Capital Region Water Proposed 2020 Budget and Rates November 13, - - PowerPoint PPT Presentation

Capital Region Water Proposed 2020 Budget and Rates

November 13, 2019

Welcome/Overview

Road Map

• 2019-2020 Accomplishments/Challenges/Opportunities
• Overviews
• Strategic Initiatives
• Engineering
• Wastewater
• Water
• Administration
• Proposed 2020 Budgets and Rates
• Questions and Comments

Staffing & Organizational Structure

2019 Highlights

2019 New CReW Members

Joseph Ward January 14 Laborer 1 - Wastewater Douglas Keith February 11 Chief Financial Officer Charlotte Katzenmoyer March 18 Chief Executive Officer Jamie Maynard June 17 Labor/Entry Level Maint Operations Zachary Nye June 17 Labor/Entry Level Maint Operations Densin Wilson June 17 Labor/Entry Level Maint Operations Carlesha Halkias July 15 Human Resource Manager Paul Eads August 12 Service Person 1 Micaela Swart August 12 Project Engineer Na’Reece Glenn August 26 Laborer 1 – Drinking Water Jack Jackson August 26 Business Diversity Intern Thomas York August 26 GIS Manager Michelle Mancuso September 3 Operations Supervisor - Water Shaunice Chism September 6 CSR – Account Specialist 1 Shane Russell September 16 GIS Analyst

11/13/2019

Chief Executive Officer

Charlotte Katzenmoyer

Chief Financial Officer Doug Keith Director of Engineering Dave Stewart Director of Drinking Water Mike McFadden Director of Wastewater Jess Rosentel Director of Administration Mike Doweary Director of Strategic Initiatives Tanya Dierolf Executive Assistant Colleen Boeckelmann Human Resources Manager Carlesha Halkias 6

Senior Staff

Chief Executive Officer

Finance Treasury Accounting Accounts Receivable Grants and Capital Projects Accounting Payroll Automated Meter Program Engineering Design and Construction Stormwater and Wet Weather Control Program Asset and GIS Management Drinking Water Water Operations Water Distribution Facility Maintenance Water Quality Program Wastewater Wastewater Operations Collection Operations Facility Maintenance Collection Construction Pretreatment Program Environmental Compliance Administration Procurement Customer Service Information Technology Office Management Strategic Initiatives Diversity and Inclusion Community Relations Outreach Legal Human Resources Risk Management

Board of Directors 11/13/2019 7

Organizational Structure

Customer Focus

2019 Highlights

2019 Highlights

• Leak adjustment policy
• Payment options
• 24/7 online credit card
• Multiple payment locations through MoneyGram
• Outreach – presence at multiple community events
• Stormwater informational meetings
• Quarterly suburban partners meetings
• Community Ambassadors

…and more to come in 2020

• Suburban Partnership
• Stormwater Fee (fair and equitable)
• Customer Service Relocation

2020 Opportunities… …And Challenges

• Customer Assistance Program
• Consent Decree
• Privatization Concerns

Strategic Initiatives

Connecting with the Public

Strategic Initiatives

Elevate and sustain the work of Capital Region Water through

• Community Engagement
• Stakeholder Partnership
• MWDBE Program Development

Engineering

Water Projects – Major Capital

2020 2021 2022 2023 2024 Funding Sources DeHart Evaluation & Construction $ 992,000 $5,000,000 $10,000,000 $5,000,000 Bond Proceeds, Conservation Easement Proceeds, Pennvest Loan Cameron St. Water Main $3,619,000 $7,000,000 $ 7,000,000 $7,000,000 $7,000,000 Bond Proceeds, Cash Reserves, Pennvest Loan Water Main Replacement $2,450,000 $2,634,000 $ 2,832,000 $3,044,000 $3,272,000 Rate Financed (PayGo) Water Main Condition Assessment $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 PayGo Mountain Line Clearing & Repairs $ 591,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 Bond Proceeds, PayGo

