HomeMy WebLinkAboutMINUTES - 05211996 - AJ1 :A
AJ. 1
THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY, CALIFORNIA
DATE: May 21, 1996 MATTER OF RECORD
SUBJECT: ADJOURNMENT
The Board of Supervisors adjourned the May 21, 1996, Board meeting
to Tuesday, May 28, 1996 at 2 P.M. , at the East Bay Municipal
Utility District (EBMUD) Administration Center, 375 11th Street,
Oakland, and Wednesday, May 29, 1996, at 6 :30 P.M. , in the Walnut
Creek City Council Chambers, 1666 N. Main Street, Walnut Creek, to
enable Board members to attend said meetings on EBMUD's proposed
budget and water rates.
THIS IS A MATTER FOR RECORD PURPOSES ONLY
NO BOARD ACTION TART
iA or
TW
S EAST BAYp- RECEIVED
E EE
MUNICIPAL UTILITY DISTRICT -DENNISGENERA MDAN IEMER GER
- - MAY 2 0 196
May 15, 1996
,CLERK BOARD OF SUPERVISORS
--CONTRA COSTP+CO �
Dear Colleague:
We have just completed the General Manager's Report and
Recommendations on Rates and Charges. The report describes several
options for the EBMUD Board's consideration. Their decision, scheduled for
June 11, will determine EBMUD rates effective with billing periods beginning
on or after July 1, 1996.
We invite your participation at our upcoming
PUBLIC HEARINGS ON EBMUD FY 97 PROPOSED BUDGET AND RATES
Tuesday, May 28, 1996 Wednesday, May 29, 1996
2:00 pm 6:30 pm
EBMUD Administration Center Walnut Creek City Council
37511th Street, Oakland Chambers
1666 N. Main Street, Walnut Creek
The proposed budget will allow EBMUD to maintain the high quality of water
that customers rely on, improve our aging infrastructure and continue our
aggressive efforts to attain additional water supplies. To meet these goals we
project a need to increase water rates overall by 4.5 percent.
Since some elements of customer bills will not be changed, the projected rate
increase would raise different customer group bills by different amounts.
The increase would translate into a 4.1 percent increase for the District's
average customer who uses 250 gallons of water per day; a 4.0 percent increase
for the typical multi-family customer who uses 1,230 gallons per day; a 4.3
percent increase for the typical commercial customer who uses 1,230 gallons
per day and a 4.4 percent increase for the typical industrial customer who uses
12,300 gallons per day.
375 ELEVENTH STREET. OAKLAND . CA 94607-4240. (570) 287-0701
BOARD OF DIRECTORS JOHN A.COLEMAN . KATY FOULKES . JOHN M.GIOIA
FRANK MELLON. NANCY J.NADEL MARY SELKIRK. KENNETH H.SIMMONS
Rewe/
May 15, 1996
Page Two
The staff is recommending the Board adopt one of four rate structures for
single-family water customers. The recommended alternative is to amend
the current four-tiered structure to include a 4.5 percent increase at each tier.
Under the current rate structure, single-family customers pay $1.09 per unit
(748 gallons) of water for each unit used from 0-7; $1.35 for 8-16 units; $1.65
per unit for 17-30 units and $1.95 for units in excess of 30.
Other alternatives include one that would establish a 3 tiered structure and
two alternatives that are designed to address climatic differences within the
service area. These alternatives would provide more water at third tier rates
during hotter months, from April through September.
EBMUD is committed to providing the highest quality water at the best
possible rates; the proposed rate structure options are designed to make rates
equitable for all our customers.
You may also send your written comments to our Board of Directors at the
address listed below.
For your review, the Rates and Charges section of the General Manager's
Report and Recommendations on Rates and Charges is attached. If you
would like a 'full report, please contact Marie Plumb in the Office of the
Secretary at 287-0404.
I thank you for your attention as well as your interest.
Sincerely,
Dennis M. Diemer
General Manager
DMD:GLC:glc
Encl.
7
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RECOMMENDED REVISIONS TO WATER SYSTEM
RATES AND CHARGES
INTRODUCTION
Water System rates and charges include a service charge, a volume charge (consumption), an
elevation surcharge, a private fire service charge, charges related to the installation of water and
private fire service and other ancillary charges.
Based upon the proposed FY97 budget,most water system rates and charges are recommended
to be increased by 4.5% as described below.
RECOMMENDED REVISIONS TO WATER RATE STRUCTURE
For FY97, we recommend continuing a two part water rate structure consisting of a monthly
service charge and a charge for water consumption.
