HomeMy WebLinkAbout6 Water rate report Agenda Item # 6
Public Utl � ity District i
WORKSHOP
To: Board of Directors
From: Neil Kaufman
Date: August 19, 2009
Subject: Discussion of Water Rate Study Report
1. WHY THIS MATTER IS BEFORE THE BOARD
The purpose of this workshop is to discuss the Water Rate Study and potential water
rates.
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.
Another facet of compliance with AB 2572 involves the development a new volume-based
water rate structure. The current volumetric water rate structure applies only to
commercial accounts and utilizes a declining block format. The District issued a Request
for Proposals (RFP) for a consultant to assist the District in developing the new rate
structure. On April 15, the Board awarded a contract to perform the Water Rate Study
to HDR.
A workshop to discuss water rate structures at the concept level was held on May 6,
2009. At that workshop, the Board identified three alternatives for further
investigation.
• Uniform Rate Structure
• Two-Tier Increasing Block Rate Structure
• Season Rate Structure
A second workshop was held with the Board on June 3, 2009. At that workshop, the
Board identified a favored alternative of a two-tier increasing block rate for residential
customers and a uniform rate structure for commercial customers.
On August 5, 2009 a workshop was held to discuss the results of water rate analyses
and potential rates. A proposed rate structure was presented based upon prior Board
direction. The proposed rate structure includes:
• A two-tier inclining block rate for residential customers
• A uniform rate for commercial customers
• A volume-based pump zone charge
• A reduction in the number of pump zones from eleven to seven
Within this overall structure, three alternatives were discussed regarding the proposed
rate increase. Three options regarding the commercial rate structure were also
discussed.
3. NEW INFORMATION
Shawn Koorn from HDR will present additional information, the results of the rate
study analyses and the recommended rates.
There will also be a brief review to Proposition 218 and its impact on the process for
setting new water rates. The main issues are:
• The District is required to mail a notice to all ratepayers and property owners of
the proposed change in rates
• The District is required to hold a public hearing at least 45 days after the
mailing of the notices
• The proposed change in rates is considered rejected if written protests are
received from a majority of the affected property owners
The current rate study schedule is given below:
• First Board Workshop on water rate structure concepts - May 6
• Second Board Workshop on water rate structure concepts-June 3
• Discussion of water rate study analysis and proposed rate structure -August 5
• Additional discussion of water rate study analysis and proposed rate structure -
August 19
• Preliminary rate study report presented to Board -August 19
• Final rate study report presented to Board of Directors- September 2
• Public Workshop/Board Mtg. on proposed water rates - September 2
• Review and approval of new Water Rates- September 16
• Mailing of Notices of Public Hearing -After September 16
• Public Hearing on Proposed Water Rates and Board adoption vote - November 19
• Implementation of New Rates - January 2010
4. FISCAL IMPACT
There is no direct fiscal impact associated with this workshop item.
5. RECOMMENDATION
Re ive is r po and provide comment.
i
Ed Taylor Stephen Hollabaugh
Water Utility Manager Assistant General Manager