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12 - Update on Council Study Session about Water BudgetsCITY OF BOULDER WATER RESOURCES ~DVISORY B4ARD AGEND~ ITEM 1!'IEETING DATE: December 17, 2007 4GENDA TITLE: Update on Council Study Session about Water Budgets PRESENTER/S: Jim Knopf, ~~4'RAB Chair Bill DeOreo,WRAB Nlember Ned ~?Villiams, Director of Public Work for Utilities EZECLTTIVE SLT1~I11-T~RY: The Boulder City Council is scheduled to have a Study Session on February 12, 2008 to discuss Water Budgets. At the Nov. 19 WRAB meeting, Jim Knopf and Bill De(~reo were the ~'RAB members appointed to work with city staff to draft the basis for a~?VR!~B/staff Consensus Recornmendation to present at the Study Session. C~n Nov. 29, Jim Knopf and Bill De~reo met with city staff (Carol Linn, Bronwyn ~~4'eygandt and Ned t?Villiams) to discuss issues and begin to draft the Consensus Recommendation. :~N:~LYSIS: The purpose of the Feb. 12 Study Session is to provide City Council with a background on the Water Budget rate sti-ucture, to provide inform~tion about the status of 20U7 water revenue and use, to discuss ne~t steps that the Cityr Ii~lanaber is considering and to see if City Council has questions or additional recommendations. The City IVlanager is considering some revisions to the Rules that may change the mannei• in ~~vhich ~~vater budgets are detertnined. These Rule changes may occur soon after the Feb. 12 Study Session, provided the City I~IanaSer is comfortable in irnplernenting these Rule changes based upon the outcor~ie of the Study Session. The ~'R_~B/staff Consensus Recommendation effort will inform the City Nianager and City Council about the possible changes to the Rules that could occur after the Feb. 12 Study Session. Based upon the Nov. 29 meeting bett~veen, Knopf, De(~reo, Linn, ~~4'eygandt and ~Uilliams, the follo~~ing is a summary of the areas upon which there was agreement and areas in which there was not agreement: AGENDA ITERZ # PAGE 1 Sin61e-Family Residential Areas of agreement - No change at this time. While there are potential adjustments that could be made for fine-tuning, there does not appear to be an immediate change required. Public education is needed so that customers realize their indoor allocation in the winter months is sufficient to provide about 2,000 gallons of winter watering, even though their outdoor allocation in Dec. Jan and Feb is zero. Adding a 1% outdoor allocation in Dec, Jan and Feb was also considered but is not suggested at this time. A'Iulti-Family Residential Areas of agreement for change: I. Find a way to allow for budget adjustments based upon a measurable characteristic of the living unit. At the Nov. 29 meeting, we discussed continued use of an indoor allocation of 4,000 gal/living unit, up to and including athree-bedroom unit, as the basis. Customers could apply for an adjustment if the number of bedrooms exceeded three, in which case an additional bedroom would receive an additional 1,000 gal/unit/month. Since the Nov. 29 meeting, concern has been expressed from city staff about using bedrooms as a way to deal with Multi-Family Residential (IUIFR) budget adjustments. In the past, it's been difficult to decide if a room is a bedroom, dressing room, den, computer room, recreation room or general purpose room. Over the course of the life of the living unit, it may be used as all of those. Staff has further discussed the following alternatives: • Increase the indoor allocation for all MFR accounts. This does not seem like a viable solution since year-to-date MFR are paying a lower percentage of the revenues compared to the percent of water used. • Base adjustments on number of people living in the unit, similar to single-family residential. This approach would put the burden of identifying the residents annually on the property owner which could become cumbersome given that this is a college community ~~ith a lot of moves in the spring and fall. • Have different indoor allocations based on whether a unit is small, medium or large. Staff is working to get some additional data for our meeting about MFR. It may be that the duplexes, triplexes and fourplexes are the buildings that may need a larger indoor allocation, but the buildings with 20 units are doing just fine. • h~lake no additional changes regarding adjustments or indoor allocation for MFR. Staff is flagging this issue for further V4'RAB discussion at our meeting. 