HomeMy WebLinkAboutSS3 - Wastewater Rate Study - UpdatedFigure 1— Projected Fund Balance
Received After Agenda Printed
May 26, 2015
Item No. SS3
$3.50
Target Balance
(Operations + Capital)
$3.00
w
c
0
$2.50
eserves with a e
Increase
W
$2.00
i
`.
c
$1.50
U_
'`., Minimum Balance
�\ (Operations)
v
$1.00
d
`\
L
a
\
\
$0.50
\`��
Reserves without
`\ Rate Increase
\\
$0.00
FY 2014 -15 FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Figure 2 — Neighboring Agency Comparisons
ATTACHMENT A
May 26, 2015 - REVISED DRAFT
CITY OF NEWPORT BEACH
592 Superior Avenue
Newport Beach, CA 92663
��4
SEWER AND RECYCLED WATER RATE STUDY
May 26, 2015
HF &H CONSULTANTS, LLC
201 North Civic Drive, Suite 230
Walnut Creek, CA 94596
®H &H CONSULTANTS, LLC All fight =reamed.
This documentis printed on 100% recycled, post consumer content paper
201 N. Civic Drive, Suite 230
Walnut Creek, California 94596
Telephone: 925/977-6950
Fax: 925/977 -6955
WWW.hfh- consultants.com
May 26, 2015
Mr. George Murdoch
Utilities General Manager
City of Newport Beach
592 Superior Avenue
Newport Beach, CA 92663
Subject: Sewer and Recycled Water Rate Study
Dear Mr. Murdoch:
tomorrow's Resources Today
Robert D. Hilton, CMC
John W. Farnkopf, PE
Laith B. Ezzet, CMC
Richard J. Simonson, CMC
Marva M. Sheehan, CPA
Robert C. Hilton, CMC
HF &H Consultants, LLC, is pleased to submit this Sewer and Recycled Water Rate
Study to the City of Newport Beach (City). The report summarizes the analysis that
was conducted to develop the recommended rates. A copy of the rate model is
included in the appendix.
The Recycled Water revenue increases and Recycled Water rate design sections
presented in this report summarize the analysis that was previously submitted as a staff
report and presented to City Council on April 29, 2014. The City Council subsequently
adopted, by Resolution 2014 -78 on September 9, 2014, the recommended Recycled
Water rates in compliance with Proposition 218, effective October 9, 2014, and updated
each January 1 thereafter.
The City has demonstrated leadership in improving rate payer equity during a time
when costs are increasing in compliance with regulatory mandates. It has been a
privilege to assist the City with this step forward.
Very truly yours,
HF &H CONSULTANTS, LLC
John W. Farnkopf, P.E.
Senior Vice Presiden
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ................................................. ............................... 1
Findings And Recomm mend ations ........................................ ............................... 1
Sewer........................................................................... ............................... 1
RecycledWater .............................................................. ............................... 2
2. INTRODUCTION ........................................................... ............................... 4
StudyPurpose ..................................................................... ..............................4
Rate Making Objectives ........................................................ ..............................4
Background........................................................................ ............................... 4
Sewer........................................................................... ............................... 4
RecycledWater ............................................................... ..............................4
3. SEWER PROJECTED REVENUE INCREASES ................... ............................... 6
Revenue Requirements ....................................................... ............................... 6
Salaries......................................................................... ............................... 6
Benefits........................................................................ ............................... 6
Operations& Maintenance .............................................. ............................... 6
Internal Services Allocation ............................................. ............................... 7
Operating Reserve Expense ............................................ ............................... 7
Capital Reserve Expense ................................................. ............................... 7
Miscellaneous Costs ....................................................... ............................... 7
Revenue Increases .............................................................. ............................... 7
FundBalance ....................................................................... ..............................8
Minimum Fund Balance .................................................. ............................... 9
TargetFund Balance ...................................................... ............................... 9
4. SEWER RATE DESIGN ................................................. ............................... 10
Current Rate Structure ...................................................... ............................... 10
Proposed Rate Structure .................................................... ............................... 10
Current and Proposed Customer Bill Comparisons ................ ............................... 12
Comparison with Neighboring agencies ............................... ............................... 13
S. RECYCLED WATER PROJECTED REVENUE INCREASES .............................. 15
RevenueRequirements ..................................................... ............................... 15
OperatingExpenses ..................................................... ............................... 15
Purchased Recycled Water ............................................ ............................... 15
Pump Station Operating and Maintenance ...................... ............................... 15
Depreciation................................................................ ............................... 16
6. RECYCLED WATER RATE DESIGN ............................... ............................... 17
Current Rate Structure ...................................................... ............................... 17
Proposed Rate Structure .................................................... ............................... 17
Customer Bill Comparisons ................................................ ............................... 20
APPENDIX A. SEWER AND RECYCLED WATER RATE MODEL
TABLE OF FIGURES
Figure 1 -1. Current and Proposed Sewer Rates .......................... ............................... 2
Figure 1 -2. Average Current and Proposed Monthly Sewer Bills .... ...............................
2
Figure 1 -3. Current and Proposed Recycled Water Rates ............. ...............................
3
Figure 3 -1. Annual Revenue Requirement Components .............. ...............................
6
Figure 3-2. Capital Projects ...................................................... ...............................
7
Figure 3 -3. Projected Revenue Increases ................................... ..............................8
Figure 3 -4. Fund Balance With and Without Rate Increases ........ ...............................
9
Figure 4 -1. Fixed and Variable Revenue ................................... ...............................
10
Figure 4 -2. Calculation of Monthly Fixed Charges ...................... ...............................
11
Figure 4 -3. Calculation of Sewer Consumption Charge .............. ...............................
11
Figure 4 -4. Five Year Sewer Rate Projections ........................... ...............................
12
Figure 4 -5. Customer Bill Comparison ...................................... ...............................
13
Figure 4 -6. Neighboring Agency Comparison ............................ ...............................
14
Figure 5 -1. Revenue Requirement Projections .......................... ...............................
15
Figure 6 -1. FY 2014 -15 Revenue Requirement by Cost Category ...............................
18
Figure 6 -2. Calculation of Monthly Fixed Charges ...................... ...............................
