CC Agenda Packet 05-14-18 Work Session

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Metropolitan Wastewater Management Commission Budget and Program Summary BUDGET AND RATE HISTORY The graphs on pages 17 and 18 show the regional residential wastewater service costs over a 5- year period, and a 5-year Regional Operating Budget Comparison. Because the Equipment Replacement, Major Infrastructure Rehabilitation and Major Capital Outlay programs are managed in the Eugene Operating Budget, based on the size, type and budget amount of the project these programs are incorporated into either the 5-year Regional Operating Budget Comparison graph or the 5-Year Capital Programs graph on page 18. The Regional Wastewater Capital Improvement Programs graph on page 18 shows the expenditures over the recent five years in the MWMC’s Capital Program and including Asset Management projects. A list of capital projects is located in Exhibit 13 on page 44. As shown on the Regional Residential Sanitary Sewer Rate graph on page 17, regional sewer user charges have incrementally increased to meet the revenue requirements necessary to fund facility improvements as indentified in the 2004 MWMC Facilities Plan. This Plan demonstrated the need for a significant capital investment in new and expanded facilities to meet environmental performance requirements and capacity to serve the community through 2025. Although a portion of these capital improvements can be funded through system development charges (SDCs), much of the funding for approximately $196 million (in 2006 dollars) in capital improvements over the 20-year period will come from user charges. Since 2004, this has become the major driver of the MWMC’s need to increase sewer user rates on an annual basis. In FY 08-09, there was an 11% user rate increase over FY 07-08 rates applied uniformly across all user classes. This rate increase provided adequate revenue to meet current bond covenants and meet requirements to issue $50.7 million in bonds in FY 08-09. Additionally, in October of 2008, the Commission adopted an interim user rate increase of 7% due to the closure of Hynix Semiconductor. This increase was necessary to issue new revenue bonds and maintain bond covenants for existing bonds. The typical residential monthly wastewater bill increased an additional $1.10 per month and went into effect on December 1, 2008. In FY 09-10, there was an 18% user rate increase over FY 08-09 rates applied uniformly across all user classes. This rate provided for Operations, Administration, Capital programs, reserves and debt service to be funded at sufficient levels to meet FY 09-10 requirements. In FY10-11 user rates increased 5% over the prior year rates, and in FY 11-12 and FY 12-13 user rates increased 4% each year, over the prior year rates to provide for Operations, Administration, Capital programs, reserves, debt service, and debt coverage requirements. In FY 13-14 user rates increased 3% over the prior year rates, in FY14-15 user rates increased by 3.5% and in FY 15-16 user rates increased by 2% over the prior year rates to provide for Operations, Administration, Capital programs, reserves, debt service, and debt coverage requirements. In FY 16-17 user rates increased 2% over the prior year rates and in FY 17-18 user rates increased 3% over the prior year rates to provide for Operations, Administration, Capital programs, reserves and debt service and debt coverage requirements. Page 16FY 18-19 BUDGET AND CIP