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HomeMy WebLinkAbout4 - Utility Rate Structure and Billing System EvaluationCITY OI' BOULD~R WAT~It RESOURCE ADVISORY BOARD AG~NDA I'1'EM MEETING DATE: October 20, 2003 SUBJECT: Staff and Consultant Piesentation iegardmg the Utility Rate Structuie and Billmg System Evaluahon REQUESTING DEPARTMENT: Ned Williams, Director of Pubhc Works for Utihhes Joanna Crean, Public Woiks Admirustrator Carol Lmn, Utihties Financial Manager BOARD ACTION R~QUESTED: Recommendation to proceed wrth detailed analysis of the watei rate stiuctures as presented in the Technical Memorandum 4(Attachment A). rISCAL IMPACT: None at this time Tom Gould fiom Economic and Engineermg Seivices, Inc (EES) and Gaty Thorson from Langham Consulting Services, Ina (Langham) will be attending the meeting to conhnue the Watei Rate Struclure and Billmg System Evaluation wilh the WRAB The first part of the presentatton will focus on Che iate structure and will mclude: a discussion of the rate stiuctures proposed for furthei analysis as mentioned in Techrucal Memorandum 4(Attachment A) and a review of the delails associated wrth each rate structure (i.e., how the blocks are determined, etc ). The second part of the presentarion will focus on the billmg system and wrll mclude: highhghts of possible billmg system enhancements, analysis of billmg systems for top rate designs, and an update on the "build veisus buy" analysis and peer comparisons. To date 22 rate structures have been evaluated against ihe goals and criteria that were prioritized and developed at previous WRAB meetings. The "top scoring" iate structures were presented at the last WRAB meehng on September 15"' These 6 rate structures mcluded thiee variations of seasonai rates and three variations of water budgets (foi details, please refer to Technical Memo 3 which was distribuCed at the Septembei 15~h WRAB meetmg). In accordance with the WRAB direction al its September meeting, Ken Wilson (with Jim Knopfs help) provided a memo called "Additions and Modifications to the Top Rated Water Budget Rate St~uctures" (rate stiuctures known as #] 7, 19 and 20) [Attachment B]. In additron, Ken piovided a memo from Ken, 7im, Peter Mayer and Bill DeOreo ent~tled "Important ConsideraCions foi All Rate Structuies Under Consideration" (Attachment C). Ciry staff and Tom Gould have ieviewed, discussed and evaluated the additions and modificarions to thc iate structures thaC Ken and 7im provided The iesulting rate structures, as outhned m Technical Memo 4, are in accoidance with the duection supported by Lhe WRAB at the September 15°' meeting and also respond well to the iecommendations fiom Ken and 7im We are requestmg WRAB's iecommendation to study these iate stiuctuies by customei class as outhned m Technical Memo 4. The prelimmary fmdmgs of this analysis will be presented at the November 17~~' WRAB meehng Attached ate the materials for your review piior to the WRAB meetmg on October 20`h. • Attachment A: Technical Memorandum 4- Selection of Final Rate Design Alteinatives and Development of Block Thresholds • Attaehment B: Addirions and Modifications to Top Rated Water Budget Rate Structures (as pioposed at the September 15`h WRAB meeUng) ~submitCed by Ken Wilson and Jim KnopfJ • Atlachment C Important Considerations foi All Rate Structuies Under Consideration [submrtted by Ken Wilson, Jim Knopf, Peter Mayer, and Bill DeOreo] • Attachment D: Revised Schedule for the Rate Structure and Bilhng System Evaluation HandouCs of ihe Power Pomt piesentations will be available at Yhe WRAB meetmg. ATTACHMENT A CITY OF BOULDER Technical Memorandum 4 Selection of Final Rate Design Alternatives and Development of Block Thresholds October 74, 2003 Prepared by: Economic and Engineering Services, Inc. Bellevue, Washington Introduction Techmcal Memorandum 3, evaluated twenty-two (22) water rate structures, and provided a list of six rate structures foi further evaluation While this screenmg piocess helped to narrow the numerous alternatives to a more manageable level, it did not begm the process of more clearly defimng the specifics of the rate structuie (e.g. size of the blocks, defmition of seasons, etc.). The ob~ective of this technical memorandum is to provide clu•ity and a detailed discussion of the approach and methodology that will be used to establish the various components of the tate structures for different customer classes. This techrucal memorandum will not discuss or focus on pnce. The next step of the lechmcal analysis is to use the findings and conclusion from this memoiandum to move to the pricmg within each rate structure Prior to moving to the pricing analysis and the extensive analysis thaC is requu•ed, the Water Resources Advisory Board (WRAB) should review the key conclusions and recommendations contamed in this Technical Memoiandum to confirm the specific rate structures to be reviewed Review of the Top Scoring Rate Structures From the evaluation process, six iate structures were selected for further review The rate structures were all inverted block rate stiuctures There were two basic rate stiuctures - a seasonal rate structure and the water budget rate structure. Certain elements of the top sconng rate structures could be common to all (e.g. goal based mcentives). In the screenmg process, the ob~ective was to determme whether these addit~onal elements "enhanced" or "detracted" from the overall rate structure At the same t~me, it was recognized that Yhese rate sCructures would need to be further refined to better reflect the specific customers bemg served Therefore, the six "screened" rate structuies provided the starhng pomt for futther refining and enhancmg the structures to match Yhe specific objectives of the city. Provided below in Table 1 is a sumin~y of the six iate slructures Chat weie selected for further ieview and development. __ __ ~~/~pt+ Technical Memorandum 4 2 ~G`"`~ Clty of Boulder 10 Top scorer of iate structures 1- 9(#5 Seasonal rates wrth fixed Chresholds and a 2-block wmter iate), plus goal based mcentives 213 5 Seasonal iates with fixed lh~esholds and a 2-block wmter rate. 195 19 Top scorer of ] 1- 18 (#17 4-block waCer budgeC; block 1- f~xed threshold, block 2-"typical" lot size and irr~gation iequircments, succeedmg blocks based on relaUOnship to outdoor goal), w~th the target set and fixed each year. No monthly ad~ustmente for weather and ET 187 20 Top Scorer of I 1- 19 (#19 4-block water budgct; block ]- fixed threshold, block 2-"typical" lot size and ~rr~gation requiremenCS, succeedmg blocks based upon relal~onship lo outdoor goal Target is set and f~xed each year No monthly ad~ustmenl for weathec and ET ), plus a discount for city appioved irngation systems w~th ram sensors and weather-based conCrollers. Ig~ 17 Indoor waCer use based upon a f~xed Chreshold, with outdoor use determmed based upon an assumed "typical" lot size and ~rrigaCton requirement5 Succeedmg blocks based upon relationship to outdoor goal. Billmg period goals are ad~usted for actual weather and ET Forward lookmg goals are commurucated via the monthly bilhng statement ~ ~5 7 Seasonal rates with a fixed threshold ad~usted based upon water supply availab~lity and a 2-block wmter iate. 175 Fiom the above list, mdividual WRAB members provided comments and suggestions lo the city for enhancmg the iate structuies noted above Given these additional comments and suggeshons, it was determmed that for purposes of this study, the number of rate structures to be reviewed should iemam at a maximum of 5 to 7, and that the final 5 to 7 iate structures should attempt to mcorporate, as best as possible, the vaiious comments and suggestrons that were received from the various parties. Piovided below is a deta~led discussion of our approach to establishing the Pmal set of rate siructures thaL will be 1uiLbcr evaluated foi each cuslomer class of service Establishment of Customer Classes of Service Each class of service places diffeient demands upon the sysLem, while at the same time, the city may have different objectives (e.g. conservation) for lhe vanous rypes of customers served on the ~~ Technical Memorandum 4 City of Boulder Ra~ ~ Strnckure ~inal Scor~ Nunnber Rate Stcuctur~ Descrlption (Oat of Q00), systcm. Given ihis challenge, it is oflen advisable and prudent to estaUhsh watei iates by customer class of seivice In establishing cuslomei classes of seivice, two citteria aie often used Customer classes of seivice are oflen established aiound facility requirements and usage chaiacteiistics As an example, a smgle-family iesidential customei has significanLly diffeient facility iequirements and usage patCeins, when compared to a large mdustrial cusComer. A single-family customer may be seived via a 3/n" meter, while the mdustual customei is scived via a 6" meter Their usage pattcins may also vaiy