HomeMy WebLinkAboutNon-Agenda Item - Water Budget Study SessionCITY OF BOULDER
WATER RESOURCES ADVISORY BOARD
NON-AGENDA IT~M
TO: WRAB Members
FROM: Ned Williams, Director of Public Works for Ufilities
DATE: September 7, 2007
RE: Water Budget Study Session
The City Council5tudy Session on Water Budgets, originally scheduled for September 25, 2007,
has Ueen re-scheduled for OctoUer 9, 2007.
As was discussed at the August 20 WRAB meeting, Jim Knopf and Bill DeOreo prepared the
attached memo for the Study Session packet. Since the study session has been delayed, this
information may get updated.
Page 1
Discussion from WRA6 for Council Study Session on Water Budge[ September 25, 2007
Notes to City Council from WRAB on Water Budgets
(25 Sep.'07 for WRAB/Council study session)
General Comments
Boulder's water budget rate structure was created in response to the drought and water
restrictions experienced in 2002/2003. As you remember, it was generally believed that
Boulder's water rights were so senior, and the water supply system was so robust that the
city really did not have to worry about shortages. In 2002, we were reminded that we are
not immune from droughts by the fact that there was essentially no snow pack remaining
at the end of May, which resulted in the Boulder Creek watershed reservoirs not filling.
At the same time there was a decreased allocation in the ColoradoBig Thompson project,
which reduced the yield to the Boulder Reservoir system. This was a very serious
situation, and it caught the city off-guard.
In response to the 2002 drought a series of water restrictions were put into place that
focused almost exclusively on irrigation use. These mandated very limited watering
times and schedules for all in-igation, and resulted in significant degradation of
landscapes and the loss of matm-e trees, which effects are still being seen.
The water- budget system was an attempt on the part of WRAB and the citizens to design
amore flexible and fair drought response system. It's main goals were:
• To establish reasonable allocations of water (i.e. Water Budgets) for each
customer based on their actual characteristics and needs.
• To define a rate structure that charges all customers at the same rate as long as
they stay within their budgets. This rate was to be based on the actual revenue
requirements of the city from water sales.
• To charge for water use in excess of the budgets at marginal and then penalty
rates so that no customers would have an economic incentive to conserve.
• To integrate the water rate structure into overall water management for drought
response and emergency situations that require curtailment of water use, but to
give customers the maximum flexibility in how they choose to use their
allocations of water.
• To use the water billing system, rather than police officers, to identify customers
that are exceeding their water budgets so that they can be contacted and offered
assistance.
There was much discussion about the details of the system, but the WRAB believed that
the details of how the ordinance was to be addressed should be left as flexible as possible.
The code authorization for the charges is given in chapter 4-20(b) which describes the
water budget rate structure.
Frozzz the ordinance chapter 4-20 (b)
Page I
Discussion from WRAB for Counci] Study Session on Water Budget September 25, 2007
"...The rate structure provides an individualized water budget to each customer that is
expected to meet the customer's specific water needs... "
"...'Monthly water budget' means the amount of water allocated to the water utility
customers to meet their anticipated watering needs for the month... "
"...based on reasonable and necessary indoor and/or outdoor use... "
From the rules...
6. Water Budget Adjustments
"Water budget adjustments may be granted by the city manager ...The city manager may
consider the following,..
• Number of
people in household...
• Irrigdble area...
• Irrigable area of
public right-of-way...
• Average monthly use (commercial and industrial accounts only)...
• Other... "
This is a five block water rate structure. The intention of the WRAB was that the average
rates for blocks I and 2 would be based on the actual cost of service for water use in
Boulder; block 3 was to be based on the marginal cost of new water; blocks 4 and 5 were
to be based on penalty chazges for excessive (wasteful) use of water.
Even though the staff was not initially in support of the water budget rate structure they
have moved forward to implement the system based on council's direction. The main
work that needed to be done was the development of individual budgets for each
residential and irrigation account. (There aze 26,400 of these accounts). Since the system
was first put into practice in January of 2007 WRAB has heard only a few complaints,
but these have been vocal, and we hope that council will direct staff to make the
necessary changes to the rules in order to address them.
Current Issues
There are just a few current issues that need attention:
• Correcting errors for CI (commercial & industrial) customers with one meter
serving inside and outside uses.
• Clarifying the authority of the Manager to make water budget adjustments
• Including irrigated right of way azeas
• Refining how multi-family budgets aze determined
• Making retroactive adjustment for erroneous bills
• Determining the capabilities of the billing system
Page 2
Discussion from WRAD for Counci] Study Session on Water Budget SeptemUer 25, 2007
In general, the system has been very successful. There az-e several ways to gage this.
