HomeMy WebLinkAbout14 Water Rate Alternatives Agenda Item # 14
i
--'-' TRUCKEE DONNER
WORKSHOP
To: Board of Directors
From: Neil Kaufman
Date: May 06, 2009
Subject: Discussion of Water Rate Structure Alternatives
1. WHY THIS MATTER IS BEFORE THE BOARD
The purpose of this workshop is to discuss various water rate structure alternatives at the
concept level.
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. The deadline for
submittal of proposals was March 20, 2009. Seven proposals were received in response to
the RFP and on April 15, the Board awarded a contract to perform the Water Rate Study to
HDR.
3. NEW INFORMATION
HDR has submitted a data request to the District covering information necessary to conduct
the rate study. District staff has begun to assemble this information.
A key component of the Water Rate Study is two workshops with the Board of Directors to discuss
volumetric billing and alternative rate structures at a conceptual level. There are numerous
parameters to be considered in developing water rates, including:
• Base consumption allowances vs. no consumption allowance
• Pumping cost recovery
• Flat rate volumetric pricing vs. inclining block volumetric pricing
• Seasonal pricing
• Conservation incentives
• Matching of revenues to operational costs
Shawn Koorn from HDR will lead the workshop discussion. The focus of this first workshop is to
allow the Board to obtain information regarding rate structure alternatives and then provide
direction regarding the potential rate structures where efforts should be focused. The second
workshop regarding water rate concepts is scheduled for the June 3 Board meeting. At that
time, the District will need to provide direction to HDR regarding which rate structure
alternatives to carry forward.
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
• Preliminary rate study report presented to Board -August 5
• Final rate study report presented to Board of Directors-August 19
• 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 4
• Implementation of New Rates-January 1, 2010
4. FISCAL IMPACT
There is no direct fiscal impact associated with this workshop item.
5. RECOMMENDATION
7Ta
tion reg rding additional information to be generated for the June 3 workshop.
Mic ael Holley
Water Utility Manager General Manager