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HomeMy WebLinkAboutMINUTES - 12051995 - D6 TO: BOARD OF SUPERVISORS FROM: WATER COMMITTEE ;.% Costa Supervisor Gayle Bishop, Chair _ t.JI sta Supervisor Tom Torlakson C tt�h DATE: December 5, 1995 u� ��� SUBJECT: REPORT ON EBMUD WATER RATE INCREASES SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Authorize Chair to sign a letter to the East Bay Municipal Utility District (EBMUD), protesting the inequity of recent tiered water rate increases and seismic improvement surcharges. REASON FOR RECOMMENDATION/BACKGROUND In June, 1995, the EBMUD Board approved rate increases within a tiered rate structure which has had the effect of subsidizing low use water users in western areas of Contra Costa and Alameda Counties, while also instituting a costly fourth tier rate to capture high volume water users in central and southern Contra Costa County. Approved rates for single-family residences range from $1.09 for up to 172 gallons per day (gpd); $1.35 from 172 to 393 gpd; $1.50 from 393 to 738 gpd; and $3.44 for use above 738 gpd. County Water Agency staff has requested and received documentation to enable detailed research into the rationale for these rates, and also to enable evaluation of use of a tiered rate structure in non- drought years. Staff evaluation of these issues is not complete; however it has become apparent that the basis for existing rates is flawed, the fourth tier rate is not based on relevant background information and was added by EBMUD's Board at the last moment ostensibly to promote conservation. In addition, the lowest tier rate is a subsidized rate; in other words, this rate is lower than the costs to EBMUD to provide this water. The County letter would protest both rate extremes. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): 4,A Supervisor Gayle Bishop, Chair Supervisor Tom Torlakson ACTION OF BOARD ON December 5, 1995 APPROVED AS RECOMMENDED X OTHER X APPROVED staff's' recommendaton above, and the Board of Supervisors also DIRECTED County Counsel and staff to report to the Board of Supervisors on December 19, 1995, with language for a potential ballot measure. VOTE OF SUPERVISORS -y__ UNANIMOUS (ABSENT #5 1 HEREBY CERTIFY THAT THIS IS A TRUE AND AYES: NOES: CORRECT COPY OF AN ACTION TAKEN AND ABSENT: ABSTAIN: ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Roberta Goulart (510) 646-2071 ATTESTED December 5, 1995 cc: Community Development Department PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR 11— BY: , DEPUTY RG:rw RRG4:12-6WC1.6bd Board Order Report on EBMUD Water Rate Increases December 5, 1995 - Page 2 - REASON FOR RECOMMENDATION/BACKGROUND (Cont'd) In addition, EBMUD recently approved a seismic improvement surcharge, which is found on the property owners' tax bill, and is also included in the bi-monthly water billing. The water billing adds seismic charges as a volume of water use percentage and by meter size. On the tax bill, the seismic improvement surcharge is based on parcel size, ranging from $9.64 per year for a quarter acre lot, to $196.80 per year for a one-acre lot. It is the opinion of the Water Committee that seismic improvement charges should be uniform for all water users, particularly as there is no correlation between parcel size and seismic improvement of water district infrastructure. Due to the extreme amount of ratepayer dissatisfaction regarding rates, the EBMUD Board will review the rate structure on December 12, 1995, and is proposing two modified rate scenarios which remove the fourth rate tier, or reduce it. Staff recommends that the above position as recommended by the Water Committee should be communicated to EBMUD's Board prior to their hearing date for review of this issue, and any additional information which staff provides relative to the appropriateness of the tiered rate structure could be communicated at a later date, at the Board's discretion. There is no reconsideration scheduled by EBMUD's Board for seismic surcharges at this time. 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F U0 ex . � w y, Fill. , ■ PROPOSED WATER RATE CHANGES --�—` — --- '� b}alrmt monthly bills Gallons per day, Optlon 1 Option 2 (,i •�i.� �.�L.il..�.�++l'.S.�r► �- pi.=;:s f.rXki y .: .- .::.'.t E; - - $11.46 -$11 {8 $11.46 EBMUDdrafts 446 "y 17.97 �7 97 f 18.15 e 25.02 25 02 25.50 f x':675 40.47 -41 1� 42.81 new rate plan t 7,738 z 48.27 p 51 „ 51.61 118.67 91 11 86.81 2,-' 329.87 -705 :, ..- 12 11- - 192.41 c for water users T c a o Saxce EBMUD By DENIS CUFF t _' staff writer OAKLAND—Water bills would p plunge up to 42 percent for the WaW �`' ■ MEETINGS YS 6 l.t-,�1Y PJ.