First, if you look at the actual volumes of water used by each category of customer within
the five blocks you will see that the vast majority (90%) of use has been within blocks 1
and 2, and that the amount of consumption in the upper three tiers has been relatively
small. The amount in the top two, penalty, tiers has been very small, accounting for only
5% of the total deliveries. It should be ]cept in mind that this is only for the first half of
the year, and these percentages are likely to change as summer watering data become
available. The experience, however, during the first 6 months of the year has been
positive.
Figure 2 shows the percent of water delivered to each customer category that was in each
block. This shows that the only 5% or less of the water delivered to the SF, MF and CI
categories was in blocks 4 and 5. It also shows that as early as the end of June, 20 % of
the irrigation account water was being used in block 4 and 5. This information tells that
the irrigation accounts are the ones that need the early attention.
Volume by Block and Category (KGAL)
(JanJune 2007)
7oo,9ao
soo.ooo
soo,ooo -
o aoo,ooo '7 ~
I
~ 300,000
y (i,
zoo,cco
100,000
3F MF CI Irri
D elk1 642,261 389,91fi 423,426 58,523
®BIk2 61,660 100,475 160,029 17,190
?BIk3 2fi,906 31,231 4fi,835 11,250
? BIk 4 fi,444 7,955 13,951 5,976
¦BIkS 9,391 6,966 17,152 16,682
Figure 1: Cumulative water use Jan-June by category and block
Page 3
Discussion from WRAB For Council Study Session on Wa[er Budget September 25, 2007
%of Consumption by Block and Category
(JanJune 2007) _
90/ s~:a. r s r e , 'ti a'.: n 6 yrve4': n i i.! ~ fisxx ~-`P -sdu a'ii ~iI PI ~ry ii~i}trl'F` 1 +G L
~i~ 4u.a ,~i ~'A9 ,v~~'~yI7 A~q~~~q~.,„.'~ "~S~f Fr.-~~~uU Ka1 if r ~ II IIfirv ~N'~I } C rl Al
60% 4~ i~'i r'"jaJ ov3.4's`£'dNi'N'~~u `5'd9°K"a~ L`rv--r'~ ~ r,¢w r_. sel i~~~~~"3~3'~~~r ill ~~'~~--~~l
~ ~ klil'3~ a"~",I
r. a ~ 4 I ':~~1L.*' p : n+ w s o ruv 7 I r~ t
~a i ~tr ~u~Y l Y µk AP 9tx-i, us wul~'i ~Ck~ 51 a i 11 3'Ne f s r l `t'
~ ~ ~ ~ ~s~ ~ ~ P~,~' r x~ ' Nr3tt~ u T
70h I.r.n i+u rx r d Il'-iitw t 1.iM gm~4 ~r ~ I a s r
s'~"a`rv`6 ~'~If"~r"'~'! 91'P"~GfV"IN ~L ~i li rx a a~y~.'lli{Acr.,~3V r'`""t°r ~"~iV'..r+~,l~'1 ~'ys.i 1l7
s0~ x`~€r1~,,,M~+tA($ ~ <Ir~°PU"~~'rt~~'I ~II~~=uIN~~d~`.~`~y-~N~Z"dl~w~'~~~lr'
m fi~ ~ ~r u"?~u adnF'-a ~~'lll~ n~l ~ ^ i~s I ~ I ~~IY~~~- a°' zs; n. ~''~i"~ a$ir, u
u ~ i t4 M~ 9 i+'~, i1;' r f71d ~ ~~p17, " 5 T 'J ! I "7 P ,
o ,u ~ s r ~ a t yr I risM r ~r_ x
1 ~ n a x 3 +dr4-r,~ xi i. I~ & ~ r~~ i BY I ;„S I
m 60% ~
I rx. Y ~I~¢~- `~i4~~~~~~~h~, ~a'~~1"~3 ~ kr, rsu da ,y>'~ ~ 'k' _ ~ fi ll~5t,~t~ 77~ f`E
40/ k~Y! 7' 14`ra u~ no- t ~+µL..:'I r i it k3+~1 k
v r ~ ti tpy~ swagt rA ~ a s~~~bi~yr _"iI U I ~-~~3~y~ .
30% `d i w~ - lilts 2. d.."~ h r` :
` fi ,x1
ii1 "~~~32Y'~~r-'~u~°~",~ a~asuq is ~~d ~ 6 ~ 3.h ka
~
~,I yl.
