HomeMy WebLinkAbout7, Contract- HDR_Water_Rate_StudyConsent Item # 7
Consideration of a
Contract with HDR Inc. to
Review and Update the
District's Water Rate Study
August 21, 2013
Background / History
• AB 2572
— Unfunded state mandate
— Volumetric billing of water consumption
• Monthly meter surcharge adopted December 3, 2008
— Paid for a portion of the cost to install water meters
— $5 per customer
— Five year period ending December 31, 2013
— 7 % of water revenue
• HDR completed a water rate study in 2009
— Board adopted the study on September 16, 2009
— Water rates increased 1.75% in FY10 and FY11
— No rate changes in FY12 and FY13
2
New Information
• Inflation from December 2011 to July 2013 was 3.5%
according to Bureau of Labor Statistics
• Based on preliminary budget estimates a modest increase
of 3% is likely needed in FY14 and FY15
• Objectives of a rate study
— Ensure
customers
pay for
only the
cost of service
— Ensure
sufficient revenue
exists to
meet all District obligations
3
New Information
• HDR
— Excellent quality of District's 2009 water rate study and
2010 electric rate study
— Vast experience in water rate studies
— Unique experience specific to the District
• HDR was asked to submit a proposal for a rate study update
— Use 2009 study as basis
— Use post -meter volumetric data collected since 2009
— Update current costs and expenditures
— Validate assumptions
0
Fiscal Impact
• Cost of the rate study update is $28,875
• Sufficient funds exist in the FY13 budget
5
Recommendation
• Award a contract to HDR, Inc. to update the District's 2009
water rate study for an amount of $28,875
a