HomeMy WebLinkAbout1978-09-19; City Council; 5541-1; Draft request for proposal professional servicesCITY OF CARLSBAD
AGENDA BILL NO. J"vT V/ -
DATE: SEPTEMBER 19, 1978
DEPARTMENT:PUBLIC WORKS
Initial:
Dept. Hd.
C. Atty.
C. Mgr.
Subject: DRAFT REQUEST FOR PROPOSAL FOR PROFESSIONAL SERVICES;
SUBSIDIARY DISTRICT FORMATION
Statement of the Matter
Council received progress to date for the formation of a subsidiary District of
the Carlsbad Municipal Water District by the City at their adjourned meeting of
August 22, 1978 and directed staff to prepare a draft RFP for professional services
for their review. Exhibit A is the proposed RFP and includes the key items which
the staff believes will require analysis prior to submitting the the final
application. It is anticipated that staff will have a recommendation for
selection of the consultant for the November 7, 1978 meeting.
Exhibit
A. Draft RFP
Recommendation
If Council approves the draft RFP, authorize the City Manager to solicit
proposals.
Council Action:
^9-19-78 Council approved the draft RFP and authorized the City Manager
to solicit proposals.
REQUEST FOR PROPOSAL
The City of Carlsbad is interested in receiving proposals for the conduct of
an objective analysis of key issues for the formation of a subsidiary district of
the Carlsbad Municipal Water District by the City of Carlsbad. A staff report
concerning this subject is included which will provide background in the matter.
Certain information in the staff report is no longer current, but the general
discussion should be sufficient for the preparation of a proposal. It is the
intent of the City to proceed under the provisions of the District Reorganization
Act, California Government Code 56000 for the formation of the subsidiary district.
The report of the analysis performed will be utilized to support the application
to the Local Agency Formation Commission of San Diego County by the City.
The key issues to be analyzed or tasks to be accomplished are:
1. Verification that 70% of the taxable property within the District
is within the City limits of the City of Carlsbad. Planimetric
computations indicate-that 72-73% of the Distrfct^taxabTe property
is within the City, however, it is believed that this must be
verified from assessor's data. The consultant may with to recommend
any other acceptable method than that suggested to make this
verification.
2. Verification that 70% of the registered voters of the District are
within the City voting districts.
3. Development of an organizational plan for the combined water operation
and perform an analysis of the cost benefits which may accrue. It is
envisioned that the City Water Department (an enterprise fund) and
the CMWD subdidiary district would continue to operate as separate
fund activities but as a single operating entity. Accordingly, this
analysis should include recommendations on accounting practices and
procedures in order to maintain the financial independence of the two
entities.
4. Analyze the rate structure of both organizations and recommend a
single rate structure for the combined operation if it is considered
feasible.
5. Compare the salary and fringe benefits of the City and the District
and develop recommendations regarding the transfer of District
employees to the City. This recommendation should include provisions
to ensure that District employees will retain all seniority rights,
retirement benefits and major fringe benefits that they presently
enjoy.
It is desired that the tasks outlined above be completed and a report submitted
within three months of authorization to proceed from the City Council. City staff
participation will be limited to the Director of Utilities & Maintenance on an "as
available basis" not to exceed 4 hours per week.
Information to be submitted in the proposal:
1. A narrative statement explaining how the tasks will be accomplished
to include a reasonably detailed schedule showing target dates from
start to complete the various tasks.
2. A total lump sum fee and a proposed schedule of payments for the work
outlined above.
3. A brief biographical resume of each person to whom major responsibility
will be delegated and how their experience and training will relate
to the specific task assignment.
This request for proposal is, as a point of clarification, to cover only the
work outlined. It is not anticipated that the consultant will be retained to assist
the City staff in the development of or assist in the processing of the application.
