The Longest Yard

Water Budget Rate Structures & The City of Boulder, Colorado

January 25, 2007
2006 Malcolm Pirnie, Inc. All Rights Reserved

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Todays Discussion
Rate Structures in General Water Budget Rate Structures Water Budgets and the City Discussion

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What is a Rate Structure?

The design and organization of billing charges by customer class in order to recover revenue requirements

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

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Uniform Rate

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Decreasing Block Rates

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Seasonal Rate

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DecreasingBlock Rates Increasing Block Rates Uniform Rate

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Decreasing Block Rates Water Budget Rates Uniform Rate

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Least

Fla tR ate Dec lini ng Blo ck

Conservation Most

The Rate Structure Continuum

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Un i f or m Sea s on al Inc rea sin gB l oc k Bu d ge Ind t\ i vi d ual ized

Water Budget Rates

Designed for resource efficiency Budget individualized for each customers indoor usage and outdoor usage Retains increasing block structure Volumetric block thresholds dependent on customers usage patterns
Indoor allowance Outdoor allowance

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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

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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

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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

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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

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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 customers monthly budget Block threshold stated as percent of total monthly budget

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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

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Boulder Water Budget Rate Structure

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

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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

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Percentage of Monthly Outdoor Budget

2% 5 2% 0 1% 5 1% 0 5 % 0 %

Ja Fe M r Apr M y Jun Jul Aug Se O N D c n b a a p ct ov e

sed on evapotranspiration index

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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

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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 Allowance 87,000 gallons Total Annual Budget 171,000 gallons

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Monthly Water Budget (indoor/outdoor)

3 ,0 0 0 0 2 ,0 0 5 0 2 ,0 0 0 0
Gallo ns

1 ,0 0 5 0 1 ,0 0 0 0 5 0 ,0 0 0 Ja Fe M r Apr M y Jun Jul Aug Se O N D c n b a a p ct ov e

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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 = Block 2: 15,000 to 25,000 gal: 10 Kgal * $2.60 = Block 3: 25,000 to 38,000 gal: 5 Kgal * $5.20 = Total July Volume Charges: $29.25 $26.00 $26.00 $81.25

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Whats 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

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Discussion

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