To: Members of the Castle Rock Water Commission
From:
Mark Marlowe, P.E., Director of Castle Rock Water
Anne Glassman, Business Solutions Manager
Title
2021 Rates & Fees Study Deliverables
Town Council Agenda Date: NA
Body
________________________________________________________________________________
Executive Summary
As part of the annual rates and fees study, Castle Rock Water (CRW) staff gathers several pieces of information to input into the four enterprise models for calculating rates, system development fees and cost of service. Throughout the study, staff will bring to Commission some of those inputs and deliverables used for this process.
Customer Characteristics Analysis
CRW conducts an in-depth analysis of accounts in service to determine customer characteristics and consumption patterns (Attachment A). We start by looking at the most current billing data for FY2020. From there, we break down the number of accounts by meter size and customer class. We then compare the number of actual permits for the last several years to the number of projected permits in that same year.
An average consumption based on the most current three years (2018-2020) by account, meter size, customer class and winter versus summer season is calculated. This average three-year period serves as a comparison to previous three-year periods going back as far as 2012. This takes into consideration weather patterns and rainfall variances from year to year. Customer data for the last three years (2018-2020) then determines an average representative customer for each customer class. One customer from each customer class then represents the class average and their consumption patterns calculate a typical customer’s annual bill.
Billed usage by tier from 2012-2020 by customer class is analyzed to see if customers are staying within their budgeted tiered rate structure. The purpose of this data analysis is also to see if customers over time are conserving water and avoiding Tier 3 - Excessive usage and Surcharge (over 40,000 gallons per month).
We also look at the customers with a 0.67 single family equivalent (SFE) to see if their consumption patterns are meeting the intent of the program, to use a third less water than an average ¾” residential customer’s usage. In addition to the 0.67 SFE accounts, we have added the new Water Efficiency Plan (WEP) accounts which started in 2019. Effective January 1, 2021, all new residential ¾” accounts will bill as a 1 SFE. Accounts with an SFE less than 1 prior to January 1, 2021 will be grandfathered until the property changes ownership, at which time it will change to a 1 SFE going forward. This only pertains to the monthly Water Resources base charge and not the Water Resources system development fees.
Other areas of interest within the study include consumption patterns based on watering schedules, consumption patterns based on water wiser designations, customer class consumption based on irrigated areas, consumption patterns for customers designated as Home Owner’s Associations (HOA’s), bulk water accounts consumption, and Town accounts consumption patterns over time, just to name a few.
Some conclusions that CRW has drawn from this year’s customer characteristics analysis include:
1. Our projections for estimated growth continue to be lower than actual growth numbers. The actual growth results have resulted in higher than projected revenues. We continue to make sure that we are planning our capital projects to meet the needs of this growth by looking each year at various planning scenarios and moving up capital projects where necessary.
2. Despite all of our efforts on water conservation, the three year rolling averages do not show that we are making much progress in reducing the average residential customer’s water consumption year over year.
3. Non-residential customer water use is remaining flat year over year with the exception of the hospital where water use has been rising since 2013.
4. The 0.67 program appears to be working fairly well in terms of meeting the goals of reduced water consumption.
5. The Water Efficiency Plan program also appears to be working in terms of reducing average water use of residential development.
6. The Water Wiser program does not appear to be resulting in as much savings in water as we would hope. Water wiser customers appear to actually be using more water during irrigation season than non-water wiser customers. We may want to evaluate how to improve this program going forward.
7. Limiting irrigated area to less than 3,000 square feet for a residential unit appears to result in a lower average monthly usage than our typical residential unit.
8. The results of the non-residential ColoradoScape program are positive as seen by the overall reduction in water use in the Castlewood Ranch HOA.
Growth Forecast by Year 2021-2026
Attachment B shows the preliminary projected growth numbers for 2021-2026 for all customer classes. This information comes from the Town’s Development Services Department. These growth numbers are inputs into the rates and cost of service models to forecast the increase in accounts, customer usage and change in future revenues.
Benchmarking Chart Follow-Up
In response to commissions request from the April meeting, staff has put together benchmarking charts that show how CRW compares to other communities in terms of fixed charges. We have also shown the variable charges as a comparison as well. Below are the charts showing how CRW compares to other local providers for both fixed and variable monthly charges. The benchmarking data shows CRW’s 2021 rates as compared to the 2020 rates of the surrounding communities. CRW updates these charts each year near the end of the annual rates and fees study. The first chart shows the comparison on just the fixed charges. From looking at the chart you can easily see that the monthly fixed charges for CRW in yellow, fall in the middle of the chart as compared to the surrounding communities. Our fixed charges are pretty average for Colorado communities and on the low side compared to the other South Metro Water Providers in the green.
The next chart shows the monthly variable charges for winter use for the same communities. In this chart you can see the CRW also falls into the lower middle of the providers and falls within the low end as compared to the other South Metro Water providers shown below in green.
The final chart shows the variable charges for a typical summer use comparison. CRW falls a little higher than the middle when looking at the typical variable charges for the summer use. CRW also falls into the middle of the South Metro Water Providers in green.
Overall in the benchmarking comparisons CRW falls into the average for charges when looking at variable versus fixed charges when compared to other surrounding communities.
Attachments:
Attachment A: Customer Characteristics Analysis
Attachment B: Growth Forecast by Year 2021-2026