28pu Si Water And Sewer Rates

From: Crisp, Dale To: Allen, Russell Cc: James, Perry; Jackson, Donna; Massengill, Robert; Waldroup, Kenneth; McCauley, Jeff; Alford, Jennifer; Brown, Nicole; Lex Warmath; Melissa Levin; Doug Carter; Buchan, Edward; Williams, Cinnamon; Alford, Cathy; Watkins, Marva Subject: SPECIAL AGENDA ITEM: Water and Sewer Rate Increase for Remainder of FY 09 and FY 10 - Additional Information Date: Thursday, April 16, 2009 12:40:20 PM Attachments: Public Utilities CIP.doc Raleigh PU Rate Options 4-16-09.pdf Connection Fees Inreases vs. Revenue.xls Capacity Fees 2009 Major NC systems.xls Capacity Fees 2009 Summary Wake County Towns.doc Capacity Fees 2009 Spreadsheet.xls w-s bill comparision @ 6ccf.xls w-s bill comparision @ 8ccf.xls Memo on credit rating gradations--DEC.doc Rate History and CIP FY 83- Current.xls Monthly Water Sewer Charges Chart for Council Meeting - 3-17-09.xls

As a result of the discussion by the City Council of the subject Special Item at the April 7th Council meeting, staff reviewed the back-up material provided to the City Council in their agenda notebooks and confirmed that some City Councilors did not receive the comprehensive report that was prepared on April 2nd by City staff and consultants to fully address questions and requests for information that had been previously directed to staff when the Council first discussed this subject issue at their March 17th Council meeting. In order to be sure that all the Councilors received the entire report, you forwarded the report to them via e-mail on April 8th. Also, as a result of the April 7th City Council meeting discussion of the proposed water and sewer rate increase item, some additional questions and requests for information were made by City Councilors that the April 2nd report did not address. These additional questions and request for additional information were referred to City staff. The following report is to respond to those questions and requests. Regarding the City Council’s questions about the final recommendations from the Water Conservation Advisory Council (WCAC) for the remaining items City Council referred to them, the WCAC has now completed their discussion of these items and their final recommendations are being submitted to the City Council as a separate agenda item for the April 21st Council meeting. Regarding the City Council’s questions about the Public Utilities Department’s Capital Improvement Program Plan (CIP), the Council set a special City Council meeting workshop on April 27th for a detailed discussion of the current and revised CIP with staff. However, the attached table is a summary of the totals of the updated detailed CIP information which we will present on the 27th. City staff and consultants have used this revised CIP data to generate w/s rate analysis and develop funding options that City Council has requested. We have developed three funding options for the revised FY 2010 CIP total of $914,864,000. The rate analysis summaries from Raftelis Financial Consultants, the City’s current w/s rate consultants, for each of these options are also attached to this report. Our goal in preparing these options has been for the w/s rate increases to return as soon as possible to the w/s rate increases that had been the City’s planned increases prior to the w/s revenue shortfall caused by the wet weather conditions, water conservation efforts and economic / customer growth downturn. In general terms, all three options modeled by Raftelis include the reduced annual department wide operating budget expenses along with the reduced CIP discussed previously, but still assumes the switch to tiered w/s rates and monthly billing initiative on Dec. 1, 2009 and the Dempsey E. Benton Water Treatment Plant start-up in Feb., 2010, plus includes the additional w/s acreage fee re-imbursement revenue and water capacity sales revenues for FY 10 and FY 11.

Option #1 – Maintains the 15% w/s rate increase discussed with Council last year when the FY 2009 budget was adopted for FY 2010 effective on July 1, 2009 and very conservative consumption / customer growth percentages we have seen this year. This option results in a 21% w/s rate increase in FY 11 effective July 1, 2010, but returns us to the previously indicated 9% in FY 12, 7% in FY 13 and 7% in FY 14. This type of very high w/s rate model results in FY 11 is what led City staff to recommend a higher and earlier w/s rate increase (17% on May 1st) than what was previously projected. Option #2 - Maintains the 15% w/s rate increase in FY 10 effective on July 1, 2009 and very conservative consumption / customer growth percentages in FY 10 and FY 11, but assume a 3% growth for the last 3 years of the projection period, plus $6 million per year in “new w/s connection fee” revenue beginning in FY 2011 and beyond, which would require a $2,500 per w/s connection increase by that time in new w/s connection fee revenue. This produces the desired results of a 9% w/s rate increase in FY 11 effective July 1, 2010 and also returns to the previously indicated 9% increase in FY 12, 7% increase in FY 13 and 7% increase in FY 14. Option #3 – Implement the 17% w/s rate increase effective on May 1, 2009 and maintain for all of FY 10, plus assume a less conservative consumption / customer growth percentages in FY11 (i.e. 3.5% growth per year for the remaining projection period), plus $4 million per year in “new connection fee” revenue in FY 2011 and beyond, which would require a total of a $1,500 increase by then. This also results in a 9% w/s rate increase in FY 11 effective July 1, 2010 and also returns to the previously indicated 9% in FY 12, 7% in FY 13 and 7% in FY 14. As you can see, options #2 and #3 moderates the future w/s rate increases back to the previously targeted levels, but in order to do so relies on additional revenue from proposed sizeable increases in the cost of new w/s customer connections to the City’s water and sewer system. In nd the April 2 report to City Council, City staff recommended a $500 increase in the connection fee total for FY 2010 and a $500 increase in FY 2011 for a total increase of $1,000 per connection phased over a two year period. Option #2 actually requires a total increase of $2,500 per connection over the same two year period and option #3 a total increase of $1,500 per connection over this same period. Attached is a table that indicates the additional revenue that would be generated at varying increases in the connection fee totals at varying numbers of new connections per year. We have assumed a conservative number of new w/s connections over the next two years at 2,500 per year for the rate analysis options #2 and #3 connection fee total increases. The City Council has indicated an interest in phasing in any increase in new w/s connection fees or “w/s capacity fees”, therefore an increase of $500 in FY 2010 and an additional increase nd $1,000 in FY 2011, as outlined in option #3 would meet this phase in goal. In the April 2 report to Council, we updated the information on the current capacity charges for the major w/s systems across N.C. and the Triangle area w/s systems for the current fiscal year (2009) and I have attached that information again to this report. I also added a spreadsheet (copy attached) for easier direct comparison of this information. As you can see, Durham and Winston-Salem continue to report that they have no w/s capacity fees. Of the 13 w/s systems who reported having a w/s capacity fee, Charlotte’s is currently the lowest at $1,835 for a single family residence and Holly Springs the highest at $8,000. The average capacity fee among those 13 systems that have such a fee is $3,573 and the average of all 15 system surveyed is $3,096. As you know and as we have previously reported to City Council, Raleigh does not have a connection charge named “w/s capacity fee”. However Raleigh’s current various w/s connection charges that do the same things that we understand these other w/s systems use their “capacity fees” to do, which is to provide revenue to fund their W/S Capital Improvement Programs, just as we use our various w/s connection fees, we simply do not call them “capacity fees”. The sum of Raleigh’s connection fees is $1,666 for FY th 2009. As you know, at the March 17 Council meeting these fees were updated for FY 2010, with an effective date of July 1, 2009. At the April 7th Council meeting, a $200 increase in the Sewer

