDCs) 20.15 1.59 2.04 1.27 1.40 1.45
Additional Long-Term Debt(millions) $2.10 $44.15 $0.00 $40.00 $0.00 $0.00
Annual Debt Service(millions) $0.08 $1.80 $3.45 $5.01 $6.58 $6.58
Year-End Reserves (millions)
Water Fund $1.46 $4.64 $7.60 $3.81 $5.96 $8.46
Debt Service Fund 0.22 4.62 4.62 8.62 8.62 8.62
Totals $1.68 $9.26 $12.22 $12.43 $14.59 $17.09
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`' City of Tigard
Water Rate Study Executive Summary
SECTION
Water Financial Plan Detailed
Results
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• • •• CONSULTING
• • A DIVISION OF MALCOLM PIRNIE
6812001 / POR
Water Financial Plan
Table 1
City of Tigard
Water Financial Plan
Tigard CIP
Total
Descri tion Line FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2011-20
ASR Well 3-Design&Equip 1 $259,804 $2,304,397 $45,761 $2,609,963
ASR Well 4-Siting Study 2 30,000 30,000
ASR Well 4-Design,Drill&Equip Year 1(50%) 3 1,859,000 1,859,000
ASR Well 4-Drill&Equip Year2(50%) 4 1,115,000 1,115,000
New Pump Station-Siting Study 5 50,000 50,000
New Pump Station-Design 6 255,000 255,000
New Pump Station-Construction Year 1(67%) 7 963,000 963,000
New Pump Station-Construction Year 2(33%) 8 481,000 481,000
New PRV from 550G to 410 Zone 9 105,000 105,000
Pipeline connecting 5506 and 530 Zones-Design 10 197,000 197,000
Pipeline connecting 550G and 530 Zones-Constructic 11 1,770,000 1,770,000
Annual Fire Flow Improvement Allocation 12 100,000 100,000 100,000 200,000 200,000 200,000 200,000 1,100,000
Pipeline for installing PRV 550G4 13 17,000 17,000
Pipeline in Main St.&Tigard Ave. 14 101,000 101,000
Water Master Plan Update 15 140,000 140,000
Asset Management Program 16 100,000 100,000
Res.Seismic&Condition Assessment 17 100,000 100,000
PS8-Design 18 210,000 210,000
PS8-Construction 19 1,900,000 1,900,000
550-6270-755827-550'Zone IOMil 20 3,543,043 221,569 3,764,612
Joint Water Supply Projects 21 4,347,998 5,245,436 17,424,543 33,012,465 27,522,199 1,288,111 458,407 89,299,160
Willamette Sherwood Pipeline 22 1,000,000 3,333,333 4,333,333
Repayment of Prior LOC 23 225,000 5,936,275 6,161,275
SDC Methodology Update 24 25,000 25,000
Water Main Line Oversizing 25 100,000 98,039 142,776 137,284 132,004 150,000 150,000 150,000 150,000 150,000 1,360,103
BANsAdjustments-L.O.Projects 26 (27,522,199) (1,288,111) 28,810,310 0
BANS Adjustments-Other 27 (813,004) (390,000) 1,203,004 0
Unfunded CIP Adjustment 28 0 0 0 0 0 0 0 0 0 0 0
Total(w/o Inflation) $9,494,041 $15,144,456 $20,126,716 $34,358,511 $0 $0 $33,087,721 $5,135,000 $350,000 $350,000 $118,046,445
Expected Expenditure Rates 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Inflation Factor 1-All other projects
Expected Inflation Rate 0.0% 2.0% 3.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Inflation Factor 1.000 1.020 1.051 1.093 1.136 1.182 1.229 1.278 1.329 1.383
Inflation Factor 2-Joint Water Supply Projects
Expected Inflation Rate-Joint Water Supply Projects 0.0% 12.4% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Inflation Factor-Joint Water Supply Projects 1.000 1.124 1.191 1.263 1.339 1.419 1.504 1.594 L690 1.791
Capital Outlays $417,100 $249,652 $266,699 $284,949 $304,490 $325,416 $347,830 $371,840 $397,565 $425,131 $3,390,671
Expected Capital Expenditures w/Inflation $9,911,141 $16,242,522 $23,865,900 $43,447,985 $304,490 $325,416 $49,066,585 $6,935,477 $862,835 $909,012 $151,871,363
Total Growth-Related CIP $5,684,928 $2,824,739 $8,891,595 $17,519,817 $15,190,361 $739,386 $2,592,653 $1,744,667 $0 $0 $55,188,146
10/21/2010
Water Financial Plan
Table 2
City of Tigard
Water Financial Plan
Capital Improvement Plan(With Inflation)
Descri tion I Line FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 I Total
ASR Well 3-Design&Equip 1 $0 $265,000 $2,421,000 $50,000 $0 $0 $0 $0 $0 $0 $2,736,000
ASR Well 4-Siting Study 2 30,000 0 0 0 0 0 0 0 0 0 30,000
ASR Well 4-Design;Drill&Equip Year 1(50%) 3 0 0 0 0 0 0 2,284,810 0 0 0 2,284,810
ASR Well 4-Drill&Equip Year 2(50%) 4 0 0 0 0 0 0 0 1,425,210 0 0 1,425,210
New Pump Station-Siting Study 5 0 51,000 0 0 0 0 0 0 0 0 51,000
New Pimp Station-Design 6 0 0 267,903 0 0 0 0 0 0 0 267,903
New Pump Station-Construction Year 1(67%) 7 0 0 0 1,052,197 0 0 0 0 0 0 1,052,197
New Pump Station-Construction Year 2(33%) 8 0 0 0 0 546,574 0 0 0 0 0 546,574
New PRV from 550G to 410 Zone 9 105,000 0 0 0 0 0 0 0 0 0 105,000
Pipeline connecting 550G and 530 Zones-Design 10 0 0 0 0 0 0 242,124 0 0 0 242,124
Pipeline connecting 550G and 530 Zones-Constructic 11 0 0 0 0 0 0 0 2,262,442 0 0 2,262,442
Annual Fire Flow Improvement Allocation 12 0 0 0 109,262 113,633 118,178 245,811 255,643 265,869 276,504 1,384,900
Pipeline for installing PRV 550G4 13 17,000 0 0 0 0 0 0 0 0 0 17,000
Pipeline in Main St.&Tigard Ave. 14 101,000 0 0 0 0 0 0 0 0 0 101,000
Water Master Plan Update 15 0 0 0 0 0 165,449 0 0 0 0 165,449
Asset Management Program 16 0 0 0 109,262 0 0 0 0 0 0 109,262
Res.Seismic&Condition Assessment 17 0 0 0 0 113,633 0 0 0 0 0 113,633
PS8-Design 18 0 0 0 0 0 0 258,101 0 0 0 258,101
PS8-Construction 19 0 0 0 0 0 0 0 2,428,610 0 0 2,428,610
550-6270-755827-550'Zone IOMil 20 3,543,043 226,000 0 0 0 0 0 0 0 0 3,769,043
