Board of Aldermen 12-08-2020 Page 20
Alderwoman Lu
| apologize, | thought | knew.
Attorney Bolton
A “yes” vote if it prevails will cause the Resolution to be back before the Board with a motion to override the
veto in order. A “no” vote, if that were to prevail would not allow further consideration of this Resolution and
the veto would stand.
Alderwoman Lu
Thank you.
(Roll Call Resumes)
A viva voce roll call was taken which resulted as follows:
Conclusions
¢ Planned rate increases cover the costs to finance the capital investments that are required
to comply with regulatory mandates and to maintain the high level of services provided by
the City to its ratepayers.
¢ Despite the increases, Nashua’s sewer charges in 2023 will still be lower than its peer
utilities charge in 2020 and well below the 2018 NH State Average Household Quarterly Bill.
¢ Nashua rates are and will remain affordable to all major household income brackets based
on EPA’s 2 percent affordability metric.
Integrated Planning Framework: Reducing future costs
¢ Nashua is currently developing an Integrated Plan Framework (IPF) to comply
with its Consent Decree with the US Environmental Protection Agency:
¢ Prioritizes capital projects that best address the most pressing system needs as
determined by Nashua using City-developed criteria.
¢ Defers capital projects that are determined to confer fewer benefits for similar investment
costs.
¢ IPF smooths the “cost curve” and can mitigate future rate increases.
Nashua Capital Funding Strategies to Minimize Ratepayer Impacts
¢ Nashua employs a mix of financing strategies to minimize ratepayer impacts:
Planned Future Major Capital Expenditures
¢ More than $52 million in upcoming required capital investments from FY2020-
FY2025:
Pump Stations Rehabilitation (Phase 1 and Phase 2): $10.86 million
CMOM Plan: $5.20 million
Sewer Infrastructure Program: $30.40 Million
Wastewater Treatment Primary Tanks Upgrades: $3.90 million
Phosphorus Removal and Storage Facility: $1.00 million
¢ Wastewater Plant Booster Stations: $0.80 million
Primary Drivers of Required Rate Increases
Major Cost Drivers are associated with expenditures on required Capital Projects
¢ Current and future required capital project investments are substantially increasing
annual debt service costs:
¢ Annual Debt Service is projected to increase from $5.1 million in FY2020 to $8.4 million in FY2025 (10%
average annual increase)
¢ Annual Operation and Maintenance expenditures are projected to increase at a modest rate of 3 percent
per annum during same period
Sewer Bill Compared to EPA Affordability Metric
EPA uses 2 percent of Household Income as the threshold of sewer bill affordability
2.5%
2.0%
15% 1.4% 1.4%
1.2%
1.0%
1.0%
0.8% 0.8%
9 0.6% 0.6%
a 5 0.5% oe ee nay 0:5% 0.5%
- 7 alk i B of |
0.0%
20th Percentile 40th Percentile 60th Percentile
mag pct. HHI 2020 mam pct. HHI 2021 mam pct. HHI 2022 mam pct. HHI 2023 = EPA Affordabilty Thresholds
Proposed Residential Sewer Increases 2021 through 2023
A 20 percent increase in sewer user fees in 2021 followed by a 15 percent increase in 2022 and no increase
(0 percent) in 2023
sitet Oe fe
Rate per CCF $2.36 $2.83 $3.26 $3.26
Quarterly Flat $31.94 $38.33 $44.08 $44.08
Charge
Average $79.14 $94.97 $109.22 $109.22
Household
Quarterly Bill
Increase iN ——s === === === $15.83 $14.25 $14.25
Average Quarterly
Household Bill
Comparison of Nashua Residential Sewer Rates with Selected
Regional Rates (2020)
Estimated Quarterly Household Bill based on water consumption of 20 CCF
teeny Ci Fee per CCF Household Quarterly Bill
Historic Volumetric Charges for Sewer Services
The volumetric charge is the fee charged to a customer based on how much water the customer uses.
Volumetric Charge For Sewer Services 2004-2020
$2.50
$2.00
$1.50
$1.00
$0.50
S-
2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020
The 2004 volumetric charge of $1.66 per hundred cubic feet is equivalent to $2.31 in 2020 dollars. The 2020 charge
was $2.36 equating to a “real” increase of just 2 percent over 16 years.
Hazen 3
