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Agenda Packet City Council - 08/21/2023
o',A-)5r.,f,�r Cit`, of Corpus Christi 1201 Leopard Street s 1 Corpus Christi,TX 78401 _ x w cctexas.com \ Meeting Agenda - Final City Council Monday,August 21, 2023 9:00 AM Council Chambers FY 2023-2024 Budget Workshop: Including but not limited to Water and Wastewater Public Notice:ITEMS ON THIS AGENDA ARE FOR COUNCIL'S INFORMATIONAL PURPOSES ONLY. NO ACTION WILL BE TAKEN AND NO PUBLIC COMMENT WILL BE SOLICITED. A. Mayor Paulette Guajardo to call the meeting to order. B. City Secretary Rebecca L. Huerta to call the roll of the required Charter Officers. C. BRIEFINGS: 1. 23-1392 FY 2023 - 2024 Budget Workshop: Including but not limited to Water and Wastewater sponsors: Office of Management and Budget D. ADJOURNMENT City of Corpus Christi Page 1 Printed on 812812023 SC GO � O F U hORp aRA�49 xs52 AGENDA MEMORANDUM City Council Workshop of August 21, 2023 DATE: August 17, 2023 TO: Peter Zanoni, City Manager FROM: Eddie Houlihan, Director of the Office of Management and Budget EddieHo@cctexas.com (361) 826-3792 FY 2023-2024 Budget Workshop: Including but not limited to Water and Wastewater STAFF PRESENTER(S): Name Title/Position Department 1. Michael Murphy Chief Operating Officer Water and Wastewater ISSUE: This is the sixth of seven City Council workshops to discuss the FY 2024 proposed operating budget. The topics for the sixth workshop include Water and Wastewater. BACKGROUND INFORMATION: A briefing on the FY 2024 proposed budget was presented to the Mayor and City Council on July 25, 2023. The FY 2024 proposed budget focuses on City Council and community priorities including public safety, street reconstruction/maintenance, parks, libraries, and animal care. The FY 2024 proposed budget, comprised of all funds excluding transfers, totals $1.5 billion. The General Fund budget is$291.9 million, and the Capital Budget totals $604.1 million. A series of seven City Council budget workshops are scheduled to be held from July 19 to August 25. At these sessions, City staff will review in detail the budget proposals with the Mayor and City Council. Additionally, there will be five public input sessions to be held from August 7 to August 16. The budget is scheduled to be adopted on September 5, 2023, for the City's fiscal year which begins on October 1. The sixth budget workshop will be held on Monday, August 21, 2023, at 9:00 am. At the workshop, the City Council will be presented with the FY 2024 proposed budget for Water and Wastewater. Water and Wastewater: The focus of Corpus Christi Water (CCW) is 24-hour daily utility operations to provide clean and dependable water and wastewater services to customers. This entails reliable delivery of safe potable water and raw water to customers in addition to the collection, treatment, and disposal of wastewater. Rate changes are proposed for Water and Wastewater in FY 2024. The proposed rate changes achieve the City's goal of establishing a more equitable rate structure. A typical water residential customer using 6000-gallons of water a month will see a monthly increase of$1.82. The monthly increase for a typical residential Wastewater customer with a 5000-gallon winter quarter average will be $2.39. The FY 2024 combined proposed operating and capital budget for the Water and Wastewater Departments is $592.8M and includes funding from the Water Fund, Wastewater Fund and Capital Improvement Program. Below is a summary of the funding and position counts that would be authorized by the FY 2024 proposed budget. FUND FY 2024 AUTHORIZED POSITIONS PROPOSED BUDGET Water Fund $160,607,674 330 Wastewater Fund 83,754,591 260 Capital Projects (includes street support) 348,474,232 0 [Total $592,836,497 590 The FY 2024 budget reflects Corpus Christi Water's (CCW) focus on maintaining its commitment to provide the highest level of service while minimizing inflationary impacts. The increases in the budget are primarily due to higher costs for electricity, chemicals and materials which are beyond the control of CCW. CCW has requested no new positions in the proposed budget. Water FY 2024 Proposed Capital Budget includes $209 million for the expansion of our water supply, condition assessment of key assets and significant improvements at the O.N. Stevens Water Treatment Plant to increase treatment capacity and improve operational resiliency. Infrastructure improvement programs will continue to focus on pipe replacement and upgrades to existing assets. Wastewater FY 2024 Proposed Capital Budget includes $113 million for continued expansion and improvements to the six wastewater treatment plants, over 100 lift stations and collection system infrastructure. LIST OF SUPPORTING DOCUMENTS: PowerPoint - not attached • Water and Wastewater DRAFT Corpus ChristiWater- Serving the Coastal Bend • FY2023-2024 PROPOSED BUDGET rtµ _ m . Presented ,by Michael Murphy, P.E. • IN Chief Operations Officer ` ��� August 21 , 2023 FY2023-2024 Proposed Budget CCW' Table of Contents Overview of Corpus Christi Water ----------------- Michael Murphy WATER - FY23 Achievements - Proposed Water Fund Budget - Capital Improvement Projects Water Rates Introduction ----------------- Reba George NewGen Strategies and Solutions ----------------- Andy McCartney WASTEWATER - FY23 Achievements ----------------- Michael Murphy - Consent Decree - Proposed Wastewater Fund Budget 2 - rA-ni tal Tm-nrnvAmant Prniant-c Corpus Christi Water CLW' An Enterprise Fund Corpus Christi Water is not supported by the City' s General Fund. • An Enterprise Fund provides essential services through fees and charges . 3 MISSION STATEMENT For 130 years , the City of Corpus Christi has been vital as the water supplier of the region . Our commitment to 500 , 000 residents across the Coastal Bend is to plan , produce and deliver water that is affordable , drought-proof , sust le and reliable . 7)rpus Christi `JVater , " Sereing the Coastal Bend 4 Organizational Structure CCW Korey Hardeman Mike Murphy,P.E. Adrianna Escamilla Exec.Assistant to Chiefoperations officer Strategic Business Manager COO Wes Nebgen,MBA Drew Molly,P.E. Director of Water System Esteban Ramos Director of Water System and Infrastructure Support Services Water Resource Manager Jiangang(Daniel)Deng,PhD,P.E. Reba George,MPA,CPM w lmann,P.E.tant DirectorAssistant Director of SupportServices ing andructure Water Wastewater Infrastructure Treatment Utility Billing Finance and Water Quality Asset Office Budget Management Water Treatment Wastewater Positions FY FY Plant 2023 2024 Infrastructure Wastewater Lift Engineering Human Resources, Stations Services Safety,and Security Wastewater .0 260 WaterAbout Corpus Christi Water A Superior-Rated - 4 Surface Water Sources 1 Water Treatment Plant (ONSTWP) 1 Water Quality Laboratory 7 Elevated Storage Tanks 3 Repump Stations 1 , 821 Miles of Water Distribution Pipelines 100 , 00 Water Connections - - 0 Miles of Water Service Lines 9 1 , 512 Wastewater Treatment Plants (WW 6 Miles of Wastewater Pipelines 1 , 268 Lift Stations 106 Wastewater Connections 93 , 000 Miles of Wastewater Service Ling 1 , 381 6 VolumeSurface Water Sources ccw' and Infrastructure Choke Canyon 662 , 821 acre-ft Reservoir 256, 339 acre-ft Lake Corpus Christi 31 , 440 acre-ft � �; Lake Texana 35 , 000 acre-ft Lower Colorado River 141 Miles Mary Rhodes Pipeline 5 t 7 FY23 Achievements CCW' Water Conservation 365 Resiliency Measures • Xeriscape Symposium 0 Mary Rhodes Pipeline • Rain Barrel Sale 0 O . N . Stevens Upgrades • PSA' s 0 Storage Tank Upgrades • Elementary Education Program Backflow Program Water Resource Planning Service Response for Repairs • Desalination • Inner Harbor Utility Billing Office Customer • La Quinta Experience • Barney Davis • Increase in Call Volumes • Harbor Island ' Decrease in Average Daily Hold • Groundwater Time • Effluent Reuse • Decrease in Average Daily Handle • Aquifer Storage and Recovery Time 8 Performance Measures CCW' Indicator Measure Planned FY 2023 Planned FY 2023 Estimate FY 2024 Millions of gallons of potable Production water distributed per day 93 MGD 87 MGD 92 MGD (Average MGD) Percentage of water quality Water Quality readings that meet state 100% 100% 100% requirements for safe water. Percentage of water main breaks Service Response 95% 93% 95% repaired in under 24 hours. 