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

2. 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

3. 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

4. Revenue Requirement Projections
Projected Costs
City Operating Costs
$ ,000
$ ,000
$ ,000
$ ,000
$ ,000
$ ,000
SASM Treatment Costs
$ 1,459,000
$ ,675,000
$ ,843,000
$ ,027,000
$ 2,074,000
$ 2,122,000
EPA Compliance Costs $
$ ,000
$ ,000
$ ,000
$ ,000
$ ,000
Capital Improvements
$ ,000
$ ,180,000
$ ,510,000
$ ,310,000
$ 1,310,000
$ 1,380,000
Reserves
$ ,000
$ ,000
$ ,000
Total
$ 2,728,000
$ ,039,000
$ 4,558,000
$ 4,553,000
$ 4,612,000
$ 4,611,000

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

7. CIP Work Plan Examples

8. 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

9. Single Family Residential Customer
Adopted Sewer Charges
Current Fixed-Rate Basis
Fiscal Year:
Prior 6 Years
Residential Sewer Service Charge per dwelling unit
$297
$600
$677
$685
Percent Increase
None
102%
13% 0% 1%

10. 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

11. 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

12. Single Family FY12-13 Flow-Based Bills

13. Proposed Rate Summary

14. Single Family Residential Bill Impacts

15. Commercial FY 11-12 Bill Impacts

16. Multi Family Residential Bill Impacts

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

18. 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

19. Questions & Answers