sigmficantly The mdustiial custonier may be fairly even m their use from day-to-day and from month-lo-month. In contrast, a smgle-family rasidential customei may have laige swmgs m their consumption from season-to-scason, with their highest peak use a funchon of lawn spiinklmg (irrigation) In the case of the ciCy, it is pioposed that for each customer class of seivice, rate stiuctures bc utilized that reflect the specific characteiistics of the class of seivice, along wrth any admmistiative/billing consideiaUons For the city, rt is iecommended that five distmct customer classes of service be considered for puiposes of desigmng water iales. These five customer classes of seivice aie as follows: ^ Smgle-Family Residential ^ Large Users ^ Multi-Family Residential ^ Metered Irrigation ^ Commeicial In order to classify the city's cuetomers to a class of service, each customer class of seivice musl be defined. Piovided below is a set of defirutions for each of the five customei classes of service. These defmrtions may be iefined ovar time to help clarify any umque customer class characYerist~cs. Single-Family Residential Single-family iesidential shall mclude. one smgle-family dwellmg, one single-family dwelhng which mcludes an accessory dwelhng urut wrthm the dwellmg, or one common wall smgle- family unit all served by a smgle meter Multi-ramily Residential A multi-family strucYure oi facihty shall mean any residenhal structure oi facility conYaming two (2) or more dwelling units, mcludmg, but not l~mited to, duplexes, ri•iplexes, apartment buildings, condommiums, trailer parks and paicels containmg two (2) oi more separate dwellmg umts served thiough common meter(s), but shall not include hotels or motels Commercial Commercial shall include all uses not classified as smgle-family iesidential, multi-family residential, large ueer, or ~n~igation, and shall mclude, but not be ]~mited to, stiuctures used foi ietail sales, ofhces, manufactuimg, schools, convalescent centers and nursmg homes, and each such busmess shall be considered as a separ~te unit even though two or more may be m the same buildmg In the event there is moie than one type oP operation m Lhe same buildmg, and the ~~~~pC Technical Memorandum 4 4 CG7 Clty of Boulder operarions are seperately meteied, (i e., a piofessional office, a retail store, a restaLirant, oi an apattment) then each sepatate categoiy or type sball pay at the iate fixed uuder that particulai categoiy or type. Large User Large users are defined as customeis whose mdividually meteicd average annual monthly potable water consumptron is m excess ol 2,500,000 gallons per monLh. The aveiage annual monthly consumption shall be calculated on thc aveiage of thc most iecent thiee-yeai peiiod. The three-yeai period shall be based upon the three most-recent calendar yeats An exception and inodificaeion shall be inade to adjust foi those yeats thal ~re designated as drought years or contain extiaoidinary consumption. Metered Irrigation This rate schedule applies to customers for purposes of irrigahon. Irrigation shall include meters mslalled wbich serve primaiily landscapc iriigation systems and include meteis which serve mumcipal park propeities, except foi those meters which seive only non-irrigahon uses Given the above customei classes of service, iate structuies can be eelected that besl fit the characteristics of the various customer classes of servicc Definition of Seasons In the evaluation of the raCe st~uclutes, lhe seasonal rate structures contamed a"wmter" and "summer" time period In order to move forward and develop these alternatives, a cleat defirution of these two time periods is needed For purposes of developmg any rate stiucture that contams seasonality, the seasons shall be defined as follows. ^ Wmter Period - October thtough April ^ Summer Period - May through Septembei These seasonal defmitrons weie selected smce the summei time period closely matches the seasonal usage patterns of the city. The impoitance of definmg seasonal time peiiods is to allow for different pricing of water during different periods of demand and supply. Defining the First (Initial) Block Size As mentioned previously, all of the proposed rate structuies are mverled block rate shuctures. Regardless of the total number of blocks, all of the iate stiuctuies have an mriial ar first block of consumption. The purpose of this discussion is to define the mtended consumption that should occur withm the fiist block, and the methodology or basis for quantifying the block size. One of the weaknesses of many iate slructures is Lhe lack of iaYionale around which block sizes are established One of the criticisms of the city's exisYing water rate stiucture was the lack of a ~~~ Technical Memorandum 4 5 City ot Boulder cleai and iationa] basis for the establishment of the block sizes The appioach to be used heiem attenipls to eLimnate that concern. Philosophically, for each iatc structure, the first block should be established based upon some iaUonal and ieasonable amount Foi single-family residential and multi-family iesidenlial customers, the philosophical basis to be used is "indooi° use. For commeicial, laige user and irrigation cuslomeis, a slightly different appioach is used, whereUy the average class consumprion is used as lhe slattmg pom~ for establishmg lhe block size. Provided below is a detailed discussion of the appioach used lo establish the mitial block size foi each class of service. Sirtgle-Tarrzily Residentdal Indtial Block Size - A numbei of diffeient methods weic exammed to estabhsh the first block foi smgle-family residential cusComers. The basis foi eslabhshing lhe block size is that it should ieflect "mdooi" use While the cily's cuiient use of AWC could be viewed as a method to establish "mdoor" use for smgle-family iesidential cusYomeis, there appeais to bc a numbei of concerns with the AWC. The iecent cappmg of ~he AWC at 5,000 gallons ieflecled one of the concetns related to "cheatmg" the system by mflatmg the AWC and coiresponding block thtesholds oi by not encouraging efficient watei use. Given that, AWC was noY strongly considered as a method Yo establish lhe first block size foi smgls-family iesidenYial customers However, AWC will be used as a basis for estaUhshing Che mitial block size for any rate alternatives that modify the existing (cuirent) rate structuie. The fiist method that was exammed as a rnethod to establish the fust block size was based upon the single-familq class aveiage use m the wmter pei7od Based upon a lhrea-year aveiage, this produced a block size of 5,200 gallons/month. The next method exammed was suggested by mdividual members of WRAB Under this approach, the first block would be established based upon an assumed 150 gallons/day/household Assuming 30 days in a month, this equates to a first block size of 4,500 gallons/month The third method ieviewed was using the city's plamm~g criteria. Based on prelimmary mformation used by the Plannmg Deparlment, the city assumes that smgle-family homes have 2 2 occupants, and a ieasonable amount of watei for mdoor use is 66 gallons/capita/day.i Usmg these assumptione, this is the equivalent of 143 gallons/d1y/household or 4,356 gallons/month Another potential method that was considered foi establishing the mitial block size was fixture counts Each typc of fixtuie has an assumed use, and when added togelher, each mdividual household would have an individual block size The use of fixtuie counts was deemed to be too admmistratively coinplex and was elimmated for that ieason. Thc three basic methods discussed above all appear to piovide compatable results. In discussions with the criy, it was deteimined that the final selected block size should be rounded to thousands of gallons This ioundmg was suggested to simphfy the administradon of the iate. The city and E~S believe that the methodology usmg the aveiage number of occupants (2 2) and a pci capita usage piovided ihe most iational basis for the establishment of the block size. With roundmg lo thousands of gallons, this method would imply an initial block size of 5,000 gallons per month. ~ Cily ot Bouldcr Watci Consa vaGon Fulutcs Study (I-Iydroaphe~c and Aquac~all, 2000) ~~~ Technlcal Memorandum 4 g City of Boulder The mitial block size should be consistent, season-to-season and month-to-month That is, the mitial block size should be the same each month, which m this case, for smgle-family iesidential, is 5,000 gallons per month Multi-Famdly Residential Initial Block Size - The cstablishment of the fiist block size foi mult~- family residential considered three diffeient approache~ The f~rst approach considered a class avciage AWC per unit, multiplied by lhe number of units, to establish Yhe total block s~ze Thts method was nol pursued since thcie were conceins about usmg the class average AWC Given Lhat AWC changes from