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08/09/2022 - Regular - Additional Docs-Utility Rates4 ORCHARD Utility Committe LULJmLUL4 Budget Water Utility Rates Discuss 0840009402 Note: This is intended to illustrate the project estimates and potential fur Utility Rate Discussions in 2022 • May 10, 2022 July 12,2022 • July 19,2022 July 19,2022 • August 09,2022 August 09, 2022 Utility Committee Utility Committee Finance Committee Council Work Study Utility Committee Regular Council Meeting Previoustv Discussed July Meetings: • Water Financial Outlook • Water Capital Improvement Program (CIP) • Rate Structure Adjustments for Conservation • Rate Setting Goals • Meet Water Obligations (Operations, Debt, Capital and Reserves) • Fund the Water Capital Improvement Program • Promote conservation of water • Increase equity among customers by adjusting rate structure • Option A: • Rates required to meet the goals and financial outlook without structural chan • Base charge increase of $2/month or $4/bi-month billing + Tier increases Aua,ust Meetina,: Option B: Alternative Rate Structure (strengthen conservation incentive) • Develop and present the adjusted rate structure 0 Better meets the rate setting goals Water Rate Structures Residential Meters * * $ 53.50 $ 81.50 $ 3.65 $ 3.85 $ 4.05 $ 4.30 $ 4.60 $ 57.50 $ - $ 4.50 $ 4.91 $ 5.35 $ 5.83 $ 6.47 $ 7.37 $ 64.00 $ - $ 4.50 $ 4.73 $ 4.96 $ 5.21 $ 5.52 $ 5.91 $ 60.00 $ - $ 4.50 $ 4.82 $ 5.15 $ 5.56 $ 6.06 $ 6.67 $ 53.50 $ 3.85 $ 3.85 $ 4.85 $ 5.24 $ 5.71 $ 6.28 $ 6.97 Current: Base Fee ($53.50/Up to 3,000, or $81.50/Up to 5,000 of consumption per unit) + single additional meter size differential + actual consumption • Tiers are priced per 1, 000 gallons Structural Changes • Meter Differential no longer factored into bill • Scenario G: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario H: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario I: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario J: Base Fee + actual consumption (No consumption included in base) Water Rate Structures Non -Residential 3/4 Meters $ 81.50 $ - $ - $ 3.65 $ 3.85 $ 4.05 $ 4.30 $ 4.60 $ 57.50 $ - $ 4.50 $ 4.91 $ 5.35 $ 5.83 $ 6.47 $ 7.37 $ 64.00 $ - $ 4.50 $ 4.73 $ 4.96 $ 5.21 $ 5.52 $ 5.91 $ 60.00 $ - $ 4.50 $ 4.82 $ 5.15 $ 5.56 $ 6.06 $ 6.67 $ 53.50 $ 3.85 $ 3.85 $ 4.85 $ 5.24 $ 5.71 $ 6.28 $ 6.97 Current: Base Fee (Includes up to 5,000 gallons of consumption per unit) + single additional meter size differential + actual consumption • Tiers are priced per 1, 000 gallons -Jff Structural Changes • Units are no longer factored into bill Et Adjust Meter Differential to Industry Standard • Scenario G: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario H: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario I: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption • Scenario J: Base Fee + actual consumption (No consumption included in base) Meter Differential Pricing Structural Changes • Meter Size Differential will be based on the AWWA Industry Standard Methodology Meter Differential 3/4 1 1.5 2 3 4 6 0 0 0 0 0 0 81.50 87.50 105.50 123.50 159.50 231.50 357.50 AWWA I ndustry Standard Methodolo $ 57.50 $ 96.03 $ 191.48 $ 306.48 $ 575.00 $ 958.53 $1, 916.48 $ 64.00 $ 106.88 $ 213.12 $ 341.12 $ 640.00 $1,066.88 $ 2,133.12 .1 ' •11 11 '111 1 $ 53.50 $ 89.35 $ 178.16 $ 285.16 $ 535.00 $ 891.85 $ 1,783.16 Water Rate Impact Scenarios illustrative on[ ► Residential ► Single Family Multi -family Apartment (8 Units) Non -Residential 4 units Office Suite ► 12 units Office Suite School Restaurant Irrigation P. Other Government ► Other Government -Community Center ► 96-unit Large Commercial Residential- Illustrative Examples Wi me r Average 1 3/4 71000 $ $ $ $ $ 89 138 196 190 707 $ $ $ $ $ 78 154 245 176 609 $ $ $ $ $ 82 146 220 181 648 $ $ $ $ $ 79 147 231 175 618 $ $ $ $ $ 82 149 232 182 647 Summer Ave rage 1 3/4 20,000 High Consumption 1 3/4 341000 D u p I e x-Summer Avg 2 3/4 17,500 Apartment 8 1 53,500 W i me r Average 1 3/4 71000 $ - $ - $ - $ - $ - $ $ $ $ $ (11) 16 49 (15) (99) $ $ $ $ $ (6) 8 24 (9) (59) $ $ $ $ $ (10) 9 35 (16) (89) $ $ $ $ $ (6) 11 36 (9) (60) Summer Average 1 3/4 20,000 High Consumption 1 3/4 34,000 Duplex -Summer Avg 2 3/4 171500 Apartment 8 1 53,500 Residential Illustrative Examples Residential Customers: • 15% used 0-3,000 gallons and paid $53.50 or less per bill in 2021 • 85% used 3,000+ gallons and paid above $53.50 per bill in 2021 Low Consumption 1 3/4 3,001 1 $ 81.50 $ 58 $ 64 $ 60 $ 65 Low Consumption 1 3/4 31000 $ 53.50 $ 58 $ 64 $ 60 $ 65 Low Consum tion 1 3/4 3, 001 $ 81.50 $ 58 $ 64 $ 60 $ 65 p 3/4 41000 $ $ $ 81.50 81.50 81.87 $ $ $ 62 67 67 $ $ $ 69 73 73 $ $ $ 65 69 69 $ $ $ 69 73 73 Low Consumption 1 Low Consumption 1 3/4 50000 Low Consumption 1 1 3/4 511100 $200 $175 $150 $125 $100 $75 $50 � $25 $0 0 1,000 2,000 a PAF--..d Residential I llustrativ ),000 6,000 7,000 8,000 9,000 10,000 15,000 20,000 25,000 GALLONS a Non -Residential -Illustrative Examples 4-Unit Office Suite 4 3/4 71000 $ $ $ $ $ 326 978 21068 909 21018 $ $ $ $ $ 76 118 31614 11364 31323 $ $ $ $ $ 82 121 31101 11136 21784 $ $ $ $ $ 79 119 31363 11255 31062 $ $ $ $ $ 82 123 31427 11308 31157 12-Unit Office Suite 12 3/4 15,000 School 1 3 425,000 Restaurant 1 3/4 190,000 Irrigation 1 2 422,000 4-Unit Office Suite 4 3/4 71000 $ - $ - $ - $ - $ - $ $ $ $ $ (250) (860) 1,546 455 1,305 $ $ $ $ $ (244) (857) 1,033 227 766 $ $ $ $ $ (247) (859) 1,295 346 1,044 $ $ $ $ $ (244) (855) 1,360 399 1,139 12-Unit Office Suite 12 3/4 1 15,000 School 1 3 4251000 Restaurant 1 3/4 1901000 Irrigation 1 2 4221000 Non -Residential Illustrative Examples Overall ".esults Et Recommendation Option A: No Structural Change $2.00/ month increase on Base Fee's -$4.00/bi-monthly increase on Base Fee's -4% increase in Tiered consumption rates Option B: Structural Change to strengthen conservation incentive Scenario G: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption Scenario H: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption Scenario I: Base Fee (Includes up to 3,000 gallons of consumption) + actual consumption Scenario J: Base Fee + actual consumption (No consumption included in base) Staff Recommendation Option B: Structural Change to strengthen conservation incentive Scenario J Base Fee + actual consumption (No consumption included in base) Achieves revenue target Meets Department of Health anticipated conservation standards and requirements Empowers customers to conserve water and reduce water bill Charges for consumption while providing a stable base for the system Modernizes billing system to be more in line with peers uestl*ons &t Discussion