Implementing Budget-Based Rates

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Presentation transcript:

Implementing Budget-Based Rates ACWA 2016 SPRING CONFERENCE & EXHIBITION May 5, 2016 Monterey, CA Implementing Budget-Based Rates Amidst a Drought and Prop. 218 Challenge Carlos G. Reyes, P.E. Director of Resource Conservation and Public Outreach

LVMWD Service Area

LVMWD Services Provide reliable and high quality- Potable water service Wastewater treatment Recycled water service Biosolids composting

3x/week

2x/week 1x/week

Guiding Principles for Rate Setting Rate structure must be fair and equitable. Provide revenue and rate stability for LVMWD. Price structure set to drive efficiency ethic. Minimize impacts to efficient customers. Comply with Proposition 218.

A Transparent Process Public meetings Public workshops Outreach to cities, HOAs & community groups Direct mail to all customers Customer questionnaire Public Hearing on October 26, 2015

Past Rate Structure - Tiered Rates Cost Tier 2 Tier 1 Use

Water Budgets Cost Use Excessive Inefficient Efficient Outdoor Use Over 150% of Water Budget Water Budget Excessive 101% to 150% Of Water Budget Inefficient Cost Efficient Outdoor Use Efficient Indoor Use Use

Potable Water Charges “Readiness to serve” charge increased to recover more fixed costs. Commodity charges reflect costs of importing, treating and delivering water. Elevation charges reflect increased cost of pumping to higher locations. Higher tiers reflect costs created by those users.

Recycled Water Water is water! Water budget structure to promote efficient use. “Readiness to serve” charge added to enhance revenue stability.

Sanitation Rates A “per-person” rate structure adopted for all residential customers. Maximum charge is for a household of 6 people. Some households will see a decrease. Sanitation rates assume a “reasonable” NPDES permit for Tapia Water Reclamation Facility.

Website Tiered Rates vs. Budget-Based Rates Comparison

Wasteful Usage Penalties Resolution No. 2468 established an administrative penalty structure for “wasteful” use that is more than 200% of a customer’s water budget. 1st offense – written warning. 2nd offense – penalty of $2.50 per unit of water. 3rd+ offense(s) – penalty of $5.00 per unit of water.

Website Water Budget Calculator

Implementation September 2, 2015: Prop. 218 notice released; five letters received. October 26, 2015: Approved rates. November 25, 2015: Adopted Policy for Water Budget Adjustments. January 12, 2016: Lifted irrigation restrictions. February 2016: Billing under new rates began.

Next Steps Refine customer data. Implement billing system improvements. Develop focused outreach program for “inefficient” customers. Continue customer education. Analyze revenues vs. projections during rate study. Make program adjustments as necessary.

Questions…..