- .' largest users, stay the same for the Y Whof a`st- Bay Municipal lowest users and climb from 1 per- FROM PAGE 1 Ar--- -rrK Utility flt5ti icC9oard cent to 7 percent for families in the '°"~' '�"" toos y middle under plans unveiled Mon- said John Coleman,*fioartl mem- Whclic hearings on day by the East Bay Municipal Util- ber from Lafayette.�,prefer to cut new waW. etes ity District. the budget and spending rather than When and where: 7 p.m. Water system administrators rec- put this on the backs of other cus- Dec. 5 at Las Lomas High ommend two options for changing totners." School Student Commons, rates to quell a rebellion over new John Gioia of Richmond,the wa- 1460 S.Main St.,v&lnut Creek; tiered rates that wallop large users. ter board president,said he believes 2 p.m. Dec. 12 at EBMUD ad- Many customers in Central Con- a staff proposal to scale back the ministration building, 375 11th tra Costa County and the San.Ra- fourth tier in the price system is a St., Oakland mon Valley say the tiers discriminate fair attempt at compromise. against property owners whose wa- "We're trying to be sensitive to households using from about 250 to ter use is higher because of hot ten- the concerns of the large users about 800 gallons a day. ratures and large lots.The district the overnight changes in their bills. We are providing significant relief," Customers districtwide average says it needs to promote conserva= P g �' about 250 gallons a day, but cus- tion with a premium rice on high Gioia said. P P g He said that if rates are lowered tomers east of the Caldecott Tunnel water use on grass and plants in an average about 730 gallons a day in and climate. -. by budget cuts, the price break the summer months when tempera- One water board member criticdl should be spread to all customers— tures and water use rise. not just enjoyed by large users. of the current rates said it's unfair EBMUD administrators recom- to lower rates for customers usin The recommendation by acting g General Manager Dennis Diemer mend against a rebate or credit for 800 or more gallons a day by raising �.� was a mixed bag for water rebels customers who paid for water under rates for those one step below on the have t who hhreatened to secede from the fourth price tierthis summer.In- C water consumption ladder. stead, administrators suggest that "My gut reaction is it's unfair,`' the district unless the district pro- customers be given until Jul 1 to vided them significant rate relief. y y their entire water bills. C Please see WATER,back poge `� Administrators recommend two Pa �. options,one abolishing and the other Diemer added, however, that it --- =-- lowering the fourth price tier,which would be possible to finance a rebate - accounted for the sharpest increase of the fourth-tier payments if the and caused some customers'bills to board came up with a different rate �l/L�l9s = �� double. structure than the ones he proposed. -r Administrators recommend fi- Coleman said a rebate or credit ' ' � '' nancing the price break by raising is essential to stop water rebels from --- bills from I percent to 7 percent for seceding from the water district. - T 0 G =� • ■WATER COSTS I aC C -a • G5 �:5�:�►� � Water �.�, Current and possible water rates © a �� ,mss-_• -`O=C _Z3' for East Bay Municipal(Jtilfty Dis- �►, FROM PAGE 1A C3 O ( • �''® � trict households, not including w' -tier,but I don't think we should give the elevation surcharge. that money back.Where would we 0 is �' �' � �r�.�j �7 come up with the money?" asked CURRENT—FOUR TIERS Katy Foulkes,a board member from Price/unit* gallons/day Piedmont who also represents $109 0172 Orinda and Moraga. "Two wrongs don't make a right." $1.35 173-369 B considers Some customers say they deserve $1.50 370-738 a rebate because the new rates dis- $3.44 739&up rebate for district's criminate against their area with hot temperatures and big lots. OPTION 1 —FOUR TIERS "If it was wrong to approve the biggest water users rate, if they went overboard, they Price/unit gallons/day should give the money back,"said $1.09 0-172 Paul Parkhurst,a Lafayette resident. $1.35 173-369 By DENIS CUFF "The board is concerned about sav- staff writer ing scarce resources like water and $1.65 370-738 OAKLAND—Call it the$3 million question: Does money.Why don't they cut back their $1.95 739&up the East Bay's largest water supplier give money back expenses. to customers hit with a steep new price tier that is about Director John Coleman of OPTION 2—THREE TIERS to be abolished or slashed for being too harsh. Lafayette said the district must credit Price/Unit gallons/day A total of 20,582 houses in Central Contra Costa the money on future bills or he will $1 09 0172 County and the San Ramon Valley would get water bill continue to press for