Monthly Service Charge
It is recommended that the monthly service charge be increased by 4.5% for all meter sizes. For
a 5/8" meter, the service charge would increase from $5.54 to $5.79 for monthly billing, and
from $11.08 to $11.58 for a two month billing. (Schedule A)
Water Volume Rates
With respect to the rate for water consumption(also known as the commodity rate), we propose
to increase the current FY96 rate for multi-family, commercial, and industrial customers by
4.5%. This would increase the multi-family rate from $1.40/unit to $1.46/unit, and all other
customers (excluding single-family residential) from $1.50/unit to $1.57/unit.
For single-family residential customers,we have identified four rate structure options as follows
and-as summarized in Exhibit 1.
1. Recommended Rate Structure
Increase the current four-tier rate structure by 4.5% as described in this report:
Option 1 - Four Tiers
Maximum Current Proposed
Tier Units gallons/day Rate Rate
1 0-7 units 172 $1.09 $1.14
2 8-16 units 393 $1.35 $1.41
3 17-30 units 738 $1.65 $1.72
4 above 30 units +739 $1.95 $2.04
1
2. Alternative Rate Structures
Also for your consideration is a three tier rate option similar to the FY96 staff
recommendation and two four tier seasonal rate structure alternatives that provide more
water in the third tier in the Summer months (April - September) based on the higher
evapotranspiration rate east of the hills. All of these options retain the same
"breakpoints"for the tiers regardless of geographic location.
I
Option 2 - Three Tiers
Maximum
Tier Units gallons/day Cost
1 0-7 units $172.00 $1.14
2 8-16 units $393.00 $1.47
3 above 16 units $394.00 $1.77
Seasonal Option 3 - Four Tiers Seasonal (40 units in Summer)
Maximum Maximum
Tier Winter Units gallons/day Cost Summer Units gallons/day Cost
1 0-7 units 172 $1.14 0-7 units 172 $1.14
2 8-16 units 393 $1.41 8-16 units 393 $1.41
3 17-30 units 738 $1.74 17-40 units 983 $1.74
4 above 30 units +739 i $2.05 above 40 units +984 $2.05
Seasonal Option 4 - Four Tiers Seasonal (50 units in Summer)
Maximum Maximum
Tier Winter Units gaIIons/day Cost Summer Units gallons/day Cost
1 0-7 units 172 $1.14 0-7 units 172 $1.14
2 8-16 units 393 $1.41 8-16 units 393 $1.41
3 17-30 units 738 $1.75 17-50 units 1,229 $1.75
4 above 30 units +739 $2.06 above 50 units +1.230 $2.06
2
AT 1
DISCUSSION
The District's Water Rate Structure Study completed in 1995 had the objective of developing
"equitable water rates that encourage water conservation." Based on this objective,the District
adopted a water rate structure that encourages conservation and is based on the following
principles:
• Cost of service for each customer class based on their demand characteristics
Single family
Multi-family
Other(commercial, industrial.. irrigation, schools, etc.)
• Nogeographic differentiation in rate structures (all customers pay the same rate for water
usage)
• Inverted (increasing) block rates for single family residential customers
• "Revenue neutral" (i.e., projected revenues equal anticipated expenditures)
The current rate structure consists of a monthly service charge that varies with the size of the
water meter($5.54 for a 5/8" meter) and a charge for water consumption. For single-family
residential customers, the current rate structure consists of four tiers as follows:
Current Rate Structure
Maximum
Tier Units gallons/day Cost
1 0-7 units 172 $1.09
2 8-16 units 393 $1.35
3 17-30 units 738 $1.65
4 Above 30 units 739 $1.95
.For a complete discussion on tiered rates, see Exhibit 2.
This rate structure is consistent with the Memorandum of Understanding with the California
Urban Water Conservation Council regarding urban water conservation in California. The
Memorandum was signed by over 200 California water agencies and requires making a good
faith effort to implement conservation pricing structures. The rate structure also reflects a cost of
service concept that allocates costs based on a methodology developed by the American Water
Works Association. The methodology used,referred to as the Base Extra-Capacity Method,
allocates our costs to provide service based on demand characteristics of the system. Costs are
allocated to a variety of customer classes, distinguished by their different demand
characteristics. Each class is further characterized by geographic location (east and west of hills)
to evaluate the cost of service by area. This is based on a cost of service study completed as part
of the 1995 Water Rate Structure Study. See Exhibit 3 for further discussion on cost of service
and how it is applied to water rates.
All the water rate structures described below pertain to the volume charge for water. All of the
options retain the same monthly service charge that was described on page 1.