Nutrient Fee was approved to fund the Water Conservation Incentive Initiative, effective July 1, 2009. These increases raise the w/s connection fee total effective on July 1, 2009 to $1,938. If Council chooses option #3 above which implements the 17% w/s rate increase effective on May 1, 2009 and the phased additional connection fee increases for FY 2010 of $500 and $1,000 in FY 2011, the w/s connection fee totals would then be $2,438 and $3,438, respectively. Both of these total w/s connection fees values are still very competitive with the “benchmarked” w/s systems averages for FY 2009. City Council requested information regarding the cost to the “average” or typical residential customer if the 17% w/s rate increase is approved. Historically we have considered the “average” or typical residential customer uses 8 ccf per month of w/s service. This is approximately equal to 6,000 gallons per month. However, our billing data now indicates with a “water conservation minded residential customer base” likely resulting from the exceptional drought experience of FY 2008, our “average” residential customer is using 6 ccf per month or approximately 4,500 gallons per month. Attached is a summary table that compares the current w/s rates to the proposed 17% increase rates for the current “average” residential customer using 6 ccf per month. As you can see, that “average” residential customer will pay $10.06 more per two month billing cycle period, equal to $5.03 per month or $60.36 per year with a 17% w/s rate increase than they currently pay. As discussed earlier, we had originally projected that a 15% w/s rate increase would be necessary on July 1, 2009 rather than the 17% w/s rate increase now requested for May 1, 2009. The cost difference between these two different rate increases to the “average” residential customer is also shown on the attached summary table. For a billing cycle the difference is $1.23, for a month the difference is $0.62 and for the entire 14 months of time difference, given the two month earlier effective date that has been proposed, the amount is $17.50. For comparison purposes, I have also prepared a summary table based on a residential customer who still uses 8 ccf per month and the cost differences are shown in a similar format to the previously described table and results. While the projected increases are greater with the higher water and sewer consumption values as you would expect, they are not significantly higher. Additional questions were raised by Council regarding the financial impact of the City W/S Utility Fund’s AAA revenue bond credit rating being downgraded in gradations. I have attached a report memo regarding this issue also from the City’s Chief Financial Officer, Perry James, and we have asked the City’s financial consultants at DEC who contributed to the report to attend the April 27th City Council CIP workshop meeting in case there are additional questions regarding bond ratings. th Finally there was discussion by the City Council at the April 7 meeting about the history the City’s Public Utilities CIP. Attached is a 25 year history spreadsheet that we have prepared that compares the w/s rate increases to the Public Utilities Department’s adopted total CIP funding. As you can see, the City has raised w/s rates in previous years at levels equal to or greater than the 15% and 17% increase implemented last year and proposed for FY 2010. Also, you can see that the CIP planning period has grown from 5 years to 10 years to now 15 years and that the investment needed has increased with these greater planning periods as well as a result of the significant amount of comprehensive engineering studies that have been performed in recent years at City Council direction to access the condition and necessary improvements for entire water supply, water treatment, water distribution, sewer collection, wastewater treatment and reuse water systems of the seven service areas of the Raleigh Public Utilities Department since 2000. The specific titles of the reports and studies that were used to guide our preparation of the CIPs over the last few years are listed below along with the City’s engineering consultant firms that performed the work and when these were either completed or most recently updated.



Water Quality / Water Supply & Distribution System Master Plan Update Plan -



Hazen& Sawyer Feb 2008 EM Johnson Water Treatment Plant Expansion Engineering Report - Hazen & Sawyer - May 2007

     

Neuse River Wastewater Treatment Plant Expansion Preliminary Engineering Report - Hazen & Sawyer/CDM Feb 2009 Smith Creek Wastewater Treatment Plant Process Improvements Engineering Evaluations Report - Brown and Caldwell - March 2007 Little Creek Wastewater Treatment Plant Expansion and Upgrade Preliminary Engineering Report - Green Engineering/Hazen & Sawyer- Aug 2008 Sanitary Sewer System Capacity Study - CDM/Hazen & Sawyer - August 2008 Reuse Water System Master Plan - Black & Veatch - Feb 2007 Biosolids Management Master Plan - CDM/Hazen & Sawyer - August 2008

For reference on the Rate and CIP History Spreadsheet I have highlighted the years where the City has sold w/s revenue bonds in order to fund the approved CIP expenditures. Note that prior to 1996 the City used General Obligation bonds as the debt funding mechanism for its moderate CIP appropriations. In reviewing the CIP appropriation totals prior 2000, the projects that were included were almost all growth related projects only with many years containing funding for large w/s system extension projects for City initiated annexation areas. Another clear observation from this review is that by not investing in w/s infrastructure rehabilitation and replacement projects in many adopted CIPs, plus experiencing tremendous customer growth, the City was able to have many years where w/s rate increases were not required. RECOMMENDATION: Public Utilities recommends City Council approval of the 17% water and sewer rate increase as earlier proposed, but with an effective date of May 1, 2009, along with approval of the recommendations for an additional $500 increase per connection to the Water Nutrient Fee in 2010, beyond the w/s connection fee amounts set previously for FY 2010, and concurrence with a planned additional increase of $1,000 effective in FY 2011, as outlined in the option #3 w/s rate analysis summary. Thanks, Dale.

H. Dale Crisp H. Dale Crisp, P.E. Raleigh Public Utilities Director One Exchange Plaza, Suite 620 (919)-857-4540 fax (919)-857-4545

Public Utilities CIP Budget Totals Adopted FY 2009

Phase I $546,529,000

Phase II $856,824,000

Total $1,403,353,000

Phase III $0

New Total $0

Initial FY 2010

$457,256,500

$944,312,000

$1,401,568,500

$0

$0

Revised FY 2010

$361,403,500

$553,461,000

$ 914,864,000

$692,502,000

$1,604,366,500

Note: Officially there is only two (2) phases to the PUD CIP for a 10 year total plan, but due to the revenue variance from prior capital financing projections, we have added a third 5 year period to indicate that we have not deleted any w/s projects from the approved CIP to address the revenue variance, we have simply shifted some w/s projects totaling $483,704,500 to a “Phase III”. We also included some w/s projects that have been projected for construction in Phase III, such as the Little River Reservoir Water Treatment Plant.

