HomeMy WebLinkAbout10 Water Rate Study Agenda Item #
(57�
Staff Report
To: Board of Directors
From: Peter Holzmeister
Date: July 20, 2005
Subject: Water rate study
Why this matter is before the board: The board authorized Reiter Lowry Associated to prepare a
water rate study. This agenda item is a workshop to discuss the results of that study.
History: When the 2004 budget was adopted, we looked at the commercial meter water rate and
decided that it is poor public policy to have a declining block rate structure. We decided at that a
water rate study should be undertaken to eliminate the declining block structure within our
commercial water rate. We also decided to evaluate a metered residential water rate as a first look
at what a water rate would look like if we decided to deploy residential meters. So the scope of
services assigned to Reiter Lowry Associates was to prepare a report showing a commercial
metered rate eliminating the declining block structure and showing a possible residential metered
rate.
New information: We now have a series of spreadsheets that list total water system costs,
identified as fixed or variable, and allocated to commercial and residential water demand. The
spreadsheets are then used to develop suggested commercial and residential rates. The rates
have a customer charge component that captures 100% of fixed costs, a first metered block rate
that captures normal variable costs, and a second higher block rate that captures costs associated
with irrigation of landscaping. The spread sheets are not easy to print on normal paper, but I will
try and send them as attachments to this memo. I am waiting for Glenn Reiter to send me a report
in a format that is easier to use, and I will then send that to you. On Wednesday evening we will
walk you through the spread sheets and you will see how we developed the rates
Going to residential metered water rates is a big move. The District has not yet decided to
implement residential water meter billing. This workshop is a first review of the residential water
meter issue. We do not need to be in a hurry to complete the review. There are significant cost
issues to be explored. There are policy issues that will certainly need to be fully discussed. This
report establishes a base of information that should help us talk about residential water meters.
The commercial water rate is a different story. We have billed commercial customers based on
water meters for many years. There is reason to move more quickly on adoption of a new
commercial rate to eliminate the declining block structure.
At any rate, it should be an interesting discussion, with more interesting discussions to follow.
Recommendation: This is a workshop. No decision is required of the board.
Analysis of Fixed and Variable Costs For Metered and Un-Metered Accounts
18.34% 18.34% No Energy
Cost Cost Un-Metered Un_Metered
% % Amount Amount Fixed Variable Amount Zone
Item Amount Fixed Variable Fixed Variable Metered Metered Remaining Cost
1 Operations Supervision&Engineei $74,700 100% 0.00% $74,706 $0 $13,704 $0 $61,002
2 Construction Engineering $66,883 100% 0.00% $66,883 $0 $12,269 $0 $54,614
3 Facilities Operations $478,086 100% 0.00% $478,096 $0 $87,697 $0 $390,389
4 Power Supply $1,406,945 15% 85.00% $211,042 $1,195,903 $38,712 $219,368- $1,148,865
5 Distribution Operations/PM $141,772 100% 0.00% $141,772 $0 $26,006 $0. $115,766
6 Contract Service Agreements/pm $37,637 100% 0.00% $37,637 $0 $6,904 $0 $30,733
7 Misc.General Operations/PM $216,059 100% 0.00% $216,059 $0 $39,632 $0 $176,427
8 Rent $4,400 100% 0.00% $4,400 $0 $807 $0 $3,593
9 Maintenance of Operations&Engi $92,872 100% 0.00% $92,872 $0 $17,036 $0 $75,836
