5.3 ERMUSR 12-11-2018 - Laserfiche WebLink

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Commercial Clean Energy Choice Program Rate; these rate sheets will be submitted for approval in January. Notable items in the electric budget for 2019 are: • 3%cost of living adjustment(COLA) for Office, Field, and Management pay plan groups; 2.85% COLA for Lineworker pay plan group; • Replacement of bucket truck#8 • Delay in replacement of digger truck#10 until 2020; • Shared cost in the replacement for Pickup Truck#14 for Technical Services; • Shared cost in a technology upgrade for the Utilities Conference Room; • Replacement of the decorative downtown street lights; • Electric Service Territory acquisition plant and reintegration costs for Areas 7 & 8 from reserves; • Electric Service Territory acquisition loss of revenue for Areas 1, 2, 3, and 4 from reserves; • Construction of new storage building adjacent to the West Substation from reserves. Water Budget and Rates The water budget and rates reflect the continuation in budgeting philosophy and rate design that continues the direction of shifting to more fixed cost recovery to mitigate revenue recovery volatility related to weather. Additionally,the budget includes a longer consideration of capital improvement projects. This longer vision planning helps to smooth out the impact of water system capital improvement projects as many of these project have substantial cost in ratio to the annual water expense budget. Considering a rolling 5 to 10 year window of capital improvement projects allows for financial planning and budgeting using reserves similar to a sinking fund to buffer and mitigate the volatility of capital outlay. In 2019 there are two larger capital improvement projects,the rehabilitation of the Auburn Street Water Tower and the construction of a new Well #8 building. Because of this planning strategy, the water tower project and the well building project are being funded from reserves rather than issuance of bonds. The proposed 2019 residential water rates are a 2% increase to the 1st Tier and a 2% increase in the basic monthly charge. These rate changes result in a projected 1.72% annual water cost increase for a typical residential customer. This is the equivalent to a$4.90 per year increase for these customers. For commercial customers, it is more difficult to classify typical users. The 1st Tier and basic monthly charges are increased by 2%in the proposed budget. But because the 2nd and 3rd Tiers are not being increased,the amount of usage will result in commercial customer blended rate increase of 2%or less. Notable items in the water budget for 2019 are: • 3% COLA for Office,Field, and Management pay plan groups; • Conservative estimate for usage growth; • Shared cost in the replacement for Pickup Truck#14 for Technical Services; • Shared cost in a technology upgrade for the Utilities Conference Room; • Joint Urban Services District Study with the city funded from trunk funds; • Rehabilitation of the Auburn Street Water Tower; • Construction of new Well #8 building. Page 2 of 3 82