9 FY 2024 PROPOSED BUDGET WATER FUND: ccwt. $160.6M 23 vs 24 Water Actuals Budget Budgei I $ in Millions lRevenues 1 $142.28 f $135.81 1 $162.37 $26.56 lExpendituresl $137.33 1 $144.87 1 $160.61 $15.74 InterFund Chgs, $2.2, 1% ,,"'PorAll'ocations-44"91 Miscellaneous, Personnel $0.5, 0% Interest & Investments, Debt Service, Service & Sales, $1.1, 1% $156.7, 97% Fines & Fees, Operating, $1.8, 1% , Water 309 330 330 - 10 FY24 Proposed Budget CCW . Services ($ in Millions) Water FY 20 rop Water resource planning 1 .2 anage raw water storage Treat water $37. • aintain & repair water distribution Utility Billing & Customer Service $6. • Utility Engineering & Support Services Debt Service dministrative Service Charge and Support (General Fund Transfer) TOTAL $160.7 Year-Over-Year Costs CCW . Services ($ in Millions) Water FY 2022 FY 2024 o Change Proposed anage raw water storage $ 0.5 $1 .2 140% Water resource planning Treat water $29.3 $37. 9 29% aintain & repair water distribution Utility Billing & Customer Service Utility Engineering & Support Services Debt Service Transfer to General Fund TOTAL $137 .3 $160.7 Year-Over-Year Costs ccW Labor Water FY 2022 FY 2024 Increase Billing Specialist $10.51 $16. 14 53.56% Lead Resolution Specialist .4' Instrument & Electrical Technician $20. 80 $22.72 • Water Quality Field Technician $14.78 $17. 8020.43% Utility Technician I $12.77 $14. 64 14 .64% Utility Technician II Utility Technician III $17. 12 $18. 69 • Utilities Foreman $17. 97 Utilities Sr. Plant Operator 13 Year-Over-Year Costs CCW . Chemicals (per ton) Water FY 203 $228 121% 022 FY 2024 Increase Liquid Aluminum Sulfate Liquid Ammonium Sulfate 0 46 Liquid Cationic Polymer .40 40 Liquid Chlorine Railcar ., 5 777% $1,2Liquid Chlorine 1-Ton Cylinders (Emergency Supply) 00 00 0.% 50o Liquid Caustic Solution $455 46 Hydrofluorosilicic Acid $432 600 25o Sodium Chlorite Solution . Sodium Permanganate 460 0 04 Year-Over-Year Costs CCW . Misc. Water FY zozz FY zoz4 4.5' Fire Hydrant 498 58 8" C-900 Pipe DR18 (per foot) . $20.20 8" PVC pipe SCH40 (per foot) , .79 0.73 , 8" Ring Kit , 8" Sleeve 9.73 , 8" Repair clamp , 8" Gate Valve 99 3�" Meter $97. 16 , Advanced Metering Infrastructure Component `Smart Meter' 9 $114 .34 Electricity (per kwh) $0.08652 1 11 : Water FY23 CIP Progress CCW 5-Year Strategic Plan Tota I Tota I Projects In Projects In Completed Budgetof Number of Investment Design Construction Projects Projects in Projects A,, Amount • - 36 $128,834,359 22 10 4 $77,270,533 • $20M ONSWTP Raw Water Influent and Chemical Facilities Improvements (Re-Bid Date September 20, 2023) • $4 . 6M Ship Channel Water Line Relocation (Re-Bid) • $1 . 2M City-Wide Water Line Cathodic Protection (Re-bid) • $4 . 4M Wesley Seal Dam Dewatering and Spillway Gate Rehab (Design) • $6 . 8M Leopard Street Water Line Replacement (TXDOT design coordination) • $6 . 3M Nueces Bay Blvd - Poth (Additional SUE Required) • 1 . 3M Mary Rhodes II Bank Erosion (USACE Joint Funding) • $7M Additional Projects 16 Tntal 851 _ 6M Water FY23 CIP Progress ccW TllTater SOl1rCeS Status On FY23 """N Constructi Schedule Budget Choke Canyon Dam Infrastructure Improvements Seawater Desalination Design esley Seale Dam Instrumentation Rehabilitation Design OOO esley Seale Dam Dewatering System and Spillway Gate Rehab Design 4 O O Design Lines Status Schedule Budget Notes Constructi Mary Rhodes Condition Assessment O Mary Rhodes I System Improvements Design OOO USACE joint Mary Rhodes II System Improvements (Bank Erosion) D- OO fundinq Nueces River Raw Water Pump StationComplete Funding Nueces River Raw Water Pump Station TransmissionConstructi Main 4OO OOO Water FY23 CIP Progress ccW Water Treatment MM , �r23 Budget Note em Improvements O� OOO ONSWTP Clearwell 3 OOO ONSWTP Cunningham WTP BUT,TM I M Complete Funding ONSWTP Electrical Distribution Improvements D- OOO ONSWTP Electrical Substation Reliability Design OOH Coordination ONSWTP Filter Building RehabilitationComplete Funding ONSWTP Filtration System Hydraulic Improvements Design OOH OOO ONSWTP Flocculation Upgrades and Baffling D- OO OOO ONSWTP Navigation Pump Station Improvement Design OOO ONSWTP Raw War Influent and Chem. Faces Re-bid Sept te Improvement D- O O O O 0 ONSWTP Recycle Pond Improvements Design 000 ONSWTP Security Upgrade Design OOH 18 Water FY23 CIP Progress CCW Water Treatment Cont . MEMM ONSWTP Sedimentation Basin Improve44- Construction $4,015f000 ONSWTP Site Infrastructure Improvements Design 9 OO Water Distribution Lines Status °n FY23 Budget Notes Schedule City-Wide Large Size Water Line Cathodic Protection Design City-Wide Water Line Repair/Replacement Large DiameterConstruction V slif000f000 City-Wide Water Line Repair/Replacement (Small Diameter) OO Elevated Water Storage Tanks - City-Wide 4O OOO Flour Bluff 18" Line Extension Design OOO TXDOT Leopard Street & Up River Road Water Line Replacement Design OOH Coo rdination Additional SUE Nueces Bay Blvd - Poth Lane Water Line Replacement D- OO000Required Packery Channel Water Line ReplacementComplete Funding Water FY23 CIP Progress CCW Water Distribution Lines (Cont. ) status Schedule �r23 Budget Notes°""" Sand Dollar Pump Station Improvements Design 0 000 Postponed SH286 Water Line Replacement D- OO OOO Ship Channel Water Line Relocation Design 4 .O O OO Re-bid Southside Water Transmission Main -Cathodic Protection Design sifloof000 Water Line Extension to Padre Island Design 0 o o o Water System Process Control Reliability Improvements Design OOO Water Facilities and Other Status Schedule Fr23 Budget Notes CC Water Parking Lot Improvements Design OOO M. Warehouse Design :00 000 Delayed to Wesley Seale Boat Ramp and Pier - Sunrise Beach Design 400 OOH On Constructi 20 Streets Projects Status Schedule Fr23 Budget Notes Water CIP C Large Volume User Projects Water Distribution Lines FY24 FY25 FY26 Total Budget budget Budget E . Navigation Blvd. Water Line $5, 250, 11 $6, 300, 11 $12, 100, 1 Replacement / 111 1 1 11 Leopard Street & Up River Road Water $8, 350, 00 $17, 840, 0 Line I'M II-a $9, 490, 000 1 11 Nueces Bay Blvd - Poth Lane Water Line $8, 350, 00 $17, 750, 0 Replacement $9, 400, 000 1 11 Ship Channel Water Line Relocation $5, 959, 787 7 $25, 399, 78 $21, 950, 0 $6, 300, 00 $53, .49 1 / 1 • Water FY24 CIP : $222 . 