yeai-lo-yeac, by defimtion, the mitial block size may also change Yrom year-to-year The next meYhod ieviewed used a value of 100 - 125 gallons/day/umL to esCablish the block size. This amount per umt was suggested by an mdividual WRAB membei and is comparable to multt-family per uni~ volumes assumed withm the mduetry. Under this approach, the block size may be in the range of 3,000 - 3,750 gallons/uniUmonth The fmal apptoach consideied was to develop the consumprion per unit, m relationship to the smgle-family iesidential block size. Undei this appioach, a multi-family iesidential cixstomer would be provided, on a pei unrt basis, the equivalent of 80% of the block size established foi the smgle- family ~esidential class of seivice Usmg this method, this would equlte to 4,000 gallons/unrt/month (5,000 gallons x 80% = 4,000 gallons) This last approach was deemed to be ihe most appropriate smce it had a clear ielationsbip to the smgle-family residential block size, and would be stable from yeai-to-year The use of 80°lo is a common and reasonable factor for establishmg the iclalionship between smgle-family residenlial consumpYion and mulYi-family residential per umt consumption, and has been used in the past by the city as a reasonable measure of mulh-family residential per unit "mdooi" consumption m P1anY InvesCment Fee (PIF) calculations As with the single-family icsidential class of service, the mihal block size foi multi-family residential will be consistent month-Co-month Commercial and Large User Initial73lock Size - Por these two customer classes of seivice, a consistent methodology needs to be established to determme Che imYial bloek size. Up Co this pomt, the focus has been on "mdoor" use when reviewmg smgle-family and multi-family iesidentiaL Many of the commercial and large user customers certainly have an "mdoor" and "outdoor" component to theii consumption However, the approach used to establish the smgle- family and multi-family mitial block sizes does not work well foi Yhese Ywo customer classes of service. Therefoie, two alteinative methodologies to establish the miYial block s~zes weie revicwed The first method considered each mdividual customei's AWC to establish the imual block size One of the issues that the city is awaie of concernmg the use of AWC for commercial customers rs the seasonal nature of some busmesses, and ~he fact Lhat the AWC may not account foi the seasonality aspect. Tlierefore, the alteinative methodology would be veiy similar to the pievious appioacb, but the first block would be established based upon the annual avetage monthly use. Undci this approach, the average reflects both wmtei and summer usage, and not just winter period use The city beheves that this approach is faiily comparable to usmg the AWC, but hae the potential to addiess some of the conceins the commercial customers have iaised. Theiefoie, iC is recommended Lhat annual avciage monthly consumption be used to establish the imtial block size foi commetcial and large user customers. Individual WRAB membeis have sLiggested anothei alternalive appioach that may be considered and implemented by the city at a later date. Under this approach, commercial customeis would ~~~~ Technical Memorandum 4 ~ City of Boulder be categoiized inlo separate sub-catego~ies or classes (e.g. icstauiants, supermaikets, etc), and block sizes be developed bascd upon lhe sub-class average. it has also been suggested that water biidgets may be established on a gallons per square foot basis of the establishment The erty, at this point m lime, believes that the most effective method to encourage conservaUon from these customeis is to woik directly with them, conduct conseivation audits, and use other methods (e.g. equipment rebates) Lo encourage efficient use. Metered Irrigatdon Initdal Block Stize - Obviously, metcred iirigation customers do not have "indoor" use Therefoie, the imrial block size ehould be based upon Lhe itiigation needs of the specific cuslomer, and any succeedmg blocks should ieflect "mefficienP' use. Under this appioach, the specific aiea needing irrigation is measuied to determme the mitial block size and then multiplied by an assumed per square foot apphcation rate, to deteimme the total volume of water within Yhe mrtial block In measurmg irngable area, the area will be iounded to the neaiest 100 squate feet, to simphfy the admmistrative aspects of determming the irut~al block size The u~rtgable lot area will be multiphed by 12 gallons/square fooC lo deYermme the annual volume of water. This volume of watei per square foot assumes a tuif giass urigation need Finally, the annual requiiement will be shaped to the monthly requirements usmg evapotianspiianon (ET) This aspect of developing the block size is discussed m mo~e detail undei the second (outdoor) block size deteimmaCion. The other appioach Yhat was reviewed for deCermming mitial block size was to use 90% of the customer's average summer consumption. Defining the Second Block Size Each of the iale stiucluies has a second block component withm the rate shucture. The second block size is ciiYical m those mstances wheie there are at least lhiee blocks to thc rate structure For example, ihe seasonal rato stivctuie m the wmCer time only has two blocks, buC in the summer time it has three blocks Therefoie, m the wmtei Cnne, the sacond block is all consumption over and above the fiist block. In contrast to this, the summer t~me period must define a second block size. How the second block size is determmed will be the focus of this discussion. The primary or philosophical basis for establishing the second block size is outdoor walermg needs. This is parlicularly true foi smgle-family and multi-family residential customers. Therefore, foi the smgle-family and multi-family customcrs, irrigable requirements will be factored mto Lhe deteimmahon. At the same Yime, the iriigable requiiements may be "shaped" Yo ieflect evapotranspirarion (ET) and differing irrigation needs Provided below is a discussion of the development of the second block size for the vauous customei classes of service. Single-Family Residential Second Block Size - The second block for smgle-family residenual customers should ieflect the irrigation requirements of these customers. The general approach is to considei the amount o£ aiea to be irrigated and multiply that area by the assumed iiiigation requirements on a pei squaie foot basis Threa different appioaches weie ieviewed to determine irrigation needs and the aiea to be iuigated. The fitsl approach would iequire the ciry to measure each individual customer's ~riigable aiea Alternatively, the city can woik from existmg data that may group single-family lots into various size categoties Fiom these lot size categoties, aveiage iriigation requirements could be determmed Finally, the city can assume an "average" ~~pp~ Technlcal Memorandum 4 8 C~'~ City of Boulder sizc loC and irriga~ion needs. In reviewmg cach of these methods, the crty was conccined wilh the level of effort and cost associatcd wrih mcasuring individual customer properlies and iiiigable aieas Using the fiist appioach could also potcnCially cceate a latge numbei of appeals by cuslomcis claimmg that theii proper~y was mcorrectly measured. Given those conceins, the fiist method of individually measuimg customei lots was not consideied foi use withm this study The next alteinative is Co gioup customers mto vanous sized lots, by potenhally usmg cxistmg data and mfoimation. Thc cily collects data for stoimwatci/flood managemcnt fees and groups smgle-family iesidential customers mto lot sizes of 0- 15,000 square feet, 15,001 - 30,000 square feel, and greater than 30,000 squa~e feet. In reviewing the data, over 93% of the smgle-family residential lols (mside-ciLy residents) fell mto the first "bm" of 0-] 5,000 squaie feet. Given the magmtude of ctiistomers that fall mto the first "bin" it was uncleai as to the advanCage of creatmg thiee "bms" or categories for smgle-family lot sizes, usmg the bieakpomts from the flood data. Fiom a geographical mfarmation system (GIS) analysis, ptoperty densiries and buildmg footprints were exammed Table 2 provides a summaiy of this analysis Rurul/Cstates- Total Lot Sizc 19,3ll Buildmg Footpiint 2~232 Low Density - Total Lot S~~e 9,940 Buildmg Footpnnt 1,684 Medium Density - Total Lot S~ze 6,360 Bwlding Pootprml 2,244 Neither the stormwater/flood manageinent fee mformation nor lhe GIS data appeared to piovide obvious oi easy groups to segiegate the smgle-family residential customers. The fmal approach that was reviewed was to establish an assumed loC size and determme the irrigable needs of that lot size. From the mformation ieviewed above, an aveiage lot size of 9,000 square feeC was established. This lot size should capture the vast ma~ority of smgle-family lot sizes in the city From this assumed