10 Maintenance of Facilities $513,753 85% 15.00% $436,690 $77,063 $80,103 $14,136 $419,514
11 Maintenance of Distribution Lines $698,070 100% 0.00%n $698.070 $0 $128,049 $0 $570,021
12 Maintenance of Contract Service A $0 100% 0.00% $0 $0 - $0 $0 ` $0
13 Outside Services Employed $8,000 100% 0.00% $8,000 $0 $1,467 $0 $6,533
14 Injury and Damages $40,286 85% 15.00% $34,243 $6,043 $6,281 $1108 $32,896
15 Operations Supervision&Engine $48,815 100% 0D0% $48,815 $0 - $8,954 $0 $39,861
16 Misc General Operations-Power S $73,467 85% 15.W% $62,447 $11,020 $11,455 $2,021 $59,991
17 Admin&General Operations-Powt $0 100% 0.00% $0 $0 $0 $0 $0
18 Admin&General-Salaries $68,046 100% 0.00% $68,046 $0 $12,482 $0 $55,564
19 Office Supplies&Expenses $8,180 IW% 090%a $8,180 $0 $1,500 $0 $6,680
20 Injury&Damages(Safety) $10,137 100% 0.00% $10,137 $0 $1,859 $0 $8,278
21 Maintenance of Communications E $1,500 100% 0.00% $1,500 $0 $275 $0 $1,225
22 Customer Assistance Expenses $10,685 100% 0.00% $10,685 $0 $1,960 $0 $8,725
23 Admin&General Salaries $3,496 100% 0.00% $3,496 $0 $641 $0 $2,855
24 Office Supplies&Expenses $3,325 100% O.W%o $3,325 $0 $610 $0 $2,715
25 Professional Services $6,000 100%, 0.00% $6,000 $0 $1,101 $0 $4,899
26 Injuries&Damages $52 I W% 0.00% $524 $0 $96 $0 $428
27 General Advertising $8,896 IW% 0.00% $8,896 $0 $1,632 $0 $7,264
28 Misc.General Expenses $6,670 IW%o 0.00% $6,670 $0 $1,223 $0 $5,447
29 Meters/Service Operations Expenst $182.000 0% I00.00%a $0 $182,000 $0 $18Z000 $0
30 Maintenance of Distribution Lines $738 100%n O.W% $738 $0 $135 $0 $603
31 CustomerAccount Operations-Salai $3,641 100% 0.00% $3,641 $0 $668 $0 $2,973
32 Meter Reading Expense $33,547 0% 1 OO.W% $0 $33,547 $0 $33,547 $0
33 Customer records&Collections E $263,999 100% O.W% $263,999 $0 $48,426 $0 $215,573
34 Bad Debt $4,080 100%o 0.00% $4,080 $0 $748 $0 $3,332
35 Admin&Operations General Salar $165,684 100% 0.00% $165,684 $0 $30,392 $0 $135,292
36 Office Supplies&Expenses $100,406 100% 0.00% $100,406 $0 $18,418 $0 $81,988
9252005 1:26 PM
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Analysis of Fixed and Variable Costs For Metered and Un-Metered Accounts
18.34% 18.34% No Energy
Cost Cost Un-Metered Un-Metered
% % Amount Amount Fixed Variable Amount Zone
Item Amount Fixed Variable Fixed Variable Metered Metered Remaining Cost
37 Outside Services Employed $40,335 100% 0.00% $40,335 $0 $7,399 $0 $32,936
38 Insurance $165,880 100% 0.00% $165,880 $0 $30,428 $0 $135,452
39 Injuries&Damages(Safety) $4.268 100010 0-00% $4,268 $0 $783 $0 $3,485
40 Administrative&General-Salaries $135,168 100% 0.00% $135,168 $0 $24,794 $0- $110,374
41 Office Supplies&Expenses $5,520 100% (Wo% $5,520 $0 $1,013 $0 $4,507
42 Outside Services Employed $64,500 100% 0.00%a $64,500 $0 $11,831 $0 $52,669
43 Injuries&Damages(Safety) $465 100% 0.00% $465 $0 $85 $0 $380
44 General Advertising $6.389 I00% 0.00% $6,389 $0 $1,172 $0 $5,217
45 Misc.General Expenses $11,303 1W% 0.00% $t 1,303 $0 $2,073 $0 $9,230
46 OutsideServices Employed $12,000 100% 0,00% $12,0M $0 $2,201 $0 $9,799
47 Misc General Expenses $44,450 100% 0.00% $44,450 $0 $8,154 $0 $36,296
48 Interdepartmental Rent $270,925 100% 0.00% $270,925 $0 $49,696 $0 $221,229
49 Debt $2,720,M0 100% 0.00% $2,720,000 $0 $498,937 $0 $2,221,063
50 ransfer to Prop 55 Reserve $28,000 100% 0.00% $28,000 $0 $5,136 $0 $22,864
51 Total Water Opertions Expense $8,292,508 '- $6,786.932 $1,505,576 ss,2vz,sos $1,244,945 $452.180 - ' $5,446,517 $1,148,865
Percent Fixed v Variable 1 81.84% 18.16%n -
52 Amount of fixed Recovered from S 100%n $1,244,945
53 Amount remaining to be recovered in rate Rem Fixed $452,180
54 Metered Volume rate per Kgal-Co $ 2.75/KGaI $1,697,125
55 Flat
56 Total AF Metered w/o Energy