Joint Water Supply Projects 21 4,347,998 5,895,870 20,760,298 41,692,314 36,844,023 1,827,860 689,520 0 0 0 112,057,883
Willamette Sherwood Pipeline 22 1,000,000 3,400,000 0 0 0 0 0 0 0 0 4,400,000
Repayment of Prior LOC 23 225,000 6,055,000 0 0 0 0 0 0 0 0 6,280,000
SDC Methodology Update 24 25,000 0 0 0 0 0 0 0 0 0 25,000
Water Main Line Oversizing 25 100,000 100,000 150,000 150,000 150,000 177,267 184,358 191,732 199,402 207,378 1,610,137
BANS Adjustments-L.O.Projects 26 0 0 0 0 (36,844,023) (1,827,860) 43,335,475 0 0 0 4,663,593
BANS Adjustments-Other 27 0 0 0 0 (923,840) (460,895) 1,478,556 0 0 0 93,821
Unfunded CIP Adjustment 28 0 0 0 0 0 0 0 0 0 0 0
Total(w/Inflation) $9,494,041 $15,992,870 $23,599,201 $43,163,036 $0 ($0) $48,718,755 $6,563,637 $465,270 $483,881 $148,480,692
N
10/21/2010
Water Financial Plan
Table 3
City of Tigard
Water Financial Plan
Funding Sources for Improvements
Descri tion FY2011 I FY2012 I FY2013 I FY2014 FY2015 FY2016 I FY2017 I FY2018 I FY2019 I FY2020 Total
Construction Fund $7,794,798 $15,572,837 $23,277,246 $42,827,198 ($350,319) ($365,425) $48,337,573 $6,166,018 $465,270 $483,881 $144,209,078
Water(Operating)Fund Capital Outlays 417,100 249,652 266,699 284,949 304,490 325,416 347,830 371,840 397,565 425,131 3,390,671
Grant Funded Capital 1,699,243 108,390 0 0 0 0 0 0 0 0 1,807,633
Improvement SDC Account 0 311,643 321,955 335,838 350,319 365,425 381,182 397,619 0 0 2,463,981
Total $9,911,141 $16,242,522 $23,865,900 $43,447,985 $304,490 $325,416 $49,066,585 $6,935,477 $862,835 $909,012 $151,871,363
C7
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10/21/2010
Water Financial Plan
Table 4
City of Tigard
Water Financial Plan
Projected Debt Issue Size and Costs
Descri tion FY2011 I FY2012 FY2013 I FY2014 FY2015 FY2016 I FY2017 FY2018 FY2019 FY2020
Issue Sizing&Type(select Type for each year) Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue
Bond Proceeds Required $1,845,407 $38,850,000 $0 $35,200,000 $0 $0 $36,380,409 $0 $0 $0
Issuance Costs 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Reserve Requirement 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 1000% 10.00%
Reserve Req?
Revenue Bonds Issue Size Yes $2,097,054 $44,147,727 $0 $40,000,000 $0 $0 $41,341,374 $o $0 $0
G.O.Bonds Issue Size No 0 0 0 0 0 0 0 0 0 0
Debt Service Requirements
Term(Years) 25 25 25 25 25 25 25 25 25 25
Interest Rate 5.50% 5.50% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Subject to
Coverage?
Annual Debt Service Costs $156,334 $3,291,185 $0 $3,129,069 $0 $0 $3,234,000 $0 $0 $0
Accumulated Debt Service TRUE 78,167 1,801,926 3,447,518 5,012,053 6,576,587 6,576,587 8,193,587 9,810,587 9,810,587 9,810,587
Annual G.O.Debt Service Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated G.O.Debt Service 0 0 0 0 0 0 0 0 0 0
C7
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10/21/2010
Water Financial Plan
Table 5
City of Tigard
Water Financial Plan
Annual Debt Service Subject to Coverage Requirements
Subject to
Descri tion I Requirement I FY2011 I FY2012 I FY2013 I FY2014 I FY2015 I FY2016 I FY2017 I FY2018 I FY2019 FY2020
Existing Debt Service
Subtotal $0 $0 $0 $o $0 $0 $0 $0 $0 $0
Debt Service on Proposed Debt TRUE $78,167 $1,801,926 $3,447,518 $5,012,053 $6,576,587 $6,576,587 $8,193,587 $9,810,587 $9,810,587 $9,810,587
Total Debt Service $78,167 $1,801,926 $3,447,518 $5,012,053 $6,576,587 $6,576,587 $8,193,587 $9,810,587 $9,810,587 $9,810,587
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10/21/2010
Water Financial Plan
C-6
Table 6
City of Tigard
Water Financial Plan
Estimated O&M Costs by Year
Escalation
Description Rate FY2011 FY2012 FY2013 FY2014 I FY2015 FY2016 I FY2017 FY2018 FY2019 FY2020
Salaries-Management 7.7% $15o $161380 $174,276 $187,737 $202,237 $217,858 $234,685 $252,812 $272339 $293,374
Salaries-General 6.3%, 536,996 570.994 607,144 645.584 686.456 729,917 776,129 825,267 877,516 933,072
Part Time-Temporary 3.0% 0 0 0 0 0 0 (1 0 0 0
Overtime 6,0% 25,000 26,500 28,090 29.775 31,562 33,456 35,463 37,591 39,846 42,237
Unemployment 3.0% 684 705 726 747 770 793 817 841 866 892
Worker's Compensation 7.1% 20,569 22,026 23.585 25,256 27,044 28,959 31,010 33.206 35,558 38,076
Social Securig/Medicare 5.3'7. 52.570 55,373 58,325 61,434 64,709 68,159 71,792 75,620 79,651 83,898
Tri-Met Tae 6.6% 4.684 4,995 5,327 5,690 6,057 6,459 6,888 7.345 7.833 8,353
Retirement 6.7% 70,218 74,906 79,907 85,242 90,933 97,005 103,481 110,390 117,760 125,623
Retirement-3%ERMatch 6.7% 4,505 4,805 5,126 5,468 5,832 6,221 6,636 7,079 7,551 8,055
VEBA-ER 3.0% 10,200 10,506 10.821 11,146 11.480 11,825 12,179 12.545 12.921 13.309
Life Ins/ADD/LTD 6,0%, 2,520 2,671 2,831 3,001 3,181 3.372 3,575 3.789 4,016 4.257
Long Term Disability 3.0'7 0 0 0 0 0 0 0 0 0 (1
Medical/Dental/Vision 6.0% 145,131 153,839 163,069 172,853 183.225 194,218 205,871 218.223 231,317 245,196
Dental Benefits 3.0'% 0 0 0 0 0 0 0 0 0 0
Office Supplies 60% 2,000 2.120 2247 2,382 2,525 2,676 2,837 3,007 3.188 3.379
Small Tools&Equipment 3.0'% 20,043 20,644 21,264 21,902 22,559 23.235 23,932 24,650 25,390 26,152
Fuel 3.0% 25,500 26265 27,053 27,865 28300 29.561 30,448 3L362 32,303 33,272
Water Costs:L.O.&Ptld 6.0% 3.362.145 3.563 874 3,777,706 4,004,368 4,244,631 4,499,308 1,265,137 1,341,046 1421,508 1,506,799