20/ sra car s• i ~ u, rri u+:x J
lal x xa 11 r" ~ ~ 0 ~ ~ "I i t3si
a t~s~xs S~ f ~ i~" I n~~"Y ~'I-~°~ 'fi a"r.~',I `t„v,~~~"Vc wKs .
m~ 'x !,n Fli 5 ~ a r q l o~n~K ~i .u ~
~,-uuii iilrs ~k` sL ~'s` rtr ir,'Z+,~^~p 1i9 ~H<,'~h r
Y s,t A~ v I i "ns to n i RBI II yy
SF MF CI Irri
O BIki H4% 72% 64% 53%
®BIk2 71% 79% 24% i6%
?BIk3 4% 6% 7% 10%
?BIk4 1% 1% 2% 5%
¦BIkS 1% 2% 3% 16%
Figure 2: Percent of water by block to each category
Another way of gauging the success of the system is from the revenue and water
production data. According to data presented by staff, both revenue and water production
are down, slightly, but are not out of line with expectations.
From WRAB's perspective we have not had any single family or irrigation customers
come to the board to complain about the system. We have, however had complaints from
the commercial/institutional and multi-family groups.
Complaints from CI (commercial & industrial) Customers
The commercial customers who have complained have been from the CI customers who
have one meter for both indoor and irrigation use. The problem here is that instead of
determining their budgets as the total of the indoor and outdoor use (as is done for the
residential customers) the budgets were determined as the total annual use divided by 12,
and this average was used for each month of the year. It is virtually impossible for any
customer with a significant amount of irrigation use to stay within an average monthly
budget determined in this manner.
Figure 3 shows data for a small commercial account for the January through August bills.
Even though this customer has used less than the annual budget for the year, during July
and August it was necessary to exceed the budget in order to maintain the landscape. The
august bill included water use in Block 5, at $12.10/kgal.
Page 4
Discussion from WRAB for Council S[udy Session on Water budget September 25, 2007
14000
~
12000 °Mx~h~d m'*ati+~, ~ t
~ ~ " tiX ~ '~'e~ a ~T a t ~+V`"~iw 9' ~ ~N ih~ e e~''Yn~ rt Rik ~ u~ o~riknu°~~~'2~ `~rMz
~ ~ a w ~n
10000 ~ y '
: ~ m
n
O1 8000 " I ~ ~
w D Budget
~ ~ ®Actual
6000
4000
2000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Figure 3: Example of a problem CI budget when irrigation is involved
While this is not a large problem for the system as a whole, as shown in Figure 1, it is a
real problem for the CI customers who have a single meter for inside/outside use, and
also a significant amount of irrigated area. Many of these are small, former residential
properties that have been converted to CI use. However, this also includes most school
dishict property. The City has offered the option of waiving inspection fees for new
meter installation so that they can have irrigation meters. However, inspection fees
represent only a small portion of the cost for excavation, pavement repair and plumbing
to install a separate irrigation line and meter, and WRAB believes it is not reasonable to
expect CI customers with single indoor/outdoor meters to go to the expense of installing a
new meter and irrigation line in order to obtain a reasonable water budget.
When the water budgets were set, there was a long discussion about how to deal with
water budgets for commercial customers. The concept of simply dividing the total annual
use by 12 was agreed to in the end, but in WRAB's opinion this was supposed to be used
for i~xdoor uses, not outdoor uses. The discussion memo that went to council describing
the system was not absolutely clear on this point, and said that the commercial budgets
u-e to be calculated as the annual consumption divided by 12. The need for an irrigation
budget shaped to ET is such an obvious need we believe customers with combined meters
should have been able to receive a water budget amendment from the City Manager. We
have had two meetings with the manager about this, but this still needs direction from
council.
Commercial customers with combined meters need to be able to use the same approach
used by single family residential customers in setting their water budgets. Instead of
getting an indoor allocation of 7 lcga]/month, however, the CI customers would get their
Page 5
Discussion from WRAB for Council Smdy Session on Water Budget ~ September 25, 2007
annual indoor use (determined from their average winter consumption) divided by 12 for
the indoor component of their budget, and the outdoor budget would be based on their
irrigated area-as is done for single family customers. This would eliminate the CI
problem.
Authority of the Manager to Make Water Budget Adjustments
There are several default values used for setting budgets that were recognized to be
variables. These include the number or residents, irrigated azea, presence of a pool or
gazden, type of business, process uses present, etc. Instead of trying to anticipate each of
these the decision was made to allow customers to have the right to obtain adjustments
based on their special circumstances. That is why an adjustment process was written into
the description. The adjustment process is clear: any budget maybe adjusted by staff to
accommodate large families; special health requirements, and other unforeseen
circumstances. Outdoor budgets maybe adjusted to accommodate errors in the
calculation of property size or adjusted area.