Recommended Water Rate Structure
Option 1. Retain the current four tier rate structure and increase all four tiers by the same
percentage. This would increase the prices for all tiers by 4.5%without any changes to the
breakpoints between the four tiers. Prices for the four tiers are recommended to be $1.14/unit for
the first tier; $1.41/unit for the second tier; $1.72/unit for the third tier; and $2.04/unit for the
fourth tier. Under this option 33% of the customers east of the hills and 98%west of the hills
would fall within the first three tiers in the summer.
This option would result in uniform increases in our customers bills of 4.5%, regardless of the
level of consumption. Due to the seismic charge not increasing, the average residential water bill
would only increase by 4.1%.
The first tier of the pricing structure, which is equal to the average winter consumption for all
customers. reflects the base costs of providing water service. These base costs approximate costs
that are incurred by the District to provide year-round indoor water service for such activities as
cooking, cleaning and personal hygiene activities which do not vary with the seasons.
Water consumption in the second tier may indicate above average indoor water needs, activities
that require higher water consumption and limited outdoor watering. To account for this, water
is priced close to the system's average cost of water which includes both year-round base
consumption and some of the higher extra-capacity peaking service for outdoor watering.
The third and fourth tiers are recommended to be priced to approximate the extra-capaciq costs
of providing peaking demand in the summer months. This amount would be higher than the base
allocated costs of providing year-round water service because facilities that are used to provide
summer irrigation are typically only used during the summer months and are generally under
utilized during the winter months. See Exhibit 4 for a comparison of the yearly water bill for
EBMUD customers to other water utilities under this proposed rate structure.
Alternative Water Rate Structures
Option 2. Adopt a three tier rate structure. This rate structure would be similar to the one
recommended previously by the 1995 Water Rate Structure Study. The breakpoint between the
first and second tiers would be 172 gallons per day and the breakpoint between the second and
third tiers would be 393 gallons per day. These are the same breakpoints as the first three tiers of
the four tier rate structure. Prices for the three tiers are $1.14/unit for the first tier(the same as
the four-tier rate structure), 51.47/unit for the second tier($0.06/unit greater than the four-tier
rate structure), and $1.77/unit for the third tier ($0.05/unit greater than the,four-tier rate
structure).
4
This option is revenue-neutral and generates the revenues needed to recover the costs of service
for east and west of the hills. The price of the first tier under this option would continue to
reflect the approximate costs to provide year-round indoor water service to our customers. The
second tier, priced at the average of the base and extra-capacity costs, provides our customers
with the means to address their individual needs at an affordable price that reflects the costs to
provide the service. The third tier reflects the approximate cost of the extra-capacity (summer
watering) service that we provide to meet this extra-capacity demand.
Seasonal Options
Alternative water rate Options 3 and 4 (outlined below) are designed to address the issue of
climatic differences between east and west of the hills. This climatic differential results in
differences in the amount of water that is required to sustain plant growth, which is expressed as
the evapotranspiration(ET) rate. Based upon the available weather station data, the ET rate for
areas east of the hills (such as Walnut Creek) is approximately 41 inches per year, for coastal
areas west of the hills (such as Oakland) it is approximatel}' 29 inches per year. To keep the
same landscaped area healthy would require almost 41% more water east of the hills than west of
the hills. This difference is due to the higher ET rate.
Option 3. Adopt Four Tiers With Summer Breakpoint at 40 Units. This option would recognize
that water usage requirements increase in the summer months in both the east and west sides of
the service area. Summer consumption in the drier, warmer east side of the hills requires a
greater volume of water in the summer months due to outdoor water demands. Communities
west of the hills also show greater demand for water in the summer months, although mostly at
lower volumes. To account for the 41% higher ET rate east of the hills, the breakpoint between
the third and fourth tiers during the summer months would be increased to 40 units/month(984
gallons per day) to reflect the higher need for outdoor irrigation.
During the summer months, 80% of the customers east of the hills and 99% of the customers
west of the hills would fall within the first three tiers. To remain revenue neutral, prices for the
third and fourth tiers would have to be increased slightly from Option 1 to account for the lower
consumption at the fourth tier. Under this option, we estimate the increase to be 50.02/unit for
tier 3 and 50.01/unit for tier 4 when compared to Option 1.
This option would be applied during the months of April through September which corresponds
to the period of little or no rainfall. Between the months of October and March, the four tier rate
structure with the breakpoint at 30 units per month between the third and fourth tiers would be
effective, similar to Option 1. Lowering the breakpoint in the winter months would give our
customers an incentive to conserve water in the rainy, cooler season. Prices for the tiers would
be the same throughout the vear.'