Professional/Contractual Services 6.0% 384,390 407.453 431,901 457,815 485,284 514,401 545,265 577,980 612,659 649,419
Water Costs:Sampling 3.0% 39,745 40,937 42,165 43.430 44,733 46,075 47,458 48,881 50,348 51,858
Legal Fees 3.0% 30,900 31,827 32,782 33,765 34.778 35,822 36,896 38,003 39.143 40,317
R&M-Facilities 6.0% 8,500 9;010 9,551 10,124 10,731 11,375 12,057 12,781 13,548 14,361
R&M-Water Lines 9.7% 70,000 76.102 82,736 89,948 97 789 106,313 1 15,581 125,656 136,610 148.518
R&M-Control Valves 6.0'7 17,000 18,020 19,101 20,247 21,462 22,750 24.115 25,562 27,095 28.721
R&M-Reservoir 60% 6,000 6,360 6,742 7,146 7,575 8,029 8,511 9,022 9,563 10.137
R&M-Grounds 60'% 12,000 12,720 13,483 14,292 15,150 16,059 17.022 18,044 19,126 20,274
R&M-Pump Station 6.0% 8,500 9.010 9,551 10.124 10,731 11.375 12,057 12,781 13,548 14,361
R&M-SCADA 60"0 8.000 8,480 8,989 9,528 10,100 10.706 11,348 12.029 12,751 13,516
R&M-Wells 3.0'7. 11,500 11,845 12,200 12.566 12,943 13,332 13,732 14,144 14,568 15,005
R&M-Meters 6.0'7 227.100 113,550 120,363 127,585 135,240 143,354 151,956 161,073 170,737 180,981
R&M-Service Lines 3.0'7, 20.500 21,115 21,748 22,401 23,073 23,765 24,478 25.212 25,969 26,748
R&M-Regulators 3.0% (1 0 (1 0 0 0 0 0 0 0
R&M-Fire Hvdrmt 60% 120,000 60,000 63,600 67.416 71,461 75,749 80,294 85,111 90,218 95,631
R&M-Vehicles 3.0'7 25,000 25,750 26.523 27.318 28,138 28,982 29,851 30.747 31,669 32,619
Utilities-Electric 6.0'% 271,728 288,032 305,314 323,632 343,050 363,633 385,451 408,578 433,093 459,079
Utilities-Water/Setccr/SWM 60% 1,000 1,060 1.124 1,191 1,262 1,338 1,419 1504 1.594 1,689
Utilites-Phone/Pager/Culls 6.0'7 9.706 10288 14906 11,560 12,254 12,989 13,768 14,594 15-470 16,398
Advertising&Publicity 60% 43.167 45;757 48,502 51,413 54,497 57,767 61,233 64,907 68,802 72.930
Fees and Charges 60%, 1725 1.829 1,938 2,055 2,178 2,308 2,447 2.594 2.749 2,914
Dues&Subscriptions 30% 6.900 7,107 7,320 7,540 7.766 7,999 8,239 8,486 8.741 9,003
Travel and Training 3.3'% 7,250 7,492 7,742 8.000 8,266 8,542 8,827 9,121 9,425 9,740
Conservation Expenses 3,0% 31.700 32,651 33,631 34,639 35,679 36,749 37,851 38.987 40.157 41,361
Insurance 3.0% 0 0 0 0 0 0 0 0 0 0
Property Damage 6.0% 5,750 6.095 6.461 6.848 7,259 7,695 8,156 8,646 9,165 9,715
Rents and Leases 3.0% 3.000 1.090 3,183 3.278 3,377 3,478 3.582 3,690 3,800 3.914
Bad Debt Expense 60% 5.750 6,095 6.461 6,848 7.259 7,695 8.156 9,646 9,165 9,715
Special Department Expenses 60'% 8000 8.480 8.989 9,528 10,100 10,706 11,348 12,029 12-751 13,516
Vehicles 3.0%, 70,000 72.100 74.263 76,491 78,786 81,149 93,584 86091 88-674 91,334
Computer Hardware and Software 3.0% 3,100 3,193 3,289 3,387 3,489 3,594 3,702 3,813 3,927 4,045
Equipment 3.0% (l 0 0 0 0 0 0 0 0 0
Interdepartmental Costs 3.0% 443,482 456,786 470,490 484,6115 499,143 514,117 529,541 545.427 561,790 578.643
AMR Program O&M 6.0% 0 100,000 106,000 112,360 119.102 126,248 133,823 141,852 150,363 159,385
Monthly Billing Program Adj. 63% 0 50,000 53,166 56532 60.111 63,916 67,963 72,266 76,841 81,706
Total 0&M Costs $6.334,338 $6,654,237 $7,037,707 $7,444,053 $7,874,667 $8,331,033 $5,310,593 $5,613,029 $5,933621 $6273.495
Less Capital Ondava $417,100 $249.652 $266699 $284,949 $304,490 $325,416 $347.830 $371,840 $397,565 $425,131
Net O&M Costs $5,9.17.238 $6404.585 $6,771008 $7,159,104 $7.570,177 $8,005.617 $4,962,763 $5,241,189 $5,536,056 $5,848365
10/21/2010
Water Financial Plan
C-7
Table 7
City of Tigard
Water Financial Plan
O&M Manual Overrides
Descri tion I Escalation I FY2012 I FY2013 I FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Salaries-Management 7.7%
Salaries-General 6.3%
Part Time-Temporary 3.0%
Overtime 6.0%
Unemployment 3.0%
Worker's Compensation 7.1%
Social Security/Medicare 5.3%
Tri-Met Tax 6.6%
Retirement 6.7%
Retirement-3%ER Match 6.7%
VEBA-ER 3.0%
Life Ins/ADD/LTD 6.0%
Long Term Disability 3.0%
Medical/Dental/Vision 6.0%
Dental Benefits 3.0%
Office Supplies 6.0%
Small Tools&Equipment 3.0%
Fuel 3.0%
Water Costs:L.O.&Pild 6.0% 1,265,137
Professional/Contractual Services 6.0%
Water Costs:Sampling 3.0%
Legal Fees 3.0%
R&M-Facilities 6.0%
R&M-Water Lines 8.7%
R&M-Control Valves 6.0%
R&M-Reservoir 6.0%
R&M-Grounds 6.0%
R&M-Pump Station 6.0%
R&M-SCADA 6.0%
R&M-Wells 3.0%
R&M-Meters 6.0% 113,550
R&M-Service Lines 3.0%
R&M-Regulators 3.0%
R&M-Fire Hydrant 6.0% 60,000
R&M-Vehicles 3.0%
Utilities-Electric 6.0%
Utilities-Water/Sewer/SWM 6.0%
Utilites-Phone/Pager/Cells 6.0%
Advertising&Publicity 6.0%
Fees and Charges 6.0%
Dues&Subscriptions 3.0%
Travel and Training 3.3%
Conservation Expenses 3.0%
Insurance 3.0%
Property Damage 6.0%
Rents and Leases 3.0%
Bad Debt Expense 6.0%
Special Department Expenses 6.0%
Vehicles 3.0%
Computer Hardware and Software 3.0%
Equipment 3.0%
Interdepartmental Costs 3.0%
AMR Program O&M 6.0% 100,000
Monthly Billing Program Adj. 6.3% 50,000
10/21/2010
Water Financial Plan
Table 8
City of Tigard
Water Financial Plan
Number of Water Meters by Meter Size and Customer Class
Meter Size TWSA I Unused Unused
Total Meters
5/8 x 3/4-Inch 15,635 0 0
1-Inch 1,604 0 0
1 1/2-Inch 375 0 0
2-Inch 320 0 0
3-Inch 24 0 0
4-Inch 11 0 0
6-Inch 5 0 0
8-Inch 5 0 0
Totals 17,979 0 0
CO
10/21/2010
Water Financial Plan
Table 9
