PowerPoint Presentation (Added 6/4/21)

Rate Study, Rate Recommendations 
and Public Outreach Plan 
City Council Workshop June 8, 2021

• Review Water/Wastewater Financial Plan Options
• Consider Citizens Utility Advisory Commission   
Recommendations
• Receive Council Direction
–Financial Plan Options
–Public Outreach Plan
• Potential Dates for Council Action
2
Purpose and Recommended Action

• Rate Objectives 
• Forecast Assumptions
–Operating Revenue and Expenses
–Capital Outlay
• Water/Wastewater Financial Plan and Options
–Financial Targets
–Financial Plan Baseline
–Proposed Rate Option 1
–Proposed Rate Option 2
3
Rate Study Overview

• Will Be Just and Reasonable
• Provide Revenue Stability 
• Maintain Financial Targets
• Encourage Conservation
• Costs of Service Based on Customer Characteristics
4
Rate Objectives

• Account Growth and Demand
–Account Growth: FY22 &FY23 1%; FY24 &FY25 .75%; FY26 .5%
–Demand: Consumption per Account at Normal Weather 
• Expenses Increase $1.7+ Million Annually by FY26
–Salaries, Wages & Overtime  2.5%
–Taxes and Benefits  3.0%
–Contracted Services  2.0%
–Raw Water  4.0%
–Chemicals, Granular Activated Carbon & Supplies  3.5%
–91st Avenue Wastewater Treatment Expense  4.0%
–All other Expenses  2.0%
5
Forecast Assumptions - Operating

System Operations
FY22-31 $123M
6

Plant Operations
FY22-31 $193M
7

• Significant Capital Investments
–10-year Capital Improvement Plan $395 million
–First Five Years $242 million
–Addresses Deferred Maintenance
–Minimizes Costly Emergency Repairs
–Updates to New Technologies 
–Improvements for Efficiency
–Improves Resiliency and Redundancy
• Assumed Debt Issuance
–$122 Million in Bond Sales Over Five Years
8
Forecast Assumptions - Capital

9
Capital Outlay  ($M)
0
10
20
30
40
50
60
70
80
90
Actual Cash Flow
Projected Cash Flow

• Working Capital
–50% of O&M Expense
• Days Cash on Hand
–250 Days, Minimum 180 
• Debt Service Coverage
–1.85x Senior, 1.2x All Debt
• Results In “AA” Credit Rating
10
Financial Plan – Council Policy Targets

11
Financial Plan Baseline (No Rate Increases)
FY22
FY23
FY24
FY25
FY26
Sources of Cash 
$ 143.0
127.5
127.2
123.8
124.4
Uses of Cash 
157.4
133.9
138.4
139.9
142.2
Net Cash In (Out)
(14.4)
(6.4)
(11.2)
(16.1)
(17.8)
Ending Working Capital
48.0
41.6
30.4
14.3
(3.5)
W/C % of O&M (target 50%)
80%
68%
48%
22%
(5%)
Presented to Council January 12, 2021

Proposed Rate Options (Percent)
12
Annual Rate Percentage Increases
Fiscal
Option 1
Option 2
Year
Water
Sewer
Combined
Water
Sewer
Combined
2022
6.5%
5.5%
6.0%
4.3%
3.0%
3.7%
2023
3.0%
2.7%
2.9%
4.3%
3.0%
3.7%
2024
3.0%
2.7%
2.9%
4.3%
3.0%
3.7%
2025
3.0%
2.7%
2.9%
4.3%
3.0%
3.7%
2026
3.0%
2.7%
2.9%
4.3%
3.0%
3.7%
Option 1 – continue final year of 2017 Plan then level increases the remaining four years
Option 2 – reset to level increases all five years

Proposed Rate Options (Dollar Amount)
13
Monthly Single Family Bill Impact
Fiscal
Option 1
Option 2
Year
Water
Sewer
Combined
Water
Sewer
Combined
2022
$2.68
2.03
4.71
1.77
1.11
2.88
2023
1.32
1.05
2.37
1.85
1.14
2.99
2024
1.36
1.08
2.44
1.93
1.18
3.10
2025
1.40
1.11
2.51
2.01
1.21
3.22
2026
1.44
1.14
2.58
2.10
1.25
3.35
Single Family customer with ¾” meter service using an average of 9,000 gallons monthly.  
Actual increases will vary depending on consumption and customer class.

