1B - 2008 Utility Rate Study - Laserfiche WebLink

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While commercial entities pay the same rate for water usage as a residence, they pay higher fixed monthly meter and stand by charges, in essence paying a higher rate per gallon for water used. Existing Residential Rate Structure-Rate Option I: This rate structure would apply to single family and multi-family residential and senior residents. If the existing rate structure is not modified, the quarterly meter charge would increase by $1.75 to $30.97 per quarter for a residential home in 2009, $32.83 in 2010, $34.80 in 201 I, and $36.89 in 2012, or a 6.0% increase per year. Commercial and industrial users would pay an increase of 6.0% based on the meter size. The City has seen water consumption increase with the popularity of lawn sprinkler systems, and staff has emphasized the increasing importance of water conservation and the need to charge those who necessitate over sizing of the system for peak usage. The Minnesota DNR is putting pressure on cities to implement conservation measures, and is reluctant to issue permits to cities for new wells if conservation measures are not in place. A pricing structure that makes heavy lawn watering more expensive is one way to encourage conservation. The current rate structure does not provide incentives for water conservation Rate structure Options II and 1ll do provide an incentive for conserving water resources as is shown on Appendix F. Residential Rate Option II This tier option would keep the existing base usage of 10,000 gallons, but institute two tiers above it. The first tier above the base usage would be for usage up to 35,000 gallons, or the next 25,000 gallons of usage, and would be charged at $2.73 per thousand gallons. The second tier above the base usage would be for all usage over 35,000 gallons and would be charged at $4.78 per thousand gallons. This tier option produces $1,040,000 in usage revenues, or roughly equal to the amount of purchased water charges paid to the City of Roseville. The meter charge increases slightly for a residential user from the present amount of $29.22 to $32 and for a senior residence from no current charge to $17. The fixed charges, (meter charge and stand by charge) generates $505,800 in revenues, or equal to the amount of fixed charges such as salaries, contractual and general fund admin charge. Total revenues then, equal approximately $1,546,000. This option captures 41 % of the water usage in the base, 40% in the second tier and 19% in the top tier. The average residential user then has a usage charge which represents approximately 51 % of their water bill. The proportion becomes higher as the usage goes up and the rate per gallon becomes higher with greater usage, which provides an incentive to conserve water. The average residential user of 25,000 gallons per quarter pays $.0032 per gallon and a higher residential user of 50,000 gallons per quarter pays $.0071 per gallon. The low senior user (16,000 gallons) would pay $.0016 per gallon. l' 8