2. Outdoor irrigation budgets should be based upon the actual irrigable area, whenever possible. This may require the property owner to submit an Adjustment Request that outlines the irrigable area on an aerial photo from the city's GIS system so that the city staff can calculate the irrigable area. In any situations where multiple water meters are configured in a looped system to irrigate an area, the city will consider combining the water meter information for water budget purposes. 3. Each account would receive an additional 1% of their outdoor allocation in Dec, Jan and Feb for winter watering. AGENDA ITEM # PAGE 2 Areas in which there was not agreement for change: 1. None CammerciaUIndusti~iaUInstitutional (CII): Areas of agreement for change: 1. All CII customers will be offered the choice of one of the following options: a. AMU (Average Monthly Use) -defined as the historical average annual use divided by 12 so that every month has the same budget. The AMU will be the default methodology unless a customer requests use of another approved option. i. AMU will result in monthly wastewater charges based on all water used, which could include water used for irrigation (this is no change to the current practice). ii. Depending upon the customer's evaluation, the AMU option may not be the best option for customers with erratic indoor water use or for customers with one meter for both indoor and outdoor water use. b. HMU (Historical Monthly Use) -defined as the historical monthly use for each month (January 3-year historical average =January water budget, February 3-year historical average =February water budget, etc.) based on the most recent rolling three-year average and recalculated every year. i. HMU will result in monthly wastewater charges based on all water used, which could include water used for irrigation (this is no change to the current practice). ii. Depending upon the customer's evaluation, the HMU option may not be the best option for customers with variable or unpredictable indoor water use or for customers with one meter for both indoor and outdoor water use. The H1VIU option may be most applicable for customers with predictable seasonal variations for their indoor uses and insignificant outdoor uses. c. Indoor/Outdoor -defined as an indoor allocation based on the most recent Average Winter Consumption (AV4'C) and an outdoor allocation based on irrigable area (including public right of way), using an application rate of 15 gpsf and shaped based on historical monthly ET. i. Indoor/Outdoor will result in wastewater charges based on AWC which would result in monthly wastewater charges that did not include outdoor water use (this is a change fiom current practice for C/I accounts, but is similar for residential accounts). ii. Indoor/Outdoor would receive an additional 1% oftheir outdoor allocation in Dec, Jan and Feb for winter watering. AGENDA ITEM # PAGE 3 Areas in which there vas not agreement for change. 1. Jirn and Bill have suggested a fourth option, but staff does not recommend offering it at this time: d. Custom -defined as determined by a specific review of indoor and outdoor uses based on reasonable and documented efficiency standards. i. Custom budgets are intended for customers with highly unpredictable water use and should not be based on a historical use pattern. Irrigation Only: Areas of agreement for change: I. Include and add public right of way (ROW) to the irrigable area for all accounts. Areas in which there was not agreement for change. 1. None Refunds and Credits: Areas of agreement for change: To give refunds where water budgets were incorrect back to the start of the water budget program on January 1, 2007, or to some other date that relates to a specific incorrect billing (e.g. beginning of the irrigation season). Credits have been and will continue to be given on the water bills to customers who have been incorrectly billed during 2007. Approval of a Water Budget Adjustment Request does not necessarily mean that there was an incorrect bill. Areas in which there was not agreement for change: To recalculate back bills and give credits where wastewater charges were collected on irrigation water (this has been in practice for many years when a C/I account does not have a separate irrigation meter), or where the water budgets methodology has changed in 2008. ADDITIONAL ISSUES: In addition to the above mentioned changes to the water budgets, Jim and Bill suggest the following actions be taken. Staff is not suggesting that all of these actions be taken at this time and be presented and discussed at the Study Session. The study session is intended to provide Council with an