19
Figure 6 -3. Calculation of Commodity and Pump Station Charges ..............................
19
Figure 6 -4. Five Year Recycled Water Rate Projections .............. ...............................
20
ACRONYMS
CIP Capital Improvement Plan
EDU Equivalent Dwelling Unit; an average single - family residential
customer
EMU Equivalent meter unit
FY Fiscal Year
GPD Gallons Per Day
HCF or CCF Hundred Cubic Feet of metered water; 748 gallons; a cube of water 4.6
feet on edge
I &I Inflow and Infiltration; stormwater runoff that enters collection systems
through surface or subsurface connections, cracks, or other openings
O &M Operations and Maintenance
OCSD Orange County Sanitation District
OCWD Orange County Water District
PAYGo Pay -As- You -Go, in reference to funding capital improvements from
cash rather than from borrowed sources of revenue
SFR Single Family Residential
ACKNOWLEDGEMENTS
City Council
Edward Selich, Mayor
Diane Dixon, Mayor Pro Tern
Kevin Muldoon, Council Member
Tony Petros, Council Member
Duffy Duffield, Council Member
Scott Peotter, Council Member
Keith Curry, Council Member
City Finance Commission:
Diane Dixon, Mayor Pro Tern
Keith Curry, Council Member
Tony Petros, Council Member
Larry Tucker, Appointed Finance Commission Member
City Staff
George Murdoch, Utilities General Manager
Dan Matusiewicz, Deputy Finance Director
Rachell Wilfert, Management Assistant
HF &H Consultants, LLC
John Farnkopf, Sr. Vice President
Sima Mostafaei, Senior Associate
SEWER AND RECYCLED WATER RATE
STUDY
This page intentionally left blank
City of Newport Beach Sewer and Recycled Water Rate Study
1. Executive Summary
1. EXECUTIVE SUMMARY
This report summarizes the analysis of the City's sewer and recycled water rates. The
analysis represents a collaborative effort of the City's Staff and consulting team. HF &H
prepared the financial plan model using the City's FY 2015 -16 preliminary operating
budget for sewer, and the FY 2014 -15 preliminary operating budget for recycled water.
FINDINGS AND RECOMMMENDATIONS
Sewer
1. Key Assumptions. Rates were set to generate revenue sufficient to fund the
City's collection system expenses, local capital improvements funded from cash,
and to maintain the City's reserves.
2. Revenue Projections. The revenue'' increases enable the City to address
collection and pump station improvement projects that were identified in the
City's Sewer Master Plan. These increases enable the City to ramp up PAYGo
funding for capital projects over the next five years; by the fifth year, the rates
will enable the City to fund $1,300,000 per year on a pay -as- you -go cash basis
without issuing debt.
3. Rate Design. The City's current sewer customers pay the sum of the following: a
fixed monthly sewer use charge that is the same for all customers and a
commodity charge based on metered water use during the monthly period. In
addition, for meters 2 -inch or larger, a $10.00 monthly surcharge is assessed, and
for connections servicing two or more dwelling units on the same connection, a
$2.00 per unit per month surcharge is assessed for any additional dwelling units.
We recommend combining the two surcharges into the monthly use charge, and
maintaining the commodity charge. Under the revised rate structure, customers
will pay the sum of only two charges: a monthly sewer use charge, graduated
based on the capacity of the connection, and the commodity charge.
4. Projected Rates. Figure 1 -1 shows the sewer rates that are needed to cover the
projected revenue requirements, and compares the revised structure to the
current structure. In the revised rate structure, the service charges were
graduated using an EMU multiplier that was based on the ratio of $4.50 to $14.50
(the current rate ratio), the effect of which is to increase the service charges for
the larger services. The revised rate structure maintains the consumption charge,
but includes the larger meter and additional dwelling unit surcharges as part of
the monthly sewer use charge.
May 26, 2015 Page 1 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
1. Executive Summary
Figure
1 -1. Current and Proposed Sewer Rates
Monthly
Current
Revised
Flow
Current
Size
(HCF)
Structure FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Structure
Structure FY 2015 -16
FY 2016 -17
FY 2017 -18
FY 2018 -19
FY 2019 -20
Monthly Sewer Use Charge
$324.55 $347.27 $364.64
5/8" or 3/4"
$4.50
$5.97
$7.34
$8.22
$8.79
$9.41
$9.88
1"
$4.50
$5.97
$7.34
$8.22
$8.79
$9.41
$9.88
1 1/2"
$4.50
$6.56
$8.07
$9.04
$9.67
$10.35
$10.87
2"
$14.50
$8.95
$11.01
$12.33
$13.19
$14.11
$14.82
2 1 /2"
$14.50
$9.54
$11.74
$13.15
'':$14.07
$15.05
$15.81
3"
$14.50
$10.14
$12.47
$13.97
'J$14.95
$16.00
$16.79
4"
$14.50
$11.93
$14.68
$16.44
$17.59
$18.82
$19.76
6"
$14.50
$13.42
$16.51
$18.49
$19.78
$21.17
$22.23
8"
$14.50
$14.91
$18.34
$20.55
$21.98
$23.52
$24.70
10"
$14.50
$19.09
$23.48
$26.30
$28.14
$30.11
$31.61
Monthly Sewer Use Charge
(Sewer Only Customers)
Rate per Account
$6.25
$9.99
$12.28
$13.76
$14.72
$15.75
$16.54
Consumption Charge
Rate per HCF
$0.35
$0.35
$0.43
$0.48
$0.52
$0.55
$0.58
Sewer Surcharges
Multi Unit surcharge (per DU) $2.00
Note 1
Note 1
Note 1
Note I
Note I
Note 1
Note 1: The surcharge has been incorporated into the Monthly Sewer Use Charge under the revised structure.
5. Customer Bills. Figure 1 -2 shows an average monthly residential and non-
residential bill at the current rates, and the average bills over the five year
projection period. In addition to paying the monthly sewer use charge based on
the size of the connection, each customer's monthly bill includes a consumption
charge that is determined by multiplying the consumption charge times the
average monthly residential flow of 11.49 HCF and non - residential flow of 595
HCF, respectively.
