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City of Scottsdale — Regular Meeting (2026-02-24)

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Item 12
CITY OF
SCOTTSDALE
City Treasurer’s Office
fs
7447 E. Indian School Rd. Suite #210 
Scottsdale, AZ 85251
PHONE 480-312-2427
WEB www.ScottsdaleAZ.gov
Date: 
February 11,2026
To: 
Honorable Mayor Borowsky and Members of the City Council
From: 
Sonia Andrews, City Treasurer/Chief Financial Officer
Subject: Water Sewer Rates
The city is proposing a 4.5% water rate increase and a 3.5% sewer rate increase for FY26/27. These 
increases were determined by the Water Resources Department using a 5-year rate model to calculate 
revenue requirements for upcoming water and sewer operating and capital needs.
In accordance with City Comprehensive Financial Policy No. 9.02 and 9.03, the city establishes water and 
sewer rates pursuant to a multi-year financial plan applying debt financing and excess reserves for capital 
projects to avoid significant rate fluctuations.
As the Water Department is still assessing the need for certain capital projects, and due to significant 
unknowns with certain capital projects, the 5-year financial plans are still being refined and Council should 
be aware of the following:
1. 
The rate increases do not include funding for capital projects that do not have accurate cost 
projections and capital projects that are still being defined.
2. Capital asset reinvestments over the 5-year planning period may still need to be refined in the rate 
model.
3. Debt financing and debt service considerations are still being determined. The water and sewer 
capital funding program should consider an appropriate allocation of debt financing versus cash 
funding for capital projects in accordance with Comprehensive Financial Policy No. 9.05.
As the Water Department refines the capital projects and related needs, the water and sewer 5-year 
financial plans and rate models will be updated in compliance with our Comprehensive Financial Policies.
Please contact me if you have any questions or would like additional information.
C: 
Charter Officers
Kira Peters 
Anna Henthorn 
Scott Selin

CITY COUNCIl
REPORT
A35
♦
mm
Meeting Date: 
February 24,2026
General Plan Element: 
Public Services & Facilities
General Plan Goal: 
Maintain a sustainable water and wastewater astern.
ACTION
Adopt notice of intention to increase water and wastewater rates, increase miscellaneous water 
charges, and make housekeeping adjustments to Chapter 49 City of Scottsdale Revised Code for 
fiscal year 2026/27 and establish May 19,2026, as the date for a public hearing.
BACKGROUND
Financial Planning Process: As prescribed by the City of Scottsdale's adopted Comprehensive 
Financial Policies, the City sets rates for water and wastewater customers based on annually 
updated five-year financial plan for each enterprise fund. The five-year plans are used to ensure 
that rate changes generate sufficient revenues to cover costs of serving customers and to 
maintain adequate reserves in accordance with the City’s adopted financial policies; reserve 
policies provide for contingencies and stabilize rate increases over the five-year planning 
period. As part of the comprehensive planning effort, the impact on the combined utility is 
carefully considered in determining the appropriate balance between rate increases and 
expenditure needs including future capit^ improvements and debt financing needs. The City 
believes that a strategy of annual marginal rate increases to smooth out long term revenue 
requirements produces more affordable and predictable rates for customers.
State Public Notification Process: State statutes establish the public notice and public hearing 
process to ensure that City water and wastewater customers receive adequate notice time, the 
ability to study the rate report supporting the proposed rate increases, and the opportunity to 
speak at a public hearing regarding the proposed increases. State statutes require:
• 
Adoption of a notice of intention to modify rates and miscellaneous water charges at a 
regular Council meeting (February 24,2026) and setting of a date for a public hearing 
(May 19,2026) on the proposed changes to be held not less than 60 days after adoption 
of the notice of intention;
• 
Posting of a written report or data supporting the changes with the City Clerk at least 30 
days prior to the public hearing (April 17,2026);
• 
Publication of a notice of public hearing regarding the City's intention to modify rates 
and miscellaneous water charges in a newspaper of general circulation within the
Action Tal
Blueink Bundle ID: OIZrvaTExJ

Gty Council Report i Notice of Intent
boundaries of the municipality not less than 20 days prior to the public hearing (March 
18,2026);
• 
A public hearing at a City Council meeting (May 19,2026);
• Adoption of the proposed changes any time after the public hearing (May 19,2026);
• 
Implementation of changes no sooner than 30 days after adoption (proposed water 
rates effective November 1,2026, miscellaneous water charges and wastewater rates 
effective July 1,2026).
IMPACT ANALYSIS
In accordance with its adopted financial policies, the City completed the annual updates to the 
comprehensive five-year financial plans that incorporate all projected operating and capital 
revenues and expenses to determine the cash needs of the water and wastewater enterprise 
funds. The City is proposing modifications to the water and wastewater rates and is proposing 
increases to miscellaneous water charges to meet cost recoveiy requirements for services 
provided to specific customers. As part of the comprehensive planning effort the impact on the 
combined utility bill for water and wastewater service was carefully considered in determining 
the appropriate balance between the proposed rate changes and debt financing. Based on the 
updated five-year financial plans, a synopsis of cost impacts is explained below.
Water - The water enterprise fund is impacted by multiple cost factors over the five-year 
planning period including:
• Operating cost increases for raw water to include current drought pricing, put in place 
by Central Arizona Project (CAP),
• 
Costs associated with additional water source and supply,
• Operating cost increases for electricity in the Arizona Public Service (APS) service area,
• Increasing cost for replacing and repairing aging infrastructure,
• Operating cost increases for personnel services and benefits.
Increases to base fees are proposed to better reflect the recovery of standard operating costs 
and adjusted to capture the demand availability designed into the system. Increases to 
commodity rates are proposed to generate sufficient revenues to maintain the water fund as 
self-sustaining enterprise, encourage efficient water use and urge conservation.
A 4.5% increase to base water fee is proposed.
• 3.5% to cover standard operating costs and capital improvements/projects,
• 
1.0% to assist in funding additional water sources and supply amidst the uncertainly on 
the Colorado River.
Overall, the water base fee and commodity rate changes are forecasted to generate an annual 
revenue increase of approximately $6,259,870 or 4.5% and proposed to become effective 
November 1,2026.
Page 2 of 4
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Gty Council Report | Notice of intent
Wastewater - The wastewater enterprise fund is impacted by multiple cost factors over the 
five-year planning period including:
• Operating cost increases for electricity in the APS service area,
• 
Increasing cost for replacing and repairing aging infrastructure,
• 
Expansion of facilities and sewer line extensions within the service area that are not 
covered by development fees,
• 
Maintenance cost increases of system infrastructure due to increased system demand,
• Operating cost increases for personnel services and benefits.
Increases to base fees are proposed to better reflect the recovery of fixed operating costs and 
adjusted to capture the demand availability designed into the system. Increases to volumetric 
rates are proposed to reflect the cost of wastewater loadings by customer class and generate 
sufficient revenues to maintain the wastewater fund as a self-sustaining enterprise.
Overall, the wastewater base fee and volumetric rate changes are forecasted to generate an 
annual revenue increase of approximately $2.1 million or 3.5% and proposed to become 
effective July 1,2026.
Water Miscellaneous Qiarges - To address cost recovery, increases to several water 
miscellaneous charges are proposed to meet the City’s financial policy that charges to recover 
all direct and indirect costs of service. Miscellaneous charges are assessed to specific users of 
the service so that general rate payers do not bear the burden. The proposed water 
miscellaneous charge increases include:
• 
Meter Service Line fees for 5/8", 
1”, and 2" meter sizes
• 
Meter Service Line, Meter and Deliveiy fees for 5/8", %", 1", and 2" meter sizes
Increases to water miscellaneous charges are proposed to maintain cost recovery for specific 
services. The fee changes are forecasted to generate an annual revenue increase of 
approximately $62,030 and proposed to become effective July 1,2026.
There are no proposed changes for wastewater miscellaneous charges.
Changes to the City Code for housekeeping updates, including processes, definitions, and titles, 
are proposed to be effective July 1,2026.
Page 3 of 4
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aty Council Report | Notice of Intent
OPTIONS & STAFF RECOMMENDATION
Recommended Approach
Adopt the notice of intention to increase water and wastewater rates and charges for fiscal year 
2026/27 and establish May 19,2026, as the date for public hearing to proceed with proposed 
rate increases in conformity with State statutes.
RESPONSIBLE DEPARTMENT(S)
Water Resources and City Treasurer's Office
STAFF CONTACTS (S)
David Walby, Interim Water Resources Senior Director, [480) 312-7931, 
DWalby@scottsdaleaz.gov
Kira Peters, Deputy City Manager, (480) 312-7288, KiPeters@scottsdaleaz.gov
APPROVED BY
David Walby, Interim Water Resources Senior Director 
(480) 312-7931, DWalby@scottsdaleaz.gov
2/10/26 06:42 MST
Date
Sonia Andrews, City Treasurer/Chief Financial Officer 
(480) 312-2364, SAndrews@scottsdaleaz.gov
Greg Caton, City Manager
(480) 312-7759, GCaton@scottsdaleaz.gov
Date
2/9/26 17:50 MST
Date
ATTACHMENTS
1. Draft-Proposed Legal Notice of Public Hearing
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Page 4 of 4

LEGAL NOTICE
CITY OF SCOTTSDALE 
NOTICE OF PUBLIC HEARING REGARDING 
CITY’S INTENTION TO INCREASE 
WATER AND WASTEWATER RATES
The City of Scottsdale hereby gives notice pursuant to Arizona Revised Statutes section 9-511.01 of a 
public hearing to be held at the regularly scheduled City Council meeting on May 19,2026 at 5 p.m. in 
the Kiva in City Hall, 3939 N. Drinkwater Boulevard, Scottsdale, Arizona in connection with the City's 
intention to consider an ordinance modifying water and wastewater rates and charges for City water 
and wastewater services for fiscal year 2026/27. At the hearing, the City will accept verbal and written 
comments concerning the proposed water and wastewater rate ordinance. A report, including 
documentation supporting the modification, is available at the City Clerk's office and the City's website 
at: https://www.scottsdaleaz.gov/water/water-service/rates-fees.
Attachment 1

CITY OF
SCOnSDALE
City Manager’s Office
Item 12
Memorandum
To: 
Honorable Mayor Borowsky and Members of Council
From: 
Greg Caton, City Manager
David Walby, Interim Senior Director Water Resources 
Date: 
February 17, 2026
Subject: 
Currently Available Water and Sewer Rate Studies
This memo gives some background information on water and wastewater rate studies. In addition to the 
study in progress with a consultant, staff already have two recent studies to help evaluate needs and 
guide proposed rates. These water and wastewater studies are critical as they help staff evaluate 
operating and capital needs while proposing rates that are affordable for customers.
Available Studies
Currently, staff have access to two recent studies to help inform and guide the rate-setting process. The 
most recent studies, conducted by Raftelis, were completed for water in 2024 (Attachment 1) and 
wastewater in 2020 (Attachment 2).
In addition, Scottsdale Water Resources is currently completing a comprehensive water and wastewater 
rate study with the consultant company Black and Veatch. Once the study is complete staff will present 
the study to City Council.
Critical Direction is Needed for Final Rate Model
While proposed rates have been offered, decisions about the Colorado River and direction from Council 
about ways to address possible water allocation reductions will need to be incorporated into the final 
rates for our residents. Knowing this, the proposed rates for FY26/27 were developed using a current 
cost model that is flexible to ensure rates are valid, cover costs for a robust water utility and maintain 
healthy reserves as required by financial policies.
There is significant uncertainty with Arizona water resources, particularly regarding the Colorado River 
and its expiring usage guidelines. This uncertainty affects planning. Scottsdale Water anticipates 
reductions in Colorado River water allocations through the Central Arizona Project (CAP) and is prepared 
to face these challenges.
Scottsdale Water will offer various options for Council to consider in the management of water resources. 
These options include but are not limited to; being involved in the raising of Bartlett Dam project, 
purchasing water credits. Advanced Water Purification (AWP) initiatives, accessing more groundwater 
(within limits) and enhanced conservation efforts.
7447 E. Indian School Rd., Scottsdale, AZ 85251 • ScottsdaleAZ.gov

As more information becomes available about the Colorado River and allocation reductions, Scottsdale 
Water will provide solutions and associated costs to the City Council. The decisions on solutions will 
inform accurate updates to the water and wastewater rate model.
As the water landscape changes, Scottsdale Water will continue to meet customer needs with the 
highest quality standards while adapting to the changes in Arizona water resources.
C: 
Charter Officers
Jeff Walther, Assistant City Manager
Attachments:
2024 Water Rate Study 
2020 Wastewater Rate Study
Page 2 of 2
^'CITYOF
Ig^SCOnSDALE

City of
SCOTTSDALE
Water Financial Plan, Cost of Service, 
and Rate Study
Final Report / January 26, 2024
^ RAFTELIS
ATTACHMENT 1

^ RAFTELIS
January 26, 2024
Ms. Gina Kirklin 
Scottsdale Water 
7447 East Indian School Road 
Scottsdale, AZ 85251
Subject: Water Financial Plan, Cost of Service, and Rate Study 
Dear Ms. Kirklin,
Raftelis is pleased to provide this Water Financial Plan, Cost of Service, and Rate Study (study) for Scottsdale 
Water.
The primary objectives of the study included the following:
• 
A financial plan for the study period FY24 through FY29.
• 
Cost of service analysis to ensure costs are allocated equitably to customer classes.
• 
Design rates to recover the revenue requirements of each customer class.
• 
Develop an interactive rate model for Scottsdale Water to develop financial plans and rates in the future.
The Report summarizes the key findings and recommendations related to the study. The key findings and results are 
based on data provided as of December 2023. Since that time, the City may have refined and reduced some forecasts 
which impact the results.
It has been a pleasure working with you, and we thank you and the Scottsdale Water staff for the support provided 
throughout this study.
Sincerely,
Todd Cristiano
Senior Manager
383 North Corana | Denver, CO 80212 
Denver, CO 80111
vvww.raftelis.com

Table of Contents
Executive Summary..................................................................................................................... 7
INTRODUCTION................................................................................................................................................... 7
STUDY GOALS AND OBJECTIVES...................................................................................................................... 7
STUDY FINDINGS..................................................................................................................................................8
RELIANCE ON CITY-PROVIDED DATA.................................................................................................................9
Section 2: Assumptions............................................................................................................ 10
CUSTOMER GROWTH........................................................................................................................................10
REVENUE INFLATION FACTORS........................................................................................................................10
EXPENSE INFLATION FACTORS........................................................................................................................10
Section 3: Financial Plan........................................................................................................... 12
INTRODUCTION..................................................................................................................................................12
OPERATING FUND CASH FLOW........................................................................................................................ 12
Beginning Balance...............................................................................................................................................................................12
Revenues.............................................................................................................................................................................................12
Revenue Requirements....................................................................................................................................................................... 13
Target Reserves................................................................................................................................................................................... 13
Debt Service Coverage Requirements.................................................................................................................................................13
Indicated Water Service Revenue Adjustments................................................................................................................................. 13
Section 4: Cost of Service......................................................................................................... 15
INTRODUCTION..................................................................................................................................................15
COST OF SERVICE PROCESS.......................................................................................................15
Project FY24 Revenue at Current Rates............................................................................................................................................ 15
Determine Test Year Revenue Requirement......................................................................................................................................15
Functionalize Revenue Requirement.................................................................................................................................................16
Allocate Functionalized Costs to Cost Components..........................................................................................................................17
Customer Class Units of Service........................................................................................................................................................ 18
Determine Customer Class Units ofService.......................................................................................................................................19
Distribute Costs to Customer Classes.................................................................................................................................................19
COMPARISON OF FY25 COST OF SERVICE TO REVENUE AT CURRENT RATES..........................................20
Section 5: Rate Design.............................................................................................................. 22
INTRODUCTION................................................................................................................................................. 22
CURRENT RATES...............................................................................................................................................22
FY25 COST-OF-SERVICE RATES...................................................................................................................... 23
CITY OF SCOTTSDALE
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY

List of Tables
Table 1: FY25 - FY29 Financial Plan Summary....................................................................................................... 2
Table 2: Comparison of Current and FY25 Cost-of-Service Rates............................................................................ 3
Table 3: Customer Growth....................................................................................................................................... 4
Table 4: Revenue Inflation Factors............................................................................................................................4
Table 5: Expense Inflation Factors............................................................................................................................5
Table 6: Beginning Fund Balances............................................................................................................................6
Table 7: FY25 - FY29 Financial Plan Summary....................................................................................................... 8
Table 8: Projected FY25 Revenue Under Current Rates........................................................................................... 1
Table 9: FY25 Revenue Requirement ($ millions)..................................................................................................... 2
Table 10: Functional Components.............................................................................................................................2
Table 11: Revenue Requirement Among Functional Components ($ millions)..........................................................3
Table 12: FY25 Allocated Revenue Requirement ($ millions).................................................................................... 4
Table 13: FY25 U n its of Service [1 ]...........................................................................................................................5
Table 14: FY25 Unit Cost of Service......................................................................................................................... 5
Table 15: FY25 Customer Class Cost of Service ($ millions).....................................................................................6
Table 16: FY25 Comparison of Cost of Service to Revenue at Current Rates............................................................6
Table 17: FY25 Comparison of Adjusted Cost of Service to Revenue at Current Rates............................................. 6
Table 18: Current Rates........................................................................................................................................... 8
Table 19: FY25 Cost-of-Service Rates...................................................................................................................... 9
Table 20: Five-Year Rate Forecast, Alt 1................................................................................................................ 12
Table 21: Five-Year Rate Forecast - Alt 2............................................................................................................... 13
Table 22: Five-Year Rate Forecast - Alt 3............................................................................................................... 14
List of Figures
Figure 1: Residential Bill Impacts, 11,500 gallons.
.17
List of Appendices
Appendix A: Rate Schedules (FY25 - FY29)
CITY OF SCOTTSDALE
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY

This page was intentionally left blank to facilitate two-sided printing.
CITY OF SCOTTSDALE
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY

Executive Summary
INTRODUCTION
The City of Scottdale’s (City) water utility provides water service to approximately 95,000 customers inside and 
outside the City. Scottsdale Water is financially self-sufficient, with funding for capital and operating requirements 
derived primarily from rates. Scottsdale Water authorized this study to ensure that an adequate level of revenue 
from water rates is maintained to finance Scottsdale Water’s daily operations as well as future capital 
improvements and expansions. The study included the following:
Development of a water financial plan for the five-year study period. Fiscal Year (FY) 25 to FY29 
Analysis of customer class cost of service 
Design of water rates for the test year of FY25
Raftelis used industry standard methodologies supported by the American Water Works Association (AWWA) 
Principles of Water Rates, Fees, and Charges Ml manual.
STUDY GOALS AND OBJECTIVES
Scottdale Water’s overarching goals for this study were to develop long-term financial plans for the water utility 
while ensuring:
• 
Rate revenues are sufficient to meet annual operating expenses, debt service, and capital expenditures 
Capital projects are funded with the optimal mix of rate revenue and debt to minimize impacts to 
customers
Reserve levels are maintained in accordance with annually adopted Comprehensive Financial Policies, 
industry best practices, and bond covenants for debt service coverage requirements
• 
Rates are based on a cost-of-service analysis that equitably recover the cost to provide service to customer 
classes
In addition to the cost-of-service rate design, Scottsdale Water identified specific pricing objectives to develop the 
rate alternatives presented in this study. These objectives were guided by two primary goals: revenue sufficiency 
and defensibility.
• 
Wise use of water. In conjunction with other Scottdale Water conservation initiatives, water rates promote 
the wise use of discretionary water.
• 
Rate stability. Annual rate adjustments produce sufficient revenue to meet annual revenue requirements. 
This includes determining the appropriate balance between rate increases and debt financing with marginal 
rate changes from year to year.
• 
Revenue stability: Produce rates that maintain a steady stream of revenue during periods of water usage 
variability.
• 
Interclass equity. Maintain equity between the customer classes (i.e., prevent one class from subsidizing 
another).
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
1

STUDY FINDINGS
The principal findings of this study are as follows:
Projected water rate revenues should be sufficient to meet annual revenue requirements through the study 
period. Revenue requirements include operation and maintenance expenses, payments on existing and 
forecasted debt service, transfers, and rate-funded capital projects while maintaining reserve levels and debt 
service coverage. It is recommended that the water financial plan be updated annually to reflect current 
revenue and revenue requirements estimates. Table 1 summarizes the results of the financial plan. The 
results are based on data provided as of December 2023. Since that time, the City may have refined and 
reduced some forecasts which impact the results.
Table 1: FY25 - FY29 Financial Plan Summary
Description
Annual Revenue Adjustments 
Cumulative Adjustments 
Ending Op Fund Balance, $ mil 
Target Reserves, $ mil 
Capital Reserves Balance, $ mil 
Debt Service Coverage'
FY25 FY26 FY27 FY28 FY29
11.0% 
11.0% 
11.0% 
11.0% 
11.0%
11.0% 
23.2% 
36.8% 
51.8% 
68.5%
$21.2 
$22.0 
$22.9 
$23.8 
$24.6
20.4 
21.2 
22.0 
22.9 
23.8
112.5 
74.8 
50.1 
15.3 
57.9
2.69 
3.23 
3.88 
4.66 
6.16
The FY25 cost-of-service rates (FY25 rates) retain the existing rate structure: a monthly service charge that 
varies by meter size and a volume rate that increases by volume block. Table 2 shows the monthly base fee 
and volume rates for current FY24 and FY25 rates. Current rates recover approximately 23.1% of total rate 
revenue from the base fees, while FY25 cost of service rates recover 27.9% of total revenue from the base 
fees.
‘ Comprehensive Adopted Financial Policies, Policy 9 - Enterprise Funds: 9.07 Debt Coverage Ratio Target. Bond 
covenants may exist that require maintaining a minimum debt coverage ratio. In order to maintain the city’s high bond 
rating, the city will recommend rates based on a target debt coverage ratio of at least 2.0 times for Water and Wastewater 
and 1.5 times for Aviation and Solid Waste. For financial planning purposes, the debt coverage ratios will be calculated 
without consideration of development fee revenues.
2 CITY OF SCOTTSDALE