areas east of rebates from a few bucks to$350 or more if the East the Caldecott Tunnel to secede from $1.41 173-369 Bay Municipal Utility District decides to return money the water district. $1.69 370&up collected under its fourth and highest rice tier. The latest thorny rate issue g P * Unit equals 748 gallons The board is moving toward reducing the tier rate or emerged this week as administrators Source:East Ba Municipal Utility District eliminating the tier in response to an outcry from cus- unveiled two alternative plans for al- Y P tomers in the hot central part of the county and the San tering the fourth tier. Ramon Valley. Under the current rates, house- Many board members and administrators,however, _ hold water use above 738 gallons a tween$2.6 million and$3 million, are cool toward a rebate because the district's budget day is billed at$3.44 per unit,triple officials estimate. was based on collecting the fourth tier fees.The rebate the price for use averaging below 172 To offset the lost revenue,the dis- would leave about a 2 percent hole in the operating bud-- gallons a day.A unit is 748 gallons. trict could dip into a special fund set get. Dennis Diemer, acting general up to avoid sudden rate increases j "The board made a mistake in approving that fourth f manager, told a press conference when water sales plummet during . Tuesday he recommends the high- prolonged spells of dry or wet Phase see WATER,Xck page est price be slashed to either$1.69 weather,administrators said. _ or$1.95 per unit to relieve the sting Some directors, however, say it for larger users in the summer. would be wrong to raid a fund to Diemer recommended against a hold down all customers'bills to give rebate, but explained how it could a break to only one group of cus- . „�. � ,� ._� . be offered if the board wanted to do tomers. -- - — so. About 25,000. of the 294,000 i The district would calculate the houses in the district bought some 1 difference between what large users water under the fourth tier this sum- paid this summer and fall,and what mer or fall,officials estimate. they would have paid under the About 20,582 of those households lower rates the board the board in- are in Central Contra Costa and the tends to adopt Dec. 12. San Ramon Valley.The other 4,739 Then the district would give a are in shoreline communities in credit on the first water bills issued Alameda County or West Contra in 1996.The program could cost be- Costa. MA—Contra Costa Times Sunday,November 12,1995 E D mAL ITO S - Restructure water rates - "' $MUDrI1lISt replace In fact,water rates are higher now O G C1 in dry areas than they were during the 0 g CICu3falr earthquake tax drought of the late 1980s and early © Q lic 01990s. o avoid a customer rebellion and 0 a � EBMUD should retain its four- promote economic fairness, East tiered rate schedule,but it also should I O (� TBay Municipal Utility District di- O 4 CIC rectors are going to have to seriously raise the usage limits.That would still . . " reeonsider both their water rate strut- Promote conservation but not penalize O 1: . 0 ` 0C :tire and earthquake retrofit tax. The People who are using less water this _._ firmer is inequitable, and the latter is year than they have in the past. Jl1°gal• An even greater inequity is the seis- I`The water rates that went into effect mic retrofit tax imposed by EBMUD. :)R.July 1 clearly are punitive for resi- This is a clear violation of Proposition nts living on the dry side of the Calder 62,which recently was upheld by the :oit Tunnel. California Supreme Court. 'Some homeowners are paying sev- eiial hundred dollars a month for water Prop. 62 requires that all special because of steeply tiered rates.And just taxes be adopted by two-thirds of the about everyone in the dry part of the governing body of a district and a ma- 3istrict has seen his or her water bills jority of the voters. The water board siyrocket. failed to do either. --'Proponents of tiered rates say that EBMUD directors have a couple of people who use great amounts of wa- options.They could put the tax to a ter.should pay more per unit because vote or they could simply add a sur- it promotes conservation.That's a charge to water rates. iialid argument—to a point. Other utilities, including gas and electricity, A surcharge would be fair if the are priced to promote conservation by tiered rate system were not so steep. iffcreasing rates as usage rises. A better solution would be for -*-Also, it is a misuse of water for EBMUD to devise a plan that would h6m' eowners who live in an and cli- tax each residential customer at the mate.to try to maintain huge areas of same rate and put it to a vote. lush lawn and plantings that normally Now the tax is based on lot size, re- thrive in areas that receive substantial gardless of water usage. People with year-round rainfall. lots smaller than a quarter acre are - 1! However,it is unfair for people who paying just$9.64 a year,while those 1 C, a C" do,conserve and are using signifi- . with one-acre lots are paying$196.80. 