Figure 1 -2. Average Current and Proposed Monthly
Sewer Bills
Monthly
Meter
Flow
Current
Size
(HCF)
Structure FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Single Family Residential 5/8"
11.49
$8.52 S12.28 $13.76
$14.72 $15.75 $16.54
Non Residential 4"
595.00
$224.75 $270.82 $303.32
$324.55 $347.27 $364.64
Recycled Water
1. Key Assumptions. Rates were set to generate revenue sufficient to fund the
City's recycled water system's operations and maintenance expense, the cost of
May 26, 2015 Page 2 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
1. Executive Summary
purchasing recycled water from OCWD, and capital replacement expense related
to pump stations and meters.
2. Rate Design. The City's current recycled water customers pay the sum of two
charges: a monthly fixed charge that is based on the size of the connection, and a
commodity charge based on metered water use during the monthly period. The
commodity charge is based on 80% of the potable water rate. We recommend
unlinking the recycled water rate from the potable water rate and aligning the
recycled fixed and commodity charges with the fixed costs and the cost of
purchased water from OCWD, respectively. In addition to the fixed and
commodity charges, pump station users will be charged a pump station charge
based on the cost to operate and maintain the stations and convey recycled
water.
3. Projected Rates. The rate projections are shown in Figure 1 -3.
Figure 1 -3. Current and Proposed Recycled Water Rates
Current
FY 2014 -15
FY 2015 -16
FY 2016 -17 FY 2017 -18
FY 2018 -19
Monthly Service Charge
5/8" or 3/4"
$13.82
$18.91
$19.29
$19.68
$20.07
$20.47
1"
$23.03
$31.53
$32.16
532.80
$33.46
$34.13
1 1 /2"
$46.06
$63.05
$64.32
$65.60
$66.91
$68.25
2"
$73.70
5100.88
$102.90
$104.95
$107.05
$109.19
3"
$138.18
5189.15
$192.94
$196.80
$200.73
$204.75
4"
$230.30
$315.25
$321.56
$327.99
$334.55
$341.24
6"
5460.61
$630.50
$643.11
$655.98
$669.10
$682.48
8"
5736.98
$1,008.81
$1,028.99
$1,049.57
$1,070.56
$1,091.97
Monthly Commodity Charge
Rate per HCF
$2.46
$0.86
$0.87
$0.89
$0.91
$0.93
Monthly Pump Station Charge
Rate per HCF
none
$0.36
$0.37
$0.38
$0.38
$0.39
May 26, 2015 Page 3 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
2. Introduction
2. INTRODUCTION
STUDY PURPOSE
The purpose of this study is to update the City's rates to ensure that they generate
sufficient revenue and that the rate structures for sewer and recycled water reflect the
City's current rate - making objectives. The study was commissioned by the City to
evaluate the effect of certain rate structure modifications in response to input from its
customers.
RATE MAKING OBJECTIVES
The City's current rate - making objectives include the following:
• Provide revenue sufficiency and financial stability to cover the projected capital
and O &M costs of providing recycled water and funding the City's Sewer fund.
• Meet the City's operations and capital funds reserve targets for the sewer
enterprise fund.
• Rates should reflect equity of costs in proportion to the level of service.
• Provide for efficient administration and execution of utility billing.
• Minimize "rate shock" overall and to any specific customer class.
• Rates should be clear and understandable to the customers.
• The rates must comply with Proposition 218 and applicable State codes.
BACKGROUND
Sewer
The City provides sewer service to approximately 64,465 customers. The City's existing
sewer collection system consists of a network of forcemain and gravity sewers. This system
is composed of approximately 197 miles of mainline gravity pipes, 4.7 miles of forcemains
with 4,922 manholes and cleanouts, and 25,525 sewer laterals with an approximate length of
121 miles in the public- rights -of -way. The City's service area lies within the OCSD who is
responsible for treating the City's sewer. The City also owns and operates 21 pump stations
in various areas which lift sewer from the lower areas and several island communities for
treatment at OCSD's treatment plant.
Recycled Water
The City currently has five recycled water customers totaling 14 water connections. The
customers include Big Canyon and Newport Beach Country Club golf courses; East
Bluff School, Our Lady Queen of Angels School, and the City which uses recycled water
for irrigation of medians and parks.
In 1991, the City entered into an agreement with OCWD for the distribution and sale of
Green Acres Project water. The agreement stipulates the rules and regulations for the
May 26, 2015 Page 4 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
2. Introduction
City to provide recycled water. Included in this agreement is the stipulation that
recycled water rates may not exceed 80% of the potable water rate. The agreement term
is for 25 years with five 5 -year automatic extensions, with an estimated ending term
year of 2041.
The City subsequently entered into "End User Agreements' for the sale of recycled
water to large customers in 1996 for a 10 -year term. These agreements, now expired,
included provisions that OCWD and the City would provide funding to modify golf
courses and construct pump stations to facilitate the use of recycled water. However, in
2011, the City and the Big Canyon Country Club entered into an agreement that
provided for the delivery and sale of recycled water, and a pump station license
agreement.
May 26, 2015 Page 5 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
3. Sewer Projected Revenue Increases
3. SEWER PROJECTED REVENUE INCREASES
REVENUE REQUIREMENTS
Rate analysis begins by determining the revenue requirements that must be met by
rates. For purposes of this study, a ten -year rate projection period was developed using
a spreadsheet model (see Appendix A). However, only the first five years are shown in
Figure 3 -1 for rate - setting purposes. Figure 3 -1 summarizes the major categories
comprised in the revenue requirements, indicating the annual change.
Fiaure 3 -1, Annual Revenue Reauirement Components
Salaries
This cost category includes regular and overtime pay and is projected to increase
gradually at about 3% per year during the projection period. No staff headcount
increases are anticipated; the cost trend is driven primarily by cost of living adjustments
set in labor agreements.
Benefits
This cost category includes health, dental, and vision as well as Other Post- Employment
(OPEB) and Public Employment (PERS) retirement benefits. During the projection
period these costs are projected to increase at about 5% per year. The cost trend is
driven primarily by increases in health care benefit costs set in labor agreements.
Operations & Maintenance
This cost category includes non - personnel related operating and maintenance expenses,
such as electrical utility costs, fuel, and non - capital materials and equipment. During
the projection period, these costs are expected to increase gradually at about 1.73% per
year, based on the five -year historical average of inflation for the Los Angeles area.
