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7.A. - Page 59 <br /> 2.12.2 Quantity Charge Modifications <br /> The proposed rates incorporate relatively minor modifications to the City's residential and <br /> non-residential rate structures. These modifications include: <br /> A) Modification to Residential Tier Breakpoints <br /> Based on analysis of the City's water consumption data from recent years and evaluation of <br /> alternatives, BWA recommends the City reduce its tier breakpoints to reflect the substantial <br /> decrease in residential water demand that has occurred over the past decade, particularly in <br /> recent years. The revised residential tier breakpoints are based on water use standards for a <br /> typical family as described below. Current and proposed residential tier breakpoints are shown <br /> on the following table. <br /> Table W7: Proposed Residential Tier Breakpoints <br /> Residential Bi-Monthly Use per Tier(hcf) <br /> Rate Tier Current Proposed <br /> Tier 0- 10 0- 8 <br /> Tier 2 11- 25 9- 20 <br /> Tier 3 26- 50 21- 40 <br /> Tier4 51+ 41+ <br /> The City has historically exceeded its potable water supply assurance from SFPUC and has incurred <br /> substantial costs for its recycled water system and Water Resources Management Program in order <br /> to help ensure adequate potable water supply to meet customer demands and improve potable <br /> water supply reliability. These costs of these programs is passed on to residential customers via the <br /> City's inclining tiered rate structure. The rates developed for each tier are designed to reasonably <br /> reflect the incremental costs of providing water service to each tier. The lowest levels of water use <br /> in Tier 1 do not recover any costs for the City's recycled water system or Water Resources <br /> Management program since these programs are not needed for providing low levels of water use. <br /> Rates for higher tiers are designed to reflect escalating levels of cost-recovery for the City's recycled <br /> water system and Water Resources Management Program and equitably recover the marginal costs <br /> of service from water use in each tier. <br /> Residential Tier Breakpoints <br /> • Tier 1: 0 — 8 hcf — The Tier 1 breakpoint at 8 hcf per bi-monthly billing period (4 hcf per <br /> month) represents a standard "lifeline" level of indoor water use needed by a typical family <br /> with high efficiency water use. High efficiency water use per single family home is estimated <br /> at roughly two-thirds of the 55 GPCD indoor water use performance standard used by the <br /> California State Water Resources Control Board (SWRCB), multiplied by 2.74 people per <br /> B Water Utility Finances& Rates 32 <br /> 'N Water&Sewer Financial Plans&Rate Studies <br />