lot size, assumed impcrvious aieas were subtracted For this analysis, it was assumed that the buildmg footpunt was 2,500 square feeC, a patio was 200 squaie feet (10' x 20'), a driveway ~s 600 square fcet (20' x 30'), and a gaiage is 500 square feet (20' x 25'). Sidewalks were not included to iecogruze the numerous diffeiences m individual pioperly, and to keep the impeivious area to a ieasonable total. The total for the assumed impervious aiea is 3,800 square feet This leaves an irrigable atea of 5,200 squaie fcet Turf grass annually iequires approximately 18 gallons/square foot (conservative requiremenC without any irngation efficiencies) for urigation purposes. Howevei, the annual ieqmrement of 18 gallons/squzue feet can be ad~usted downwaid to ieflect iirigahon efficiencies which may still result in a healthy, susLamable lawn. The city sclected an adjustment factor of 70% to reflect the ePficiencies which result m an apphcaCion rate of 12.7 gallons/squaie foot. Using these assumptions, the calculated ~~~pC Technical Memorandum 4 9 ~~"'7 Clty of Boulder LokSize Depnitian Tram Zoaing Co¢e T~ot S~2e (Sq. Ft,) annual iiiigalion requiienient is appioximately 65,000 gallons. This is very similar to the 60,000 gallons that thc crty has historically used foi plannmg puiposes Given the similarrty between Yhe two mimbcrs, foi puiposes of this study, 60,000 gallons will be the assumed ~rrigation tequirements. An impoiCant ob~echve of the city is to uunimize the admmistiative ieqmiements, along with the numbei of customer appeals foi vaiiances. TherePoie, m oidei to help mimmize the potentiai number of appeals, ihe typical lot size ot 9,000 squaie feet will be used, with ~rrtgaCion requiiements of 6Q000 gallons Based upon these assumptions, the iirigatron requnemenis per square foot of total lot size is 6 66 gallons/squaie fbot. If a customcr appeals for a vauance, theii tolal lot size would be measured and multiplied by 6.66 gallons to deteimine theu iirigahon needs One of the concepts noted earhei was tbe estabhshment of gioups of lot sizes (i e bins) to create a mare cquitable estabhshment of iriigation needs The above appioach can be modified to achieve this ob~ective. Provided below m Table 3 is an example of this approach. Fiist 9,000 squaie feet of the total lot size 6 66 gallons/square foot Nexl 9,000 square fect of the tolal lot size 4 00 gallons/square foot (__ 60%) All ovei 18,000 square leet of lhe totul lot size 2 50 gallons/square loot (- 40°l0) Px~mplc: Assuming a 20,000 square foot lot: 9,000 square feet x( 6C gallons/square toot = 6Q000 gallons 9,000 square fecl x 4 00 gallons/square foot = 36,000 gallons 2_,000 squt~re fcct x 2 50 gallons/squatc foot = S 00_ • 0 qallons 20,000 square fccl 101,000 gallons As can be seen m Table 3, Yhe allocaYion per square foot is decieased as the lot size incieases It is piesumed thaY the lot is planted with less tuif grass, and msCead conCams planYmgs requirmg lower irrigation needs. At the same time, the city desiies to encourage owneis of larger lots to landscape with grass and plantmgs that use less water per squate foot, when compared to turf giasa, or to use efficient urigarion techmques. If desired, the approach shown above m Table 3 could also be used to establish only two bm sizes. In lhat case, lhe thiid bm size would be elimmaCed and all square footage over the irutial 9,000 square feet would be provided 4 00 gallons/square foot. Another appioach that has been suggested for establishmg "indivtduahzed" block sizes far smgle-family tesidential is lo use the tax assessed lot s~ze foi each parcel. Under this approach, the tax assessed lot size would be mulhplied by 6.66 gallons pet squaie foot to determme the block size An alteinative to this, which is based upon the appioach shown m Table 3, is Lo use ___ ///e ~± Technical Memorandum 4 10 ~~~GC`~ Clty of Boulder T,ok Sp2es (CaEegoriesl Determination oFAnr~uul Waker 6 66 gallons pei squaie foot ior the fnst 9,000 square feet, and 4.00 gallons per squaie foot Yot all squaie footagc ovei the mitial 9,000 squate feet allocaUon. Using the above approaches, block sizes can be established foi any of the iate structure alternatives bemg ievicwed by lhe city The remammg issue conceinmg block 2, is how il is shaped for iriigation needs Given a total amount of watei needed for outdoor ~riigation, the focus shifts to lhe potential shapmg of the water Lo reflect the monthly iuigation iequiremenCs and ET. One method that can be used to accomplish this is to Lise the Bouldei ET and shape the water mCo monChly allocahons to cieate the Ulock size for cach month. Tn discussions with the city, it wae noted that Lwo items should be taken mto account m establishmg the annual shape of monthly water required for iirigation puiposes. First, fiom a water supply perspective, the city mcuis three different peiiods The first peiiod is a"diiect flow" period This peiiod is generally May and June. At the end of Che "d~rect 11ow" period, Che city reltes primatily upon its supply storage for water supply. This period is generally July thtough September. Thc remammg months of Oclober thiough April is considered the non-iirigation period from a supply perspective. The importance of distingmshmg the supply periods is that the city wants to encourage n~rigation m an efficient mannei duiing the direct flow period of May and June. Therefore, the city has mdicated lhat the second block size foi the monChs of May and June should be sized Yo encourage iirigation use m an efficient mannei. Given that, m establishmg the block sizes foi May and June, they will not be based upon ET, but iathei, set equ11 lo the block size fot July, which is based upon ET. The second issue that needs lo be Yaken mto account m shapmg lhe block sizes is that the city also wants to encourage iriigation of trees and shruUs duting the wmter penod Therefoie, during the winter period, Che block size is provided with exlra waLer to allow foi urtgaLion of tiees and shrubs The aveiage ET foi the city was used as a starling pomt for shapmg the annual water requuemenls. Thc smglc-family allowance of 60,000 gallons was allocated ovei the averagc monthly ~T At the same time, the allocation of watei for May and June was mcieased to equal the allocak~on m 7uly (12,000 gallons) This adclihonal water m May and 7une is over and above - the origmal 60,000 gallon Establishmg Monthly Block 2 Sizes allocation. This additional for Single-Family Residential ailocation of water in May and ~a,ooo oso June adds appioximately 5,000 tz,ooo - ~ n ~ ;~;` ''~~~~ ti 1~, ~ ~~~ '~~ o ao gallons foi irngatron purposes o~e,ooo i~'s~ E o30 ~ I-Block2 durmg this period Finally, S s,ooo -~ ~~ ' o zo a~°'`~ Er durmg the wmter pertod, ~ a,ooo -, ,~ e ~' o~o + additional allocations of water z,ooo ° o@ ~° ~ o 0o have been added lo allow for ~a~~e'~~a~PQ~~a~~~ce~9~P~yeQ`~c~~o~~oP 1TYlga[loll of ttees Thls additional allocation of water m the winter peiiod adds approximately 10,000 gallons of water over the months of November thiough April. The chart above shows the relarionship between the city's aveiage ET and the fmal block si~es cstablished foi block 2. Given Chis appioach to establishing the shape and __ _ l~~~ Technical Memorandum 4 11 ~~ C~ty of 8oulder allocation of watei for irrigation purposes, the fmal allocation of water foi the 9,000 squaie foot smgle-family residenhal lot would be 75,000 gallons. One concept that has been discussed prev~ously is the "bankmg" of water. "Bankmg" of water would allow a cuslomei Lo cariy-foiwaid any unused allocatron of watei in a partrculai month to anothei month "Bankmg" of watei is not a good concept foi two specific reasons. Fitst, the admm~strauve complexily of "bankmg" could bc significant aud problematia The othci reason, and moie importantly, is that the cily does not want customer's to "bank" their water from the "direct flow" peiiod and shiPl lheu "banked° consumption to the peak irngation periods. By domg so, it defeats the entue putpose of shapmg the watci block tiize to lhe uiigation requirements. Theiefore, our recommendahon would be to disallow any "bankmg" of water by customers Multi-I%a~nily Residential Second Block Size - Establishing Che second block size foi multi- family customers is similar to Yhe approach used foi smgle-family iesidential. One of the issues suiroundmg mulri-family residential customers was the fact that there aie multi-family customers that have metered irrigarion, and those that do not Consideiation was given to establishing two multi-family ratc schedules, wiYh and wrthout metered iiiigaUon. In discussmg this issue further, the city believed thaY Yhis was not necessaiy or desirable al this hme Most of the larger mult~- family customers wrih sigmficant irrigation requ~rements ate already metered for irrigation. It was suggested that a three block rate structure