Las Gallinas Valley Sanitary District Sewer Rate Methodology Study March 6, 2014 Presented by Tom Gould, Vice President HDR Engineering, Inc.
Overview of the Presentation • Review the District’s study of their sewer rate structure – Overview of the general approach used – Summary of the technical review – Key Board policy direction – Summary of the results 2
Key Steps to the Study 1. Review the District’s existing rate structure 2. Determine (prioritize) the Board’s rate design goals and objectives 3. Conduct a survey of other California and Bay- area rate design practices 4. Review of conceptual rate structures 5. Review the District’s customer data/billing information 6. Develop rate design options (alternatives) 7. Review the key (needed) Board policy decisions 3
1. Overview of the District’s Current Rates • Rate = $647/unit/year Classification of Use Sewer Service Units (1) Residential Single ‐ Family Dwelling 1.0 per living unit Apartment house, condominium, or 1.0 per living unit other multi ‐ family dwelling Mobile home park or trailer court 1.0 per mobile home pad and 1.0 per tailer space 1.0 for up to 2 rooms used for renting, plus 0.25 for Rooming house each additional room used for renting. Motel Unit with Kitchen 1.0 per living unit Motel Unit without Kitchen 0.5 per living unit (2) Schools Public or private schools without 0.01 per pupil, faculty member and employee; pupil showers or cafeteria facilities count based upon average daily attendance Public or private schools with showers 0.02 per pupil, faculty member and employee; pupil or cafeteria facilities count based upon average daily attendance The number of pupils shall be determined by the average daily attendance over the school year immediately preceeding the annual determination of sewer service charges . . . The number of faculty . members and school employees shall be that number employeed at the end of such school year. 4
1. Overview of the District’s Current Rates (continued) Classification of Use Sewer Service Units (3) Other Than Above (a) Domestic ‐ strength users; commercial, office buildings, retail, churches, halls, public agencies, laundromats, service 1.0 per average monthly residential water consumption stations, medical offices, barber and times strength factor of 1.0 beauty shops, car washes, convalescent hospitals, hospitals, and other domestic strength discharges. 1.0 per average monthly residential water consumption (b) High strength users: times strength factor shown below: Restaurants/Cafes 2.6 Bakeries 2.6 Mortuaries 2.6 Hotel with restaurant 2.0 Markets with disposal 2.6 Mixed uses (high & domestic strength) 2.0 Industry As determined by formula Other High ‐ Strength As determined by formula c) Other users: For users for whom the above methods do not equitably apply, the assignment of sewer service units shall be based upon available information reasonably applied by the District. . 5
2. Prioritization of the District’s Rate Design Goals and Objectives* Board Prioritization [1] Rank District Management Prioritization Revenue Stability and Predictability 1 Revenue Stability and Predictability Fair Allocation of Costs to Attain Equity 2 Easy to Understand and Administer Stability and Predictability of Bills 3 Fair Allocation of Costs to Attain Equity Simple and Easy to Understand 4 Freedom from Controversy as to Interpretation of the Rates Avoidance of Undue Discrimination 5 Predictability of the customer bills from year to year [1] – The first two rate design goals and objectives for the Board were a tie for 1 st . [*] – Based upon the James C. Bonbright’s Attributes of a Sound Rate Structure 6
3. Survey of Other California Wastewater Billing Practices and Rate Structures • Reviewed the State Water Resources Control Board (State Water Board) rate survey – FY 2012/13 Wastewater User Charge User Survey – Surveyed 759 agencies with 422 utility responses • Review undertaken – Statewide – Bay-Area 7
3. Frequency of Billing and Rate Structure (State ‐ Wide and Bay ‐ Area) Frequency of Billing and Rate Structure Used 160 #2 Resid. 140 Annual & Flat Annual & Volume Based 120 Bi ‐ Monthly & Flat 100 State ‐ Wide Bi ‐ Monthly & Volume ‐ Based 80 #1 Resid. Monthly & Flat 60 #1 Comm. Monthly & Volume Based 40 Unknown 20 0 Residential Multi ‐ Family Commercial Bay Area Frequency of Billing and Rate Structure Used 30 #1 Resid. Annual & Flat 25 #1 Comm. Annual & Volume Based 20 Bi ‐ Monthly & Flat Bay ‐ Area Bi ‐ Monthly & Volume ‐ Based 15 Monthly & Flat 10 Monthly & Volume Based Unknown 5 . . 0 . . . Residential Multi ‐ Family Commercial 8
3.Other Surveyed Information • Size of the utility does not appear to correlate to the bill frequency or the rate structure utilized – Bill frequency and rate structure appear to be more driven by access to the necessary data and ease/cost of administration • HDR conducted a more detailed review of local utilities – District’s frequency and structure is similar to others – Most use a flat residential rate – Range of treatment in the SFR/MFR rate relationship – Strength relationship are typical of other utilities 9
4. Review of Conceptual Rate Structures • Basic Terminology – Fixed costs and fixed charges – Variable cost and variable/volumetric charges • Basis for volumetric charges • Review of the District’s Current Fixed/Variable Costs – HDR reviewed the District’s budget and determined 5% of the costs were variable costs • There appears to be a limited cost-basis for a significant portion of the District’s rates to be billed on variable or volumetric basis 10
4.Basis for Volumetric Billing • Typically utilize metered water consumption • Measure an average winter water period – Intended to remove “outdoor” irrigation use • District uses mid-December thru mid- February for their time period Sewer Billing Using • Commercial is an average of Average Winter Water Use 20 winter/summer 18 16 • HDR found it challenging and Consumption Basis 14 for Sewer Billings 12 Water Use time consuming to work with 10 8 the individual customer data 6 4 – Not easy to cross-reference 2 0 data and accounts J A S O N D J F M A M J – There are significant administrative issues associated with movement to a volumetric rate 11
5. Profile of Residential/MF Usage Patterns • Reviewed 2011 and 2012 residential and multi-family individual customer data • Patterns between the two years were fairly similar – 2011 MF ranged from 76% to 86% of SFR – Industry literature: 72% - 93% • Vast majority of residential 2012 Residential Average Winter Use customers use 10 CCF (7,500 Average Monthly Winter Water Use Cumulative % 1,200 100.0% gallons) or less per month 90.0% 1,000 80.0% – Data included some very high 70.0% # of Customers 800 residential use 60.0% 600 50.0% – Original data from the water 40.0% 400 30.0% utility was not corrected for 20.0% 200 10.0% customers with leaks 0 0.0% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25+ CCF/Month 12
6. Development of Rate Design Options • Board reviewed multiple rate structure options as a part of this study. Three key Board rate design policy issues 1. Rate Structure - Board policy direction – maintain existing fixed rate structure 2. Rate Relationships - Adjust the rate relationship between residential and multi-family (i.e. multi-family is set at xx% of a single-family residential 3. Definition of a Sewer Unit - Adjust or revise the definition of a sewer unit to 8 CCF/month to reflect a SFR customer and gain consistency across all users • Specifically impacts commercial and the calculation of billing units 13
6. Development of Rate Design Options (continued) • Board’s Review of the Options – Reviewed numerous rate design options • Fixed and volumetric rates • Range of rate relationships between single-family and multi-family (with and without relationship adjustments) • Definition of an equivalent residential unit (ERU) – Received public comment and feedback during Board work sessions – Conducted a detailed review of the multi-unit customers (customer definition/migration) – Requested the development of additional rate design options 14
Recommend
More recommend