May 26, 2015 Page 6 HF &H Consultants, LLC
FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Salaries
$ 947,547
$ 975,973
$1,005,253
$1,035,410
$1,066,472
Benefits
575,693
604,478
622,612
641,290
660,529
Operations & Maintenance
995,721
989,549
1,006,668
1,024,084
1,041,800
Internal Services Allocation
670,581
682,182
693,984
705,990
718,203
Operating Reserve Expense
37,497
242,152
214,690
456257
224,189
Capital Reserve Expense
500,000
750,000
1,000,000
1,000,000
1,300,000
Miscellaneous Costs
33,000
33,571
34,152
34,743
35,344
Total Revenue Requirement
$ 3,760,039
$4,277,905
$4,577,358
$4,897,773
$5,046,538
Salaries
This cost category includes regular and overtime pay and is projected to increase
gradually at about 3% per year during the projection period. No staff headcount
increases are anticipated; the cost trend is driven primarily by cost of living adjustments
set in labor agreements.
Benefits
This cost category includes health, dental, and vision as well as Other Post- Employment
(OPEB) and Public Employment (PERS) retirement benefits. During the projection
period these costs are projected to increase at about 5% per year. The cost trend is
driven primarily by increases in health care benefit costs set in labor agreements.
Operations & Maintenance
This cost category includes non - personnel related operating and maintenance expenses,
such as electrical utility costs, fuel, and non - capital materials and equipment. During
the projection period, these costs are expected to increase gradually at about 1.73% per
year, based on the five -year historical average of inflation for the Los Angeles area.
May 26, 2015 Page 6 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
3. Sewer Projected Revenue Increases
Internal Services Allocation
The City has historically transferred funds from the Sewer Enterprise Fund to the
General Fund as reimbursement for governmental costs incurred by the General Fund
on behalf of the Enterprise. Much of this funding reimburses the General Fund for
salaries, equipment, and program costs associated with general services. During the
projection period, these costs are expected to increase gradually at about 1.73% per year,
based on the five -year historical average of inflation for the Los Angeles area.
Operating Reserve Expense
The City transfers rate revenue to its Operating Reserve during the projection period to
smooth out the annual revenue requirements and meet the minimum fund balance
requirement. Please refer to the section titled 'minimum fund balance' in this report for
further discussion of the fund policy.
Capital Reserve Expense
The City's 30 -year capital improvement program planned expenditures are
summarized in Figure 3 -2.
Figure 3 -2. Capital Projects
The City plans to fund these capital improvements with cash from rate revenue. To
accomplish this goal, the program is phased based upon the implementation cost of the
facilities, and the quantity of work the City can reasonably administer each year. The
programmed rate increases over the next five years allow the City to ramp up funding
for capital projects and provide the City approximately $1.3 million annually by FY
2019 -20 with the additional revenue generated from the recommended rate increases.
Miscellaneous Costs
This cost category includes non - capital office and shop equipment. During the
projection period, these costs are expected to increase gradually at about 1.73% per year,
based on the five -year historical average of inflation for the Los Angeles area.
REVENUE INCREASES
To determine how much additional rate revenue is required, the projected revenue
requirements are compared to the revenue from current rates. The revenue from
May 26, 2015 Page 7 HF &H Consultants, LLC
Project
CIP Project Description
Cost
Collection System Capacity
Improvements
$1,281,391
Collection System Condition
Improvements
$16,648,060
Pump Station Improvements
$11,088,000
'Fatal $29,017,451
The City plans to fund these capital improvements with cash from rate revenue. To
accomplish this goal, the program is phased based upon the implementation cost of the
facilities, and the quantity of work the City can reasonably administer each year. The
programmed rate increases over the next five years allow the City to ramp up funding
for capital projects and provide the City approximately $1.3 million annually by FY
2019 -20 with the additional revenue generated from the recommended rate increases.
Miscellaneous Costs
This cost category includes non - capital office and shop equipment. During the
projection period, these costs are expected to increase gradually at about 1.73% per year,
based on the five -year historical average of inflation for the Los Angeles area.
REVENUE INCREASES
To determine how much additional rate revenue is required, the projected revenue
requirements are compared to the revenue from current rates. The revenue from
May 26, 2015 Page 7 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
3. Sewer Projected Revenue Increases
current rates also reflects the impact of reduced water demand required of the City's
customers to comply with the State Water Resources Control Board's emergency
regulations. For the City's consumption charges, sewer flows from individual City
customers are not metered; therefore water use data is the closest representation of
flows that customers discharge to the City's system for conveyance and treatment.
Estimating current rate revenue took into account 23,104 currently active meters whose
flow equaled 3,932,915 HCF. We also included the annual surcharge revenue for meters
2" or larger, as well as the surcharge for multiple dwelling units serviced by the same
meter. The resulting rate revenue for FY 2014 -15, prior to rate increases, but net of 0.4%
of bad debt, was estimated at $3,105,332. Based on this estimate, annual revenue
increases were projected as shown in Figure 3 -3.
ure s -s. rro eciea reevenue increases
FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Revenue Requirement
Revenue from Current Rates"
Difference
Fund Balance (before increase)
Revenue from Increases
Fund Balance (after increase)
0.4%
on conservation efforts
FUND BALANCE
$3,760,039 $4,277,905 $4,577,358 $4,897,773 $5,046,538
$ (654,707) $ (1,172,574) $ (1,472,027) $ (1,792,442) $ (1,94
$ 1,259,566 $ 320,046 $ (972,663) $ (2,363,872) $ (4,1
$ 654,707 $ 1,172,573 $ 1,472,027 $ 1,792,442 $ 1,941,206
$ 1,916,729 $ 2,159,108 $ 2,350,244 $ 2,764,401 $ 2,902,600
revenue and cutbacks to
revenue
The FY 2014 -15 estimated year -end fund balance is projected to be $1,865,000, which is
slightly higher than the minimum operations balance of $1,423,000. Figure 3 -4 shows
the fund climbing toward the target balance throughout the five year rate projection
period, based on the projected revenue increases. Fluctuations in annual flow will
affect revenue generation and the resulting fund balance. The City is advised to
carefully monitor the fund balance in the event of downward fluctuations in flow.
