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7A-% DRAFT URBAN WATER MANAGEMENT PLAN MM OPIERFAMMMMM The meter reader will be able to drive through the City and read the meters remotely from the vehicle by radio transmission communication. The radio drive -by technology permits reading 5,000 meters per hour, limited only by the speed limit and a one -mile electronic transmission radius. It is expected that the pilot project will show that the use of remote meter reading technology can significantly decrease the amount of time it takes to read meters, improve meter reading accuracy, and improve the safety of employees. Another benefit is this technology will make it relatively easy to transition from bimonthly to monthly meter reading and billing for residential customers, helping these customers to better monitor their water use for conservation purposes. 5.2 Financial Guiding Principles In 19931 City Council approved and adopted seven guiding principles for managing the Water Enterprise Fund as summarized below. Revenues and Expenditures in Balance The water fund is a self - sustaining enterprise where revenues derived from customer charges should equal the expenditures in running the water system. Revenues must be segregated from other municipal funds and uses, and cannot be co- mingled with other activities. Expenditures include costs for operations and maintenance, wholesale water purchases, capital improvements, and reserves. 2. Capital Improvement Program The City shall maintain a capital improvement program to provide for the systematic and efficient replacement/renewal of the water distribution system over time. The program will also address steps and actions necessary to comply with federal, state, and regional regulations regarding health and safety issues. 3. Emergency Reserve Fund The City shall maintain a reserve fund to potentially address emergency engineering projects and/or other costs related to catastrophic or unforeseen circumstances (e.g., earthquake, drought, regulatory change). 4. Basic Service Charge Equal to Fixed Costs All fixed costs associated with operations and maintenance of the City's water system (e.g, salaries, benefits, equipment, supplies, and services) are recovered from customers via a basic service charge. The basic service charge varies with meter size and needs to be paid by customers regardless of how much water they use. All other costs (wholesale purchase water, electrical power from PG &E, capital improvements, conservation programs, and the City's rights -of -way compensation costs) are collected via a customer quantity charge. A quantity charge is assessed on each water unit (hundred cubic foot) used by customers as recorded by water meters. 5. Cost of Service Equity Among Customer Groups Each customer group is to pay its fair share of the costs incurred by the City in providing water service. No customer group is to subsidize others by virtue of water rate differentials. 36