Agenda - 06-12-2007-4gg - Laserfiche WebLink

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a~ o\•~~~ ~ ~i•..r F ^v EFLAND SEWER SYSTEM Proposal for Rate Study for Small Wastewater Collection Utility declined even though the number of customers has continued to increase. RFC utilized risk analysis techniques to provide insights to Utilities which helped staff develop appropriate estimates of water and sewer billable units and more robust risk contingency plans. City of Buffalo, New York PROJECT DETAILS RFC recently provided financial advisory services for a comprehensive cost of service and Cost of Service Study rate stud for the Buffalo Water Board `Board" The Board's ri ob ectives Rate Study y ( ~• p~~9 p ~ l were revenue sufficiency and equitable cost recovery from all customer classes. To achieve REFERENCE these objectives, RFC performed a cost of service study and developed two alternatives to Mr. Joseph Giambra Commissioner of Public Works the existing three-block, declining block rate structure. The results of the cost of service 65 Niagara Square study indicated that the discount. being realized by large volume customers was not cost Room 502 Buffalo, NY 14202 justified and that only a minor portion of consumption was within the middle rate block. (716) 851-5636 RFC recommended a phased approach to bringing the discount fox consumption in the third rate block closer to a cost justified level and phasing out the middle rate block. Both the Board and the City's Common Council unanimously approved RFC's recommendations. As part of the project scope, RFC examined the Board's existing rate affordability program in order to identify opportunities for improvement and possible alternative programs that would more effectively target disadvantaged customer groups. In order to provide the Board with some meaningful guidance on selecting an affordability assistance approach, RFC prepared multiple evaluation matrices examining different affordability approaches and their relevance to the Board's needs and goals. The analysis included statistical data on the City's economic and demographic makeup. Based on this analysis, RFC was able to make several observations about the goals that should be accomplished by any new program. PROJECT DETAILS City of Portland Bureau of Water, Oregon Wholesale and Retail Rate Study The City of Portland Water Bureau (`Bureau") provides retail water service to customers Rate Model ~~ the City and wholesale water service to 19 agencies under agreements that are Financial Planning expiring within the next couple of years. RFC assistance will be separated into two parts: REFERENCE assistance in developing wholesale rates; and development of a robust modeling tool for Mr. David Hasson on rate calculation and financial l nnin use b the Bureau. Finance Director ~g p g y City of Portland 1120 SW 5"' Avenue, Suite 600 The Bureau is in the process of finalizing a new long-term wholesale agreement with Portland, OR 97204 (503) 823-7158 explicit terms on rate setting. Wholesale customers use 40 percent of the total water produced by the Bureau and generate about 20 percent of the total revenue under the current agreement The new agreements will take into account peaking factors and include take or pay basis arrangements, provide for interruptible water sales, and excess use. Other factors that will enter into wholesale rates are differential losses in the transmission and distribution systems and flexibility to include different asset rate bases for different customers for calculating rates under the utility basis. RFC has been engaged to develop rates consistent with the new agreement for the wholesale agencies, ONSU~TANTS, NC.17