PROPOSAL EVALUATION:
The proposals submitted in response to this request will be evaluated by a committee
composed of appropriate members of City staff. Consideration will be given to the
qualifications of the consultant team, the manner in which the work will be
organized and coordinated, the work program and schedule and the fee for services
provided. However, the fee in itself shall not be the determining factor. The
City of Carlsbad reserves the right to reject all proposals if none meet the
qualifications sought by the evaluation committee. Proposals should be submitted
to:
Roger W. Greer
Director of Utilities and Maintenance
City of Carlsbad
1200 Elm Avenue
Carlsbad, CA 92008
REPORT ON CITY WATER DEPARTMENT/
CMWD CONSOLIDATION
ROGER W. GREER
Director of Utilities & Maintenance
March 31, 1977
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I. HISTORY:
CITY OF CARLSBAD:
The City Water Department was formed in 1958 when the City purchased
the Carlsbad Mutual Water Company and the Terramar Water Company, both
privately owned companies. Assets included a well-field in the San Luis
Rey Valley, transmission lines from the wellfield through Oceanside,
chlorination facilities, Lake Calavera and other smaller storage reservoirs,
distribution lines and administrative facilities. The system was upgraded
by construction contracts in 1960 and 1970. The City Water Department
service area is generally that area known as "old Carlsbad" and extending
as far south as Terramar and Car Country, as far east as El Camino Real
and the SDG&E easement east of Woodbine, El Camino Mesa and Tiburon and
to the north by Hiway 78. A precise description of the service area is
rather difficult, however, the boundaries are outlined on the map included
as Enclosure (1). The department presently has 14 fulltime employees with
abatements for salaries of 4 1/3 employees for administration and services
provided by other departments (Public Works Administration, Utilities/
Maintenance, Engineering, Finance and Purchasing). The'department serves
over 5000 customers. Annual water consumption is approximately 5500 acre
feet. Bonded indebtedness (Revenue Bonds) as of June 30, 1976 is $1,757,000
and is paid for from the revenues of water sales. Water rates are established
by the City Council.
CARLSBAD MUNICIPAL WATER DISTRICT:
The Carlsbad Municipal Water District was formed in 1954 for the purpose
of supplying imported water from the San Diego County Water Authority to the
incorporated areas of the City of Carlsbad and unincorporated areas generally
between the Agua Hedionda and Batiquitos Lagoons east to Rancho Santa Fe
Road, San Marcos & Vista. The District retails water to customers in their
service area and wholesales water to the City's water system. The District
normally employs 10 personnel including finance and administrative. Technical,
legal and public relations services are provided by appropriate consultants
under contract to the District. The District serves almost 1400 retail
customers. Water consumption, less the wholesale quantity sold to the City,
is about 5200 acre feet a year. Bonded indebtedness (general obligation
bonds) as of June 30, 1976 was $2,333,000 and is paid for from property taxes
at tax rates established by the Board of Directors.
PREVIOUS CONSOLIDATION EFFORTS:
The City was incorporated shortly before the formation of the District,
however there was litigation challenging the incorporation proceedings
necessitating that the City be included in the District, rather than petition
for separate membership in the San Diego County Water Authority. It is alleged,
although I find no documentation to the effect, that it was the intent of early
CMWD Boards to consolidate water operations under City management at some time
convenient to both parties. In early 1971 a joint committee (City & District)
met to discuss a single entity operations. A result of these committee deliber-
ations was a proposed operating agreement developed by the CMWD members whereby
the District would conduct all water operations under a contractual arrangement
with the City. Essential elements of this proposed agreement included transfer
of all personnel and equipment, and responsibility for system operation (less
Lake Calavera) to the District. The District would conduct all operations, do
all utility billing (including sewer & trash) and transfer sufficient funds
annually to the City to meet their bonded debt service requirements. The City
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Council would also have the right to review any proposed water rate increases
in the City service area. The proposal raised several questions by the City
and considerable discussion and correspondence between the two parties ensued.
No final agreement on this "one entity" proposal was ever reached.
In 1973, the CMWD Board appointed a Citizen's Committee to review the
issue. The City Water Committee likewise reviewed alternatives in how to
achieve a one entity operation. The CMWD Citizen's Committee presented
their study findings to the City Council in November 1973. This study
concluded that a single entity operation would result in a small overall
cost saving and improved system efficiency and offered three alternatives
on how a legally constituted single entity could be accomplished.