5
Option 4. Adopt Four Tiers With Summer Breakpoint at 50 Units. This is similar to Alternative
3 except that the breakpoint between the third and fourth tiers would be set at 50 units per month
(1,230 gallons per day) in the summer months. This option would take into account the variation
in the temperature east of the hills, especially in the Southern area where itis considerably hotter,
resulting in a higher ET rate than the Walnut Creek area. Under this option 90% of the
customers east of the hills and over 99%west of the hills would fall within the first three tiers in
the summer. Prices would have to be increased by $0.03/unit for tier 3 and $0.02/unit for tier 4
from those indicated in Option 1.
Similar to Option 3, this rate structure would be applied during the summer months of April
through September. Between the months of October and March, the four tier rate structure with
the breakpoint at 30 units per month between the third and fourth tiers would be effective. Prices
for the tiers would remain the same throughout the year.
Other Alternatives Evaluated
Evapotranspiration/Goal-Based Rates- The District retained a consultant to analyze the potential
for an evapotranspiration (ET) rate for its single-family residential customers to determine the
extent to which this type of rate would increase the equity of the conservation incentive built into
the present residential rate structure.
The purpose of the report is to provide the Board with an idea of what an ET rate could look like,
hoxv this type of rate would impact customer bills, how much the rate would cost to implement,
and the advantages and disadvantages of implementing an ET rate. The report also includes as
background, information on ET rates in place at other water districts.
The table below describes the six ET rate designs,their estimated cost to implement, on-going
costs to administer, and implementation time frame.
Rate Option Estimated Estimated Estimated Time
Implementation FTE To Cost To to
Cost Administer Administer Implem.
Option 1: 2 Zones;No Seasons;No Lot $200,000 1 $705000 4 months
Sizes
Option 2: 3 Zones;No Seasons No Lot $225,000 1 $70,000 6 months
Sizes
Option 3: 3 Zones; 2 Seasons,No Lot Sizes $675,000 1 $70,000 8 months
Option 4: 3 Zones;No Seasons; 4 Lot Sizes $15500,000 4 $650,000 12 months
Option 5: 3 Zones; 2 Seasons; 4 Lot Sizes $1,800,000 4 $650,000 14 months
OF on 6: 3 Zones; 2 Seasons; 4 Lot Sizes $1,800,000 4 $650,000 14 months
(Alternative Calculation)
* Includes the cost of 5.000 iot size audits, annually.
6
ET options 1, 2 and 3 have about the same impact as the District's seasonal options 3 and 4. The
District's options have the added advantage of no geographic differences in rates which is one of
the principles contained in the current rate structure.
ET options 3, 4 and 5 bring in lot size as a factor and this is where dramatic differences begin to
occur in the price of water each customer pays depending on their climate zone and lot size.
Changes in monthly volume charges vary significantly between customers, with changes
between 15% and 25%being common for the more complex versions of this rate.
Due to the complexity and expense of ET options 3, 4, and 5, and the geographical rate
differences in ET options 1, 2, and 3, should the Board decide to consider an ET rate, staff would
recommend choosing one of the two seasonal options (options 3 and 4) described on page 3 and
4 of this report.
Depending on the option selected,the implementation could take from 4 to 14 months to
complete. This would include the time to perform a study of the ET of the service area, collect
and refine data including lot size data from the counties,reprogram the Customer Information
System, do extensive public outreach and education. In addition, we would expect to have a
significant number of questions from the public during the first year of implementation.
In addition, we have also studied but are not recommending the three rate structure options that
are described below. The rate impacts of these alternatives are summarized in Exhibit 5.
1. Retain four-tier rate structure and increase the prices (not the percentage) of all four tiers
by the same amount- This option would increase the price of each tier by $0.06 per unit
so that an amount of$1.7 million collected from the price increase, along with the
increase in the monthly service charge, will be equal to the amount of the increase in
revenue requirements between FY96 and FY97 that are attributed to single-family
residential customers.
However, this option would result in an uneven percentage increase for consumption
levels ranging from 5.0% for 5 units to 3.3% for 120 units. This structure also would not
recover sufficient revenues to cover costs east of the hills, and would result in west of
hills customers paying more than their cost of service. There appears to be no
justification to raise the rates for each tier by a different percentage,therefore, this
alternative is not recommended.
2. Retain four-tier rate structure but increase the first tier by greater amount to bring it
closer to the average of the base and extra-capacity costs- This option would increase the
price of the first tier from $1.09/unit in FY96 to $1.20/unit in FY97, an increase of 10%.
Because this increase in the price of the.first tier is higher than the proposed 4.5%
increase for FY97, it allows us to set prices that are lower than what they would be for the
other three tiers.