2M ccwt' Water Utility Support-Street Projects $12,793,071 Water Sources Water Facilities&Other $16,996,326 $8,926,000 Water Supply Lines $14,908,500 Continuation of the five-year strategic plan to improve system resiliency , reliability , and Water Treatment Water Distribution Lines $95,339,000 capacity . $73,235,442 22 WATER I CIP ccW, Project # Project Name FY24 FY25 FY26 Total 16" Water Main Ext. Hwy 286 to 23061* Alameda $360, 000 $4, 400, 000 $2, 200, 000 $6, 960, 000 23021* Sand Dollar Connection Line 16" $660, 000 $6, 300, 000 $6, 300, 000 $13, 260, 000 24026 ONSWTP Fluoride System Improvements $330, 000 $2, 090, 000 $2,420, 000 E. Navigation Blvd Water Line 24020 Replacement $550, 000 $5,250, 000 $6,300, 000 $12, 100, 000 24027 SH358 Water Line Relocation $1, 375, 000 $1, 375, 000 24010 Wash Rack Water Utilities $141,000 $1,255,000 $1,396,000 $14, 800, 00 $3,416, 000 $19,295, 000 0 $37, 511, 000 *Included in FY 2023 CIP Plan with a scheduled begin date 23 in FY 2024 FY24 Water CCW Drought •e Exemption Fund Drought Surcharge Exemption Fee Beginning Balance $ 20,023,148 • Established in 2018 as a non- mandatory fee to develop a drought- Revenue proof water supply Drought Surcharge Exemption • In addition to utility bill Fee $ 4,200,000 Interest on Investments $ 403,693 charges , customers using over Total Revenue $ 4,603,693 100 , 000 gallons per day pay an optional $0 . 25 per 1 , 000 gallons of Expenditures water per month Transfer for Debt Service $ 521,556 • Exemption from applicable Ending Balance $ 24,105,286 allocation surcharges of City Code Section 55-154 24 FY24 Proposed CCW' Water Rates • Rates are reviewed every two years • Proposed monthly rates effective January 2024 • Rate changes for equity in the rate structure 25 Water Customer Classes ccw' • Residential OCL Wholesale Inside ( ICL) San Patricio Municipal Water Outside City Limits (OCL) District • Commercial South Texas Water Authority ICL OCL Raw water-contract San Patricio Municipal Water • Large Volume District ICL Flint Hills OCL Celanese Beeville • OCL Network Mathis Nueces County Water Control ement Dist#4 ( Port Aransas ) 26 Water Charges CCW' • Raw water charge per 1 , 000 gallons Includes $0 . 05 per 1, 000 Water Supply Development F Peter Size 5/8" X 3/4" • Minimum Charge 1" - Based on meter S 10 1- 1/2" - Includes first 2 , 000 gallons 2" 3" • Large Volume Charge 4 6" Includes the first 10 million gallons 8" or larger • Volume charge per 1 , 000 gallons v Water Cost Basis ccw' Raw Diversion Transmissio Distribut x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x 28 Customer Class Water (Pumping) Treatment n (Network) ion Residential ICL Residential OCL Commercial ICL Commercial OCL Large Volume ICL Large Volume OCL OCL Network OCL Wholesale Raw water-Contract customers CCWt- FY22 Annual FY22 Annual Customer Type Billed Usage Revenue Billed Revenue Billed Usage (Billion gals) ($ Millions) (in Billion Gallons) Industry 9. 6 $28.8 (in $ Millions) Wholesale 5.0 $ 8.3 Includes Raw Water Raw Contract 12.6 $ 12.4 Residential 6.1 $46.6 Commercial 5.8 $40.6 INDUSTRY Total 39.1 $ 136.5 4% - ��arrr�r�rarrr�r�rarrr�r�rarrr�r�rarrr�r�rarrr�rr,«r�p WHOLESALE �I .A CONTRACT 29 e ■.. i CiSa u ■�■ ■��66 a �� .:rue �lofillu u OUR ,r> t :.> f ,,,, ��, ..: i...H 11M"I _� �i`�®��r� �° raaaaq -aOa�CFa ■ f i 31n ii c a � � a■■�!�, ■ _ � �€'` 'r�'""c r�ril .:_■. �raiai:rlla■i ��a��ai�Y i a ,. u ■■e�'�■r�a _ i Cc a a `� at rah,. i ' L LL r � - �• ti i�'iiit� --. ease �[La :-•��. eve ll�i `, '�, e p�1i 1161.111 • .•� 4fF]4�P�®pb. � aa���E�A'7alhd w F` ,�• � �`{e�wµiLe., S�a [,rill.Jam' 1 CORPUS CHRISTI WATER NewGen WATER AND SEWER RATE STUDY & Solutions 9)2023 NEWGEN STRATEGIES D SOLUTIONS, n Ak Utilities operate like a business, though the service being provided is a IMPORTANCE OF vital resource shared by all members of the community. LOCAL OFFICIALS IN The City Council must be able to address complex industry challenges including rising costs, needed infrastructure improvements, and customer UTI LITY affordability. MANAGEMENT The City Council must ensure the viability of the business by ensuring revenues match or exceed expenses and financial metrics are met. 9)2022 NEWGEN STRATEGIES D SOLUTIONS, PROJECT TEAM INTRODUCTION NEWGEN STRATEGIES AND SOLUTIONS, LLC OUR FIRM OUR CLIENTS Be a consulting company that makes a difference for our clients,our employees and in our communities. ���► + � ,�» 2012 management and economic consulting ��� 0 r. firm created by consultants who are NATURAIGAS established dedicated to our client's mission and 12 recognized as experts in our respective fields of service Locations nationwide Lubbt ck f'IRVING ® Make an lmpaA L11 NeuPEW ( � ) Eostertnnnvatim ECONOMICS SUSTAINABILITY NewGen's • • N ORE N Core � Eapea Quality Values STRATEGY COMPETENCIES ei;rienu.uun 50+ cultivate employees .m•� ■ cniti.temmunity . . Be the Trusted Advisor pom a t6 i o 2023 N EWG EN STRATEGI ES AN•SO LUTI ONS,LLC 33 PROJECT TEAM Chris Ekrut, MPA Partner/CFO Technical and QA/QCAdvisor • QA/QC of Deliverables Andy McCartney, CPA, r ; y • Knowledge of CCW MBA • CCW wholesale expertise Principal Project Manager Tia Carnes, MBA Main point of contact Senior Consultant Keep project moving " • Technical expertise Assistant Project Manager • Chair of R&C Committee • Analysis/ Model building • Presentations • Data management • Utility billing analysis • Rate structure analysis • Bill impact forecast • Regional benchmarking o 2023 NEWGEN STRATEGIES AND . . �= Background & Methodology Cost Drivers & Cost of Service AGENDA � oposed Rates 9)2023 NEWGEN STRATEGIES ® Questions & Next Steps SOLUTIONS,U-C 35 BACKGROUND & METHODOLOGY • NewGen ensured compliance with: — American Water Works Association M1: Principles of Water Rates, Fees, and Charges. — Water Environment Federation Manual Of Practice No. BACKGROUND , 27: Financing and Charges for Wastewater Systems. qq of Ppn�1 METHODOLOGY Finaac►cgtora Charges Wastcwater Systems � _ imEaei. y�n EMS — Compliance with contractual agreements and bondholder commitments. ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Cost Allocations performed at the functional level with Wholesale rates determined by summing unit costs based on the functions utilized per contracts. CONTRACTUAL CUSTOMER METHODOLOGY Contract methodology calculates Raw Water ;�, and Wholesale Water rates at the functional �_� level with Debt Service Coverage considered. • APPROACH TO The remaining Net Revenue Requirements are generated by the Retail Class. RATE DEVELOPMENT Functions used under the contractual method 38 were: • � Raw Water/ Raw Water Diversion /Water Treatment/ Network(Pumping, Storage, and ' Transmission) / Distribution / Utility Metering r / Meters/Administration. The Retail portion of the new rate model determines rates to generate the remainder of the net revenue requirements(Cost of Service or COS) after Raw Water, Raw Water Diversion,Wholesale Treated,and Wholesale Treated Network rates and revenues have APPROACH • been determined. RATE MODEL DEVELOPMENT _ Outside City proposed water monthly minimum charges kept at 1.5 times Inside POLICY r Cit., month) minimum charges. CONSIDERATIONS FOR RATE DESIGN Outside City proposed water volumetric 39 rates set equal to Inside City volumetric rates, which would bean increase for I[ � Outside City volumetric rates. Outside City proposed wastewater monthly minimum charges kept at 1.25 times Inside City monthly minimum