City of Tigard
Water Financial Plan
Equivalency Factors
Meter Size TWSA Unused Unused
5/8 x 3/4-Inch 1.00
1-Inch 2.67
1 1/2-Inch 8.00
2-Inch 12.99
3-Inch 22.90
4-Inch 46.97
6-Inch 50.00
8-Inch 80.00
10/21/2010
Water Financial Plan
Table 10
City of Tigard
Water Financial Plan
Number of EDUs by Meter Size and Customer Class
Meter Size TWSA Unused Unused
5/8 x 3/4-Inch 15,635 0 0
1-Inch 4,279 0 0
1 1/2-Inch 2,999 0 0
2-Inch 4,156 0 0
3-Inch 550 0 0
4-Inch 517 0 0
6-Inch 250 0 0
8-Inch 400 0 0
Totals 28,785 0 0
0
10/21/2010
Water Financial Plan
Table 11
City of Tigard
Water Financial Plan
EDU Forecast
Description FY2011 I FY2012 I FY2013 FY2014 I FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
EDUs
TWSA 28,785 28,785 28,872 28,958 29,045 29,132 29,220 29,307 29,395 29,483
Total 28,785 28,785 28,872 28,958 29,045 29,132 29,220 29,307 29,395 29,483
New EDUs
TWSA 0 86 87 87 87 87 88 88 88 88
Total 0 86 87 87 87 87 88 88 88 88
Growth Rate
TWSA 0.0% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
System Growth 0.0% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
C7
10/21/2010
Water Financial Plan
Table 12
City of Tigard
Water Financial Plan
SDC Forecast
Descri tion FY2011 I FY2012 FY2013 I FY2014 I FY2015 FY2016 FY2017 I FY2018 I FY2019 FY2020
Annual SDC Escalation Rate
Improvement NA 2.00% 3.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Reimbursement NA 2.00% 3.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
Improvement Fee
TWSA $3,538 $3,609 $3,717 $3,866 $4,020 $4,181 $4,348 $4,522 $4,703 $4,891
Reimbursement Fee
TWSA $2,936 $2,994 $3,084 $3,207 $35336 $3,469 $3,608 $3,752 $3,902 $4,058
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Water Financial Plan
Table 13
City of Ti-ard
Water Financial Plan
Forecast of SDC Revenues
Description FY2011 I FY2012 I FY2013 FY2014 I FY2015 FY2016 I FY2017 I FY2018 FY2019 FY2020
Improvement Fee
TWSA $0 $311,643 $321,955 $335,838 $350,319 $365,425 $381,182 $397,619 $414,764 $432,649
Total $0 $311,643 $321,955 $335,838 $350,319 $365,425 $381,182 $397,619 $414,764 $432,649
Reimbursement Fee
TWSA $0 $258,575 $267,131 $278,649 $290,665 $303,198 $316,272 $329,910 $344,136 $358,975
Total $0 $258,575 $267,131 $278,649 $290,665 $303,198 $316,272 $329,910 $344,136 $358,975
Grand Total $0 $570,217 $589,086 $614,487 $640,984 $668,623 $697,454 $727,529 $758,900 $791,623
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10/21/2010
Water Financial Plan
Table 14
City of Tigard
Water Financial Plan
Estimated Revenues
Descri tion FY2011 I FY2012 I FY2013 I FY2014 I FY2015 I FY2016 I FY2017 I FY2018 I FY2019 FY2020
Water Assumptions
Rate Revenue Increases 34.50% 14.00% 14.00% 14.00% 4.30% 4.30% 4.30% 4.30% 0.00% 0.00%
Month of Rate Increase 1 10 10 10 10 10 10 10 10 10
Prorated Percent Impact of Increase 38.01% 62.22% 62.22% 62.22% 62.22% 62.22% 62.22% 62.22% 62.22% 62.22%
Meter Growth 0.00% 0.30% 030% 0.30% 0.30% 0.30% 0.30% 030% 0.30% 0.30%
Sales Growth 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
System Growth 0.00% 0.30% 0.30% 0.30°% 0.30% 0.30% 0.30°% 0.30% 0.30°% 0.30%
Revenues
User Charge Revenues-Water
Before Increase $7,887,387 $10,640,361 $12,166,402 $13,911,307 $15,906,467 $16,640,216 $17,407,813 $18,210,818 $19,050,864 $19,108,017
Revenues from Increase 1,034,419 926,854 1,059,784 1,211,778 425,568 445,199 465,736 487,220 0 0
Total User Charges $8,921,806 $11,567,215 $13,226,185 $15,123,085 $16,332,035 $17,085,415 $17,873,549 $18,698,037 $19,050,864 $19,108,017
Revenue Summary
User Charge Revenues-Water
Revenues Before Increase $7,887,387 $10,640,361 $12,166,402 $13,911,307 $15,906,467 $16,640,216 $17,407,813 $18,210,818 $19,050,864 $19,108,017
Revenues from Increase 1,034,419 926,854 1,059,784 1,211,778 425,568 445,199 465,736 487,220 0 0
Total User Charges $8,921,806 $11,567,215 $13,226,185 $15,123,085 $16,332,035 $17,085,415 $17,873,549 $18,698,037 $19,050,864 $19,108,017
Non-Rate Revenues(net of related expenses)
Developer Overhead $10,000 $10,030 $10,060 $10,090 $10,121 $10,151 $10,181 $10,212 $10,243 $10,273
Miscellaneous Fees/Charges 2,500 2,508 2,515 2,523 2,530 2,538 2,545 2,553 2,561 2,568
Other Utility Sales 4,443 4,456 4,470 4,483 4,497 4,510 4,524 4,537 4,551 4,564
Leaks/Misreads Credits (22,915) (22,984) (23,053) (23,122) (23,191) (23,261) (23,331) (23,401) (23,471) (23,541)
Meter Sales 27,679 27,762 27,845 27,929 28,013 28,097 28,181 28,266 28,350 28,435
Fire Hydrant Flow Testing Srvc 2,000 2,006 2,012 2,018 2,024 2,030 2,036 2,042 2,049 2,055
Late Penalties/Charges 120,774 121,136 121,500 121,864 122,230 122,597 122,964 123,333 123,703 124,074
Returned Check Fees 1,286 1,290 1,294 1,298 1,302 1,305 1,309 1,313 1,317 1,321
Bad Debt (20,483) (20,544) (20,606) (20,668) (20,730) (20,792) (20,854) (20,917) (20,980) (21,043)
Miscellaneous Fees&Charges 420 421 423 424 425 426 428 429 430 431
Rental Income 66,492 66,691 66,892 67,092 67,294 67,495 67,698 67,901 68,105 68,309
Interest Earnings-Water Fund 9,673 30,492 122,395 114,079 97,716 144,271 96,870 25,160 62,137 132,562
Total Non-Rate Revenues $201,869 $223,265 $315,746 $308,010 $292,228 $339,367 $292,552 $221,429 $258,995 $330,010
Total Revenues $9,123,675 $11,790,480 $13,541,931 $15,431,095 $16,624,263 $17,424,783 $18,166,100 $18,919,466 $19,309,859 $19,438,027