Table 2: Comparison of Current and FY25 Cost-of-Service Rates
Description
Base Fees, $ per bill 
5/8” 
3/4” 
1” 
1.5" 
2"
3"
4"
6"
8"
Alternate 1 
.. 
-9 Alternative 3
Current Rates (Across the 
, 
(One Volumetric
Board Increases) (Cost of Service)
Ml
tl.
Volume Rate, $ per kgal 
Residential
Tier 1 
Tier 2 
Tier 3
^ v ■ 
Tier 4
Tiers
JM^rnMy
Tierl 
Tier 2 
Tier 3 
Tier 4
Commercial
Tier 1 
Tier 2 
Tier 3 
Tier 4
Note: kgal = 1,000gallons
$15.05
19.40 
27.55 
45.15 
60.20
120.40 
188.20
-376.25 
526.75
-IP
"T •
$1.65 
3.10 
4.25 
5.70 
7.05
$1.65
3.10
4.25
5.70
$1.65
3.10
4.25
5.70
$16.71
21.53
30.58
50.12
66.82
133.64 
208.90
417.64 
584.69
$1.83
3.44
4.72
6.33
7.83
$1.83
3.44
4.72
6.33
$1.83
3.44
4.72
6.33
$16.71
23.05
35.74 
67.46 
105.53 
226.09
403.74 
828.85 
1,526.79
$1.83
3.43
4.70
6.31 
7.80
$1.52
2.86
3.92
5.26
$1.67
3.14
4.31 
5.78
$16.71
23.05
35.74 
67.46 
105.53 
226.09
403.74 
828.85 
1,526.79
$1.70
3.23
4.42
5.95
7.30
$1.70
3.23
4.42
5.95
$1.70
3.23
4.42
5.95
''T-'
■i
RELIANCE ON CITY-PROVIDED DATA
During this project, Scottsdale Water provided Raftelis with a variety of technical information, including cost and 
revenue data. Raftelis did not independently assess or test the accuracy of such data - historical or projected. 
Raftelis has relied on this data in the formulation of our findings and subsequent recommendations, as well as in 
the preparation of this report.
There are often differences between actual and projected data. Some of the assumptions used in this report will not 
be realized, and unanticipated events and circumstances may occur. Therefore, there are likely to be differences 
between the data or results projected in this report and the actual results achieved, and those differences may be 
material. As a result, Raftelis takes no responsibility for the accuracy of data or projections provided by or prepared 
on behalf of Scottsdale Water, nor do we have any responsibility for updating this report for events occurring after 
the date of this report.
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
3

Section 2: Assumptions
The assumptions outlined in this section are utilized to project the number of customer accounts, revenues, and 
expenses for future years. Changes in these assumptions could materially impact the results of the findings and 
conclusions. Scottsdale Water staff provided data on customer accounts and usage for FY21 through FY23, actual 
revenues and expenses for FY22, and budget revenues and expenses for FY23 and FY24. The remaining years of 
the study were projected based on assumptions shown in this section.
CUSTOMER GROWTH
Table 3 shows customer account growth projections for all customer classes based on discussions with Scottsdale 
Water. The water conservation savings factor is used to reflect customer reductions in consumption during the 
study period. Scottsdale Water provided additional consumption to be included in the projections for multifamily 
on Line 3 and commercial customers on Line 5.
Table 3; Customer Growth
Line No. 
Description
1 
Account growth
2 
Water conservation savings
3 
Multifamily Ocgal)
4 
Total multifamily (kgal)
5 
Commercial (kgal)
6 
Total Commercial(kgal) 
Note: kgal = 1,000gallons
FY25 FY26 FY27 FY28 FY29
1.0% 
1.0% 
1.0% 
1.0% 
1.0%
99.0% 
99.0% 
99.0% 
99.0% 
99.0%
8,675 
21,290 
1,314
4,378,978 
4,408,505 
4,409,378 4,408,937 4,408,496
50,126 
142,885 
92,773 
22,266
4,822,540 
5,015,063 
5,107,335 5,129,090 5,128,577
REVENUE INFLATION FACTORS
Table 4 shows the revenue inflation factors used to project future miscellaneous revenues and calculate interest 
earnings. Projections conservatively assume a minor increase in miscellaneous, non-rate revenues throughout the 
study period. The reserve interest rate is used to calculate the interest earnings income based on projected fund 
balances and is based on conservative estimates.
Table 4: Revenue Inflation Factors
Description
FY25 FY26 FY27 FY28 FY29
Miscellaneous or other revenues 
2.0% 
2.0% 
2.0% 
2.0% 
2.0%
Interest earnings 
0.5% 
0.5% 
0.5% 
0.5% 
0.5%
EXPENSE INFLATION FACTORS
Table 5 shows the expense inflation factors used to project future operating and capital project expenses for the 
study period. These factors were determined with input from City staff.
4
CITY OF SCOTTSDALE

Table 5: Expense Inflation Factors
Description
FY25 I FY26 I FY27 I FY28 I FY29
General
Salary
Benefits
Utilities
Chemicals
Transfers
Capital
3.0%
5.0%
5.0%
7.5%
2.0%
3.0%
3.0%
3.0%
5.0%
5.0%
7.5%
2.0%
3.0%
3.0%
3.0%
5.0%
5.0%
7.5%
2.0%
3.0%
3.0%
3.0% 
3.0%
5.0% 
5.0%
5.0% 
5.0%
7.5% 
7.5%
2.0% 2.0% 
3.0% 
3.0%
3.0% 
3.0%
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
5

Section 3: Financial Plan
INTRODUCTION
Scottsdale Water is a self-supporting enterprise fund for the City. Scottsdale Water maintains three funds: the water 
development fee fund, the water resource fund, and the operating fund. The operating fund tracks activities 
associated with the daily operations and maintenance of the water utility. Water rates are based on the operating 
fund. The other two funds are associated with funding from new development and the grovrth-related capital 
projects. This study focuses on the operating fund because user rates and fees fund all expenditures.
The other two funds track sources and uses of funds associated with growth-related projects. Scottsdale Water has 
various funds for the water utility to track activities associated with impact fee revenues and growth-related projects 
separate from activities associated with the daily utility operations and maintenance. Scottsdale Water maintains 
distinct funds to monitor the revenue generated from Water Development and Water Resource fees. The difference 
between revenues and capital expenditures in these funds is subsidized using the operating fund.
The capital cash flow includes capital-related activities.
OPERATING FUND CASH FLOW
The operating fund cash flow tracks activities associated with funding annual operating revenues.
Beginning Balance
The cash balance includes required reserves and unrestricted carryover monies from previous years, which are 
transferred into the capital fund. The fund balance is projected to be $19.6 million at the beginning of FY24.
Table 6: Beginning Fund Balances
Description 
FY24
Operating reserve, 25% of O&M 
$19,579,406
Repair and Replacement, 2% of original cost assets 
$17,726,530
Capital fund beginning balance 
$116,695,229
Revenues
Operating revenue is generated from three main sources: water rate revenue, other revenue, and investment 
income. The forecasted water service revenue under current rates is based on the expected number of water 
accounts and billed volume for each customer class. On average, the revenue from current rates amounts to $128.9 
million annually throughout the study period, making up approximately 94% of the total operating income.
In addition to water rate revenue, the City receives income from various other sources, including late charges, 
account initiation fees, non-potable water service charges, resale of water from the advanced water treatment 
facility, and miscellaneous sources. This additional revenue totals around $8.6 million annually, representing 6% of 
the total revenue. Notably, approximately $2.7 million of this $8.6 million comes from the resale of water from the 
advanced water treatment facility.
Moreover, the City foresees a 1% armual growth in accounts over the study period. Anticipating the water 
consumption associated with significant one-time developments, the planning department has provided a summary 
of forthcoming significant developments to estimate additional one-time commercial and multifamily accounts.
6
CITY OF SCOTTSDALE

Revenue Requirements
The revenue requirements encompass various components, including operation and maintenance expenses 
(O&M), transfers like Advanced Water Treatment, Franchise Fees, and city transfers, debt service payments, as 
well as cash-funded capital expenditures. O&M, which covers personnel, materials, supplies, and indirect costs 
linked to collection and treatment expenses, amounts to an average of $86.5 million annually during the study 
period. On the other hand, the bond debt service averages $22.8 million annually throughout the study period, 
including payments for a proposed $100 million debt issuance in 2025.
The City has a comprehensive capital improvement plan that outline whether capital is funded by water rates, 
contractual funds, the development fee fund, or the water resource fund. Transfers from the operating fund are 
made to the water development fee fund and the water resource fee fund in cases where the annual capital 
expenditures exceed the fund's revenues. The average annual cash required to finance the rate-funded capital 
improvement program is $84.4 million for costs associated with the water fund. Additional transfers of a yearly 
average of $9.1 million are required to the water development and water resource fee funds. Franchise fees paid to 
the City, transfers to the Advanced Water Treatment Plant, and citywide cost allocation transfers collectively 
average $14.9 million annually.
Target Reserves
The City has established two distinct reserves to safeguard the financial stability of the water utility and prepare for 
unforeseen expenses or disruptions to revenue streams. This proactive approach to maintaining ample reserves 
helps prevent the utility from hastily adjusting rates m reaction to unexpected events. The City ensures an 
operating reserve amounting to 25% of annual operation and maintenance (O&M) expenses, occasionally denoted 
as equivalent to 90 days of O&M expenses. Additionally, Raftelis modeled a capital reserve of $17.7 million, 
representing 2% of the book value of the asset list.^
Debt Service Coverage Requirements
Most lenders require that the borrower maintain a minimum debt service coverage (DSC) ratio, where the DSC is 
defined as net revenues divided by the annual debt service. Net revenues are defined as operating revenues 
excluding development impact fee revenues less O&M expenses. O&M expenses exclude depreciation expenses. 
The City’s revenue bonds require the water utility to maintain a minimum DSC ratio of 1.25, and the City has a 
poUcy to maintain a coverage ratio of 2.00.
Indicated Water Service Revenue Adjustments
Water rate revenue should be sufficient to meet revenue requirements, finance the capital improvement program, 
maintain adequate reserves, and debt service coverage. The City has identified specific policy reserve requirements 
for the water utility. These include an operating reserve equal to 90 days of operating expenses and a capital reserve 
of 2% of original cost fixed assets. These amounts provide a reasonable operating allowance for sound water utility 
operations and meet revenue cycle interruptions or unanticipated capital expenditures. Annual adjustments of 
11.0% are necessary each year from FY25 to FY29. Revenue increases are effective on November 1 each year.
^ Comprehensive Adopted Financial Policies, Policy 9 - Enterprise Funds; 9.05 Water and Wastewater Asset Replacement 
Reserve. The city will maintain a “Water and Wastewater Asset Replacement Reserve” in its Enterprise Fund as stated in 
Policy 2 to provide funding for the repair and maintenance of critical assets.
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
7

Table 7: FY25 - FY29 Financial Plan Summary
Description
Annual Revenue Adjustments 
Cumulative Adjustments 
Ending Op Fund Balance, $ mil 
Target O&M Reserves, $ mil 
Capital Reserves Balance, $ mil 
Debt Service Coverage^
FY25 I FY26 I FY27 i FY28 FY29
11.0% 
11.0% 
11.0% 
11.0% 
11.0%
11.0% 
23.2% 36.8% 
51.8% 
68.5%
$22.9 
22.0 
50.1 
3.88
$21.2
20.4
112.5
2.69
$22.0
21.2
74.8
3.23
$23.8
22.9
15.3
4.66
$24.6
23.8
57.9 
6.16
^ Comprehensive Adopted Financial Policies, Policy 9 - Enterprise Funds: 9.07 Debt Coverage Ratio Target. Bond 
covenants may exist that require maintaming a minimum debt coverage ratio. In order to maintain the city’s high bond 
rating, the city will recommend rates based on a target debt coverage ratio of at least 2.0 times for Water and Wastewater 
and 1.5 times for Aviation and Solid Waste. For financial planning purposes, the debt coverage ratios will be calculated 
without consideration of development fee revenues.
8 CITY OF SCOTTSDALE

Section 4: Cost of Service
INTRODUCTION
Equitable water rates fairly recover the cost of service from each customer class. Determination of cost of service 
considers water use, the rate of use, and number of customers. The cost-of-service analysis is conducted for a test 
year considered representative of the period in which resultant rates are expected to be in effect. The year FY25 
was selected as the test year for this study.
COST OF SERVICE PROCESS
The cost-of-service process is a method to assign costs based on each customer class’s proportionate share of water 
flow characteristics and the number of customers. The cost-of-service analysis consists of the following seven steps;
1. Project FY24 rate revenue at current rates
2. Determine test year revenue requirement
3. Functionahze revenue requirement
4. Allocate functionahzed costs to cost components
5. Determine customer class units of service
6. Distribute costs to customer classes
7. Design rates to recover class cost of service and total revenue requirement
Project FY24 Revenue at Current Rates
Raftelis projected FY25 revenue at current rates using detailed billing records provided by the City. Revenue 
projections are based on the current number of customers by meter size and class, projected use per account, and 
growth in the number of accounts by class forecasted for that year. The FY25 revenue at current rates is shown 
below. The projection of bills and volume shown in this table also serves as the basis for the FY25 units of service 
and calculation of the customer class revenue requirement. Table 8 shows the FY25 projected bills, bUled volume, 
and rate revenue.
Table 8: Projected FY25 Revenue Under Current Rates
Customer Class
Residential 
Multifamily 
Commercial 
Fire Service
Total
BiUs
1,006,790
55,232
74,059
20,724
1,156,806
Volume (kgal)
13,377,142
4,343,864
4,824,440
0
22,545,446
Revenue 
($ million)
$73.6
25.5
29.0
.04
$128.1
Determine Test Year Revenue Requirement
The revenue requirement shown in Table 9 below shows the level of revenue required from rates with the FY25 
revenue adjustment.
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
1

Table 9: FY25 Revenue Requirement ($ millions)
Item
Operation and Maintenance Expenses 
Debt Service 
Capital Improvements 
Total Expenditures
Non-Rate Revenue Offsets 
Other Operating Income 
Bond Issuance 
Change in Fund Balance 
Total Non-Rate Revenue Offsets
Net FY25 Revenue Requirement
Operating Capital
$81.5
$81.5
$8.6
$8.6
$77.5
24.0
106.3
$130.3
100.0
($34.8)
$45.5
$64.6
Total
$81.5
24.0
106.3
$211.8
m:
8.6
100.0
(34.8)
$55.2
$142.2
- n
Functionalize Revenue Requirement
Water systems comprise several facilities (unit processes or functions) designed and operated to collect, treat, and 
distribute water to customers. The separation of costs into functional components provides a means for distributing 
costs to customer classes based on their responsibility in the system. The O&M revenue requirement can be 
functionalized based on the line item descriptions in the budget. Water system assets served as a reasonable basis 
for functionalizing annual capital costs. Annual capital projects vary by cost and type on an annual basis. 
Functionalizing annual capital based on the actual capital program can shift cost allocations, resulting in swings in 
the cost of service rates. Because the percent of costs by function in an asset listing does not vary as much over 
time, proportionately allocating the capital revenue requirement based on assets provides a smooth and predictable 
method for allocating costs. Table 10 shows the functional cost components.
Table 10; Functional Components
Unit Process
• 
Source of Supply
• 
Pumping
• 
Wells/Treatment
• 
Treated Storage
• 
Transmission
• 
Distribution
Unit Process
• 
Meters and Services
• 
Customer Billing
• 
Fire Protection
• 
All Other Infrastructure
• 
Another 
''4
M
Table 11 shows the FY 2025 O&M revenue requirement allocated to functional components. The allocation of 
functional costs was determined by City staff. The basic premise supporting the functionalization process is to 
assign an expense to a facility or facilities that have the most impact on those costs. Raftelis provided guidance on 
this approach but ultimately relied on the City’s best judgment in assigning the costs. Once these expenses are 
functionalized, they can be allocated based on their function or how they are designed to operate in the system. 
The O&M revenue requirement totals $81.5 million.
2
CITY OF SCOTTSDALE

Table 11: Revenue Requirement Among Functional Components ($ millions)
Functional Component
Source of Supply
Pumping
Wells/Treatment
Treated Storage
Transmission
Distribution
Meters and Services
Customer Billing
Fire Protection
All Other Infrastructure
Mother
Total
Cost
$5.0
8.2
35.7
1.3
1.5 
5.7
6.6 
1.3 
0.1 
9.1 
7.0
$81.5
Allocate Functionalized Costs to Cost Components
Once costs have been separated into cost categories by function, they can be further allocated to cost components. 
Mocating costs to cost components provides a means of assigning the functionalized expenses based on the design 
and functional parameters that characterize each water system expense. Cost components correspond to the unique 
demand characteristics of the customer classes to recover costs from the customers who cause the utility to incur 
them.
The allocation methodology used in this study is the base extra-capacity method, which is the most common 
edlocation methodology employed for water utilities throughout Arizona and the West. This methodology 
incorporates the following standard cost components: supply, base, maximum day demand, maximum hour 
demand, fire protection, and customer services. For example, water treatment plants are designed and operated to 
meet maximum day demands. The functional costs associated with the treatment plant are allocated to the base 
and maximum day components. This split of costs is based on the percent base demands of the maximum day 
demands and the remainder to the maximum day demand cost component.
Whereas the functional O&M costs can be directly allocated to cost components, allocating capital costs includes 
one additional step. The allocation of system assets to functional cost components provides the basis for allocating 
annual capital costs. Cost of service is generally allocated to cost components that reflect the design and functional 
parameters of the associated facility. A detailed listing aids in allocating the annual capital revenue requirement to 
specific cost components or a combination of cost components. This allocation is based on that facility's particular 
function or design parameter. Although the City’s detailed asset listing does not specifically identify the functional 
area of each asset, Raftelis reviewed each asset and assigned it a particular function to the extent possible. This 
functionalization was used to develop the cost component allocation percentages. General plant assets not 
specifically assigned are allocated in proportion to all other plant assets.
Meters and services are allocated using equivalent meter ratios. Equivalent meter ratios allow for allocating the 
fixed cost of providing this capacity to customers based on their potential demand. Equivalent meter units in this 
study are based on American Water Works Association (AWWA) -rated hydraulic capacities and are calculated to 
represent the potential demand on the water system relative to a base meter size. AWWA capacity ratios are 
calculated by dividing the capacity of each meter size by the capacity of a ^A-inch meter, the base meter size in this
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
3

study. For example, the capacity of a 1-inch meter is divided by the capacity of a Vt" (50/30) to derive the 1-inch 
meter capacity ratio of 1.67.
Customer and private fire costs are allocated based on the quantity, such as total bills and number of meters. 
Indirect costs are reallocated in proportion to all other costs. Table 12 summarizes the allocated revenue 
requirement. The allocated revenue requirement is distributed to customer classes based on their proportionate 
share of total units of service.
Table 12: FY25 Allocated Revenue Requirement ($ millions)
Description Supply Base
O&M Expense 
Capital Costs 
Adjustments 
Net Rev. Req.
$6.93
8.08
0.94
$15.95
$37.90
36.72
4.65
$79.24
Max Max 
Day Hour
Meters Customer
$15.74
13.95
0.19
$29.88
$2.76
2.40
(1.76)
$3.40
$6.28
1.40
4.68
$12.36
$1.20
0.00
0.07
$1.28
Private
Fire
$0.10
0.38
(0.42)
$0.06
Indirect
Total
$6.65
$77.54
1.69
64.62
(8.34
0.00
$0.00
$142.16
Customer Class Units of Service
Customers of a water utility are often identified according to customer class. Each customer class has unique water 
demands and usage characteristics. Because the cost of service is based on the concept of proportionality, customer 
service characteristics for each customer class must be analyzed to distribute the functionalized and allocated 
system revenue requirements based on their respective demand profiles.
The peaking factors for each customer class were calculated using the City’s detailed billing data for FY 2021 and 
FY 2022. The multi-family, commercial/industrial/outside city, irrigation, and temporary construction maximum 
day and maximum hour peaking factors are each calculated considering their maximum month and the average 
month demands. The City does not have daily demands from customers, so peak demands must be estimated using 
class data and system peaking data. The following equation is used to estimate the maximum day and maximum 
hour peaking factors.
Class Peaking Factor = (Class A verage Day of Max Month -r Class A verage Day) x 
(System Max Day -f- System Average Day of Max Month)
The class maximum day peaking factor is multiplied by the ratio of the system max hour to system max day 
demands.
Fire protection units are based on one simultaneous fire event lasting 4 hours at 4,000 gallons per minute. These 
units of service are allocated to private fire and public fire based on the number of equivalent hydrants. Table 13 
summarizes the customer class units of service.
4
CITY OF SCOTTSDALE

Table 13: FY25 Units of Service [1]
Customer Class
Annual
Demand
(Kgal)
Residential 
MuItifamUy 
Commercial 
Total
[1] Indudes inside City and outside City.
13,377,142
4,343,864
4,824,440
22,545,446
Max Max Day Max Max Day 
Day 
Extra 
Hour 
Horn
Demand 
Capacity 
Demand 
Capacity
Factor 
gpd 
Factor 
Gpd
BiUs
1.35 
12,804 
1.17 
6,092 
1,006,790
1.31 
3,731 
1.16 
1,926 
55,232
1.50 
6,551 
1.18 
2,435 
74,059
23,086 
10,453 
1,136,081
Vi." Meter 
Equivalent
165,844
27,516
36,981
230,340
Determine Customer Class Units of Service
The unit cost of service is the share of the allocated revenue requirement by cost component divided by the units of 
service for each. The unit costs for each cost component are used to determine the customer class cost of service. 
Table 14 shows the development of the unit cost of service by cost component.
Table 14: FY25 Unit Cost of Service
Customer
Class
Supply
Annual
Demand
Revenue Requirement, $ Millions
O&M Expense 
Capital Costs 
Adjustments [1] 
Revenue 
Requirement
$6.93
8.08
0.94
$15,95
$37.9
36.72
4.65
$79.24
Units of Service 22,545,446 
22,545,446
Max Dav
$15.74
13.95
0.19
$29.88
23,086
Max
Hour
$2.76
2.40
(1.76)
$3.40
Meters Customer
$6.28
1.40
4.68
$12.36
$1.20
0.00
0.07
$1.28
10,453 
230,340 
1,136,081
Fire
$0.10
0.38
(0.42)
$0.06
1,727
Indirect
Total
$6.65 
$77.54
1.69 
64.63
(8.34) 
0
0 
$142.16
•> :
Unit Cost of Service, $ per unit [2]
$ per Kgal $ per Real
O&M Expense 
Capital Costs 
Adjustments 
Total Unit 
Costs
$0.31
0.36
.04
$1.68
1.63
.21
$0.71
$ per gpd $ per end
$681.61
604.40
8.23
$264.27
229.22
(168.65)
$3.51 
$1,294.24 
$324.85
$ per eq.
Meter
$2.27
0.51
1.69
$4.47
$ per bill
$1.06
0.00
.07
$1.12
$ per Eq
Hydrant
$4.85
18.26
(20.33)
$2.78
A
[1] Costs allocated to the Indirect cost component are re-allocated in proportion to all other cost components. 
[2] An equivalent meter is equal to the number of meters in the system stated on a 5/8” equivalency basis
Distribute Costs to Customer Classes
The cost of service process is based on the concept of proportionality. Allocated costs must be distributed by 
the units of service for each customer class. This distribution is the product of the customer class units of 
service in Table 13 by the unit costs in Table 14. The customer class cost of service is shown in Table 15.
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
5