could be established m which the second block is based upon the specific iriigable area of each multi-family customei This irrigable area could be deteimmed fiom the data collected and used to calculatc the sLoimwaCer/flood management fee Usmg the relationship determmed in the smgle-family iesidenhal analysis, ihe irrigable area foi each customer would be multiplied by ll 53 gallons pei squaie foot (60,000 gallons = 5,200 squaie feet) to detcimme the annual volume for the second block size As with the smgle-family iesidenual customers, lhis annual volume oP water, deteiimned foi each specific cuslomer would be shaped based upon histoiical monthly ET The ~bove approach should be acceptable to both meteied nrigahon and non-metered irrigation multi-fam~ly cuslomers The assumption is that any multi-family customei that has metered irrigaLion should noC use any significant amounts of block 2 watei, and should nevei be billed for block 3 water In conirast, the multi-family customer that does not have metered iriigation is piovided an allocation of block 2 water that is based upon their specific iriigable aiea. Commercial/Large User Second Block Size - For the commercial/latge usei customers, it is proposed that a two block iate structuie be uCilized Theiefore, the second block will represent all consumption over and above the first block consumption As discussed previously, each mdividual customer will have a fiist block established Uased upon the~i specific consumpUon characterisrics (annual average monthly) Many of these customers have irrigation meters and as a result, the second block of consumption does not relate to outdoor usage. Furthermore, there are commercial customers that have minimal irrigation requiiements, if any. Tharefoie, ihe focus of this class of seivice is not necessarily on outdoor consumption. _ ~~/~ Techn~cal Memorandum 4 '~2 ~~~ Clty of Boulder As mentioned prevtously, the city believes that workmg diiectly with lhe customeis and estabhshmg "best managemenf practices" is the most effechve tool for achievmg efhcient water use wrth lhese cuetomers. Given that, il did not appear teasonable or piudent lo establish addiYional blocks, beyond the second block, foi ihis gioup of customeis. Metered Irrigatiore Second Block Size - For Che meCeied uiigation cusComers, it is pioposed ihat a maximum of a two-block rate stiuctuie be used The city believes Chat using up to two blocks aic sufficienl for this customer gioup, given that there is no mdoor consumphon, and the first block is cslabhshed based upon ihe specific irrigable aiea of the customer or theii aveiage summer consumption Theiefoie, by definilton, all consumption ovei ihe fiist block will be billed in the second block Defining Third and Fourth Block Sizes Theie are ceilam iate struct~ires lhat have ihird and foutth block sizes. In all cases, the block sizes are based upon the relationship to the "goal " Previously, block 3 may have been described as "101% to 150% of Goal " The quesuon that arises is how the "goal" is dafined. The "goaP' may be defined as the outdoor goal only (i e. block 2), or the sum of both the mdoor and outdooi goals (i.e. the sum of block 1 and block 2) EssenYially, how the "goal" is defined creates different block sizes Provided below m Table 4 is a simple example of this issue Block 1 Block 2 Block 3 (101 -150% of Goal) Block 4 (All Excecs Usc) 0 - 5,000 gallons 5,001- I5,000 gallons I5,00] - 20,000 gallons All Use Over 20,000 gallons 0 - 5,000 gallons 5,001 - 15,000 gallons ] 5,001 - 22,500 gallons All Use Ovci 22,500 gallons As can be seen above m Table 4, how thc "goal" is defmcd changes tha block sizes. Foi purposes of this study, the "goal" shall be defined as outdooi use only (i e. 2"`~ block consumption). This defmrtion was sclected since many watei budgets and traditional rate structures target outdooi use, and customeis that are billed m block 3 oi 4 aie usmg water gieater than theri defined needs Flartheimore, the majority of customeis that will be billed in block 3 or 4 will likely be duiing Lhe summei uiigation peiiod. They will have most likely encountered block 3 oi 4 as a iesult of inefficient outdoor watermg, and not inefficient mdoor use. ~~~pp~ Technical Memorandum 4 13 ~T`~ City of Boulder g~t~ Indooe + OuEduor °~lack Qutd4or (2"~ Blocl~) ~ Goal (la` 8t 2°~ 131oc1d ~ Croa~ Other Rate Design Features Withm the oiigmal "top scormg" rate stiuctuies shown on Table 1, there aie featuies which can be apphed to any of the final rate structuies developed (e.g. ad~ustment for watei supply conditions, incenYives foi exceeding goals, etc ). In othei cases, the feature may be admmisYrative, and not necessanly structuial (e.g. ad~usting for actual ET tor billing purposes) While developmg the evaluation process, i~ was important to deteimine whether these "featuies" enhanced or detracted fiom the rate designs Given Chal these featuies can ba applied to any of the final rate designs, for purposes of developing further detailed evaluations of the rate stiucture, these featuies will be iemoved from the analysis By domg so, it "collapses" ceitam "top scormg" rate struclures mto idenhcal rate alLematives Foi example, the only differencc between the origmal rate structures #5 and #10 is the use of goal-based mcentives on #10. In summary, the four featuies that will be taken out of the evaluation process at this pomt, and potentially added back m latei, mclude the followmg: ^ Ad~uslxnent of blocks and piice foi water supply availability ^ Goal Uased incentives2 ^ Ad~ustment of block 5izes for actual ~T (weathei) ^ Discounts foi eity appioved irrigation eystems Z"Goal-baved mcenhves" ar~ ~clated to block 2 usage, and iewards a customer for cousummg less thcn their block 2 allotmenl m thc pcak use per~od Pot cxample, il a customei has a block 2 site oi ] Q000 gallons, and uses only 8,000 gallons m the month, thcy would be given a ciedd foi 2,000 gallons Lnnec a l~xed mccntive ratc The cusLomei ~s stdl charged the st~mdard ratc foi the 8,000 gallons consumed, but it givcn Some level of cicdit (reward) ior consummg below Lhcu alloLLed amouut ~~~ Technical Memorandum 4 14 Cfly of Boulder Consideration of Modifications to the City's Existing Rate Structure The city iecognizes that many of the iate structuree bemg discussed withm lbis etudy cannot be immediately implemented due lo the hmitations of the cily's cuiienl b~llmg system. Theiefore, one of issues discussed is whether the city's existmg rate stiuclure can be modified to addtess some of Che concerns that have been iaised in the past These modtfications may be a way to transition to a new iate structure, or may be of a level of acceptability that they would be used gomg foiward. Tn ieviewing the exislmg iaLe structure for each class of scivice, the city felt that the rate stiucture as ri apphed to m~ilti-family iesidenlial, commercial and meteied uugalion was acceptable for the time bemg, ar lhat the constramte of the ciCy's billmg system did not allow foi meamngful modificalions. Theiefore, the focus was on the modifications thal could be made to the existing smgle-family iesidential iate stiucture Single-Family Residerctial Modiflcations - For smgle-family iesidential, tlle existmg rate could be modified to in7prove the assumptions conceining the second block size The fust block size would iemam at ~ts cuiient structure; AWC capped at 8,000 gallons. The second block size would be cstablished m a mannei similar lo that discussed earher That is, single-family iesidenhal customers would be provrded with a 2"d block size that is based upon the 7uly iequitements of 12,000 gallons of water The thiid block would be all contumphon over and above lhe second block. At this point, it is unclear whether the city's existing billing eystem could bill foi a shaped block based upon ~T If the city's exisling b~lling system can handle a shaped 2"d block, then that is the approach thal would be used. Specific Rate Structures to Be Evaluated By Class of Service The above discussion has exammed a numbei of areas of the potenhal rate shuctures for each class of service. Specifically, this technical memorandum has mdicated lhe need for and defined the customer classes of service to be used foi rate design purposes At the same time, for each class of seivice, lhc methodology lo be used to establish the first and second blocks of the various rate designs have been provided. Theicfore, the final step m defmmg the rate stiuctures to be further evaluated ie to mcoipoiate those findmgs mto the var~o~ts "top scormg" rate structures In woikmg wrth the "top ecoimg" rate stiuctuies, it wae noted that these structures would need to be modified to better conform to ihe speciiic characterishcs of e~ch class of seivice Al the same tune, the crty's existmg rate sh~ucture could bc modified foi thc smgle-family iesidential cuetomers to