(7
A
10/21/2010
Water Financial Plan
Table 15
City of Tigard
Water Financial Plan
Calculation of Revenue Proration by Month
Sales Subject to Percent of Fiscal Average
Month Month I Increase I Year I FY2007 I FY2008 FY2009 FY2010 Revenues
January 1 $2,764,448 38.01% $576,469 $529,934 $498,881 $535,095
February 2 2,229,353 30.66% 300,272 287,414 468,560 474,462 382,677
March 3 1,846,676 25.39% 462,291 456,469 .436,321 573,940 482,255
April 4 1,364,421 18.76% 414,491 422,605 397,807 324,957 389,965
May 5 974,456 13.40% 524,889 485,369 508,112 506,123
June 6 468,332 6.44% 412,602 412,602 579,793 468,332
July 7 7,272,170 100.00% 742,168 791,988 803,681 779,279
August 8 6,492,891 89.28% 869,137 718,339 793,738
September 9 5,699,153 78.37% 1,030,357 1,102,184 1,390,778 1,174,440
October 10 4,524,713 62.22% 725,375 698,010 723,469 715,618
November Il 3,809,095 52.38% 650,779 589,037 647,065 724,159 652,760
December 12 3,156,335 43.40% 297,128 442,726 479,117 348,579 391,888
Total $6,136,821 $5,985,291 $6,644,990 $4,555,214 $7,272,170
n
10/21/2010
Water Financial Plan
Table 16
City of Tigard
Water Financial Plan
Sources and Uses--Water Fund
Descrition FY2011 I FY2012 I FY2013 FY2014 FY2015 I FY2016 I FY2017 I FY2018 I FY2019 FY2020
Interest Rate on Fund Balance 0.50% 1.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Sources of Funds
Beginning Water Fund Balance $2,410,162 $1,459,045 $4,639,350 $7,600,154 $3,807,791 $5,963,766 $8,463,326 $1,223,695 $1,292,348 $4,921,363
User Charge Revenues-Water 8,921,806 11,567,215 13,226,185 15,123,085 16,332,035 17,085,415 17,873,549 18,698,037 19,050,864 19,108,017
Non-Rate Revenues(net of related expenses)
Developer Overhead 10,000 10,030 10,060 10,090 10,121 10,151 10,181 10,212 10,243 10,273
Miscellaneous Fees/Charges 2,500 2,508 2,515 2,523 2,530 2,538 2,545 2,553 2,561 2,568
Other Utility Sales 4,443 4,456 4,470 4,483 4,497 4,510 4,524 4,537 4,551 4,564
Leaks/Misreads Credits (22,915) (22,984) (23,053) (23,122) (23,191) (23,261) (23,331) (23,401) (23,471) (23,541)
Meter Sales 27,679 27,762 27,845 27,929 28,013 28,097 28,181 28,266 28,350 28.435
Fire Hydrant Flow Testing Srvc 2,000 2,006 2,012 2,018 2,024 2,030 2,036 2,042 2,049 2,055
Late Penalties/Charges 120,774 121,136 121,500 121,864 122,230 122,597 122,964 123,333 123,703 124,074
Retuned Check Fees 1,286 1,290 1,294 1,298 1,302 1,305 1,309 1,313 1,317 1,321
Bad Debt (20,483) (20,544) (20,606) (20,668) (20,730) (20,792) (20,854) (20,917) (20,980) (21,043)
Miscellaneous Fees&Charges 420 421 423 424 425 426 428 429 430 431
Transfers In
Rate Stabilization to Water Fund 0 0 0 0 0 0 0 0 0 0
Interest Earnings-Water Fund 9,673 30,492 122,395 114,079 97,716 144,271 96,870 25,160 62,137 132,562
Total Sources of Funds $11,467,345 $13,182,833 $18,114,390 $22,964,157 $20,364,761 $23,321,053 $26,561,728 $20,075,260 $20,534,102 $24,291,081
Uses of Funds
Net O&M Expenditures $5,917,238 $6,404,585 $6,771,008 $7,159,104 $7,570,177 $8,005,617 $4,962,763 $5,241,189 $5,536,056 $5,848,365
Water(Operating)Fund Capital Outlays 417,100 249,652 266,699 284,949 304,490 325,416 347,830 371,840 397,565 425,131
Transfers Out
Water Fund to CIP Fund(Cap.Reserves) 3,586,747 0 0 6,710,886 0 0 11,924,720 3,491,135 0 3,277
Water Fund to Debt Service Fund 87,216 1,768,1 10 3,355,029 4,879,563 6,404,098 6,404,098 7,979,756 9,555,415 9,555,415 9,555,415
Water Fund to Rate Stabilization 0 0 0 0 0 0 0 0 0 0
Ending Water Fund Balance 1,459,045 4,639,350 7,600,154 3,807,791 5,963,766 8,463,326 1,223,695 1,292,348 4,921,363 8,334,820
Total Uses of Funds $11,467,345 $13,182,833 $18,114,390 $22,964,157 $20,364,761 $23,321,053 $26,561,728 $20,075,260 $20,534,102 $24,291,081
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10/21/2010
Water Financial Plan
Table 17
City of Tigard
Water Financial Plan
Sources and Uses--CIP Fund(Cap.Reserves)
Descri tion FY2011 I FY2012 I FY2013 I FY2014 FY2015 FY2016 I FY2017 FY2018 FY2019 FY2020
Interest Rate on Fund Balance 0.50% L00% 2.00% 2.00% 2.00% 200% 100% 2.00% 2,00% 2.00
Sources of Funds
Beginning CIP Fund(Cap.Reserves)Balance $2,290,176 $0 $0 $0 $0 $0 $0 $0 $0 $0
Transfers In
Water Fund to CIP Fund(Cap.Reserves) $3,586,747 $0 $0 $6,710,886 $0 $0 $11,924,720 $3,491,135 $0 $3,277
Rental Income 66,492 66,691 66,892 67,092 67,294 67,495 67,698 67,901 68,105 68,309
Interest Earnings 5,725 0 0 0 0 0 0 0 0 0
Total Sources of Funds $5,949,140 $66,691 $66,892 $6,777,979 $67,294 $67,495 $11,992,418 $3,559,036 $68,105 $71,586
Uses of Funds
Transfers Out
CIP Fund(Cap.Reserves)to Construction Fund 5,949,140 66,691 66,892 6,777,979 67,294 67,495 11,992,418 3,559,036 68,105 71,586
Ending CIP Fund(Cap.Reserves)Balance 0 0 0 0 0 0 0 0 0 0
Total Uses of Funds $5,949,140 $66,691 $66,892 $6,777,979 $67,294 $67,495 $11,992,418 $3,559,036 $68,105 $71,586
J
10/21/2010
Water Financial Plan
Table 18
City of Tigard
Water Financial Plan
Sources and Uses--Bond Proceeds Fund
[Description FY2011 I FY2012 FY2013 FY2014 FY2015 FY2016 I FY2017 FY2018 FY2019 FY2020
Interest Rate on Fund Balance 0.50% 1.00% 2.00% 2.00% 100% 2.00% 2.00% 2.00% 2.00% 2.00
Sources of Funds
Beginning Bond Proceeds Fund Balance $0 ($0) $23,653,755 $889,069 $8,980 $9,162 $9,347 $94 $1 $0
