2010 2 0 1 0 W a t e How do your rates rate? r a n AWWA’s 2010 Water and Wastewater Rate Survey provides the third quarters of 2010, the survey includes data from 308 d W Water and Wastewater most comprehensive and current water and wastewater utility water utilities and 228 wastewater utilities serving US cities a s rate and financial data and analysis available. Data include with populations ranging from 1,000 to 9 million. The survey is t e water and wastewater charges, rate structures, fees, billing a joint effort of American Water Works Association and Raftelis w a Rate Survey cycles, affordability programs, and conservation efforts, shown Financial Consultants, Inc. t e r on easy-to-read spreadsheets. Conducted in the second and R a t e S u r v e y AWWA is the authoritative resource for knowledge, information, and advocacy to improve the quality and supply of water in North America and beyond. AWWA is the largest organization co-produced by of water professionals in the world, advancing public health, safety, and welfare by uniting the efforts of the full spectrum of the water community. Through our collective strength, we become better stewards of water for the greatest good of people and the environment. 1P-6.5C-54005-2/11-SB 54003 2010 Cover.indd 1 2/3/2011 9:48:05 AM 2010 Water and Wastewater Rate Survey American Water Works Association Raftelis Financial Consultants, Inc. 54005 2010 Water and WW Rate Survey Text.indb 1 2/3/2011 10:09:51 AM American Water Works Association Copyright © January 2011 American Water Works Association/ 6666 West Quincy Avenue Raftelis Financial Consultants, Inc. Denver, CO 80235 tel. 303.794.7711 All rights reserved. No part of this publication may be repro- fax 303.347.0804 duced or transmitted in any form or by any means, electronic www.awwa.org or mechanical, including photocopy, recording, or any informa- tion or retrieval system, except in the form of brief excerpts or Raftelis Financial Consultants, Inc. quotations for review purposes, without the written permission 1031 S. Caldwell Street, Suite 100 of the publisher. Charlotte, NC 28203 tel. 704.373.1199 ISBN-13: 978-1-58321-808-2 fax 704.373.1113 ISBN-10: 1-58321-808-4 www.raftelis.com 54005 2010 Water and WW Rate Survey Text.indb 2 2/3/2011 10:09:51 AM Contents Contents Foreword v Residential vs. Nonresidential 8 Acknowledgments vi Fixed Charges 8 2010 Participants vii Fixed Charges by Meter Size 8 Median Fixed Charges 8 Part I: Overview, 1 Minimum Charges 8 Time Frame 1 Other Charges 9 Basis of Analysis 1 Service Connection and Capital Recovery Charges 9 Sample Selection 1 High-Strength Surcharges 9 Sorting the Sample 1 Other Surcharges 9 Missing and Inaccurate Data 2 Billing 9 Use of the Survey Data 2 Billing Cycle 10 Effective Date 10 Part II: The New Normal, 3 Measurement Units 10 Historic Perspective 3 Conservation Efforts 10 New Normal 3 Conservation Programs 10 Keys to Succeeding in the New Normal 4 Seasonal Rates 10 Water Restrictions 10 Part III: Survey Highlights and Observations, 5 Operations 10 General Utility Information 6 Employees 10 Ownership 6 Water Sources 10 Service Population 6 Production Ratios 11 Accounts 6 Fiscal Year 11 Rate Comparisons 6 Capital 11 Increases in Water Charges from 2008 Survey 6 Annual Capital Needs 11 Increases in Wastewater Charges from 2008 Survey 6 Income Statement 11 Comparison of Charges among Survey Groups 6 Income Statement Averages 11 Residential vs. Nonresidential Comparisons 7 Balance Sheet 12 Outside-City Differentials 7 Balance Sheet Averages and Ratios 12 Rate Structures 7 Affordability 12 Water Rate Structures 7 Affordability Programs 12 Wastewater Rate Structures 8 iii 54005 2010 Water and WW Rate Survey Text.indb 3 2/3/2011 10:09:51 AM Contents Affordability Percentages 12 Exhibits Acronym List 13 Exhibit 1. Water System Characteristics 15 Exhibit 2. Water Charges 25 Tables Exhibit 3. Other Water Charges and Data 36 Table 1. Water Rate Structure Distribution 8 Exhibit 4. Wastewater System Characteristics 47 Table 2. Median Connection and Capital Exhibit 5. Wastewater Charges—Summary 55 Recovery Charges 9 Exhibit 6. Other Wastewater Charges and Data 64 Table 3. Number of Utilities with Different Types Exhibit 7. Median Household Affordability Index 72 of Surcharges 9 Table 4. Number of Utilities Reporting Charts Conservation