Table 15: FY25 Customer Class Cost of Service ($ millions)
Customer 
Supply 
Max
Class 
(Kgal) 
Day
Residential 
Multifamily 
Commercial 
Fire Service
Total
$9.5
3.1
3.4
0.0
$16.0
$47.0
15.3
17.0
0.0.
$79.2
$16.6
4.8
8.5
0.0
$29.9
Max
Hour
$2.0
0.6
0.8
0.0
$3.4
Total
Meters Customer Fire
$8.9 
$1.1 
$0.0 
$85.1
1.5 
0.1 
0 
25.3
2.0 
0.1 
0 
31.7
0.0 
0.0 
0.1 
0.1
$12.4 
$1.3 
$0.1 
$142.2
COMPARISON OF FY25 COST OF SERVICE TO REVENUE AT CURRENT RATES
Table 16 shows the comparison of FY25 cost of service to revenue at current rates for each customer class. The 
change in each customer class’ cost is a product of two components: 1) the functionahzation and allocation of the 
revenue requirement and 2) the distribution of these costs to customer classes based on their units of service.
Table 16: FY25 Comparison of Cost of Service to Revenue at Current Rates
FY24 Revenue
Class
Residential 
Multifamily 
Commercial 
Fire Service
Total
FY25Cost Undercurrent Change-$ Chaj^e- 
of Service 
„ , 
%
Rates
$85,063,607 
$73,642,623 
$11,420,985 
15.5%
25,333,183 
25,478,575 
(145,392) 
-0.6%
31,706,944 
28,952,163 
2,754,781 
9.5%
57,696 
41,449 
16,247 
39.2%
$142,161,430 
$128,114,809 
$14,046,621 
11.0%
In order to avoid rate decreases, followed by increases. City staff provided direction that the cost of service for 
each class should be adjusted to keep cost recovery at least equal to existing rates. Table 17 shows the adjusted cost 
of service.
Table 17: FY25 Comparison of Adjusted Cost of Service to Revenue at Current Rates
Class
Residential 
Multifamily 
Commercial 
Fire Service
Total
FY25 Cost 
of Service
$84,957,694
25,478,575
31,667,465
57,696
, 
$142,161,430
FY24 Revenue
Under Current Change - $ 
Rates
$73,642,623
25,478,575
28,952,163
41,449
$128,114,809
$11,315,071
0
2,715,302
16,247
$14,046,621
Change -
%
15.4%
0.0%
9.4%
39.2%
11.0%
6
CITY OF SCOTTSDALE

WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
7

Section 5: Rate Design
INTRODUCTION
In the development of water rate schedules, a basic consideration is to establish equitable charges to customers 
commensurate with the cost of providing service. The only method of assessing equitable water rates would be 
determining each customer’s bill based on their unique service requirements. Since this is impractical, schedules of 
rates are usually designed to meet average conditions for groups (classes) of customers having similar service 
requirements. Rates should be reasonably straightforward in apphcation and subject to as few misinterpretations as 
possible.
CURRENT RATES
The City’s existing rate structure consists of a monthly service charge and volumetric rates that vary by class.
Table 18 lists the current rates and structures. Current base fees recover approximately 22.9% of total rate
revenue.
Table 18: Current Rates
Description
Base Fees, $ per bill
■M.
5/8”
3/4”
1”
1.5"
2"
3"
4"
6"
8"
m
IRW.
Volume Rate, $ per kgal
Residential
Tier 1 
Tier 2 
Tier 3
; 
Tier 4
Tier 5
Multifamily/Commercial
Tierl
: 
. 
Tier 2
Tier 3 
Tier 4
n
Current Rates
$15.05
19.40 
27.55 
45.15 
60.20
120.40 
188.20 
376.25 
526.75
$1.65
3.10
4.25
5.70
7.05
$1.65
3.10
4.25
5.70
■M
8
CITY OF SCOTTSDALE

FY25 COST-OF-SERVICE RATES
The cost of service rates retains the existing structure. The base fee recovers approximately 22.9% of total 
rate revenue. Table 19 shows the monthly base fees by meter size, the O&M, and capital volume rates.
Table 19: FY25 Cost-of-Service Rates
Description
Base Fees, $ per trill
5/8”
L... 
3/4”
1” 
1.5" 
2"
3"
4"
6"
8"
Alternate 1 
Current Rates (Across the
Board Increases)
Volume Rate, $ per kgal
Residential
Tier 1
g- 
Tier 2
Tiers 
Tier 4 
Tiers
I Multifamily
Tier 1
I 
Tier 2
Tiers
t- 
Tier 4
Commercial
Tierl 
Tier 2 
Tiers 
Tier 4
Note: kgal = 1,000gallons
$15.05
19.40 
27.55 
45.15 
60.20
120.40 
188.20 
376.25 
526.75
$1.65
3.10
4.25
5.70
7.05
■i.
$1.65
3.10
4.25
5.70
I.
$1.65 
3.10
m 4.25 
5.70
$16.71
21.53
30.58
50.12
66.82
133.64 
208.90
417.64 
584.69
$1.83
3.44
4.72
6.33
7.83
$1.83
3.44
4.72
6.33
$1.83
3.44
4.72
6.33
Alternative 2 
(Cost of Service)
$16.71
23.05
35.74 
67.46 
105.53 
226.09
403.74 
828.85 
1,526.79
$1.83
3.43
4.70
6.31 
7.80
$1.52
2.86
3.92
5.26
$1.67
3.14
4.31 
: 
5.78
Alternative 3 
(One Volumetric 
Rate)
$16.71
23.05
35.74 
67.46 
105.53 
226.09
403.74 
828.85 
1,526.79
$1.70
3.23
4.42
5.95
7.30
$1.70
3.23
4.42
5.95
m
I
$1.70
3.23
4.42
5.95
Figure 1 outlines the customer bill impacts for existing rates compared to the rate design alternatives for a single­
family residential customer with a 5/8-inch meter using 11,500 gallons per month. Because of the impacts 
between the current structure and the alternatives, Scottsdale Water may consider implementation of structural 
changes over multiple periods of time.
The increased revenue requirement placed in the base fee is driven by the inclusion of the cost of water-capital 
component. The inclusion of the capital component, a fixed cost based on contractual allocation, achieves a greater 
level of revenue stability. The rate of base fee increase, from the 5/8-inch meter size to larger meter sizes, is driven by 
a shift to align with AWWA meter capacities.
While the study results reflect structural changes in a single year, Scottsdale Water may elect to change its structure 
over multiple years to ease the amount of change occurring in any specific meter size or customer class.
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
9

Figure 1: Residential Bill Impacts, 11,500 gallons
$49.00
$48.00
$47.00
$46.00
$45.00
$44.00
$43.00
$42.00
$41.00
$40.00
$43.45
$48.23
$48.13
I
Existing
Alt. 1
Alt. 2
Alt. 3
10 CITY OF SCOTTSDALE

APPENDIX A:
Rate Schedules 
(FY25 - FY29)
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
11

Table 20: Five-Year Rate Forecast, Alt 1 
Alt 1 (Across the Board Increases)
Customer Class
SFR
Tier1 
Tier 2 
Tiers 
Tier 4 
Tiers
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$1.83 
$2.03 
$2.26 
$2.50 
$2.78
$3.44 
$3.82 
$4.24 
$4.71 
$5.22
$4.72 
$5.24 
$5.81 
$6.45 
$7.16
$6.33 
$7.02 
$7.80 
$8.65 
$9.60
$7.83 
$8.69 
$9.64 
$10.70 
$11.88
Multifamily Residential
Tierl 
$1.83 
$2.03
Tier 2 
$3.44 
$3.82
Tier 3 
$4.72 
$5.24
Tier 4 
$6.33 
$7.02
$2.26 
$2.50 
$2.78
$4.24 
$4.71 
$5.22
$5.81 
$6.45 
$7.16
$7.80 
$8.65 
$9.60
Commercial 
Tier 1 
Tier 2 
Tiers 
Tier 4
$1.83 
$2.03 
$2.26 
$2.50 
$2.78
$3.44 
$3.82 
$4.24 
$4.71 
$5.22
$4.72 
$5.24 
$5.81 
$6.45 
$7.16
$6.33 
$7.02 
$7.80 
$8.65 
$9.60
Potable Monthly Meter Charges
Meter Size
5/8"
3/4"
1"
1-1/2"
2"
3"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$16.71
$21.53
$30.58
$50.12
$66.82
$133.64
$208.90
$417.64
$584.69
$18.54
$23.90
$33.94
$55.63
$74.17
$148.34
$231.88
$463.58
$649.01
$20.58
$26.53
$37.68
$61.75
$82.33
$164.66
$257.39
$514.57
$720.40
$22.85
$29.45
$41.82
$68.54
$91.39
$182.78
$285.70
$571.17
$799.64
$25.36
$32.69
$46.42
$76.08
$101.44
$202.88
$317.13
$634.00
$887.60
Private Fire Monthly Meter Charges
Line Size
5/8"
3/4"
1"
1-1/2"
2"
3"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$2.22
$2.22
$2.22
$2.22
$2.22
$2.22
$2.22
$2.22
$2.22
$2.46
$2.46
$2.46
$2.46
$2.46
$2.46
$2.46
$2.46
$2.46
$2.74
$2.74
$2.74
$2.74
$2.74
$2.74
$2.74
$2.74
$2.74
$3.04
$3.04
$3.04
$3.04
$3.04
$3.04
$3.04
$3.04
$3.04
$3.37
$3.37
$3.37
$3.37
$3.37
$3.37
$3.37
$3.37
$3.37
12
CITY OF SCOTTSDALE

Table 21: Five-Year Rate Forecast - Alt 2 
Alt 2 (Cost of Service)
Customer Class
SFR
Tier 1 
Tier 2 
Tiers 
Tier 4 
Tiers
Multifamily Residential
Tier 1 
Tier 2 
Tiers 
Tier 4
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$1.8S
$S.4S
$4.70
$6.S1
$7.80
$1.52
$2.86
$S.92
$5.26
$2.0S
$S.81
$5.22
$7.00
$8.66
$1.69
$S.18
$4.S6
$5.84
$2.25
$4.2S
$5.79
$7.77
$9.61
$1.88
$S.5S
$4.8S
$6.48
$2.50
$4.69
$6.4S
$8.6S
$10.67
$2.08
$S.91
$5.S7
$7.20
$2.77
$5.21
$7.14
$9.57
$11.84
$2.S1
$4.S4
$5.96
$7.99
Commercial 
Tier 1 
Tier 2 
Tiers 
Tier 4
$1.67
$S.14
$4.S1
$5.78
$1.86
$S.49
$4.79
$6.42
$2.06
$S.87
$5.S1
$7.12
$2.29
$4.S0
$5.90
$7.91
$2.54
$4.77
$6.54
$8.78
Potable Monthly Meter Charges
Meter Size
5/8"
S/4"
1"
1-1/2"
2"
S"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2028
$16.71 
$18.54 
$20.58 
$22.85 
$25.S6
$2S.05 
$25.59 
$28.40 
$S1.52 
$S4.99
$S5.74 
$S9.67 
$44.04 
$48.88 
$54.26
$67.46 
$74.89 
$8S.12 
$92.27 
$102.42
$105.5S 
$117.14 
$1S0.0S 
$144.SS 
$160.21
$226.09 
$250.96 
$278.56 
$S09.20 
$S4S.22
$40S.74 
$448.16 
$497.45 
$552.17 
$612.91
$828.85 
$920.02 $1,021.2S $1.1SS.56 $1,258.25
$1,526.79 
$1,694.74 $1,881.16 $2,088.08 $2,S17.77
Private Fire Monthly Meter Charges
Line Size
5/8"
S/4"
1"
1-1/2"
2"
S"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2028
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$S.09
$S.09
$S.09
$S.09
$S.09
$S.09
$S.09
$S.09
$S.09
$S.4S
$S.4S
$S.4S
$S.4S
$S.4S
$S.4S
$S.4S
$S.4S
$S.4S
$S.81
$S.81
$S.81
$S.81
$S.81
$S.81
$S.81
$S.81
$S.81
$4.2S
$4.2S
$4.2S
$4.2S
$4.2S
$4.2S
$4.2S
$4.2S
$4.2S
WATER FINANCIAL PLAN, COST OF SERVICE, AND RATE STUDY
13

Table 22: Five-Year Rate Forecast - Alt 3 
Alt 3 (One Volumeteric Rate)
Customer Class
SFR 
Tier 1 
Tier 2 
Tiers 
Tier 4 
Tiers
FY 2025
FY 2026 FY 2027 FY 2028 FY 2029
$1.70
$3.23
$4.42
$5.95
$7.30
$1.89
$3.58
$4.90
$6.60
$8.11
$2.09
$3.98
$5.44
$7.33
$9.00
$2.32
$4.41
$6.04
$8.13
$9.99
$2.58
$4.90
$6.71
$9.03
$11.09
Multifamily Residential 
Tier 1 
Tier 2 
Tier 3 
Tier 4
Commercial 
Tier 1 
Tier 2 
Tier 3 
Tier 4
$1.70
$3.23
$4.42
$5.95
$1.70
$3.23
$4.42
$5.95
$1.89
$3.58
$4.90
$6.60
$0.00
$1.89
$3.58
$4.90
$6.60
$2.09
$3.98
$5.44
$7.33
$0.00
$2.09
$3.98
$5.44
$7.33
$2.32
$4.41
$6.04
$8.13
$0.00
$2.32
$4.41
$6.04
$8.13
$2.58
$4.90
$6.71
$9.03
$0.00
$2.58
$4.90
$6.71
$9.03
Potable Monthly Meter Charges
Meter Size
5/8"
3/4"
1"
1-1/2"
2"
3"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$16.71 
$23.05 
$35.74 
$67.46 
$105.53 
$226.09 
$403.74 
$828.85 
$1,526.79
$18.54
$25.59
$39.67
$74.89
$117.14
$250.96
$448.16
$920.02
$1,694.74
$20.58
$28.40
$44.04
$83.12
$130.03
$278.56
$497.45
$1,021.23
$1,881.16
$22.85
$31.52
$48.88
$92.27
$144.33
$309.20
$552.17
$1,133.56
$2,088.08
$25.36 
$34.99 
$54.26 
$102.42 
$160.21 
$343.22 
$612.91 
$1,258.25 
$2,317.77
Private Fire Monthly Meter Charges
Line Size
5/8"
3/4"
1"
1-1/2"
2"
3"
4"
6"
8"
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$2.78
$3.09
$3.09
$3.09
$3.09
$3.09
$3.09
$3.09
$3.09
$3.09
$3.43
$3.43
$3.43
$3.43
$3.43
$3.43
$3.43
$3.43
$3.43
$3.81
$3.81
$3.81
$3.81
$3.81
$3.81
$3.81
$3.81
$3.81
$4.23
$4.23
$4.23
$4.23
$4.23
$4.23
$4.23
$4.23
$4.23
14
CITY OF SCOTTSDALE

CITY OF 
SCOTTSDALE
Wastewater Rate Study
Final Report / March 27, 2020
^ R A FTE LI S
attachment 2

RAFTE LIS
March 27, 2020
Ms. Leslie DeReche 
Senior Financial Analyst 
City of Scottsdale 
7447 East Indian School Road 
Scottsdale, AZ 85251
Subject: Wastewater Rate Study
Dear Ms. DeReche,
Raftelis is pleased to provide this Wastewater Rate Study Report for the City of Scottsdale (City).
The major objectives of the study include the following:
• 
A 10-year financial plan for the study period FY2021 through FY2029.
• 
Cost of service analysis to ensure costs are allocated in an equitable manner to customer classes
• 
Design rates to recover each class’ revenue requirement
• 
Research and provide recommendations on strength loadings for the City’s commercial customer classes
• 
Develop an interactive rate model for the City to develop financial plan and rates in the future.
The Report summarizes the key findings and recommendations related to the study.
It has been a pleasure working with you, and we thank you and the City staff for the support provided throughout 
the course of this study.
Sincerely,
Todd Cristiano
Senior Manager
5619 DTC Parkway, Suite 850 
Denver, CO 80111
www.raftelis.com

Table of Contents
TABLE OF CONTENTS....................................................................... 4
LIST OF TABLES.................................................................................................5
LIST OF APPENDICES........................................................................................5
EXECUTIVE SUMMARY..................................................................... 8
INTRODUCTION..................................................................................................8
STUDY GOALS AND OBJECTIVES....................................................................8
STUDY FINDINGS................................................................................................9
RELIANCE ON CITY-PROVIDED DATA............................................................ 10
SECTION 2: ASSUMPTIONS.............................................................11
SECTION 3: WASTEWATER RATES................................................13
INTRODUCTION................................................................................................13
FINANCIAL PLAN..............................................................................................13
CAPITAL FUND CASH FLOW.........................................................................................................13
Operating Cash Flow.......................................................................................................................14
COST OF SERVICE...........................................................................................15
Cost of Service Process................................................................................................................. 15
FY21 Revenue At Existing Rates.................................................................................................. 15
Test Year Revenue Requirement.................................................................................................. 16
Revenue Requirement Allocation................................................................................................. 16
Rate Design...................................................................................................................................... 21
CITY OF SCOTTSDALE
\WATER, WASTEWATER, AND STORMWATER RATE STUDY REPORT

List of Tables
Table 1: Comparison of FY21 Proposed and Cost of Service Rates ............................................................ 9
Table 2; Study Assumptions.............................................................................................................................11
Table 3: Wastewater Utility Operating Fund Cash Flow Projections........................................................... 14
Table 4: FY21 Revenue Under Proposed Rates............................................................................................. 15
Table 5: FY21 Revenue Requirement ($ million)............................................................................................ 16
Table 6: FY21 Allocated Revenue Requirement ($ million).......................................................................... 17
Table 7: FY21 Units of Service......................................................................................................................... 18
Table 8: FY21 Unit Cost of Service.................................................................................................................. 20
Table 9: FY21 Customer Class Cost of Service ($ million)........................................................................... 20
Table 10: FY21 Comparison of Cost of Service to Revenue at Proposed Rates........................................21
Table 11: FY21 Proposed Rates...................................................................................................................... 22
Table 12: FY21 Cost of Service Rates............................................................................................................. 23
List of Appendices
APPENDIX A: FINANCIAL PLAN 
APPENDIX B: COST OF SERVICE 
APPENDIX C: EXTRA STRENGTH SURVEY 
APPENDIX D: RATE DESIGN
CITY OF SCOTTSDALE
WASTEWATER RATE STUDY REPORT

Executive Summary
Introduction
The City of Scottsdale (City) provides sewer service to approximately 82,000 customers to both customers inside 
the City and outside the City. The City is financially self-sufficient with funding for capital and operating 
requirements derived primarily from rates. The City authorized this study to assure that an adequate level of 
revenue from wastewater rates is maintained to finance the City’s daily operations as well as future capital 
improvements and expansions. The study includes the following:
• 
Development of wastewater financial plans for the 6-year study period, Fiscal Year (FY) 2019-2024. 
Analysis of customer class cost of service.
• 
Design of wastewater rates.
Raftelis used industry standard methodologies supported by the American Water Works Association (AWWA) 
Principles of Water Rates, Fees, and ChargesMl manual and the Water Environment Federation MOP27, Financingfor 
Wastewater Systems for this rate study.
Study Goals and Objectives
The City’s overarching goal for this study was to develop long-term financial plans for the wastewater utilities 
while ensuring:
Rate revenues are sufficient to meet annual operating expenses, debt service, and capital expenditures 
Capital projects are funded with the optimal mix of rate revenue and debt to minimize impacts to 
customers
Reserve levels are maintained in accordance with industry best practices, and that debt service coverage as 
required by bond covenants is met
Rates are based on a cost-of-service analysis which equitably recovers the cost to provide service to 
customer classes
In addition, the City identified specific pricing objectives to develop the rate alternatives presented in this study, in 
addition to cost-of-service rate design. These objectives were guided by two primary goals: revenue sufficiency and 
defensibility.
Revenue stability, produce rates that maintain a steady stream of revenue during periods of water usage 
variability.
Interclass equity, maintain equity between the customer classes (i.e. prevent one class subsidizing another). 
Intraclass equity, maintain equity between low and high volume customers within a class.
8
CITY OF SCOTTSDALE

Study Findings
Principal findings of this study are as follows:
Projected wastewater service revenue should be sufficient to meet annual revenue requirements through the 
study period. Revenue requirements include operation and maintenance expense, payments on existing 
debt service, transfers, rate funded capital projects, while maintaining reserve levels and debt service 
coverage. It is recommended that the wastewater financial be updated annually to reflect current estimates 
of revenue, operating expenses, capital improvement needs, maintaining reserve targets, and debt service 
coverage.
The proposed rates alternatives retain the existing rate structure; a monthly service charge which varies by 
meter size and a volume rate which varies by class based on their strength loadings. The volume rate 
consists of two components - an O&M rate and a capital rate. Those rates are detailed in the rate design 
section. Table 1 shows the monthly base fee and volume rates at existing and the proposed rates. The 
proposed FY21 base fees recover approximately 18.4% of total rate revenue. The FY21 cost of service rates 
retain that fixed and variable cost relationship.
Table 1: Comparison of FY21 Proposed and Cost of Service Rates
Description [1]
Base Fees> $ per bill
1" and less 
1.5"
2"
3"
4"
6"
8"
Existing
$4.50
$4.50
$4.50
$27.00
$63.00
$81.00
$119.00
Proposed
$4.74
$4.74
$4.74
$25.15
$57.82
$74.16
$108.46
Volune Rate, $pe, 1,000 ganoo. 
I^dC^ptol
Single-family Residentitil 
$2.68 
$2.65
Multi-family Residential 
$2.68 
$2.65
Commercial without dining 
$2.68 
$2.52
Commercial with dining 
$3.57 
$4.30
Hotels, motels without dining 
$2.92 
$2.60
Hotels, motels with dining 
$3.57 
$4.30
Carwcishes 
$2.65 
$1.92
Commercial Laundry 
$3.21 
$3.52
Laundromats 
$2.68 
$2.16
Metal Platers 
$2.95 
$3.02
Restaurants; bakeries 
$4.98 
$5.85
Service station auto repair 
$2.68 
$2.67
Medical Institutes 
$2.68 
$2.39
Schools 
$2.68 
$2.08
Black Mountain [2]
[1] Out of City customers are charged a surcharge up to 15% applied to O&M, Capital 
and Base fees.
[2] Black Mountain is assessed a contractual rate.
WASTERWATER RATE STUDY REPORT
9

Reliance on City-Provided Data
During this project, the City (and/or its representatives) provided Raftelis with a variety of technical information, 
including cost and revenue data. Raftelis did not independently assess or test for the accuracy of such data - 
historic or projected. Raftelis has relied on this data in the formulation of our findings and subsequent 
recommendations, as well as in the preparation of this report.
There are often differences between actual and projected data. Some of the assumptions used in this report will not 
be realized, and unanticipated events and circumstances may occur. Therefore, there are likely to be differences 
between the data or results projected in this report and actual results achieved, and those differences may be 
material. As a result, Raftelis takes no responsibihty for the accuracy of data or projections provided by or prepared 
on behalf of the City, nor do we have any responsibility for updating this report for events occurring after the date 
of this report.
10
CITY OF SCOTTSDALE