Bond Proceeds 2,097,054 44,147,727 0 40,000,000 0 0 41,341,374 0 0 0
Transfers In
Interest Eamings 0 118,269 245,428 8,980 181 185 94 1 0 0
Total Sources of Funds $2,097,054 $44,265,996 $23,899,184 $40,898,049 $9,162 $9,347 $41,350,815 $95 $1 $0
Uses of Funds
Issuance Costs, $41,941 $882,955 $0 $800,000 $0 $0 $826,827 $0 $0 $0
Transfers Out
Bond Proceeds Fund to Debt Service Fund 209,705 4,414,773 0 4,000,000 0 0 4,134,137 0 0 0
Bond Proceeds Fund to Construction Fund 1,845,407 15,314,514 23,010,115 36,089,069 0 0 36,389,756 94 1 0
Ending Bond Proceeds Fund Balance (0) 23,653,755 889,069 8,980 9,162 9,347 94 1 0 0
Total Uses of Funds $2,097,054 $44,265,996 $23,899,184 $40,898049 $9,162 $9,347 $41,350,815 $95 $1 $0
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10/21/2010
Water Financial Plan
Table 19
City of Tigard
Water Financial Plan
Sources and Uses--Debt Service Fund
IDescription FY2011 I FY2012 I FY2013 FY2014 I FY2015 I FY2016 I FY2017 I FY2018 I FY2019 I FY2020
Interest Rate on Fund Balance 0.50% 1.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00
Sources of Funds
Beginning Debt Service Fund Balance $o $219,302 $4,624,478 $4,624,478 $8,624,478 $8.624,478 $8,624,478 $12,758,615 $12,758,615 $12,758,615
Transfers In
Water Fund to Debt Service Fund $87,216 $1,768,110 $3,355,029 $4,879,563 $6,404,098 $6,404,098 $7,979,756 $9,555,415 $9,555,415 $9,555,415
Bond Proceeds Fund to Debt Service Fund 209,705 4,414,773 0 4,000 000 0 0 4,134,137 0 0 0
Interest Earnings 548 24,219 92,490 132,490 172,490 172,490 213,831 255,172 255,172 255,172
Total Sources of Funds $297,469 $6,426,404 $8,071,997 $13,636,531 $15,201,065 $15,201,065 $20,952,203 $22,569,203 $22,569,203 $22,569,203
Uses of Funds
Total Debt Service $78,167 $1,801,926 $3,447,518 $5,012,053 $6,576,587 $6,576,587 $8,193,587 $9,810,587 $9,810,587 $9,810,587
Transfers Out
Ending Debt Service Fund Balance 219,302 4,624,478 4,624,478 8,624,478 8,624,478 8,624,478 12,758,615 12,758,615 12,758,615 12,758,615
Total Uses of Funds $297,469 $6,426,404 $8,071,997 $13,636,531 $15,201,065 $15,201,065 $20,952,203 $22,569,203 $22,569,203 $22,569,203
(7
10/21/2010
Water Financial Plan
Table 20
City of Tigard
Water Financial Plan
Sources and Uses--Construction Fund
Descrition FY2011 I FY2012 I FY2013 I FY2014 I FY2015 FY2016 I FY2017 FY2018 I FY2019 F1'2020
Interest Rate on Fund Balance 0.50% 1.00% 200% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00
Sources of Funds
Begiruting Construction Fund Balance $0 ($251) $67,025 $135,947 $460,409 $1,185,142 $1,952,638 $2,356,604 $104,234 $52,775
Transfers In
CIP Fund(Cap.Reserves)to Construction Fund 5,949,140 66,691 66,892 6,777,979 67,294 67,495 11,992,418 3,559,036 68,105 71,586
Bond Proceeds Fund to Construction Fund 1,845,407 15,314,514 23,010,115 36,089,069 0 0 36,389,756 94 1 0
Reimbursement SDC Account to Construction Fund 0 258,575 267,131 278,649 290,665 303,198 316,272 329,910 344,136 358,975
Improvement SDC Account to Construction Fund 0 311,643 321,955 335,838 350,319 365,425 381,182 397,619 0 0
Interest Earnings 0 334 2,030 5,964 16,456 31,378 43,092 24,608 1,570 528
Total Sources of Funds $7,794,547 $15,951,506 $23,735,148 $43,623,445 $1,185,142 $1,952,638 $51,075,359 $6,667,871 $518,046 $483,863
Uses of Funds
Capital Improvements Projects $7,794,798 $15,884,480 $23,599,201 $43,163,036 $0 $0 $48,718,755 $6,563,637 $465,270 $483,881
Transfers Out
Ending Construction Fund Balance (251) 67,025 135,947 460,409 1,185,142 1,952,638 2,356,604 104,234 52,775 (18)
Total Uses of Funds $7,794,547 $15,951,506 $23,735,148 $43,623,445 $1,185,142 $1,952,638 $51,075,359 $6,667,871 $518,046 $483,863
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Water Financial Plan
Table 21
City of Tigard
Water Financial Plan
Sources and Uses--Reimbursement SDC Account
Descri tion FY2011 I FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Interest Rate on Account Balance 0,50% 1.00% 2.00% 2,00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Sources of Funds
Beginning Reimbursement SDC Account Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Reimbursement Fee Receipts 0 258,575 267,131 278,649 290,665 303,198 316,272 329,910 344,136 358,975
Transfers In
Interest Earnings 0 0 0 0 0 0 0 0 0 0
Total Sources of Funds $0 $258,575 $267,131 $278,649 $290,665 $303,198 $316,272 $329,910 $344,136 $358,975
Uses of Funds
Transfers Out
Reimbursement SDC Account to Construction Fund 0 258,575 267,131 278,649 290,665 303,198 316,272 329,910 344,136 358,975
Ending Reimbursement SDC Account Balance 0 0 0 0 0 0 0 0 0 0
Total Uses of Funds $0 $258,575 $267,131 $278,649 $290,665 $303,198 $316,272 $329,910 $344,136 $358,975
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10/21/2010
Water Financial Plan
Table 22
City of Tigard
Water Financial Plan
Sources and Uses--Improvement SDC Account
Descrition FY2011 I FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Interest Rate on Fund Balance 0.50% 1.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Sources of Funds
Beginning Improvement SDC Account Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $418,954
Improvement Fee Receipts 0 311,643 321,955 335,838 350,319 365,425 381,182 397,619 414,764 432,649
