HomeMy WebLinkAbout1991-12-10; Municipal Water District; 140; Revised Inclining Block Water Rate Structurepw 7 0 & a
%
, {tJ
CARLSBAD iif- llClPAL WATER DISTRICT - - 2ENDA BILL j;L I’ 0 /?M
AB#)YO TITLE:
MTG. Ia- /0 -‘i 1
DEPT. Adoption of Revised Inclining Block Water Rate Structure
RECOMMENDED ACTION:
Adopt Resolution No. ?& promulgating actions taken at the December 3rd Board of
Directors meeting on issues pertaining to the District’s inclining block rate structure and the
disbursement of penalty funds received.
ITEM EXPLANATION
At the Board of Directors meeting on December 3rd, the Board approved the recommendation
of the Water Commission on issues that pertain to revisions to the inclining block rate
structure and the disbursement of penalty funds received. More specifically, the Board:
A. Approved Revisions to the Current Structure.
The new rate structure will be as follows:
Categorv # of units
B.
Res. Lifeline $ .90 7
Block 1 $1.15 Up to Allocation
Block 2 $1.43 l%-20% Over Allocation
Block 3 $1.73 20%+ Over Allocation
Approved Revisions to the Allocation Method for Single Family Residential
Users.
Single Family Residential Users Allocations am to be based on usage during
the base year (1989-90) less the conservation target in effect.
C. Approved the Use of Penalty Funds Received by the District.
The allocation of existing inclining block rate penalty revenue will be used
for: customer service for improvements to the customer billing system; a
refund to single family residential users who conserved more than 20% over
the base year; and a one-time credit for the first 5 units of water to all
customers.
A rate stabilization Fund and Reserve Fund will be established and any future
penalty monies received will be deposited to these two funds equally. The
rate stabilization fund will be utilized to help offset potential future water rate
increases and the reserve fund will be utilized to supplement the stabilization fund, offset any penalty the District incurs from the SDCWA, or for other
purposes. The use of the existing funds is summarized on the following page:
Amount
Customer Service
Refund to S-F Customers
5 Units to all Customers
Rate Stabilization Fund
Reserves
Total
$100,000
140,000
97,700
431,150
431,150
$130,000
FISCAL IMPACT
The Board decided upon a reduction in the number and cost of the inclining blocks, an
increase in the number of units billed at the lower blocks and a return to setting single family
allocations on actual demands in 1989-90, less the conservation target in effect. The
recommended revisions will reduce the additional revenue received by over 87%. Using the
August-September billing cycle as a guide, the revisions would have reduced the additional
revenue from $260,000 to $33,000 during that billing cycle.
The Board’s actions will also reduce the current funds on hand by approximately $337,000.
The remaining funds, of approximately $862,000, and future funds will be divided on a 50%-
50% basis between a rate stabilization fund and a reserve fund.
EXHIBITS
Resolution No. 966 Revising the Inclining Block Rate Structure
- A.
RESOLUTION NO. 7 6 6
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE CARLSBAD MUNICIPAL WATER DISTRICT
REVISING ITS INCLINING BLOCK WATER RATE STRUCTURE
WHEREAS, the supplier of water to Carlsbad, the San Diego County Water Authority
(Authority), continues to have a water rate structure that penalizes agencies for exceeding their
monthly allocations; and
WHEREAS, the Carlsbad Municipal Water District (District) adopted a revised inclining
block water rate structure on June 4, 1991; and
WHEREAS, the District desires to revise the existing system to reduce the amount of
excess revenue generated by the inclining block water rate structure.
NOW, THEREFORE, BE IT RESOLVED that the District’s Board of Directors amends
the existing rate system as described in Resolution No. 731 to read as follows:
1. Monthly allocations for all existing water user classifications will be established by the
General Manager using actual consumption during the base year of 1989-90 (July 1989 through
June 1990) and reducing that amount by the conservation target for the Incremental Interruption
and Conservation Plan (IICP) phase in effect. An inclining block water rate system will be in
effect for all customers who exceed their monthly allocations.
2. When 1989-90 historical billing data is not available, monthly allocations for all
customers will be based on an average monthly usage for that specific user classification. Under
circumstances when the average does not provide for an equitable allocation, the allocation will
be determined on a case-by-case basis by the District’s General Manager.
3. Water consumed by all customers up to their monthly allocation shall be billed at the
Block 1 rate (current retail), with the exception of single-family residential customers (SFR) who
will receive the first 7 units at a lifeline rate. For those customers who exceed their monthly
,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
allocation, increasingly higher block rates will be charged. Based on the percentage by which the
customer exceeded his/her monthly allocation, the additional block rates will be as follows:
BLOCK % OVER ALLOCATION RATE
Lifeline First 7 units (SFR) $0.90
Block 1 Up to Allocation $1.15
Block 2 1% to 20% Over $1.43 .