APPROACH T• charges. RATE MODEL Outside City proposed wastewater DEVELOPMENT /Q•� volumetric rates set at 1.5 times Inside City POLICY• ���� volumetric rates, which would be a decrease from 2.0 times. CONSIDERATIONS FOR RATE DESIGN Outside City residential and commercial 40 customers are a very small population. New rate model expanded to determine the cost of service for each individual Retail customer T class utilizing the full cost of service allocation process (functionalization /classification / APPROACH T• distribution). RATE • DEVELOPMENT & Proposed water customer classes include: Residential, Commercial & Other, Large Volume POLICY• � Users, and Irrigation (Consolidate Golf Course Irrigation into Irrigation). CONSIDERATIONS FOR RATE DESIGN Goal is the elimination of subsidies occurring 41 between customer classes. REVENUE COST OF FINANCIAL UTILITY REQUIREMENTS SERVICE PLAN PRICING =W t� NOW =© Revenue Final Rates, d Reuse Increases Fees and ++• Demand Charges Forecasted Existing Debt + Revenue vs. RevenueService Sewer Stlenyth + + 1•+ LM 42 T Utilizing the Cash-Needs or Cash Basis Approach to determining Revenue Requirements as in past years. COST OFSERVICE Revenue Requirements = O&M Expenses + Debt ;�,� Service + Pay-As-You-Go Capital (PAYGO or Cash Funded Capital) + amounts needed to meet Cash Reserve Requirements and Debt Service METHODOLOGY Coverage. � AA� Other revenues sources are subtracted to arrive at the Net Revenue Requirement or Cost of 43 • Service. Once determined, the Net Revenue Requirement T is then functionalized into raw water, raw water diversion, treatment, network, distribution, billing, meters, & administration. COST OFSERVICE Functionalized costs are then classified using the ;�;� Base-Extra Capacity Method as described in the METHODOLOGY 44 ►z� AWWA M1 manual into the following cost � components: base, maximum day demand, & customer. �� Classified cost components are then distributed to the customer classes based on their • proportionate usage of the system. Study Recommendations Simplify the Raw • • • Calculation. • Complex calculation for three (3) customers (Alice, Beeville & Mathis) that uses actual expenses and has never been part of any rate model. • Consider negotiation in the future using the same terms and conditions for all three customers and remove need for the Raw Water Cost Adjustment. • City Budget process goes through several levels of approval with final approval by the City Council eliminating the need for true-ups based on actual expenses. Simplify Wholesale ' • Water and Treated Water Network Customer - - • Consider renegotiation in the future using standard uniform contracts. 45 Study Recommendations EliminationOCL rates from ICL rates given CCWs service area. • More defensible to the PUC if challenged by OCL customers. •Volumetric rates were brought into alignment first due to extreme differences. •Some OCL volumetric rates were much higher than ICL volumetric rates and some were much lower (over 50%) with little to no justification. • Residential, Commercial and ICL Large Volume Class customers were subsidizing the OCL Large Volume Customer Class paying only $1.95/1,000 gallons currently. Meter Equivalency Units for . • • • - based on Meter Size was corrected and updated. •Affected larger meter sizes greater than 4". NewGen will review Monthly Minimum charges • but reduced these to a maximum of no more 46 Study Recommendations Utilize more cash g of the CIPPlan in the future. L — —? • Funding $500,000 for both Water & Wastewater projects in FY 2024 & FY 2025. • Applicable to Repair & Replacement projects of Distribution mains and small collection system pipes. • Helps increase the Utility's Debt Service Coverage factor. • • - ' • • increase cash reserve requirements •from• • 1 days of O&M expense • 120 days. • Important for Corpus Christi's geographic risk. Consider changing the Financial Policy for Debt Service • - • • • 1 • 47 COST DRIVERS FOR FY 2024 & FY 2025 • Needed infrastructure to meet future demand requires future Debt Issuances, which increases Debt Service and Debt Service Coverage requirements for CCW. MAIN COST • Inflationary Pressures on Capital Projects have DRIVERS been projected as well as those on O&M PROPOSED Expenses. CHANGES ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC CONTRACTUAL CUSTOMER RATES FOR FY 2024 & FY 2025 Total Water System FY 2023 Budget FY 2024 Budget FY 2025 Budget O&M Expenses $ 77,817,978 $ 88,599,637 $ 91,730,400 Minor Capital Outlays 2,256,879 5,775,616 2,855,066 FY I & Total PILOT& Transfers 8,493,081 6,948,570 7,018,056 Total Debt Service 38,468,050 42,076,630 60,527,809 FY 2025 NET Total Cash Funded CIP - 500,000 500,000 REVENUE Total Revenue Requirements $ 127,035,988 $ 143,900,454 $ 162,631,331 REQUIREMENT FOR TOTAL Other Operating Revenues $ 2,658,358 $ 2,900,034 $ 2,760,571 WATER Non-Operating Revenues 4,495,316 2,711,524 1,538,940 SYSTEM Total Other & Non-Operating ReN $ 7,153,674 $ 5,611,558 $ 4,299,510 Total Net Revenue Requirement $ 119,882,314 $ 138,288,896 $ 158,331,821 Percentage Change 15,35% 14,49% ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Non-Rate Payer Raw Water Current Proposed Volumetric Rates in$/1,000 Gallons 2023 2024 Difference SPMWD (All Gallons) $ 1.01 $ 1.05 $ 0.04 Increase FY 1 Celanese (All Gallons) $ 1.01 $ 1.05 $ 0.04 Increase RESULTS Koch/Flint Hills (All Gallons) $ 1.01 $ 1.05 $ 0.04 Increase FOR NON- Only Applies to Raw Water for SPMWD(Raw Water), Celanese, & Koch (Flint Hills) RATE PAYER RAW WATER ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Public Agency Rate Payer Raw Water Current Proposed Volumetric Rates in $/1,000 Gallons 2023 2024 Difference FY 2024 Public Agencies (All Gallons) $ 1.03 $ 1.02 $ (0.01 Decrease RESULTS Applies to Raw Water for SPMWD (TW), STWA,Violet WSC, & NCWCID#4 FOR NON- RATE PAYER RAW WATER ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Raw Water Diversion Current Proposed Volumetric Rates in $/1,000 Gallons FY 2023 FY 2024 Difference FY 2024 Treated Water Customers $ 0.10 $ 0.12 $ 0.02 RESULTS FOR RAW WATER Applies to All Customers Except: Alice, Beeville, Mathis, SPMWD (Raw Water), Celanese, and Koch (Flint Hills) DIVERSION ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Treated Water Current Proposed Volumetric Rates in $/1,000 Gallons FY 2023 FY 2024 Difference FY 2024 All Treated Water Customers $ 1.19 $ 1.62 $ 0.43 Increase RESULTS • Only Applies to SPMWD(TW),STWA,Violet WSC,and NCWCID#4 TREATED WATER ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Network Water Current Proposed Volumetric Rates in $/1,000 Gallons FY 2023 FY 2024 Difference FY 2024 & All Network Water Customers $ 0.42 $ 0.57 $ 0.15 Increase FY 2025 RESULTS Only Applies to Violet WSC and NCWCID#4 FOR NETWORK WATER ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Wholesale Water &Treated Water Network Service Current Proposed Proposed Volumetric Rates in $/1,000 Gallons FY 2023 FY 2024 FY 2025 Wholesale Treated Water SPMWD (All Gallons) $ 1.28 $ 1.74 $ 2.37 STWA(All Gallons) $ 1.28 $ 1.74 $ 2.37 FY 2024 • � Treated Water Network FY 2025 NCWCI D#4 (All Gallons) $ 1.71 $ 2.31 $ 2.94 Violet WSC(All Gallons) $ 1.71 $ 2.31 $ 2.94 PROPOSED RATES Public Agency Raw Water $ 1.03 $ 1.02 $ 1.02 ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC RETAIL COST OF SERVICE FOR FY 2024 & FY 2025 Total