1. Formation of an Improvement District of the City service area
under CMWD and place the entire operation under a legally
constituted water district.
2. Formation of a District under the jurisdiction of the City Council
and integrating both operational entities under City Council.
3. Formation of a Water District with the City Council sitting as
the Board of Directors with the district operating as an independent
entity from other city functions with the administrator reporting
directly to the Board.
The Committee further concluded that although three alternative means
were available to constitute a legal entity, that the costs of money and
time were such as to preclude their serious consideration and that an operating
agreement similar to the 1971-72 efforts was the most expedient way to proceed.
City Council had, prior to receiving this report, proposed that a consultant
be hired at about $15,000 with costs being split equally between the City and
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the District, to provide recommendations on how best to provide for single
entity operation. The CMWD Board declined to participate in such an endeavor
until the final report of Citizen's Committee had been submitted. The City
Council rationale for this proposal was that the consultants report would
not be clouded by any bias which might be attributed to any committee of
the District or the City.
In early 1974, Mr. Frank Lilley who was performing management consultant
services for the City, reviewed the matter and submitted a report to the City
Manager. He concluded, essentially, that if a comparison was to be made
between operations to determine which was more "efficient", they should be
compared when both entities were operating under similar circumstances. Since
the City was undergoing management changes (City Manager) and reorganization
(hiring a Public Works Administrator and a Director of Utilities & Maintenance)
a valid comparison could not be made at that time. He further advised that
should the City deem it appropriate to form a subsidiary district under the
provisions of the District Reorganization Act of 1965, that such deliberations
should be deferred until the City included within the city limits in excess of
70% of the CMWD service area. He recommended that the matter not be considered
further until sometime in 1975 when he believed there would be management
stability and the conditions of the Reorganization Act relating to sub-
sidiary districts had been met.
The most recent overtures for discussion of the single entity water
operation concept were made by Mayor Frazee in a letter to the CMWD Board
on March 18, 1976 suggesting that meetings at staff level be initiated to
review the issues. Mayor Frazee has appointed Councilmen Packard and Lewis
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to this committee, and President MacLeod has appointed himself and Director
Maerkel as the CMWD representatives. No meeting has been called as of this
date.
OPERATIONS:
A comparison between the operations of the City system and CMWD
leads to the proverbial "apples & oranges" types of discussion. The
City Water Department is primarily a residential distribution agency
with a limited storage capability; CMWD, on the other hand, focuses primarily
on transmission and storage of water with a limited residential distribution/
customer service requirement. Future development will be for the most part
in the CMWD service area, therefore they will of necessity increase their
distribution/customer service capabilities. There are, of course, many
similarities between the two operations in that they employ similar skilled
persons (operators, clerks, etc.), use similar types of equipment and tools,
and have a common concern for water quality and delivery. The City of Carlsbad's
customer base is primarily residential users, whereas, the CMWD retail customer
base is presently oriented to agricultural customers. It is because of these
system dissimilarities, i.e., distribution vs transmission; residential vs
agricultural, that comparisons of efficiency of operations have little validity.
As an example, it could be argued that the City system is more efficient because
our water employee to customer ratio is -.„ ^3 or 1 employee per 272 customers
whereas CMWD's is 1400 or 1 employee per 140 customers; on the other hand
10
proponents of CMWD's "efficiency" could very easily point out that they can
retail 5200 acre feet of water with 10 employees for a ratio of 520 acre feet
per employee, whereas, the City crews can only retail 5500 or 300 acre feet
18.33
per employee. These arguments are specious and add nothing to the visibility
of the real issues involved.
OPERATING EXPENDITURES:
Operating expenditures are comprised of these costs associated with
delivery of water to the customer and include the cost or purchase price
of the water itself. They include salaries, utility expenses and pumping
costs, maintenance of the meters and services, general system maintenance,
customer accounting and general administration. Not included in these
expenditures are the costs of debt service, capital improvements or con-
siderations for depreciation. The major expense associated with operating
costs is the purchase price of water.
