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DRAFT URBAN WATER MANAGEMENT PLAN 6. Water Conservation Rate Structure The City is to employ water conserving rate structures that encourage customers to use water wisely. This includes having customers pay higher unit prices for increasing increments of water used during a billing period. 7. Economic Growth and Development Promote and support the economic growth - and development throughout the City by prudent water resource planning. 5.3 Existing Rates Based on the guiding principles, the City adopted an increasing block rate structure that has been in existence since the drought of 1989. Table 5.1 shows the City's water rates effective November 28, 2002. For residential cusforners, the city uses a five -block rate structure where the unit price of water increases from $0.88 to $2.50 per hundred cubic foot (Ccf) with increasing increments of water use. The first block provides a relatively affordable "lifeline" for low water users that use less than 10 Ccf per bi -month (equivalent to 123 gallons per day per house). The $0.88 price equals the cost of water purchased from San Francisco. Water gets progressively more expensive as all water used above the lifeline allotment is charged at the rate for the highest amount used during each billing period. This is an unusual rate system, but reinforces the water conservation price signal. Multiple - family accounts are included in the residential rate structure. When a site has more than 9 dwelling units, it is given a discount on its monthly service charge to reflect lower water demands. In addition, because multiple - family accounts often have one meter and many dwelling units, the City prorates the block water use thresholds for each site based on number of dwelling units. The non - residential classes include commercial, municipal, and other customers (e.g., Canada College). The monthly service charges increase with meter size. The quantity charge is based on a two -block rate structure. If a non- residential customer uses 15 or less Ccf/month, the price is $1.75 /Ccf. If a customer uses more than 15 Ccf/month, all water use is charged at $1.80 /Ccf. The modest price differential between the blocks reflects the fact that non - residential customers are much more heterogeneous regarding how they use water and their associated volumes. Just because a non - residential customer uses a lot of water, does not necessarily mean they use water inefficiently. Hence, a large rate differential is not warranted or used. For new development, the City charges a water facilities fee to recover investments made by existing water customers in the water distribution system to accommodate new growth. The facilities fee, effective July 1, 1994, is $1,787 per 5/8" meter equivalent (higher fees for larger meters). 37