May 26, 2015 Page 8 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
3. Sewer Projected Revenue Increases
Figure 3-4. Fund Balance With and Without Rate Increases
$3.50 Target- Ralarinp
(Operations + Capital)
$3.00
w
c
o_
$2.50
`
with Rate
Increase
$2.00
m
C $1.50
urlrRalance
(Operations)
m
$1.00
.o
,
a
$0.50
$0.00
FY 2014 -15 FY 2015 -16 FY 2016 -17 FY 2017 -18 FY 2018 -19 FY 2019 -20
Minimum Fund Balance
The minimum balance (red line) is the balance that is required to meet the City's
operating expenses during the year. If this minimum balance were maintained, the
Sewer Fund should be able to fund its monthly cash flow over this extended period
without relying on the General Fund for a short -term loan. When the Operations
Reserve balance is below the minimum balance, the likelihood increases that temporary
funding from the General Fund will be required to meet cash flow needs. The City's
reserve policy dictates that the minimum Operations Reserve balance be set equal to
50% of annual O &M expenses.
Target Fund Balance
The proposed revenue increases move the fund balance (solid green line) upward
toward the target balance (blue line). The target balance is the sum of the minimum
balance for operations (red line) plus an allowance for capital projects. This allowance
provides liquidity to fund construction for projects on a pay -as- you -go basis. With
adequate capital reserves, the City is able to pay construction contractors without
encroaching on the Operations Reserve. The allowance is based on the average annual
budgeted capital improvement projects.
May 26, 2015 Page 9 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
4. Sewer Rate Design
4. SEWER RATE DESIGN
CURRENT RATE STRUCTURE
The City currently has 23,104 active accounts who pay the sum of two charges every
month for Sewer service: a basic service charge of $4.50 per account plus a sewer
consumption charge of $0.35 per HCF based on metered water use during the billing
period. In addition to the charges specified above, customers with a water service
connection of 2 "or greater pay a $10.00 monthly surcharge. Moreover, customers with
more than one dwelling unit that is serviced by the same connection pay a surcharge of
$2.00 for each additional dwelling unit. Lastly, the City's 485 sewer customers who do
not purchase potable water from the City are charged $6.25 per account per month.
PROPOSED RATE STRUCTURE
The proposed rate structure is based on the revenue generated by the current rate
structure and categorizes the revenue into two categories: fixed revenue and variable
revenue. Fixed revenue is considered fixed because it does not vary based on flow,
while variable costs vary because they are based on the amount of water purchased, or
sewage produced and therefore, are solely comprised of the sewer consumption charge.
For the purpose of rate design, the sewer use charge for customers who do not purchase
water from the City was analyzed separately. Figure 4 -1 presents the breakdown of the
current revenue by revenue category:
Current Revenue
Fixed Revenue
Sewer Use Charge (per account) $1,247,616
Surcharge (2" meters or greater) $78,720
Surcharge (per additional DU) $378,492
Total Annual Fixed Revenue $1,704,828
Variable Revenue
Consumption Charge (per HCF) $1,376,520
Total Annual Variable Revenue
$1,376,520
Subtotal
$3,081,348
Sewer Use Charge (per account)*
$36,375
Grand Total **
$3.11 T723
Revenue from customers who do not
water from the City of Newport Beach
* *Gross revenues; does not account for bad debt
May 26, 2015 Page 10 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
4. Sewer Rate Design
In order to determine the monthly charge by size of connection, we first converted the
number of active meters to equivalent meter units (EMU) as shown in Figure 4 -2. The
EMU multiplier by meter size is the same multipliers used to determine the fixed
charge by meter size for the current sewer rates; in other words, it is the ratio between
$4.50 to $14.50, or 1 to 3.2. The monthly charge for an EMU of 1.00 is derived by
dividing the total fixed revenue of $1,704,828 by the total number of EMUS, or 23,815.
This quotient was then divided by 12 to convert from an annual charge of $71.59 to a
monthly charge of $5.97. The service charges were then graduated using the EMU
multipliers, the effect of which is to increase the service charges for the larger services.
Note the total annual revenue of $1,704,828 from fixed charges in Figure 4 -2 is equal to
the total annual fixed revenue presented in Figure 4 -1.
Fiaure 4 -2. Calculation of Monthly Fixed Charaes
The sewer consumption charge was derived using the monthly meter readings in HCF
for all customers. Figure 4 -3 presents the derivation of the proposed sewer consumption
charges.
'I ure 4 -3. ualclnaaon oT newer L onsumpnon unar f
Current Usage Charge
Cost Category Revenue (HCF) per HCF
Revenue $1,376,520 3,932,915 $0.35
For sewer customers who do not purchase potable water from the City, and therefore,
do not have a proxy for their sewer flows, an average flow per account was derived by
using average water use per single family residential account. The 11.49 HCF average
May 26, 2015 Page 11 HF &H Consultants, LLC
Total
Monthly
Annual
Total Active
EMU
Total
Service
Fixed
Meter Size
Accounts
Multiplier
EMUS
Charge
Revenue
a
b
a *b
c
a *c *12
5/8" or 3/4"
15,357
1.00
15,357
$5.97
$1,099,342
1"
6,276
1.00
6,276
$5.97
$449,272
11/2"
364
1.10
400
$6.56
$28,663
2"
886
1.50
1,329
$8.95
$95,137
2 1/2"
1
1.60
2
$9.54
$115
3"
34
1.70
58
$10.14
$4,138
4"
119
2.00
238
$11.93
$17,037
6"
54
2.25
122
$13.42
$8,698
8"
11
2.50
28
$14.91
$1,969
10"
2
3.20
6
$19.09
$458
23,104
23,815
$1,704,828
The sewer consumption charge was derived using the monthly meter readings in HCF
for all customers. Figure 4 -3 presents the derivation of the proposed sewer consumption
charges.
