Body
Department of Utilities
Reference: 2015 Proposed Utility Rates
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Prepared By: Curtis Bauers, P.E., Director of Utilities
Sarah Borgers, P.E., Assistant Director of Utilities
Date Prepared: November 10, 2014
PURPOSE
To modify the 2014 Utilities rates based on Willdan Financial Services cost-of-service analysis and rate study analysis in conjunction with the Utilities Cash Flow Model previously presented and direction provided by Council following the Study Session on 2015 Proposed Utility Rates.
BACKGROUND
The Utilities Department has completed an intensive cost of service and rate study analysis through consultation with Willdan Financial Services. The analysis included a thorough review of current and future operational and capital expenditures required to operate City utilities in a conscientious and sustainable manner.
The result of this study showed the need for a 2015 revenue increase of 8% in the water fund, 4% in the wastewater fund, and by $0.64 per customer bill for stormwater fees over the average revenues generated from 2011-2013. Services are also required by statute to be based on "cost of service". This means that each customer class (such as residential, commercial, or irrigation users) should be charged fairly and equitably based on how much it costs to provide those services.
The majority of Residential water customers will see a slight decrease in their bills, and commercial customer rates will not be changed substantially either. Multi-family customers will see increases between 6-9% depending on their usage. Irrigation-only and bulk rate users that will see the biggest change in their bills, based on the need to more closely reflect cost-of-service in their rates. This may also help in water conservation management since irrigation is by far the biggest impact on the water system, pushing summertime consumption up mo...
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