WATER COSTS:
CMWD establishes the selling price of wholesale water to the City in
a manner similar to establishing retail rates. The City water purchase
price for unfiltered water delivered in February, 1977 was:
$ 64.70 cost of water from SCWA
14.00 override - established by CMWD
1.00 chlorination - established by CMWD
$ 79.70
San Diego County Water Authority establishes the initial price. The override
is established by CMWD to defray the operating costs of transmission and storage
within their system. Capital costs associated with the construction of the
facilities used for transmission and storage are defrayed by payments of taxes
established by tax rates of the various improvement districts, to retire the
various bonds.
The chlorination charge is established by CMWD to defray the purification costs,
• Thus, the City's wholesale cost has two components, a product cost ($64.70) and
a processing cost ($15.00).
Filtered water, which commenced delivery on October 1, 1976 (with February
and March 1977 to be unfiltered water due to construction of additional
facilities) is delivered to CMWD at a cost of $85.75 per acre foot. This
results in the wholesale price of water to the city at $100.75 ($85.75 + $15
processing cost).
Water costs comprise a large percentage of the total operating and main-
tenance costs of either enterprise. The cost of water comprised 48.4% of
the cities operating expense and 67.9% of the CMWD operating expense in FY76.
The differential of the percentage of cost of water to total operating expense
illustrates the different customer bases from which the two entities are
performing. The City must read considerably more meters, maintain a higher
number of services and prepare a far greater number of bills than the CMWD
who is operating as a wholesaler to the City and as a large volume purveyor to
single agricultural customers with a relatively small residential base. As
the CMWD service area becomes more urbanized, the ratio of water cost to total
operating expenses will of necessity decrease.
RATE STRUCTURE:
Water rates are established on the basis of providing part of or all of
the total expenses on the basis of the type of operation, i.e., enterprise
or special district. An enterprise operation is supported on revenues from
sales alone. Taxes may be levied by those agencies which are not operated
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as enterprise to cover the cost of operations and defray the cost of bonded
indebtedness. The City of Carlsbad Water Department is an enterprise operation
and defrays all system expenses (including retirement of bonds) from the revenues
collected from water sales. CMWD derives income from water sales, a general tax
rate and additional tax rates for certain improvement districts to defray their
system cost's. The City of Carlsbad service area is included in the general
taxing area of CMWD as well as Improvement Districts 1 and 4. The result of
these circumstances is that only the most astute may be able to determine what
the cost of water is since they will be paying a rate plus taxes to pay for
their service. The current City water rates are shown in the first column;
the second column reflects a 5<£ per unit increase which is a direct pass
through cost due to wholesale cost increases which will be recommended to
Council in May:
38<£ per unit (a unit is 100 cubic 43<£ unit on 1 July 77
feet or 748 gallons)
23<£ per unit over 200 units 28<£
(industrial only)
Agricultural customers are charged 43<t
38i£ per unit, but receive an
agricultural rebate when this is
allocated to the City from CMWD -
this is $33 per acre foot or a
rebate of 7.Si per unit
net cost, therefore is 30.5<£ or 35.5<t after 1 July 77
The CMWD basic water rates are as follows:
33<£ per unit - first 10 units
24<t per unit - over 10 units
15£ per unit - agricultural over 30 units
These rates are currently under revision and will be as follows after
1 July 1977:
per unit - flat rate residential
per unit - flat rate - green belt
per unit - flat rate - agricultural
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The tax rates for the CMWD service area (which includes the City) is as
follows:
14* per $100 AV
5* per $100 AV
16* per $100 AV
28* per $100 AV
2* per $100 AV
General Levy
Imp. Dist. #1
Imp. Dist. #2
Imp. Dist. #3
Imp. Dist. #4
Both jurisdictions charge a ready-to-serve fee; City's $3.85 and CMWD is
$3.50 per month for a 5/8" meter (the latter will increase to $4.00 after
1 July). These charges increase as the size increases up to 6" which is
$56.65 for the City and $50 per month for CMWD. To better provide visibility
to comparisons, I have developed two illustrative examples - a typical
residential owner and an agricultural user which are included as Enclosure 2.