Programs by Type 10 Chart 1. Water Utility Ownership 84 Table 5. Average and Median Production Ratios 11 Chart 2. Wastewater Utility Ownership 84 Table 6. Average Water Income Statement Data 11 Chart 3. Median Service Population 85 Table 7. Average Wastewater Income Statement Data 11 Chart 4. Median Number of Accounts 85 Table 8. Average Water Balance Sheet Data 12 Chart 5. Trends in Survey Years 86 Table 9. Average Wastewater Balance Sheet Data 12 Chart 6. Annualized Rate Increase From 1996 to 2010 87 Chart 7. Median Monthly Charges 87 Chart 8. Median Monthly Charges 87 Chart 9. Residential Wastewater Billing Methods 88 Chart 10. Water Rates Effective Dates 88 Chart 11. Wastewater Rates Effective Dates 89 Chart 12. Median Capital Needs by Group 89 Chart 13. Residential Water Billing Frequency 90 Chart 14. Residential Wastewater Billing Frequency 90 Chart 15. Count of US Respondents by Region 91 Chart 16. US Population Served by Region—Median 91 Chart 17. US Population Served by Region— Totals 92 Chart 18. Total US Respondents by State 92 Chart 19. US Water Rate Structure 93 Chart 20. US Wastewater Rate Structure 93 Chart 21. US Water Billing Frequency for Residential 94 Chart 22. Utilities by Category 94 iv 54005 2010 Water and WW Rate Survey Text.indb 4 2/3/2011 10:09:51 AM Foreword Foreword This 2010 Water and Wastewater Rate Survey is a joint effort of the industry. This survey has been used extensively by numerous the American Water Works Association (AWWA) and Raftelis utilities and other industry stakeholders in benchmarking utility Financial Consultants, Inc. (RFC). AWWA is a nonprofit profes- rates, rate methodologies, rate trends, and other financial and sional association dedicated to providing high quality technical rate related data. information to its water utility members and the general pub- In this 2010 effort, RFC, in partnering with AWWA, lic. AWWA has evaluated water rates for decades, with earlier expanded its scope to include more utilities in the United States. iterations of rate data appearing in the Journal AWWA. RFC is The data and analysis are presented in both a book and an elec- a nationally recognized water and wastewater finance and pric- tronic format. ing consulting firm, with a commitment to collecting and shar- ing data relevant to the industry. RFC also has a rich history of   conducting industry surveys and providing in-depth analysis of water and wastewater rates and charges nationwide. The two organizations joined forces in 2002 to produce the 2004 Water and Wastewater Rate Survey and subsequently have pro- David B. LaFrance George A. Raftelis duced an updated survey every two years. Through this partner- Executive Director Chief Executive Officer ship, AWWA is able to provide a timely and analytical report to AWWA Raftelis Financial Consultants, Inc. v 54005 2010 Water and WW Rate Survey Text.indb 5 2/3/2011 10:09:51 AM Acknowledgments Acknowledgments Water and wastewater pricing structures continue to increase in participation, collecting and inputting data, and supporting the complexity in order to address communities’ evolving pricing quality control process. Their efforts resulted in the highest sur- objectives. As a result, making meaningful rate comparisons has vey participation yet of 341 utilities. Other RFC staff provided become increasingly challenging. The American Water Works valuable assistance in contacting utilities and reviewing data. Association/Raftelis Financial Consultants, Inc. (AWWA/RFC) On the AWWA team, Kurt Keeley served as project man- team has attempted to gather as useful and accurate data as pos- ager. Kurt originally initiated the AWWA/RFC partnership. He sible from as large a sample as practical. AWWA and RFC grate- then oversaw the different elements needed to bring the sur- fully acknowledge the following leaders and key participants. vey to fruition. Patrick McElhany served as the technical coor- Peiffer Brandt transitioned into a role as RFC’s project direc- dinator for the project. Patrick designed the database to store tor. The 2010 edition is the seventh national water and wastewa- the responses, developed the survey tool (a disk containing a ter rate survey on which he has worked. He brought extensive Microsoft Access file), and handled all other technical matters. experience in overseeing the survey