0 6 CAL cAntly less water this year than last to That's 20 times as much. C O Q ILJI stie ttheir bills increase so sharply. 1 0 qI X_.3C Simply put,the tiered rate system As a result, a minority of the dis- makes sense,but it needs to be recon- trict's customers on the dry side of the 1 0 a IC 4C figured. hills is paying most of the seismic � L O C�kL 11 Households using an average of retrofit bill although most of the pro. O C)C more than 738 gallons of water a day posed work will be to replace aging are in the highest of four tiers and pay pipes west of the hills. - $3:44 per unit (748 gallons). Cus- That disparity, along with massive tomers using less than 172 gallons a price increases, is why there is serious day pay$1.09 per unit. talk of secession and withholding of The problem with the system is not payment of water bills by customers toe price of water at the highest tier, in the dry part of the district. but that the top rate kicks in a too low alevel of water usage.And it does not There is no reason why EBMUD di- + abequately take climate into consider- rectors can't come up with a rate - ataoa. structure and retrofit tax or surcharge Perhaps the current rate structure that is fair to all parties and still pro- waald make sense during a severe motes conservation. Failure to do so drought or if EBMUD water supplies could result in a costly and disruptive wlere low.Neither is the case. customer revolt. . y • 1 ' RECEIVED �R EAST BAY /J MUNICIPAL UTILITY DISTRICT NOV 29 w November 27, 1995 [CLERK BOARD 0 suPERV OR, CONTRA COSTA CO. Dear Colleague: As promised in a previous letter, I have enclosed a copy of the Report and Recommendations on Revisions to the Water System Schedules of Rates and Charges. The report describes several options for the EBMUD Board's consideration. As you know, the current rate structure was adopted in June 1995 after an 18 month process of review and discussion with a citizens' advisory committee. The attached report lays out several alternative rate structures that maintain the following principles: • Revenue neutral (revenues equal anticipated expenditures), * Based on cost of service for each customer class (single family, multi- family, other institutions and businesses) * No geographic differentiation in rate structures * Inverted (increasing) block rates for single family residential customers EBMUD is committed to providing the highest quality water at the best possible rate. - We invite your participation at either the upcoming public meeting (Tuesday, December 5th, at 7:00 pm) at Las Lomas High School Student Commons, 1460 South Main Street in Walnut Creek or the public hearing (Tuesday, December 12th, at 2:00 pm) at the EBMUD Administration Center, 375 11th Street in Oakland. You may also send your written comments to our Board of Directors at the address listed below. I thank you for your attention as well as your interest. Sincerely, /r �- Dennis M. Diemer Interim General Manager Encl. *N ELEYENM S?WT.OAKLAND.CA OW7-0I0.010)p6+f000 IOAROOFORECTORS JOHNA.COLEMAN.KATYFWLKES.JOHN M.G!ON FRANKWLWN.NANCYJ.NADEL. MARYSELMK.KENNETHKif►IMONS C� L�� t EAST BAY MUNICIPAL UT1[ M DISTRICT DATE: November 27, 1995 MEMO TO: Board ofDirectors FROM Dennis M.Diemer,Interim General Manager SUBJECT: Report and Recommendation on Revisions to the Water System Schedules of Rates and Charges IMODUC 13ON At its November 14, 1995 meeting,the Board of Directors act a public hearing for December 12, 1995 at 2:00 p.m.to consider alternatives for single-family residential rates. The Board will also bold a public meeting at Las Lomas High School Student Commons at 7:00 p.m. on Tuesday, December S. 1995. _ The Board directed staff to prepare alternative rate structures based on the principles embodied in the Water Rate Structure Study(WRSS)and consistent with the California Urban Water Conservation Council Memorandum of Understanding(MOU)regarding Urban Water Conservation in California. Staff has also analyzed options associated with funds collected from the current fourth tier charge of 53.44 per unit. RECOMNENDA77ONS 1. Hold the scheduled public hearing on single-family residential water rates and charges on December 12, 1995. 