7
AT* 1
This option would result in the first tier price exceeding the base costs of providing water
service to meet year-round base consumption. The increase for a customer who uses 5
units/month would be approximately 7.3%. The increase for a customer who uses 50.
units/month would be about 3.5%. At the present time there appears to be no justification
to raise the first tier by a greater percentage than other tiers,and this option is, therefore,
not recommended.
3. District-wide Flat(Uniform Volume)Rate- Based on costs allocated to east and west of
the hills, we examined the impact of a flat rate ($1.40/unit) for all consumption. The
average cost of service for East of the hills customers is $1.50 per unit, compared to
$1.35 per unit for West of hills customers. Thus, under a single flat rate structure of
$1.40 per unit, West of hills customers would subsidize customers East of hills. This
alternative is not consistent with the Water Rate Structure Study principles and is not
recommended.
RECOMMENDED REVISIONS TO OTHER RATES AND CHARGES
Elevation Surcharge
It is recommended that the Elevation Surcharge be increased by 4.5% for each of the two
elevated zones due to increases in associated operations and maintenance costs. The rate for the
lower zone (Elevation Designators 2-5) would increase from $0.21 per Ccf to $0.22 per Ccf. The
higher elevation zone (Elevation Designators 6 and greater) is recommended to increase from
$0.46 to $0.48 per Ccf. (Schedule A)
Seismic Improvement Program Surcharge
iizre are no new proposed rate increases for the Seismic Improvement Program (SIP) surcharge.
The Report and Recommendation of the General Manager dated February 23, 1996
recommending modification of the water rates to finance the SIP was adopted by the Board on
March 12, 1996. The new SIP charges became effective May 1, 1996 and should be sufficient to
cover the cost of the program for FY97.
Service Installation Charges
We recommend that the existing service installation charges be increased by 1.5%to reflect a
cost-of-living adjustment to labor for these services based on the Consumer Price Index for
FY97. (Materials are paid for by the applicant based on actual cost.)
Fire Service Rates
At the March 19. 1996 meeting of the Finance Committee, staff was asked to consider whether to
reduce private fire service charges for single family residential customers with fire service meters
greater than 4" diameter, and to describe the impact of implementing that reduction. Customers
with fire service meters greater than 4" in diameter would pay the current charge for a 4" meter.
8
AI
As of April 1996, there were four single family residential customers who would benefit from
this reduction which would reduce meter revenues by $4,000 annually. In order to recover the
revenue foregone by implementing this change, meter rates would rise very slightly. For small
meter sizes,there would be no increase because the required increase would be less than 1/2 cent
per month. A table of all meter sizes, and additional rates required to cover the cost of
implementing the change, is shown below:
Current Additional Current Additional
Meter size price/month price/month Meter size price/month price/month
5/8" $5.54 $0.00 6" $98.64 $0.03
1" 8.44 0.00 8" 155.64 .04
1-1/2" 13.14 0.00 10" 222.14 .06
2" 18.84 0.00 12" 307.64 .08
3" 32.14 0.01 14" 393.14 .10
4" 51.14 0.01 16" 497.64 .13
18" 602.14 .16
A schedule of the changes to the rates and charges that would go into effect if this change is
implemented is shown on Exhibit 6. As shown in the table above, the overall impact on meter
rates is minimal. However, we recommend no change from the current charges which are based
on the cost of service principles of the Water Rate Structure Study.
Account Establishment Charge
At the March 19, 1996 meeting of the Finance Committee, staff presented the pros and cons of
alternatives for the account establishment fee that would reduce the burden of the $25 fee on
landlords each time they have a change in tenants. In accordance with the Finance Committee
instructions, the recommendations are as follows:
• Develop an automated landlord sign-on service and not collect the Account
Establishment Fee (AEF) for those landlords who sign on and sign an Application for
Intervening Water Service. Charge a one-time processing fee of$10.00 to defray the cost
of setting up the accounts in the Customer Information System
• Reduce the amount of the AEF for landlords who do not sign on for the automated
service from $25 to $10 per water service change
The recommended program and alternatives are presented here as Exhibit 7.
9
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• Exhibit 2
Tiered Rates
A tiered rate structure consists of prices for each tier and breakpoints between the tiers such that
the overall amount of revenues generated by these prices, when applied to our customer usage
pattern, will equal the projected revenue requirements. Since the District does not collect
revenues that are in excess of its costs, prices for some tiers will be lower and prices for certain
other tiers will be higher than the system average cost to provide service. An inverted block
tiered rate structure provides the ability to reflect the costs of providing base and peaking services
to our customers.
The District uses the base-extra capacity cost allocation method to allocate costs. The base-extra
capacity method is recommended by the American Water Works Association (AWWA) and is
generally accepted throughout North America. This method assigns costs to base service that
reflects year-round demand, and extra-capacity service which reflects peaking demand.