process, while still assisting Brandy Hymel helped coordinate the project, including data col- in reaching out to utilities for participation, reviewing techni- lection and editing. cal calculations, and providing quality control. Rocky Craley Enough cannot be said about the water and wastewater pro- evolved into a role as RFC’s project manager. Rocky managed fessionals of each utility who worked with us in conducting the the day-to-day aspects of the survey, including the support staff, survey. These experts worked diligently to complete the survey, and provided critical support in reviewing data and performing respond to our questions, check rate calculations, and confirm various analyses. Without Rocky’s efforts, the survey would not survey input. We recognize the effort it took on their part to have been possible. RFC was fortunate to have the assistance provide us with accurate data. We are indebted to all of these of two interns, Andrew Clementi and Brian Phillips. Their pri- professionals for the success of the survey. We anticipate that mary responsibilities were contacting utilities to encourage their these individuals will take pride in the ultimate survey product. vi 54005 2010 Water and WW Rate Survey Text.indb 6 2/3/2011 10:09:51 AM 2010 Participants 2010 Participants ALABAMA Los Angeles (2) CONNECTICUT Cobb County KANSAS Arab Mammoth Lakes Bridgeport Columbus Atchison Decatur Manteca Dalton Johnson County Mobile Modesto DELAWARE Gwinnett County Kansas City Opelika Norwalk Newark Rome Olathe (2) Novato Savannah Wichita ALASKA Oakland DISTRICT OF COLUMBIA Anchorage Oceanside Washington HAWAII KENTUCKY Fairbanks Ontario Honolulu Fort Wright Orange FLORIDA Louisville ARIZONA Orange County Auburndale IDAHO Mayfield Flagstaff Palmdale Bradenton Boise Owensboro Glendale Pomona Broward County Paducah Peoria Rialto Clearwater ILLINOIS Warren County Phoenix Riverside Cocoa Aurora Scottsdale Sacramento (2) Collier County Bolingbrook LOUISIANA Tucson (3) San Diego (2) Fort Lauderdale Chicago Baton Rouge Yuma San Jose (2) Gainesville Decatur Jefferson San Juan Capistrano Jacksonville DeKalb Lafayette ARKANSAS San Marcos Kissimmee Evanston Lafourche Parish Hope Santa Barbara Lakeland Moline New Orleans Jonesboro Santa Cruz Melbourne Naperville Little Rock (2) Santa Monica Miami Pekin MARYLAND Rogers South Lake Tahoe Ocala Peoria Annapolis Valley Center Okaloosa County Rockford Baltimore CALIFORNIA Walnut Orange County Winnetka Columbia Azusa Watsonville Orlando Laurel Burbank Panama City INDIANA Calabasas COLORADO Pensacola Gary MASSACHUSETTS Chula Vista Aurora Pinellas County Michigan City Boston (2) Coachella Boulder Port Charlotte Hingham Concord Denver (2) Port St. Lucie IOWA Springfield Costa Mesa Fort Collins St. Petersburg Des Moines Covina Lafayette Fort Madison MICHIGAN Dana Point Longmont GEORGIA Marshalltown Ann Arbor Fremont Loveland Athens-Clarke County Newton Battle Creek Glendale Pueblo Atlanta Sioux City Coldwater Huntington Beach Sterling Augusta Spencer Holland Kern County Cartersville Waterloo Kalamazoo La Mesa Clayton County Lansing vii Copyright © 2011 AWWA & Raftelis Financial Consultants, Inc. 54005 2010 Water and WW Rate Survey Text.indb 7 2/3/2011 10:09:52 AM 2010 Traverse City NEW MEXICO OREGON TENNESSEE VIRGINIA Ypsilanti Albuquerque Albany Chattanooga Ashburn Participants Farmington Beaverton Erwin Charlottesville (2) MINNESOTA Gallup Bend Jackson Chesapeake Eagan Las Cruces Canby Johnson City Chesterfield Minneapolis Rio Rancho Corvallis Knoxville Fairfax Rochester Eugene Maryville Newport News St. Paul NEW YORK Grants Pass Memphis Norfolk Buffalo (3) Klamath Falls Murfreesboro Portsmouth MISSISSIPPI Monroe County Medford Nashville Prince William County Greenwood New York City Portland (2) Oak Ridge Richmond Meridian Onondaga County Springfield Tullahoma Stafford Tupelo Schenectady Tualatin White House Suffolk Virginia Beach MISSOURI NORTH CAROLINA PENNSYLVANIA TEXAS Williamsburg Jefferson City Asheville (2) Allentown Abilene St. Louis Carrboro Erie Addison WASHINGTON Cary Lancaster Amarillo Bellevue MONTANA Charlotte Lansdale Arlington Kennewick Billings Durham Lebanon Austin Kent Bozeman Fayetteville Lehigh County Brownsville Seattle Kalispell Greensboro Philadelphia Carrollton Skagit County Raleigh Pittsburgh College Station Tacoma NEBRASKA Roanoke