went from 4,500 gallons a month to 125,000 gallons a month because their classification
changed from residential to commercial usage. Chairman Lynch asked Ms. Daniels why it was
changed? Ms. Daniels answered that GF Fire was set up in the beginning as a residential
customer but it should have been classified as a commercial customer all along. This
misclassification along with 3-4 others was discovered while dissecting properties for the
cost-of-service study. Ms. Daniels explained that the classifications are either "residential",
"commercial" and a less often used classification of "usage". For the usage classification the
billing is only for actual water usage not a monthly rate, for instance ball field concessions,
fairgrounds etc. She added that the WPCA could change the classification for the Fire House to
residential but technically a residential classification is just for dwellings where people live. Mr.
Jones asked what the decision is for the GF Fire House classification, Chairman lynch said it
can't be answered until the rate study is complete. Mr. Jones pointed out that the GF Fire House
also rents out the facility which would not be residential. Mr. Juber asked what the difference in
cost would be for GF Fire. Ms. Daniels said she would find out.
Financial projection and cost of service study presentation:
Mark Beauchamp, President of Utility Financial Solutions, LLC and Jillian Jurczyk. Rates
Manager Utility Financial Solutions, LLC were present.
Mr. Beauchamp presented a financial projection and cost of service study. He said that UFS does
cost of studies and financial planning for municipalities in 44 states. For the Town of Ledyard,
USI completed a preliminary draft with a long-term financial projection.
Before Mr. Beauchamp started the Powerpoint presentation he made a couple of observations:
- Most utility companies do not operate by classifications of either residential or commercial but
rather classifications by meter size.
- The WPCA's amount of water purchased vs. the amount of water billed leaves a 37%
difference which equates to a 37% loss.
- The water meters are not recording the proper consumption. The average water meter has a life
of 15 - 20 years, the average life of the water meter inventory is 18 years. It is not unusual to see
a 30-40% loss when a meter is old. Chairman Lynch added that the WPCA performs a
significant amount of line flushing which equates to a pure loss of water.
USI provided an assumption table for FY 24-29 and projections without rate adjustments. Mr.
Beauchamp pointed out that the WPCA needs to increase rates since without rate adjustments
the WPCA is not breaking even. He provided three scenarios of rate tracks:
- Breakeven rate track / one year - the customer rate impact is $43.29 per month.
- Breakeven rate track / two years - the customer rate impact is $21.64 per month for year one
and $25.97 per month for year two.
- Breakeven rate track / three years - the customer rate impact is $14.29 per month for year one,
$17.85 per month for year two and $21.87 per month for year three.
Mr. Beauchamp stressed the importance of a fixed customer charge which recovers the cost for
connection at zero consumption.
A new rate structure will create winners and losers for customers. Mr. Beauchamp said the
proper step would be completing rate adjustments then dealing with the rate structure. It was
asked if changing classifications to meter size would affect only businesses or residential