14
Financial Targets Metrics
Option
FY22
FY23
FY24
FY25
FY26
Working Capital % of O&M 
(target 50%)
1
70%
63%
58%
58%
55%
2
73%
70%
61%
60%
52%
Debt Service Coverage-
Senior  (target 1.85x)
1
1.88
1.91
2.04
2.12
2.17
2
1.83
1.83
1.99
2.10
2.19
Debt Service Coverage-
All  (target 1.2x)
1
1.64
1.62
1.64
1.63
1.58
2
1.60
1.54
1.58
1.59
1.57
Days Cash on Hand
(target 250 days)
1
172
151
133
134
125
2
184
173
146
142
116

15
How Does Glendale Compare to Other Cities?
 -
 20
 40
 60
 80
 100
 120
 140
Single Family Bill Comparison at 9,000 Gallons/month
For Water, Sewer and Taxes Charges
Water
Sewer
Tax & Fees
$
$128.52
$86.75
$84.92
$82.04
$63.50

16
Other Scenarios
 -
 20
 40
 60
 80
 100
 120
 140
Single Family Bill Comparison at 4,000 Gallons/month 
For Water, Sewer and Taxes Charges
Water
Sewer
Tax & Fees
$
$79.07
$51.04
$52.90
$54.00
$24.96

17
Other Scenarios
 -
 50
 100
 150
 200
 250
 300
 350
 400
 450
 500
Commercial Bill Comparison for 20,000 Gallons/month
For Water, Sewer and Taxes Charges
Water
Sewer
Tax & Fees
$
$475.76
$233.95
$229.42
$220.44
$172.25

18
Other Scenarios
 -
 100
 200
 300
 400
 500
 600
 700
 800
 900
 1,000
Sprinkler Bill Comparison for 90,000 Gallons/month
For Water and Taxes Charges
Water
Tax & Fees
$906.83
$449.33
$440.39
$421.77
$347.94

• Cost per Day for Average Residential Customer
–$2.57 for Water and Sewer Services
–Option 1 Adds 15 cents (first year) 
–Option 2 Adds 10 cents (first year)
• Cost of Glendale Water
–40 gallons to fill your bathtub $0.11 
Using bottled water $35.60
–90 gallons to do a load of laundry $0.24
–21,000 gallons to fill your swimming pool $97.86
19
Value of Water

• What you get for a Day’s Service
–Raw Water Purchase and the Rights to Additional Capacity
–Treatment: Personnel, Electricity, Chemicals & Maintenance
–Infrastructure to Deliver: Mains, Meters & Fire Protection
–Water Quality Assurance During Treatment & Delivery
–Disposal of Used Water: Collect, Treat & Re-claim
• Benefits
–Resiliency: 24/7 uninterrupted services
–Redundancy: Multiple Sources of Supply & Treatment
20
Value of Water - Continued

• Water and Wastewater Rate Revenue Increase
–Support Financial Plan to Increase Rates  
–Prefer Option 2 - Level Increases Over Five Years
21
Recommendation from the Citizens 
Utility Advisory Commission

• Media Outreach
– Video Presentation and Answers to FAQs
– Glendale Website, Water webpage, Glendale 11 
– Social Media: Facebook, Twitter, Vimeo, Instagram
– Press Releases to TV and newspaper media
• Newsletters/Direct Mailer
– Council Members
– Customers and Community Associations
22
Public Outreach Plan

• Financial Plan Options
–Option 1: FY22 6.0%, Then Level 2.9% FY23-FY26
–Option 2: Level 3.7% Increases FY22 through FY26
• Public Outreach Plan
23
Receive Council Direction

• Middle of June 
–Commence Public Outreach Efforts
• Early July
–Video Presentation and Frequently Asked Questions 
• August 10, 2021  
–Adopt Notice of Intent and Set Public Hearing Date
• October 26, 2021  
–Conduct Public Hearing on Proposed Rate Adjustments
• October 26, 2021  
–Formal Vote on Proposed Rate Adjustments
• January 1, 2022  
–Effective Billing Cycle If Rates Are Approved
24
Next Steps