Rapids State College Corpus Christi Yakima (2) Grand Island Rocky Mount Dallas Lincoln Salisbury RHODE ISLAND Denton WEST VIRGINIA Norfolk Welcome Providence El Paso Charleston Omaha Winston-Salem Fort Worth (2) Morgantown SOUTH CAROLINA Garland NEVADA NORTH DAKOTA Berkeley County Houston WISCONSIN Clark County Bismarck Charleston Lubbock Brookfield Henderson Grand Forks Clemson Mansfield Kenosha Las Vegas (3) Conway New Braunfels Madison (2) North Las Vegas OHIO Georgetown County Plano Manitowoc Reno Akron Lancaster San Antonio Milwaukee Canton Mount Pleasant San Marcos Neenah NEW HAMPSHIRE Cincinnati (2) North Myrtle Beach Schertz Stevens Point Manchester Cleveland (2) Okatie Southlake Waukesha Columbus Spartanburg NEW JERSEY Lima UTAH WYOMING Clifton Toledo SOUTH DAKOTA Provo Cheyenne Trenton Sioux Falls Salt Lake City OKLAHOMA Oklahoma City VERMONT Tulsa Bennington viii Copyright © 2011 AWWA & Raftelis Financial Consultants, Inc. 54005 2010 Water and WW Rate Survey Text.indb 8 2/3/2011 10:09:52 AM Part I: Overview Part I: Overview This survey provides information on water and wastewater Sample Selection charges for a diverse and meaningful sample of US cities. The The stratified sample of utilities was identified in several steps in data is provided in a series of exhibits arranged by system size to order to create a diverse and meaningful sample. First, most of assist in comparisons for analytical and benchmarking purposes. the utilities that participated in the AWWA/RFC 2008 Rate Sur- Part I provides an overview of the survey methodology. Part vey were included. The survey sample was expanded to include II provides insight into the “new normal” within the water and additional utilities recommended by RFC and AWWA. More wastewater industry. Part III provides highlights of the survey, than 1,100 utilities within the United States were in the list of key findings, and observations. utilities asked to participate. We did not include international utilities in this edition of the rate survey. Time Frame The survey was conducted in the second and third quarters of Sorting the Sample 2010. The objective of the survey is to have data on rates that Utilities located in and serving the areas identified in the 2010 are current as of January 1, 2010. The data on water sold, waste- participant list returned surveys with relevant information. Utili- water treated, and system revenues are for calendar year 2009 or ties from 49 states and the District of Columbia are included in the most recent fiscal year, if applicable. the survey. Water data is provided for 308 utilities and wastewa- ter data for 228 utilities. Basis of Analysis Sorting the sample by city or service population does not The survey focuses on the attributes of utilities serving sample necessarily yield comparable groups of systems. For benchmark- cities. A major goal of the survey is to identify water supply and ing purposes, we grouped utilities according to common operat- distribution and wastewater collection and treatment utilities ing characteristics. To provide additional insights, we compiled serving the core population of each community. Characteristics our results into three utility classifications: Group A, Group B, of service providers will vary even for communities with simi- and Group C. These classifications recognize benchmark differ- lar populations. Many cities have a single utility responsible for ences among utilities of various sizes. providing both water and wastewater services. In other cases, The sample of water utilities was sorted by gallons of water multiple utilities manage water and wastewater systems for dif- sold, measured in million gallons per day (MGD). The sample of ferent sections of a city. Elements of the survey focus on differ- wastewater utilities was sorted by gallons of wastewater treated, ent aspects of water and wastewater services. For many utilities, measured in MGD. Because utilities often treat less wastewater different individuals within the organization completed portions than billed water use, the group ranges for wastewater have been of the questionnaire. adjusted. The table on page 2 provides the MGD ranges that were included in each group. 1 Copyright © 2011 AWWA & Raftelis Financial Consultants, Inc. 54005 2010 Water and WW Rate Survey Text.indb 1 2/3/2011 10:09:52 AM