1. Pathways to Lasting Solutions “The Longest Yard” Water Budget Rate Structures & The City of Boulder, Colorado January 25, 2007 © 2006 Malcolm Pirnie, Inc. All Rights Reserved

2. Pathways to Lasting Solutions Today’s Discussion  Rate Structures in General  Water Budget Rate Structures  Water Budgets and the City  Discussion

3. Pathways to Lasting Solutions What is a Rate Structure?  Typically consists of two components  Service charge Fixed charge, Readiness to Serve Recover customer billing and metering costs  Volume charge Unit charge based on amount of water used Variety of volumetric rate designs available The design and organization of billing charges by customer class in order to recover revenue requirements

4. Pathways to Lasting Solutions Uniform Rate

5. Pathways to Lasting Solutions Decreasing Block Rates

6. Pathways to Lasting Solutions Seasonal Rate

7. Pathways to Lasting Solutions Uniform Rate Decreasing Block Rates Increasing Block Rates

8. Pathways to Lasting Solutions Uniform Rate Decreasing Block Rates Water Budget Rates

9. Pathways to Lasting Solutions Flat Rate Declining BlockUniform SeasonalIncreasing Block Budget\ Individualized The Rate Structure Continuum Least Most Conservation

10. Pathways to Lasting Solutions Water Budget Rates  Designed for resource efficiency  Budget individualized for each customer’s indoor usage and outdoor usage  Retains increasing block structure  Volumetric block thresholds dependent on customer’s usage patterns  Indoor allowance  Outdoor allowance

11. Pathways to Lasting Solutions Water Budget Rate Components  Indoor allowance  People per household  Building square footage  Number of bedrooms/bathrooms  Outdoor allowance  Irrigable area  Lot square footage  Weather considerations, evapotranspiration

12. Pathways to Lasting Solutions City of Boulder Water Budget Rates  Drought of 2002 - 2003  Mandatory water restrictions instituted  Goal:  Reduce water use by 25 percent, or 1.19 million gallons between May 2002 and April 2003  Goal met by November 2002 when 1.296 million gallons was conserved

13. Pathways to Lasting Solutions City of Boulder Water Budget Rates  Water restriction prompted Citizen involvement  More flexibility during drought (when and how much)  Preferred to know specific quantity of water needed  More education  City began investigating alternative rate structures in June 2003  Hired consultant to review various structures  Involvement included Citizens Water Resource Advisory Board City Council

14. Pathways to Lasting Solutions City of Boulder Water Budget Rates  Staff, WRAB selected water budget structure from number of alternatives  City Council endorsed water budget rate structure in December 2004

15. Pathways to Lasting Solutions Boulder Water Budget Rate Structure  5-tiered increasing block structure (volumetric)  Rates for each block are the same for each class  Block threshold based on each customer’s monthly budget  Block threshold stated as percent of total monthly budget

16. Pathways to Lasting Solutions Boulder Water Budget Rate Structure  Budget calculation based on customer class  Residential – Indoor allowance + Outdoor allowance  Multifamily – Indoor allowance + Outdoor allowance  Nonresidential – Average Monthly Usage (AMU)  Irrigation – Outdoor allowance based on irrigable area

17. Pathways to Lasting Solutions Boulder Water Budget Rate Structure Rate (per 1,00 gal) Block Size (% of budget) Block 1 $1.95 (3/4 x base rate) 0% - 60% Block 2 $2.60 (the "base rate") 61% - 100% Block 3 $5.20 (2 x Base Rate) 101% - 150% Block 4 $7.80 (3 x Base Rate) 151% - 200% Block 5 $13.00 (5 X Base Rate) Greater than 200%

18. Pathways to Lasting Solutions Boulder Residential Water Budget Rates  Indoor allowance  Single family – 7,000 gallons/month  Multifamily – 4,000 gallons/month/unit  Outdoor allowance  Irrigable area “pervious area” Single family – 3-tiered gallons/sq ft threshold basis –Tier 1: 0 to 5,000 sq ft @ 15 gal/sq ft –Tier 2 : 5,001 to 14,000 sq ft @ 12 gal/sq ft –Tier 3: >14,000 sq ft @ 10 gal/sq ft Multifamily – 15 gallons/sq ft  Allocated on a monthly basis using ET index  ET Index = Evapotranspiration Index

19. Pathways to Lasting Solutions Percentage of Monthly Outdoor Budget Based on evapotranspiration index

20. Pathways to Lasting Solutions Boulder Nonresidential Water Budgets  Commercial/Industrial  Average Monthly Usage (AMU)  Irrigation  Irrigable area “pervious area” – 15 gallons/sq ft  Allocated on a monthly basis using Et index  Et Index = Evapotranspiration Index

21. Pathways to Lasting Solutions Single Family Example  Pervious area = 6,000 sq ft  Indoor Annual Budget: 7,000 gal/month * 12 months = 84,000 gallons  Outdoor Annual Budget: 5,000 sq ft * 15 gallons/sq ft = 75,000 gallons +1,000 sq ft * 12 gallons/sq ft = 12,000 gallons Total Outdoor Allowance87,000 gallons  Total Annual Budget 171,000 gallons

22. Pathways to Lasting Solutions Monthly Water Budget (indoor/outdoor) Gallons

23. Pathways to Lasting Solutions Single Family Example (continued)  July usage = 30,000 gallons  July budget:  7,000 gallons + 87,000 gallons * 20%  July budget = 25,000 gallons  July volume charges for 30,000 gallons usage:  Block 1: 0 to 15,000 gallons:15 Kgal * $1.95 =$29.25  Block 2: 15,000 to 25,000 gal:10 Kgal * $2.60 = $26.00  Block 3: 25,000 to 38,000 gal: 5 Kgal * $5.20 = $26.00 Total July Volume Charges:$81.25

24. Pathways to Lasting Solutions What’s in Store for 2008  Continue to monitor changes in usage patterns  Irrigable area adjustments  Right-of-Way adjustments  Reviewing commercial and industrial budget basis  Average monthly usage  Historical monthly usage  Indoor/outdoor allocations  Continued community involvement

25. Pathways to Lasting Solutions Discussion