Water System FY 2023 Budget FY 2024 Budget FY 2025 Budget O&M Expenses $ 77,817,978 $ 88,599,637 $ 91,730,400 Minor Capital Outlays 2,256,879 5,775,616 2,855,066 FY I & Total PILOT& Transfers 8,493,081 6,948,570 7,018,056 Total Debt Service 38,468,050 42,076,630 60,527,809 FY 2025 NET Total Cash Funded CIP - 500,000 500,000 REVENUE Total Revenue Requirements $ 127,035,988 $ 143,900,454 $ 162,631,331 REQUIREMENT FOR TOTAL Other Operating Revenues $ 2,658,358 $ 2,900,034 $ 2,760,571 WATER Non-Operating Revenues 4,495,316 2,711,524 1,538,940 SYSTEM Total Other & Non-Operating ReN $ 7,153,674 $ 5,611,558 $ 4,299,510 Total Net Revenue Requirement $ 119,882,314 $ 138,288,896 $ 158,331,821 Percentage Change 15,35% 14,49% ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC Total Water System Net Revenue Requirement CALCULATIONLess: Raw Water Composite Revenues OF THE RETAIL Less: Raw Water Non-Ratepayer Revenues WATER NET Less: Raw Water Diversion Revenues REVENUE Less: Raw Water Ratepayer Revenues Less: Wholesale Treated Water Revenues REQUIREMEN Less: Network Treated Water Revenues Retail Water Net Revenue Requirement ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC FY 2024 Retail Net Revenue Requirement Calculation Utility Billing Raw Water Network Pumping, Meters Raw Water Diversion Water Treatment Storage&Transmission Distribution Administration Total Total Water System Net Rev.Requirement $ 38,102,357 $ 2,382,150 $ 36,519,101 $ 16,980,274 $ 30,822,284 $ 13,482,731 $ 138,288,897 Less; Raw Water Non-Ratepayer Revenues 13,502,471 13,502,471 Less; Raw Water Diversion Revenues 599,856 599,856 Less; Wholesale Treated Water Revenues 8,098,061 8,098,061 Less; Wholesale Network Water Revenues 318,684 318,684 Total Retail Net Revenue Requirement $ 24,599,886 $ 1,782,294 $ 28,421,040 $ 16,661,590 $ 30,822,284 $ 13,482,731 $ 115,769,825 FY 2025 Retail Net Revenue Requirement Calculation Utility Billing RawWater Network Pumping, Meters RawWater Diversion Water Treatment Storage&Transmission Distribution Administration Total Total WaterSystem Net Rev.Requirement $ 41,772,649 $ 2,350,561 $ 48,786,425 $ 16,662,198 $ 32,990,400 $ 15,769,587 $ 158,331,820 Less; Raw Water Non-Ratepayer Revenues 13,982,957 13,982,957 Less; Raw Water Diversion Revenues 810,756 810,756 Less; Wholesale Treated Water Revenues Z 10,945,210 10,945,210 Less; Wholesale Network Water Revenues s 408,781 408,781 Total Retail Net Revenue Requirement $ 27,789,692 $ 1,539,805 $ 37,841,215 $ 16,253,417 $ 32,990,400 $ 15,769,587 $ 132,184,116 ALLOCATION FACTORS All Peaking Calculations Based on FY22 Data(including Unbilled City Use) Max Day Max Day Max Day Avg.Day Avg.Day Max Day Customers Customers (kGal) % Peaking Increment Increment MEUs MEUs Ratio (kcal) Capacity(kGal) (%) (Monthly) Class Average Day MDD Bills MEUs Inside Residential 16,095 28.0% 1.22 19,621 3,526 28% 88,712 90% 92,916 71% Inside Commercial&Other 12,703 22.1% 1.13 14,369 1,666 13% 8,904 9% 32,021 25% Inside Large Volume Users 1,380 2.4% 1.21 1,665 285 2% 3 0% 213 0% Inside Golf Course Irrigation 10 0.0% 2.79 29 19 0% 3 0% 36 0% Inside Unbilled City Use 702 1.2% 4.22 2,966 2,264 18% 209 0% 1,215 1% Outside Residential 212 0.4% 1.59 336 124 1% 511 1% 606 0% Outside Commercial&Other 1,586 2.8% 1.22 1,937 351 3% 156 0% 1,700 1% Outside Large Volume Users 24,782 43.1% 1.18 29,167 4,385 35% 11 0% 990 1% Inside Irrigation 77 0% 1.49 115 38 0% 132 0% 346 0% Outside Irrigation0 0% 1.54 0 0 0% 2 0% 11 0% 57,549 100% 70,206 12,657 100% 98,643 100% 13005 , 2 100% 63 eJ 2023,NEWGEN S-FRAFEGIES AND SOLU-1 0:1 S,.LLC ALLOCATION FACTORS • Large Volume Customers take water on a more consistent basis year-round as evidenced by their Maximum Day to Average Day Demand ratio of 1.18. • In theory, Large Volume Customers provide benefit to the water system by having a low Maximum Day demand to Average Day demand (daily average volumes do not deviate greatly from maximum day volumes). • Examination of other customer classes were very close (Residential = 1.22 and Commercial = 1.13), but not Irrigation (1.94). • Performing planned maintenance at the O.N. Stevens WTP is harder during the winter months due to the constant and large demand of the Large Volume Customers. Impact of Large Volume Customers on Retail CCW System Retail Customer Class Volumes • Large Volume Customers are 46.03% of the Retail CCW System by volumes (9,548,693 kgals)for FY 2022. • Residential Customers are 28.69%of the Retail CCW System by volumes (5,952,200 kgals)for FY 2022. O 0 :m Residential �aCommercial • Commercial Customers are 25.14%of the Retail CCW System by volumes ■Irrigation (5,215,547 kgals)for FY 2022. Large Volume • Irrigation Customers are the remaining 0.14%of the Retail CCW System by volumes(29,075 kgals)for FY 2022. u 65 14 1 low There is concentration Adding significant raw Risk of idled capacity in Residential & risk with Large Volume water supply and water the future exists for Commercial Customer Customers—greater treatment infrastructure captive Residential and classes are not impact on the CCW for Large Volume, Raw Commercial customers if experiencing a lot of System constituting 46% Water, Wholesale Large Volume Customers growth. of volumes with 14 Treated Water and severely cut back water customers. Wholesale Network demand in the future Customer's growing with these infrastructure demand (debt service improvements without increasing). long-term contracts. No long-term water Limited capacity is service contracts for available on the Water Retail treated water System. with Large Volume Customer Class. 66 ORIGINAL PROPOSED RETAIL WATER RATES FOR FY 2024 & FY 2025 WATER Inside City Retail Water Monthly Minimum Charge Original Current Proposed Proposed ster Size FY 2023 FY 2024 FY 2025 5/8" $ 12.92 $ 13.44 $ 13.44 FY 2024 & 3/4" 12.92 13.44 13.44 FY 2025 1" 19.39 33.60 33.60 1-1/2'1 32.31 67.20 67.20 PROPOSED 2" 64.60 107.52 107.52 3" 103.36 201.60 201.60 RETAIL 4" 206.72 336.00 336.00 RATES 6" 323.00 739.20 739.20 8" 646.00 1,209.60 1,209.60 10" 646.00 2,016.00 2,016.00 Applies to Residential/Commercial/ Irrigation/ Golf Course / Large User Customers Large User Charge $ 24,202.00 $ 38,420.00 $ 38,420.00 ©2023 NEWGEI' SGIES AND SOLUTIONS,LLC WATER Outside City Retail Water Monthly Minimum Charge Original Current Proposed Proposed Meter Size FY 2023 FY 2024 FY 2025 5/8" $ 19.39 $ 20.16 $ 20.16 FY 2024 & 3/4" 19.39 20.16 20.16 FY 2025 1" 29.08 50.40 50.40 1-1/2'1 48.46 100.80 100.80 PROPOSED 2" 96.90 161.28 161.28 3" 155.05 302.40 302.40 RETAIL 4" 310.09 504.00 504.00 RATES 6" 484.50 1,108.80 1,108.80 8" 969.00 1,814.40 1,814.40 10" 969.00 3,024.00 3,024.00 Applies to Residential/ Commercial/ Irrigation/ Large User Customers Large User Charge $ 40,382.00 $ 38,420.00 $ 38,420.00 ©2023 NEWGEI' -GIES AND SOLUTIONS,LLC WATER Retail Water Service Volumetric Rates($/1,000 Gallons) Original Current Pro osed Proposed FY 2023 FY 2024 FY 2025 Raw Water Charge All Gallons $ 0.97 $ 1.12 $ 1.12 Inside Residential FY 2024 & 0-2,000 $ - $ - $ - 2,001 -6,000 $ 5.08 $ 5.18 $ 5.18 6,001 - 15,000 $ 5.83 $ 5.94 $ 5.94 FY 2025 15,001+ $ 6.36 $ 6.49 $ 6.49 PROPOSED Inside Commercial&Other 0-2,000 $ - $ - $RETAIL 2,001+ $ 5.56 $ 5.67 $ 5.67 Inside Large Volume Users RATES 0- 10,000,000 $ - $ - $ - 10,000,001+ $ 3.94 $ 4.02 $ 4.02 Inside Irrigation 0-2,000 $ - $ - $ - 2,001+ $ 6.36 $ 6.49 $ 