Payson Water Company: Informational Meeting. June 11, 2018
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1 Payson Water Company: Informational Meeting June 11, 2018
2 Agenda & Topics Five years in, what have we accomplished? Payson water infrastructure upgrades C.C. Cragin Reservoir Pipeline ACC rate case 2 June 11, 2018 Payson Water Company
3 Accomplishments since purchase from Brooke Improved Customer Service Customer Service Center moved to Prescott, AZ Online payments accepted 24/7 More flexibility on disconnections/ payment plans Automated / expedited responses to emergency calls. distribution lists for conservation notices/ possible outages due to repairs Paperless billing and automatic payment options Nearly half our customers participate in either billing or autopay (or both) 3 6/13/2018 Add a footer
4 Accomplishments since purchase from Brooke Less water service outages/ Improved reliability Complaints filed at the ACC down significantly MDC addition of supplemental supply from Town of Payson has ELIMINATED outages Development of staff capability to more quickly resolve outages Company Focus on Long-term infrastructure investment Property Values are up 4 6/13/2018 Add a footer
5 Payson Home Values: Zillow.com July 2014 median home value: $187,000 March 2018 median home value: $243, % avg. annual increase Sound reliable service and infrastructure contributes positively to home values 5 June 11, 2018 Payson Water Company
6 Payson Water: Infrastructure Upgrades
7 According to the American Society of Civil Engineers: Arizona will need $6.1 BILLION in drinking water infrastructure over the next 20 years. Priorities need to change: U.S. drinking water infrastructure receives a grade of D. There are an estimated 240,000 water main breaks per year in the United States, wasting over two trillion gallons of treated drinking water. 83% of water systems are small systems and serve just 8% of the population, making it difficult to achieve economies of scale 7 June 11, 2018 Payson Water Company
8 Payson Infrastructure Upgrades Why? Aging facilities will continue to deteriorate unless addressed soon Some storage / pressure tanks rusted and leaking Water meters aging (some 40 yrs. plus) and many are likely inaccurate Desire to improve water supply reliability Well production rates continue to drop on current wells Will analyze wells that were abandoned to see if they can be brought back online 8 6/13/2018 Add a footer
9 Payson Infrastructure Upgrades Why? Desire to continue to improve service reliability Ability to monitor system status and performance remotely Ability to turn off sections of systems to make repairs Ability to restart equipment remotely without driving 2 hours to site when power goes off Desire to improve water quality New tanks = less rust and better taste Better control over chlorine treatment (liquid chlorination) Address problem spots with persistent air in water (milky coming out of tap) 9 6/13/2018 Add a footer
10 Payson Infrastructure Upgrades System Automations & Other Upgrades: AUTOMATION TO TAKE PLACE AT ALL PAYSON WATER COMPANY LOCATIONS Remote level monitors Remote chlorine monitors Remote restart of pumps and systems Centralized monitoring of well production rates New Radio-read flow meters New shut-off valves to improve ability to repair systems without shutting off customer services Some main distribution line replacements in areas prone to leaks Liquid Chlorination (replacing pellets): Geronimo Estates / Elusive Acres Whispering Pines Meads Ranch Mesa del Caballo Gisela / Tonto Creek Shores Deer Creek 10 June 11, 2018 Payson Water Company
11 Variable Frequency Drives (VFD) VFD s provide a more reliable and energy efficient ways to pressurize distribution systems. In most cases, it allows for removal of pressure tanks (many of which are rusting and need replaced). VFD Installations Planned At: Flowing Springs East Verde Gisela / Tonto Creek Shores Deer Creek Whispering PInes 11 6/13/2018 Add a footer
12 Storage Tank Upgrades/ Expansion East Verde (expansion) Meads Ranch (replacement) Whispering Pines (repair) Deer Creek (expansion & repair) Mesa del Caballo (expansion & repair) 12 6/13/2018 Add a footer
13 C.C. Cragin Reservoir Welcome: Greg Kornrumph Manager of Water Rights, SRP
14 C.C. Cragin Reservoir Agreement between Payson Water Company, SRP, and Town of Payson SRP owns and maintains the dam and pipeline to Town of Payson Town of Payson owns and operates water treatment facility adjacent to Mesa del Caballo. Payson Water Company pays our proportional cost of ownership for each of those projects. Allows for 70 acre-feet per year (average) from the reservoir for Mesa del Caballo. We are essentially securing perpetual water rights Commodity charge from Town will be half of current water purchased from Town s wells Payson Water Company can still supplement supply with water from Town of Payson when necessary (i.e. when Cragin is unavailable). When Cragin is being used it will allow Company wells to rest and rehabilitate. 14 June 11, 2018 Payson Water Company
15 15 June 11, 2018 Payson Water Company
16 16 June 11, 2018 Payson Water Company
17 17 June 11, 2018 Payson Water Company
18 What others are saying about the reservoir 18 June 11, 2018 Payson Water Company
19 19 June 11, 2018 Payson Water Company
20 ACC Rate Case
21 ACC Rate Case As part of our previous rate case (mid-2014) we were ordered to file for our next rate case by June 30, 2018 Application includes approximately $1,000,000 of new/ upgraded capital investment in ALL Payson systems (in addition to Cragin). As previously noted, American infrastructure rates as nearly failing by ASCE. Costs of asset additions are included in rates, but based on the expected life of an asset. Here are the expected lifespans of assets (source: NARUC): Storage tanks: 45 years Supply mains: 50 years Reservoirs: 40 years Treatment plants: 30 years Meters: 12 years General structures & improvements: 30 years Pumps: 8 years Chlorinators: 5 years 21 June 11, 2018 Payson Water Company
22 Payson Water Company ALL CUSTOMERS Estimated Rate Increases Mesa del Caballo Customers Our filing will request an increase of approximately 45-50% Current avg. bill of $34 will increase to approx.$50 Sources of rate increase: Annual Revenues lower than projected by ACC during last rate case ($70,000) Infrastructure upgrades Property and Income taxes (more revenue = more tax) Operating expenses have remained flat. ACC will review all costs to be sure they are supported and capital expenditures are used and useful. This is only the 2 nd rate increase in the last 20 years. Average bill now (excluding PWAM): $ $6.76 (WIFA charge) = $43.35 New estimated avg. billing: $ new surcharge (12.96) = $67.95 (59% increase) PWAM will remain (as a pass-through cost) and be approx. the same per month Buy-in costs for Cragin are funded with WIFA at an interest rate approved by WIFA at the time of closing (now around 4%, 4.8% max) WIFA has offered forgiveness of half of the $875,000 loan used to pay buy in costs. 22 6/13/2018 Add a footer
23 Questions? Thank you for your time! 23 June 11, 2018 Payson Water Company
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