bctter meet the goals and ob~ectives of the cily. Given lhat, specific rate structuie alternatives have been developed foi each class of service (see bclow). A mam ob~eclive m developmg ihesc alternatives was to incoiporate mput fiom both city staff and Che mdividual WRAB membeis who piovided comments as well as to mlpiovc and Yailoi the ratc stiuctures foi each class of seivice. Piovidcd below is a suinmary of the specific iate stiuctuies to be developed and quantified for purposes of furQier evaluation by customer class p~~ Technlcal Memorandum 4 15 ~~ Cily of Boulder Single-Family Residen4ial Rate Structures To Be Evaluated SINGLT-FAMILY RTSIDP,NTIAi. RATL' STRUCTURT 1- SEASONAI.I.Y DIFG~RF,NTIATED RATE STRUCTURG WITH A 2-BI.OCK WINT~12 RATE AND A 3-BLOCK SUMMP:R RATP. ~ ~ ~~S1S l`OC ~Mock #~e~ermi~~ng ~31oci~ Size , Pxfcin~g of th~ ~IQCMc Winter Period Block 1 First 5,000 gallons Inverted Block Wmter Price Block 2 All Usage Over 5,000 gallons Invcrled Block Winter Pncc Summer Period - Block 1 First 5,000 gallons Same Price as ls` Block Wmtei Block 2 Next 12,000 gallons Inveited Block Summer Piice Block 3 All Usage Over 17,000 gallons Invertcd Block Summei Piice SINGLE-FAMII.Y RF,SID~NTIAL RATE STRUCTURF, 2- WAT~R BUDGET WPPH FOUR (4) CONSUMP'PION BI.OCKS. BIACK 1 IS FIXRD FOR INDOOR USE, BLOCK 2 IS BASF.D UPON THE IRRIGATION R~QUIREMPNTS OF A 9~000 SQUAI2F, FOOT LOT SIZE, AND BLOCK 3 USES 150%a OP BLOCK 2 TO D~TPRMINF. SIZF,. „ ~ ~ ' ~~5~,~' fQk' - ' ~ ~ ~ ' ~ ' ' , ~ ~ ' $~qG~ ' ' ' A8tPt1`1T11~1~1g ~IOG~ 53~~ ~A'1c~~tNg OF ~~ BX4Ck Block 1 Fiist 5,000 gallons InverCed Block Pnce Block 2 Vaues by Month - Uses 9,000 sq fl.~l~ Inverted Block Piice Block 3 ]O1°Io to 150% of Outdoor Goal Inverted Block Price Block 4 Over 150% of Outdoor Goal Inverted Block Puce ~~~ Each month will have a set outdoor goal based on an average Iot stze of 9,000 square feet and an outdoor appLcation rate of 6 66 gallons per squaie foot of lot size The monthly irrigahon requirements will be sl~aped by hmtorical weaChei and ST l~~~ Technical Memorandum 4 ~~~ ~~ ~ 16 ~ City of Boulder SINGL~-I+AMILY R~SIDPN'fIAL RA17S STRUCTURP 3- WATlIi BUD(;P:P WITH FOUR (4~ CONSUMPTION BI.OCKS. BLOCK 1 IS PIXPD POR INDOOR USE~ BLOCR 2 USES TAREP DIFI~'PRPNT "BINS" TO DLT~RMINP IRRIGATION R~QU[R~MCNTS~ AND BLOCK 3 USIs'S 125% OF BLOCK 2 TO D~TERMINR SI`Ll:. ~ B~~~S fPr 13lock ' Actermining ~31ack Size -' Prieing t~f t~~ ~laCk Block 1 F~rst 5,000 gallons Inverled Block Price Block 2 Varies By Month - Uses 3`Binssj1~ Inve~ted Block Price Block 3 101% to 125% of Outdooi Goal Inveited Block Price Block 4 Over 125% of Outdooi Goal Inveited Block Piice ~~~ Each month will have a set outdoor goal based on thiee separalc lot size "bms" (0- 9,000 sq. ft , 9,00 ]- 18,000 sq ft , aud geeater than 18,000 sq fr) and an outdoor apphcation i ate of 6 66 gallons per square foot ot "lypicaP' lot size The irrigable ieqwrements for Yhe 0-9,000 sq ft bm will be allocated based upon 9,000 sq ft The 9,001 - 18,000 sq ft bm size will be based upon 15,000 sq ft, and the third bm will be baced upon irrigable requiremcnts for 24,000 sq ft The monthly irrigation requirements will be shaped by historical weather and ~T, SINGLE-FAMILY RESID~NfIAL RA'PP STRUCTORE 4- WATER BUDG~'P WITH FIVE (5) CONSUMPTION BLOCKS. I31.OCK 1 IS FIXCD FOR INDOOR USF.~ BLOCK 2 IS BASED TAX ASSF.SS~D LOT SIZE~ BLOCK 3 Is 125% Or Br.ocx 2, Anrn Br.ocK 4IS 150% Or BLOCK 2. ~ ; ~ ~, , ~ , ~ ' ~ „ "~~SIs f~t`, . ~ , ~Bl~~~ . , , ~ Dc,t~C~m'~iqg ~l~rc~ Size ~ ~ ~ Prici~tg tr~ khe.l~~bck' , Block 1 FnsL 5,000 gallons Inveited Block Price Block 2 Vaiieti-Uses Tax Assessed Lot Size ~l~ Inveited Block Price Block 3 101% to 125% of Outdoor Goal Inveited Block Pnce Block 4 125°lo to 150% of Outdoor Goal Inverted Block Pitce Biock 5 Ovei 150% of Ouldoor Goal Inveited Block Price ~~~ Each month will have a set outdoor goal based on the tax a sscssed lot size and an irrigaCion applicaGOn rate of 6 66 gallons pei square fooC of total assessed lot s~ze The monthly trrigatton rcquirements will be shaped by histotical weathei and ET - ___ _ __ ~~ppC Technical Memorandum 4 ~~ ~'~`7 Clty of Boulder SINGL~-1+AMII.Y R~SIDENTIAL RAT13 STRUCTURC 5- WATER 13UDC,TT WITH FOUR (4) CONSUMI'1'ION BLOCKS. 13LOCK 1 IS FIXF.D FOR INDOOIi UST~ BLOCK 2 IS BASF.D UPON EITHP:R A CUSTOMGR PROVIDP.D IRRIGABLT SIZE, OR A DTFAOLT Or S~ZOO SQOARC PRPT OF IRRIGAllLE AI2~A. SUCC~TDING BLOCKS BASTll UPON RELATIONSHIP TO I31.OCK 2. „ ~as3s for Bloc~ , Detexmfining ~3~oak S~~e Pri¢ing 4~ t1~c ~f1~~Cc Block 1 Pust 5,000 gallons Inveited Block Price Block 2 Custoiner Provided or Defaull Size~~~ Inveited Block Piice Block 3 101% to 125% of Outdoor Goal InvetCed Block Price Block 4 Ovei 125% of Outdooi Goal Inverted Block Price ~~~ Each month wdl h avc a set outdoor goal based on either the customer provided iriigable aiea oi assumed "defaulY' ix~igable area of 5,200 and an application rate of l2 gallons per square foot The monthly ~rrigation ~equirements will be shaped by hi5tocical weather and ET. SINGL~-FAMILY RCSIDENTIAL RATC STRUCTURP (-~XISTING CITY I2ATF. STRUCTUR~ MODIFIED TO REFLECT CURRENT CITY GOALS. , „~31ock'; , , , Block 1 Block 2 Block 3 Tf~si~ far ; Det~r~~~ ~1o'cl~,~i~ AWC, capped at 8,000 gallons Next 12,000 gallons All Excess Usagc ~, , , „ ~"~c~fhg r2#' this #34n~1~' Inveiled Block Piice Inveited Block Puce Invcited Block Piice Multi-Family Residential Rate Structures To Be Evalua4ed MULTI-FAMILY RCSIDF,NTIAL RATC STRUCTURF. 1- SF.ASONALLY DICP~RF.NTIATED RATF STRUCTURE WITH A 2-BLOCK WINT~R RAT~ AND A 2-BLOCK SUMMER RATF.. ~~Q~k , ,`„ , Wanter Peraod - Block 1 Block 2 Summer Period - Block 1 Block 2 ,B~S~S ~4P ~ Determ~niang ~llnc~'~~z~ ~ ~ First 4,000 gallons per unit All Excess Usage First 4,000 gallons pci umt All Excess Usagc Friai~~'n~~ t~i~ ~,inel~ Inverted Block Wmtei Price InverCed Block Wmter Price Same Price as la` Block Wintet Inveiled Block Summer Price ~~~ Technical Memorandum 4 18 Clty of Boulder MOI.I I-FAMILY RESIDPNTIAI. RATP 5'PRUCTURE 2- WATF.R BUDG~'P WITH PIVP (5) CONSUMPTION 13LOCKS. BLOCK 1 IS A PIXED P~R UNPP THRCSHOLD~ BLOCK 2 IS 13ASED ON ~PHP CUSTOMER SPh:CIFIC IRRI(;ARI.~ ARPA~ AND SUCC~TDING 13LOCR8 BASED UPON RPLATIONSHIP TO OOTDOOR Goni,. Basia Pdr '131ock-~ ' , , , A~xermi~i~g ~31oe~ Siz~ ~riei~$ af t~e ~ilu~k Block 1 First 4,000 gallons per unit Inverted Block Piicc Block 2 Vaues By Month - Iiiigable Aica~~~ Inverted Block Price Block 3 101% to 125% of Outdooi Goal Inveited Block Price Block 4 125% to 150% of Outdooi Goal Inveited Block Priee Block 5 Over 150% of Outdoor Goal Inveited Block Price ~~~ Each month will have a sel ouCdoor goal based on the irrigable area as determmed by lhe cily and an ~icigalion apphcation raCe of 12 gallons per square fooC The monthly irrigat~on requirements will be shaped by historical weather and ET MULTI-FAMILY RESID~NTIAL RATE STRUCTURE 3- WATF,R BUDG~T WITH FOUR (4) CONSOMPTION BLOCKS. BI.OCK 1 IS A FIXF.D PPR UNIT THRESHOLD, BLOCK 2 IS BASCD ON THE CUSTOMPR SP~CIrIC IRRIGAI3LP AR~A~ AND SUCCC~DING BI.OCKS BAS~D UPON RELATIONSHIP TO OUTDOOR GOAL. $~S~& ~bC, ' " ~r~OC~''r ' ' ' I~Rt~x~1l~llili1gB104~ 5~,~0 ~CIC9~$` Q~~ITB'I~~OC1~" Block 1 Fust 4,000 gallons pei umt Inveited Block Piice Block 2 Vaiies By Month - Irrigable Aiea ~~~ Inveited Block Piice Block 3 101% to 125°lo of Outdooi Goal Inverted Block Price Block 4 Over 125% of Outdoor Goal Inverted Block Price ~~~ Each month will have a cet outdoor goal based on the uiigablc area as determmed by the mty and an irrigatron applicahon rate of 12 gallone per square foot The monthly ~rrigation requ~tements w~il be shaped by h~storical weather and ET -- l~~~ Technlcal Memorandum 4 ~ City of Boulder Commercial/Large User Ra4e Structures to Be Evaluated COMM~RCIAL/LARU~ US~R 12AT1~ STRUCTORP 1- SEASONALLY DIPPEREN'PIATED RA7T STRUCTURF. WITH A 2-BI.OCK WINTPR RATI~; AND A 2-I3LOCK SOMMIR RA'fP. ~, ~~o~k , , ~r'dS~S;~QA' Detcrniininig liiael~,~i~zc Fri~~ri~ o~ tH~'Rlack Winter Pertod - Block 1 Block 2 Summer Period - Block 1 Block 2 ~~~ Average monthly use is to be deteimmed for each md~vidual customer based upon a lhree-year average, reviewed and establ~ehed period~cally. The same block 1 size is used for both wiutec and summer qme penods Aveiage Monthly Use~~~ All Usage Over Block 1 Average Monlhly Use~l~ All Usage Over Block 1 Inverted Block Wmlei Price InvcrLed Block Wmtei Pricc Same Price as ]`r Block W~ntei Inverted Block Summer Price COMMERCIAL/LARGE USER RATR STRUCTURG 2- SEASONALI.Y DIPPCRP.NTIAT~D RAT~ STRUCTURE WITH A 2-BI,OCK WINTF.R RATI: AND A 2-BLOCK SUMMP:R RAT~. $loc~ B0S~9 ~'Q~' peterr~ai~ing ~1~~1~'~Y~e ~'rlcingoPt~~Blac~ ' , Winter Pertod - Black 1 Block 2 SummerYeriod - Block 1 Block 2 90% Average Monthly Use~~~ All Usage Ovei Block 1 90% Average Monlhly Use~~~ All Usage Over Block 1 Inverled Block Wmter Price Inverted Block Wmter Puce Same Pnce as Winter Block 1 Inverted Bloek Summer Price ~~~ Average monthly use is to be delermmed for each mdrvidual customer based upon a three-year average, reviewed and estabhshed period~cally The same block 1 s~ze is used for both wmter and summer timc peuods The use of 90% repiesents the c~Cy's perception of this class l0 lmpi ove water eff~ciency - __ _ .. ~~~~ Technical Memorandum 4 ~~ Clty of Boulder METERED IRRIGATION RATE STRUCTURES TO BE EVALUATED MF.TPRCD IRRIGATION RATR STRUCTURI; 1- UNITORM RATE. ~~5~~ ~ol' , Blcrck ' D~terarr-ii-iag ]ilool~ Saze Pricing af the ~lack Block ] All Metered Consumption Fixed Piice MrTPRED IRRIGATION RATP STRUCTURT 2- WA1T,R 13UDG~T WITH TWO (2) CONSUMPTION BLOCKS. BLOCK 1 IS BASRD UPON CUSTOMTR SPECIrIC IRRIGAI3LE ARF.A~ AND BLOCK 2 IS ALL USAGE OV~R BLOCK 1. ` ~RS~S~ EO1C ~$Ioc~t .