6.49 Inside Golf Course Irrigation 0-2,000 $ - $ - $ - 2,001+ $ 3.57 $ 3.64 $ 3.64 ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC 70 WATER Retail Water Service Volumetric Rates($/1,000 Gallons) Original Current Proposed Proposed FY 2023 FY 2024 FY 2025 Raw Water Charge All Gallons $ 0.97 $ 1.12 $ 1.12 FY2024 & Outside Residential 0-2,000 $ - $ - $ - FY 2025 2,001 - 6,000 $ 3.11 $ 5.18 $ 5.18 6,001 - 15,000 $ 3.88 $ 5.94 $ 5.94 PROPOSED • . • , 15,001+ $ 4.90 $ 6.49 $ 6.49 RETAILOutside Commercial&Other 0-2,000 $ - $ - $RATES 2,001+ $ 4.22 $ 5.67 $ 5.67 Outside Large Volume Users 0- 10,000,000 $ - $ - $ - 10,000,001+ $ 1.95 $ 4.02 $ 4.02 Outside Irrigation 0-2,000 $ - $ - $ - 2,001+ $ 4.90 $ 6.49 $ 6.49 ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC 71 Inside Residential Customers FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates 2 Fixed Rate Revenues $ 20,881,544 $ 14,007,152 $ 15,034,764 Commodity Rate Revenues 20,635,747 27,693,849 28,710,020 Total $ 41,517,291 $ 41,701,001 $ 43,744,783 Comparison Change from Cost of Service 0.44% 5.37% Cost of Service/1,000 Gallons $ 7.04 • • • Service • FY 2025 FY 2025 Revenues Re Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 23,625,023 $ 14,039,152 $ 15,068,051 Commodity Rate Revenues 24,012,067 27,399,174 28,710,020 Total $ 47,637,090 $ 41,438,326 $ 43,778,071 Change from Cost of Service -13.01% -8.10% Cost of Service/1,000 Gallons $ 8.08 72 Outside Residential Customers FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 433,610 $ 127,853 $ 150,353 Commodity Rate Revenues 325,253 355,472 495,226 Total $ 758,863 $ 483,325 $ 645,580 • •, • Change from Cost of Service -36.31% -14.93% Cost of Service/1,000 Gallons $ 9.59 • • • Vic _ • FY 2025 FY 2025 Revenues LLL _ -_nues Cost of Service at Current Rates at Proposed Rates 00, Fixed Rate Revenues $ 471,245 $ 127,999 $ 150,505 Commodity Rate Revenues 368,399 355,472 495,226 Total $ 839,644 $ 483,471 $ 645,732 Change from Cost of Service -42.42% -23.09% Cost of Service/1,000 Gallons $ 10.61 73 Inside Commercial Customers FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 7,675,127 $ 3,165,000 $ 5,238,052 Commodity Rate Revenues 15,517,461 29,443,054 30,633,083 Total $ 23,192,588 $ 32,608,053 $ 35,871,134 Comparison Change from Cost of Service 40.60% 54.67% � Cost of Service/1,000 Gallons $ 4.99 of Cost Vic to rServiceto FY 2025 FY 2025 Revenues RevenuesLLL Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 8,276,059 $ 3,176,579 $ 5,257,591 Commodity Rate Revenues 18,200,929 29,443,054 30,633,083 Total $ 26,476,988 $ 32,619,633 $ 35,890,674 Change from Cost of Service 23.20% 35.55% Cost of Service/1,000 Gallons $ 5.70 74 Outside Commercial Customers FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 1,172,885 $ 216,294 $ 411,506 Commodity Rate Revenues 2,036,173 3,007,635 3,934,452 • •. • Total $ 3,209,058 $ 3,223,928 $ 4,345,958 S Vic Change from Cost of Service 0.46% 35.43% • • • Cost of Service/1,000 Gallons $ 5.52 ervicet • eveFY 2025 FY 2025 Revenues LLLL Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 1,253,103 $ 216,596 $ 412,035 Commodity Rate Revenues 2,368,896 3,007,635 3,934,452 Total $ 3,621,998 $ 3,224,231 $ 4,346,487 Change from Cost of Service -10.98% 20.00% Cost of Service/1,000 Gallons $ 6.23 75 Inside Large Volume Users FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 861,078 $ 889,257 $ 1,416,182 Commodity Rate Revenues 1,756,971 1,541,031 1,638,271 Total $ 2,618,049 $ 2,430,287 $ 3,054,453 Comparison Change from Cost of Service -7.17% 16.67% • • • Cost of Service/1,000 Gallons $ 5.17 e vice Service • FY 2025 FY 2025 Revenues Revenues Cost of Service at Current Rates at Proposed Rates OOAA Fixed Rate Revenues $ 921,074 $ 889,257 $ 1,416,182 Commodity Rate Revenues 2,046,669 1,541,031 1,638,271 Total $ 2,967,743 $ 2,430,287 $ 3,054,453 Change from Cost of Service -18.11% 2.92% Cost of Service/1,000 Gallons $ 5.86 76 Outside Large Volume Users FY 2024 FY 2024 Revenues Cost of Service at Current Rates at Proposed Rates Fixed Rate Revenues $ 13,076,977 $ 5,458,332 $ 5,310,941 Commodity Rate Revenues 31,054,508 23,840,670 41,191,141 Total $ 44,131,485 $ 29,299,002 $ 46,502,082 ' CS• • • Change from Cost of Service -33.61% 5.37% • • • Cost of Service/1,000 Gallons $ 4.88 ee 'rVVv ii'ccc ee • FY 2025 FY 2025 Revenues Revenues Cost of Service at Current Rates at Proposed Rates LL FA Fixed Rate Revenues $ 13,994,118 $ 5,458,332 $ 5,310,941 Commodity Rate Revenues 36,270,675 23,840,670 41,191,141 Total $ 50,264,793 $ 29,299,002 $ 46,502,082 Change from Cost of Service -41.71% -7.49% Cost of Service/1,000 Gallons $ 5.56 77 REVISED PROPOSED WASTEWATER RATES • Maintains equity in rates • Considered after Community Input • Developed 2-year Financial Statement to analyze fund balance impacts • Reviewed current and future debt service • In-depth discussion with consultant I M PACTS • Greatly reduces capacity to cash fund CIP • Future proposed change in fund balance policy delayed 78 2024 Raw Water Rate Adjustments CCW" Effective January 1., 12025 All Retail Customers Current Proposed % change Raw Water (per 1000 gallons) $0.97 $1 .12 15% This includes the $0.05 per 1000 gallon Raw Water Supply Development charge 79 2024 Retail Water Rate Adjustments CCW" Effective January 1., 12025 MINIMUM MONTHLY CHARGE Includes first 2000 gallons for Residential and Commercial Customers INSIDE CITY LIMITS OUTSIDE CITY LIMITS Meter Size Current Proposed Meter Size Current Proposed 5/8" X 3/4" $12.92 $ 12.92 5/8" X 3/4" $19.39 $ 19.39 1" $19.39 $ 32.30 1" $29.08 $ 48.48 1 1/2" $32.31 $ 64.60 1 1/2" $48.46 $ 96.95 2" $64.60 $ 107.52 2" $96.90 $ 155.12 3" $103.36 $ 193.80 3" $155.05 $ 290.85 4" $206.72 $ 336.00 4" $310.09 $ 504.00 6" $323.00 $ 710.60 6" $484.50 $ 1,066.45 8" or larger $646.00 $ 1,162.80 8" or larger $969.00 $ 1,745.10 10" or larger $646.00 $ 1,938.00 10" or larger $969.00 $ 2,908.50 ao 2024 Residential Volume Rate Adjustments Effective January 1., 12025 Inside City Limit Current Proposed % Outside City Limit Current Proposed % change change 2001 - 6000 $5.08 $5.08 0% 2001 - 6000 $3.11 $5.08 63% 6001 - 15000 $5.83 $5.83 0% 6001 - 15000 $3.88 $5.83 50% 15001 and up $6.36 $6.36 0% 15001 and up $4.90 $6.36 29% Residential Volume Rates (per 1000 gallons) 81 2024 Commercial Volume Rate Adjustments Effective January 1., 12025 Inside City Limit Current Proposed % change Outside City Limit Current Proposed % change 2001 - 6000 $5.56 $5.56 0% 2001 - 6000 $4.22 $5.56 32% Commercial Volume Rates (per 1000 gallons) 82 2024 Large Volume Water Rate Adjustments Effective January 1., 2024 — December 31., 2025 Inside City Limit Current Proposed % change Outside City Limit Current Proposed % change 0 - 10,000,000 $24,202 $24,202 0% 0 - 10,000,000 $40,382 $24,202 -40% 10,000,000 and up $3.94 $3.94 0% 10,000,000 and up $1.95 $3.94 102% Large Volume Rates (per 1000 gallons) 83 2024 Sample Bills : Water ccw' Effective January 1., 2024 — December 31., 2025 Residential, Inside City Limits Current Proposed Increase 3/4" meter $39.06 $39.96 $ 0.90 6,000 gallons Residential, Outside City Limits 3ff meter Current Pro posed Increase 6,000 gallons $37.65 $46.43 1 $ 8.78 84 2024 Sample Bills : Water ccw' Effective January 1., 2024 — December 31., 2025 Commercial, Inside City Limits 3" meter Current Proposed Increase 20,000 gallons $222.84 $316.28 $93.44 Commercial, Outside City Limits Current Proposed Increase 3" meter $250.41 $413.33 $162.92 20,000 gallons 85 2024 Sample Bills : Water ccw' Effective January 1., 2024 — December 31., 2025 Large Volume Type Current Proposed Increase 10 if meter Inside City Limits $427,348 $442,140 $14,792 90,000 million gallons Outside City Limits $284,651 $443,110 $158,459 86 2024 Water Rate Adjustments CCW- 12025 Water Type and Agency Measure Current Proposed change Raw Water Per 1000 gallons $1.03 $1.03 0% STWA, SPMWD Treated Per 1000 gallons $1.28 $1.74 36% Port Aransas, Violet Treated Per 1000 gallons $1.71 $2.31 35% STWA South Texas Water Authority SPMWD San Patricio Municipal Water District 87 Consent Decree CCW Fifteen-year Agreement between the City, EPA, TCEQ, and Department of Justice that requires the City to upgrade its Wastewater Infrastructure by achieving various milestones during the time period. The agreement became effective in January 2021 . • $14 . 