1. Elk Grove Water District Water Rate Update and Connection Fees Habib Isaac – Principal April 10, 2013

2. 2013 Water Rate Study

3. Elk Grove Water District - Utility Rate Project | 3 Water Rate Study Drivers First Revenue adjustment pushed back to January 2014 –Achieved based on updated reserve balances –Revenue adjustments scheduled for each January, if necessary Revenue recovered - 65% fixed / 35% variable FY 2012-13 consumption is baseline year for analysis –Projections based on average usage over last two calendar years –Meter conversions accounted for in projections –Consumption for metered accounts increases in first 2 years

4. Elk Grove Water District - Utility Rate Project | 4 Between July 2012 – December 2012 –Used 2 year average derived from 2011 and 2012 –Already accounts for non-metered conversions Between January 2013 – June 2013 –Average based on 2011 and 2012 existing metered accounts –Non-metered accounts usage determined as follows: Expected usage derived on a per month basis using 2011 and 2012 data Conversion rate equals 125 meters per month c FY 2012-13 Consumption Projection

5. Elk Grove Water District - Utility Rate Project | 5 Variable Rates Schedule for January 2014 Residential Accounts Tier 1 = $1.39 Tier 2 = $2.76 Non-Residential Accounts $1.57 Irrigation Accounts $1.70 Existing Structure Tier 1 = $1.46 Tier 2 = $1.80

6. Elk Grove Water District - Utility Rate Project | 6 Fixed Rates Schedule for January 2014

7. Elk Grove Water District - Utility Rate Project | 7 Customer Impact – January 2014 1.86 1.02 6.36

8. Elk Grove Water District - Utility Rate Project | 8 Five Year Rate Schedule

9. Elk Grove Water District - Utility Rate Project | 9 Non-Metered; 5-Year Rate Schedule Non-metered accounts are expected to only be charged 2014 rates Lot sizes > 4,000 SqFt will still be charged a rate per SqFt Multiple units will be charged the variable component = $11.00 Non-Metered Accounts 70.22 72.00 73.83 76.03 78.96 94.36 96.86 99.44 102.54 106.67 123.33 126.70 130.17 134.35 139.91 190.92 196.32 201.88 208.57 217.48 1" 1.5" 2" 3"

10. Elk Grove Water District - Utility Rate Project | 10 Next Steps – Water Rate Study Approval of rate study on April 24, 2013 Prop. 218 notices mailed May 2, 2013 Public workshop may be scheduled: May? Public Hearing scheduled for June 26, 2013 New rates implemented on January 1, 2014

11. Elk Grove Water District - Utility Rate Project | 11 Questions and Answers

12. 2013 Water Connection Fee Study

13. Elk Grove Water District - Utility Rate Project | 13 Meter and Installation Charges –Recovers cost of new meter and installation Capacity Charges –Applicable to Service Area 1 –Based on cost of CIP in 2003 –Total CIP cost allocated to existing and new equivalent dwelling units (EDU) –Cost per EDU converted into fee schedule based on meter size Existing Fee Methodology

14. Elk Grove Water District - Utility Rate Project | 14 Existing Fee Schedule Meter SizeEDU Meter Charge Capacity ChargeTotal 1”1.0$580$3,895$4,475 1-1/2”2.38668,9599,825 2”4.01,10215,58016,682 3”9.02,64535,05537,700 4”16.04,47062,32066,790 6”36.08,452140,220148,672

15. Elk Grove Water District - Utility Rate Project | 15 Buildout projections refined based on District discussions with the City –Expected buildout reduced down from UWMP projections –Additional water well not necessary; removed from future CIP costs –New development represents approximately 6.1% of total water demand at buildout Updates to Capacity Charge

16. Elk Grove Water District - Utility Rate Project | 16 Three components: 1.Plan-Based: Share of Future CIP 2.Buy-In: Share of 2003 CIP Funded through existing bond issues 2002A and B, 2003A, 2005A 3.Buy-In: Share of cost of issuance and interest paid What Does the Capacity Charge Cover?

17. Elk Grove Water District - Utility Rate Project | 17 A proportional share (6.1%) of four projects is allocated to new development –Railroad Corridor Water Line –Hampton Road WTP Refurbishment –VFDs - Booster Pumps Railroad Street WTF –Unforeseen Capital Projects Total value of improvements allocated to new development: $74,300 Component #1: Future CIP

18. Elk Grove Water District - Utility Rate Project | 18 Improvements in the 2003 Capacity Fee were funded through debt service –Amount of CIP equals $20.5 million Share of program costs is included in this fee update Approximately $1.3 million of $20.5 million attributed to new development Component #2: 2003 CIP

19. Elk Grove Water District - Utility Rate Project | 19 Proportional share of the cost of issuance is allocated to new development –Additional costs incurred when issuing debt –Approximately $58,500 allocated to new development Proportional share of interest paid to date is allocated to new development –Reimbursement to rate payers Total debt paid through 2014 = $30.3 million –Approximately $668,600 allocated to new development –Based on share of 2003 CIP and COI Component #3: Share of Debt Service

20. Elk Grove Water District - Utility Rate Project | 20 Proposed Capacity Fee Schedule Meter Size Existing Capacity Fee Proposed Capacity Fee Difference 1”$3,895 $ 3,206$ (689) 1-1/2”8,959 6,413 (2,546) 2”15,580 10,260 (5,320) 3”35,055 19,238 (15,817) 4”62,320 32,063 (30,257) 6”140,220 64,125 (76,095)

21. Elk Grove Water District - Utility Rate Project | 21 Proposed Meter Charge Meter Size Existing Meter Charge Proposed Meter Charge Difference 1”$580$926$346

22. Elk Grove Water District - Utility Rate Project | 22 Proposed Combined Fee Schedule Meter Size Proposed Meter Charge Proposed Capacity FeeTotal 1”$926 $3,206 $4,132 1-1/2”926 + TBD 6,413 7,339+ 2”926 +TBD 10,260 11,186+ 3”926 +TBD 19,238 20,164+ 4”926 +TBD 32,063 32,989+ 6”926 +TBD 64,125 65,051+

23. Elk Grove Water District - Utility Rate Project | 23 Private Fire Line Capacity Charges Meter Size Proposed Capacity Fee (Private Fire Lines) 2” $162 3” 470 4” 1,001 6” 2,908 8” 6,197 10” 11,145

24. Elk Grove Water District - Utility Rate Project | 24 Next Steps – Connection Fee Study Approval of Connection Fee Study on April 24, 2013 30-day notice prior to Public Hearing: May 26, 2013 Public Hearing scheduled for June 26, 2013 New connection fees implemented on Sep. 1, 2013

25. Elk Grove Water District - Utility Rate Project | 25 Questions and Answers