Section 2: Assumptions
This section presents the major assumptions used in this study. Changes in these assumptions could materially 
impact the results of the findings and conclusions.
Table 2: Study Assumptions
Reserve Fund Targets
Beginning balance
Operating fund, 60 days of O&M
Repair and replacement (2% of Gross Assets)
Undesignated for future capital
Escalation factors:
Customer growth
Chemical cost inflation
ENR construction cost index
General cost inflation
General cost inflation + Growth
Labor cost inflation
One-Time (non-recurring) expense
Capital improvements
$4,080,192
60
$4,604,686
$17,126,861
500 accts per year 
5.0% 
3.0% 
2.0% 
2.0% 
2.0% 
3.5%
Operating fund FY21 beginning balance 
Target DSC
Outside City Differential
$25,811,741 
1.20 
1.15
WASTERWATER RATE STUDY REPORT
11

Section 3: Wastewater Rates
Introduction
The City’s wastewater utility is a self-supporting enterprise fund. The City has one combined fund for the 
wastewater utility but must track activities associated with impact fee revenues and growth-related projects separate 
from activities associated with the daily operations and maintenance of the utility. For the purposes of this study, 
Raftelis developed two separate cash flows for the rate analysis.
Operating cash flow (unrestricted cash)
• Capital cash flow
The operating cash flow is used for the basis of determining the annual revenue requirement and proposed revenue 
adjustments. The capital cash flow includes capital related activities. Tables for the wastewater utility financial 
plan, cost of service, and rate analysis can be found in Appendix B.
Financial Plan 
CAPITAL FUND CASH FLOW
The capital fund cash flow tracks activities associated with the projected capital improvement program and the 
funding sources required to meet those requirements.
Beginning balance
The cash balance includes unrestricted carryover monies from previous years. The fund balance will be $47.2 
million at the beginning of FY21.
Sources of funds
Sources include impact fee revenue, investment income, and transfers from the operating cash flow. Impact fee 
revenue averages $1.5 million annually beginning in FY21. Impact fee revenue projections is based on data from 
the City’s budget documents. This equates to approximately 500 new accounts per year. Transfers from the 
operating cash balance average $16.8 million per year to fund the wastewater capital improvement program. 
Investment income is calculated using a 1.0 percent annual interest rate applied to the average fund balance and 
averages $1.4 million annually.
Uses of funds
The City’s capital projects for the study period totals $132.6million with inflation. The capital improvement 
program includes projects for overall system improvements, wastewater treatment, technology master plan 
identified projects, and SROG projects. An annual inflation allowance of 3.5 percent is applied to the projected 
capital costs.
Capital fund reserves
The capital fund ending balance in FY24 is approximately $42.7 million. These funds are reserved for future capital 
projects.
WASTERWATER RATE STUDY REPORT
13

OPERATING CASH FLOW
Financial activities associated with funding annual operating revenues and revenue requirements are tracked 
separately from the activities associated with impact fee project funding.
Beginning balance
The cash fund balance includes unrestricted carryover monies from previous years. The fund balance is projected 
to be $25.8 million at the beginning of FY21.
Revenues
Operating revenue is derived from wastewater rate revenue, investment income, and interfund payments for 
wastewater services used by City facilities. Wastewater service revenue under existing rates is based on the 
projected number of wastewater accounts and billed volume for each customer class. Revenue from proposed 
FY21 rates averages $42.7 million annually during the study period. The City anticipates 500 new accounts per 
year over the study period. Wastewater service rate revenue accounts for approximately 81% of total operating 
income with existing rate revenue. The City also receives income for other service rate revenue such as late 
charges, account initiation fees, non-hazardous liquid waste, non-potable water service charges, stormwater quality 
fees, and other miscellaneous sources. This service rate revenue is approximately $4.7 million annually and 
represents 9% of total revenue. Transfers from the City for the advanced water treatment plant, the reclaimed water 
distribution system, and other debt service averages $6.3 annually. The debt service transfer ends in FY25. These 
transfers are approximately 10% of total existing revenues.
Revenue Requirements
Revenue requirements include operation and maintenance expense (O&M) and transfers to the wastewater impact 
fee and bond cash flow. O&M consists of personnel, materials and supplies associated with treatment building rent 
city indirect costs. O&M averages $26.5 million annually during the study period. Transfers for impact fee projects 
are for the ongoing capital improvement program projects. MFC Bonds debt service averages $8.1 million per year 
through the study period. Sewer revenue bonds average $4.6 miUion per year and will be defeased in FY23. Debt 
service related to non-growth and growth-related projects are funded from rate revenues. Transfers to the capital 
fund to fund the capital improvement program average $14.0 million per year. Franchise fees paid to the City 
average $2.6 million armually.
Indicated Wastewater Service Revenue Adjustments
Wastewater rate revenue should be sufficient to meet revenue requirements, finance the capital improvement 
program, and maintain adequate reserves. A minimum operating reserve equal to 60 days of operating expenses is 
recommended. This amount provides a reasonable operating allowance for sound wastewater utility operations. 
The City has identified additional policy reserve requirements. Equal annual adjustments of 2.0% are required in 
FY22-FY24. Revenue increases are effective July 1 of each year. It is also recommended that the financial plan be 
updated annually to determine if the projected increases are appropriate.
Table 3: Wastewater Utility Operating Fund Cash Flow Projections
Description
Revenue Adjustment 
Ending Balance ($ millions)
Target Reserves ($ millions) 
Undesignated Reserves ($ millions) 
Debt Service Coverage
FY19 FY20 FY21
0.0%
$25.81
$8.68
$17.13
184.5%
0.0%
$25.43
$18.84
$6.60
179.1%
2.0%
$20.72
$20.68
$0.04
181.1%
FY22
2.0%
$21.68
$21.64
$0.04
193.6%
FY23
2.0%
$23.81
$23.11
$0.70
315.6%
FY24
0.0%
$25.81
$8.68
$17.13
184.5%
14
CITY OF SCOTTSDALE

Cost of Service
Equitable wastewater rates fairly recover cost of service from each customer class. Determination of cost of service 
takes into account volume of contributed flow, strength, and number of customers. The cost of service analysis is 
conducted for a test year considered representative of the period in which resultant rates are expected to be in 
effect. The year FY21 was selected as the test year for this study.
COST OF SERVICE PROCESS
The cost-of-service process is a method to assign costs based on each customer class’ proportionate share of 
wastewater flow characteristics and number of customers. The cost-of-service analysis consists of the following 
seven steps:
1. Determine the FY21 rate revenue at existing rates
2. Determine test year revenue requirement
3. Functionalize revenue requirement
4. Allocate functionalized costs to cost components
5. Determine units of service
6. Distribute costs to customer classes
7. Design rates to recover class cost-of-service and total revenue requirement
FY21 REVENUE AT EXISTING RATES
Raftelis developed FY21 rate revenue at existing rates using detailed billing records provided by the City. Revenue 
projections are based on the current number of customers by meter size and class, projected use per account and 
growth in the number of accounts by class. The FY21 revenue at existing rates is shown below. This projection 
serves as the basis for determining the FY21 revenue requirement. This billing data analysis is also used in the units 
of service analysis.
Table 4: FY21 Revenue Under Proposed Rates
Customer Class 
Bills 
^1”
(kgals)
Res/Comm/Ind 
891,262 
7,897,828
Multifamily 
43,074 
1,976,765
Commercial without dining 
35,233 
879,302
Commercial with dining 
2,734 
199,518
Hotels, motels without dining 
795 
102,604
Hotels, motels with dining 
1,232 
312,497
Carwashes 
274 
58,299
Commercial Laundry 
143 
12,999
Laundromats 
59 
8,294
Metal Platers 
24 
190
Restaurants; bakeries 
5,485 
368,184
Service station auto repair 
1,806 
48,724
Medical Institutes 
1,415 
200,382
Schools 
1,031 
66,803
Black Mountain 
12 
90,156
Total 
984,579 
12,222,544
Revenue 
($ million)
$26,028,476
$6,731,804
$3,352,908
$827,576
$350,937
$1,223,450
$166,691
$47,894
$25,671
$689
$2,041,405
$174,591
$622,458
$183,087
$252,061
$42,029,697
WASTERWATER RATE STUDY REPORT
15

TEST YEAR REVENUE REQUIREMENT
The revenue requirement shown in Table 5 below shows the level of revenue required from rates with the FY21 
proposed revenue adjustments.
Table 5: Wastewater - FY21 Revenue Requirement ($ millions)
Item
Operation and Maintenance Expense 
Debt Service 
Capital Improvements 
Total Expenditures
Adjustments 
Other Operating Income 
Transfers In 
Other Rate Revenue 
Change in Fund Balance 
Total Adjustments
Net FY21 Revenue Requirement
FY21
r.
$26.8
$12.6
$15.0
$54.5
($2.5)
($6.9)
($2.6)
($0.5)
($12.4)
$42.0
REVENUE REQUIREMENT ALLOCATION
The underlying principle in cost allocation is to convert the test year revenue requirement into costs that best reflect 
the cost associated with customer wastewater demands placed on the system. Those costs are proportionately 
allocated to customer classes based on their respective units of service to determine class cost of service. Customer 
class units of service typically include billable flow, strength, and number of bills.
Functional Cost Components
Wastewater systems are comprised of several facilities (unit processes or functions) that are designed and operated 
to collect, treat, and dispose of effluent to natural bodies of water. The separation of costs into functional 
components provides a means for distributing costs to customer classes based on their respective responsibility in 
the system. The City’s asset listing and line item detail budget were used as a btisis for the functionalization of 
costs.
Allocation of Functionalized Costs
Once costs have been separated by function, they can be further allocated to cost components. Allocating to cost 
components provides a means of assigning costs based on the design and functional parameters that predominately 
influence the amount of that cost. Cost components include contributed flow, chemical oxygen demand (COD), 
total suspended solids (TSS), and customer and billing costs.
Volume costs are those which vary directly with the quantity of contributed sewer volumes to the plant. COD and 
TSS costs are associated the processes needed to treat and discharge effluent. Billing costs are related to customer 
service, billing, and other general administrative costs. The customer costs represent a portion of annual repair and 
replacement capital costs to be recovered through the month base fee. Allocating these costs to the base fee also 
provides revenue stability.
O&M related to the treatment plant are allocated to their respective volume, COD or TSS cost component. For 
example, lift station and collection line expenses are allocated directly to the flow cost component. Other treatment 
related expenses such as operations, maintenance and fleet management are allocated to flow, COD, and TSS cost
16 CITY OF SCOTTSDALE

components. Treatment related costs were allocated based on the current percent of costs for flow, COD, and TSS 
assessed by SROG. Other expenses not specifically assigned are allocated in proportion to all other treatment 
expenses.
The allocation of system assets to functional cost components provides the basis for allocating annual capital costs. 
Cost of service is generally allocated to cost components that reflect the design and functional parameters of the 
associated facility. For example, assets such as the trunk mains, collection mains, and interceptor mains reflect 
assets used to serve customers served by the collection system and are allocated directly to the flow cost 
component. The City does not maintain a detailed listing of treatment plant assets. A detailed listing aids in 
allocating costs to specific cost components or combination of cost components based on that facilities particular 
function or design parameter. Treatment plant assets have been assigned to cost components based on Raftelis’ 
experience with other similar size utilities. General plant assets not specifically assigned are allocated in proportion 
to all other plant assets.
Allocated Revenue Requirement
Table 6 summarizes the allocated revenue requirement. The allocated revenue requirement is distributed to 
customer classes based on their proportionate share of total units of service.
Table 6: Wastewater - FY21 Allocated Revenue Requirement ($ millions)
Description
O&M Expense 
Capital Costs 
Adjustments 
Net Rev Req.
Flow
COS
$10.3
$9.6
($1.6)
$18.4
$7.7
$2.0
($1.5)
$8.3
TSS
$7.3
$1.5
($1.3)
$7.6
Billing Customer Total
$1.4
$0.0
($0.8)
$0.6
$0.0
$7.1
$0.0
$7.1
$26.8
$20.3
($5.1)
$42.0
Customer Class Units of Service
Customers of a wastewater utility are often identified according to customer class. Because cost-of-service is based 
on the concept of proportionality, the units of service for each customer class must be analyzed to distribute the 
functionalized and allocated system revenue requirements based on their respective flow and billing profiles. Table 
7 details the proposed units of service.
WASTERWATER RATE STUDY REPORT
17

Customer Class
Single-family Residential 
7,897,828
Multi-family Residential 
1,976,765
Commercial w/ dining 
879,302
Commercial w/ dining 
199,518
Hotels, motels w/o dining 
102,604
Hotels, motels w/ dining 
312,497
Carwashes 
58,299
Commercial Laundry 
12,999
Laundromats 
8,294
Metal Platers 
190
Restaurants; bakeries 
368,184
Service station auto repair 
48,724
Medical Institutes 
200,382
Schools 
66,803
Black Mountain 
90,15 6
Total 
12,222,544
[1] Includes inside City and outside City.
Table 7: FY21 Units of Service [1]
Flow COD 
- TSS
(kgal) (mg/1) 
(mg/1)
TSS (lbs) Bills Customer
450 
29,640,548
450 
7,418,798
400 
2,933,351
1,000 
1,663,980
620 
530,545
1,000 
2,606,221
40 
19,448
900 
97,569
300 
20,752
600 
949
2,200 
6,755,449
360 
146,290
500 
835,594
260 
144,856
0 
290,941
53,105,289
225 
14,820,274
225 
3,709,399
200 
1,466,675
600 
998,388
120 
102,686
600 
1,563,733
150 
72,932
340 
36,859
110 
7,609
300 
474
600 
1,842,395
280 
113,781
100 
167,119
100 
55,714
0 
118,978
25,077,016
891,262
43,074
35,233
2,734
795
1,232
274
143
59
24
5,485
1,806
1,415
1,031
12
984,579
1,066,908
310,410
217,945
24,522
9,090
15,362
2,711
682
574
24
44,429
9,608
18,693
16,568
317
1,737,842
Commercial Customer Extra Strength Survey
The City’s commercial volume rates are based on extra strength characteristics of the quality of wastewater. The 
treatment system must be designed to handle the various flow and loadings from each customer class. Therefore, 
customer classes that contribute higher strength flows should also contribute more to the costs of operating and 
maintaining the system. The City uses Chemical Oxygen Demand (COD), the amount of organic compounds, and 
Total Suspended Solids (TSS), the amount of suspended particles for their high strength customer classes.
Raftelis surveyed several industry sources such as utilities rate schedules, research documents, and state and federal 
pubhcations to compare COD and TSS strengths of the City’s 15 customer classes. Many entities reference the 
California State Water Resources Control Board standards published in 1998. Since then, the EPA Onsite 
Wastewater Treatment Systems Manual was published in 2002, Connecticut Department of Environmental 
Protection published Guidance for Design of Large-Scale On-Site Wastewater Renovation Systems in 2006 and the 
Ohio Administrative Code, Chapter 3745-42 Permits to Install and Plan Approvals for Water Pollution Control in 
2018, have provided comprehensive summaries of COD and TSS strengths for high strength customer classes. In 
addition, many research publications have focused on the variation of strengths within specific customer classes 
including restaurants, car washes, breweries, and others. Raftelis also compared the COD and TSS strengths for 
high strength customer classes with 8 other utilities.
The City’s current COD and TSS strengths for high strength customer classes are within the range of the industry 
practices as shown in charts below. Each chart lists the City of Scottsdale’s (City) customer classes and plots the 
strength used in rate setting (shown in red). The largest variability was within the restaurants/ bakeries and 
commercial laundry customer classes. Figures 1 and 2 illustrate the relative position of the City’s strengths to that 
of the survey information collected by Raftelis.
18 CITY OF SCOTTSDALE

Figure 1: COD Strength Ranges by Customer Class
COD (mg/l)
4,000 
3,500 
3,000 
a 2,500
S. 2,000
ao
<-> 1,500 
1,000 
500 
0
• 720 .
%m I
• 800 
• 400
• 1,650
• 1,000
• 2,687
• 3,650
§ 2,200
• 1,600 
g
I'”” 
•
• 620 # 600 • 600 * 
• 600 
* ^00 A ^ S
I275 
I 
| 300 .258 
I
30 i 40 
225
' '////////////'
• 891 
260
• Survey Information (mg/l) • Scottsdale Current COD (mg/l)
Figure 2: TSS Strength Ranges by Customer Class
TSS(mg/)
4,000
3.500 
3,000
2.500
?
12,000
1.500 
1,000
500
0
• 3,825
• 2,312 • 2,319
• 960
I 600
300 550 
• 280 • 275 A
9 99 • 100 9
850
680 
j 
• 960
•!“ ge ™ J - I... I... • 
* IS" I
jyy 
240
y y y y y y y y y y y y 
y y y y 
y y
• Survey Information (mg/l) • Scottsdale Current TSS (mg/l) 
^
250
100
WASTERWATER RATE STUDY REPORT
19

Unit Cost of Service
The unit cost of service is the quotient of the allocated revenue requirement by cost component divided by the units 
of service for each. The unit costs for each cost component are used to determine the customer class cost of service.
Table 8; Wastew/ater - FY21 Unit Cost of Service
Description
Revenue Requirement, $ millions
Flow
COD
O&M Expense 
Capital Costs 
Rev. Req Adj.
Net Revenue. Req.
$10.3
$9.6
($1.6)
$18.4
$7.7
$2.0
($1.5)
$8.3
TSS
$7.3
$1.5
($1.3)
$7.6
Billing
$1.4
$0.0
($0.8)
$0.6
Ready to 
Serve
$0.0
$7.1
$0.0
$7.1
Total
$26.8
$20.3
($5.1)
$42.0
Units of Service 
Inside City 
Outside City 
Total Units of Service
Unit Cost of Service [1] 
O&M Expense 
Capital Costs 
Adjustments 
Total Unit Costs
11,803,410 
50,983,839
419,134 
2,121,450
12,222,544 
53,105,289
$0,842
$0,782
($0,128)
$1,496
$0,145
$0,038
($0,028)
$0,155
24,041,392
1,035,624
25,077,016
$0,291
$0,060
($0,050)
$0,302
959,990
24,589
$1,420
$0,000
($0,769)
$0,652
1,713,037
24,805
984,579 
1,737,842
$0,007
$4,077
$0,000
$4,084
[1] Out of city unit costs are charged a surcharge up to 15%
-jm
Because cost-of-service is based on the concept of proportionality, customer class units of service must be analyzed 
to distribute the functionalized and allocated system revenue requirements.
Distribution of Costs to Customer Classes
Table 9 shows the distributed cost-of-service to customer classes. The customer class units of service in Table 7 are 
multiplied by the unit cost of service in Table 8 to determine the customer class cost of service.
Table 9: Wastewater - FY21 Customer Class Cost of Service ($ millions)
Customer Class
Single-family Residential 
Multi-family Residential 
Commercial without dining 
Commercial with dining 
Hotels, motels without dining 
Hotels, motels with dining 
Carwashes
Commercial Laundry 
Laundromats 
Metal Platers 
Restaurants; bakeries 
Service station auto repair 
Medical Institutes 
Schools
Black Mountain 
Total
[1] Includes inside and outside city.
Flow COD
$11.85
$2.98
$1.32
$0.30
$0.16
$0.48
$0.09
$0.02
$0.01
$0.0003
$0.55
$0.07
$0.30
$0.10
$0.13
$18.38
$4.61
$1.16
$0.46
$0.26
$0.09
$0.42
$0.00
$0.02
$0.00
$0.0002
$1.05
$0.02
$0.13
$0.02
$0.05
$8.28
TSS
$4.48
$1.13
$0.45
$0.30
$0.03
$0.49
$0.02
$0.01
$0.00
$0.0001
$0.56
$0.03
$0.05
$0.02
$0.04
$7.61
Bills Customer Total
$0.58
$0.03
$0.02
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.0000
$0.00
$0.00
$0.00
$0.00
$0.00
$0.64
$4.37
$1.27
$0.89
$0.10
$0.04
$0.06
$0.01
$0.00
$0.00
$0.0001
$0.18
$0.04
$0.08
$0.07
$0.00
$7.11
$25.89
$6.56
$3.14
$0.97
$0.31
$1.45
$0.12
$0.05
$0.02
$0.0007
$2.35
$0.17
$0.56
$0.21
$0.22
$42.03
20
CITY OF SCOTTSDALE

Comparison of FY21 Cost of Service to Revenue at Existing Rates
Table 10 shows the comparison of FY21 cost of service to revenue at existing rates for each customer class. The 
change in each customer class’ cost is a product of two components: 1) the functionalization and allocation of the 
revenue requirement and 2) the distribution of these costs to customer classes based on their units of service.
Table 10: FY21 Comparison of Cost of Service to Revenue at Existing Rates ($ millions)
FY21Costof 
Class 
„Service
Single-family Residential 
$25.89
Multi-family Residential 
$6.56
Commercial without dining 
$3.14
Commercial with dining 
$0.97
Hotels, motels without dining 
$0.31
Hotels, motels with dining 
$1.45
Carwashes 
$0.12
Commercial Laundry 
$0.05
Laundromats 
$0.0210
Metal Platers 
$0.0007
Restaurants; bakeries 
$2.35
Service station auto repair 
$0.17
Medical Institutes 
$0.56
Schools 
$0.21
Black Mountain 
$0.22
Total 
$42.03
FY21 Revenue 
Under
Existing Rates
$26.03
$6.73
$3.35
$0.83
$0.35
$1.22
$0.17
$0.05
$0.0257
$0.0007
$2.04
$0.17
$0.62
$0.18
$0.25
$42.03
Change - $
($0.14)
($0.17)
($0.21)
$0.14
($0.04)
$0.23
($0.04)
$0.00
($0.00)
$0.00
$0.31
($0.00)
($0.06)
$0.03
$0.00
$0.03
Change - %
-0.5%
-2.5%
-6.3%
16.7%
-10.6%
18.8%
-25.9%
8.5%
-18.2%
3.0%
15.0%
-2.0%
-10.3%
15.1%
0.0%
0.0%
RATE DESIGN
In the development of schedules of wastewater rates, a basic consideration is to establish equitable charges to 
customers commensurate with the cost of providing service. The only method of assessing entirely equitable 
wastewater rates would be the determination of each customer’s bill based upon their unique service requirements. 
Since this is impractical, schedules of rates are normally designed to meet average conditions for groups (classes) of 
customers having similar service requirements. Rates should be reasonably simple in application and subject to as 
few misinterpretations as possible.
WASTERWATER RATE STUDY REPORT
21