- De~ermir~3ng ~l~n~k 59~~ ~'r~aing of the BIAe~ Block 1 Customer Specific Irrigable Area~l~ Iuverted Block Price Block 2 All Usage Over Block 1 Inveiled Block Price Each month will have a set outdoor goal based on the ~rrigaUle area as determmed by Che e~ly and an ~xngalion apphcation raCe of 12 gallons per squa~e foot The monthly ~rr~gatron requ~remenCs will be shaped by h~storical weather and ET METERTD IRRIGATION RATE STRUCTURF. 3- WATF.R BUllGET WITH TWO (2) CONSUMPTION BLOCKS. BLOCK 1 IS RASED UPON 90% OF THE CUSTOMER'S AVTRAGT SUMMCR CONSUMPTION (ASC). 8~~16 f4T ~3#0~~ ' ' , l~~x~r~ini~g ~Yaak' ~3~~ ; Pxi~#ng aP the ~G~ek, ' , Block 1 90% of Customer's ASC Inverted Block Piice Block 2 All Usage Over Block 1 Inverted Block Piice ~~~ Aveiage summer consumptton is to be determmed for each mdividual customer bascd upon a thiee-year average, reviewed and estabhshed periodically The use ot 90% represents the c~ty's peicepl~on of this class to improve water eff~ciency Summary This techrucal memarandum has described the appioach and methodology to be Lised Co esYablish lhe classes of service and block sizes for the various rate st~~tctuies w be evaluated. ~~~~ Technical Memorandum 4 27 City of Boulder ATTACHMENT B ADDITIONS AND MODIFICATIONS TO TOP RATED WATER BUDGET RATE STRUCTURES Water Budgef Rafe Structure #19 "Indoor water use based upon a fixed threshotd, with outdoor use based upon an assumed "typical" lot size and irrigation requirements. Succeeding blocks based upon relationship to outdoor goal. Target set and fixed eacl~ year. No mmithly ad,justments for weather and ET. Forward looking goals are communicated via the monthly billing statement " ~-p~ b~ ~~i i sg ~g 3 t,7'~y A"y'~. q;~,i' ~Sye~..~ ;. ,_;:np~t'{°eb~,~c-~ aa ?" ~ ~.a ~~,;~~" 3,~t,~~ E~`'c~tEg ~ r.4 ~~Q.~' ,fi~~~' G` I.~'~"I~i zs~r 7L-4$~.,L rt~,Y ~~~ir~~,} ~': i~ ~ i ~~,~„'e-6 ~A~~i;'~^.~~lSMl,.~1~' M, ~hS~i~~°~~R; ~n, ~~,'` ^.33',n~c;'ir~,"Y~#3,~~`~,nE`v-,Pre~..,~.,A~C~~i, .~,' Block 1 Fixed Thieshold Inverted Block Piice Block 2 Based on "Typical" lot size, typ~cal weather, Inverted Block Price water supply, fixed taiget Block 3 101% to 150% of Goal Inverted Block Price Block 4 Over 150% of Goal Inveirted Block Price Recommended Additions: 1) Add goal based incentives to encourage meetmg fixed target (similar to stiucture #10). 2) Use between 3 and 5 lot size "bins" to establish block 2 Customers are placed m a bm based on tax assesscd lot size. Single "typical" lot size for all customeis is unacceptable (i.e one size fits none - hke current strucCUte) 3) Basis for determmmg Block 3 siz,e should be 101% to 125% of Goal 4) Basis for deteiminmg Block 4 size should be over 125% of Goal. Water Budget Rate Structure #20 "Indoor water use based upon a fixed threshold, with outdoor use based upon an assumed "typical" lot size and irrigation requirements. Succeeding blocks based upon relationship to outdoor goal. Target set and fixed each year. No monthly ad,justments for weather and ET. Porward looking goals are communicated via the monthly billing statement. Discount for City approved irrigation systems with rain sensors and weather-based controllers:' ~ ~,~, ~ ~~~,9~~~u~k~~~'~~;'j`~~#~~ai~r~oi~~~t~1~.'r~i~~i~~~~'r'~~~~~~$~~!~°~~.z=~~: ~~~~~~~~~~~~~~~"~~~~~ Block 1 F~xed Threshold Inverted Block Pr~ce Block 2 Based on "Typical" lot size, typical weather, Inverted Block Piice water supply, fixed target Block 3 101% to 150% of Goal Inverted Block Piice Block 4 Over 150% of Goal Inverted Block Price Recommended Additions: 1) Add goal based incentives to encour~ge meeting fixed target (similar to structure #10). 2) Use tax assessed lot size multiplied by irugation requnements (12 - 14 gallons per SF per yeai) to determme Block 2 size Smgle "Cypical" lot size foi all custoineis is unacceptable (i e one size fits none - like cuiient structure) 3) Add a 5'~' block rate. 4) Basis for deteiminmg Block 3 size should be 101% to 12S% of monthly goal 5) Basis for determining Block 4 size should be 125%o to 150% of monthly goal 6) Basis foi defeimming Block 5 s~ze should be over 150% of monthly goal Water Budge# Rate Structure #17 "Indoor water use based upon a~xed threshold, with outdoor use Uased upon an assumed "typical" lot size and irrigation requirements. Succeeding blocks based upon relationship to outdoor goal. Billing period goals are adjusted for actual weather and ET. rorward looking goals are communicated via the monthly billing statement " Block 1 Fixed Threshold Block 2 Based on "Typical" lot size, water supply, fixed target Block 3 101% to 150°Io of Goal Block 4 Over 150% of Goal ',,_ `" , . :`° ~ ~ ~f'~I~l3~~,~~`~ Inverted Block Price typical weather, Inverted Block Price Inveited Block Price Inverted Block Price Recommended Additions~ 1) Add goal based incenhves to encouiage meeting fixed target (similar to shucture #10). 2) Customer submits measuicment of imgable area or accepts City "defaulP' size to determme Block 2. 3) Basis foi determmmg Block 3 size should be 101% to 125% of Goal. 4) Basis for determtmng Block 4 size should be over 125% of Goal This document offeis specific detail and iefinement for this proposed rate structure and attempts to meld ideas from othei highly scored rate structures. Elements That Apply to All Water Budget Rate Structures • Allocations should be determined based on the specific customer category and mtended end use See recommendations foi SF, MF, irrigation, and commeicial accounts on the other document we are submitung. • Indoar allocation is piovided in 12 equal mcrements while the outdooi inigation follows the htsloiic climate curve, but lhe total is a single fixed target Chat can be set each year. • Data requirements sliould be kept to a mimmum, and there should be no micro-analys~s of landscapes or plant types Landscape designs and watei efficiency will be left to the discretion of mdividual customers with the rate structuie piovidmg appropriate mformahon and mcentive ~ For structures that include a"target". In full supply yeats the outdooi targets should be set to 100%. In times when shartages reqwie curtailment, targets should be reduced as necessaiy to achieve savmgs, and customers should be fiee to use water as they believe is best as long as they stay withm their allocations. ~ An appeals process should be estaUlished for customers who dispute the budget developed for their property • The overall rate structure appiies to all users in all customer classes. • The water budget foi each class of user that defines block sizes is developed separately. • Rates should be set so normal utilrty revenue requirements are met with service chaiges and water sales in Blocks 1, 2(and 3 for 5 block system). Revenue fiom Block 4(and 5) should be earmarked for water conservation oi other supply enhancement pro~ects - in keeping with current Boulder policy ATTACHMENT C Important Considerations for All Rate Structures Under Consideration To: Tom Gould and EES Consultmg Team, City of Boulder WRAB, and Ciry of Boulder Staff P'rom: Ken Wilson, Jim Knopf, Petei Mayei, and Bill DeOreo Below aie some impoitant ~ssues that should be considered in connection with all six of rate structures selected fot additional analysis as part of the on-gomg City of Boulder study. Customer Categories Regardless of the rate siructure (seasonal, water budget, etc ) the customer category ~s an important determmant of oveiali design One size does not f~C all The rate structuie must address all customei categories explicitly and not set aside important groups of customers to be handled "latei" Thcie are 5 ciitical customer categones Theie may be ~mportant subcategoiies withm these five. i. Single-family residential ii Multi-faTtuly residential m Irngahon oniy iv Commcrcial and Institutional v Industrial Rates Equity between customers and classes of customers requires that the rate chaiged for each usage block be consistent foi all Rates and seivice charges must be set to cover all necessary revenue requirements and all rate structure5 