Base service, which to single-family residential customers would represent year-round indoor
water needs, generally receives a lower cost allocation because of higher plant utilization.
Peaking service represents summer watering demand and generally receives a higher allocation of
costs than base service due to lower plant utilization.
The first tier of our rate structure reflects the lower allocated base cost and we have set the
breakpoint of the first tier to be equal to the average winter consumption for all customers (7
units or 172 gpd). The table on the next page shows the components of the breakpoints of the
current four tier rate structure and the rationale behind the choice of each of these breakpoints.
We have also set the price of the first tier to reflect the base cost ($1.14/unit) and to provide
water at cost to meet essential needs for everyone within the District. Prices for the top three
tiers are set such that they allocate the costs related to providing peaking services. Prices for the
second to fourth tiers are set progressively higher to provide increasing conservation incentives to
our customers so that customers who are impacted by the fourth tier are provided with a-strong
incentive to conserve.
_The second tier is priced so that it reflects the needs of customers whose usage may exceed the
system average indoor usage. The customer may have a higher need for water for a number of
reasons.including family size, medical reasons, limited outdoor watering, or simply personal
preferences. The second tier, priced at or near the system average cost of water ($1.41/unit), will
provide such users with an amount of water that recognizes their additional needs.
The third tier sends our customers a price signal that reflects the peaking requirements that they
impose on the system.
AT#
Exhibit 2
(continued)
The choice of a breakpoint of 30 units a month or 738 gallons per day represents the average
summer consumption in our hotter east of hills area. Assuming an indoor usage requirement of
about 7 units per month, 30 units represent about 23 units a month or 566 gallons per day for
,utdoor watering without going into the fourth tier.
The fourth tier for usage above 30 units a month or 738 gallons per day reflects the greater
peaking requirements that customers impose on the system.
SINGLE-FAMILY RESIDENTIAL RATE STRUCTURE COMPONENTS
Tiered structure with inclining blocks:
Breakpoints: 7 units (172 gpd) - average winter consumption for all
customers (equal to year-round indoor
consumption)
16 units (393 gpd) - average monthly consumption for East of
Hills customers
30 units (738 gpd) - average consumption in summer months
for East of Hills customers
30 +units (738 gpd)- peak demand in summer months
Ail
Exhibit 3
Cost of Service
The recommended rate structure for FY97 is based on a cost of service concept such that
projected revenues from each customer class is equal to the allocated costs of providing the
service for that class of customer. Exhibit 3a shows the projected number of customers,
estimated consumption and revenue requirements in FY97 for each class of customer. As shown
in the table, single-family residential customers will use about 48% of the total projected
consumption and will generate about 51% of the total revenues derived from rates. The table.also
shows that the class of multi-family and commercial/industrial/other customers will use about 18%
and 34%, respectively, of the total water consumption and will generate about 16% and 33% of
the total revenue derived from rates.
Water rates for each class of customers above are derived from cost analyses and cost allocations
that were completed as part of the 1995 Water Rate Structure Study. Costs are allocated to
reflect District operations to meet each class of customer's base consumption. In addition to base
costs, the system also incurs costs needed to meet system peaking demands. These costs are
allocated to each class of customer in proportion to their relative contribution to the system's
peak(s). For example, industrial customers have relatively constant year-round demand for water
when compared to irrigation customers who exhibit very high peaking demand during the summer
months with little or no usage the rest of the year. Likewise, residential customers have a fairly
stable base demand for indoor use and high peaking demand in the summer due to outdoor
watering.
Usage on the east side of the service territory is higher during the warmer summer months. An
indicator of the higher usage in the summer months for these customers can be made by
comparing consumption data. An average customer who resides east of the hills uses-about 7
units in the winter months or 172 gallons per day, which most likely corresponds to indoor water
needs. In the summer months, the average customer uses about 25 to 30 units of water per month.
(A unit of water is equal to 748 gallons or 24.6 gallons per day and 7 units per month corresponds
to 172 gallons per day.) The ratio between summer and winter usage gives an indication of the
relative peaking requirements of the area and the added facilities that are needed to provide the
service.
Exhibit 3b also shows a breakdown of the projected revenues and consumption for our single-
family residential customers. As an extension of the cost of service concept that is applied to
separate customer classes, we also have made an effort to identify and allocate the costs that are
needed to serve customers based on east and west of the hills. This differentiation in the cost
structure within a class of customers was made to identify any meaningful cost differences
between the two areas that we serve. Peaking demands are approximately 16% higher east of the
hills than they are west of the hills, therefore a proportionally larger amount of the peaking costs
are allocated to those customers located on the east side of the service territory. This results in
east of the hills residential customers volume charges being approximately 11% higher than their
consumption (360/c versus 40%).