City of Raleigh Public Utilities Rate Options Assumptions used in EACH OPTION 1. Reduced annual department-wide operating budget. - [Line No. 21] 2. Reduced 10-year CIP ($1.4 billion reduced to $914 million). 3. Implementation of monthly billing on December 1, 2009 and DE Benton Water Treatment Plant start-up in February 2010. O&M Cost impacts of: a. FY 2010 - $2 million b. FY 2011 and after - $6 million - [Line No. 22] 4. Additional acreage fee reimbursements for “oversized” city water and sewer main projects completed, in the following amounts (In addition to the $1.0 million annual amount already built into the rate model): a. FY 2009 - $3.9 million b. FY 2010 - $9 million c. FY 2011 - $6 million - [Line No. 19] Assumptions used in OPTION #1 1. Maintain 15% water and sewer across-the-board rate increase effective July 1, 2009. - [Line Nos. 8 & 9] 2. Conservative outlook for consumption growth: Consumption returns to FY 2008 levels in FY 2011, and then grows at 1% per year thereafter. - [Line Nos. 11 & 12] Projected Summary Rate Increases FY 2010 – FY 2014: 15%, 21%, 9%, 7%, 7% Assumptions used in OPTION #2 1. Maintain 15% water and sewer across-the-board rate increase effective July 1, 2009. - [Line Nos. 8 & 9] 2. Less-conservative outlook for consumption growth: Consumption returns to FY 08 levels in FY 11, and then grows at 3% per year thereafter. - [Line Nos. 11 & 12] 3. $6 million in additional annual revenue beginning in FY 11 from a new $2,500 capacity fee on new connections ($1 million additional in FY 2010 for phase-in period). - [Line No. 19] Projected Summary Rate Increases FY 2010 – FY 2014: 15%, 9%, 9%, 7%, 7% Assumptions used in OPTION #3 1. Implement 17% water and sewer across-the-board rate increase effective May 1, 2009. - [Line Nos. 8 & 9] 2. Least-conservative outlook for consumption growth: Consumption returns to FY 08 levels in FY 11, and then grows at 3.5% per year thereafter. - [Line Nos. 11 & 12] 3. $4 million in additional annual revenue beginning in FY 11 from a new $1,500 capacity fee on new connections ($1 million additional in FY 2010 for phase-in period). - [Line No. 19] Projected Summary Rate Increases FY 2010 – FY 2014: 17%, 9%, 9%, 7%, 7%

Revenue Sufficiency Summary - Option #1 Actual FY 2008

Line No.

Estimated FY 2009

Projected FY 2010 FY 2011

Projected FY 2012 FY 2013

60,774,088 $ 11,392,246 72,166,334 $

78,240,486 $ 11,656,132 89,896,618 $

Proje FY 2014

Total System Revenue Water Revenue 1. 2. 3.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

49,351,707 $ 11,622,530 60,974,237 $

53,631,972 $ 11,263,220 64,895,192 $

72,192,300 $ 11,523,207 83,715,507 $

83,422,880 $ 88,972,867 11,791,051 11,927,995 95,213,931 $ 100,900,862

Sewer Revenue 4. User Charges 5. Miscellaneous Revenue 6. Subtotal: Sewer Revenue 7. Total: Revenue All Sources 8. 9. 10.

$

41,084,575 $ 43,885,081 $ 49,424,009 $ 58,259,008 $ 62,948,586 $ 66,968,374 $ 71,269,063 12,918,079 11,373,431 11,506,630 11,641,827 11,779,051 11,918,334 12,059,707 $ 54,002,654 $ 55,258,512 $ 60,930,639 $ 69,900,835 $ 74,727,638 $ 78,886,708 $ 83,328,770 $ 114,976,891 $ 120,153,704 $ 133,096,973 $ 153,616,341 $ 164,624,256 $ 174,100,639 $ 184,229,631

Raleigh Water Rate Increase Raleigh Sewer Rate Increase Previous Model:

15.00% 15.00% 15.00%

15.00% 15.00% 15.00%

21.00% 21.00% 9.00%

9.00% 9.00% 9.00%

7.00% 7.00% 7.00%

7.00% 7.00% 7.00%

0.00% 0.00%

-8.00% -8.00%

-3.50% -3.50%

0.00% 0.00%

1.00% 1.00%

2.00% 2.00%

3.00% 3.00%

49,351,707 $ 11,622,530 60,974,237 $

49,341,414 $ 11,263,220 60,604,634 $

58,646,995 $ 11,392,246 70,039,241 $

72,192,300 $ 11,523,207 83,715,507 $

79,022,891 $ 11,656,132 90,679,023 $

85,091,337 $ 91,642,053 11,791,051 11,927,995 96,882,389 $ 103,570,048

40,374,274 $ 11,373,431 51,747,705 $

47,694,169 $ 11,506,630 59,200,799 $

58,259,008 $ 11,641,827 69,900,835 $

63,578,072 $ 11,779,051 75,357,123 $

68,307,741 $ 11,918,334 80,226,076 $

73,407,135 12,059,707 85,466,842

3,900,000 $

9,000,000 $

6,000,000 $

- $

- $

-

Mid-Year Adjustment to Test Coverage 11. 12.

Total Water Revenue Total Sewer Revenue

Adjusted Water Revenue 13. 14. 15.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

Adjusted Sewer Revenue 16. 17. 18.

User Charges Miscellaneous Revenue Subtotal: Sewer Revenue

$ $

41,084,575 $ 12,918,079 54,002,654 $

19.

Additional Revenue Adjustment

$

- $

20.