2. Select one of the following two rate structure options described in this sport: Option 1 -Lower Fourth Tier Tier 1 (0-7 units) 51.09hmit Tier 2(8-I6 units) S1.35/unit Tier 3(17-30 units) 51.65/unit Tier 4(above 30 units) S 1.93Amit Qntion 2-Three_Tiers Tier 1 (0-7 units) - S 1.09hmh - 'Tier 2(8-16 units) $1.41/unit Tier 3 (above 16 units) S1.69/unit, • Board of Directors November 27, 1995 Page 2 Rates and charges aro recommended to be effective with billing periods beoming on or after January 1. 1996. This date will provide staff with sufficient time to program and test any changes before producing bills with the new rates. 3. Provide a six-month payment extension(From January 1 to July 1. 1996)for single-family residential accounts with usage in the current$3.44Amh fourth tier. This extension would be granted,provided these customers keep current with subsequent bills. DISCUSSION Conservation Pricing: The April 1995 EBMUD WRSS had as its main objective the establishment of equitable water rates that encourage conservation. This study was performed consistent with the California Urban Water Conservation Council MOU which was signed by over 200 California water agencies(including EBMUD)and specifies 16"Best Management Practices" (BMP)for urban water conservation. Key to the WRSS was BMP No. 11: "Member agencies to make good faith efforts to implement conservation pricing." The MOU states: Conservation pricing provides incentives to customers to reduce average or peak use,or both. Such pricing includes: a. Rates designed to recover the cost of providing service;and b. Billing for water and sewer service based on metered water use. Conservation pricing is also characterized by one or more of the following components: c. . Rates in which the unit rate is constant regardless of the quantity used. (uniform rates)or increases as the,quantity used increases(increasing block rates); d. Seasonal rates or excess-use surcharges to reduce peak;demands during summer months; C. Rates based upon the long-run marginal cost or the cost of adding the next unit of capacity to the system; f Lifeline rates. EBMUD's WRSS developed rate structures based on the following principles: • Based on cost of service for each customer lass - - Single family . Multi-family - Other(includes commercial,industrial,irrigation,schools,etc.) • I 1 Board of Directors November 27, 1995 Page 3 • No geographic d'ifferentistion in tate structures • Inverted(increasing)block rates for single family residential customers • 'Revenue normal"(i.e.,projected revenues equal anticipated expenditures) Cost of Service: EBMUD's WRSS included a cost-of-saviee analysis which used American Water Works Association(AWWA)recommended methods for determining the costs of serving each customer class. Costs were aUocated to s variety of customerclasses,distinguished by their different demand characteristics. Each class was fiuther disaggregated on the basis of geographic location(east and west of the hills)to evaluate the cost of service by area. To determine the costs of serving each class of customer,the study allocated costs to various customer service characteristics,including average(base)demand,maximum six-month demand, maximum-day and maximum-hour demand, customer service,billing, equivalent meters and fire protection. This allocation process was based on an engineering review of the,system components. Using this methodology derives the total cost responsibility of each class, or the "cost of service." The following table presents FY96 revenue nxMirements,based on the cost of service for each class,the number of customers and projected water sales. FY96 - PROJECTED WATER SALES AND REVENUE Revenue Number of Sates Requirements Customers (MCeQ (MS) Single-Family East 62,000(21'/•) 13.8(35%) s428.4(36%) West 2341-000(79%) 25.5(65%) 51.0(64%) Multi Family 28,000 15.3 24.6 Commercistwustrial 32,000 27.9 48.3 Total 35%,000 82.5 152.3 Single-Fsmily Residential Rate Structure: Of the projected revenue requirements for single. f mly residential customers, 531.4 million of the 351 million projected for West of the Dills is collected on the volume charge and 520.8 million of the$28.4 million projected for East of the 1 Board of Directors November 27, 1995 Page 4 Hills is collected on the volume charge. The allocation of revenue requirements among single- fin*residential bill components is shown below. ELEMENTS OF REVENUE REQUIItEMENT FY% SINGLE-FAMELY RESIDENTIAL ACCOUNTS (SMillions) East west Volume Charge 20.8 31A Meter Charge 4.4 17.3 Elevation Surcharge 3.2 2.3 Total 28.4 $1.0 The District's current single-family residential rate structure is based on four tiers with inclining . blocks set as follows: Tier Current Rate Rite Block Justification for Breakpoint 1 0-7 units(0-172 gpd) 7 units represents average winter consumption 51.09/Ccf for all customers(equal to year-round indoor consumption) 