A summary of these analysis is as follows:
ILLUSTRATIVE EXAMPLE SUMMARY
RESIDENTIAL
AGRICULTURAL
USER
RESIDENTIAL
AGRICULTURAL
USER
CITY SERVICE
ANNUAL UNIT
175.70 58.6*
1801.92 34.5*
CITY SERVICE
ID#3
ANNUAL UNIT
196.35 65.5*
< N/A — -»
' CMWD
ID#2
ANNUAL UNIT
152.10 50.7*
1059.02 20.3*
CMWD
ID#3
ANNUAL UNIT
160.95 53.7*
1125.77 21.6*
AFTER 1 JULY 1977
190.70 63.6*
2062.92 39.5*
211.35 70.5*
« N/A >
174.30 58.1*
1381.22 26.5*
183.15 62.0*
1411.97 27.0*
The illustrative examples reveal that the consumers total cost of water served in
the City service area is consistently higher than water served by CMWD. It should
be pointed out however, that the City water customers are taxed to provide for the
cost of the CMWD facilities (ID taxes); a general fund levy and are subject to a
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$15 water processing cost in addition to the basic price of water delivered by
the Water Authority. The process cost amounts to 3.4<£ per unit or about 9%
of the total consumer cost per unit. Citing the residential user in the
illustrative example, the general CMWD tax levy amounts to $10.33 or pro-rating
that amount over his normal annual usage of 25 units per month (300 units
per year) this adds 3.4£ to his unit cost or another 9%. It has been suggested
that the surcharge and the general tax levy are "double charges", however, the
fact remains that any water operation must be self-supporting and rates, taxes
and charges must be set to reach that goal. It is obvious that should the two
entities be merged, that developing a uniform rate thoughout the combined
jurisdiction will require a detailed analysis to ensure equity to all users.
The percentage breakdown of expenditures of City water revenues utilizing the
1976 Audit Report is as follows:
OPERATIONS &
MAINTENANCE
32.3%
& BOND RETIRE
17.8%
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DISCUSSION:
The interests of both the City Council and the CMWD Board are considered to be
the same - to provide the taxpayer the highest level of water service at the
lowest cost. The long range planning of both bodies is intimately interwoven
in how best to meet the needs of their constituents in the future. The Tri-
Agency Pipeline, Squires Dam #2 plans to increase storage capacity, the south
aqueduct intertie to better serve La Costa are but a few examples, and are of
equal concern to both bodies, since the manner in which they are/are not
carried out will have major impacts on what our City's future will be. In
the past, the two entities focus of attention has been centered on somewhat
isolated areas of concern and the needs for coordinated and/or integrated
actions have been met by staff coordination. As the City develops and
matures, the need for coordinated policy actions becomes more evident. There
\
appear to be three courses of action which have previously been discussed
and are presented here. Other alternatives may be suggested, but are most
likely modifications of these mentioned.
1. City Council sitting as CMWD Board (subsidiary district):
ADVANTAGES:
A. Best able to integrate water requirements with other social
needs priorities. This is the argument that a "full service
city" can ensure a higher quality of service than can a
"contract city".
B. Water service, like sewers, construction standards, service
levels, and parks are all considerations which must be
coordinated with land use decisions. The Council is best
able to bring complete perspective to this area of total
public facility management and planning.
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C. Water service is a vital issue, therefore, the highest deliberative
and taxing authority having primary responsibility for jurisdiction
should establish policy for this service.
D. City Council, being supported by a larger, more complete staff
can expect a broader level of staff support.
E. All water assets could be centralized under single management
based on a Council approved transition schedule. CMWD would
continue to exist and operate - the Council, sitting as CMWD
would establish policy.
DISADVANTAGES:
A. Water responsibilities can diminish or dilute Councils concern
for other areas of responsibility.