Wastewater Projects – Major Capital

2020 2021 2022 2023 2024 Funding Sources Front St. Pump Station $10,301,000 Pennvest Loan Collection System Rehab. $ 5,882,000 $ 5,000,000 $ 5,000,000 $5,000,000 $5,000,000 Bond & Rate Financed Paxton Creek Interceptor $ 610,000 $10,000,000 $10,000,000 Pennvest Loan Arsenal Blvd $ 1,238,000 $ 2,280,000 Pennvest Loan Front St. Interceptor Rehab $ 221,000 $10,000,000 $10,000,000 Pennvest Loan Other Multi-Model CCTV $ 400,000 $ 400,000 Cash Reserves 2nd & 7th Streets Multi-Model $ 460,000 Rate Financed Anaerobic Digester Roof Repair $ 1,946,000 Bond Proceeds AWTF Bio-Gas Project $ 1,000,000 $ 6,750,000 $ 6,750,000 Bond Proceeds, PV Loan Primary Clarifier Improvements $ 168,000 $ 4,000,000 $3,500,000 Cash Reserves, PV Loan Spring Creek Pump Station $ 500,000 Bond Proceeds

Green Stormwater Infrastructure

2020 2021 2022 2023 2024 Funding Sources 4th & Dauphin $ 329,000 Grant, Pennvest Loan South Allison Hill $ 1,179,000 Rate Financed, PV Loan Paxton Creek TMDL Joint PRP $ 434,000 $ 447,020 $ 458,196 $ 469,650 $ 481,392 Rate Financed Camp Curtin Big Green Block $ 1,857,000 Rate Financed, PV Loan SW Pond Retrofit $ 222,000 $ 1,650,000 Rate Financed, PV Loan TLC Cornerstone $ 363,000 Pennvest Loan Phase 2 Design $ 375,000 $ 750,000 $ 1,000,000 Rate Financed 10 Acres/Yr @ $150 - $300k $ 1,500,000 $ 3,000,000 $ 2,620,781 Pennvest Loan 8.85 Acres/Yr @ $250k $ 379,219 $ 2,095,781 Rate Financed

Wastewater

Overview & Stats

500 1000 1500 2000 2500 3000 3500 4000 4500

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Total Number of Inlets Cleaned

Cummulative Inlets Cleaned Number of Inlets in System (4,000)

10 20 30 40 50 60 70 80

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2108 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Total Miles of Sewer Pipe Inspected (CCTV)

Cummulative Miles of Pipe

100 200 300 400 500 600 700 800 900 1000

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019

Total Number of Inlets Repaired

Cummulative Inlets Cleaned Number of Inlet Repairs Required (875)

Water

Overview & Stats

$- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2014 2015 2016 2017 2018 2019

Reducing Costs Through Proactive Leak Detection and Repairs

Percentage Water Loss Regulatory Benchmark 20% Cumulative Savings since 2014

32 30 22 26 19 24 30 30 30 30 30 30 5 10 15 20 25 30 35 2014 2015 2016 2017 2018 2019

Water Main Break History Based on 200 miles of CRW mains

Main Breaks Industry Benchmark

Administration

Human Resources

2019

Compensation Study Negotiating a new labor contract Started the process of rebuilding a Human Resource team and building capacity Hired and onboarded 14 new CReW members

2020

Develop performance appraisals that support and further Core Values. Audit and amend employee handbook. Develop and implement employee Ethics and Compliance Hotline. Implement a new HRIS and related modules. Expand and enhance wellness initiatives. Implement bi-monthly onsite facility hours. Build upon community relationship to maximize recruiting efforts.

Customer Service

2019 Alternative Payment Locations Upgrade Phone System SOP Development & Training 2020 Customer Assistance Program (utilizing non-rate revenue) Alternative Payment Options Education/Training

Information Technology

2019

Security cameras Datacenter upgrades New VOIP Telephone System connecting all sites Access Card System

2020

AWIA, HIPPA & PCI Assessments Munis Upgrades Website & Mobile App Development Upgrade SCADA System

Office Management

2019

Intranet Document/Records Library Website Updates: Forms Library, Translate & Events Calendar Emergency Response Plan, SOP Development & Training Wayfaring Signage

2020

Business Development Training Charitable Giving Campaign Facilitate logistical and administrative needs for all departments

American Water Infrastructure Act of 2018 (AWIA)

