PROPOSAL TO ADJUST CURRENT WATER RATES Goal: Address frequently expressed concerns of citizens  Simplicity  Understandability  Fairness  Liability Risk

SIMPLICITY and UNDERSTANDABILITY EFFECT ON THE SUPPLY CHARGE Current Supply Charge  Calculated as $0.32 X 12 per ccf used = $3.84 per ccf, but using the previous year's May to October months (with no charges for November through April), but paid for over 12 months, but not this year … the following year. Proposed Supply Charge  Calculated each month as $0.22 X 12 per ccf used = $2.64 per ccf, paid right after it's used. Which would you choose?

FIVE PARTS OF THE PROPOSAL  Remove the Supply Charge “Look Back”  Supply Charge Based on 12 months, not 6  Reduce Fixed Meter Fee by Additional 19%  Use Two Tiers for Variable Use Fee  Prop 218 Notice in Fall Proposal affects all 3 Components of the Bill

FROM THE CONSUMER’S PERSPECTIVE BILL COMPONENTS There are 3 Bill Components : Distribution Charge -- by meter size, pays for administrative costs Supply Charge -- pays for infrastructure costs Variable Use Fee -- pays for actual water processed and delivered

FROM THE CONSUMER’S PERSPECTIVE CALCULATING A BILL Take the 3 bill components: Distribution Charge, Supply Charge and Variable Use Fee and add them together. Calculations based on our proposal are as follows: Monthly Bill without tiers: Distribution Charge by meter size, plus $2.64 per ccf Supply Charge, plus $0.86 per ccf Variable Use Fee = Total Water Bill Monthly Bill with proposed tiers: Distribution Charge by meter size, plus $2.64 per ccf Supply Charge, plus $0.50 per ccf 20 = Total Water Bill

PROPOSAL - PART ONE Remove the Supply Charge “Look Back”  Pay As You Go Bill each month for actual water use Pay for your own water use, not for those living at the property the previous May – October  No money carry over  Familiar …  The Way It’s Always Been Done, Pay As You Go

PROPOSAL - PART TWO Supply Charge Based on 12 months, not 6  Water will cost the same regardless of when you use it  Advocated for by Measure P supporters  Advocated for by Davis Enterprise  Provides Resilient/Sustainable Revenue

PROPOSAL - PART THREE Reduce Fixed Distribution Charge by 19%  Moves volume-related meter replacement costs into Supply Charge  Lessens fixed fee burden for all  Helps Equalize the Cost Burden between low and and high volume users

PROPOSAL - PART FOUR Variable Use Fee Tier 1 and its Effect  Current fee = $0.86 per ccf  Proposed Tier 1 fee = $0.50 per ccf  Tier 1 includes 20 ccf per living unit  Reduces Cost of Low Volume Water  Reduction of $0.36 per ccf produces per month savings of $7.20 at 20 ccf

PROPOSAL - PART FOUR Variable Use Fee Tier 2 and its Effect  Proposed Tier 2 Fee = $1.90 per ccf for use greater than 20 ccf per living unit  Incentive to Conserve  Immediate Reward for Efficient Use  Does not penalize large families  2.25 ccf per person (State standard)

PROPOSAL - PART FOUR The graphical examples that follow are for Single Family Residential accounts organized by increasing annual water use.

Each Group below represents 10% of the SFR accounts

Looking at the highest Water use Group

Four Way Picture Progression from Bartle Wells (in yellow) to CBFR (in red) to this proposal (in green)

 We believe this is a better rate structure It is more responsive to consumers It is more equitable It is simpler and easier to understand It is fiscally resilient and sustainable It reduces the community’s fiscal risk It addresses citizens concerns It further addresses fairness It addresses our liability risk WHY DO ANYTHING?

 We believe this is a better rate structure It is more responsive to consumers It is more equitable It is simpler and easier to understand It is fiscally resilient and sustainable It reduces the community’s fiscal risk It addresses citizens concerns It further addresses fairness It addresses our liability risk WHY DO IT NOW?

LIABILITY RISK?