'I ure 4 -3. ualclnaaon oT newer L onsumpnon unar f
Current Usage Charge
Cost Category Revenue (HCF) per HCF
Revenue $1,376,520 3,932,915 $0.35
For sewer customers who do not purchase potable water from the City, and therefore,
do not have a proxy for their sewer flows, an average flow per account was derived by
using average water use per single family residential account. The 11.49 HCF average
May 26, 2015 Page 11 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
4. Sewer Rate Design
use was determined using customer billing data and dividing total single family
consumption by the number of single family accounts. Next, using the revised rate
structure, the $9.99 charge shown in Figure 44 represents the average single family bill
per month. It was calculated as the monthly sewer use charge of $5.97 per account plus
the product of the $0.35 consumption charge times 11.49 HCF.
Using the fixed and variable rates as calculated in Figure 4 -2 and Figure 4 -3, a five -year
rate plan was prepared based on the City's Sewer revenue requirements as presented in
Figure 3 -1. The rates included in the 5 -year plan reflect annual rate increases starting in
FY 2015 -16 to keep pace with the increase in the revenue requirements. The proposed 5-
year rate plan is shown in Figure 4-4.
Fiaure 4 -4. Five Year Sewer Rate Proiections
Note L The surcharge has been uicorporated into the Monthly Sewer Use Charge under the revised structure.
CURRENT AND PROPOSED CUSTOMER BILL COMPARISONS
Figure 4-5 presents a comparison of monthly customer bills using the current rate
structure and the recommended revised rate structure. The rates used to calculate the
revised bills are the FY 2015 -16 charges presented in Figure 44. It is notable that current
customers who are subjected to the multiple dwelling $2.00 monthly surcharge will
experience a decrease in their monthly bill. This occurs based on the revisions to the
May 26, 2015 Page 12 HF &H Consultants, LLC
Current
Revised
Structure
Structure
FY 2015 -16
FY 2016 -17
FY 2017 -18
FY 2018 -19
FY 2019 -211
Monthly Sewer Use Charge
5/8" or 3/4"
$4.50
$5.97
$7.34
$8.22
$8.79
$9.41
$9.88
P
$4.50
$5.97
$7.34
$8.22
$8.79
$9.41
$9.88
11/2"
$4.50
$6.56
$8.07
$9.04
$9.67
$10.35
$10.87
2'
$14.50
$8.95
$11.01
S12.33
$13.19
$14.11
$14.82
21/2"
$14.50
$9.54
$11.74
513.15
$14.07
$15.05
$15.81
3"
$14.50
$10.14
$12.47
$13.97
= F$14.95
$16.00
$16.79
4"
$14.50
$11.93
$14.68
$16.44
$17.59
$18.82
$19.76
6"
$14.50
$13.42
$16.51
518.49
$19.78
$21.17
$22.23
8"
$14.50
$14.91
$18.34
$20.55
$21.98
$23.52
$24.70
10"
$14.50
$19.09
$23.48
$26.30
$28.14
$30.11
$31.61
Monthly Sewer Use Charge (Sewer Only Customers)
Rate per Account
$6.25
$9.99
$12.28
$13.76
$14.72
$15.75
$16.54
Consumption Charge
Rate per HCF
$0.35
50.35
$0.43
$0.48
$0.52
$0.55
$0.58
Se we r Surcharges
Multi Unit surcharge (per DU)
$2.00
Note I
Note 1
Note I
Note 1
Note 1
Note 1
Note L The surcharge has been uicorporated into the Monthly Sewer Use Charge under the revised structure.
CURRENT AND PROPOSED CUSTOMER BILL COMPARISONS
Figure 4-5 presents a comparison of monthly customer bills using the current rate
structure and the recommended revised rate structure. The rates used to calculate the
revised bills are the FY 2015 -16 charges presented in Figure 44. It is notable that current
customers who are subjected to the multiple dwelling $2.00 monthly surcharge will
experience a decrease in their monthly bill. This occurs based on the revisions to the
May 26, 2015 Page 12 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
4. Sewer Rate Design
monthly sewer use charge. The graduated rates, based on meter capacity, better reflect
associated flow assumed per dwelling unit, and its equivalent.
Fiaure 4 -5. Customer Bill Comparison
COMPARISON WITH NEIGHBORING AGENCIES
Based on available sources, Figure 4 -6 shows the recent charges for sewer service
among similar Orange County agencies, specifically ones that charge a fixed monthly
use charge coupled with a flow -based commodity charge. Larger agencies tend to have
lower rates because they can take advantage of economies of scale and have a larger
base of customers over which to distribute fixed costs. Figure 4 -6 indicates that the
City's current and proposed sewer rates track the trend line along with its neighbors
(identified with red diamonds in Figure 4 -6).
May 26, 2015 Page 13 HF &H Consultants, LLC
Numberof
Average
Current
FY 15 -16
Dwelling
Monthly
Monthly
Monthly
Difference
Customer Name
Meter Size
Units
Flow(HCF)
Bib
Bill
(S)
Single Family Residential (low flow)
5/8"-V
1
2
$ 5.20
$
8.20
$3.00
Single Family Residential (avg flow)
5/8" - 1"
1
11
$ 8.35
$
12.07
$3.72
Single Family Residential (high flow;
5/811- 1"
1
16
$ 10.10
$
14.23
$4.13
Multi Family Residential
3"
55
243
$ 209.55
$
117.09
(592.46)
Commercial
4"
1
595
$ 224.75
$
270.82
$46.07
Commercial
8"
141
2,074
$ 1,022.40
$
911.20
($111.20)
Commercial
6"
1
1,584
$ 568.90
$
698.42
$129.52
COMPARISON WITH NEIGHBORING AGENCIES
Based on available sources, Figure 4 -6 shows the recent charges for sewer service
among similar Orange County agencies, specifically ones that charge a fixed monthly
use charge coupled with a flow -based commodity charge. Larger agencies tend to have
lower rates because they can take advantage of economies of scale and have a larger
base of customers over which to distribute fixed costs. Figure 4 -6 indicates that the
City's current and proposed sewer rates track the trend line along with its neighbors
(identified with red diamonds in Figure 4 -6).
May 26, 2015 Page 13 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
4. Sewer Rate Design
$20
$15
I
m
s $10
0
a
$5
$c 4
0
re 4 -6.
