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<br /> <br />Water Rate Cost-of-Service Study <br />Section 1. Executive Summary <br /> <br /> <br />HF&H Consultants, LLC | July 8, 2025 | Page 8 of 53 <br />Figure 1-7. Current Water Use Charge Rates <br /> Source: Figure 4-3. <br />1Commercial includes commercial, industrial, other, municipal, <br />commercial fire, landscape irrigation, and recycled water <br />accounts. <br /> <br />All components of the rate structure were reviewed, including the composition of the customer <br />classes, the structures of the Service Charges and Water Use Charges, and the need for <br />Drought Rates. <br />Proposed Service Charge Rates <br />Currently, about 38% of the rate revenue is generated by the current Fixed Service Charges. <br />For a Single Family Residential bill of average bi-monthly water use (14 HCF), the Service <br />Charge represents nearly 45% of the total bill. <br />Adjustments in FY 2025-26 are recommended to re-align the Service Charge rates with the <br />cost-of-service. Revenues from the proposed Service Charges (the Service Charges in Figure <br />1-8 and the Fire Service Charges in Figure 1-9) would generate 37% of the overall rate <br />revenue. This level of revenue from Service Charges will continue to provide adequate revenue <br />stability when combined with the relatively fixed revenue from non-seasonal (base) water <br />demand. <br />Summary of Proposed Service Charge Rates <br />Figure 1-8 summarizes the current and proposed rates to re-align with the cost of service. <br />The proposed rates would become effective January 1, 2026, January 1, 2027, and January <br />1, 2028. <br />With the recommended increases and realignment to the cost-of-service, revenues from the <br />Service Charges would increase 6.2% in FY 2025-26. Thereafter, all Service Charge rates <br />would increase uniformly according to the recommended annual revenue increases of 6%, <br />effective January 1, 2027 and 5% effective January 1, 2028. <br />Water Use Charges <br />Current Tiers Current Rates <br />Single Family Residential <br />Tier 1 (0-10 hcf) $6.90 <br />Tier 2 (11-14 hcf) $7.89 <br />Tier 3 (15-20 hcf) $10.30 <br />Tier 4 (21+ hcf)$15.59 <br />Multi Family Residential <br />All Water Use $8.47 <br />Commercial1 <br />All Water Use $8.47 <br />ATTY/RESO.0109/CC RESO WATER RATES - EXHIBIT A <br />REV: 11-05-25 MI