Total: Adjusted Revenue All Sources

$ 114,976,891 $ 116,252,340 $ 138,240,040 $ 159,616,341 $ 166,036,146 $ 177,108,464 $ 189,036,889

21. Total Operating Expense 22. Additional Expense for Benton WTP & Monthly Billing

$ (80,709,066) $ (86,694,777) $ (87,450,609) $ (88,677,565) $ (91,215,736) $ (93,843,170) $ (96,563,343) (2,000,000) (6,000,000) (6,000,000) (6,000,000) (6,000,000)

23. Revenue Available for Debt Service

$

34,267,824 $

29,557,563 $

48,789,431 $

64,938,776 $

68,820,410 $

77,265,295 $

86,473,547

Outstanding and Estimated Debt Funding Needs 24. Revenue Bond and Parity Debt 25. Subordinate Debt (SRF & GO Bonds) 26. Other Installment Financing 27. Total Debt All Sources

$ (13,673,778) $ (13,659,633) $ (28,108,451) $ (36,598,838) $ (37,026,961) $ (37,567,439) $ (49,288,428) (4,916,845) (4,094,934) (3,358,618) (3,614,212) (2,985,316) (2,562,069) (2,390,708) (11,054,271) (11,643,189) (11,623,514) (9,637,767) (9,332,932) (4,155,934) (4,006,297) $ (29,644,894) $ (29,397,756) $ (43,090,582) $ (49,850,818) $ (49,345,209) $ (44,285,443) $ (55,685,433)

28. Annual Surplus / Deficit

$

4,622,930 $

159,807 $

5,698,849 $

15,087,959 $

29. Total Budgeted Annual PAYGO 30. Total Surplus / (Deficit) Including PAYGO

$

- $ 4,622,930

(7,250,000) $ (7,090,193)

(3,000,000) $ 2,698,849

(5,000,000) $ (15,000,000) $ (30,000,000) $ (30,000,000) 10,087,959 4,475,202 2,979,852 788,114

$

50,742,908 $

50,742,908 $

43,652,715 $

46,351,564 $

31. Unrestricted Net Assets - Beginning Balance

19,475,202 $

56,439,523 $

32,979,852 $

60,914,724 $

30,788,114

63,894,576

Legal Covenant 1.20 City Policy

2.51 1.75

2.16 1.75

1.74 1.75

1.77 1.75

1.86 1.75

2.06 1.75

1.75 1.75

32. 33.

Debt Service Coverage Parity Indebtedness

34. 35.

Debt Service Coverage on Parity, Subordinated, & G.O. Indebtedness

1.00 City Policy

1.84 1.25

1.66 1.25

1.55 1.25

1.61 1.25

1.72 1.25

1.93 1.25

1.67 1.25

36. 37.

Debt Service Coverage on All Sources

1.00 City Policy

1.16 1.00

1.01 1.00

1.13 1.00

1.30 1.00

1.39 1.00

1.74 1.00

1.55 1.00

38.

Ending Unrestricted Net Assets

39.

Target Ending Unrestricted Net Assets (min 35%)

40.

Over/(Under) Ending Unrestricted Net Assets

41.

Ratio of Ending Unrestricted Net Assets to O&M and Debt

Exclusive of 15% of Unrestricted Net Assets

Exclusive of Unrestricted Assets

Summary Option #1

35%

$

50,742,908 $

43,652,715 $

46,351,564 $

56,439,523 $

60,914,724 $

63,894,576 $

64,682,690

$

38,623,886 $

40,632,387 $

45,689,417 $

48,484,934 $

49,196,331 $

48,345,014 $

53,287,071

$

12,119,022 $

3,020,328 $

662,147 $

7,954,589 $

11,718,394 $

15,549,562 $

11,395,618

0.46

0.38

0.36

0.41

0.43

0.46

0.42

4/16/2009

Revenue Sufficiency Summary - Option #2 Actual FY 2008

Line No.

Estimated FY 2009

Projected FY 2010 FY 2011

Projected FY 2012 FY 2013

Proje FY 2014

60,774,088 $ 11,392,246 72,166,334 $

71,241,377 $ 11,656,132 82,897,509 $

80,932,282 11,927,995 92,860,277

Total System Revenue Water Revenue 1. 2. 3.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

49,351,707 $ 11,622,530 60,974,237 $

53,631,972 $ 11,263,220 64,895,192 $

65,781,818 $ 11,523,207 77,305,024 $

75,921,176 $ 11,791,051 87,712,227 $

Sewer Revenue 4. User Charges 5. Miscellaneous Revenue 6. Subtotal: Sewer Revenue 7. Total: Revenue All Sources 8. 9. 10.

$

41,084,575 $ 43,885,081 $ 49,424,009 $ 53,313,950 $ 57,550,936 $ 61,184,744 $ 65,071,787 12,918,079 11,373,431 11,506,630 11,641,827 11,779,051 11,918,334 12,059,707 $ 54,002,654 $ 55,258,512 $ 60,930,639 $ 64,955,776 $ 69,329,987 $ 73,103,079 $ 77,131,494 $ 114,976,891 $ 120,153,704 $ 133,096,973 $ 142,260,801 $ 152,227,497 $ 160,815,306 $ 169,991,771

Raleigh Water Rate Increase Raleigh Sewer Rate Increase Previous Model:

15.00% 15.00% 15.00%

15.00% 15.00% 15.00%

9.00% 9.00% 9.00%

9.00% 9.00% 9.00%

7.00% 7.00% 7.00%

7.00% 7.00% 7.00%

0.00% 0.00%

-8.00% -8.00%

-3.50% -3.50%

0.00% 0.00%

3.00% 3.00%

6.00% 6.00%

9.00% 9.00%

49,351,707 $ 11,622,530 60,974,237 $

49,341,414 $ 11,263,220 60,604,634 $

58,646,995 $ 11,392,246 70,039,241 $

65,781,818 $ 11,523,207 77,305,024 $

73,378,619 $ 11,656,132 85,034,751 $

80,476,447 $ 88,216,188 11,791,051 11,927,995 92,267,498 $ 100,144,182

40,374,274 $ 11,373,431 51,747,705 $

47,694,169 $ 11,506,630 59,200,799 $

53,313,950 $ 11,641,827 64,955,776 $

59,277,464 $ 11,779,051 71,056,515 $

64,855,829 $ 11,918,334 76,774,164 $

70,928,248 12,059,707 82,987,955

3,900,000 $

10,000,000 $

12,000,000 $

6,000,000 $

6,000,000 $

6,000,000

Mid-Year Adjustment to Test Coverage 11. 12.

Total Water Revenue Total Sewer Revenue

Adjusted Water Revenue 13. 14. 15.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

Adjusted Sewer Revenue 16. 17. 18.

User Charges Miscellaneous Revenue Subtotal: Sewer Revenue

$ $

41,084,575 $ 12,918,079 54,002,654 $

19.

Additional Revenue Adjustment

$

- $

20.