■ Buena Park
■ Seal Beach
♦ Newport Beach - 0 Garden Grove SD
Proposed
■ Huntington Beach
ruin, Rat
Newport Beach - Current
■ La Habra E Costa Mesa SD
0 Fullerton
50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
Population of Service Area
' AIM .."W;.-'S.5.�.5.6z-
May 26, 2015 Page 14 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
5. Recycled water Projected Revenue Increases
S. RECYCLED WATER PROJECTED REVENUE INCREASES
REVENUE REQUIREMENTS
The City's FY 2013 -14 revenue requirement served as the basis for determining the
revenue requirement projections through FY 2018 -19. Figure 5 -1 summarizes the
sources and assumptions for the data as well as the projected expenditure trends:
Fiaure 5 -1. Revenue Reauirement Projections
Operating Expenses
This cost category includes administration and overhead expenses that are calculated as
10% of the total recycled water revenue requirement and 1% of the budgeted general
fund overhead charged to the water fund, respectively. During the projection period,
the City's operating expenses are projected to increase gradually at about 1.73% per
year, based on the five -year historical average of general inflation for the Los Angeles
area.
Purchased Recycled Water
This cost category for FY 13 -14 was based on the actual water purchases in FY 12 -13
multiplied by the cost of purchased water from OCWD of $360 per acre foot. During the
projection period, the City's purchased water costs are projected to increase gradually
at about 1.88% per year, based on the five -year historical average of OCWD purchased
water charges per acre foot.
Pump Station Operating and Maintenance
This cost category for FY 13 -14 was based on the actual cost of inspections, scheduled
and corrective maintenance, source changeovers and pump station rehabilitation and
maintenance as provided by the city. During the projection period, the City's pump
station operating and maintenance costs are expected to increase gradually at about
1.73% per year, based on the five -year historical average of general inflation for the Los
Angeles area.
May 26, 2015 Page 15 HF &H Consultants, LLC
FY 13 -14
FY 14 -15
FY 15 -16
FY 16 -17
FY 17 -18
FY 18 -19
Operating Costs
$ 40,488
$ 41,188
$ 41,901
$ 42,626
$ 43,363
$ 44,114
Purchased Recycled Water
167,598
173,417
179,438
182,810
186,245
189,745
Pump Station Operating & Maintenance
39,408
47,218
48,104
49,007
49,927
50,864
Depreciation
17,500
17,543
17,587
17,632
17,678
17,724
Total Revenue Requirement
$ 264,994
$ 279,366
$287,030
$ 292,075
$ 297;213
$ 302,446
Annual Change
5%
3%
2%
2%
2%
Operating Expenses
This cost category includes administration and overhead expenses that are calculated as
10% of the total recycled water revenue requirement and 1% of the budgeted general
fund overhead charged to the water fund, respectively. During the projection period,
the City's operating expenses are projected to increase gradually at about 1.73% per
year, based on the five -year historical average of general inflation for the Los Angeles
area.
Purchased Recycled Water
This cost category for FY 13 -14 was based on the actual water purchases in FY 12 -13
multiplied by the cost of purchased water from OCWD of $360 per acre foot. During the
projection period, the City's purchased water costs are projected to increase gradually
at about 1.88% per year, based on the five -year historical average of OCWD purchased
water charges per acre foot.
Pump Station Operating and Maintenance
This cost category for FY 13 -14 was based on the actual cost of inspections, scheduled
and corrective maintenance, source changeovers and pump station rehabilitation and
maintenance as provided by the city. During the projection period, the City's pump
station operating and maintenance costs are expected to increase gradually at about
1.73% per year, based on the five -year historical average of general inflation for the Los
Angeles area.
May 26, 2015 Page 15 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
5. Recycled water Projected Revenue Increases
Depreciation
This cost category includes replacement costs for pump station facilities and water
meters. The annual pump station facility replacement cost was based on $600,000 in
construction costs, amortized over 40 years. The annual meter replacement cost was
based on the American Water Works Association's standard cost of $259 per meter per
year, amortized over 15 years. During the projection period, the City's pump station
facility replacement costs are held constant at $15,000 per year, while the meter
replacement costs are projected to increase gradually at about 1.73% per year, based on
the five -year historical average of inflation for the Los Angeles area.
May 26, 2015 Page 16 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
6. Recycled Water Rate Design
6. RECYCLED WATER RATE DESIGN
The following section was previously submitted as a separate report dated April 24,
2014. The City Council subsequently adopted the recommended rates in compliance
with Proposition 218, effective October 9, 2014. The following text summarizes the rates
documented in the April 2014 report and subsequently adopted by the City Council.
CURRENT RATE STRUCTURE
The City currently has five recycled water customers totaling 14 connections. These
customers pay the sum of two charges every month for water service: a basic service
charge based on the size of the service connection plus a commodity charge based on
metered water use during the billing period. In 1991; the City entered into an agreement
with OCWD for the distribution and sale of recycled water. The agreement stipulated
that the recycled water rate may not exceed 80% of the potable water rate. It is the City's
current practice to charge customers 80% of the potable water rate based on that
agreement.
PROPOSED RATE STRUCTURE
Under the new rate structure, the recycled water rates will no longer be linked to 80% of
the potable water rates. The proposed rate structure is based on the FY 2014 -15 revenue
requirement, and categorizes the expenses into three categories: fixed costs, variable
costs and pump station - related costs. Fixed costs are considered fixed because they do
not vary based on flow, and include the annual cost of meter reading and replacement,
as well as administrative and overhead. Variable costs vary because they are based on
the amount of water purchased, and therefore, are solely comprised of the annual cost
of purchased water from OCWD. Pump station - related costs are comprised of
inspections, maintenance, and rehabilitation & replacement that are directly related to
the pump stations. Figure 6 -1 presents the breakdown of the FY 2014 -15 revenue
requirement by cost category:
May 26, 2015 Page 17 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
6. Recycled Water Rate Design
ure 6 -1. FY 2014 -15 Revenue Requirement by Cost I
FY2014 -15
fixed Costs
Administration
$25,433
Overhead
$12,208
Meter Reading
$1,514
Meter replacement
$2,543
Other agency fees
$2,035
otal Fixed Costs
"' $43,732
ariable Costs
Purchased Water $173,417
>tal Variable Costs $173,417
amp Station Costs
Inspections $7,021
Maintenance $13,109
Rehab & Replacement $42,087
Aal Pump Station Costs $62,218
Total Revenue Requirement $279,366
In order to determine the monthly charge by size of connection, we first converted the
number of active meters to equivalent meter units (EMU) as shown in Figure 3 -2. The
EMU multiplier by meter size is the same multipliers used to determine the fixed
charge by meter size for potable water rates. The monthly charge for an EMU of 1.00 is
derived by dividing the total fixed costs of $43,732 by the total number of EMUs or
192.70. This quotient was then divided by 12 to convert from an annual charge of
$226.94 to a monthly charge of $18.91. The service charges were then graduated using
the EMU multipliers, the effect of which is to increase the service charges for the larger
services. Note the total annual revenue of $43.732 from fixed charges in Figure 6 -2 is
equal to the total fixed costs presented in Figure 6 -1.
