HDR Engineering Inc 3/26/2020 - Laserfiche WebLink

City of Everett 12020 Water,Filtration,Sewer,and Stormwater Rate Study •01 1.Project Approach As part of the review, a revision to the filtration rate structure for Alderwood may be necessary to stabilize the rates based on capital expenditure fluctuations and changes in the sinking fund minimum target. HDR will assist with the information provided to Alderwood as this will require an amendment to the water agreement between the City and Alderwood. Filtration costs for all other water customers(i.e., retail and other wholesale)will be calculated as a part of this study. As a part of the last comprehensive rate study, the filtration charges were adjusted by the overall proposed annual filtration rate adjustments. This rate was then compared to a calculation which analyzed the total filtration costs, less Alderwood filtration revenues, to derive and average cost(rate)for filtration to retail and other wholesale customers. This same approach is proposed for this study to evaluate the filtration charges. Sewer—A cost of service study was not conducted as a part of the last comprehensive rate study as the City was negotiating a new wholesale agreement at that time. This study will conduct a sewer cost of service study and equitably allocate costs to the various customer groups. The sewer cost of service study is important at this point in time, as the City is anticipating a change in their stormwater rate structures by moving to impervious area based stormwater rates. At the present time, the stormwater rates are incorporated into the City's sewer rates. Movement to impervious area based stormwater rates will segregate the costs of stormwater out of the City's sewer rates. Hence, a sewer cost of service analysis will equitably allocate only sewer-related costs to each customer class of service. The City currently serves the following sewer customer classes of service: ✓ Residential— Inside and Outside City(1.5 outside City rate multiplier) ✓ Non-Residential— Inside and Outside City(1.5 outside City rate multiplier) ✓ Septage ✓ Wholesale—Alderwood ✓ Wholesale—Mukilteo ✓ Wholesale-Silver Lake As a part of the sewer analysis, HDR will review and evaluate the sewer customer data to determine the number of accounts, equivalent residential units(ERUs), and wastewater volumes(water usage). As part of this analysis, HDR will evaluate the current definition of an ERU (900 cubic feet)and determine whether this definition should remain in place or be redefined to some other value more reflective of current(typical) residential usage. If an ERU is defined as a different value, then this change will be incorporated into the proposed sewer rate designs(Task 1.5), as well as discussed with the wholesale customers if amendments are necessary to their agreements. From the collection of sewer customer data and information, the City's 2021 sewer costs will be equitably distributed to each of the customer classes of service. Similar to the water T&D cost of service study, the cost information will be functionalized, allocated, and then distributed to the classes of service using generally accepted cost of service methodologies. The City's data is currently functionalized between the major categories of collection, treatment, bio-solids, and pretreatment. In allocating these costs, they will be segregated between volume-related, strength-related (BOD and TSS), and customer-related. Equitable distribution factors will be developed for each of these specific cost-classifiers using the best available City and customer class specific data. The cost of service will be summarized to compare the current revenues of Page 5