|
APPROPRIATION COMMITTEE-2019 ATM
<br /> age. Those with brand new meters pay about 4%more than they should and those with 25-year old meters
<br /> pay about 3.3%less than they should. One might argue that there is an"equity"benefit from the proposed
<br /> meter upgrade, but the deviations are modest and the real impact averages out over time for any given
<br /> resident.
<br /> The project would provide three major benefits:
<br /> 1. Reduce labor and vehicle costs associated with reading meters manually and,possibly, admin-
<br /> istrative overhead related to abatement requests.
<br /> 2. For the first five years, eliminate or sharply reduce normal annual expenditures to replace older
<br /> meters. After five years, the meters not replaced initially would reach 15 years of service life
<br /> and the replacement program would have to resume at the current rate (averaging 330 meters
<br /> per year over the past several years).
<br /> 3. Reduce wasted water by detecting irregular water usage via daily readings and thus triggering
<br /> internal repairs by rate-payers.
<br /> The table below shows the estimated cash flows over 15 years. Savings are shown as negative costs (in
<br /> parentheses).The debt service figures are from the March 5 presentation.For the other columns,we inflated
<br /> annual values for FY2021 and later at a 2% annual rate,the Federal Reserve's target rate.
<br /> Fiscal Costs Savings Net Cost
<br /> Year Ent.Fund Debt System Meter Meter Fuel Vehi- Meter
<br /> Payments Maint. Reader Mgmt. Iles Replace.
<br /> (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
<br /> 2020 $1,000,000 $45,867 $0 $0 $0 $0 $0 $0 $1,045,867
<br /> 2021 - $436,667 $35,700 ($39,000) ($12,506) ($1,600) ($1,750) ($84,150) $333,361
<br /> 2022 - $624,720 $36,414 ($40,576) ($13,011) ($1,665) ($1,821) ($85,833) $518,229
<br /> 2023 - $610,960 $37,142 ($68,979) ($22,119) ($2,830) ($3,096) ($87,550) $463,530
<br /> 2024 - $597,200 $37,885 ($84,430) ($27,073) ($3,464) ($3,789) ($89,301) $427,030
<br /> 2025 - $583,440 $38,643 ($86,118) ($27,614) ($3,533) ($3,864) ($91,087) $409,866
<br /> 2026 - $569,680 $39,416 ($87,841) ($28,166) ($3,604) ($3,942) - $485,543
<br /> 2027 - $555,920 $40,204 ($89,597) ($28,730) ($3,676) ($4,020) - $470,101
<br /> 2028 - $542,160 $41,008 ($91,389) ($29,304) ($3,749) ($4,101) - $454,624
<br /> 2029 - $528,400 $41,828 ($93,217) ($29,890) ($3,824) ($4,183) - $439,113
<br /> 2030 - $514,640 $42,665 ($95,082) ($30,488) ($3,901) ($4,266) - $423,568
<br /> 2031 - $178,880 $43,518 ($96,983) ($31,098) ($3,979) ($4,352) - $85,986
<br /> 2032 - - $44,388 ($98,923) ($31,720) ($4,058) ($4,439) - ($94,752)
<br /> 2033 - - $45,276 ($100,901) ($32,354) ($4,140) ($4,528) - ($96,647)
<br /> 2034 - - $46,182 ($102,919) ($33,001) ($4,222) ($4,618) - ($98,580)
<br /> 2035 - - $47,105 ($104,978) ($33,662) ($4,307) ($4,711) - ($100,551)
<br /> Sources: (2)March 5 presentation to Selectmen
<br /> (4)Email from David Pinsonneault to Carolyn Kosnoff,March 20,2019.
<br /> (5-8)Consultants'report,inflated at 2%after FY2020.
<br /> (9)Cost per meter estimated from presentation to Selectmen,March 19,2018 multiplied by 575 meters/year,the mid-
<br /> point of the range of annual replacement assumed in the presentation, inflated at 2%annually after FY2020.We
<br /> note that,over the past five years,the average rate of replacement has been 330 meters/year.
<br /> In the table above,column(2)shows the one-time cost covered by the retained earnings. Column(3)shows
<br /> projected debt payments, which end in FY2031. Column (4) shows costs of maintaining the physical and
<br /> software network for a "hosted system", Columns (5)-(8) show savings (represented as negative costs)
<br /> estimated by the consultant for reduced labor (1 Meter Reader and 1 Meter Manager), vehicle, and fuel
<br /> used currently for meter reading. Column (9) shows savings from not having to replace meters during the
<br /> 34
<br />
|