2 9-16 units(173-393 gpd) 16 units represents average monthly = 5.1.35/Ccf - consumption for East of Bills"omen 3 17-30 units(394-738 gpd) 30 units represents average co on in 51.50/Ccf summer months for East of lfills customers 4 30+units(739+gpd) All consumption above 30 units,which exceeds 13.44/Ccf the average consumption in summer months for East of the Hills customers In lieu of establishing a lifeline rate(250 per unit),the first tier quantity and price(51.09 per unit) provides water below cost to meet essential needs. The cost of the fourth tier(53.44 per unit) . represents the unit cost of the next increment of water supply,which is based on marginal cost pricing. The application of marginal cost pricing theory to water rate structures presumes that excessive water use,along with system growth,creates the need for additional water supplies,and Board of Directors November 27, 1995 Page 5 that setting a marginal cost price may be an additional method for encouraging efficient use of acarce water sources. The marginal cost estimate used in the WRSS was based on the District's Water Supply Management Program,Composite Program IL The available cost estimate and the aspected supply from this option yielded an avenge cost of$3.44 per unit(51,500 per acre foot). ALTERNATIVE RATE STRUCTURES Table I provides two rate structure options for the Board's consideration. .Shown are FY95 rates and existing FY96 rates along with Option 1,a lower fourth tier structure,and Option 2,a three- tier structure,both of which maintain the S 1.09 first tier price. The lower fourth tier structure shifts a portion of the revenue requirement to usage between 17 and 30 units,while reducing the price of the fourth tier. This structure provides an orderly progression in cost for all consumption beyond the first tier. The three-tier structure is based on the recommendations of the WRSS. Both Option 1 and Option 2 meet the District's WRSS's main objective of establishing water rates that encourage conservation and are also consistent with the Study's principles and the California Urban Water Conservation Council MOU. Both options include inclining block rates that would produce revenues matched to the cost of service for the single-family sanstomer class east and west of the Oakland Berkeley hills. Both options are also revenue-neutral (i.e.,projected revenues match anticipated District expenditures). Neither option differentiates geographically. In other words, a specific consumption level is priced the same throughout the service area, regardless of location. Required changes to the District's Schedule A-Water System Rates and Charges for both Option 1 and Option 2 are attached. The amounts for the seismic improvement surcharge, calculated at 4.3%of all water rates and charges,aro modified accordingly. Table U slsows three other alternatives,whish are not recommended. One altenmati•ve eliminates the current fourth tier and increases the price per unit in the remaining three 66 by 50 for all usage. This is not recommended because of adverse impacts on customers in the lower tiers. A second alternative,whish provides for a fourth tier with revenues used for conservation programs,is also presented but not recommended. This structure would not be rtverune-neutral but would annually generate 5960,000 of funds in excess of the projected revenue requirements. (Under this structure,each five-cent increase per unit for consumption in excess of 30 units per month would generate approximately 3160,000 annually) This excess amount would then be applied to conservation programs. _ The current conservation program budget is$2.3 mfilion,of which$0.6 million is used for the ULFT Program. The 5960,000 in excess funds generated from the structure shown would 1 . Board of Directors November 27, 1995 Page 6 sop cam a 42 percent in funuding for the program. Under this alternative,the excess revenues would be collected from only that portion of the customer base in the top tier. h would be vwvmely difficult to tailor the benefits from the excess funds to this portion of the customer base. Therefore,we do not recommend this alternative. The third alternative shows the impact of a Bat rate(51.37 per unit for all consumption). The average cost of service for East of Kills"omen is$I AS per unit, compared to 51.31 per unit for west of Hills customers. Thus,under a single flat rate structure of$1.37 per unit,West of Dills customers would subsidize customers East of ills. This alternative is not consistent with the WRSS principles and is not recommended. ISSUES REGARDING FOURTH TIER CHARGES OF 53.44 PER UNIT Staff was also asked to quantify the impacts of eliminating the current$3.44Amit fourth tier