11

2021-2022 Rate RevenuesCity of Tacoma | Environmental Services Department

Environmental Services CommissionSeptember 10, 2020

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22

Agenda• Budget Challenges

• 2021-2026 revenue model

• Projected rate increases

• Residential monthly bill comparison

• Affordability

• Next Steps

33

• Predicting and planning for impacts of Covid-19

• Assuming system risk through reduced CIP and increased debt• Balance capital spend with staff capacity

• Utility revenue needs are projected to be greater than CPI• Solid Waste (3%); Wastewater (4%); Surface Water (3%)

• Cost Drivers• Construction inflation is 5%

• Wages and benefits growth

• Assessments / Internal Services increases

Challenges

44

Prior Six Year Revenue Plan

Year Solid Waste Wastewater Surface Water2019 3.0% 4.0% 3.5%2020 3.0% 4.0% 3.5%2021 3.0% 3.5% 3.0%2022 3.0% 3.5% 3.0%2023 3.0% 3.0% 2.5%2024 3.0% 3.0% 2.5%

Sheet1

2017-2019 Biennium - Previous View of Rates

YearSolid WasteWastewaterSurface Water

20174.0%5.5%5.5%*

20184.0%4.5%5.5%*

20193.0%4.5%5.0%

20203.0%4.5%5.0%

20213.0%4.0%4.5%

20223.0%4.0%4.5%

* Includes 0.5% dedicated rate revenue for Open Space

YearSolid WasteWastewaterSurface Water

20193.0%4.0%3.5%

20203.0%4.0%3.5%

20213.0%3.5%3.0%

20223.0%3.5%3.0%

20233.0%3.0%2.5%

20243.0%3.0%2.5%

Projected Changes in Rate Revenues

YearSolid WasteWastewaterSurface Water

20190.0%0.0%-0.5%

20200.0%0.0%-0.5%

20210.0%0.0%-0.5%

20220.0%0.0%-0.5%

55

2021 – 2024 Revenue DifferencesYear Solid Waste Wastewater Surface Water2021 -1.0% -1.5% -1.0%2022 -1.0% -1.5% -1.0%2023 1.0% 1.0% 0.5%2024 1.0% 1.0% 0.5%

Sheet1

2017-2019 Biennium - Previous View of Rates

YearSolid WasteWastewaterSurface Water

20174.0%5.5%5.5%*

20184.0%4.5%5.5%*

20193.0%4.5%5.0%

20203.0%4.5%5.0%

20213.0%4.0%4.5%

20223.0%4.0%4.5%

* Includes 0.5% dedicated rate revenue for Open Space

2019-2020 Biennium - Proposed View of Rates

YearSolid WasteWastewaterSurface Water

20193.0%4.5%4.5%

20203.0%4.5%4.5%

20213.0%4.0%4.0%

20223.0%4.0%4.0%

20233.0%4.0%3.5%

20243.0%4.0%3.5%

Projected Changes in Rate Revenues

YearSolid WasteWastewaterSurface Water

2021-1.0%-1.5%-1.0%

2022-1.0%-1.5%-1.0%

20231.0%1.0%0.5%

20241.0%1.0%0.5%

66

2021 Six Year Revenue Plan

Year Solid Waste Wastewater Surface Water2021 2.0% 2.0% 2.0%2022 2.0% 2.0% 2.0%2023 4.0% 4.0% 3.0%2024 4.0% 4.0% 3.0%2025 3.0% 4.0% 3.0%2026 3.0% 4.0% 3.0%

Sheet1

YearSolid WasteWastewaterSurface Water

20212.0%2.0%2.0%

20222.0%2.0%2.0%

20234.0%4.0%3.0%

20244.0%4.0%3.0%

20253.0%4.0%3.0%

20263.0%4.0%3.0%

77

Average Residential Customer Bill

2020 Monthly

2021 Monthly

2022 Monthly $ Difference % Difference

Wastewater $49.97 $50.44 $51.21 $0.47 $0.77 0.9% 1.5%

Surface Water $25.66 $26.21 $26.74 $0.55 $0.52 2.1% 2.0%

Solid Waste $45.71 $46.55 $47.49 $0.85 $0.94 1.9% 2.0%

88

2020 Residential Bill Comparison

Based on theoretical residential customer: 7,000 SF residential lot for surface water, 6 CCF water for wastewater, and for solid waste a 60 gallon garbage container, two 90 gallon recycling containers, and two 90 gallon yard/food waste containers picked up every other week (or a weekly equivalent)

