To: Members of the Castle Rock Water Commission
From:
Anne Glassman, Business Solutions Manager
Mark Marlowe, P.E., Director of Castle Rock Water
Title
Rate and O&M Costs AWWA Benchmarking Metrics
________________________________________________________________________________
Executive Summary
The purpose of this memorandum is to provide Castle Rock Water Commission with rate cost and O&M cost metrics from the American Water Works Association (AWWA) national benchmarking.
Rate and O&M Cost AWWA Benchmarking:
Each year since 2014 staff has participated in the AWWA’s annual benchmarking study. Castle Rock Water (CRW) uses many of these metrics as quarterly key performance indicators (KPIs) to help understand the areas that may need improvement. For the study completed in 2019 there was a total of 144 participants nationally, 44 water only utilities, 10 wastewater only and 90 combined operations. CRW is considered a combined utility. The count for each question answered varies depending on how many participated in the question.
The first cost related benchmark that CRW looks at is the Customer Service Cost per Account. This takes the total costs related for customer service divided by the number of accounts. This is important as it helps to show whether the utility is in line nationally for how much customer service costs. As you can see from the table below, in terms of a combined utility CRW is in the lowest quartile or 25th percentile based on the 2018 year end data for the 2019 survey.
|
Customer Service Cost Per Account |
|
Utility Type |
CRW |
75th Percentile |
Median |
25th Percentile |
Count of Utilities |
|
Combined |
$77.05 |
$19.15 |
$28.82 |
$43.33 |
50 |
|
Water |
$140.50 |
$19.24 |
$31.95 |
$58.41 |
34 |
|
Wastewater |
$10.73 |
$13.41 |
$18.90 |
$27.49 |
32 |
The next rate cost related benchmark that CRW tracks is the cost for residential service per month. This is tracked based on the water/water resources fund, wastewater fund and the stormwater fund separately. These metrics are important and tracked as a quarterly KPI. CRW looks at affordability for residential customer’s bills throughout the rates and fees study and comparing the average bills in the AWWA survey is another metric to help determine where the utility stands in terms of costs. As shown in the tables below you can see for the most part that CRW ranges from the median to the 25th percentile for each of these metrics as well.
|
Cost of Residential Service-Water |
|
Type |
CRW |
75th Percentile |
Median |
25th Percentile |
Count of Utilities |
|
7,500 Gallons per Month |
$63.56 |
$29.65 |
$38.10 |
$51.28 |
82 |
|
Average Monthly Bill |
$63.56 |
$23.24 |
$34.40 |
$41.30 |
81 |
|
Average Monthly Usage |
7,330 |
4,488 |
5,500 |
7,092 |
81 |
|
Cost of Residential Service-Wastewater |
|
7,500 Gallons per Month |
$55.43 |
$38.90 |
$50.47 |
$63.08 |
82 |
|
Average Monthly Bill |
$35.66 |
$29.16 |
$35.55 |
$45.50 |
80 |
|
Average Monthly Usage |
4,000 |
3,962 |
4,600 |
5,760 |
74 |
|
Cost of Residential Service-Stormwater |
|
Average Monthly Bill |
$7.12 |
$3.78 |
$5.48 |
$7.84 |
32 |
A third set of cost related metrics that CRW follows closely and includes in the quarterly KPIs are the operating costs for water/water resources and wastewater. Operating and maintenance costs are a large portion of where spending goes each year for CRW. It is important for CRW to understand how much is being spent in this area in order to ensure that these are kept as reasonable/minimal as possible. Operating costs keep the organization running month to month and thus are an important section in the annual AWWA survey. When looking at the water/water resources fund, CRW is in the 25th percentile on the survey in each category as shown in the table below. When looking at the wastewater fund CRW is in the 75th percentile in two categories and 25th percentile in one as also shown in the table below.
|
O&M Costs for Water Service |
|
Type |
CRW |
75th Percentile |
Median |
25th Percentile |
Count of Utilities |
|
Cost per Account |
$689 |
$313 |
$428 |
$618 |
74 |
|
Cost per MG |
$5,214 |
$1,738 |
$2,466 |
$3,519 |
74 |
|
Cost per 100 mile of Pipe |
$3,564,968 |
$1,988,318 |
$2,891,000 |
$4,062,825 |
72 |
|
O&M Costs for Wastewater Service |
|
Cost per Account |
$254 |
$276 |
$378 |
$527 |
67 |
|
Cost per MG |
$3,821 |
$1,679 |
$2,489 |
$3,953 |
63 |
|
Cost per 100 mile of Pipe |
$1,893,227 |
$1,917,681 |
$2,868,950 |
$3,834,601 |
66 |
Overall when being compared nationally in the AWWA survey in terms of these cost and rate related categories CRW is challenged and has room to improve our competitiveness. CRW understands that many factors play into this ranking in these categories, including infrastructure needs, location, climate and many others and plans to continually evaluate these KPIs to look for opportunities for improvement.