Total: Adjusted Revenue All Sources

$ 114,976,891 $ 116,252,340 $ 139,240,040 $ 154,260,801 $ 162,091,266 $ 175,041,662 $ 189,132,137

21. Total Operating Expense 22. Additional Expense for Benton WTP & Monthly Billing

$ (80,709,066) $ (86,694,777) $ (87,450,609) $ (88,677,565) $ (91,215,736) $ (93,843,170) $ (96,563,343) (2,000,000) (6,000,000) (6,000,000) (6,000,000) (6,000,000)

23. Revenue Available for Debt Service

$

34,267,824 $

29,557,563 $

49,789,431 $

59,583,236 $

64,875,530 $

75,198,492 $

86,568,794

Outstanding and Estimated Debt Funding Needs 24. Revenue Bond and Parity Debt 25. Subordinate Debt (SRF & GO Bonds) 26. Other Installment Financing 27. Total Debt All Sources

$ (13,673,778) $ (13,659,633) $ (28,108,451) $ (36,598,838) $ (37,026,961) $ (37,567,439) $ (49,288,428) (4,916,845) (4,094,934) (3,358,618) (3,614,212) (2,985,316) (2,562,069) (2,390,708) (11,054,271) (11,643,189) (11,623,514) (9,637,767) (9,332,932) (4,155,934) (4,006,297) $ (29,644,894) $ (29,397,756) $ (43,090,582) $ (49,850,818) $ (49,345,209) $ (44,285,443) $ (55,685,433)

28. Annual Surplus / Deficit

$

4,622,930 $

159,807 $

6,698,849 $

9,732,418 $

29. Total Budgeted Annual PAYGO 30. Total Surplus / (Deficit) Including PAYGO

$

- $ 4,622,930

(7,250,000) $ (7,090,193)

(3,000,000) $ 3,698,849

(5,000,000) $ (15,000,000) $ (30,000,000) $ (30,000,000) 4,732,418 530,321 913,049 883,361

$

50,742,908 $

50,742,908 $

43,652,715 $

47,351,564 $

31. Unrestricted Net Assets - Beginning Balance

15,530,321 $

52,083,982 $

30,913,049 $

52,614,303 $

30,883,361

53,527,352

Legal Covenant 1.20 City Policy

2.51 1.75

2.16 1.75

1.77 1.75

1.63 1.75

1.75 1.75

2.00 1.75

1.76 1.75

32. 33.

Debt Service Coverage Parity Indebtedness

34. 35.

Debt Service Coverage on Parity, Subordinated, & G.O. Indebtedness

1.00 City Policy

1.84 1.25

1.66 1.25

1.58 1.25

1.48 1.25

1.62 1.25

1.87 1.25

1.68 1.25

36. 37.

Debt Service Coverage on All Sources

1.00 City Policy

1.16 1.00

1.01 1.00

1.16 1.00

1.20 1.00

1.31 1.00

1.70 1.00

1.55 1.00

38.

Ending Unrestricted Net Assets

39.

Target Ending Unrestricted Net Assets (min 35%)

40.

Over/(Under) Ending Unrestricted Net Assets

41.

Ratio of Ending Unrestricted Net Assets to O&M and Debt

Exclusive of 15% of Unrestricted Net Assets

Exclusive of Unrestricted Assets

Summary Option #2

35%

$

50,742,908 $

43,652,715 $

47,351,564 $

52,083,982 $

52,614,303 $

53,527,352 $

54,410,714

$

38,623,886 $

40,632,387 $

45,689,417 $

48,484,934 $

49,196,331 $

48,345,014 $

53,287,071

$

12,119,022 $

3,020,328 $

1,662,147 $

3,599,048 $

3,417,972 $

5,182,338 $

1,123,642

0.38

0.36

0.38

0.37

0.39

0.36

0.46

4/16/2009

Revenue Sufficiency Summary - Option #3 Actual FY 2008

Line No.

Estimated FY 2009

Projected FY 2010 FY 2011

Projected FY 2012 FY 2013

Proje FY 2014

61,701,602 $ 11,392,246 73,093,848 $

72,347,034 $ 11,656,132 84,003,166 $

82,202,462 11,927,995 94,130,456

Total System Revenue Water Revenue 1. 2. 3.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

49,351,707 $ 11,622,530 60,974,237 $

53,631,972 $ 11,263,220 64,895,192 $

66,794,488 $ 11,523,207 78,317,695 $

77,106,228 $ 11,791,051 88,897,279 $

Sewer Revenue 4. User Charges 5. Miscellaneous Revenue 6. Subtotal: Sewer Revenue 7. Total: Revenue All Sources 8. 9. 10.

$

41,084,575 $ 43,885,081 $ 50,139,692 $ 54,095,126 $ 58,403,608 $ 62,098,390 $ 66,050,777 12,918,079 11,373,431 11,506,630 11,641,827 11,779,051 11,918,334 12,059,707 $ 54,002,654 $ 55,258,512 $ 61,646,322 $ 65,736,952 $ 70,182,660 $ 74,016,725 $ 78,110,484 $ 114,976,891 $ 120,153,704 $ 134,740,170 $ 144,054,647 $ 154,185,825 $ 162,914,004 $ 172,240,940

Raleigh Water Rate Increase Raleigh Sewer Rate Increase Previous Model:

15.00% 15.00% 15.00%

17.00% 17.00% 15.00%

9.00% 9.00% 9.00%

9.00% 9.00% 9.00%

7.00% 7.00% 7.00%

7.00% 7.00% 7.00%

0.00% 0.00%

-6.50% -6.50%

-3.50% -3.50%

0.00% 0.00%

3.50% 3.50%

7.50% 7.50%

11.00% 11.00%

49,351,707 $ 11,622,530 60,974,237 $

50,145,894 $ 11,263,220 61,409,114 $

59,542,046 $ 11,392,246 70,934,292 $

66,794,488 $ 11,523,207 78,317,695 $

74,879,180 $ 11,656,132 86,535,312 $

82,889,195 $ 91,244,732 11,791,051 11,927,995 94,680,246 $ 103,172,727

41,032,551 $ 11,373,431 52,405,982 $

48,384,803 $ 11,506,630 59,891,433 $

54,095,126 $ 11,641,827 65,736,952 $

60,447,735 $ 11,779,051 72,226,786 $

66,755,769 $ 11,918,334 78,674,104 $

73,316,362 12,059,707 85,376,069

3,900,000 $

10,000,000 $

10,000,000 $

4,000,000 $

4,000,000 $

4,000,000

Mid-Year Adjustment to Test Coverage 11. 12.

Total Water Revenue Total Sewer Revenue

Adjusted Water Revenue 13. 14. 15.

User Charges Miscellaneous Revenue Subtotal: Water Revenue

$ $

Adjusted Sewer Revenue 16. 17. 18.

