To: Members of the Castle Rock Water Commission
From:
Mark Marlowe, P.E., Director of Castle Rock Water
Title
Rates and Fees Study Deliverables - April 2018
Body
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As part of the annual rates and fees study, Castle Rock Water staff gathers several pieces of information to input into the four enterprise models for rate making, development of the system development fees and to determine a cost of service basis. Throughout the study this year, staff will be bringing to Commission some of those inputs and deliverables that are used for this process.
2017 Year End Financials (Attachment A)
The year end 2017 financials are used for several reasons within the study. One, as a starting point for line item detail in developing the new 2019-2023 budget. Prior year actuals are also used for trend comparison, normally a historical 3+ years. An escalation factor is then input into the models for all years past the 5-year planning period up to and including 2055. The 2017 year end O&M line item detail is used in the cost of service model to allocate to the individual functions such as treatment, distribution and storage just to name a few.
2017 Year End Fund Balances (Attachment A)
The year end 2017 fund balances serve as the beginning balance for 2018 and forward. These fund balances serve as a source of cash net of all required reserves such as operating, revenue stabilization, and catastrophic reserve. This source of cash is then used to fund future CIP and O&M before any rate increases will be recommended.
2019 Budget Business Case Requests
As part of the budget process, equipment purchases in excess of $25,000 and all new personnel Full Time Equivalent (FTE) requests are vetted thru the Leadership Team as well as the Town Manager’s office for consideration and approval before they are preliminary input into the study. Three FTE business case requests are being presented for 2019 budget consideration: (1) SCADA Analyst, (2) Utility Locator, and (3) Water Plant Operator.
The driver of the FTE for a SCADA Analyst is to improve current service levels and meet new service levels. The consistent increase in the amount of SCADA System components, SCADA communications systems, security/surveillance infrastructure and the forecasted growth necessitates additional personnel. The recently approved SCADA Master Plan projected this position to be budgeted in 2018; however, we delayed this request so as not to compete with the higher priority water plant operator positions requested and approved for the 2018 budget. This position would be 100% rate funded and the annual estimated financial impact including benefits would be $108k.
Field Services is also asking for an additional Utility Locator in 2019. The purpose of this new FTE is to maintain the current levels of service and compliance while keeping up with the increasing demands of the Utility Locating program. Due to the growth, the number of locate requests, our Utility Locate program has had to process, has almost doubled over the past 5 years. The total number of tickets processed in 2012 was 11,097 and in 2017 it was 20,411 with an expected 24,000+ locate requests in 2019. This position would be 100% rate funded and the annual estimated financial impact including benefits would be $76k.
The third request is to add one Water Plant Operator IV position in 2019. The additional operator is needed to facilitate the change of hours of staffed daily water treatment operations and migrate towards the 24/7/365 days objective by 2020. An additional FTE in 2019 is needed to take one step closer (we will need to add the final Plant Operator FTE in 2020) to fully accommodate the 24 hour operation. It is staff’s intention to add FTE’s on a graduated basis so that the impact of each additional FTE can be assessed. This position would be 100% rate funded and the annual estimated financial impact including benefits would be $88,000.
The estimated annual financial impact would be $272,000 if all three business cases are approved for the 2019 budget.
Growth Forecast by Year 2018-2023 (Attachment B)
Attachment B shows the preliminary growth forecast numbers for 2018-2023 by customer class that is provided by the Town’s Development Services Department. Although a growth forecast thru 2055 is provided by the Town, the 5-year planning period is looked at in more detail. These growth numbers are input into the rates and cost of service models to forecast the increase in accounts, customer usage and change in future revenues.
Attachments
Attachment A: 2017 Year End Financials & 2017 Year End Fund Balances
Attachment B: Growth Forecast by Year 2018-2023