update of the program and to focus on near-term changes. While some of these items are included in future staff work programs, other items are not and would require additional City Council and community dialogue before deciding the next steps: • Drought Plan: Update the drought plan and integrate the water budget system into it. This includes ways to use water budget adjustments to accomplish reduced water use during drought or other emergencies. • Customized CII Water Budgets: Incorporate efficiency benchmarking by: o Disaggregating the CII customers into homogenous sub-categories within the billing system, and o Surveying the CII customers to obtain necessary information for normalizing (establishing) efficiency benchmarks (efficiency standards). AGENDA ITEM # PAGE 4 • Carr-over (water baiiliuig}: Modify the billing system to handle all the reasonable methods of setting and managing budgets such as annual budgets, and monthly carry- overs. • Water-waste Ordinance: Draft a more comprehensive water-waste ordinance. • System-wide efficiency study: Perform a detailed system audit using the methodology adopted by AWWA and the International Water Association to determine real and apparent losses. Include asystem-wide leak detection survey to determine the frequency of leaks in the distribution system. • Rate Adjustments: Study rate adjustments to various rate tiers as most customers reduce waste and stay within their budgets, thereby reducing water waste penalties. • System-wide Vt~ater Demand Needs: Update the system water demands based on results of the water budget program, climate change, and other relevant factors. WRAB INPUT NEEDED: WRAB input is needed with respect to the preferred changes to water budgets that could be implemented soon after the Feb. 12, 2008 Study Session in order for staff, Red Oak Consulting and Advanced (the billing CIS vendor) to evaluate and estimate the time and cost to implement the changes as well as any annual revenue and rate impacts of making the changes to water budgets. Staff anticipates presenting this information at the next WRAB meeting (January 28, 2008}, so that WRAB can make a final recommendation, should it choose to do so. This analysis would also be included in the Study Session packet. The Study Session packet will be finalized and delivered to the City Manager's Office on January 30, 2008 for copying and distribution. In addition, staff will continue to meet with representatives fiom the commercial and industrial sector, Boulder Chamber of Commerce and Boulder Tomorrow group to keep them informed, solicit their feedback and suggestions, and apprise them of WRAB's status. ATTACHMENTS: A -January-October 2008 Water Revenue and Use Data AGENDA ITEM # PAGE 5 ATTACHMENT A -Water re~~enue and water use, Jan -Oct 2007 January through October 2007: Billed Water Revenue by Customer Class Single-Family Multi-Family Commercial / Irrigation Only TOTAL Residential Residential Industrial Service Charge $2,023,354 $641,129 $660,384 $211,779 $3,536,64 Block 1 2,826,566 1,381,877 1,401,978 515,013 6,125,433 Block 2 783,443 519,174 795,471 287,225 2,385,313 Block 3 633,314 367,700 688,237 430,390 2,119,64 Block 4 229,875 152,063 285,143 325,988 993,068 Block 5 334,563 210,784 647,038 1,059,825~jI 2,252,20 Bill (86,292) (94,736}~ (125,729) (157,924) (464,682 Adjustments 999 999 TOTAL $6,744,821 $3,177,990 $4,352,521 $2,672,295 $16,947,62 of TOTAL 40% 19% 25% 16% 100% January through October 2007: Billed Watei• Use by Customer Class (Y1,000 gal) Single-Family Multi-Family Commercial / Irrigation Only TOTAL Residential Residential ~ Industrial Block 1 1,501,654 735,043 728,081 272,294 3,237,072 Block 2 313,311 207,715 318,042 114,890 953,958 Block 3 126,726 73,516 137,495 86,078 423,815 Block 4 30,650 20,275 38,019 43,465 132,409 Block 5 26,765 16,863 51,763 84,786 180,177 TOTAL 1,999,106 1,053,412 1,273,400 601,513 4,927,431 of TOTAL 41% 21% 26% 12% 100% January through October 2007 vs. 2006: Revenues and Use by Customer Class Single-Family (Multi-Family Commercial / Residential Residential Industrial Irigation Only Total Approx. No. of 22,300 2,500 ~ 2,100 1,600 28,500 Customers 2007 Billed Revenue 40% 19% V 25% V 16% 100% $6,744,821 $3,177,990 $4,352,521 $2,672,295 $16,947,627 2007 Use 41% 21% 26% 12% 100% {1,000 gallons) 1,999,106 1,053,412 1,273,400 601,513 $4,927,431 2006 Billed Revenue 43% 18% 20% 19% 100% $8,320,362 $3,368,856 $3,872,$93 $3,643,130 $19,205,242 2006 Use 40% I 21% 25% V 14% 100% (1,000 gallons) 2,124,260 1,118,007 1,302,904 715,112 $5,260,283