2008 Water Rate and Fee Study - Lake Havasu City

6. Proposed FY 2009-10 Rates for ServiceAppendix C summarizes the detailed water use by customer class, projected water useand projected revenue by customer class for FY 2009-10.6.1. Current RatesThe City’s current water rate structure is comprised of a base charge that varies by metersize and a volume rate applied per 100 cubic feet (ccf) of metered water use. The volumerate is a 4 block inclining block structure which means the rate per ccf increases asconsumption moves through the 4 usage blocks.6.2. Pricing ObjectivesRed Oak worked with City staff to evaluate twelve different water rate pricing objectives.The top five objectives and a brief description include:• Conservation – Effective in promoting the efficient use of resources on a yearroundbasis.• Revenue Stability – Effective in providing stable revenue stream to recoverrevenue requirements in the face of variable external factors such as tourism, parttimeresidents and weather.• Cost-of-Service Equity – Developing rates so that each customer’s monthly waterbills equals the cost borne by the City in providing that service.• Administrative Ease –Minimize the administrative burdens associated withimplementing and sustaining the use of a rate structure.• Customer Bill Impact – Minimizes the impact among customers in similar classes,in both the short-term and long-term.6.3. Proposed Base ChargeTable 6-1 summarizes the existing and proposed monthly base charge. The base chargeis assessed monthly to all customers based on water meter size and recovers customercosts that include utility billing, meters and services, and a portion of the localdistribution line costs.Lake Havasu City2008 Water Rate and Fee Study49440146-1