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<br /> <br />Water Rate Cost-of-Service Study <br />Section 4. Cost-of-Service Analysis <br /> <br /> <br />HF&H Consultants, LLC | July 8, 2025 | Page 27 of 53 <br />Figure 4-3. Current Water Use Charge Rates <br /> 1Commercial includes commercial, industrial, other, municipal, <br />commercial fire, landscape irrigation, and recycled water <br />accounts. <br />CONSUMPTION CHARGE MODIFICATIONS <br />Volume charges can be structured in a variety of ways, including uniform, increasing block, <br />decreasing block, and seasonal rate designs. Currently, a tiered rate structure is used for <br />Single Family Residential. Single Family Residential customers remain the most homogeneous <br />class in terms of usage purpose (primarily indoor and outdoor needs), but actual peaking <br />behavior and discretionary use have declined due to conservation, drought-responsive <br />landscaping, and evolving customer behavior. <br />For other customer classes—Multi Family Residential, Commercial, Irrigation, and Recycled <br />Water—the diversity in customer size, water use intensity, and seasonal demand makes it <br />difficult to design meaningful and equitable tiered rate structures. These customers often <br />exhibit highly variable and use-specific patterns that are not well aligned with standardized <br />tiers. <br />Further, while usage volumes are tracked, there is limited data available regarding the timing <br />of water use within each customer class. Without detailed information on when water is used, <br />it is challenging to fully assess demand patterns or design rates that reflect the true cost <br />impacts of peaking or time-based demand. <br />Given these factors, the City is transitioning to a uniform rate structure for all customer <br />classes. Uniform rates provide a simpler billing method and better align with the City’s current <br />cost-of-service allocations, which are based on demand, service levels, system capacity, and <br />fire protection needs—not tiered peaking assumptions. In addition, all customers exhibit peak <br />levels of usage, so charging a uniform rate is more equitable. This approach ensures equity <br />and compliance with cost-of-service principles while improving administrative efficiency. <br />The design and calculation of these uniform volumetric charges for each customer class are <br />detailed in Section 5 of this report. <br />Our recommended modifications are as follows: <br /> Changing from tiered rates for Single Family Residential customers and uniform rates for <br />all other customer classes, to a uniform volumetric rate structure for all customers. This <br />change simplifies the rate structure, aligns more closely with actual water usage patterns <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