1M Lift station upgrades • $15 . 4M Begin construction of Oso W"^7-r _ -- Phase II • $15M Begin construction of Green 1 WWTP Phase I • $1 . 6M City-wide SCADA upgrade • Continued upgrade to the collect ' system • Continued inspection and cleaning of the collection system • Continued Preventative maintenance 88 FY 2023 Achievements Wastewater FY 2023 GOALS MET • Initiate 3 Indefinite Delivery, Indefinite Quantity ( IDIQ) contracts on : - Pipe replacement - Manhole rehabilitation and replacement - Associated collection system improvements • Identify and initiate design for large capacity Consent Decree Actions Totalto D. . . • . . Sewer Line Cleaning 543 Miles 447 Miles 121% Sewer Line Inspection 379 Miles 297 Miles 128% • - • - • 138 138 100 Air Relief Valve Inspection 402 251 160 StationLift • - • 102 102 100% 89 FY24 PROPOSED BUDGET WASTEWATER FUND: CCWt. $83.7M $ in Millions - - � .- - .- - , Revenues $80.40 $81.31 $95.65 $14.34 Expenditures $71.58 $78.83 $83.75 $4.92 Miscellaneous, $0.04, 0% Allocations, Personnel, $17.6, 21% $16, 19% Interest & Investments, Debt Service, Service & Sales, 'i $0.6, 1% $6.5, 8% $94.1, 98% Operating, Capital, $3.8, $39 8, 48°� Fines & Fees, 4% $0.9, 1% FY23 to Wastewater 232 260 260 ---- 90 FY24 Proposed Budget By Service CCW : ($ in Millions) Wastewater FY 2024 Proposed Treat wastewater Maintain & repair wastewater collection $20 . 8 Manage lift stations Debt service $20 . 0 Transfer to General Fund 91 TOTAL Year-Over-Year Costs CCW . Services ($ in Millions) Wastewater FY 2022 FY 2024 � Increase Treat wastewater $27. 0 $31. 8 18% aintain & repair wastewater Collection $17. 9 $20. 8 .: W. Lift Stations Debt Service $18.3 $20.0 • Transfer to the General Fund 92 TOTAL Year-Over-Year Costs CCW . Chemicals Wastewater FY 2022 FY 2024 Increase Sodium Hypochlorite 12.50 (per gallon) 0 $1 .2Sodium Bisulfite 400 (per gallon) 6 0 Polymer (per gallon) 6 4% .' Wastewater Sludge Disposal (annual lump sum) 93 Year-Over-Year Costs CCW . Misc. Wastewater FY 2022 FY 2024 Increase 48" Manhole 0 24" Ring and Sanitary Sewer Cover 1 $517 135% Electricity (per kwh) $0.08652 I 11• Wastewater FY23 CIP Progress Strategic Plan • • Total Projects • • • - • • • tl • • Design Construction Pr• • 27 $89,170,224 14 8 5 $78,065,224 • $355K Greenwood WWTP Flood Mitigation Awaiting CDBG Grant • $2 . 4M Airline Rd . Lift Station Land Acquisition • $3 . 3M Williams Dr . Lift Station Force Main Alignment Considerations • $2 . 7M Twin 36" Line Rehabilitation • $2 . 3M Other Various Projects Total $11 . 1M 95 Wastewater FY23 CIP Progress ccw Wastewater Treatment Plants status on Schedule FY23 Budget Notes w Allison WWTP Upgrades Process ImprovementConstruction $4,35OfOOO Broadway WWTP Rehabilitation Design $5,510,000 Broadway WWTP Third Clarifier D- OOO Greenwood WWTP Flood Mitigation Design000 CDBG Greenwood WTP Process Upgrade Design $3,545,930 Laguna Madre WWTP RehabilitationComplete $905,000 Old Broadway WWTP DecommissioningComplete $5,350,000 OSO WRP Process Upgrade Design $11,250,000 OSO WRP Aeration Coarse Bubble UpgradeConstruction $1,410,310 Whitecap Fence ReplacementComplete $360,000 Whitecap WWTP ImprovementsConstruction $5,163,000 Wastewater FY23 CIP Progress ccw Wastewater Lift Stations status °n FY23 Budget Notes Land Schedule Airline Rd. Lift station Upgrades Design $2,360,000 Acquisition City-Wide Lift Station Repair Design40 000 London Area WW Collection System Improvements D- O O O O O Constructio Electrical Williams Lift Station Upgradesn $6,493,442 - McBride Force Main and Lift StationComplete $205,000 Williams Lift Station Force Main Design $3,130,000 Alignment Waldron Lift Station Force Main D- $440,000 Park Road 22 Lift Stationcomplete $320,000 Wooldridge Rd. and Morgan Ave. Lift Station Upgradesn V $2,706,942 Wastewater FY23 CIP Progress ccw Wastewater System Maintenance status on Schedule FY23 Budget Notes City-Wide Collection Capacity Remediation Design 000 000 City-Wide Wastewater IDIQConstruction $17,300,000 Hewit Dr./Santa Fe St. WW Line Upsizing Hydraulic Design 0� 000 Modeling Twin 36" Wastewater Mains Rehabilitation Bidding Design $2,650,000 Process Wastewater Facilities and Other Status On Schedule FY23 Budget Notes Wastewater Backup Generators Design •00 000 Wastewater Maintenance Shop Design 0 0 0 0 01.111111 MEN Wastewater Treatment Plants & Lift Station ScadaConstruction $1,650,000 Street Projects Status On Schedule FY23 Budget Notes $21,993,3 ,. Wastewater Utility SupportConstruction 98 Wastewater CIP : $ 1263M ccwt' Wastewater Utility Support-Streets $13,585,788 Wastewater Wastewater System Treatment Plants Other $52,867,328 $14,083,777 Continuation of Strategic Plan to Upgrade Wastewater Treatment Plants , Lift Stations , and the Collection System Wastewater System Wastewater Lift Maintenance $31,579,000 Stations $14,160,000 99 FY 2024 WASTEWATER CIP ccW, Project # Project Name FY 2024 FY 2025 Total Legend Oso WRP $3,580,00 -Pm-WWL- 23037* $500,000 $3, 080, 000 oa a Pn m, Operation Center 0 Wa�EewateF MUM-Blucher Park WW $209 000 $3,250 000 $3,459,00 __Farce - Improvements 0 Effi-LF-IM —Efiluen[ForceMan � Up River Rd WW $2,080,00 IRI Force Main Im ' 23012* p $275,000 $1, 805, 000 �, - 0 e Water Street WW $1,715,00 23019* $275, 000 $1, 440, 000 Line Imp 0 22155/ WWTP Operation & $2,200,00 $2200 000 $4,400,00 , 22156* Control Centers 0 0 Northwest Blvd. 24106 Wastewater $440,000 $220, 000 $660, 000 Infrastructure Upgrade Total $3,899,00 $11, 995, 00 $15, 894, 0 0 0 00 *Included in FY 2023 CIP Plan with a scheduled begin date 100 2024 Proposed CCW' Wastewater Rates • Rates are reviewed every two years • Proposed monthly rates effective January 2024 • Rate changes for equity in the rate structure 101 Wastewater Charges CLW' • Minimum charge Includes first 2 , 000 gallons • Volume charge per 1 , 000 gallons Residential customer is based on Winter Quarter Average (WQA) thly U =charge • ResidentialX X X X X CommercialX X 102 Wastewater FY22 Annual Billed Revenue CCW OCL ICL Multi- Customer • _ Commercial& family Revenue other residential ICL Single Family $ 1% 1% Residential 50.8 -- ... $ ICL OCL - Residential 0.0 Commercial ICL Commercial and $ and Other Other 23.5 31% OCL Commercial c' and $ Other 0.7 ICL Multi-family $ Residential 0. 6 Total 75.6 OCL- ICL Single Residential family 0% residential 67% 103 e ■.. i CiSa u ■�■ ■��66 a �� .:rue �lofillu u OUR ,r> t :.