Existing Rates
The City’s existing rate structure consists of a monthly service charge that varies by class and two volumetric rates 
for billed volume. Billed volume is based on a return to sewer factor of 90% of the customers average winter 
consumption for the prior December, January, and February. Table 11 lists the existing rates and structures. The 
proposed FY21 base fees recover approximately 18.4% of total rate revenue.
Table 11: FY21 Proposed Rates
Description
CuiTcnt Rates
Base Fee, $ per bill
5/8" 
$4.50 
, ■ 
.
3/4" 
$4.50
1" 
$4.50
1.5" 
$27.00
2" 
$63.00 ,
3" 
$81.00
4"
6"
8"
Volume Rate, $ per 1,000 gallons [1] O&M Charge 
Single-family Residential 
$1.17
Multi-family Residential 
$1.17
Commercial without dining 
$1.16
Commercial with dining 
$ 1.72
Hotels, motels without dining 
$1.25
Hotels, motels with dining 
$1.71
Carwashes 
$1.08
Commercial Laundry 
$ 1.48
Laundromats 
; 
$1.10
Metal Platers 
$ 1.33
Restaurants; bakeries 
$2.43
Service station auto repair 
$1.18
Medical Institutes 
$1.12
Schools 
$1.09
Black Mountain [2]
[1] Out of City customers are charged a surcharge up to 15% applied to O&M, Capital and Base fees.
[2] Black Mountain is assessed a contractual rate.
$119.00 
$225.00 
$315.00 
Capital Charge 
$1.51 
$1.51 
$1.52 
$1.85 
$1.67 
$1.86 
$1.57 
$1.73 
$1.58 
$1.62 
$2.55 
$1.50 
$1.56 
$1.59
Total
$2.68
$2.68
$2.68
$3.57
$2.92
$3.57
$2.65
$3.21
$2.68
$2.95
$4.98
$2.68
$2.68
$2.68
Proposed Rate
The proposed rates retain the existing structure. Strength loadings for the commercial customers also remain the
same.
22
CITY OF SCOTTSDALE

Table 12: FY21 Cost of Service Rates
Description
Service Charge, $ per bill
Proposed Rates
S’
:r
i.
. I
5/8"
3/4"
1.5"
2;;
4"
6"
8"
Volume Rate, $ per 1,000 gal [1] O&M Charge 
Single-family Residentid 
$1.61
Multi-family Residential 
$1.61
Commercial without dining 
$1.51
Commercial with dining 
$2.90
Hotels, motels without dining 
$ 1.56
Hotels, motels with dining 
$2.90
Carwashes 
$1.05
Commercial Laundry 
$2.28
Laundromats 
$1.23
Metal Platers 
$1.90
Restaurants; bakeries 
$4.07
Service station auto repair 
$1.63
Medical Institutes 
$ 1.40
Schools 
$1.17
Black Mountain [2]
[1] Out of City customers are charged a surcharge up to 15% applied to O&M, Capital and Base fees.
[2] Black Mountain is assessed a contractual rate.
$4.74 
$4.74 
$4.74 
$25.15 
$57.82 
$74.16 
$108.46 
$204.83 
$286.50 
Capital Charge 
$1.04 
$1.04 
$1.01 
$1.40 
$1.04 
$1.40 
$0.87 
$1.24 
$0.93 
$1.12 
$1.78 
$1.04 
$0.99 
$0.91
Total
$2.65
$2.65
$2.52
$4.30
$2.60
$4.30
$1.92
$3.52
$2.16
$3.02
$5.85
$2.67
$2.39
$2.08
1
■'1
WASTERWATER RATE STUDY REPORT
23

24
CITY OF SCOTTSDALE

APPENDIX A:
FINANCIAL PLAN

City of Sconsdale, AZ 
Wastewater Utility 
Financial Plan Dashboard
Dashboard
3/27/2020
FY21 Proposed Rates
Operating Fund (S-OPl 
Months Increase is Effective in First Year 
Annualized Percentage Increase 
Cumulative Increase
Transfer to Capital Fund
Operating Fund Ending Balance
Target Reserves 
Operating Reserve 
Repair/Replacement Reserve 
Revenue Bond Debt Service Reserve 
Total Ta^et Reserves 
Unreserved Fund Balance
Debt Service Coverage
Capital Fund
12
0.0%
0.096
14,292416
25,811,741
12
0.0%
0.096
15,000,000
25,959,209
4,080,192 
5,232,391
0 
13,604,582
4,604,688 0
12
2.0%
2.0%
19,200,000
20,566,517
6,632,981
14,048,446
0
12
2.0%
4.0%
14,000,000
21,456,296
7,249,068
14,395,503
0
12
2.0%
6.1%
18,200,000
23,501,134
8,304,110
14,807,299
0
12
2.0%
8.2%
18,200,000
26,719,705
8,583,836
15,480,318
0
12
2.0%
10.4%
18,200,000
25,731,634
5,018,209
16,121,092
0
8,684,880
17,126,861
184.5%
18,836,972
6,522,237
179.1%
20,681,427
^114,910;
181.1%
21,644,572
(188,275)
193.6%
23,111,409
389,725
315.6%
24,064,154
2,655,552
347.2%
12
2.0%
12.6%
18,200,000
25,168,402
5,170,683
16,539,964
0
12
2.0%
14.9%
18,200,000
24,996,547
5,329,905
16,918,929
0
21,139,301
4,592,333
313.9%
21,710,646
3,457,755
317.1%
22,248,834
2,747,713
319.0%
12
2.0%
172%
18,200,000
22,168,596
5,496,287
17,237,345
0
22,733,632
<'565,037J
231.6%
Annual CIP with Inflation 
Revenue Bond Issuance Proceeds 
State & Other Loan Proceeds
16,525,432
0
0
22,356,477
0
0
22,193,214
0
0
17,352,864
0
0
20,589,790
0
0
33,650,957
0
0
32,038,700
0
0
20,943,581
0
0
18,948,249
0
0
15,920,810
0
0
Ending Capital Fund Balance
47,150,623 
42,666,509 
42,564,195 
42,129,431 
42,701,840 
30,213,083 
19,336,583 
19,555,202 
21,769,153 
27,010,543
Draft'For Discussion Purposes Only

atyofScottsdalt.AZ 
Wastewater Utility
Capita] Fund Cash Flow Analysis (Capital Portion of S-OP)
Una
No. Description
ForFiscal Period Ending June 30
Actual
Adopted i Approved |
Projected
2019
20X>
2020
2021
2022
2023
2024
2025
2026
2027
2028
TaMeA-1
3/27/2020
2029
Beginnini Fund Balance
$
99,736^72
$
a9.736^572
$ $ 
108,968.501 
47,150,623
$
42,666,509
$
42.564,195
$
42429,431
$
42,701340
$
30,213383
$
19336383
$
19,555402
$
21,769,153
2
3
4
5
6 
7
Sources of Funds 
New Bond Issues 
Interest Earnings
Transfer from the Operating Fund 
Development Fee Revenue 
Total Sources
1,312,231
163,741
2,556,024
1,518,747
0
1,299,218 
1499,218
0 
0
7.738,005 
14.292,116
1,500,000 
1,500,000
0
1,372,363
0
15,000,000
1,500,000
0
1,390,900
0
19400,000
1,500,000
0
1,418,100
0
14,000,000
1,500,000
0
1,462,2X
0
18,200,000
1,500,000
0
1,462,200
0
18,200,000
1,500,000
0
1.462400
0
18,200.000
1,500,000
0
1,462,200
0
18,200,000
1,500,000
0
1,462,200
0
18,200.000
1,500.000
0
1,462,200
0
18,200,000
1,500,000
5,552.743
iaU7423
17391334
17372,363
22,090,900
16318,100
21,162,200
21,162400
21,162400
21,162.200
21,162400
U462,2D0
Uses ef Funds
8 
Cash Flow CIP
9 
Tote] Uses
17,700,252
17,700,252
40,975,663
16,525,432
22,356,477 
22,193,214 
17,352,864 
20,569,790
33,650,957
32,038,700
20,943,581
18,948,249 
15,920,810
40375,663
16,525332
22356,477
22,193,214 
17352364 
20389,790 
38,650357 
82,038.700
20,943,581
18,948,249 
15320310
10
11
12
isfOefldency)
112,147,509)
69,736,572
(30,438,440)
77,589,063
565,902
47,150,623
(4.484.114)
47,150,623
(102,314)
42,666,509
(434,764)
42,564,195
572,410
42,129,431
(12,488,757)
42,701,840
(10,876,500)
30,213,083
218,619
19,336,583
2,213,951
19,555,202
5,241,390
21.769,153
77,589,063
47,150,623
47,716,526
42,666,509
42.564,195
42,129,^1
42,701340 
30,213,083
19,336,583
19,555,202 
21,769,153 
27,010,543
Draft-For Discussion Purposes Only

OtyofScottsdato.AZ 
W*stewst«r Utility
Operating Fund Cash Flow Analysis (S-OP)
42,104.363
Table A*2 
3/27/20U
Une
No.
Description
For the Fiscal Pei
e30
r
Actual X
Adopted
I
Projected
1
2019
2020
2022
2023
2025
2026
KI27
2028
2029
$
$
$
$
$
$
$
$
1 
Operating Reserve 
4,402,471 
4,080,192
2 
Repair/Replacemenl Reserve 
12,680,876 
13,680,876
3 
Revenue Bond Debt Service Reserve 
4,604,688 
4,604,688
4 
Water Oroi^ht Reserve 
0 
0
5 
Special Contractual Fund Balance 
0 
0
6 
Undesignated, Unreserved Fund Balan_____ p,4S6,0M)_ 
16,692
7 
Total Beginning Fund Balance 
19^232,009 
22382.448
4,402,471
0
4,604,688
0
0
18,610,924
4,080,192
0
4,604,688
0
0
17,126,861
5,232,391 
6,632,961
13,604,582 
14,048,446
0 
0
0 
0
0 
0
6,522,237(114,910)
7,249,068 
8,304,110
14,395,503 
14,807,299
0 
0
0 
0
0 
0
(188,275)389,725
8,583,836
15,480,318
0
O
0
2,655,552
5,018,209
16,121,092
0
0
0
4,592,333
5,170,683
16,539,964
0
0
0
3,457,755
5,329,905
16,918,929
0
0
0
2,747,713
27,618,083 
25311.741
25359,209
20366,517
21356.296
23,501,134
26,719,705
25,731,634
25.168;402
24396.547
Sources of Furtds 
Rate Revenue
8 
User Rate Revenue (Base Charge, OJ 41,631,187
9 
Additional Rate Revenue from Increases___________
10 
Total Rate Revenue with lncreas<
42,784,100
42,734,100
0
42,029,697
0
42,448,065
848,961
42,866,434
1,731,804
43,284,802
2,649,376
43,703,171
3,602,547
44,121,539
4,592,205
44,539,908
5,619,262
44.958.276
6,684,651
41,631,187 
42,784,100 
42,784,100
42,029,697
43,297,027
44,598,238
45,934,178 
47,305,717 
48,713,744 
50,159,170
51,642,927
45376.645
7,789,327
53.165,971
11
12
13
14
15
16
17
Other Rate Revenue w/o Increase 
Sewer late Charge 
Sewer Account Initiation Fee 
Out Of City Surcharge - Sewer 
Non-Hezardous Liquid Waste 
Sewer Service Charges
Total Wastewater Fee Revenue
84,595 
90,000
106,558 
135,800
75,422 
49.500
2,278339 
2,180,000
710 
0
2,545,524
90,000 
91,100
135,800 
110,000
49,500 
63,000
2,180,000 
2316,400
0 
0
92,000
111.100
2,362,728
0
92,900
112,200
2,409,983
0
93,900
113,300
2,458.182
0
94,800
114,500
2307.346
0
94,800
114,500
2,557,493  0
94,800
114,500
2,608,643  0
94,800
114,500
2,660,815
0
2,455,300
2,455,300
2.580,500
2.565328
2.615,083
2.665.382
2,716.646
2,766,793
2,817,943
2,870,115
44,176,711 
45339,400
45,239,400
44,610,197
45.862355
47.213.3M
48,599,561
50,022,363
94,800
114,500
2,714,032
0
2,923,332
48,713,744 
50,159,170 
51342.927 
53.165.971
Other Op
18 
Non-PoUble Water Service Charges 
815,943 
1,000,000 
1,000,000 
1,050,000 
1,060,500 
1,071,100 
1,081,800 
1,092,600 
1,114,500 
1,136,800 
1,159,500 
1,182,700
19 
Interest Earnings 
287383 
733,592 
733,592 
774,001 
783,900 
800,200 
823,700 
823,700 
823,700 
823,700 
823,700 
823,700
20 
Indirect CosU 
174,978 
221,300 
221,300 
210,500 
214,700 
219,000 
223,400 
227,900 
232,500 
237,200 
241,900 
246,700
21 
Miscellaneous (l) 
221,086 
98,076 
98,076 
110,676 
111,576 
112,476 
113,276 
114,176 
115,376 
116,576 
117,776 
118,976
22 
Stormwater Quality Fees 
234.882 
332,750 
332,750 
336.000 
339,400 
342,800 
346,200 
349,600 
349,600 
349,600 
349,600 
349,600
23 
Property Rental 
000000000000
24 
Contributions & Donations 
______________0_______________0_______________0_______________0_______________0_______________0_______________0_______________0_______________0______________ 0______________ 0______________ 0_
25 
Total Other Operating Income 
1,734,172 
2,385,718 
2.385.718 
2.481,177 
2,510,076 
2,545,576 
2,588,376 
2,607,976 
2,635,676 
2,663,876 
2,692,476 
2,721,676
Trensfen In
26 
Awr
27 
Transfer In Debt Service
28 
RWDS
29 
Total Transfers In
2,842,514
3,875,681
0
6,718,195
2,985.000
0
900,000
2.985,000 
2,863,545
0 
3.168.720
900,000 
900,000
2,892,200 
2,921,100
2,833,600 
2,478,700
900,000 
900,000
2,950,300 
2.979,800
2,120,400 
1,975,000
900,000 
900,000
2,979,800
0
900,000
2,979,800
0
900,000
2,979,800
0
900,000
3,885,000
3,885,000
6,932,265
6,625,800
6.299300
5,970,700
5,854,800
3,879,800
3.879.800
3.879,800
2,979,800
0
900,000
3379.600
80
Total Sources
52,629,078
51310,118
51310318
54323.639
54398,731
56358,696
57,158337
58385,139
55,229,221
56,702346
58,215304
59,767,447
Uses of Funds
31 
NON OtVISIONAL
32 
CITY TREASURER
33 
WATER RESOURCES
34 
Citywide Indirect Cost Allocation (Trarv
35 
Department Indirect Cost
36 
Cltywlde Pay Program
37 
Compensation Other
38 
Vacation Trade
831,352 
999,349
16,849,802 
17,602,289
1,189,297 
1,384,027
143,599
231,485
1,021,325 
985,077
17,678,079 
17,701,350
1384,027 
1,352,090
12.271
7,031
998,100 
1,012,200
18,290,200 
18,595,900
1.419,700 
1,490,700
1,012
1,000
1,026,500 
1,040,900
18,907,900 
19,229,800
1,565,200 
1,643,500
1,100
1,100
1,061,718 
1,082,952
19,616,148 
20,010,311
1,676,370 
1,709,897
1,104,611 
1,126,704
20,412,448 
20,822,725
1,744,095 
1,778,977
1,100
1,100
1,100
1,100
1,100
n Purposes Only

dty of Scottsdale, AZ
Wastewater Utility
Operating Fund Cash Flow Analysis
42,104,363
Table A-2 
3/27/2020
For the Fiscal Period Ending June 30
Line
Wo. Description
L
Actual
I Adopted I Approved |
Projected
J
2019
2020
2020
2021
2022
2023
2024
2025
2026
2027
2026
2029
$
$
$
$
$
$
$
$
$
$
$
$
39 
Savings from Vacant Positions
40 
Leave Accrual Payments
41 
Utilities 
_
42 
Total Operation and Maintenance Expr
[148,200} 
(34,922} 
(148,200)
58,666 
58,666 
58,666
4,265,353 
4,301,100 
4,301,100 
4,558,100
23,135,804
(151,600) 
(154,900) 
(158,400) 
(161,900)
60,000 
61,400 
62,7ro 
64,100
4,692,500 
4,831,100 
4,973,3^ 
5,213,000
(165,138) 
(168,441)
65,382 
66,690
5,585,457 
5,985,477
(171,810) 
(175,246)
68,023 
69,384
6,415,121 
6,876,603
24,572,315
24,427,577
24,508,095
25,309,900
25,837.500 
26,378,300 
27,030,500 
27,841,037
28,687,986
29,573,590
30,500,248
DebtSenrke
Existing
43 
MPC Bonds Debt Service-Sewer
44 
MPC Bonds Debt Service-Water
45 
Sewer Revenue Bonds 
Proposed
46 
Revenue
47 
MPC
48 
Total D^t Service
7,793,145
0
4,566,588
0
0
7,919,889
0
4,574.588
0
0
7.919.889
0
4,574.588
0
0
8,024,922
0
4,584.025
0
0
8,139,523
0
4.592,700
0
0
7,750,829
0
4.605,088
0
0
7,861,900
0
0
0
0
7,372,868
0
0
0
0
7,489,856
0
0
0
0
7,611,092
O
0
0
0
7,763,469
0
0
0
0
ia959,651
0
0
0
0
12.359.733
12.494.477 
12.494.477
12.608.947
12,732.223
12.355,917
7,861,900
7,372,868
7,489,856
7,611,092
7,763,469
10,959.651
48
50
51
52
53
54
Transfers Out 
AWT
Transfers to the Capital Fund 
OP Technology 
Debt Service Fund 
Franchise Fees 
Total Transfers Out
55 
Total Uses
58 
Annual Surplus (Defidettcy)
0 
0
2,558,024 
7,738,005
110,165 
40,455
3,875,681 
0
2.203,597 
2,061,835
8,747,467
0 
0
14,292,116 
15.000,000
40,455 
30,829
0 
0
2,061,835 
2,328,301
0 
0
19,200,000 
14,000,000
154,000 
511,300
0 
0
2,395,300 
2,464,200
9,840,295
16,394,406 
17,359,130 
21,749,300 
16,975.500 
20,873,600
0 
0
18,200,000 18,200,000 
138,400 
55,000
0 
0
2,535,200 
_ 2,608,200^
20,863,200
0
18,200,000
0
0
2,686,400
0
18,200,000
0
O
2,767,000
0
18,200,000
0
0
2,850,000
44,Z»,004 
46,907,087
8,386,074 
4,803/332
S331M80 
54376,172
(1306.341) 
(452.533)
59,791323 
55468,917
(4,792,692) 
889,779
55,118300 
55,266368
2.044,837 
3,218,572
56,217392 
57366,078
(988,072) 
(563,232)
0
i%2oaooo
0
0
2,935,500
20,886,400 
20,967,000 
21,050,000 
21,135,500
58387359
(171.855)
62395,898
(2.827.951)
57 
Operating Reserve
57 
Repair/Replacement Reserve
58 
Revenue Bond Debt Service Reserve
58 
Water Draught Reserve
59 
Special Contractual Fund Balance
59 
Unreserved Fund Balance
60 
Total Endii^ Balance
4,402,471 
4,080,192
4,604,688 
4,604,688
27,618,088
4,080,192 
5,232,391
13,604,582
4,604,688
18,610,924 
18,300,600 
17,126,861
6,522,237
6,632,981
14,048,446
(114,910)
7,249.068
14.395^503
(188,275)
8,304,110
14,807,299
389,725
8,583,836
15,480318
2,655,552
5,018,209 
5,170,683
16,121,092 
16,539,964
4,592,333
3,457,755
5,329,905
16,918,929
2,747,713
5,496,287
17337.345
(565,037)
26385380
25311.741
25359.209
20,566,517
213
23301.134 
26,719,705
25,731,634 
25.168302
24,996347 
22,168,596
81
82
Annual Wastewater Rate Revenue Incr 
Cumulative Revenue Increase
N/A
N/A
N/A
N/A
0.0M;
aoK
0.0W
o.cm
2.0%
2.0X
2xr%
AM
7M
6.1%
2M
8.2%
2.0%
ia4%
2.0%
12.6K
2.0%
14.9%
2.0%
17.2%
63
All in Debt Service Coverage
1.84
1.S5
1.86
1.79
1.81
1.94
3.16
3.47
3.14
3.17
3.19
2.32
Draft-For Discussion Purposes Only

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Tabla A-4
City of SeottKialt. AZ 
WattawaUr Utiltty
i & ProlKtad Mbcell
« and Othar Incoma
Una
No. Account
FOftha HmoI Pariod EndiniJuBaSO
Actual Adopted I Approvad I Bu^t
Br^ctad
2019
2020
2021
2022
2024
2025
2026
2027
20tt
n
2029
$
$
$
$
$
$
$
1
2
9
4
5
6 
7
Odtar Rata Ravanua 
Sewar Late Charge 
Sewer Account Initiation Fee 
Sewer O&M User Charge 
Sewer Other Charges 
Out or City Surcharge • Sewer 
Non-Hazardous Liquid Waste 
Sewer Service Charges
64.595
106,558
0
0
75,422
2,278,239
710
90,000
135,800
0
0
49,500
2,180,000
0
90,000
135,800
0
0
49,500
2,180,000
0
91,100
110,000
0
0
63,000
2,316,400
0
92,000
111,100
0
0
0
2,362,728
0
92,900
112,200
0
0
0
2.409,983
0
93,900
113,300
0
0
0
2,458,182
0
94,800
114,500
0
0
0
2,507,346
0
94,800
114,500
0
0
0
2,557,493
0
94,800
114,500
C
0
0
2,608,643
0
94,800
114,500
0
0
0
2,660,815
0
94,800
114,500
0
0
0
2,714,032
0
Othar Operating Income
8 
Non-Potable Water Service Charges
9 
Interest Earnings
10 
Indirect
11 
Miscellaneous
12 
Stormwater Ouallty Fees
13 
Property Rental
14 
Contributions 8> Donations
815,943 
1,000,000 
1,000,000 
1,050/X» 
1,060,500 
1,071,100 
1,081,800 
1,092,600
287,283
174,978
186,210
234,882
0
0
733,592
221,300
63,200
332,750
0
0
733,592
221,300
63,200
332,750
0
o
774,001 
783,900 
800,2X 
823,700
210,500
75,800
336,000
0
0
214,700
76,700
339,400
0
0
219,000
77,600
342,800
0
0
223,400
78,400
346,200
0
0
823,700
227,900
79,300
349,600
0
0
1,114,500 
1,136,800
823,700 
823,700
232.500
80,500
349,600
0
0
1,159,500
823,700
237,200
81,700
349,600
0
0
1,182,700
823,7X
241,900 
246,700
82,900 
84,100
349,600 
349,600
0 
0
0 
0
Tiansfeia In
15 
Transfer In AWT
16 
Transfer In RWDS
17 
Transfer In Operating
18 
Transfer In Debt Service
2,842,514
0
900,000
3,875,681
2,985.000
900,000
0
0
2.985,000
900,000
0
0
^863,545
900,000
0
3,168.720
2,892,200
900,000
0
2,833,600
2,921,100
900,000
0
2,478,700
2,950,300
900.0X
0
2,120,400
2,979,800
900,000
0
1,975,000
2,979,800
900,000
0
0
2,979,800
900,000
0
0
2,979,800 
2,979400
900,000 
900,000
0 
0
0 
0
Other Mbcellenaous I 
U SPHX ToUl Revenue
34,876
34,876
34,876
34,876
34,876
34,876
34,876
34,876
34,876
34,876
34476
34478
M
la end Other Income
11467461
1,726418 
6,726416 
11493,642 
11,701,704 
11460,456 
11424,458 
U,176,422 
9,262,269 
9,361419 
6442492 
6424406
Drafl-For Discussion Purposes Only