B. Water concerns may require a greater commitment of time and
energy than Council is willing to devote to it.
2. CMWD Board sitting as Policy Making Body (an operating agreement).
ADVANTAGES:
A. A single purpose board would devote full time and attention
to water problems.
B. All water assets would be centralized under single management
under a contractual agreement.
DISADVANTAGES:
A. City Council would be giving up policy making and management
prerogatives.
B. Water rates might not be under the immediate control of Council.
C. Planning of water facilities and coordinating with appropriate .
land use is more difficult.
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3. Continue under dual responsibilities:
ADVANTAGES:
A. This is a status quo alternative - the two entities have
operated successfully in the past.
B. There will be no transitional or reorganizational problems.
DISADVANTAGES:
A. It defers a solution to what has appeared to be a problem to
several groups which they have been reviewed several times
in the past.
B. Difficulty in the coordination of operating procedures and
development plans will increase in the future as the tempo
of development activity shifts to the CMWD service areas.
C. As the CMWD retail customer base grows - the Board can
become more independent in their actions and rate making
policies.
D. Duplications of capability to perform billing, system design,
plan checking, maintenance activity and construction inspection
will continue to persist and will increase in the future. There
will probably be little saving at this time, however with the
growth of both agencies, duplication in equipment and adminis-
trative costs will increase.
DISCUSSION OF ALTERNATIVES:
1. City Council sitting as CMWD BOARD (subsidiary district).
The City meets all legal requirements under the District Reorganization
Act of 1965 to initiate proceedings to form a subsidiary district. Enclosure
(3), attached, includes the processes which must be followed. There appears
to be little savings in salaries or costs of operating the systems as a combined
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entity, however, total administrative cost savings can be reduced by combining
management, engineering and policy making efforts. It will become more
difficult to achieve a single entity operation in the future as the CMWD
customer base increases. Additionally, the District Reorganization Act may
be ammended or changed in the future by state law - the 76 legislature had
a bill proposed which would increase the requirement for contiguous boundaries
from 70 to 90% and further that the 10% area in the district was to be un-
inhabited. This legislation was returned to committee, however, it is a
proposal that could be reintroduced at any time. Problems of integrating
personnel and equipment into the City system are considered to be easily
resolved by staff.
2. CMWD Board as primary Water Policy Board (an operating agreement).
This alternative will require a great deal of negotiation to resolve
questions of bonded indebtedness, transfer of property and integration of
city employees with the CMWD operation - yet retaining the prerogative of
rescinding the agreement at some future time. The proposal of entering
into an indefinite contract which includes coming!ing of equipment and funds
raises serious legal questions. This alternative gives up major policy
making decisions which the Council has retained in the past. It does
achieve the objective of "one entity" operation and could achieve many of
the cost saving goals of the previous alternative - although CMWD does not
have at present a full time engineering, or construction inspection staff
nor does it appear likely that there would be the necessity for a full time
lawyer on the staff in the near future. It further provides for a "single
purpose" policy making body.
3. "Continue under present arrangement.
This resolution of the issue is in fact no solution, but continues
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the status quo. Questions of duplication of effort by the City and CMWD,
the inability of City Council to have complete authority in setting water
rates, the possibility of differing goals between the City and CMWD will
continue to persist. Problems of integrating the policies of both political
bodies will require greater staff cooperation and coordination as development
occurs in the CMWD service area. The possibility of future political "quarrels"
which misdirect both entities efforts away from the goal of providing a high
level of service at least cost, is ever present. Equitation of basic water
rates for all Carlsbad citizens will be most difficult if not impossible - thus,
groups will always consider other groups as "most favored".
CONCLUSIONS:
1. The City meets the legal prerequisites for forming a subsidiary
district of the CMWD.
2. Reorganization of the operating units can be accomplished with a
lesser degree of difficulty at this time than if it is delayed
until some time in the future.
3. Operating efficiencies can result from a joining of the operation,
however, immediate cost savings will be limited.