User Charges Miscellaneous Revenue Subtotal: Sewer Revenue

$ $

41,084,575 $ 12,918,079 54,002,654 $

19.

Additional Revenue Adjustment

$

- $

20.

Total: Adjusted Revenue All Sources

$ 114,976,891 $ 117,715,096 $ 140,825,724 $ 154,054,647 $ 162,762,098 $ 177,354,350 $ 192,548,796

21. Total Operating Expense 22. Additional Expense for Benton WTP & Monthly Billing

$ (80,709,066) $ (86,694,777) $ (87,450,609) $ (88,677,565) $ (91,215,736) $ (93,843,170) $ (96,563,343) (2,000,000) (6,000,000) (6,000,000) (6,000,000) (6,000,000)

23. Revenue Available for Debt Service

$

34,267,824 $

31,020,319 $

51,375,116 $

59,377,082 $

65,546,362 $

77,511,180 $

89,985,454

Outstanding and Estimated Debt Funding Needs 24. Revenue Bond and Parity Debt 25. Subordinate Debt (SRF & GO Bonds) 26. Other Installment Financing 27. Total Debt All Sources

$ (13,673,778) $ (13,659,633) $ (28,108,451) $ (36,598,838) $ (37,026,961) $ (37,567,439) $ (49,288,428) (4,916,845) (4,094,934) (3,358,618) (3,614,212) (2,985,316) (2,562,069) (2,390,708) (11,054,271) (11,643,189) (11,623,514) (9,637,767) (9,332,932) (4,155,934) (4,006,297) $ (29,644,894) $ (29,397,756) $ (43,090,582) $ (49,850,818) $ (49,345,209) $ (44,285,443) $ (55,685,433)

28. Annual Surplus / Deficit

$

4,622,930 $

1,622,562 $

8,284,533 $

9,526,264 $

29. Total Budgeted Annual PAYGO 30. Total Surplus / (Deficit) Including PAYGO

$

- $ 4,622,930

(7,250,000) $ (5,627,438)

(3,000,000) $ 5,284,533

(5,000,000) $ (15,000,000) $ (30,000,000) $ (30,000,000) 4,526,264 1,201,153 3,225,738 4,300,021

$

50,742,908 $

50,742,908 $

45,115,470 $

50,400,004 $

31. Unrestricted Net Assets - Beginning Balance

16,201,153 $

54,926,268 $

33,225,738 $

56,127,421 $

34,300,021

59,353,159

Legal Covenant 1.20 City Policy

2.51 1.75

2.27 1.75

1.83 1.75

1.62 1.75

1.77 1.75

2.06 1.75

1.83 1.75

32. 33.

Debt Service Coverage Parity Indebtedness

34. 35.

Debt Service Coverage on Parity, Subordinated, & G.O. Indebtedness

1.00 City Policy

1.84 1.25

1.75 1.25

1.63 1.25

1.48 1.25

1.64 1.25

1.93 1.25

1.74 1.25

36. 37.

Debt Service Coverage on All Sources

1.00 City Policy

1.16 1.00

1.06 1.00

1.19 1.00

1.19 1.00

1.33 1.00

1.75 1.00

1.62 1.00

38.

Ending Unrestricted Net Assets

39.

Target Ending Unrestricted Net Assets (min 35%)

40.

Over/(Under) Ending Unrestricted Net Assets

41.

Ratio of Ending Unrestricted Net Assets to O&M and Debt

Exclusive of 15% of Unrestricted Net Assets

Exclusive of Unrestricted Assets

Summary Option #3

35%

$

50,742,908 $

45,115,470 $

50,400,004 $

54,926,268 $

56,127,421 $

59,353,159 $

63,653,180

$

38,623,886 $

40,632,387 $

45,689,417 $

48,484,934 $

49,196,331 $

48,345,014 $

53,287,071

$

12,119,022 $

4,483,084 $

4,710,587 $

6,441,334 $

6,931,091 $

11,008,145 $

10,366,108

0.39

0.39

0.40

0.40

0.46

0.43

0.42

4/16/2009

Annual W/S Revenue Projections from Varying Capacity Fee Increases and Varying New Connection Totals

$200 $500 $1,000 $1,500 $2,000 $2,500

2,000 $400,000 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000

2,500 $500,000 $1,250,000 $2,500,000 $3,750,000 $5,000,000 $6,250,000

3,000 $600,000 $1,500,000 $3,000,000 $4,500,000 $6,000,000 $7,500,000

3,500 $700,000 $1,750,000 $3,500,000 $5,250,000 $7,000,000 $8,750,000

4,000 $800,000 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000

4,500 $900,000 $2,250,000 $4,500,000 $6,750,000 $9,000,000 $11,250,000

5,000 $1,000,000 $2,500,000 $5,000,000 $7,500,000 $10,000,000 $12,500,000

Analysis of the Use of Capacity Fees In Charlotte, Greensboro, Winston-Salem and Durham Charlotte-Mecklenburg Wastewater (Sewer) Capacity Fees (based on water meter size): Total SFR

Water Capacity Fees: ¾ inch 1 inch 1 ½ inch 2 inch 3 inch "Compound" 4 inch "Compound" 6 inch FMCT 8 inch FMCT 10 inch FMCT 10" X 12" X 6" FMCT 4 inch Fire Line 6 inch FMCT 8 inch FMCT 10 inch FMCT 12 inch FMCT

415 1,038 2,075 3,320 6,640 10,375 25,938 37,350 60,175 89,225 6,225 12,969 18,675 30,088 44,613

¾ inch 1 inch 1 ½ inch 2 inch 3 inch "Compound" 4 inch "Compound" 6 inch FMCT 8 inch FMCT 10 inch FMCT 10" X 12" X 6" FMCT 4 inch Fire Line 6 inch FMCT 8 inch FMCT 10 inch FMCT 12 inch FMCT

1,420 3,550 7,100 11,360 22,720 35,500 24,850 42,600 88,750 205,900 N/A N/A N/A N/A N/A

1,835

*Effective 7/1/08 - 6/30/09 - information found on website and confirmed with Cam Coley

City of Greensboro Capacity Fees - Combined Water and Sewer* Residential homes Inside city maximum Outside city maximum

1,970 5,910

*Applies to all buildings and homes built after 1989, based on the heated square footage of the property and whether or not it is located inside or outside the city limits. The fee for a non-residential building is based on the size of the meter and whether the property is located inside or outside the city. *Effective 8/1/08 - information found on website.

City/County of Winston-Salem No capacity or impact fees collected. City has an assessment and connection fee. *As of FY 2009 - information confirmed by Nick Seeba.