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CV/H>
I
Piojoeterf
2021
2022
2023
2026
2020
2020-
2029
Total
64
66
66
62
66
69
70
71
72
73
74
75
76
77 
76 
79 
60 
61 
12
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100 
101 
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103
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106
107
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100
110
111
112
113
114 
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116 
117 
116 
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120 
121 
122
123
124 
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126 
127 
126
Waitawatef Syit«m ImpcovHncnti
Wastewatw Syttem Improvomentt
sf Svitei
Wastewater System Improvement*
Wastewater System Improvement*
Wastewater System Improvement*
Wastewater System In^rovement*
Wastewater System Improvement* 
Wastewater System Improvement* 
Wastewater System Improvement* 
Wastewater System Improvement*
er Technology Master Plats
Santtary Sewer Lateral FtehabllHatiors
Sanitary Server Lateral RehabllHation
Advaisce Water Treatment Plant Membranes • Waslcvatcs
Advance Water Treatment Plant Membranes - Wastewater
Advance Water Treatment Plant Membranes • Wastesvater
Master Plan Water Reclamailtvs
Master Plan Water Reclamation
Mastar Plan Water Reclamation
Wastewater Impact Fees
sr Treatment Fad 
tr Treatment Fad
Wastewater Treatment Fadllty In 
Wastesvater Treatment Fadlrty In
Wastewater Treatment FaclHty Improvements 
Wastewater Treatment Facllitv Improvements 
Wastewater Treatment Facility Improvements 
Wastesvater Treatment Facility Improvemrmti
Wasl
er Treatment Fadll 
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Wastewater Treetmem Facility Improvements 
Wastewater Treatment Facility Improvements 
Wastmvater TreetmersI Fedllty Improvements 
Westewatcr Treatment FKillty Improvements
St Facility imi
Wastewater Treatment FKlUty Improvement* 
Wastewater Treatment Fadllty Imprevcmtnts
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
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Y
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0
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100.000
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0
0
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0
0
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0
0
0
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300,000
70,000
0
0
0
500,000
60,000
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320,000
200,000
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75,000
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1,622.400
270,400
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0
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324,460
0
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27,040
27,040
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123,171
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2,294,723
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52,000
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60.000
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0
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5,023,162
2,498,961
1.132,774
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0
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0
0
0
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1.661,299
1,082,000
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2020-
2029
2CB0
ZQgl
2023
2014
2025
2024
2027
2ia»
2029
129
190
191 
132
139 
194
135
136 
197 
196 
199
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154 
13S
156
157 
1S6 
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161 
162 
169
164
165 
146 
167 
146
169
170
171
172
173
11 Fad
n Fadlhv Ir.
Wariewiler Treatment FacllKv Improvemerrtj 
WaHewiter Treatment Fatlltty Improvement*
Wattewiter Treatment Fadll 
Wattewitec Treatment Fadll
Waslewitei Treatment Ficllity Improvemenb 
Wastewater Treatment Fadllty Improvement* 
Wastewater Treatment Fecilltv Improvement* 
Wastewater Treatment FacllRv Improvements 
Wastewater Treatment Fedlitr Improvements 
Wastewater Treatment Farilltv Improvements
It Fadltty Improvements
ip Station Rehabiittatlon
Tachnolojy Mailer Plan Identified Wastewater Project* 
Tathnolojv Mailer Plan Identified Wastewater Projccls 
Technol^V Master Plan Identified Wastewater Projects 
Technology Master Plan Identified Wastewater Projects 
Technologv Staster Plan Identified Wastewater Projects 
Technology Maiter Plen Identified Wastewater ProjKIs 
Technologv Mailer Plan Identified Wastewater Projects 
Tcchnolecv Master PUn Identified Wastewater Projects 
Technologv Master Plan Identified Wastewater Projects 
Technology Master Plan Identified Wastewater Projects 
Technologv Master PUn Identified Wastewater Projects 
Technologv Master PUn Identified Wastewater Projects 
Tfchnology Master PUn Identified Wastewater Projects 
Tachnotogv Master PUn Identified Wastewater Projects 
Technologv Master PUn Identified Wastewater Prefects 
Technologv Master PUn Identified Wastewater Projects 
Technologv Master PUn Identified Wastewater Projects 
Technologv Master PUn Identified Wastewater Projects 
Technology Master PUn Identified Wastewater Projecu 
Dynamite Roed Sewei Interceptor 
SROG Regional Wastewater Facilities 
SROG Regionil Wastewater Feclllties 
SROG Rcglonil Wastewater Facilities 
SROG Regional Wastewater Feclllties 
lomai Road Sewer Interceptor and lift Station
mpne. inflation)
Repair and RepUcert 
Filed Assets as of lune 30. 2019
re Target Cakutatton
jgratn, hflatad
Y
Y
y
Y
Y
Y
Y
y
Y
Y
r
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
$641447,171
Cumulative estimated OeprecUllon Experue 9 291
0
0
0
0
0
0
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0
0
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0
0
0
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206.000
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4.456.400
0
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22,356477
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22,356,477
38.661.909
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1.622,400
0
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0
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1481,600
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0
0
0
0
0
0
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0
0
0
0
0
0
27,040
0
0
0
0
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216.320
17,035
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0
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22,193,214
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1,221,502
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0
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0
0
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0
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0
0
224473
0
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1,U4464
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0
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224473
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0
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17,352.864
78,427,987
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17.I7M
24589,790
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1,980,356
$14.607499
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0
0
912,490
0
0
0
0
121,665
0
0
0
0
0
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1416,653
250.466
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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216496
41.501
0
21.CB4.595
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31,712
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33.650,957
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33,650,957
132,668.735
2,653.375
$15,480416
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0
0
1497.979
163459
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
253464
17,714
0
3t567,8Q6
0
0
0
0
32.036.700
4.0K
2&SW
32.038,700
164,707,435
3.294.149
$16,121,092
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1973498
136.173
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
263.186
18.423
0
11,139,363
0
0
0
0
20.943,581
185,651.016
3.713420
$26,533464
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2452454
143.700
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
273.714
19.160
0
8,505,657
0
0
0
0
4.0*
369*
18.948.249
204,599,265
4.091.985
$16,916,929
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,lH96a
149448
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
284,662
19.926
0
S.105.419
0
0
0
0
11920410
4.0*
42.3*
15.920410
220.52a075
4.410.401
$17.237445
606.326
1.623,232
58.493
912.490
0
2,662,400 
125,000 
1460,600 
121,665 ' 
75.000 
649,293 
52,000 
442462 
540400 
1.061.600 
13,892,673 
1.955,931 
109,980 
0 
0
100400
0
0
0
0
75,000
34,000
253.MO
0
35,360
354400
27.040
0
0
623400
125400
0
2495,410
286,767
43,264
95.627,419
50,000
1,731,712
0
89,000
22042(1075
Oraft-For Discussion Purposes Only

APPENDIX B:
COST OF SERVICE

Table B-1
City of Scottsdale, AZ
Wastewater Utility
Test Year Revenue Requirement
Line
No Description
O&M
Capital
Total
1 
Operation and Maintenance Expense
2 
Debt Service
3 
Capital
4 
Total Revenue Requirement 
Adjustments
5 
Other Operating Income
6 
Transfers In
7 
Other Rate Revenue
8 
Change in Fund Balance
9
Total Adjusments
10 Net Revenue Requirment
$26,836,396 
$26,836,396
$12,608,947 
$12,608,947
_______________ $15,030,829 $15,030,829
$26,836,396 
$27,639,776 
$54,476,172
($2,481,177) 
($2,481,177)
($6,932,265) 
($6,932,265)
($2,580,500) 
($2,580,500)
_________________ ($452,533) 
($452,533)
($5,061,677) 
($7,384,798) ($12,446,475)
$21,774,719 
$20,254,978 
$42,029,697
Draft-For Discussion Purposes Only

Table B-2
City of Scottsdale, AZ 
Wastewater Utility
Allocation of Assets to Functional Cost Components
Line
No
Fixed Asset Allocation
Original Cost
Test Year 
CIP
Total
Flow
COD
TSS
Billing
Ready to 
Serve
Indirect
Total
1 Pumping
2 Collection
3 Treatment
4 General
5 Total
6 Percent of Total
7 Total Indirect
8 Total Reallocated
9 Percent o/Tofo/
$41,063,456
$378,117,508
$216,924,806
$5,241,402
$109,980
$510,203
$36,460,654
$1,801,072
$41,173,436
$378,627,710
$253,385,460
$7,042,474
9(»4
90K
45%
0%
5%
5%
33%
0%
$641,347,171
$38,881,909
$680,229,080 
$491,844,488 $103,340,332
100.0% 
73.1% 
15,4%
$5,145,382 
$1,081,084
5%
5%
23%
0%
$78,001,786
11.6%
$816,008
0%
0%
0%
0%
$0
0.0%
so
$496,989,870 
$104,421,416
73.1% 
15.4%
$78,817,794
11.6%
so
0.0%
0%
0%
0%
0%
$0
0.0%
so
0%
0%
0%
100%
$7,042,474 
$680,229,080
100%
100%
100%
($7,042,474)
$0
0.0%
$0
0.0%
$0
Table 8-3
City of Scottsdale, AZ 
Wastewater Utility 
Functional Allocations
Une
No
Allocation Categories
Flow
COD
TSS
Billing
Serve
Indirect
Total
1 Fixed Assets
2 Debt/Fixed Assets
3 Capttal/Fixed Assets
4 Flow Only
5 COD Only
6 TSS Only
7 Customer Only
8 Conveyance
9 Cust/Flow/COD/TSS
10 Flow/COD^SS
11 As All Other
12 Capital + Fixed Charge
73.1%
73.1%
73,1%
100.0%
0.0%
0.0%
0.0%
100.0%
38.2%
34.1%
0.0%
38.5%
15.4%
15.4%
15.4%
0.0%
100.0%
0.0%
0.0%
0.0%
28.4%
35.7%
0.0%
8,1%
11.6%
11.6%
11.6%
0.0%
0.0%
100.0%
0.0%
0.0%
24.3%
30.2%
0.0%
6.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
9.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
47.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
IM.0%
0.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Draft-For Discussion Purposes Only

Table B-4
City of Scottsdale, AZ
Wastewater Utility
O&M Expense Functional Allocation
Une
No
Description
Test Year 
2021
Allocation
% Fixed Allocation
Flow
COD
TSS
Billine
Serve
Indirect
Total
Account Group SI
1 FULL-TIME WAGES
2 FULL-TIME WAGES
3 PART-TIME WAGES
4 PART-TIME WAGES
5 OTHER COMPENSATION
6 OTHER EMPLOYEE REIMBURSEMENTS
7 UNIFORM. CLOTHING&TOOLAUOWANCE5
8 ONE-TIME PAYMENT
9 MILEAGE REIMfiURSEMENT/CARAUOWANa
10 OVERTIME-HOLIDAY
11 OVERTIME-OTHER
12 EXCESS REGULAR WAGES
13 RETIREMENT
14 HEALTH/DENTAL
15 FICA
16 FRINGES-OTHER
17 VACATION TRADE PAYOFF
18 VACATION PAYOFF
19 MEDICAL LEAVE PAYOFF
20 ARIZONA STATE RETIREMENT SYSTEM
21 ARIZONA STATE RETIREMENT SYSTEM
22 ARIZONA STATE RETIREMENT SYSTEM-ACR
23 ARIZONA STATE RETIREMENT SYSTEM-ACR
24 HEALTH INSURANCE
25 DENTAL INSURANCE
26 UFE INSURANCE
27 LONG TERM DISABIUTY
28 UNEMPLOYMENT
29 MEDICARE EMPLOYER TAX (FHt)
30 MEDICARE EMPLOYER TAX (FHI)
31 SOGALSECURrrYEMPLOYERTAX{FICA)
32 SOCIAL SECURITY EMPLOYER TAX (FICA)
33 VACANCY SAVINGS
34 VACANCY SAVINGS
35 VACANCY SAVINGS-CONTRA
36 VACANa SAVINGS-CONTRA
37 CIPW/0 CREDIT AUOCATION
38 W/O CREDIT-PERSONNEL SERVICES
39 W/O CREDIT-PERSONNEL SERVICES
40 CONTRACT WORKER SERVICES
41 PAY FOR PERFORMANCE
42 LUMPSUM ADJUSTMENT-BUDGET OFFICE
43 OTYWIDE PAY PROGRAM
44 COMPENSATION OTHER
45 COMPENSATION OTHER CATCH-UP
Draft-For Discussion Purposes Only
$4,452,538
$66,560
$235,012
$0
$2,330
$0
$8,344
$34,621
$314,376
$46,148
$0
SO
$0
SO
SO
$21,402
$37,264
$620,360
$7,422
$675,972
$25,440
$6,780
$156
$835
$71,780
$304,513
($148,200)
so
SO
$690,412
So
SO
So
so
$1,012
$0
Cust/Flow/COD/TSS
Cust/Flow/COO/TSS
Cust/Flow/COD/TSS
Cust/Flow/COO/TSS
Cust/Flow/COO/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/CODASS
Cust/Flow/COp/TSS
Cust/Flow/COp/TSS
Cust/Flow/CODASS
Cust/Flow/COD/TSS
Cust/Flow/CODASS
Cust/Flow/CODASS
Cust/Flow/COD/TSS
Cust/Fiow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Fiow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Fiow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/CODASS
Cust/Flow/COO/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/CODASS
Cust/Flow/CODASS
Cust/Flow/CODASS
Cust/Flow/CODASS
Cost/Flow/COD/TSS
Cust/Flow/CODASS
O.OK
0.0%
38%
38%
28%
28%
24%
24%
9%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
0.0%
38%
28%
24%
28%
24%
9%
9%
0.0%
38%
0.0%
38%
28%
24%
28%
24%
9%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
0.0%
38%
28%
24%
9%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
0.0%
38%
28%
24%
9%
24%
9%
0.0%
38%
28%
0.0%
38%
28%
24%
24%
9%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
0.0%
0.0%
38%
38%
28%
28%
28%
24%
24%
24%
9%
9%
9%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Table B-4
aty of Scottsdale, AZ
Wastewater Utility
O&M Expense Functional AllocatkMi
Line
No
Description
Test Year 
ZOZl
Allocation
% Fixed Allocation
Flow
COD
TS5
Billing
Serve
Indirect
Total
46 VACATION PAYOFF
47 MEDICAL LEAVE PAYOFF
48 VACANCY SAVINGS
Cust/Flow/COD/TSS
Cust/Fiow/CQDASS
Cust/Flow/COD/TSS
00%
0.0%
0.0%
38%
38%
38%
28%
28%
28%
24%
24%
24%
9%
9%
9%
0%
0%
0%
0%
0%
0%
100%
100%
100%
Account Group 52
49 MAN HOLE TREATMENT-OTNER
50 MANHOLE TREATMENT
51 CLOSED CAMERA TELEV1SING-OTHER
52 CLOSED CAMERA TELEVISING
53 SEWER CLEANING-OTHER
54 STORMWATER CLEANING
55 SEWER ASSESSMENT SERVICES
56 CONSULTANTS
57 SECURITY
58 LABORATORY TESTING
59 SEWER CLEANING
60 CUSTODIAL SERVICES
61 AUDITING AND ACCOUNTING
62 BANKING SERVICES
63 COLLECTION AGENa FEES
64 OTHER PROFESSIONAL SERVICES
65 POSTAGE AND SHIPPING
66 TELEPHONE/BASE
67 CELLULAR PHONES
68 SPECIALTY UNES-COMMUNICATIONS
69 PC REPLACEMENT
70 RWCH’VENTURE ASSESSMENTS
71 OVERNIGHTTRAIN/BUSINESS CONF TRAVL
72 TUITION REIMBURSEMENT
73 TRAINING/BUSINESS CONFERENCE
74 SPONSOREDTRAINING
75 PRINTINGS GRAPHICS SERVICES
76 PRINTINGS GRAPHICS SERVICES
77 PHOTOCOPY CHARGES
78 LANDSCAPING
79 MAINTENANCE, OFF EQUIPS FURNITURE
80 SOFTWARE MA1NT S LICENSING
81 SCADA SOFTWARE MAINTS Lie
82 SOFTWARE MAINT S LlC (I.S. ONLY)
83 MAINT - MACHINERY, EQUIP S AUTOS
84 SEWER LATERAL MAINT SREPAiRS
85 UNIFORM CLEANING
86 MISC MAINTENANCE AND REPAIR
87 INSURANCE S BOND PREMIUMS
88 PROPERTY, UABILFTY S WORKERS COMP
89 PROPERTY DAMAGE-NON-TOTALED VEHICLE
Draft-For Discussion Purposes Only
S1S,000
$140,000
$250,000
$150,000
$40,000
so
SO
$125,000
$85,000
$16,000
$610,000
SO
$0
$70,000
SO
$349,000
$4,100
$20,410
$10,050
$23,999
$18,810
$43,250
$19,850
SO
$47,800
$58,000
$1,000
$11,978
$58,000
SO
$123,670
$76,750
$18,102
$425,000
$95,000
$12,000
$0
SO
$211,416
$0
Flow Only
Flow Only
Flow Only
Flow Only
TSS Only
Flow Only
Flow Only
As All Other
As All Other
COD Only
TSS Only
Customer Only
Customer Only
Customer Only
Customer Only
As All Other
Customer Only
As Ail Other
As All Other
As All Other
As All Other
As All Other
As All Other
As All Other
As All Other
As All Other
As All Other
As AH Other
As All Other
As All Other
As All Other
As All Other
Flow/COD/TSS
As All Other
Fixed Assets
Flow Only
As All Other
Fixed Assets
As All Other
Cust/Flow/COD/TSS
As All Other
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100%
100%
0%
0%
0%
0%
0%
0%
100%
0%
0%
0%
100%
0%
0%
0%
0%
0%
100%
0%
100%
0%
0%
0%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
0%
0%
0%
0%
100%
0%
0%
0%
0%
100%
0%
0%
0%
100%
0%
0%
0%
100%
0%
0%
0%
100%
0%
0%
0%
0%
0%
0%
0%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
34%
36%
30%
0%
0%
0%
0%
0%
73%
15%
12%
0%
100%
0%
0%
0%
0%
0%
0%
0%
73%
15%
12%
0%
0%
0%
0%
0%
38%
0%
28%
0%
24%
0%
9%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
0%
0%
0%
0%
0%
0%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
0%
0%
100%
0%
100%
0%
100%
100%
100%
loroi
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Table
City of Scottsdale, AZ
Wastewater Utility
O&M Expense Functional Allocation
Une
No
Description
Test Year 
2021
Allocation
% Fixed Allocation
Flow
COO
TSS
Billing
Serve
Indirect
Total
90 MACHINERY & EQUIPMENT RENT
91 OTHER RENTALS
92 CARAaOWANCE/MILEAGEREIMBURSEMNT
93 FLEETMAINTENANCE&OPERATIONS*07/
94 FLEET-MAINTENANCES! REPAIR (M&R)
95 FLEET-FUEL
96 FLEET - REPLACEMENT
97 ELECTRIC
98 GAS
99 WATER
100 SEWER
101 SOLID WASTE
102 RECYCUNG SERVICES
103 SUBSCRIPTIONS Si MEMBERSHIPS
104 CITY MEMBERSHIPS
105 DAMAGE CLAIMS
106 INTERGOVERNMENTAL PAYMENTS
107 PUBLIC EDUCATION OUTREACH
108 PAPERLESS BIU INCENTIVE
109 MULTl-Cmr WATER RECLAMATION PLANT
110 LANDFILL CONTRACT
111 LICENSES & PERMITS
112 SPECIAL CONT WATER CONSERVATION
113 OTNER CONTRACTUAL SERVICES
114 W/O CREDIT CONTRACTUAL
115 FLEET DEPTACCIDENT CHARGE BACKS
116 Offset Division Expenses
$40,000
SO
$0
$0
SO
$0
$187,596
$4,250,000
$22,500
$92,000
$173,600
$20,000
SO
$4,000
$34,500
SO
SO
SO
$40,000
$4,350,000
$2,000
$13,000
$0
$43,000
$288,756
$0
$0
Flow/COD/TSS
As All Other
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
Flow/COD/TSS
Cust/Flow/COD/TSS
As All Other
As All Other
As All Other
Cust/Flow/COD/TSS
Cust/Flow/COD/TSS
As All Other
As All Other
As All Other
As Alt Other
Customer Only
Flow/COD/TSS
Flow/COO/TSS
As All Other
As All Other
As All Other
Customer Only
As All Other
As All Other
0.094
0.094
3494
0%
36%
0%
30%
0%
0%
0%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
34%
36%
30%
0%
0.0%
38%
28%
24%
9%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
38%
28%
24%
9%
0.0%
38%
28%
24%
9%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
100%
0.0%
34%
36%
30%
0%
0.0%
34%
36%
30%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
100%
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
0%
0%
100%
100%
100%
100%
0%
0%
0%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Account Group 53
117 OFFICE SUPPUES
118 RADIOS AND ASSOCIATED EQUIPMENT
119 FURNITURE & MINOR EQUIPMENT
120 FURNITURE & MINOR EQUIPMENT
121 EDUCATION & RECREATION SUPPUES
122 CHEMICALS & LABORATORY SUPPLIES
123 TREATMENT CHEMICALS
124 TREATMENT LAB SUPPUES
125 WATER SAFETY EQUIPMENT
126 BUSINESS MTGS - REFRESHMENTS & SUPPLIES
127 CLOTHING & PERSONAL PROTECT EQUIP
128 TREATMENT CHEMICAL(NON-TAXABL£)
129 CLEANING CHEMICAL(TAXABLE)
130 SAFETY & INCENTIVE AWARD
131 PHOTOGRAPHIC & DUPUCATIMG SUPPUES
132 PURCHASED WATER
133 OTHER OPERATING SUPPUES
Draft-For Discussion Purposes Only
$20,000
$21,000
$5,000
$2,000
$89,000
SO
$45,000
$58,000
$1,750
$19,700
$1,100,000
$355,000
$2,000
$7,500
SO
$52,500
As Ail Other
As All Other
As All Other
As All Other
Customer Only
Flow/COD/TSS
Flow/CODASS
Flow/COOASS
Flow/COD/TSS
As All Other
As All Other
Flow/COD/TSS
Flow/COO/TSS
Customer Only
Customer Only
As All Other
Flow/COD/TSS
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
100%
0.0%
34%
36%
30%
0%
0.0%
34%
36%
30%
0%
0.0%
34%
36%
30%
0%
0.0%
34%
36%
30%
0%
0.0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0.0%
34%
36%
30%
0%
0.0%
34%
36%
30%
0%
0.0%
0%
0%
0%
100%
0.0%
0%
0%
0%
100%
0.0%
0.0%
0%
34%
0%
36%
0%
30%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
0%
0%
0%
0%
0%
100%
100%
0%
0%
0%
0%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Table B-4
City of Scottsdale, AZ
Wastewater Utility
O&M Expense Functional Altoation
Une
No
Description
Test Year 
2021
Allocation
% Fixed Allocation
Flow
COD
TSS
Billing
Serve
Indirect
Total
134 GAS OIL & LUBRICANTS
135 SMALL TOOLS 8. EQUIPMENT
136 PAINT
137 SERVICE INTERRUPTION MATERIALS 
136 MTRS TO MAINT & REPAIR BLDS & IMPR
139 REPLACEMENT OR REPAIR
140 OTHER MAINTENANCE & REPAIR SUPPLY
141 MAT TO MAINT & REPAIR MACH, EQUIP
142 MAT TO MAINT AN D REPAIR ELEC
143 MAT TO MAINT AND REPAIR MECH SYS
144 MAINT & REPAIR OPER CNTRL SYS
145 COMMODITY W/0 CREDITS
146 Offset Division Expense
$8,500
$54,500
$0
$0
$0
$0
$0
$0
$352,000
$660,500
$14,000
$5,341
$0
Flow/COD/TSS
Flow/COD/TSS
As All Other
As All Other
Fixed Assets
Flow/COD/TSS
Fixed Assets
Fixed Assets
Fixed Assets
Fixed Assets
Fixed Assets
As All Other
As All Other
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
34%
34%
36%
36%
30%
30%
0%
0%
0%
0%
0%
0%
73%
15%
12%
34%
36%
73%
15%
30%
12%
73%
15%
12%
73%
15%
12%
73%
15%
12%
73%
15%
12%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Account Group 54
147 CONTRACTUAL CONSTRUCTION-OTHER
148 OFFICE EQUIPMENT & FURNfTURE
149 COMPUTER EQUIPMENT
150 OTHER MACHINERY & EQUIPMENT
151 MOTOR VEHICLES
152 CAPITAL OUTLAYS WORK ORDER CREDITS
153 Offset Division Exp
Account Group 57
154 COMPENSATED ABSENCES - VACATION
155 COMPENSATED A8SENCES-MED LEAVE
156 ACCRUED PAYROLL
157 CITYWIDE INDIRECT COST ALLOCATION
158 OPERATING TRANSFER OUT
159 OPERATING TRANSFER OUT
160 TRANSFERS OUT - FRANCHISE FEES
161 TRANS OUT • IN-LIEU PROP TAX
162 POST EMPLOY HEALTH INS BEN
163 Total 08>M Expenses w/o Franchise Fees
164 Total 08.M Expenses
165 Reallocation of “As Alt Other"
166 Total Allocated O&M Expense
167 O&M Allocation Percentage
SO
$37,500
$40,000
$20,000
$20,000
SO
SO
As All Other
As All Other
As All Other
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0.0%
0%
0%
0%
0%
0%
Capital Fixed Charge
0.0%
38%
8%
6%
0%
47%
Cust/Flow/COO/rSS
0.0%
38%
28%
24%
9%
0%
As All Other
As All Other
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
so
so
$0
$1,352,090
$0
SO
$2,328,301
$0
$0
$24,508,095
$26^6,396
$26,836,396
As All Other
As All Other
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
As All Other
0.0%
0%
0%
0%
0%
0%
As All Other
0.0%
0%
0%
0%
0%
0%
As All Other
0.0%
0%
0%
0%
0%
0%
As All Other
0.0%
0%
0%
0%
0%
0%
As All Other
0.0%
0%
0%
0%
0%
0%
As All Other
As All Other
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
L
0.0%
J
$8,323,525
2,016,068
$6,231,497
1,509,351
$5,909,217
1,431,291
$1,129,990
273,698
$9,467
2,293
$5,232,701
(5,232,701)
$10,339,593 
$7,740,848 
$7,340,507 
$1,403,688
100.096
38.5%
28.8%
27.4%
5.2%
$11,760
0.0%
$0
0.0%
Draft-For Discussion Purposes Only
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