Bio Terrorism Act

• f 2002

DHS Assessment

• f 2016

Risk & Resilience Assessment due December 31, 2020 Emergency Response Plan due June 30, 2021

CSR Lobby Upgrades

Resilience measures in 2020 Budget

Cybersecurity Assessment Security Plan Development & Training Fencing Flood Barriers Capital Planning Moving Customer Service

Administrative Building Considerations

Goals

• Reunite Customer Service Center with

Administration

• Reduce potential for security issues at the

Water Services Center

• Provide for enhanced customer accessibility
• Allow for future growth
• Maintain comfortable and safe work

environment to enhance employee retention

• Long-term fiscal responsibility

Current Concerns

• Existing lease agreement at 212 Locust is set to

expire September 2020

• Physical separation of customer service, billing, and

accounts receivable functions & personnel from the rest of the administrative staff

• Customer Service Center is not ideally located on

public transportation route

• Security concerns @ the Water Services Center
• No room for additional personnel for Water or

Admin

• Lease and parking costs are not fiscally prudent

long-term

• Image and Identity issues in Locust St. location

Options for Consideration

• Option 1: Extend current lease at 212 Locust St.
• Option 2: Find suitable alternative location to

lease.

• Option 3: Construct new administrative office.
• Option 4: Purchase

Option 4: Purchase Administrative Building

• Can a building be found that:
• Has enough space to accommodate growth
• Is located along public transportation lines
• Costs out favorably over the long term when compared

to leasing alternative

• Best options visited:
• Premier Eye Center
• Central Penn Business Journal
• Tracy Mansion
• 3003 N. Front St.

RECOMMENDATION: Purchase 3003 N. Front St.

  

Budget and Rate Setting Process

Finance Committee Presentation Public Hearing Board Adoption Budget Planning Budget Forecasting Finance Committee Presentation Rate Study

August November 20

Rate Calculation Process

Financial Plan Projections

• Billed Consumption
• Operating Budget
• Capital Plan
• Beginning Cash

Balance

Capital Project Funding

Funding Mix (Cash vs Debt)

Debt Covenants

Cash Flow and Revenue Needs Rates Fiscal Policies and Targets

Cash Reserves Debt Service Coverage

Rate Calculation Process

Wastewater Specific

Unit Rates Wholesale Revenue

(Input into Financial Plan)

Suburban Rate = Treatment Rate + Conveyance Rate Steelton Rate = Treatment Rate Treatment Cost Conveyance Cost Collection Cost Units (Treatment) Units (Conveyance) Units (Collection)

Rate Calculation Process

Wastewater Specific

Suburban Wholesale Revenue Other Non-Rate Revenue Net Rate Revenue Needs Total Revenue Needs Less (-) Equals (=) Suburban Revenue (Input into Financial Plan) City Retail Sewer Rates

• Capital Project Needs
• Debt Service
• Operating Expense Budget for FY 2020
• Fiscal Policies

Rate Impact Drivers

Budget & Rates

Ten-Year Capital and Financing Plan

Capital Budget Planning Summary 2020 2021 2022 2023 2024 2025 2026 2027 - 2029 Water Capital Budget $(14,052,000) $(16,584,030) $(21,181,106) $(16,339,729) $(11,404,401) $(8,138,123) $(7,960,897) $(21,188,872) Available for Capital Projects $ 21,164,783 $ 17,627,783 $ 6,653,753 $ 4,594,847 $ 6,731,762 $ 8,830,738 $ 6,765,059 $ 4,998,056 Current Bond Proceeds $ 5,015,000 $

• $
• $
• $
• $
• $
• $
• PV Pro-Fi Loan ($33.59M)

$

• $
• $ 13,400,000 $ 12,640,000 $ 7,550,000 $
• $
• $
• Funding from Rates

$ 5,500,000 $ 5,610,000 $ 5,722,200 $ 5,836,644 $ 5,953,377 $ 6,072,444 $ 6,193,893 $ 19,334,907 EOY Water Capital Reserves $ 17,627,783 $ 6,653,753 $ 4,594,847 $ 6,731,762 $ 8,830,738 $ 6,765,059 $ 4,998,056 $ 3,144,091 Wastewater Capital Budget $(24,402,220) $(36,559,340) $(36,492,995) $ (9,550,369) $ (5,814,065) $(5,558,387) $(6,377,839) $(18,132,081) Available for Capital Projects $ 5,251,304 $ 2,969,584 $ 642,244 $ 1,787,779 $ 1,253,710 $ 2,086,272 $ 3,307,444 $ 3,844,756 Current Bond Proceeds $ 4,100,000 $

• $
• $
• $
• $
• $
• $
• Current Pennvest Loan

$ 10,301,000 $

• $
• $
• $
• $
• $
• $
• PV Pro-Fi Loan ($65M.)