Transfers In
Interest Eamings 0 0 0 0 0 0 0 0 4,190 12,834
Total Sources of Funds $0 $311,643 $321,955 $335,838 $350,319 $365,425 $381,182 $397,619 $418,954 $864,436
Uses of Funds
Transfers Out
Itnprovement SDC Account to Construction Fund 0 311,643 321,955 335,838 350,319 365,425 381,182 397,619 0 0
Ending Improvement SDC Account Balance 0 0 0 0 0 0 0 0 418,954 864,436
Total Uses of Funds $0 $311,643 $321,955 $335,838 $350,319 $365,425 $381,182 $397,619 $418,954 $864,436
0
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10/21/2010
Water Financial Plan
Table 23
City of Tigard
Water Financial Plan
Sources and Uses--Rate Stabilization
IDescription FY2011 I FY2012 I FY2013 FY2014 FY2015 I FY2016 FY2017 I FY2018 FY2019 FY2020
Interest Rate on Fund Balance 0.50% 1.00% 2.00% 2.00% 2.00% 2.00% 2.00% 100% 2.00% 2.00%
Sources of Funds
Beginning Rate Stabilization Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Transfers In
Water Fund to Rate Stabilization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Interest Earnings 0 0 0 0 0 0 0 0 0 0
Total Sources of Funds $0 $0 $0 $0 $0 $0 $0 $0 $o $0
Uses of Funds
Transfers Out
Rate Stabilization to Water Fund $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Ending Rate Stabilization Balance 0 0 0 0 0 0 0 0 0 0
Total Uses of Funds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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10/21/2010
Water Financial Plan
Table 24
City of Tigard
Water Financial Plan
Summary of Fund Balances
[Description FY201] I FY2012 I FY2013 I FY2014 I FY2015 I FY2016 I FY2017 I FY2018 I FY2019 I FY2020
Beginning Fund Balances
Water Fund $2,410,162 $1,459,045 $4,639,350 $7,600,154 $3,807,791 $5,963,766 $8,463,326 $1,223,695 $1,292,348 $4,921,363
CIP Fund(Cap.Reserves) 2,290,176 0 0 0 0 0 0 0 0 0
Bond Proceeds Fund 0 (0) 23,653,755 889,069 8,980 9,162 9,347 94 1 0
Debt Service Fund 0 219,302 4,624,478 4,624,478 8,624,478 8,624,478 8,624,478 12,758,615 12,758,615 12,758,615
Construction Fund 0 (251) 67,025 135,947 460,409 1,185,142 1,952,638 2,356,604 104,234 52.775
Reimbursement SDC Account 0 0 0 0 0 0 0 0 0 0
Improvement SDC Account 0 0 0 0 0 0 0 0 0 418,954
Rate Stabilization 0 0 0 0 0 0 0 0 0 0
Totals $4,700,338 $1,678,097 $32,984,609 $13,249,647 $12,901,658 $15,782,548 $19,049,790 $16,339,009 $14,155,199 $18,151,708
Ending Fund Balances
Water Fund $1459,045 $4,639,350 $7,600,154 $3,807,791 $5,963,766 $8,463326 $1.223,695 $1,292,348 $4,921,363 $8,334,820
CIP Fund(Cap.Reserves) 0 0 0 0 0 0 0 0 0 0
Bond Proceeds Fund (0) 23,653,755 889,069 8,980 9,162 9,347 94 1 0 0
Debt Service Fund 219,302 4,624,478 4,624,478 8,624,478 8,624,478 8,624,478 12,758,615 12,758,615 12,758,615 12,758,615
Construction Fund (251) 67,025 135,947 460,409 1,185,142 1,952,638 2,356,604 104,234 52,775 (18)
Reimbursement SDC Account 0 0 0 0 0 0 0 0 0 0
Improvement SDC Account 0 0 0 0 0 0 0 0 418,954 864,436
Rate Stabilization 0 0 0 0 0 0 0 0 0 0
Totals $1678,097 $32,984,609 $13,249,647 $12,901,658 $15,782,548 $19,049,790 $16,339,009 $14,155,199 $18,151,708 $21,957,854
C)
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10/21/2010
Water Financial Plan
Table 25
City of Tigard
Water Financial Plan
Debt Service Coverage Calculation
(Including SDC Revenues)
Description Include in Test FY2011 I FY2012 I FY2013 I FY2014 I FY2015 I FY2016 I FY2017 I FY2018 I FY2019FY2020
Estimated Gross Revenues
User Charge Revenues-Water TRUE $8,921,806 $11,567,215 $13,226,185 $15,123,085 $16,332,035 $17,085,415 $17,873,549 $18,698,037 $19,050,864 $19,108,017
Developer Overhead TRUE 10,000 10,030 10,060 10,090 10,121 10,151 10,181 10,212 10,243 10,273
Miscellaneous Fees/Charges TRUE 2,500 2,508 2,515 2,523 2,530 2,538 2,545 2,553 2,561 2,568
Other Utility Sales TRUE 4,443 4,456 4,470 4,483 4,497 4,510 4,524 4,537 4,551 4,564
Leaks/Misreads Credits TRUE (22,915) (22,984) (23,053) (23,122) (23,191) (23,261) (23,331) (23,401) (23,471) (23,541)
Meter Sales TRUE 27,679 27,762 27,845 27,929 28,013 28,097 28,181 28,266 28,350 28,435
Fire Hydrant Flow Testing Srvc TRUE 2,000 2,006 2,012 2,018 2,024 2,030 2,036 2,042 2,049 2,055
Late Penalties/Charges TRUE 120,774 121,136 121,500 121,864 122,230 122,597 122,964 123,333 123,703 124,074
Returned Check Fees TRUE 1,286 1,290 1,294 1,298 1,302 1,305 1,309 1.313 1,317 1,321
Bad Debt TRUE (20,483) (20,544) (20,606) (20,668) (20,730) (20,792) (20,854) (20,917) (20,980) (21,043)
Water Fund Interest Earnings TRUE 9,673 30,492 122,395 114,079 97,716 144,271 96,870 25,160 62,137 132,562
CIP Fund(Cap.Reserves)Interest Earnings TRUE 5,725 0 0 0 0 0 0 0 0 0
Bond Proceeds Fund Interest Earnings TRUE 0 118,269 245,428 8,980 181 185 94 1 0 0
Debt Service Fund Interest Earnings TRUE 548 24,219 92,490 132,490 172,490 172,490 213,831 255,172 255,172 255,172
Construction Fund Interest Earnings TRUE 0 334 2,030 5,964 16,456' 31,378 43,092 24,608 1.570 528
Reimbursement SDC Account Interest Earnings TRUE 0 0 0 0 0 0 0 0 0 0
Improvement SDC Account Interest Earnings TRUE 0 0 0 0 0 0 0 0 4,190 12,834
Rate Stabilization Interest Earnings TRUE 0 0 0 0 0 0 0 0 0 0
Reimbursement Fee Receipts TRUE 0 258,575 267,131 278,649 290,665 303,198 316,272 329,910 344,136 358,975