Table B-5
City of Scottsdale, AZ 
Wastewater Utility
Miscellaneous and Other Revenue Functional Allocation
Line
No Account
Test Year 
2021
Allocation
% Fixed Allocation
Flow
COD
TSS
Billing
Serve
Indirect
Total
$
%
%
%
%
%
%
%
1 Other Rate Revenue
2 Sewer Late Charge
3 Sewer Account Initiation Fee
4 Sewer O&M User Charge
5 Sewer Other Charges
6 Out Of City Surcharge - Sewer
7 Non-Hazardous Liquid Waste
8 Sewer Service Charges
91,100
110,000
0
0
63,000
2.316,400
0
Customer Only
Customer Only
Customer Only
Customer Only
Cust/Fiow/COD/TSS
Ftow/COD/TSS
Customer Only
0.0%
0.0%
0%
0%
0%
0%
0%
0%
100%
100%
0.0%
0%
0%
0%
100%
0.0%
0%
0%
0%
100%
0.0%
38%
28%
24%
9%
0.0%
0.0%
34%
0%
36%
0%
30%
0%
0%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
Other Operating Income
9 Non-Potable Water Service Charges
10 Interest Earnings
11 Indirect
12 Miscellaneous
13 Stormwater
14 Property Rental
15 Contributions & Donations
Other Miscellaneous Revenue
16 SPHX Total Revenue
17 Operating Annual Surp!us/(Deflciency)
1,050,000
774,001
210,500
75,800
336,000
0
0
Cust/Flow/COD/TSS
As All Other
0.0%
0.0%
38%
0%
28%
0%
24%
0%
9%
0%
0%
0%
0%
100%
Customer Only
0.0%
0%
Customer Only
0.0%
0%
0.0%
0.0%
0.0%
0.0%
0.0%
0%
0%
0%
0%
100%
100%
0%
0%
0%
0%
As All Other
0.0%
0%
As All Other
As All Other
0.0%
0.0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
34,876 I As All Other | 
0.0%
T
ox
I ox \
ox
T
ox
T
ox
I lOOX \
“L
As All Other
J
0.0%
I 0% I 0%
T
0%
0%
I 0% I 100%
100%
100%
100%
100%
100%
100%
100%
100%
0.0%
17 Total other Rei
come
Total Allocated Other Revenue and Income
18 Percent Allocation
19 Reallocated As All Other Costs
20 Total Reallocated Other Revenue and Income
21 Percent Allocation for Cost of Service
5,061,677
5,061,677
5,061,677
L
0.0%
J
1,216,242
31.1%
355,506
1,571,748
31.1%
1,142,943
29.2%
334,081
1,477,024
29.2%
969,655
2A.8%
283,429
1,253,084
24.8%
587,961
15.0%
171,860
759,821
15.0%
0
0.0%
0
0
0.0%
1,1H877
(1,144,877)
0
Draft-For Discussion Purposes Only

Table B-6
City of Scottsdale, AZ 
Wastewater Utility
Capital and Transfers Out Functional Allocations
Une
No Account
Test Year 
2021
Allocation
Flow
COD
TSS
Billing
Ready to 
Serve
Total
$
%
%
%
%
%
%
%
1 Capital and All Other Uses
2 Debt Service
3 AWT
4 Transfers to the Capital Fund
5 CIP Technology
6 Debt Service Fund
12,608,947
0
15,000,000
30,829
0
Debt/Fixed Assets
As All Other
100%
OK
73K
OK
15K
OK
12K
OK
Capital + Fixed Charge
lOOK
38K
8K
6K
Debt/Fixed Assets
As All Other
lOOK
OK
73K
OK
15K
OK
12K
OK
OK
OK
OK
OK
OK
OK
OK
47K
OK
OK
OK
lOOK
OK
OK
lOOK
lOOK
lOOK
lOOK
lOOK
lOOK
Transfers In • Adjustments
7 Transfer In AWT
8 Transfer In RWDS
9 Transfer In Operating
10 Transfer In Debt Service
(2,863,545)
(900,000)
0
(3,168,720)
Fixed Assets
Fixed Assets
As All Other
Fixed Assets
lOOK
lOOK
OK
lOOK
73K
73K
15K
15K
12K
12K
OK
73K
OK
15K
OK
12K
OK
OK
OK
OK
OK
OK
OK
OK
OK
OK
lOOK
OK
lOOK
lOOK
lOOK
lOOK
11 Total Capital and All Other Uses
12 Allocation %
20,707,511
9,941,937
73.1X
2,088,878
15.4%
1,576.695
11.6%
0
0.0%
7,100,000
13 Oiange in Fund Balance
(452,533)
L
1.00
n
73.1K
(330,630)
15.4K
(69,468)
11.6K
(52,435)
O.OK
0.0K
0
14 Total Reallocated and All Other Uses
20,254,978
20,254,978
9,6U307
47.5%
2,019,410
10.0%
1,524,261
7.5%
0
0.0%
7,100,000 
35. IK
15 Revenue Requirement Summary
16 Operation and Maintenance Expense
17 Capital Expenditures
18 Operating Revenue Adjustment
19 Net Revenue Requirement
$26,836,396
$20,254,978
($5,061,677)
$4^029,697
lOOK
OK
OK
0.75 
$10,339,593
0.5 
$9,611,307
0.5 
($1,571,748)
$7,740,848 
$7,340,507
$2,019,410 
$1,524,261
($1,477,024) 
($1,253,084)
$1,403,688 
$11,760
$0 
$7,100,000
($759,821)^
$0 
$26,836,396
$0 
$20,254,978
So 
($5,061,677)
$18,379,152 
$8,283,235 
$7,611,684
$643,867 
$7,111,760
$0
$42,029,697
Draft-For Discussion Purposes Only

Table B-7
City of Scottsdale, AZ 
Wastewater Rate Study 
Units of Service
Line
No Description
Flow
Extra Strength
COD
TSS
Customer
Billing
Ready to 
Serve
1,000 gal
mg/I
lbs
mg/I
lbs
bills
5/8" Eq. Meter
aty and Black Mountain
1 
Single-family Residential
2 
Multi-family Residential
3 
Commercial without dining
4 
Commercial with dining
5 
Hotels, motels without dining
6 
Hotels, motels with dining
7 
Carwashes
8 
Commercial Laundry
9 
Laundromats
10 
Metal Platers
11 
Restaurants; bakeries
12 
Service station a uto repair
13 
Medical Institutes
14 
Schools
15 
Not Used
16 
Black Mountain
17 Total aty and Black Mountain
Paradise Valley
18 Single-family Residential
19 
Multi-family Residential
20 
Commercial without dining
21 Commercial with dining
22 
Hotels, motels without dining
23 
Hotels, motels with dining
24 
Carwashes
25 
Commercial Laundry
26 
Laundromats
27 
Metai Platers
28 
Restaurants; bakeries
29 
Service station auto repair
30 
Medical Institutes
31 
Schools
32 
Not Used
33 
Not Used
7,748,380
1,884,292
840,658
190,397
79,065
240,569
58,299
6,580
6,175
160
357,651
46,901
197,256
56,871
0
90,156
11,803,410
149,447
92,473
38,644
9,121
23,539
71,928
0
6,419
2,119
30
10,534
1,823
3,126
9,932
0
0
34 Total Paradise Vattey and Black Mount 419,134
450 
450 
400 
1,000 
620 
1,000 
40 
900 
300 
600 
2,200 
360 
500 
260 
0 
387 
518 ’
450
450
400
1,000
620
1,000
40
900
300
600
2,200
360
500
260
0
29,079,671
7,071,748
2,804,436
1,587,910
408,829
2,006,343
19,448
49,391
15,450
801
6,562,178
140,817
822,558
123,319
0
290,941
50,983439
560,876
347,050
128,915
76,071
121,716
599,878
0
48,178
5,302
148
193,270
5,473
13,035
21,537
0
225 
225 
200 
600 
120 
600 
150 
340 
110 
300 
600 
280 
100 
100 
0 
158 
244 '
225
225
200
600
120
600
150
340
110
300
600
280
100
100
0
14,539,836
3,535,874
1,402,218
952,746
79,128
1,203,806
72,932
18,659
5,665
401
1,789,685
109,524
164,512
47,430
0
118,978
24,041392
280,438
173,525
64,458
45,642
23,558
359,927
0
18,201
1,944
74
52,710
4,257
2,607
8,283
0
35 Total System Units of Service
12,222,544
607 
2,121,450
53,105,289
296 
1,035,624
25377,016
874,397
36,874
34,429
2,650
639
968
274
131
47
12
5,425
1,746
1,367
1,019
0
12
1,049,887
304,210
217,081
24,438
8,934
15,098
2,711
670
562
12
44,369
9,548
18,645
16,556
0
317
959,990 
1,713337
16,865
6,200
804
84
1S6
264
0
12
12
12
60
60
48
12
0
0
17,021
6,200
864
84
156
264
0
12
12
12
60
60
48
12
0
0
24389
984,579
24305
1,737,842
Draft-For Discussion Purposes Only

Table B-8
City of Scottsdale, AZ 
Wastewater Utility 
Development of Unit Cost of Service
Customer
Line
No. Description
Extra Strength
Total
Flow
COD
TSS
Billing
Ready to 
Serve
Percentage Allocation
Revenue Requirement Summary-City and Paradise Valley
1 
Operation and Maintenance Expense $ 26,836,396 
$10,339,593 
$7,740,848 
$7,340,507
2 
Capital Expenditures 
$ 20,254,978 
$9,611,307 
$2,019,410 
$1,524,261
3 
Operating Revenue Adjustment 
$ (5,061,677) 
($1,571,748) 
($1,477,024) 
($1,253,084)
4 
Net Revenue Requirement
$1,403,688
$0
($759,821)
$11,760
$7,100,000
$0
$ 42,029,697 $ 18,379,152 $ 8,283,235 $ 
7,611,684 $ 
643,867 $ 
7,111,760
Units of Service
5 
City Units of Service
6 
Paradise Valley Units of Service
7 
Total City and Paradise Valley Units of Service
Flow 
COD 
TSS 
Billing
11,803,410 
50,983,839 
24,041,392 
959,990
419,134 
2,121,450 
1,035,624 
24,589
12,222,544 
53,105,289
25,077,016
984,579
Ready to 
Serve 
1,713,037 
24,805
1,737,842
Unit Cost of Service - inside City
8 
08lM Allocation
9 
Capital Allocation
10 
Other Income Adjustments
11 
Total City Unit Cost of Service
Unit Cost of Service - Outside City and Paradise Valley
12 
08iM Allocation
13 
Capital Allocation
14 
Other Income Adjustments
15 
Total Unit Cost of Service
$0,842 
$0,145
$0,782 
$0,038
($0.128) 
($0.028)
$0,291 
$1,420 
$0,007
$0,060 
$0,000 
$4,077
($0.050) 
($0.769)$0.000
$1,496
$0,155
$0,302
$0,652
$0,968 
$0,167
$0,900 
$0,043
($0.147) 
($0.032)
$0,335 
$1,633
$0,069 
$0,000
($0.057) 
($0.884)
$1,720
$0,178
$0,347
$0,749
Draft-For Discussion Purposes Only
$4,084
$0,008
$4,688
$0,000
$4,696

Table B*9
City of Scottsdale, AZ 
Wastewater UtUity
Distribution of Costs to Customer Oasses - Inside Cfty
Une
No.
Description
Total
Vcriume
Extra Strength
COD
TSS
Customer
Billing
Ready to 
Serve
1
2
3
Unit Costs of Service • City 
O&M Unit Cost 
Capital Unit Cost 
Total Unit Cost of Service
$0.7137
$0.7823
$1.4960
$0.1172
$0.0378
$0.1550
$0.2413
$0.0604
$0.6515
$0.0000
$0.3017
$0.6515
$0.0068
$4.0768
$4.0836
Single-family Residential
4 
Units
5 
O&M Cast of Service • $
6 
Capital Cost of Service • $
Multi-family Residential
7 
Units
8 
O&M Cost of Service-$
9 
Capital Cost of Service - $
Commercial without dining
10 
Units
11 O&M Cost of Service-$
12 Capital Cost of Service - $
Commercial with dining
U Units
14 O&M Cost of Service-$
15 Capital Cost of Service-$
Hotels, motels without dining
16 
Units
17 O&M Cost of Service-$
18 Capital Cost of Service - $
Hotels, motels with dining
19 
Units
20 O&M Cost of Service-$
21 Capital Cost of Service - $
Carwashes
22 
Units
23 O&M Cost of Service - $
24 Capital Cost of Service'$
Commercial Laundry
25 Units
26 O&M Cost of Service-$
$13,023,976
$12,319,554
$3,053,055
$3,195,259
$1,290,964
$1,733,384
$553,808
$366,159
$123,928
$118,512
$698,086
$398,319
$61,679
$61,802
$15,078
7,748,380 
29,079,671 
14,539,836
$5,529,858 
$3,409,547 
$3,507,803
$6,061,828 
$1,099,212 
$878,336
1,884,292 
7,071,748 
3,535,874
$1,344,780 
$829,152 
$853,046
$1,474,147 
$267,312 
$213,598
840,658 
2,804,436 
1,402,218
$599,960 
$328,816 
$338,292
$657,676 
$106,008 
$84,707
190,397 
1,587,910 
952,746
$135,882 
$186,180 
$229,854
$148,954 
$60,023 
$57,554
79,065 
408,829
$56,427 
$47,935
$61,855 
$15,454
6,580
$4,696
49,391
$5,791
79,128
$19,090
$4,780
240,569 
2,006,343 
1,203,806
$171,689 
$235,241 
$290,424
$188,205 
$75,840 
$72,721
58,299 
19,448 
72,932
$41,607 
$2,280 
$17,595
$45,609 
$735 
$4,406
18,659
$4,502
874,397
$569,679
$0
36,874
$24,024
$0
34,429
$22,431
$0
2,650
$1,727
$0
639
$416
$0
968
$631
$0
274
$179
$0
131
$85
1,049,887
$7,089
$4,280,178
304,210
$2,054
$1,240,201
217,081
$1,466
$884,994
24,438
$165
$99,627
8,934
$60
$36,423
15,098
$102
$61,553
2,711
$18
$11,052
670
$5
Draft-For Discussion Purposes Only

Table B-9
Gty of Scottsdale.AZ 
Wastewater Utility
Distribution of Costs to Customer Gasses • Inside City
Une
No.
Description
Total
Volume
Extra Strength
COD
TSS
Customer
Bllting
Readyto 
Serve
27 Capital Cost of Service - $
$10,873
$5,148
$1,867
$1,127
$0
$2,731
28
29
30
Laundromats
Units
O&M Cost of Service - $ 
Capital Cost of Service • $
$7,619
$8,048
6,175
$4,407
$4,831
15,450
$1,811
$584
5,665
$1,367
$342
47
$31
$0
562
$4
$2,291
31
32
33
34
35
36
37
38
39
40
41
42
Metal Platers
Units
0&MCostof5«rv(ce-$ 
Capital Cost of Service-S
Restaurants; bakeries
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
Service station auto repair 
Units
O&M Cost of Service-$ 
Capital Cost of Service-$
Medical Institutes 
Units
O&M Cost of Service •$ 
Capital Cost of Service • $
Schools
43 
Units
44 O&M Cost of Service •$
45 Capital Cost of Service - $
Not Used
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
Black Mountain Average Rate
46 
Units
47 O&M Cost of Service-$
48 Capital Cost of Service-$
49 Total Cost of Service
$313
$229
$1,460,257
$816,850
$77,608
$87,557
$277,927
$271,363
$67,265
$119,513
$0
$0
$127,168
$90,008
160
$114
$125
801
$94
$30
401
$97
$24
357,651 
6,562,178 
1,789,685
$255,248 
$769,405 
$431,770
$279,803 
$248,051 
$108,113
46,901 140,817 
$33,473 $16,511 
$36,693 $5,323
197,256 822,558 
$140,778 $96,444 
$154,320 $31,093
56,871 
123,319
$40,588 
$14,459
$44,492 
$4,661
0
$0
$0
90,156
$64,342
$70,532
0
$0
$0
290,941
$34,112
$10,998
$40,436,164 
$17,658,067 
$7,904,968
109,524
$26,423
$6,616
164,512
$39,689
$9,938
47,430
$11,443
$2,865
0
$0
$0
118,978
$28,704
$7,187
$7,252,412
12
$8
$0
5,425
$3,534
$0
1,746
$1,138
$0
1,367
$891
$0
1,019
$664
$0
0
$0
$0
12
$8
SO
$625,444
12
$0
$49
44,369
$300
$180,883
9,548
$64
$38,925
18,645
$126
$76,012
16,556
$112
$67,495
0
$0
$0
317
$2
$1,292
$6,995,273
Draft-For Discussion Purposes Only

Table B-IO
aty of Scottsdale, AZ
Wastewater Utftlty
Distribution of Costs to Customer Classes • Outside Cty and Pleasant Valley
Line
No.
Description
Total
Customer
Extra Strength
Volume
COD
TSS
BHIing
Ready to 
Serve
1
2
3
Unit Costs of Service 
O&M Unit Cost 
Capital Unit Cost
Total Unit Cost of Service
$0.82
$0.90
$0.13
$0.04
$1.72
$0.18
$0.28
$0.07
$0.35
$0.75
$0.00
$0.75
$0.01
$4.69
$4.70
4
5
6
Single-family Residential
Units
O&M Cost of Service - $ 
Capital Cost of Service - $
149,447
$288,856 $122,656 
$258,119 $134,456
560,876 
280,438
$75,626 
$77,806
$24,381 
$19,482
16,865
$12,636
SO
17,021
$132
$79,800
7
8 
9
10
11
12
U
14
15
16
17
18
19
20 
21
22
23
24
25
26
Multi-family Residential
Units
O&M Cost of Service-$ 
Capital Cost of Service • $
Commercial without dining 
Units
O&M Cost of Service ■ $ 
Capital Cost of Service - $
Commercial with dining 
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
Hotels, motels without dining
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
Hotels, motels with dining
Units
O&M Cost of Service •$ 
Capital Cost of Service - $
Carwashes
Units
O&M Cost of Service-$ 
Capital Cost of Servi^ - $
Commercial Laundry 
Units
O&M Cost of Service-$
92,473
$175,527 
$75,895
$139,405 
$83,196
38,644
$67,591 
$31,716
$48,900 
$34,767
9,121
$30,470 
$7,486
$15,078 
$8,206
23,539
$42,385 
$19,319
$28,837 
$21,178
71,928
$239,977 
$59,033
$117,031 
$64,712
347,050 
173,525
$46,795 
$48,143
$15,086 
$12,055
128,915 
64,458
$17,382 
$17,883
$5,604 
$4,478
76,071 
45,642
$10,257 
$12,663
$3,307 
$3,171
121,716
$16,412
$5,291
$0
$0
$16,823
0
$0
$0
6,419
$5,268
0
$0
SO
48,178
$6,496
23,558
$6,536
$1,637
599,878 
359,927
$80,885 
$99,859
$26,077 
$25,004
0
$0
$0
18,201
$5,050
6,200
$4,645
$0
804
$602
$0
84
$63
$0
156
$117
$0
264
$198
$0
0
SO
$0
12
$9
6,200
$48
$29,068
864
$7
$4,051
84
$1
$394
156
$1
$731
264
$2
$1,238
0
$0
$0
12
$0
Draft-For Discussion Purposes Only