$ 3,519,500 $ 29,198,000 $ 30,750,000 $ 2,500,000 $

• $
• $
• $
• Funding from Rates

$ 4,200,000 $ 5,034,000 $ 6,388,530 $ 6,516,301 $ 6,646,627 $ 6,779,559 $ 6,915,150 $ 21,586,389 EOY Sewer Capital Reserves $ 2,969,584 $ 642,244 $ 1,787,779 $ 1,253,710 $ 2,086,272 $ 3,307,444 $ 3,844,756 $ 7,299,063 Stormwater Capital Budget $ (4,759,000) $ (4,347,020) $ (4,458,196) $ (3,469,650) $ (2,577,173) $(2,641,840) $(2,721,095) $ (8,662,952) Available for Capital Projects $ 500,000 $ 72,000 $ 519,980 $ 911,784 $ 2,459,915 $ 2,327,682 $ 2,179,681 $ 2,002,301 Current Grant Proceeds $ 136,781 $

• $
• $
• $
• $
• $
• $
• PV Pro-Fi Loan ($13M.)

$ 3,254,219 $ 3,150,000 $ 3,000,000 $ 2,620,781 $

• $
• $
• $
• Funding from Rates

$ 940,000 $ 1,645,000 $ 2,350,000 $ 2,397,000 $ 2,444,940 $ 2,493,839 $ 2,543,716 $ 7,940,483 EOY Storm Capital Reserves $ 72,000 $ 519,980 $ 911,784 $ 2,459,915 $ 2,327,682 $ 2,179,681 $ 2,002,301 $ 1,279,832

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Operating and Administrative Expense Budgets

Water / Wastewater / Stormwater

Proposed 2020 Wastewater Budget

Operating Expenses

FY20 Proposed Budget FY19 Adopted Budget FY19 Forecast Variance FY20 Budget to FY19 Budget Variance FY20 Budget to FY19 Forecast

Personnel $ 4,480,300 $ 4,344,288 $ 4,230,822 $ 136,012 3% $ 249,478 6% Operating Expenses 4,063,202 4,188,144 4,067,100 (124,941)

• 3%

(3,897) 0% Indirect/Professional Fee 970,700 718,200 477,847 252,500 35% 492,853 103% Administrative Fee 3,223,630 3,301,104 2,846,783 (77,474)

• 2%

376,847 13% Customer Assistance Program* 80,000

• 80,000

80,000 Debt Service 4,402,923 4,908,133 4,178,963 (505,210)

• 10%

223,960 5%

Total Operating Expense $ 17,220,756 $ 17,459,868 $ 15,801,514 $ (239,113)

• 1% $1,419,241

9%

*Note: Customer Assistance Program will be funded with non-rate revenues

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

2020 Wastewater Operating Budget

City Rate Revenue: 11,365,868 Wholesale Revenue: 8,728,057 Operations Income: 858,500 Non-Rate Revenue: 485,151

FY20 WASTEWATER SOURCE OF FUNDS - $21.4M

Administrative Fee: 3,223,630 Customer Assistance: 80,000 Debt Service: 4,402,923 Operating Expenses: 4,063,202 Personnel: 4,480,300 Professional Services: 970,700

FY20 WASTEWATER USE OF FUNDS - $17.2M

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Proposed 2020 Drinking Water Budget

Operating Expenses

FY20 Proposed Budget FY19 Adopted Budget FY19 Forecast Variance FY20 Budget to FY19 Budget Variance FY20 Budget to FY19 Forecast

