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File #: 201022.    Version: 1 Name:
Type: Discussion Item Status: Passed
File created: 4/2/2021 In control: Utility Advisory Board
On agenda: 4/8/2021 Final action: 4/15/2021
Title: Water and Wastewater Rate Structure Modifications (B) **This item was presented to the UAB on April 8, 2021.**
Attachments: 1. 201022_WWW_Rate_Analysis_Presentation_20210408
Title
Water and Wastewater Rate Structure Modifications (B)

**This item was presented to the UAB on April 8, 2021.**

Explanation
On a periodic basis, it is important to analyze and review water and wastewater rate structures in order to evaluate industry best practices and ensure rate structures promote water sustainability, provide sufficient collection of revenue, and are understandable to customers. This review and analysis resulted in several recommendations for modifying the water and wastewater rate structures to meet these criteria. The adjustments will simplify rate structures, provide consistency with other utilities in Florida and adjust revenue, increasing revenues in some rate classes.

There are six proposed modifications to the rate structures, which are identified below along with the reason or purpose for making the adjustment:

1. Adjust downward the water third tier usage cutoff to <13kgal
• Purpose: Promote water conservation
2. Increase City of Alachua wholesale water rate to $2.67/kgal
• Purpose: Adjust toward cost of service
3. Adjust 2nd tier water rate to match general services rate to $3.87/kgal
• Purpose: Adjust to cost of service and consistency

4. Adjust commercial wastewater from 95% to 100% of water usage
• Purpose: Industry best practice and adjust to cost of service
5. Convert wastewater rate from winter maximum to water use with 12kgal cap
• Purpose: Simplifying rate structure and industry best practice
6. Increase RCW by $0.23/kgal (RCW rate = $1.235/kgal)
• Purpose: Promote reclaimed water conservation and adjust to cost of service

The intent is to implement these rate structure modifications on October 1st, 2021, along with any other utility rate modifications identified through the budget process.

Fiscal Note
Staff anticipates increased revenues as a result of these changes. Potential revenue increases are estimated at:

$100,000 to $300,000 per year in Water.

$1 million to $2 million per year in Wastewater.

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