We believe that the problems of the CI customers should have been dealt with as budget
adjustments the same way that customers with special health needs may obtain an
adjustment without going to city council. In effect the adjustment would be based on the
fact that the original budget assumed the wrong irrigated area-zero. The actual irrigated
azea would be used to determine the budget. Note that the details of setting the budgets
are not written into the ordinance, but are included only in the rules.
It will help if Council could reaffirm the importance of granting adjustments in a timely
basis in order to arrive a accurate water budgets.
Irrigated Rights-of--Way
In many cases customers are responsible for maintenance of irrigated rights-of-way, but
their water budgets did not include these areas. While the rules clearly state that
irrigation of right-of-way is a basis for obtaining an adjustment, we understand that the
process has been slow. The main reason for this is that the city wants to check every
adjustment against its GIS data, which requires a lot of time. We suggest that a simpler
way is to accept the information submitted by the customer, subject to later review by the
City. This would eliminate the delay but still assure that errors would be found.
Customers who hire a competent engineer, architect or irrigation technician to make the
determination will be unlikely to submit erroneous data since these professionals will not
want to submit work with errors over their signatures. Customers who do the work
themselves will know that they will be checked.
We also recommend that the City continue its efforts to reach out to notify customers that
they should check to be sure that their budgets include any irrigatedright-of-ways.
Complaints from Multi-family Customers
Page 6
Discussion from WRAB for Council Sludy Session on Wa[er Budge[ September 25, 2007
We have had complaints that the 4000 gal per month per unit budget for multi-family
accounts was insufficient. While we do not doubt that there may be some multi-family
accounts that need adjustment the fact that 88% of all water delivered to the multi-family
category has been in blocks 1 and 2, and only 5% has been in blocks 4 and 5 is strong
evidence that there is no real systematic problem. We recommend that these problems be
dealt with as adjustments based on whatever data is necessary.
Making Retroactive Bill Adjustments
If customers have been given incorrect budgets (and, as a result have been improperly
forced into higher blocks), we believe it is only fair that the full amount of their over-
payments be refunded to them at the time that the matter is resolved. To do otherwise
seems unethical.
Capabilities of the Billing System
The billing system software was totally revised to accommodate the new water rate
structure. We were assured that it would be able to accommodate any type of customized
water budgets that were deemed most appropriate for each customer. When we asked
about this in relation to malting adjustments to the CI customers we were told that to do
so would require a significant amount of programming effort by consultants. Since this is
a fairly minor change we were taken back by the news and question whether the billing
software has successfully included sufficient flexibility to meet the changing needs of the
system. For example, if the system rigidly allows only one method of determining water
budgets for CI customers (annual use/12) it could never accommodate any adjustments.
At the minimum it should be possible to manually enter a table of 12 monthly budgets for
any customer based on special circumstances. This should Ue a minor problerai, and
council needs to investigate why the system is stumbling over it.
Summary
In summary, we believe that the water budget rate structure represents the first real
innovation in water rates since the invention of the water meter. Our experience is that
the vast majority of customers like it, and we have received very few complaints. The
information that the billing system now generates can actually be used to determine
which customers are wasting water. In the future, as more accurate budgets are
developed these capabilities will increase. In drought times the water- budget system will
provide the city with a fast, reliable way to accomplish specific needed emergency
conservation, while providing maximum flexibility for customers. Water- budgets can be
used to encourage customers to implement permanent water conservation measures by
offering the discounts in the conservation block (block 1). These long term water savings
can be used to reduce the impact of future droughts.
We recommend that council take the following actions:
Page 7
Discussion from WRAB for Council Study Session on water Budget September 25, ?007
• Instruct the City Manager to allow CI customers with single inside/outside meters
to receive budgets that include irrigation allocations that are determined in the
same manner as is used for single family accounts.
• Make it clear that the city manager has wide discretion to make water budget
adjustments based on the special circumstances of each customer as long as the
resulting budget complies with the overall goal of reasonable water use without
waste.
• Expedite the adjustment process by accepting data provided by customers for
immediate action, subject to review and verification by staff. This should include
area adjustments for irrigated rights of way.
• Continue the public education efforts to inform customers of the availability of
the adjustment process.
• Contimie to obtain the best available data on water demands so that appropriate
adjustments (both upward and downward) can be made to reflect new
technologies and encourage their adoption.
• Make sure that any billing errors are adjusted retroactively.
• Determine the actual capabilities of the billing system and if it met its original
specification.
• Work to integrate the water budget rate structure into the overall water resource
and drought contingency planning by the city
Thank you for taking the time to consider our thoughts on this important matter.
Prepared by Jim Knopf (Chair) and Bill DeOreo, as requested by WRAB at the August
WRAB monthly meeting.
Page 8