Durham City-County No capacity fees collected. Impact fees collected for new construction are designated for Streets, Parks and Recreation, and Open Space. *As of FY 2009

Summary of Water and Sewer Capacity Fees in Wake County The following is a summary of the water and sewer capacity fees for Towns which have them in each Wake County (data obtained from Towns’ websites 3/17/2009). The total fee amount for each Town is based on a single family residence using 250 GPD of water and sewer capacity or their equivalent methodology was used to calculate the underlined Total since the Towns determine their w/s capacity fees in varying ways. Other water and sewer fees apply such as acreage fees, irrigation fees, tap fees, etc. and rates for out-of-town users and multi-family residences are collected by the Towns but are not shown. Apex Capacity Fees

Combined water/sewer

$17 per GPD (GPD based on supplied list of usage by land use category)

Total w/s capacity fee

$4,250 per SFR unit

Fuquay Varina Capacity Fees Water

$1,000/lot

Sewer

$2,000/lot

Capacity Fees (non-residential) Water and Sewer combined $3,000 – 166,666 depending on size of tap Total w/s capacity fee

$3,000 per SFR unit

Holly Springs Capacity Fees (residential) Water

$4,000 – 30,000/unit based on meter size

Sewer

$4,000 – 30,000/unit based on meter size

Capacity Fees (non-residential) Water

$5,000 - $45,000 based on meter size

Sewer

$5,000 - $45,000 based on meter size

Total w/s capacity fee

$8,000 per SFR unit ¾” meter

Water

$1,110/unit or $4.44 GPD

Sewer

$950/unit or $3.80 GPD

Total w/s capacity fee

$2,060 per SFR unit

Wendell Capacity Fees

Zebulon Capacity and Development Fees Water

$1,695 - $3,017 based on meter size

Sewer

$1,746 - $3,108 based on meter size

Total w/s capacity fee

$3,441 per SFR unit

Garner Capacity Replacement Fees Water Residential/Non-Residential $4.10 per gallon for new construction reserved or projected. Sewer Residential/Non-Residential $5.50 per gallon for new construction reserved or projected. Total w/s capacity fee

$2,400 per SFR unit

Water

$887.50 per unit or $3.55 gpd

Sewer

$900 per unit or $3.60 gpd

Total w/s capacity fee

$1,787.50 per SFR unit

Knightdale Capacity Fees

Rolesville Water Single and Two-Family Residential

$675 per unit

Sewer Single and Two-Family Residential

$695 per unit

Water and Sewer Capacity Increase

$1,985 per unit

Total w/s capacity fee

$3,355 per SFR unit

Wake Forest Residential Water and Sewer Availability Fees as follows: TYPE

GPD

WATER FEE

SEWER FEE

Two Bedroom

119

$960.33

$655.69

Three Bedroom

168

$1,355.76

$925.68

Four Bedroom

279

$2,251.53

$1,537.29

Greater than Four Bedroom

279 + 60 per bedroom

$2,735.73

$1,867.89

Mobile Home

228

$1,839.96

$1,256.28

One Bedroom Apartment

84

$677.88

$462.84

Two Bedroom Apartment

125

$1,008.75

$688.75

Three Bedroom Apartment

166

$1,339.62

$914.66

¾” x 5/8” irrigation meter

166

$1,630.14 + fee for split water meter ($430 if installed at time house meter is installed; $650 if installed later than house)

----

Total w/s capacity fee $3,788.82 per SFR unit Cary Cary charges a single Development Fee for both acreage and capacity replacement fees. Residential <1,700 square feet 1,701 – 2,400 2,401 – 3,100 3,100 – 3,800 >3,800

Water $1,183 $1,471 $1,805 $2,173 $2,783

Water

Calculated using $4.15/peak day gallon

Sewer

Calculated using $9.93/peak day gallon

Total w/s capacity fee

Sewer $2,118 $2,967 $3,456 $3,855 $4,904

$5,261 per SFR unit (using 2401-3,100 median)

Morrisville Fees are charged by Cary, as owner of the merged utility system. Fees will match Cary fees after recovery of merger costs. Residential

Water

Sewer

<1,700 square feet

$1,207

$2,118

1,701 – 2,400

$1,500

$2,967

2,401 – 3,100

$1,841

$3,456

3,100 – 3,800

$2,216

$3,855

>3,800

$2,839

$4,904

Non-Residential Fees are the same as those in Cary (once change in Cary non-residential fee structure implemented). Water

Calculated using $4.15/peak day gallon

Sewer

Calculated using $9.93/peak day gallon

Total w/s capacity fee

$5,297 per SFR unit (using 2401-3,100 median)

W/S Capacity Fee Spreadsheet for FY 2009 Durham Winston-Salem Charlotte Greensboro Apex Fuquay Varina Holly Springs Wendell Zebulon Garner Knightdale Rolesville Wake Forest Cary Morrisville

$0 $0 $1,835 $1,970 $4,250 $3,000 $8,000 $2,060 $3,441 $2,400 $1,787.50 $3,355 $3,788.82 $5,261 $5,297 $3,573

Raleigh Connection fees= $1,666

$3,096

water availability water consumption sewer availability sewer consumption

$7.77 $1.96 $6.24 $1.82

per bill per ccf per bill per ccf

(2 months) 1 ccf = 748.1 gallons (2 months) 1 ccf = 748.1 gallons

The average residential type customer in the Raleigh service is currently using 6 ccf per month or 12 ccf per bill. 4489 gallons 8977 gallons Therefore the average residential customer's current w/s bill is indicated below: $7.77 $3.89 $23.52 $11.76 $6.24 $3.12 $21.84 $10.92 $59.37 or on a monthly basis $29.69 or on an annual basis $356.22 The 15 % water and sewer rate increase previously projected for FY 2010 and effective on July 1, 2009 would generate an average residential customer's bill as indicated below: $8.94 $27.00 $7.18 $25.08 $68.20 or on a monthly basis $8.83 increase

$4.47 $13.50 $3.59 $12.54 $34.10 or on an annual basis $4.41 increase

$409.20 $52.98 increase

The 17 % water and sewer rate increase proposed for 2 months in FY 2009 and all of FY 2010 and effective on May 1, 2009 would generate an average residential customer's bill as indicated below: $9.09 $27.48 $7.30 $25.56 $69.43 or on a monthly basis $10.06 increase $1.23 increase above 15%

$4.55 $13.74 $3.65 $12.78 $34.72 or on an annual basis $5.03 increase $0.62 increase above 15%

