05/13/19 City Council Agenda Packet - meeting

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Metropolitan Wastewater Management Commission Budget and Program Summary BUDGET AND RATE HISTORY The graphs on pages 17-18 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 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 and the subsequent 2014 Partial Facilies Plan Update 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 capital improvements over the 20-year period will come from user charges. This has become a major driver of the MWMC’s need to increase sewer user rates, moderately and incremental on an annual basis. The National Association of Clean Water Agency (NACWA) publishes an annual Cost of Clean Water Index, which indicates the national average charges for wastewater services. The index includes average wastewater charges by Environmental Protection Agency (EPA) regions. Of the EPA regions, Region 10, which includes Oregon, Washington and Idaho, reflects the second highest wastewater expenses nationwide, based on demographics, geography, regulatory requirements, and a range of other issues. Within Region 10, the annual change in the cost of clean water index reflected a 4.3% average increase over the past 4 years. In FY 16-17 the MWMC regional user rates increased by 2% over the prior year rates, and in FY 17-18 rates increased by 3%, and the FY18-19 user rates increased by 2.5% over the prior year. The FY 19-20 Budget is based on a 2% user rate increase over the FY 18-19 rates. This increase will provide for Operations, Administration, Capital programs, reserves and debt service, continuing to meet capital and operating requirements and supporting the Commission’s Financial Plan policies, as well as financially positioning for future investments in capital assets. The following chart displays the regional component of a residential monthly bill when applying the base and flow rates to 5,000 gallons of wastewater treated, which includes a 2% or $0.53 increase effective July 1, 2019. Page 16 FY 19-20 BUDGET AND CIP - ¸ ΐΒǾ ΑΏΐΘǾ 7®±ª 3¤²²¨® ȟ )³¤¬ Β#