Personnel $ 3,312,258 $ 3,230,378 $ 3,001,182 $ 81,880 3% $ 311,076 10% Operating Expenses 2,358,547 2,694,319 2,391,839 (335,772)

• 12%

(33,293)

• 1%

Indirect/Professional Fee 694,787 492,695 486,966 202,092 41% 207,821 43% Administrative Fee 3,097,714 3,175,648 2,735,838 (77,934)

• 2%

361,876 13% Customer Assistance Program* 80,000

• 80,000

80,000 Debt Service 10,593,437 10,800,883 10,574,226 (207,446)

• 2%

19,211 0%

Total Operating Expense $ 20,136,743 $ 20,393,922 $ 19,190,051 $ (257,180)

• 1%

$ 946,691 5%

*Note: Customer Assistance Program will be funded with non-rate revenues

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

2020 Drinking Water Operating Budget

Rate Revenue: 25,273,355 Non-Rate Revenue: 1,600,000

FY20 WATER SOURCE OF FUNDS - $26.8M

Administrative Fee: 3,097,714 Customer Assistance: 80,000 Debt Service: 10,593,437 Operating Expense: 2,358,547 Personnel: 3,312,258 Professional Fees: 694,787

FY20 WATER USE OF FUNDS - $20.1M

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Proposed 2020 Stormwater Budget 3-Year Phase In: 40% - 70% - 100%

Operating Expenses

FY20 Proposed Budget FY21 Forecast FY22 Forecast FY23 Forecast

Personnel $ 260,000 $ 845,714 $ 1,934,857 $ 1,983,228 Street Sweeping 325,000

• Equipment Lease

90,000 154,286 154,286 154,286 Indirect/Professional Fee

• 150,000

153,750 157,594 Other Operating 110,000 188,571 190,357 198,118 Administrative

• 100,000

102,500 105,063 Loan Closing and Debt Service 56,271 48,292 79,042 717,435

Total Operating Expense $ 841,271 $ 1,486,863 $ 2,614,792 $ 3,315,724

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Proposed 2020 Administration Budget

Operating Expenses

FY20 Proposed Budget FY19 Adopted Budget FY19 Forecast Variance FY20 Budget to FY19 Budget Variance FY20 Budget to FY19 Forecast

Personnel $4,745,238 $4,600,593 $3,974,061 $144,645 3% $771,177 19% General & Administrative 903,598 728,328 697,977 175,270 24% 205,622 29% Professional Services 337,000 532,760 427,905 (195,760)

• 37%

(90,905)

• 21%

Treasury 482,308 502,139 510,038 (19,831)

• 4%

(27,730)

• 5%

Capital (CSC Improvements) 120,000 (120,000)

• 100%

Total Operating Expense $6,468,144 $6,483,820 $5,609,981 $(15,676)

• 0.2%

$858,164 15%

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Rates

Proposed 2020 Wastewater Rates

Proposed 2020 Wastewater Rates

Description Existing FY 2019 Proposed FY 2020 Percent Change City of Harrisburg Sewer Rate (per 1,000 gallons)

• Sewer Utilization Charge

$6.66 $6.66 0%

• Sewer Maintenance Charge

$0.99 $0.99 0%

• Total City Sewer Rate

$7.65 $7.65 0% Suburban Sewer Rate (per 1,000 gallons)

• Suburban Customers

(Conveyance & Treatment) $4.39 $4.47 1.8%

• Steelton Customers (Treatment)

$3.08 $3.28 6.6%

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Cash Reserve Target

Wastewater Rate Increase Needs

Management Target Minimum

• 240 days

Operating Reserve Minimum (Trust Indenture)

• 60 days

Additional Management Target Minimum

• 180 days

*Includes Operating Account and Operating Reserve Account

$0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2020 2021 2022 2023 2024 Millions No Rate Increases Planned Rate Increases Management Target

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

$6.05 $6.05 $6.05 $6.53 $6.99 $7.65 $7.65 $7.99 $8.35 $9.15 $10.02 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ($) per 1,000 gal. Retail Volumetric Rate

Historical and Projected Retail Wastewater Rates

75

Fiscal Year Rate Increase 2014 51.0% 2015 0.0% 2016 0.0% 2017 8.0% 2018 7.1% 2019 9.5% 2020 0.0% 2021 4.5% 2022 4.5% 2023 9.5% 2024 9.5%