May 26, 2015 Page 18 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
6. Recycled Water Rate Design
Fiaure 6 -2. Calculation of Monthly Fixed Charaes
The commodity and pump station charges were derived using the FY 2012 -13 monthly
meter readings in HCF for all customers, and FY 2012 -13 monthly meter readings for
pump station customers in HCF, respectively. Figure 6 -3 presents the derivation of the
proposed commodity and pump station charges for FY 2014 -15:
Figure
6 -3. Calculation of Commodity and Pump Station C
Total
FY14 -15
FY14 -15
Monthly
FY 14 -15
Cost Category Costs
Active
EMU
Total
Service
Annual
Meter Size
Accounts
Multiplier
EMUS
Charge
Revenue
a
b
a *b
c
a *c *12
5/8" or 3/4"
0
1.00
0
$18.91
$0
1"
0
1.67
0
$31.53
$0
1 1/2"
0
3.33
0
$63.05
$0
2"
8
5.33
42.67
$100.88
$9,684
3"
3
10.00
30.01
$189.15
$6,810
4"
0
16.67
0
$315.25
$0
6'
2
33.34
66.68
$630.50
$15,132
8"
1
53.34
53.34
$1,008.81
$12,106
14
192.70
$43,732
The commodity and pump station charges were derived using the FY 2012 -13 monthly
meter readings in HCF for all customers, and FY 2012 -13 monthly meter readings for
pump station customers in HCF, respectively. Figure 6 -3 presents the derivation of the
proposed commodity and pump station charges for FY 2014 -15:
Figure
6 -3. Calculation of Commodity and Pump Station C
harges
Using the FY 2014 -15 rates as calculated in Figure 6 -2 and Figure 6 -3, a five -year rate
plan was prepared based on the City's recycled water revenue requirements as
presented in Figure 5 -1. The rates included in the five -year plan reflect 2% annual rate
increases across the board starting in Year 2 to keep pace with the increase in the
revenue requirements. The proposed five -year rate plan is shown in Figure 64.
May 26, 2015 Page 19 HF &H Consultants, LLC
FY12 -13
FY14 -15
FY14 -15
Usage
Charge
Cost Category Costs
(HCF)
per HCF
Variable Costs $173,417
202,793
$0.86
Pump Station Costs $62,218
172,426
$0.36
harges
Using the FY 2014 -15 rates as calculated in Figure 6 -2 and Figure 6 -3, a five -year rate
plan was prepared based on the City's recycled water revenue requirements as
presented in Figure 5 -1. The rates included in the five -year plan reflect 2% annual rate
increases across the board starting in Year 2 to keep pace with the increase in the
revenue requirements. The proposed five -year rate plan is shown in Figure 64.
May 26, 2015 Page 19 HF &H Consultants, LLC
City of Newport Beach Sewer and Recycled Water Rate Study
6. Recycled Water Rate Design
Fiaure 6 -4. Five Year Recvcled Water Rate Proiections
Curre nt
FY 14 -15
FY 15 -16
FY 16 -17
FY 17 -18
FY 18 -19
Annual Rate Increases
Flow
2%
2%
2%
2%
Monthly Service Charge
6,650
$16,820
2"
151
$446
5/8" or 3/4" $13.82
$18.91
$19.29
$19.68
$20.07
$20.47
1" $23.03
$31.53
$32.16
$32.80
$33.46
$34.13
11/2" $46.06
$63.05
$64.32
$65.60
$66.91
$68.25
2" $73.70
$100.88
$102.90
$104.95
$107.05
$109.19
3" $138.18
$189.15
$192.94
$196.80
$200.73
$204.75
4" $230.30
$315.25
$321.56
$327.99
$334.55
$341.24
6" $460.61
$630.50
$643.11
$655.98
$669.10
$682.48
8" $736.98
$1,008.81
$1,028.99
$1,049.57
$1,070.56
$1,091.97
Monthly Commodity Charge
Rate per HCF $2.46
$0.86
$0.87
$0.89
$0.91
$0.93
Monthly Pump Station Charge
Rate per HCF none
$0.36
$0.37
$0.38
$0.38
$0.39
CUSTOMER BILL COMPARISONS
Figure 6 -5 presents a comparison of monthly customer bills using the current rate
structure and the recommended revised rate structure. The rates used to calculate the
revised bills are the Year 1 charges presented in Figure 6 -4. It is notable that all current
recycled water customers will experience no less than a 44 %" bill decrease with the
recommended structure change.
tomer Name
vport Beach Country Club
Lady Queen of Angels
Canyon Country Club
Canyon Country Club
bluff School
'teure o -5. Lustomer tsar L-ora
Revised
Average
Monthly
Monthly
Current
Bill
Flow
Monthly
Meter Size
(HCF)
Bill
6"
6,650
$16,820
2"
151
$446
8"
5,256
$13,668
6"
2,463
$6,518
3"
321
$928
Revised
Monthly
Difference
Difference
Bill
($)
( %)
$8,717
($8,103)
-48%
$230
($215)
-48%
$5,504
($8,164)
-60%
$3,625
($2,894)
-44%
$464
($464)
-50%
May 26, 2015 Page 20 HF &H Consultants, LLC
APPENDIX A. SEWER AND RECYLED WATER RATE MODEL
HF &H Consultants, LLC
201 N. Civic Drive, Suite 230
Walnut Creek, CA 94596