$416.58 $60.36 increase $17.50 increase above 15% on July 1, 2009

water availability water consumption sewer availability sewer consumption

$7.77 $1.96 $6.24 $1.82

per bill per ccf per bill per ccf

(2 months) 1 ccf = 748.1 gallons (2 months) 1 ccf = 748.1 gallons

A residential type customer in the Raleigh service currently using 8 ccf per month or 16 ccf per bill. 5,985 gallons 11,970 gallons Therefore the average residential customer's current w/s bill is indicated below: $7.77 $3.89 $31.36 $15.68 $6.24 $3.12 $29.12 $14.56 $74.49 or on a monthly basis $37.25 or on an annual basis $447.00 The 15 % water and sewer rate increase previously projected for FY 2010 and effective on July 1, 2009 would generate an average residential customer's bill as indicated below: $8.94 $36.00 $7.18 $33.44 $85.56 or on a monthly basis $11.07 increase

$4.47 $18.00 $3.59 $16.72 $42.78 or on an annual basis $5.53 increase

$513.36 $66.36 increase

The 17 % water and sewer rate increase proposed for 2 months in FY 2009 and all of FY 2010 and effective on May 1, 2009 would generate an average residential customer's bill as indicated below: $9.09 $36.64 $7.30 $34.08 $87.11 or on a monthly basis $12.62 increase $1.55 increase above 15%

$4.55 $18.32 $3.65 $17.04 $43.56 or on an annual basis $6.31 increase $0.78 increase above 15%

$522.72 $75.72 increase $21.98 increase above 15% on July 1, 2009

Memorandum To:

City Manager Russell Allen Public Utilities Director Dale Crisp

From: Chief Financial Officer Perry James Date: 4/16/2009 Re:

Information on Credit Rating Gradations

At the request of Councilor Koopman at the April 7 Council Meeting, we have reviewed further the financial impacts of having City of Raleigh utility revenue bonds rated at gradations between major categories (such as AA1, AA2, or AA3). To obtain further information on the specific impacts of individual graduations of rates, I again asked the City’s Financial Advisor, Douglas Carter of DEC Associates, to review and comment on this. The following is his response: Perry, you have asked me to comment on a question raised concerning potential cost increases as a result of rating reduction. In my earlier written communication to you I outlined currently estimated cost impacts for rating reduction to the double A and single A categories and the question now raised deals with the specific cost impacts by the gradations within each letter category. Each rating category, as you know, has three gradations within the category and taking the estimated cost impact for the major categories and estimating them for the individual gradations is difficult to measure. A mathematical method, by taking the estimated change and multiplying by three (since there are three gradations within each category) is problematic and not applicable, in my opinion. Additionally, the potential gradation economic change occurs most commonly when a rating is increasing from one major category to the other, from triple B to single A, single A to double A and so on. For a credit that is in a downward movement, the estimated cost impact of this would be very similar within a category, without regard to gradation, since downward movement would impact investor perceptions and concerns for the future. For the multiple reasons mentioned in our earlier communication to you, including increased cost, it is my sincere belief that the continuation of revenue bond credit ratings at highest levels achieved by the City Water and Sewer operation is of great importance. In summary, while there would naturally seem to be different pricing impacts from the different gradations, such is more normally seen in an upward rating progression. Once the City’s revenue bonds began a downward rating movement, such would likely cast an overall negative shadow over not only new issues but also existing issues owned by investors. Such a situation is not advisable and I certainly agree with Doug Carter’s overall conclusion on the importance of the highest level bond ratings for the Water and Sewer operation. Doug Carter will be meeting with us on Monday, April 27 and plans to be at the workshop that afternoon. I will be glad to ask him to make prepared remarks on the impacts of credit ratings in the context of the rate model. Please let me know if I should arrange that. Perry James

City of Raleigh History of Water and Sewer Rate Changes and Capital Improvement Plan Investment Fiscal Year 1983 to Present Water Rate Changes

Effective Date July 1, 1983 July 1, 1984 July 1, 1985 July 1, 1986 July 1, 1987 July 1, 1988 July 1, 1989 July 1, 1990 July 1, 1991 July 1, 1992 July 1, 1993 July 1, 1994 July 1, 1995 July 1, 1996 July 1, 1997 July 1, 1998 July 1, 1999 July 1, 2000 July 1, 2001 July 1, 2002 July 1, 2003 July 1, 2004 July 1, 2005 July 1, 2006 July 1, 2007 July 1, 2008

Percent Change +37.7% +13.9% No change +5% No change No change No change No change No change No change No change No change No change No change No change +5% +5% No change No change No change +5% +9% +9% +9% +9% +15%

Sewer Rate Changes

Effective Date July 1, 1983 July 1, 1984 July 1, 1985 July 1, 1986 July 1, 1987 July 1, 1988 July 1, 1989 July 1, 1990 July 1, 1991 July 1, 1992 July 1, 1993 July 1, 1994 July 1, 1995 July 1, 1996 July 1, 1997 July 1, 1998 July 1, 1999 July 1, 2000 July 1, 2001 July 1, 2002 July 1, 2003 July 1, 2004 July 1, 2005 July 1, 2006 July 1, 2007 July 1, 2008

CIP Budgets

Percent Change +8% +11.9%

No change +5% No change +16% No change No change No change +16% No change No change No change No change No change +5% +5% No change No change No change +5% +9% +9% +9% +9% +15%

Totals $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

26,990,000 30,823,000 36,439,000 58,543,000 81,292,000 73,775,000 73,579,000 182,300,000 141,262,000 156,557,000 165,243,000 146,632,000 109,835,000 110,443,000 84,770,500 92,557,000 108,122,000 136,669,700 185,155,000 375,776,000 431,198,000 472,086,000 484,445,000 651,914,000 878,306,325 1,403,353,000

No. Years 5 5 5 5 5 5 5 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

Zebulon

Asheville

Rolesville

Garner

Morrisville

Carrboro

Chapel Hill

Knightdale

Holly Springs

3

$56. 69

$54. 69

$54. 38

$52. 75 $53. 95

$49. 64 $50. 23 $52. 3

$49. 22

$45. 06 $45. 75 $46. 84

$44. 35 $45. 06

$60

Apex

Fuquay-Varina

Average

Wendell

Wake Forest

Cary

Wilmington

Greensboro

$35. 62 $38. 70 $39. 23

$34. 92

$34. 72

$50

Fayetteville

Charlotte

Raleigh

$33. 38

$40

Durham

$19. 95

$30

Winston-Salem

$80

$69. 11

FY09 Monthly Water & Sewer Charges (Proposed Rate Increase for City of Raleigh Included)

$70

$20

$10

$-