> f ,,,, ��, ..: i...H 11M"I _� �i`�®��r� �° raaaaq -aOa�CFa ■ f i 31n ii c a � � a■■�!�, ■ _ � �€'` 'r�'""c r�ril .:_■. �raiai:rlla■i ��a��ai�Y i a ,. u ■■e�'�■r�a _ i Cc a a `� at rah,. i ' L LL r � - �• ti i�'iiit� --. ease �[La :-•��. eve ll�i `, '�, e p�1i 1161.111 • .•� 4fF]4�P�®pb. � aa���E�A'7alhd w F` ,�• � �`{e�wµiLe., S�a [,rill.Jam' 1 CORPUS CHRISTI WATER NewGen WATER AND SEWER RATE STUDY & Solutions 9)2023 NEWGEN STRATEGIES D SOLUTIONS, Total Wastewater System FY 2023 Budget FY 2024 Budget FY 2025 Budget O&M Expenses $ 53,194,588 $ 59,796,070 $ 62,550,628 Minor Capital Outlays 3,639,087 - - Total PILOT&Transfers 3,209,224 2,212,308 2,234,431 Total Debt Service 16,152,265 21,303,922 28,510,121 FY 2024 & Total Cash Funded CIP - 500,000 500,000 FY 2025 Total Re\.enue Requirements $ 76,195,165 $ 83,812,300 $ 93,795,181 RESULTSOther Operating Revenues $ 2,774,416 $ 2,482,500 $ 2,494,913 WASTEWATE Non-Operating Re\.enues 956,660 11,000 11,000 Total Other & Non-Operating Revenues $ 3,731,076 $ 2,493,500 $ 2,505,913 R SYSTEM Total Net Re\.enue Requirement $ 72,464,088 $ 81,318,800 $ 91,289,268 Percentage Change 12.22% 12.26% ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC PROPOSED RETAIL WASTEWATER RATES FOR FY 2024 & FY 2025 WASTEWATER Inside City Residential Wastewater Rates Current Proposed Proposed Minimum Charges FY 2023 FY 2024 FY 2025 FY 2024 i Meter Size FY 2025 All Meter Sizes $ 33.58 $ 34.92 $ 34.92 PROPOSED j Volumetric Rates ($/1,000 Gallons) RETAIL A Gallons 0-2,000 $ - $ - $ - RATES 2,000 - 25,000 $ 7.02 $ 7.37 $ 7.37 25,000+ $ - $ - $ - ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC 107 WASTEWATER Outside City Residential Wastewater Rates Current Proposed Proposed Minimum Charges FY 2023 FY 2024 FY 2025 FY 2024 & Meter Size FY 2025 All Meter Sizes $ 41.99 $ 43.65 $ 43.65 PROPOSED Volumetric Rates ($/1,000 Gallons) Gallons RETAIL 0-2,000 $ - $ - $ - RATES 2,000 - 25,000 $ 15.60 $ 11.06 $ 11.06 25,000+ $ - $ - $ - ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC WASTEWATER Inside City Commercial & Other Wastewater Rates Current Proposed Proposed Minimum Charges FY 2023 FY 2024 FY 2025 FY 2024 • Meter Size All Meter Sizes $ 46.10 $ 47.84 $ 47.84 FY 2025 PROPOSED R • P • , Volumetric Rates ($/1,000 Gallons) Gallons RETAIL 0-2,000 $ - $ - $ - RATES 2,000+ $ 5.26 $ 7.37 $ 7.37 ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC WASTEWATER Outside City Commercial & Other Wastewater Rates Current Proposed Proposed Minimum Charges FY 2023 FY 2024 FY 2025 FY 2024 • Meter Size All Meter Sizes $ 57.63 $ 60.06 $ 60.06 FY 2025 PROPOSED R • P • , Volumetric Rates ($/1,000 Gallons) Gallons RETAIL 0-2,000 $ - $ - $ - RATES 2,000+ $ 10.50 $ 11.06 $ 11.06 ©2023 NEWGEN STRATEGIES AND SOLUTIONS,LLC MONTHLY BILL IMPACTS AND BILL COMPARISONS Inside City Residential Customer Monthly Bill Water Bill FY 2023 FY 2024 FY 202: Impact on Average Residential Customer* Monthly Bill (5/8" Meter) $ 39.06 $ 40.88 $ 40.88 Increase ($) $ 1.82 $ - Increase (%) 4.7% 0.0 *6,000 Gallons Wastewater Bill FY 2023 FY 2024 FY 202: Impact on Average Residential Customer* Monthly Bill (5/8" Meter) $ 54.64 $ 57.03 $ 57.03 Increase ($) $ 2.39 $ - Increase (%) 4.4% 0.0% *5,000 Gallons 112 Outside City Residential Customer Monthly Bill OCL Water Bill FY 2023 FY 2024 FY 2025 Impact on Average Residential Customer* Monthly Bill (5/8" Meter) $ 37.65 $ 47.60 $ 47.60 Increase ($) $ 9.95 $ - Increase (%) 26.4% 0.0% *6,000 Gallons OCL Wastewater Bill FY 2023 FY 2024 FY 2025 Impact on Average Residential Customer* Monthly Bill (5/8" Meter) $ 88.79 $ 76.83 $ 76.83 Increase ($) $ (11.96) $ - Increase (%) -13.5% 0.0% *5,000 Gallons 113 Inside City Commercial Customer Monthly Bill Monthly Bill Impacts Water Bill FY 2023 FY 2024 FY 2025 Impact on Average Commercial Customer* Monthly Bill (3" Meter) $ 222.84 $ 326.06 $ 326.06 Increase ($) $ 103.22 $ - Increase (%) 46.3% 0.0% *20,000 Gallons Wastewater Bill FY 2023 FY 2024 FY 2025 Impact on Average Commercial Customer* Monthly Bill (3" Meter) $ 140.78 $ 180.50 $ 180.50 Increase ($) $ 39.72 $ - Increase (%) 28.2% 0.0% *20,000 Gallons 114 Outside City Commercial Customer Monthly Bill Monthly Bill Impacts Outside City Water Bill FY 2023 FY 2024 FY 2025 Impact on Average Commercial Customer* Monthly Bill (3" Meter) $ 250.41 $ 426.86 $ 426.86 Increase ($) $ 176.45 $ - Increase (%) 70.5% 0.0% *20,000 Gallons Outside City Wastewater Bill FY 2023 FY 2024 FY 2025 Impact on Average Commercial Customer* Monthly Bill (3" Meter) $ 246.63 $ 259.14 $ 259.14 Increase ($) $ 12.51 $ - Increase (%) 5.1% 0.0% *20,000 Gallons 115 Large Volume Customer Monthly Water Bills Monthly Bill Impacts Water Bill FY 2023 FY 2024 FY 2025 Impact on Average Large Volume Customer* Monthly Bill (10" Meter) $427,348.00 $ 462,836.00 $ 462,836.00 Increase ($) $ 35,488.00 $ - Increase (%) 8.3% 0.0% *90,000,000 Gallons Monthly Bill Impacts Outside City Water Bill FY 2023 FY 2024 FY 2025 Impact on Average Large Volume Customer* Monthly Bill (10" Meter) $284,651.00 $ 463,844.00 $ 463,844.00 Increase ($) $ 179,193.00 $ - Increase (%) 63.0% 0.0% *90,000,000 Gallons 116 T� d , d } W _ .yyyv R' THANKYOU ! NEWGEN STRATEGIES AND SOLUTIONS, LLC ANDY MCCARTNEY, PRINCIPAL 275 W CAMPBELL ROAD, SUITE 440 469-501-5892 RICHARDSON, TX 75080 AMCCARTNEY@NEWGENSTRATEGIES.NET REVISED PROPOSED WASTEWATER RATES • Maintains equity in rates • Considered after Community Input • Developed 2-year Financial Statement to analyze fund balance impacts • Reviewed current and future debt service • In-depth discussion with consultant I M PACTS • Greatly reduces capacity to cash fund CIP • Future proposed change in fund balance policy delayed 118 2024 Wastewater Rate Adjustments CCW" Effective January 1., 12025 RESIDENTIAL Current Proposed chane COMMERCIAL Current Proposed change Minimum (0-2000 gallons) $33.58 $33.58 0% Minimum (0-2000 gallons) $46.10 $46.10 0% 2001 and up $7.02 $7.02 0% 2001 and up $5.26 $7.02 27% Inside City Limits (per 1000 gallons) 119 2024 Wastewater Rate Adjustments CCW" Effective January 1, 1 December1 RESIDENTIAL Current Proposed% COMMERCIAL Current Propose chane d change Minimum (0-2000 gallons) $41.99 $ 41.99 0% Minimum (0-2000 gallons) $57.63 $57.63 0% 2001 and up $15.60 $11.06 -29% 2001 and up $10.50 $11.06 5% Outside City Limits (per 1000 gallons) 120 2024 Sample Bills : Wastewater CCWt- 12025 Residential, Inside City Limits Current Proposed Increase 5,000 gallons $54.64 $54.64 $0.00 Commercial, Inside City Limits Current Proposed Increase 20,000 gallons $140.78 $ 172.46 $ 31.68 121 2024 Sample Bills : Wastewater CCWt- 12025 Residential, Outside City Limits Current Proposed Decrease 5,000 gallons $88.79 $ 75.17 - $13.62 Commercial, Outside City Limits Current Proposed Increase 20,000 gallons $246.63 $256.71 $10.08 122 CCW- Residential - Inside City Limits Original REVISED Proposed Proposed Service FY2023 FY2024 $inc FY2024 $inc Water($) $ 39.06 $ 40.88 $ 1.82 $ 39.96 $ 0.90 Wastewater ($) $ 54.64 $ 57.03 $ 2.39 $ 54.64 $ - $ 4.21 $ 0.90 Based on 6,000 gallons water usage and 5,000 gallon winter quarter average 123 Corpus ChristiWater ,���t�.r FISCAL YEAR 2023-2024 (!CwServ1ng the Coastal :- • PROPOSED F� a OPERATING - PROPOSEDBUDGET �� BUDGET mow' Presented bjl less S PRESENTED TO CITY COUNCIL Michael Murphy, �s CITY OF CORPUS CHRISTI Operations Officer '� CITY MANAGER � � �' � PETER ZANONI - ,- August