Improvement Fee Receipts TRUE 0 311,643 321,955 335,838 350,319 365,425 381,182 397,619 414,764 432,649
Transfer from Rate Stabilization TRUE 0 0 0 0 0 0 0 0 0 0
CA oss Revenues $9,063,037 $12,436,406 $14,403,651 $16,125,500 $17,386,655 $18,229,537 $19,052,447 $19,858,447 $20,261,156 $20,429,444
Operating Expenses(excluding Dept.&Franchise Tax)
Net O&M(less Capital Outlays) TRUE $5,912,554 $6,399,590 $6,765,682 $7,153,424 $7,564,120 $7,999,157 $4,955,875 $5,233,844 $5,528,223 $5,840,012
Transfer to Rate Stabilization TRUE 0 0 0 0 0 0 0 0 0 0
Operating Expenses $5,912,554 $6,399,590 $6,765,682 $7,153,424 $7,564,120 $7,999,157 $4,955,875 $5,233,844 $5,528,223 $5,840,012
Net Revenues $3,150,483 $6,036,817 $7,637,969 $8,972,077 $9,822,535 $10,230,379 $14,096,572 $14,624,603 $14,732,932 $14,589,432
Debt Service Coverage Test 1
Annual DS Subject to Coverage $78,167 $1,801,926 $3,447,518 $5,012,053 $6,576,587 $6,576,587 $8,193,587 $9,810,587 $9,810,587 $9,810,587
Estimated Coverage 40.30 3.35 2.22 1.79 1.49 1.56 1.72 1 49 1.50 1.49
Target Coverage 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35
Override Target Coverage
Additional Revenues Required-Test 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Required Coverage 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15
Additional Bonds Test
DS Subject to Coverage $156,334 $3,447,518 $3,447,518 $6576,587 $6,576,587 $6,576,587 $9,810,587 $9,810,587 $9,810,587 $9,810,587
Estimated Coverage 20.15 1.75 2.22 1.36 1.49 1.56 1.44 1.49 1.50 1.49
Target Coverage L15 L25 1.25 1.15 1.15 1.15 1.15 1.15 1.15 L15
Override Target Coverage 1.25 1.25
Additional Revenues Required to Meet Target $0 $0 $0 $0 $0 $0 $0 $0 $0 s0 ro
Required Coverage 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 n
10/21/2010
Water Financial Plan
Table 26
City of Tigard
Water Financial Plan
Debt Service Coverage Calculation
(Excluding SDC Revenues)
Descri tion Include in Test FY2011 FY2012 FY2013 I FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
Estimated Gross Revenues
User Charge Revenues-Water TRUE $8,921,806 $11,567,215 $13,226,185 $15,123,085 $16,332,035 $17,085,415 $17,873,549 $18,698,037 $19,050,864 $19,108,017
Developer Overhead TRUE 10,000 10,030 10,060 10,090 10,121 10,151 10,181 10,212 10,243 10,273
Miscellaneous Fees/Charges TRUE 2,500 2,508 2,515 2,523 2,530 2,538 2,545 2,553 2,561 2,568
Other Utility Sales TRUE 4,443 4,456 4,470 4,483 4,497 4,510 4,524 4,537 4,551 4,564
Leaks/MisreadsCredits TRUE (22,915) (22,984) (23,053) (23,122) (23,191) (23,261) (23,331) (23,401) (23,471) (23,541)
Meter Sales TRUE 27,679 27,762 27,845 27,929 28,013 28,097 28,181 28,266 28,350 28,435
Fire Hydrant Flow Testing Srvc TRUE 2,000 2,006 2,012 2,018 2,024 2,030 2,036 2,042 2,049 2,055
Late Penahies/Charges TRUE 120,774 121,136 121,500 121,864 122,230 122,597 122,964 123,333 123,703 124,074
Returned Check Fees TRUE 1,286 1,290 1,294 1,298 1,302 1,305 1,309 1,313 1,317 1,321
Bad Debt TRUE (20,483) (20,544) (20,606) (20,668) (20,730) (20,792) (20,854) (20,917) (20,980) (21,043)
Water Fund Interest Earnings TRUE 9,673 30,492 ]22,395 114,079 97,716 144,271 96,870 25,160 62,137 132,562
CIP Fund(Cap.Reserves)Interest Earnings TRUE 5,725 0 0 0 0 0 0 0 0 0
Bond Proceeds Fund Interest Earnings TRUE 0 118,269 245,428 8,980 181 185 94 I 0 0
Debt Service Fund Interest Earnings TRUE 548 24119 92,490 132,490 172,490 172,490 213,831 255,172 255,172 255,172
Construction Fund Interest Earnings TRUE 0 334 2,030 5,964 16,456 31,378 43,092 24,608 1,570 528
Rate Stabilization Interest Earnings TRUE 0 0 0 0 0 0 0 0 0 0
Transfer from Rate Stabilization TRUE 0 0 0 0 0 0 0 0 0 0
Gross Revenues $9,063,037 $11,866,189 $13,814,565 $15,511,013 $16,745,671 $17,560,913 $18,354,993 $19,130,918 $19,498,067 $19,624,986
Operating Expenses(excluding Dept.&Franchise Tax)
Net O&M(less Capital Outlays) TRUE $5,912,554 $6,399,590 $6,765,682 $7,153,424 $7,564,120 $7,999,157 $4,955,875 $5,233,844 $5,528,223 $5,840,012
Transfer to Rate Stabilization TRUE 0 0 0 0 0 0 0 0 0 0
Operating Expenses $5,912,554 $6,399,590 $6,765,682 $7,153,424 $7,564,120 $7,999,157 $4,955,875 $5,233,844 $5,528,223 $5,840,012
Net Revenues $3,150,483 $5,466,599 $7,048,883 $8,357,589 $9,181,551 $9,561,756 $13,399,118 $13,897,074 $13,969,843 $13,784,975
Debt Service Coverage Test 2
Annual DS Subject to Coverage $78,167 $1,801,926 $3,447,518 $5,012,053 $6,576,587 $6,576,587 $8,193,587 $9,810,587 $9,810,587 $9,810,587
Estimated Coverage 40.30 3.03 2.04 1.67 1.40 1.45 1.64 1.42 1.42 1.41
Target Coverage 1.25 1.25 1.25 1.25 1.25 1.25 125 1.25 1.25 1.25
Override Target Coverage .
Additional Revenues Required-Test 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Required Coverage 1.05 1.05 1.05 1.05 1.05 L05 1.05 1.05 1.05 1,05
Additional Bonds Test
DS Subject to Coverage $156,334 $3,447,518 $3,447,518 $6,576,587 $6,576,587 $6,576,587 $9,810,587 $9,810,587 $9,810,587 $9,810,587
Estimated Coverage 20.15 1.59 2.04 1.27 1.40 1.45 1.37 1 42 1.42 1,41
Target Coverage 1.15 1.25 1.25 1.15 1.15 1.15 1.15 1.15 L15 1.15
Override Target Coverage 1.25 L25
Additional Revenues Required to Meet Target $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Required Coverage 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 1.15 n
N
tT
10/21/2010