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• Exhibit 4
COMPARATIVE RESIDENTIAL WATER CHARGES
Annual.Charges for 10 CCF/Mo - May 1996
Contra Costa $418
Marin
$350
Los Altos
$260
EBMUD proposed 7777777 235
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San Jose : $230
Livermore $227
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EBMUD current 1 "'226
Palo Alto $222
Los Angeles $196
Hayward 192
Alameda Co $191
San Francisco $179
North Marin $161
$0 $100 $200 $300 $400 $500
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FIRE SERVICE OPTION
SCHEDULE OF RATES AND CHARGES TO CUSTOMERS Exhibit 6
46/3 OF THE EAST BAY MUNICIPAL UTILITY DISTRICT EFFECTIVE
EBMUD -�
SCHEDULE A
RATE SCHEDULE FOR WATER SERVICE
The following rates apply to water service received inside and outside District boundaries
unless otherwise indicated.
A. ONE MONTH BILLING
Bills for all metered services shall consist of:
FIRST - A SERVICE CHARGE and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE
based on the size of a standard meter:
SERVICE SEISMIC
CHARGE IMPROVEMENT
SIZE AMOUNT SURCHARGE
5/8 AND 3/4 inch meters . . . $ 5.54 5.79 $ .80
1 inch meter . . . . . . . . 8.44 8.82 2.00
1-1/2 inch meter . . . . . . l3-44 13.73 4.00
2 inch meter . . . . . . . . -18.84 19.69 6.40
3 inch meter . . . . . . . . 32.14 33.60 12.00
4 inch meter . . . . . . . . 51 A 4 53.45 20.00
6 inch meter . . . . . . . . 984 103.11 40.00
8 inch meter . . . . . . . . 155.64 162.68 64.00
10 inch meter . . . . . . . . 222.14 232.20 92.00
12 inch meter . . . . . . . . 39::64 321.56 128.00
14 inch meter . . . . . . . . 993:-14 410.93 164.00
16 inch meter . . . . . . . . 4964 520.16 208.00
18 inch meter . . . . . . . . 692-9-4 629.40 252.00
The service charge and seismic improvement program surcharge for a special type of
meter or for a battery of meters installed on one service in lieu of one meter will be
based on the size of a single standard meter of equivalent capacity as determined by the
District.
The seismic improvement program surcharge is effective on each potable water bill
through February 28, 2025. The seismic improvement program surcharge shall not be
applied to nonpotable water service.
D1-60B.A )
U
AUTHORITY-RESOLUTION NUMBER 92981 96 f]„T A B E W q Trn\
ISSUED BY FINANCE DEPARTMENT
FIRE SERVICE OPTION
SCHEDULE OF RATES AND CHARGES TO CUSTOMERS AT.
OF THE EAST BAY MUNICIPAL UTILITY DISTRICT EFFECTIVE
EBMIJD 95fAN98
SCHEDULE A
RATE SCHEDULE FOR WATER SERVICE
(Continued)
B. TWO MONTH BILLING
Bills for all metered services shall consist of:
FIRST - A SERVICE CHARGE and A SEISMIC IMPROVEMENT PROGRAM SURCHARGE
based on the size of a standard meter:
SERVICE SEISMIC
CHARGE IMPROVEMENT
SIZE AMOUNT SURCHARGE
5/8 AND 3/4 inch meters . . . $ i x-:98 11.58 $ 1.60
1 inch meter . . . . . . . . 1-6.88 17.64 4.00
1-1/2 inch meter . . . . . . 26.28 27.46 8.00
2 inch meter . . . . . . . . 37-68 39.38 12.80
3 inch meter . . . . . . . . 64.28 67.20 24.00
4 inch meter . . . . . . . . 19:2.28 106.90 40.00
6 inch meter . . . . . . . . 498 206.22 80.00
8 inch meter . . . . . . . . 344.8 325.36 128.00
10 inch meter . . . . . . . . 444- 8 464.40 184.00
12 inch meter . . . . . . . . 616.28 643.12 256.00
14 inch meter . . . . . . . . X86.28 821.86 328.00
16 inch meter . . . . . . . . 995.28 1,040.32 416.00
18 inch meter . . . . . . . . . 1,294-=0 1,258.80 504.00
The service charge and seismic improvement program surcharge for a special type of
meter or for a battery of meters installed on one service in lieu of one meter will be
based on the size of a single standard meter of equivalent capacity as determined by the
District.