57 ACFF 5,50(lat 1,009af 4,491at
58 K Gals 1,791,900 KGaI 328.693 KGaI ##N,Wlit#NA97i7Yi
59 Charge Per K Gil to recover remaining cost $ 2.751KGal $ 3.72/KGaI
60
61 Total Sales 5,500at
62 Commercial Sales 1,009at
63 Flat rate remaining 4,491at
64
65 Flat rate portion of budget-Less energy $5,446,517
66 Flat rate portion of energy $1,148,865
67
68 ;ost per AF w/o Energy Flat rate 5 1,212.73 /at
69 ost per 1000 gals $ 3.72/KGaI
70
71 Numtxr of Flat rate customers 10,722
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Analysis of Fixed and Variable Costs For Metered and Un-Metered Accounts
18.34% 18.34%r No Energy
Cost Cost Un-Metered Un-Metered
% Amount Amount Fixed Variable Amount Zone
Item Amount Fixed Variable Fixed Variable Metered Metered Remaining Cost
72
73 ost per Year per flat rate $507.98 w/o energy
74 lost per month per flat rate account $42.33
7/15/2005 1:76 PM
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Commercial Monthly Service Charge
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Annual Monthly Revenue
Capacity Capacity Capacity ZONE COST
Cost Cost cost 1 $0.35
Capacity Capacity Per Per Per 2 $0.44
Meter Capacity Meter No Meter Meter Meter Meter 3 $0.48
Size GPM Equivalent Meters Equivalents Equivalent Equivalent Equivalent 4 $0.56
2 3/4 30 1 297 297 $982.21 $81.85 $291,715 5 $0.68
3 1 50 1.67 101 168 $1,637.01 $136.42 $165,338 6 $0.79
4 1 1/4 75 2,50 7 18 $2,455.51 $204.63 $17,189 7 $0.85
5 1 1/2 100 3.33 65 217 $3,274.02 $272.83 $212,811 8 $0.97
6 2 160 5.33 59 315 $5,238.43 $436.54 $309,067 9 $1.14
7 3 300 10.00 7 70 $9,822.05 $81850 $68,754
8 4 500 16.67 11 183 $16,370.08 $1,364.17 $180,071
9 547 1,268 $1,244,945
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11 PeterFixed Cast $1,244,945 - $982 ost/Equiv.
12 IPercent of Fixul 100% $1,244,945
Average winter Use
Sample Bill Calculator Average use
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Meter Size 3/4 Amount
Zone 2
Monthly Use 17.23 KGals
Use Chrg/Kgals $2.75 KGai $47.42
Service chg $8135 $81.85
Energy Chg. $0.44 $7.58
Total Bill $136.85
711512005 127 PM
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DRAFT Residential Monthly Service Charge
Annual Monthly Revenue Cost
Capacity Capacity Capacity Energy To
Cost Cost Cost Zrnes 1,000 gals
Capacity Capacity Per Per Per ZONE 1 0.35
Meter Capacity Meter No Meter Meter Meter Meter ZONE 2 0.44
Size GPM Equivalent Meters Equivalents Equivalent Equivalent Equivalent ZONE 3 0.48
2 3/4 30 1 10,703 10,703 $508.88 $42.41 $5A46,517 ZONE 4 0.56
3 1 50 1.67 0 $848.13 $70.68 $( ZONE 5 0.68
4 1114 75 2.50 0 $1,272.19 $106.02 ZONE6 0.79
5 1 U2 100 3.33 0 $1,696.26 $141.35 $ ZONE 7 0.85
6 2 160 5.33 0 $2,714.01 $226.17 ZONE 8 0.97
7 3 300 10.W 0 $5,088.79 $424,00 $ ZONE 9 1.14
8 4 500 16.67 0 $8,481.29 $706.77 IZONE 10
9 10,703 10,703 5,446,517
10
I 1 Meter Fixed Cuvt $5,446.517 $509 rost/Equiv.
:2 erceul of Fixed 100% $5,446,517
Cost/Kgals $0.00 KGal
Ave Mo Use Allowance 7.77 KGals Ave.Winter
Example Only
Conservation Rate
Sample Bill Calculator Sample Bill Calculator
Meter Size 3/4 Amount Meter Size _ 3/4 Amount
Zone I Zone 4
Monthly Use 7.77 KGals 0.00 KGals Enter AmountMonthly Use 8(N)KGals
Use Chrg/Kgals $0.00 KGaI $0.00 Use Chrg/Kgals $0.00 KGal $0.01 Min Vol Charge
Service chg $42.41 $42.41 Conservation Rate Above Min $0.0
Energy Ch $035 $2.72 Service chg $42,41 $42.41
'total Bill $45.12 Energy Chg. $'0.56 $4A9
otal Bill 1 $46,89
Cum
Example Conservation Rate System Total
Tiers Use Above Average High Range Charge/Kgal Charge
1 7.77 KGa1s 10.00 KGals $0.00 Kcal $0.00
2 10.01 KGals 20.00 KGals MW KGal $0,00
3 20.01 KGabs $0.00 KGal
7/152005 1:27 PM
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