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

$6.05 $6.05 $6.05 $6.53 $6.99 $7.65 $7.65 $7.99 $8.35 $9.15 $10.02 $8.64 $9.77 $11.04 $12.47 $14.09 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ($) per 1,000 gal. Retail Rate w/ SW Fee Phase In Retail Rate w/ no SW Fee

Historical and Projected Retail Wastewater Rates

76

Fiscal Year Rate Increase 2014 51.0% 2015 0.0% 2016 0.0% 2017 8.0% 2018 7.1% 2019 9.5% 2020 13.0% 2021 13.0% 2022 13.0% 2023 13.0% 2024 13.0%

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Residential Wastewater Bill Comparison

$17.19 $20.16 $22.68 $25.00 $25.44 $28.69 $28.69 $32.00 $37.50 $41.00 $49.73 $51.00 $64.05 $66.75

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Proposed 2020 Drinking Water Rates

Description Existing FY 2019 Proposed FY 2020 Percent Change

Volume Charge ($ per 1,000 gallons) All Customers $9.65 $9.84 2.0% Ready-to-Serve Charge: 5/8” $7.60 $7.77 2.0% 3/4” $16.50 $16.83 2.0% 1” $33.10 $33.76 2.0% 1-1/2” $70.91 $72.33 2.0% 2” $130.00 $132.60 2.0% 3” $363.40 $370.67 2.0% 4” $649.97 $662.97 2.0% 6” $1,754 $1,789 2.0%

Proposed 2020 Drinking Water Rates

Debt Service Coverage

Management Target Minimum (Senior) 1.45 Trust Indenture Minimum Requirement (Senior) 1.20

Debt Service

Water Rate Increase Drivers

Debt Service Coverage = Operating Revenues – Operating Expenses Total Annual Debt Service

0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2020 2021 2022 2023 2024 No Rate Increases Planned Rate Increases Indenture Requirement Management Target

$6.61 $7.18 $7.88 $8.80 $9.46 $9.65 $9.84 $10.04 $10.24 $10.45 $10.45 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 $ per 1,000 gal. Volumetric Rate

Historical and Projected Water Rates

Fiscal Year Rate Increase 2014 15.0% 2015 8.6% 2016 9.7% 2017 11.7% 2018 7.5% 2019 2.0% 2020 2.0% 2021 2.0% 2022 2.0% 2023 2.0% 2024 0.0%

Residential Water Bill Comparison

$21.21 $24.25 $27.67 $31.99 $34.74 $43.81 $44.67 $48.44 $48.44 $48.44 $48.44 $48.44 $57.63 $62.31

Proposed Stormwater Rates

Proposed 2020 Stormwater Rates

Description Proposed FY2020 Proposed FY 2021 Proposed FY2022 Phase - In 40% 70% 100% Residential Tier 1 Rate (Monthly) $1.23 $2.16 $3.08 Residential Tier 2 Rate (Monthly) $2.46 $4.31 $6.15 Residential Tier 3 Rate (Monthly) $2.46 X I.A.** $4.31 X I.A. $6.15 X I.A. Non-Residential Rate (400-700 SF) $1.23 $2.16 $3.08 Non-Residential Rate (Over 700 SF) $2.46 X I.A. $4.31 X I.A. $6.15 X I.A.

84

**I.A. = Impervious Area expressed as a unit of measurement (ERU) consistent with the average residential unit’s impervious square feet of property (increments of 1,000 SF)

Capital Region Water proposed draft 2020 Budgets and Rates during a public meeting held on November 13, 2019. To review information on the 2020 Budgets and Rates as adopted by Capital Region Water’s Board of Directors on November 20, 2019, please visit https://capitalregionwater.com/financialreports/.

Comparing stormwater fees across PA

Residential Stormwater Customer - Bill Comparison (Annual)

$25 $36 $53 $59 $74 $78 $78 $80 $90 $96 $96 $128 $169 Hazleton Chambersburg Hampden Swatara CRW Derry Lancaster Jonestown Meadville Ebensburg Mount Lebanon Lower Paxton Philadelphia

Questions and Comments