HomeMy WebLinkAbout13 Non Conforming Water Accounts Agenda Item # 13
TRUCKEE DONNER
Public Utility District
WORKSHOP
To: Board of Directors
From: Neil Kaufman
Date: May 20, 2009
Subject: Discussion of Non-Conforming Water Accounts
1. WHY THIS MATTER IS BEFORE THE BOARD
This item is informational. It involves the upcoming transition from flat rate billing to volume
based billing.
2. HISTORY
AB 2572 requires that the District begin reading the water meters installed since 1992 and
commence billing on a volumetric basis by January 1, 2010. AB 2572 also requires that all
connections be equipped with water meters and billed on a volumetric basis by January 1,
2025.
3. NEW INFORMATION
In preparation for the implementation of metered billing, the Water Department and
Administrative Services have been reviewing the status of the existing water system
customers. As of December 31, 2008 there were 11,814 residential accounts and 680
commercial accounts. During this review, a number of non-conforming situations have been
identified.
Non-conforming water services are those customers that are not in compliance with current
practices regarding metering as described in the recently revised Title 6 of the District code.
These situations will be discussed below generically in order to protect privileged customer
information.
A. Multiple Accounts in a Single Structure - There are a number of situations where a
single structure such as a duplex, fourplex or mixed-use is fed by a single service line,
but each unit receives a separate bill for water service. In some cases, the units are
under common ownership, in others they are owned by separate parties. The physical
piping is arranged such that the individual units cannot be easily separated and that an
individual customer cannot be disconnected for non-payment.
B. Single-Family Residential in Multiple Structures - There are a few of situations
where a group of separate single-family residential structures is fed by a single water
pipe, but each residential structure receives a separate bill for water service. An
example would be a mobile home park where each mobile home receives a separate
bill for water service. In some cases, the ownership and maintenance responsibility of
the exterior piping may be unclear.
C. Unbilled Services - There are few properties where a separate connection was
installed for irrigation purposes, but a bill for service is not being issued.
D. Unmetered Outdoor Usage - There is at least one situation where the meter is
located inside the building but irrigation and other outdoor usage occurs before the
meter.
Proposed Solutions
Ideally, the all of the non-conforming situations should be brought into compliance with current
practices. However, that could require reconstruction of the internal and external plumbing of
the structure to provide separate water service to individual units. Such an effort could be
quite expensive and there will undoubtedly be disagreement regarding who is financially
responsible, the property owner or the District.
As an alternative, it will often be possible to install a master meter for the property, or relocate
an existing meter to a more appropriate location. This would require that an acceptable party
such as the property owner or a homeowner's association, exist to be financially responsible
for the monthly billings. This arrangement could potentially require the modification of lease
agreements between tenants and owners. There may also be a revenue impact to the District
as well. Under the current water rate structure, the Water Department receives more revenue
for four individual residential accounts than it would for a single master metered account with
a slightly larger meter.
A third and least desirable option would be the creation of a "Non-Conforming Bulk Rate" for
water service. Considering the customer's usage would be unknown, very conservative
assumptions would be required and the corresponding bill for service would be well above the
average water bill for a similarly-sized metered service. The District can also investigate
mandating compliance with current practices upon resale or significant remodel of these
properties.
Otherlssues
Listed below are a few other issues that have been identified in the course of this review:
A. Property Conversions - Over the years, a number of properties have been converted
from single-family residential use to commercial or from commercial use to single-
family residential use. In some cases, the account was not adjusted in the billing
system to reflect the appropriate rate structure.
It is recommended that all properties be classified to the appropriate rate when the
new rate structure is approved. It is also recommended that customers are not back-
billed if they underpaid in the past, and that credits are not issued if they overpaid in
the past.
B. Construction Water for Single Family Residences - Currently, a party constructing
a single-family residence is not billed for water service until the electrical service is
transferred from temporary to permanent. This provides a period (sometimes longer
than a year)where that party receives free water service.
Provision of free water during the construction period would be inconsistent with the
District efforts to implement system-wide volume based billing. It is recommended that
this practice be discontinued and that billing for water service be initiated upon
installation of the meter.
4. FISCAL IMPACT
There is no direct fiscal impact associated with this workshop.
Based upon the recommendations given above, it is expected that the total count of single-
residential accounts will be reduced by about 200. This will be partially offset by the creation
of some new larger commercial accounts using meters (likely 1" to 2" in size). The Water
Department will discuss this issue with HDR and develop an adjusted customer count to be
used in revenue calculations for the Water Rate Study.
5. RECOMMENDATION
Receive this report and provide comment.
Ed Taylor Michael D. Holley
Water Utility Manager General Manager