4. Formation of a subsidiary district of the CMWD can result in a
more centralized and coordinated planning, land-use management,
and public facilities planning effort.
5. The CMWD can become more independent and more politically active
as their retail customer base grows.
RECOMMENDATIONS:
1. The Council consider the formation of a subsidiary district of
CI-iWD.
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2. The Council authorize staff to develop a comprehensive plan for
integration of operations, personnel assignments and transition
to City employment of CMWD personnel.
3. Council consider retention of a qualified rate consultant to
determine a completely equitable rate structure for like types
of users, i.e., domestic, agricultural, industrial.
4/1/77-pag
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C. Located South of Palomar Airport Road in CMWD service area and
in Improvement District #2.
Water Cost $ .33 X 10 X 12 - 39.60
$ .24 X 15 X 12 - 43.20
Standby
CMWD General Levy
Imp. Dist. #1
Imp. Dist. #2
Imp. Dist. #4
D. Located East of El
Water Cost
Standby
CMWD General Levy
Imp. Dist. #1
Imp. Dist. #3
Imp. Dist. #4
r rwur\ lu
oo on 1 July 77o^.oU — —
$ 82.80
$ 3.50 X 12 42.00
73.75 X $ .14 10.33
73.75 X $ .05 3.69
73.75 x $ .16 n:so
73.75 X $ .02 1.48
$ 152.10
50.7<£/
unit
Camino Real in the CMWD service area.
$ 82.80
42.00
10.33
3.69
73.75 X $ .28 20.65
1.48
. $ 160.95
53. 7$/
unit
ni i i-i\
$ 99.00
48.00
--
—
—
—
$ 174.30
58. U/
unit
$ 99.00
48.00
—
—
--
--
$ 183.15
unit
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CASE #2:
An agricultural user, cultivating 5 acres, AV $5125/acre and using as
an average 435 units/month through a 2 inch meter.
A. City service area West of El Camino Real:
Water Cost 435 X 12 X $ .38 =
Less Agricultural Rebate
Standby $ 13 X 12
CMWD General Levy 51.25 X 5 X $ .14
Imp. Dist. #1 51.25 X 5 X $ .05
Imp. Dist. #4 51.25 X 5 X $ .02
B. CMWD service area Improvement District #2.
Water Cost 10 X .33 X 12
20 X .24 X 12
405 X .15 X 12
PRIOR TO
1 July 77
$ 1983.60
(391.50)
156.00
35.88
12.81
5.13
$ 1801.92
34.5*/
unit
$ 39.60
57.60
729.00
$ 826.20
No agricultural rebate (CMWD has agricultural rate)
Standby $ 11.50 X 12 138.00
CMWD General Levy 35.88
Imp, Dist. #1 12.81
Imp. Dist. #2 57.25 X 5 X $ .16 41.00
Imp. Dist. #4 5.13
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$ 1059.02
20.3*7
unit
AFTER
1 July 77
$ 2244.60
(391.50)
$ 2062.92
39.5*7
unit
$ 1148.40
$ 1381.22
26,5*7
unit
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C. CMWD Service Area Improvement District #3
PRIOR TO AFTER
1 July 77 1 July 77
Water Cost - $ 826.20 $ 1148.40
Standby 138.00
CMWD General Levy 35.88
Imp. Dist. #1 12.81
Imp. Dist. #3 51.2 X 5 X $ .28 71.75
Imp. Dist. #4 5.13 —
$ 1125.77 $ 1411.97
21.6^7
unit unit
The above are illustrative examples only, they are accurate as far as computations
are concerned. The examples are used to demonstrate the complexity of determining
what water "really costs" and the problems associated with establishing equation
of rates. Simplicitically, revenues are generated from a combination of charges
and taxes to cover the cost of operations, purchase of water and retirement of
bonds. Adjustments will be made to either component by the governing body, based
upon best judgement at what adjustments in the amount of revenues are necessary
to sustain operations at the level desired, to pay for purchased water and to
retire bonds that were sold to finance major capital improvements.
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'ENCLOSURE(3)