Table 8-10
aty of Scottsdale, AZ
Wastewater Utility
Distribution of Costs to Customer Oasses - Outside Oty and Pleasant Valley
Une
No.
Description
Customer
Extra Strength
Total
Volume
COD
TSS
Billing
Readyto 
Serve
27
Capital Cost of Service •$
$9,190
$5,775
$2,094
$1,264
$0
$56
28
29
30
Laundromats
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
$3,003
$2,328
2,119
$1,739
$1,907
5,302
$715
$230
1,944
$539
$135
12
$9
$0
12
$0
$56
31
32
33
34
35
36
37
38
39
Metal Platers
Units
O&M Cost of Service • $ 
Capital Cost of Service • $
Restaurants; bakeries
Units
O&M Cost of Service-$ 
Capital Cost of Service - $
Service station auto repair 
Units
O&M Cost of Service - $ 
Capital Cost of Service - $
Medical Institutes
40 
Units
41 
O&M Cost of Service • $
42 
Capital Cost of Service-$
Schools
43 
Units
44 
O&M Cost of Service •$
45 
Capital Cost of Service - $
Not Used
46 
Units
47 
O&M Cost of Service • $
48 
Capital Cost of Service • $
Black Mountain Average Rate
49 
Units
50 
O&M Cost of Service-S
51 
Capital Cost of Service - $
52 
Total Cost of Service
$74
$94
$49,374
$21,821
$3,460
$2,455
$5,083
$3,785
$13,363
$10,504
$0
$0
$0
$0
30
$24
$27
10,534
$8,645
$9,477
1,823
$1,496
$1,640
3,126
$2,566
$2,812
9,932
$8,152
$8,936
0
$0
$0
0
$0
$0
148
$20
$6
193,270
$26,060
$8,401
5,473
$738
$238
13,035
$1,758
$567
21,537
$2,904
$936
0
$0
$0
0
$0
$0
$1,593,532 
$721,085 
$378,267
74
$20
$5
52.710
$14,624
$3,662
4,257
$1,181
$296
2,607
$723
$181
8,283
$2,298
$575
0
$0
$0
0
$0
$0
$359,272
12
$9
$0
60
$45
$0
60
$45
$0
48
$36
$0
12
$9
$0
0
$0
$0
0
$0
$0
$18,423
12
$0
$56
60
$0
$281
60
$0
$281
48
$0
$225
12
$0
$56
0
$0
$0
0
$0
$0
$116,486
Draft-For Discussion Purposes Only

Table B-ll
City of Scottsdale, AZ
Wastewater Utility
Comparison of Cost of Service to Revenue Under Existing Rates
Une
No.
Customer Class
Cost of 
Service
Revenue at 
Current Rates
Change-$
Change - %
$
$
$
%
City and Black Mountain
1 
Single-family Residential
2 
Multi-family Residential
3 
Commercial without dining
4 
Commercial with dining
5 
Hotels, motels without dining
6 
Hotels, motels with dining
7 
Carwashes
8 
Commercial Laundry
9 
Laundromats
10 
Metal Platers
11 
Restaurants; bakeries
12 
Service station auto repair
13 
Medical Institutes
14 
Schools
15 
Not Used
16 
Black Mountain
17 Total Inside City
Paradise Valley
18 
Single-family Residential
19 
Multi-family Residential
20 
Commercial without dining
21 
Commercial with dining
22 
Hotels, motels without dining
23 
Hotels, motels with dining
24 
Carwashes
25 
Commercial Laundry
26 
Laundromats
27 
Metal Platers
28 
Restaurants; bakeries
29 
Service station auto repair
30 
Medical institutes
31 
Schools
32 
Not Used
33 
Not Used
34 Tout
35 
System Total
25,343,530 
25,490,351
6,248,315 
6,418,903
3,024,349 
3,229,871
919,967 
789,695
242,440 
271,085
1,096,405 
926,784
123,481 
166,691
25,952 
24,137
15,668 
19,078
541 
526
2,277,107 
1,980,769
165,165 
168,662
549,290 
612,575
186,778 
152,414
0 
0
217,177 
252,061
40,436,164 
40,503,602
546,975 
538,125
314,932 
312,901
116,490 
123,036
45,548 
37,882
71,222 
79,852
357,008 
296,666
0 
0
26,012 
23,756
5,331 
6,593
168 
162
71,196 
60,636
5,915 
5,929
8,868 
9,883
23,867 
30,673
0 
0
0 
0
1,593,532 
1,526,094
42,029,697 
42,029,697
(146,821) 
-0.696
(170,589) 
-2.796
(205,523) 
-6.416
130,272 
16.596
(28,645) 
-10.696
169,620 
18.396
(43,210) 
-25.996
1,815 
7.5%
(3,410) 
-17.9%
15 
2.9%
296,338 
15.0%
(3,496) 
-2.1%
(63,285) 
-10.3%
34,364 
22.5%
0 
0.0%
(34,884) 
-13.8%
(67,438) 
-0.2%
8,850 
1.6%
2,031 
0.6%
(6,546) 
-5.3%
7,666 
20.2%
(8,630) 
-10.8%
60,343 
20.3%
0 
0.0%
2,256 
9.5%
(1,262) 
-19.1%
6 
3.6%
10,560 
17.4%
(13) 
-0.2%
(1,015) 
-10.3%
(6,806) 
-22.2%
0 
0.0%
_____ 0_ 0.0%
4.4%
67/138
0
0.0%
Draft-For Discussion Purposes Only

Table B-12
City of Scottsdale, AZ 
Wastewater Utility 
Development of Monthly Base Fee
Line
No
Meter
Size
Base Fee by Meter Size
Base Fee Revenue
Capacity
Ratio
Billing
Equivalent
Meter
City and 
BM
Paradise
Valley
City and 
BM
Paradise
Valley
Total 
Base Fee 
Revenue
1
2
3
4
5
6
7
8
9
10 
11
5/8“
3/4"
1"
1.5"
2"
3"
4"
6"
8"
Total
1.00
1.00
1.00
6.00
14.00
18.00
26.40
50.00
70.00
$0.65
$0.65
$0.65
$0.65
$0.65
$0.65
$0.65
$0.65
$0.65
$4.08
$4.08
$4.08
$24.50
$57.17
$73.50
$107.81
$204.18
$285.85
$4.74
$4.74
$4.74
$25.15
$57.82
$74.16
$108.46
$204.83
$286.50
$5.45
$5.45
$5.45
$28.93
$66.49
$85.28
$124.73
$235.55
$329.48
202,341
234,148
456,038
30,174
30,850
2,808
1,930
650
1,051
23,409
13
1,143
12
12
0
0
0
0
$1,085,567
$1,108,776
$2,165,592
$759,308
$1,784,583
$208,228
$209,322
$133,139
$301,112
959,990
24,589 $ 
7,755,627
Draft-For Discussion Purposes Only

Table B-13
Cltv of Scottsdale, AZ
Wastewater litility
Test Year Bills by Meter She
Line
No Customer Class
5/8"
Meter She
3/4"
1"
1.5"
2"
3"
4“
6-
8"
Total Base
5/8-
S
s
s
s
s
$
$
s
s
s
s
Equivalent Meter Ratio
1.00
1.00
1.00
6.00
14.00
18.00
26.40
50.00
70.00
1.00
aty and Black Mountain 
1 Service Charge, $ per bill
$4.74
$4.74
$4.74
$25.15
$57.82
$74.16
$108.46
$204.83
$286.50
$4.74
2 
Single-family Residential
3 
Multi-family Residential
4 
Commercial without dining
5 
Commercial with dining
6 
Hotels, motels without dining
7 
Hotels, motels with dining
8 
Carwashes
9 
Commercial Laundry
10 
Laundromats
11 
Metal Platers
12 
Restaurants; bakeries
13 
Service station auto repair
14 
Medical Institutes
15 
Schools
16 
Not Used
17 
Black Mountain
18 Total City and Black Mountain
Paradise Valley
19 
Service Charge, $ per bill
20 
Single-family Residential
21 
Multi-family Residential
22 
Commercial without dining
23 
Commercial with dining
24 
Hotels, motels without dining
25 
Hotels, motels with dining
26 
Carwashes
27 
Commercial Laundry
28 
Laundromats
29 
Metal Platers
30 
Restaurants; bakeries
31 
Service station auto repair
32 
Medical Institutes
33 
Schools
34 
Not Used
35 
Black Mountain
36 Total Paradise Valley
37 Total System
Draft-For Discussion Purposes Only
190,673
3,093
4,374
81
0
0
23
0
0
0
382
220
12
0
0
0
198,858
$5.45
59
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
59
198,917
228,763
2,339
2,744
47
0
12
0
12
0
0
136
95
0
0
0
0
438,285
7,528
7,955
416
23
164
22
48
0
12
905
597
36
47
0
0
8,631 
1,596
7,921 
14,963
9,895 
8,274
879 
1,055
84 
414
64 
519
85 
109
48 
23
12 
35
0 
0
1,705 
2,180
380 
454
363 
650
107 
578
0 
0
0 
0
1,011 
1,000
355 
289
806 
224
116 
44
60 
58
58 
56
35 
0
0 
0
0 
0
0 
0
70 
35
0 
0
152 
130
145 
82
0 
0
0 
u
0 1,000 
333 
51
127 
0
12 
0
0 
0
95 
0
0 
0
0 
0
0 
0
0 
0
0 
0
0 
0
23 
0
60 
0
0 
0
0 
0
234,148
$5.45
13
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
456,038
$5.45
1,143
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
30,174
$28.93
0
0
12
0
0
0
0
0
0
0
0
0
0
0
0
0
30,850
$66.49
12
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,808
$85.28
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,930
$124.73
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
650
$235.55
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,051
$329.48
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
234,161
1,143
457,181
12
30,186
12
30,862
2,808
1,930
650
1,051
3,438 
4,856,946
2 
1,266,279
30 
908,890
0 
101,519
0 
36,900
0 
62,286
0 
11,249
0 
2,821
0 
2,326
0 
57
12 
184,718
0 
40,127
1 
77,028
0 
68,270
0 
0
0 
1,301
3,483 
7,620,717
$5.45
15,638 
92,568
6,200 
33,761
792 
4,660
84 
457
156 
849
264 
1,438
0 
0
12 
65
12 
65
12 
65
60 
327
60 
327
48 
261
12 
65
0 
0
0 
0
23,350 
134,909
26,833 
7,755,627

Table B-14
City of Scottsdale, AZ
Wastewater Utility
Test Year Volumetric Rates
Line
No Customer Class
Cost of 
Service
Service Charge O&M 
Revenue 
Revenue
O&M 
Capital 
O&M 
Capital
Capital 
Billed 
Volume 
Volume 
Vol Rate 
Vol Rate
Revenue 
Volume 
Rate 
Rate 
Rounded 
Rounded
S
S
s
$
1,000 gal
S per Kgal
SperKgai $ per Kgal $ per Kgal
City and Black Mountain
1 
Single-family Residential
2 
Multi-family Residential
3 
Commercial without dining
4 
Commercial with dining
5 
Hotels, motels without dining
6 
Hotels, motels with dining
7 
Carwashes
8 
Commercial Laundry
9 
Laundromats
10 
Metal Platers
11 
Restaurants; bakeries
12 
Service station auto repair
13 
Medical Institutes
14 
Schools
15 
Not Used
16 
Black Mountain
17 Total Oty and Black Mtn
Paradise Valley
18 
Single-family Residential
19 
Multi-family Residential
20 
Commercial without dining
21 
Commercial with dining
22 
Hotels, motels without dining
23 
Hotels, motels with dining
24 
Carwashes
25 
Commercial Laundry
26 
Laundromats
27 
Metal Platers
28 
Restaurants; bakeries
29 
Service station auto repair
30 
Medical institutes
31 
Schools
32 
Not Used
33 
Black Mountain
34 Total Paradise Valley
35 Total System
$25,343,530
$6,248,315
$3,024,349
$919,967
$242,440
$1,096,405
$123,481
$25,952
$15,668
$541
$2,277,107
$165,165
$549,290
$186,778
$0
$217,177
$4,856,946 
$12,447,208
$1,266,279 
$3,026,978
$908,890
$101,519
$36,900
$62,286
$11,249
$2,821
$2,326
$57
$184,718
$40,127
$77,028
$68,270
$0
$1,301
$1,267,068
$551,917
$123,452
$697,353
$61,482
$14,989
$7,585
$305
$1,456,423
$76,406
$276,910
$66,489
$0
$127,158
$8,039,377
$1,955,058
$848,390
$266,531
$82,089
$336,766
$50,750
$8,142
$5,757
$180
$635,966
$48,632
$195,351
$52,019
$0
$88,717
$546,975
$314,932
$116,490
$45,548
$71,222
$357,008
$0
$26,012
$5,331
$168
$71,196
$5,915
$8,868
$23,867
$0
$0
$92,568
$33,761
$4,660
$457
$849
$1,438
$0
$65
$65
$65
$327
$327
$261
$65
$0
$0
$276,088
$170,833
$66,982
$30,406
$42,267
$239,778
$0
$16,814
$2,993
$65
$49,329
$3,415
$5,047
$13,354
$0
$0
$1393332
$134,909 
$917,370
7,748,380
1,884,292
840,658
190,397
79,065
240,569
58,299
6,580
6,175
160
357,651
46,901
197,256
56,871
0
90,156
$40,436,164 
$7,620,717 
$20,201,722 
$12,613,725 
11303,410
$178,319
$110,337
$44,849
$14,684
$28,105
$115,793
$0
$9,133
$2,272
$38
$21,540
$2,174
$3,560
$10,447
$0
$0
149,447
92,473
38,644
9,121
23,539
71,928
0
6,419
2,119
30
10,534
1,823
3,126
9,932
0
0
$541,253
419,134
$42,029,697 
$7,755,627 
$21,119,092 
$13,154,978 
12,222,544
$1.61
$1.61
$1.51
$2.90
$1.56
$2.90
$1.05
$2.28
$1.23
$1.90
$4.07
$1.63
$1.40
$1.17
$0.00
$1.41
$1.71
$1.85
$1.85
$1.73
$3.33
$1.80
$3.33
$0.00
$2.62
$1.41
$2.19
$4.68
$1.87
$1.61
$1.34
$0.00
$0.00
$2.19
$1.73
$1.04
$1.04
$1.01
$1.40
$1.04
$1.40
$0.87
$1.24
$0.93
$1.12
$1.78
$1.04
$0.99
$0.91
$0.00
$0.98
$1.07
$1.19
$1.19
$1.16
$1.61
$1.19
$1.61
$0.00
$1.42
$1.07
$1.29
$2.04
$1.19
$1.14
$1.05
$0.00
$0.00
$1.29
$1.08
$1.61
$1.61
$1.51
$2.90
$1.56
$2.90
$1.05
$2.28
$1.23
$1.90
$4.07
$1.63
$1.40
$1.17
$0.00
$1.41
$1.71
$1.85
$1.85
$1.73
$3.33
$1.80
$3.33
$0.00
$2.62
$1.41
$2.19
$4.68
$1.87
$1.61
$1.34
$0.00
$0.00
$2.19
$1.04
$1.04
$1.01
$1.40
$1.04
$1.40
$0.87
$1.24
$0.93
$1.12
$1.78
$1.04
$0.99
$0.91
$0.00
$0.98
$1.07
$1.19
$1.19
$1.16
$1.61
$1.19
$1.61
$0.00
$1.42
$1.07
$1.29
$2.04
$1.19
$1.14
$1.05
$0.00
$0.00
$1.29
Draft-For Discussion Purposes Only

APPENDIX C:
EXTRA STRENGTH SURVEY

Table C-1 
OtY of Scottsdale 
Sewer Rate Study 
COD Extra Strengtii lectors
Customer Class
CA State Water 
East Bay Municipal 
Ohio
Scottsdale, AZ • Resources Control Utility District • 
Administrative 
Fort Collins, CO- Los Angeles, CA-
2014 
Board-1998 
2019 
Code-2018 
2020 
2020
COD 
COD 
COO 
COD 
COD 
COD
Tacoma, WA • 
Portland, OR • San Diego, CA -
Bend, OR-2012 
2012 
2019 
2006
COO 
COD 
COD 
COD
Orange County, CA- 
2017 
COD
Single-Family Residential 
Multi-Family Residential 
Commercial Without Dining 
Commercial With Dining 
Hotels/Motels Without Dining 
Hotels/Motels With Dining 
Car Washes 
Commercial Laundry 
Mortuaries 
Laundromats 
Metal Platers 
Restaurants/Bakeries 
Service Station Auto Repair 
Medical Institutes 
Schools
(mg/L)
4S0
4S0
400
1,000
620
1,000
40
900
1,600
300
600
2,200
360
500
260
(mg/L)
263-37S
varies
varies
465
750
30
675
1,200
225
1.500
270
375
195
(mg/L)
varies
varies
840
1,841
1,163
258
1,809/5,491
517
452
(mg/L)
varies
varies
300-420
300-420
600-900
300-420
300-420
(mg/L)
varies
varies
465*
225
894
329
1,230/1,032
347
495
(mg/L)
322.5
322.5
varies
varies
465*
30
675
1200
225
1500
225
375
195
(mg/L)
720
varies
varies
312
2686.5
2130
891
(mg/L)
300-450
varies
varies
450-750
300-450
1,050-1,350
300-450
(mg/L)
1650
750
1800 / 3450
(mg/L)
600
800
600
600
600
1340
1600
300
850-2,000
600
500-700
600
(mg/L)
328.5
328.5 
varies 
varies 
275*
199.5
1068
405
403.5
367.5 
329-362
220
*dining not specified
Table C-2
Oty of Scottsdale
Sewer Rate Study
TSS Extra Strength Factors
Customer Class
CA State Water 
East Bay Municipal 
Ohio
Scottsdale, AZ- Resources Control Utility District • 
Administrative
2014 
Beard-1998 
2019 
Code-2018
TSS 
TSS 
TSS 
TSS
Fort Collins, CO- Los Angeles, CA • 
2020 
2020
TSS 
TSS
Bend, OR - 2012 
TSS
Tacoma, WA - 
2012 
TSS
Portland, OR - 
2019 
TSS
San Diego, CA- 
2006 
TSS
Orange County, CA - 
2017 
TSS
Single-Family Residential 
Multi-Family Residential 
Commercial Without Dining 
Commercial With Dining 
Hotels/Motels Without Dining 
Hoteis/Moteis With Dining 
Car Washes 
Commercial Laurtdry 
Mortuaries 
Laundromats 
Metal Platers 
Restaurants/Bakeries 
Service Station Auto Repair 
Medical Institutes 
Schools
(mg/L)
225
225
200
600
120
600
150
340
BOO
110
300
600
280
100
100
(mg/L)
175-250
varies
varies
120
600
150
240
600
110
600
280
100
100
(mg/U
varies
varies
680
310
190
270
940 / 390
270
80
(mg/g
(mg/g
varies
varies
121*
350
367
87
905/620
266
112
(mg/L)
205
205
varies
120*
ISO
240
800
110
600
150
100
100
(mg/g
500
varies
2,319
(mg/L)
150-400
varies
varies
450
150-400
400 / 700
150400
(mg/L)
400
400
500 / 900
(mg/L)
250
250
400
300
110
150
700
850
320-900
280
200-250
250
(mg/g
253
177
varies
varies
283*
694 • 3930
99
3825
960
99
253-297
200

APPENDIX D:
RATE DESIGN

Table D-1
aty of Scottsdale, AZ 
Wastewater Utilfty
Comparison of Current and l^oposed Base Fees
Una
No
Desalption
FY21
Exbttni
FY22
Proposed
Test Year
Change - $
Chanie- X
Base Fee. $ per Bill
1
2
3
4
5
6
7
8 
9
5/8“r
1.5"
2“
3"
4"
6"
8“
$4.50
$4.50
$4.50
$27.00
$63.00
$81.00
$119.00
$225.00
$315.00
$4.74
$4.74
$4.74
$25.15
$57.82
$74.16
$108.46
$204.83
$286.50
$0.24
$0.24
$0.24
($1.85)
($5.18)
($6.84)
($10.54)
($20.17)
($28.50)
5.7%
SJ%
5.2%
•6.8M
-8.234
-B.5%
-8.9K
-9.0X
-9.0K
(1) Outside City and Paradise Valley volume rates are 1.15 times Inside City rates.
Table D-2
Oty of Scottsdale, AZ 
Wastewater Utility
Comparison of Current and Proposed OftM and Capital Charges, $ per 1,000 gallons
Una
No
Customer Class
Proposed FYZl Volume Charges
Cost of Servka FY21 Volume Qiarges
Change-$
Change-%
04M
Capital
Total
OftM
apital
Total
0«M
Capital
Total
OftM
Capital
Total
1
2
3
4
5
6 
7
9
10 
11 
12
13
14
Slr^e-famlly Residential 
Multi-family Residential 
Commercial without dinhg 
Commercial with dining 
Hotels, motels without dining 
Hotels, motels with dining 
Carwashes 
Commercial Laundry 
Laundromats 
Metal Platers 
Restaurants; bakeries 
Service station auto repair 
Medical Institutes 
Schools
$1.17
$1.17
$1.16
$1.72
$1.25
$1.71
$1.08
$1.48
$1.10
$1.33
$2.43
$1.18
$1.12
$1.09
$1.51
$1.51
$1.52
$1.85
$1.67
$1.86
$1.57
$1.73
$1.58
$1.62
$2.55
$1.50
$1.56
$1.59
$2.68
$2.68
$2.68
$3.57
$2.92
$3.57
$2.65
$3.21
$2.68
$2.95
$4.98
$2.68
$2.68
$2.68
$1.61
$1.61
$1.51
$2.90
$1.56
$2.90
$1.05
$2.28
$1.23
$1.90
$4.07
$1.63
$1.40
$1.17
$1.04
$1.04
$1D1
$1.40
$1D4
$1.40
$0.87
$1.34
$0.93
$1.12
$1.78
$1.04
$0.99
$0.91
$2.65
$2.65
$2.52
$4.30
$2.60
$4.30
$1.92
$3.52
$2.16
$3.02
$5.85
$2.67
$239
$2.08
$0.44
$0.44
$0.35
$1.18
$0.31
$1.19
($0.03)
$0.80
$0.13
$0.57
$1.64
$a4S
$0.28
$0.08
($0.47) 
($047) 
($0.51) 
($0.45) 
($0.63) 
($0.46) 
(SO,70) 
($0.49) 
($0.65) 
($0.50) 
($0.77) 
($0.46) 
($0.57) 
(S068)
($0.03)
($0.03)
($0.16)
$0.73
(S0.32)
$0.73
($0.73)
$0.31
($0.52)
$0.07
$0.87
($0.01)
($0.29)
($0.60)
37.6%
37.6%
30.2%
68.6%
24.8%
69.6%
-2.8%
54.1%
11.8%
42.9%
67.5%
38.1%
25.0%
7.3%
•31.1%
-31.1%
-33.6%
-24,3%
-37.7%
-24,7%
•44.6%
-28.3%
-41.1%
-30.9%
-30.2%
•30.7%
-36.5%
h42.8%
•1.1%
-1.1%
-6.0%
20.4%
•11.0%
20.4%
-27,5%
9.7%
-19.4%
2.4%
17.5%
•0.4%
-10.8%
-22.4%
Draft-For Uscu^n Purposes Ortly