Block 3 >20% Over $1.73
The additional blocks shall be charged cumulatively. For example, if a customer exceeds his/her
allocation, the water bill will include charges in all three blocks, not just the Block 3 rate.
4. All water used from a fire hydrant through a temporary meter will be billed at the
Block 3 water rate.
5. If the Authority imposes another phase of its IICP, the District will respond by
requiring that its customers save the corresponding percentage of water for that stage, which will
then be the basis for the block rate system. The water conservation target required by each phase
is as follows:
PHASE CONSERVATION TARGET
Stage I (voluntary) 5%
Stage II 10%
Stage III 15%
Stage IV 20%
Stage V 30%
Stage VI 40%
Emergency 50%
If a conservation percentage is declared that does not match any of the stages, the District’s
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Board of Directors will set a conservation target as the basis for the inclining block rate system.
6. The General Manager, upon receipt of a completed application form demonstrating a
clear need, may approve an additional water allowance for special circumstances including but
not limited to the following circumstances:
a. Change in ownership or occupancy of a residence that results in an increase of more
than three persons. Additional allocations of three units per month will be granted for
every added permanent resident.
b. Additional water demands due to a medical condition.
c. A customer uses his/her residential dwelling as a place of business, and possesses a
valid business license issued by the City of Carlsbad.
d. Unusual needs or special hardships
e. The use of reclaimed water
Installation of ornamental fountains or swimming pools, and the maintenance of new landscaping
does not qualify for exemptions.
7. Single-family residential customers whose water consumption is currently at or below
the average residential demand minus the current conservation target will not be required to
reduce further.
8. All customers, except those referenced in section 7, must reduce their current monthly
water demands at a level equivalent to monthly usage during fiscal year 1989-90 less the current
conservation target as defined in section 5. All single family residential customers whose
consumption is below the annual average shall be exempt from the following procedures.
If usage exceeds the aforementioned parameter, a written notification shall be sent. If
repeated in the second consecutive month, an excess user charge equivalent to $50.00 or 100%
of the water usage for that month will be assessed, whichever is greater. For the third consecutive
violation, a flow restricting device may be installed in the customer’s water meter. This action
shall be taken to assure compliance with this Resolution regarding the conservation of water.
Such action shall be taken only after a hearing held by the General Manager or designee,
where the customer has an opportunity to respond to the District’s information or evidence that
the customer has repeatedly violated provisions of this resolution regarding the conservation of
water and that such action is reasonably necessary to assure compliance with this Resolution.
As determ@d by the General Manager, any such restricted service may be restored upon
application of the customer made not less than 48 hours after the implementation of the action
restricting service and only upon showing by the customer that the customer is ready, willing and
able to comply with the provisions of this Resolution. Prior to any restoration of service, the
customer shall pay all District or City of Carlsbad (City) charges for any restriction of service
and restoration as provided for in the rules governing water service for the District and City.
Any willful tampering with or removal of any flow restriction device shall result in
termination of service for a period to be determined by the General Manager.
9. Any customer against whom a penalty is levied pursuant to this section shall have a
right to an appeal, in the first instance to the District’s General Manager or designee with the
right of appeal to the District’s Water Commission, on the merits of the alleged violation, upon
1 written request of the customer to the District within fifteen days of the date of notification of
violation.
10. Any additional revenue generated by the inclining block rate structure or the
conservation rebates after deducting the penalty charges imposed by the Authority shall be
expended in the following ways:
a. For the billing cycles in which the 15 unit allocation was set for single family
customers, a refund will be given to all of those single family customers who conserved
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
C
more than 20% from the 1989-90 base year but were still subjected to higher block rate
charges due to the 15 unit allocation system. Specifically, the refund will be based on the
difference between the cost of the water bills under the previous and the new system. The
refund would be in the form of a credit on a future water bill(s) (probably beginning with
the February-March billing cycle).
b. Up to five units will be given to all customers at no charge on a future .water bill
(probably January-February billing cycle).
c. An appropriation of $100,000 will be made for improvements in customer service. Prior
to actual expenditure of the funds, staff is to return to the Board of Directors with a
specific list of improvements and costs.
d. The remaining funds, as well as all future funds, will be equally distributed between
a reserve and rate stabilization fund. Staff is hereby authorized to create these two
accounts.
11. The effective date of this Resolution shall be the October 15, 1991, billing cycle.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad Municipal
Water District held on the 10th day of December, 1991, by the following vote, to wit:
AYES: Board Members Lewis, Kulchin, L
NOES: None
ABSENT: None
ATTEST:
.
ALETHA L. RAUTENKRANZ, Secretary