The seismic improvement program surcharge is effective on each potable water bill
through February 28, 2025. The seismic improvement program surcharge shall not be
applied to nonpotable water service.
m
D 1-60B.A
cfkuod 9b, FINANCE DEPARTMENT
AUTHORITY-RESOLUTION NUMBER ISSUED BY
FIRE SERVICE OPTION
SCHEDULE OF RATES AND CHARGES TO CUSTOMERS PAGE NUMBER �� ,
46/3 OF THE EAST BAY MUNICIPAL UTILITY DISTRICT EFFECTIVE
EBMUD 95fflqi96
SCHEDULE A
RATE SCHEDULE FOR WATER SERVICE
(Continued)
C. PRIVATE FIRE SERVICES
Effective July 1, 1996, the rates for Private Fire Services are the same as those shown
in Schedule A, Sections A & B.
There is an exception for Private Fire Services, for Single Family Residential Customers,
for meter sizes 6" or larger. The rate for these services is the same as the rate for the 4"
meter shown in Schedule A, Sections A and B.
SECOND - A CHARGE FOR WATER DELIVERED based on two month meter readings
for all water delivered per 100 cu. ft.:
There shall be no charge for water used through such services extinguishing
accidental fires, but any water lost through leakage or used in violation of the
District's Regulations shall be paid for at double the rate for general use.
D. ELEVATION SURCHARGE
AMOUNT PER
Elevation Designator 100 CU. FT.
0 and 1 $.--
2 through 5 -.2+ .22
6 and greater .46 .48
Elevation surcharge is determined by the pressure zone in which the service
connection is located. Pressure zones are identified by designations which-
include
hichinclude an elevation designator.
n
D1-60B.A
v
FINANCE DEPARTMENT
AUTHORITY-RESOLUTION NUMBER ISSUED BY
t
Exhibit 7
ACCOUNT ESTABLISHMENT FEES
RECOMMENDATIONS AND ALTERNATIVES
Recommended Program
• Develop an automated landlord sign-on service and not collect the Account Establishment
Fee (AEF) for those landlords who sign on and sign an Application for Intervening Water
Service. Charge a one-time processing fee of$10.00 to defray the cost of setting up the
accounts in the Customer Information System (Schedule Q.
• Reduce the amount of the AEF for landlords who do not sign on for the automated service
from $25 to $10 per water service change (Schedule B).
• Adopt the program with an effective date of October 1. The programming for the
automated landlord program, if adopted, is estimated for completion on October 1.
Discussion
Landlords Who Enter the Pro ram
An automated system will eliminate most of the costs of taking intervening on-orders, particularly
the field stop to read the meter. It would also eliminate most of the customer service
representative's time to take credit information, etc. The computer cost is estimated at $0.00
since the per second cost for the computer time is minuscule. Staff time would be required to
process applications and enter them into the system. This cost could be defrayed by a one-time
processing fee for each Intervening Water Service Agreement. We recommend $10.00.
We estimate that no more than 1,000 of the 6,300 annual on-orders taken from landlords would
be affected by this service, and lost revenue is estimated at $25,000 annually.
Landlords Who Do Not Enter the Program
Currently, when landlords call to put intervening service in their names, the District makes a field
stop to read the meter. If the field stop were eliminated because the meter reading is estimated
based on the reading for the prior occupant's off-order and the customer service representative
takes no credit information, the cost to process the order is reduced. This would justify reduction
of the charge from $25 to $10. This will result in a reduction in revenues estimated at $79,500
annually.
Exhibit 7
(continued)
Alternatives
Establish AEF of$5.00 for each order processed by the automated system to recover
developmental cost: In addition to the $10.00 processing fee for the Intervening Water Service
Agreement, recover the developmental cost by charging an AEF of$5.00 for each order
processed. Based on an estimated 1,000 orders per year by participating landlords, this cost
would be recovered in five years, at which time this fee could be eliminated. Other utilities with a
similar service did not pass on the developmental cost to the landlords.
Waive the AEF in its entirety for landlords: Eliminating the fee entirely for landlords would be
inconsistent with the District's current philosophy that users of a service should pay the costs for
that service. This alternative can be implemented without any changes to the Customer
Information System.
Reduce the amount of the AEF for all customers with prior service within the pasteaY r and who
maintained a _good payment history(no overdue accounts : A reduced fee would subsidize the
service for this category of customer because the effort required to process this order is not
significantly different from that of a new customer. (e.g., the meter still must be read and
employment data must be updated). It would also require additional programming at a cost of
$12,000 and take approximately four weeks to implement. Approximately 15,000 orders a year
would be affected. Net revenue lost would be approximately $225,000 annually.