and .crediting customers with S3.44hnit fourth tier usage charges. Because the new rates were effective with billing cycles on or after July 1,approximately one-half of normal summer usage was billed at the new rates. The remaining sumer usage was billed at the prior FY95 rates. Estimated net fourth tier revenues for Option 1 (based on the difference between the proposed fourth tier price of SINS per unit and the current fourth tier price of 53.44 per unit)would be approximately S2.6 mullion of the.total estimated FY96 fourth tier billings of S6.0 million. For Option 2,the estimated net fourth tier revenues(based on the difference between the proposed third tier price of 51.69 and the current fourth tier price of$3.44)would be approximately S3.0 million. Should the Board select an alternative single-family residential rate structure,there are three options for addressing the S3.44 per unit fourth-tier rate impacts. 1: . AD bills issued after January 1, 1996 would be adjusted in accordance with the new rate structure. There would be no adjustments for bills issued prior to Janiary 1. There would be no impact on revenue projections. 2. Approve a credit on all bulls with fourth-tier usage for the net difference between 53.44 per unit and the new top tier rate. Begin issuing ca edits on bills as soon as programming is completed(approximately four weeks after Board action,or mid-January). The estimated impact on revenues is S2.6-S3.0 mullion. There are sufficient funds budgeted in the District's rate stabiliution/c ontingenry account to cover this amount without impacting operations,based on current projections. This also assumes that any new rate structure adopted by the Board is revenue neutral(i.e.,generates sufficient revenues to meet FY96 anticipated expenditures). - I Dowd of Directors November 27, 1995 Page 7 3. Provide a six-month psyment extension for accounts with S3.44Amit fourth-tier usage. This would allow a grace period from January i to July 1, 1996 during which previous fourth tier charges could be paid provided subsequent bills are paid on time. This grace period would prevent the imposition of late charges or turn-offs. This is the recommended option and would have no impact on revenue projections. DMD:JMM Attachments r' NY N N ~ 06alit N �► Z Vt lz W r W- 0 r 40 0to VNm Om sfONmQO J ar Of r tt; t?� tD OM f� tV 0 im rrN '�C!V AID.: 9999 � � Imy Q W Z C C OOON 'et N. 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F �Jgu 1 ' 111 10) NW Ni QM rNNNsf � If1m1� A OfNV- mTW C �1 NMCf) MCV) MOf.- N MV� � M LO C � W Oti � � ti o � r r r- rrrrrr let t� N � t�pA 4� r �VN0CM{{ m Z U V- V- C4cvfr O> O) O� QJa � mCQDON C IC 0 Ln m �� r r N M � '0 1A m 1� r I- r V- r N N ui ..j p myj c rNNM O � L Z 1! r x W Cr r r r r r r r r r r r V /Mf NIr t- 00 00V- C4cr1 Ah0> rMinr- o rrNNVVOIn M+1YVSSAN 9 R mP 11 rIf- rr- , V. { Q Z OM 10f') 01A NMet m � �N �t� N .ti•• Ol Q � 3E inO � OYf Oin w O pgON NN l9Ms1e0 � 1► 1D0> rrr V f . RATE STRUCTURE OPTION 1 REVISIONS TO SCHEDULE A-WATER SYSTEM RATES AND CHARGES 1. SCHEDULE OF RATES AND CHARGES TO CUSTOMERS #NK NUMBER 1-B OF THE EAST BAY MUNICIPAL UTILITY DISTRICT 9RCnvE Ee�uo �s�es SCHEDULE A RATE SCHEDULE FOR WATER SERVICE (Continued) A. ONE MONTH BILLING (Corftmd) SECOND - A CHARGE FOR WATER DELIVERED and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE based on one month meter readings for all water delivered per 100 cu. ft: SEISMIC WATER DELIVERED IMPROVEMENT CHARGE PER SURCHARGE PER 100 CU. FT. 100 CU. FT. INSIDE DISTRICT BOUNDARIES Single Family Residential Accounts: For the first 172 gpd $1.09 .05 For all water used in excess of 172 gpd, up to 393 gpd 1.35 .06 For all water used in excess of 393 gpd _ up to 738 gpd 1.65 %Q6 .07 For all water used in excess of 738 gpd a-.44 1.95 s1lS .08 t Multiple Family Residential Accounts: For all water used 1.40 .06 All Water Use Other Than Single Family Residential Accounts and Multiple Family Residential Accounts: For all water used 1.50 .06 The seismic improvement program surcharge is effective on each water bill through February 28, 2025. ' OUTSIDE DISTRICT BOUNDARIES Charge per 100 cu. ft. will be twice the charge applicable for Inside District Boundaries NON-POTABLE WATER Charges for non-potable water will be based on the rates applicable for non-residential customers. s D1-60A s AUMORM-IE KXMM NUMBER MUED$Y Off CO MMAGUMOff&wDW 463� SCHEDULE OF RATES AND CHARGES TO CUSTOMERS #ANWMIER 1-E OF THE EAST BAY MUNICIPAL UTILITY DISTRICT e�cnvE _ EB+�ILOD 5 SCHEDULE A RATE SCHEDULE FOR WATER SERVICE (Continued) B. TWO MONTH BILLING (continued) SECOND - A CHARGE FOR WATER DELIVERED and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE based on two month meter