undei consideiation must mect these requiiemenCS. Block 5izes Wh1t should not be the same for all customers is the size of the blocks and the determination of block break poiuts. Foi both the seasonal and waler budget rate stiuctures, block size should be deteimmed for each class of customeis to equitably encourage efficiency as best possible, In order to fairly compare rate structuies, the methodology for determining block sizes must be clearly delineated with more detail than is curiently provided in Teclmical Memoiandum 3 Some recommendations and considerations for developmg block sizes for each customer class and rate structure 1ie presented below. Single Family Indoor Ulock(s)• Same methodology should apply for seasonal rates or water budgets. Fixed value based on typical or efficient household use One possibility is to use current average demand of 150 gallons per household per day, or 55 kgal per year, or 4 5 kgal/month. Appeals piocess avail~ble for large families and extenuatmg circumstances. Outdoor blocks. Tor water budgets• Based on tax assessed 1ot size~ multiphed by a fixed application rate. Available data and expenence suggest that an apphcation rate around 12-14 gallons per squaie foot acioss the total lot size would captuie the current use patterns by Boulder SF customeis The allocation should be spread out over the months of April through October wrth the largest allocation commg m 7uly and August The bilhng system should be capable of cariying over unused allocahon fiom one month to the next through a calendar year For seasonal rates: Unclear. Technical memorandum suggests Summer Period Block 2 will be set as a multiple of the fixed thieshold block 1. This is quite similar to the current system and provides no real measurement of outdoor efficiency, as there is no documented relationship between indoor and outdoor use, llata requirements: Customei category, tax assessed lot size. Multi-family (includes duplexes) Indoor block(s): Same methodology could apply for seasonal rates or water budgets. Based on the number of umts at the propeity multiphed by a reasonable mdoor use (around 100-125 gpd/umt). Properties with pools and central laundry facil~hes should have addit~onal water allotted to account for these uses Data from a national or local sample of multi-family propeihes could be used to refine the mdooi estimates. The city's existing data base can be used as the basis for the number of units one each property. Outdoor block(s): For water budgets: Based on best estimate of irrigable area2, multiplied by the same application rate used for SF customers. lor seasonal rates: Unclear Data requirements: Customei category, numbei of units, iriigabie area, specific amemties (pool, laundiy, etc ) ~ Thece data are already lmked m the C~ty GIS 2 Irngable area, as defined m th~s memo, means total lot size mmus permanent impervtous area (buddmg footprmts and paved lreas) Temporary hardscape (mcludmg ~ocks, flagstone, decks, swimmmg pool, mulch, e[c.) should not ieduce allocahon and should allow wstomers to operlte w~thm allocahon more eas~ly Irngable area should be determmed for each customer by GIS, aenal photography, and tax usses5or data, or by analys~s of a representative slmple of cusLOmers Customers may file an appeal d they feel an error has been made Irrigation Only Accounts Outdoor block(s): For water budgets: Based on ungable area times reasonable apphcation based on the specific use. Heavily used parks and recreation fields could be given a higher allocation lhan single family yaids Decoi~hve landscapmg should get the same as SF. 1%or seasonal rates: Unclear Data requirements: Customer categoiy, iirigable aiea Commercial and Institutional Customers Indoor block(s): For water budgets: Initially a customer's historic average winter consumption can be used to determine mdoor block size Eventually, commercial customeis should be classified into separate sub-categories, or classes (i.e iestauiants, super markets, hospitahty, manufacturing, entertamment, office, school, etc.). This w~ll allow restauiants to be compared to restaurants, office buildings to office buildmgs, supermlrkets to supermaikets etc. Water use benchmarks should be established or obtained fiom lhe hterature to establish watei budgets on Che basis of gallons per square foot of establishment Block 1 could be based on the class average to 25% m excess of that value, noimal consumption based on the 50% m excess of class average, heavy on the 75% m excess of dass average and wasteful on the 90% and above of class average. Separate curves aie alieady available (for starmg pomt) for supermarkets, offices, iestaurants, hotels and high schools3 Additional analyses can bring new classes m over t~me For seasonal rates: Uncleai Customer's histoiic average wmtei consumphon can be used to determine indoor block size. Outdoor block(s): For water budgets: Most commercial and mstitut~onal customers should be encouraged lo have a separate irrigation meter (49% already have separate accounts) Those with common melers should receive an allocation based on iriigable area using the SF type of application, unless they can show their landscape is used more heavily and needs the park type allocation (~.e schools) For seasonal rates: Unclear. Data requirements: Customer category, class of CI customer, i7oor area, irrigable area, excess use cuives. 3 AwwaRP Commerc~nl and Insluutmnal End Uses of Water s[udy (2000) Industrial Customers Indoor block(s): For water budgets: Based on Uistoric use unCil customer audit can be perfoimed Based on audit results, mdoor allocation should be adjusCed to ieflcct potenYial for efficiency. For seasonal rates: Unclear Outdoor block(s): Por water budgets: Industrial customers should be encouraged to have a separate irrigation meter. Those witl~ common meters should receive an allocation based on iriigable area using the SF type of apphcation, unless they can show their landscape is used more heavily and needs the park type allocation (i.e. schools) Tor seasonal rates: Uncleai. Data requirements: Histonc use (from bilhng data), niigable area, cuslomer audits (eventually). Comparing Rate Structares and reatures Rate structures should be compared based on fundamental concepts and features that uniquely distmguish each sYructure - not by tangential items that could be part of any rate structure. One of the top rated rate structures mcluded the item, "Diseount for city approved irrigation systems wIIh ram sensors and weather-hased controllers." While this may be a worthwhile progiam il is not appropriate m the comparison of rate structures Any of the rate structures under consideration could mclude this concept, therefore it should not be a distmguishmg feature Similarly, the phrase, "Forward lookmg goals are communicated via lhe monthly billing statement " This is an excellent idea and could be included in any of the rate structures under consideration Smce rt is not a unique concept to seasonal or water budget rates, this feature sl~ould not be used to distinguish between rate structures. ATTAC~MENT D City of Boulder Rate Structure and Billing System Evaluation Calendar of WRAB/ Council Meetings October 20, 2003 Meeting Date Meeting Matls due to Tv e~ Staff 21 July 1 rro~ect overview, review and prioritize rate design goals and ob~ectives, update on billing system evaluation. August 18 WRAB August 11~ Rewew goal prioritization results, EES, Staff discuss evaluation criteria, discuss conceptual review of various rate structures (inciuding current rate structure), update on billing system September 15"' WRAB September 8'" Review inrtial evaluaUon of alternative EES, Staff rate designs, identify 3-5 finalists to review in detail, update on btllmg svstem evaluation October 20`" WRAB October 13'' Decision regarding 6 rate structures to EES, review in detail. Highlights of possible Langham, billing system enhancements, analysis Staff of bdling systems for top rate designs, and update on "build vs buy" analysis and peer comparisons. November 17' WRAB Presentation of preliminary findings including detail review of top rate structures by customer class, WRAB Staff November 18"' Public November 12'h Presentation of pro~ect (brief overview EES, Staff Meeting with highlights of the preliminary findings) and Q&A session uecemper 15"' WRAB December 8`" Final Draft Report to the Board EES, Staff includmg consultant recommendations regarding the rate structure and billing s stem TBD Public TBD Presentation of recommendations TBD Meeting regarding the rate structure and billing sVStem and Q&A session TBD WRAB TBD Final Board decision on final report and TBD recommendations February or Council 2 weeks prior to Presentation to City Council regarding EES, March meeting date the final report and recommendations Langham, regarding the rate structure and billing Staff Who Attends