SEWER SERVICE FEE RATE STRUCTURE ALTERNATIVE March 26, 2012 WORKSHOP SEWER SERVICE FEE RATE STRUCTURE ALTERNATIVE

The Wastewater System 59 miles of pipe 2 pump stations Large portion: 50+ years old Serves 5,170 homes and businesses WW conveyed from private laterals to sewer mains to treatment plant

Why Was a 2011 Rate Increase Necessary? Protect Public Health & Environment Higher Operating Costs to Meet Tighter Environmental Standards Renew Aging Infrastructure Higher SASM Treatment Fees

Revenue Requirement Projections Projected Costs 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 City Operating Costs $ 728,000 $ 746,000 $ 763,000 $ 781,000 $ 799,000 $ 818,000 SASM Treatment Costs $ 1,459,000 $ 1,675,000 $ 1,843,000 $ 2,027,000 $ 2,074,000 $ 2,122,000 EPA Compliance Costs $ - $ 188,000 $ 192,000 $ 185,000 $ 179,000 $ 41,000 Capital Improvements $ 541,000 $ 1,180,000 $ 1,510,000 $ 1,310,000 $ 1,310,000 $ 1,380,000 Reserves $ 250,000 $ 250,000 $ 250,000 Total $ 2,728,000 $ 4,039,000 $ 4,558,000 $ 4,553,000 $ 4,612,000 $ 4,611,000

Capital Improvements Sewer rehabilitation construction Largest increase is to accelerate CIP $2,500,000 per year recommended

CIP Work Plan Examples

Current Rate Structure Ordinance 1250 increased fees by 102% for 2011/12 and set annual rates through 2016/17 Single family dwelling units: $600 for 2011/12 2nd Dwelling Units charged 0.67 of single-family dwelling unit Fee= 0.67 x 600 = $402

Single Family Residential Customer Adopted Sewer Charges Current Fixed-Rate Basis Fiscal Year: Prior 6 Years 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Residential Sewer Service Charge per dwelling unit $297 $600 $677 $685 Percent Increase   None 102% 13% 0% 1%

Alternative Fee Structure Study Council adopted rates and directed immediate study of flow-based residential rates Alternative rates structure objectives Encourage conservation Provide greatest equity for customers Achieve simplicity and transparency Improve predictability regarding: Costs to customers, and; Revenues to City

Proposed Flow-Based Rates Charge per hundred cubic feet of water use Marin Municipal Water District meter readings used because sewer flows are not metered Single and multi family – based on winter water use Commercial – winter/summer average Minimum charge for all customers

Single Family FY12-13 Flow-Based Bills

Proposed Rate Summary

Single Family Residential Bill Impacts

Commercial FY 11-12 Bill Impacts

Multi Family Residential Bill Impacts

Current Provision for Financial Hardship Based on economic need eligibility for PG&E CARE program Provides a fee credit of 25%

Next Steps Finalize model Present recommendation to Council at April 2, 2012 meeting Council authorizes initiating Prop 218 public-notice process Public hearing to adopt rate increase June 18, 2012 Charges placed on tax rolls August 6, 2012

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