$67$93 $83 $76

$54 $63 $57 $58 $59

$31

$59$39

$15$13 $5 $26

$27 $27

$75

$105

$32

$149

$101

$50

$95 $97 $99

$0

$50

$100

$150

$200

$250

$300

Portland Seattle Bellevue Olympia Puyallup Spokane Tacoma Tacoma -2021

Tacoma -2022

Wastewater Surface Water Solid Waste % of Median Household Income

3.2%

3.6%

1.6%

4.9%

2.9%

2.9%

3.7% 3.7% 3.7%

PresenterPresentation NotesCity Median Income Portland 65,740 Seattle 85,562 Bellevue 112,283 Olympia 58,606 Puyallup 70,711 Spokane 47,822 Tacoma 58,617

99

Emergency Assistance ProgramBudget as of 09/08/2020 – All utilities (ES and TPU partnership)

Utility Service

OriginalFY19/20

BCAP Budget

Original BCAP

Budget Allocated

to EAP

Increased Emergency Assistance Program Budget

EmergencyAssistance Program

Expenditures (9/8/2020)

Remaining Emergency Assistance Program Budget

Power $2,500,000 $1,000,000 $1,700,000 $1,438,257 $261,743

Water $325,000 $238,248 $300,000 $195,334 $104,666

Wastewater $156,000 $72,784 $160,000 $122,970 $37,030

Surface Water $73,000 $33,400 $45,000 $39,380 $5,620

Solid Waste $197,000 $122,052 $195,000 $168,801 $26,199

TOTALS $3,251,000 $1,466,484 $2,400,000 $1,964,742 $435,258

Number of Households

Assisted

10,668

4,883

4,099

3,938

4,220

1010

2021 Assistance Recommendations

AMI project will also allow implementation of monthly billing by the 2023-2024 biennium

Assessment Power Water Solid Waste Surface Water Wastewater

Affordability Metric 6.0% 2.5% 1.0% 0.5% 2.0%

Monthly BCAP * $21 → $21 $7 → $9 $7 → $8 $4 → $5 $8 → $11

Monthly LIE/D 30% discount on bill → 35% discount on bill

Income Threshold 150% federal poverty level → 60% of area median income

* Environmental Services is increasing the BCAP credit from 15% to 20% of the average bill, consistent with TPU.

1111

• September 14 – 25: Council member reviews• October 6: City Manager presents proposed budget

and TPU and Environmental Services rates• October 13*: Alternative date for City Council Study

Session on utility rates• October/November: Community Outreach• November 17 and 24: Ordinance 12.08 and 12.09

first and second reading

Timeline

1212

2021-2022 Rate RevenuesCity of Tacoma | Environmental Services Department

Environmental Services CommissionSeptember 10, 2020

PresenterPresentation NotesTemplate Read-MeDo not insert animations or slide transitions into your presentation.Use only sans serif fonts (i.e.: Arial, Tahoma, Helvetica).Fonts must be between 24 points and 32 points in size. The minimum point size allowed is 18. Avoid having too much text. If the text flows outside the safe title area, split the information into two or more slides.Pictures with white backgrounds should be toned down by right clicking the mouse on the picture, then selecting Format Picture, lower the brightness by 10%.Ensure graphics (pictures, charts) are high resolution so they can be easily viewed on screen.

The Safe Area grid lines that you see on the background should be removed when your presentation is completely formatted.To remove the grid lines: Select the View tab. On the left side of the upper tool bar, click on Slide Master. Select the top most slide in the list. (You may need to scroll)To select the Safe Area we suggest clicking on the upper left corner of the object. Once it highlights, press delete. Save your presentation.Alternatively you may hide the Safe Area by clicking Hide Background Graphics in the Design tab for each slide in your presentation. (However, make sure this action does not also affect other graphics you have added to your presentation.)

Slide Number 1Slide Number 2ChallengesSlide Number 4Slide Number 5Slide Number 6Average Residential Customer Bill2020 Residential Bill ComparisonEmergency Assistance Program2021 Assistance RecommendationsTimelineSlide Number 12