readings for all water delivered per 100 cu. ft. SEISMIC WATER DELIVERED IMPROVEMENT CHARGE PER SURCHARGE PER 100 CU. FT. 100 CU. FT. INSIDE DISTRICT BOUNDARIES Single Family Residential Accounts: For the first 172 gpd $1.09 $0.05 For all water used in excess of 172 gpd, 1.35 .06 up to 393 gpd For all water used in excess of 393 gpd, f-bA 1.65 v96 .07 Up to 738 gpd For all water used in excess of 738 gpd S441.95 ri-8 .08 Multiple Family Residential Accounts: For all water used 1.40 .06 All Water Use Other Than Single Family Residential Accounts and Multiple Family Residential Accounts: For all water used 1.50 .06 The seismic improvement program surcharge Is effective on each water bill through February 28, 2025. OUTSIDE DISTRICT BOUNDARIES Charge per 100 cu. ft. will be twice the charge applicable for inside District Boundaries NON-POTABLE WATER Charges for non-potable water will be based on the rates applicable for non-residential customers. E s 014O.A v AUrAO Y-21MOLMON WMER swim NY as+a OF MANAWWwt•VADM RATE STRUCTURE OPTION 2 REVISIONS TO SCHEDULE A-WATER SYSTEM RATES AND CHARGES • GE NUMBER 1'B SCHEDULE OF RATES AND CHARGES TO CUSTOMERS PA OF THE EAST BAY MUNICIPAL UTILITY DISTRICT 9"cnvE - �tiruo s SCHEDULE A RATE SCHEDULE FOR WATER SERVICE 1Continued) A. ONE MONTH BILUNG (Continued) SECOND - A CHARGE FOR WATER DELIVERED and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE based on one month meter readings for all water delivered per. 100 cu. ft: SEISMIC WATER DELIVERED IMPROVEMENT CHARGE PER SURCHARGE PER 100 CU. FT. 100 CU. FT. INSIDE DISTRICT BOUNDARIES Single Family Residential Accounts: For the first 172 gpd $1.09 .05 For all water used in excess of 172 gpd, up to 393 gpd 4-." 1.41 .06 For all water used in excess of 393 gpd up to ;88-bpd 4-.W 1.69 v96 .07 For all water used in oweess el :;SS gpd X3:44 114 Multiple Family Residential Accounts: . For all water used 1.40 .06 All Water Use Other Than Single Family Residential Accounts and Multiple Family Residential Accounts: For all water used 1.50 .06 The seismic improvement program surcharge is effective on each water bill through February 28, 2025. OUTSIDE DISTRICT BOUNDARIES Charge per 100 cu. ft. will be twice the charge applicable for inside District Boundaries NON-POTABLE WATER Charges for non-potable water will be based on the rates applicable for non-residential --customers.. . l s 01-80.AA s ANTMOWN-RESOMM NUwaER JMo sY GPM of SKr 0 KOM SCHEDULE OF RATES AND CHARGES TO CUSTOMERS PAN NUMBER 1-E IF OF THE EAST BAY MUNICIPAL UTILITY DISTRICT wwera SCHEDULE A RATE SCHEDULE FOR WATER SERVICE (Continued) B. TWO MONTH BILLING (continued) SECOND - A CHARGE FOR WATER DELIVERED and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE based on two month meter readings for all water delivered per 100 cu. ft. SEISMIC WATER DELIVERED IMPROVEMENT CHARGE PER SURCHARGE PER 100 CU. FT. 100 CU. FT. INSIDE DISTRICT BOUNDARIES Single Family Residential Accounts: For the first 172 gpd $1.09 $0.05 For all water used in excess of 172 gpd, +.-861.41 .06 up to 393 gpd Fbr all water used in excess of 393 gpd, 4-.W 1.69 v96 .07 up to 788 Gpd For a'! water used in exeess of 788 upd 5:" -�e3 Multiple Family Residential Accounts: For all water used 1.40 .06 All Water Use Other Than Single Family Residential Accounts and Multiple Family Residential Accounts: For all water used 1.50 .06 The seismic improvement program surcharge is effective on each,water bill through February 28, 2025. OUTSIDE DISTRICT BOUNDARIES Charge per 100 cu. h. will be twice the charge applicable for inside District Boundaries NON-POTABLE WATER Charges for non-potable water will be based on the rates applicable for non-residential customers. DI-WAA s AUTMOBftY-KWLUWN NUMBER lum BY of MANAU M a BUD= Request to Speak Form ( THREE (3) MINUTE LIMM C=vlete this form and place it in the box near the speakers' mstrum before addressing the Board. � (510) -2 ' -Name: � r.J M A 2 i A N a S-7- 0 3 9 9 j E13MuD • 3 S - I ! 'n-1 5T• City: O A is !N �J 4C. (� tam 1peakin$ for a�yseif_or LY3 tc � 4ranK of joN , o CHECK ONE: i wish to speak on /Agenda Run #.,Dzjz.. My Comments will be: general for..WA Amt-• 3 _ 1 wish to speak on the subject of 1 do not wish to speak but leave du se Comments for the Board 2 to Consider: H � , 1 Request to Speak Form ( THREE (3) MINUTE LIMIT) Cwwlete this form and place it in the box near the speakers' m&um before addressing the Board. Nance F2 i L L 4k Ct e--' (S w �iddr+ees /f� ' �l/m, I� 1 am speaking for myself.w (imam of CHECK ONE: I wish to speak on Agenda Item L Date~ My coennwill be: general _for *ail. _ 1 wish to speak on the subject of I do not wish to speak but leve these comments for the Board to consider.