HomeMy WebLinkAboutAgenda Packet - May 05, 1976 - CC May 5, •1976
TO: CITY COUNCIL AND CITY ADMINISTRATOR
FROM: DIRECTOR OF PUBLIC WORKS
RE: WATER RATE STUDY FOR AZUSA MUNICIPAL WATER DIVISION
THE NEED TO INCREASE RATES
The last water rate study was conducted at the end of 1973 and the water rates were raised in
February, 1974. Since that time the cost of the electric energy and natural gas have sky-
rocketed causing much greater operating expenses. The City uses both electric motors and
natural gas engines to extract the well water from the ground, boost it to storage tanks at
higher elevations and keep the City's distribution system pressurized.
The water imported from the Feather River in northern California, brought in to recharge the
underground water basin, has risen in cost and the lack of heavy rains this winter has de-
creased the safe yield of the water basin and decreased the amount of free water we may
pump. These two factors along with the general inflationary trend, affecting salaries and
every commodity used by the Water Division, necessitates an increase in water rates.
COST OF WATER PRODUCTION
The costs of producing and distributing water to all of our customers during the next year
have been computed, and these costs are discussed as follows:
The average cost of both producing and distributing for all users is 2N per hundred cubic feet.
The City bears a cost of approximately 30 per hundred cubic feet for the very minimum water
users and a cost of approximately 13 per hundred cubic feet for the very large water users
such as the American Cyanamid Company, the Miller Brewery and the Azusa Greens Golf
Course.
Included in this report are exhibits which show the methods of calculation of the above rates
and a chart showing the water rates charged by the majority of the other water purveyors in
the basin as well as the water rates presently charged by the City of Azusa and the water
rates recommended by this report.
GOLF COURSE WATER
The City presently supplies the golf course with water at a rate of 10 per hundred cubic feet.
This cost is based on an agreement between the City and the golf course which provides that
the golf course will be charged the city's actual cost plus 6% profit. The rate was adjusted
the last time in early 1974. Because of the additional costs for replenishment water, increased
power costs, and the natural inflationary trend, the rate should now be recalculated. Exhibit
B of this report indicates that a rate of 15 per hundred cubic feet would more accurately
reflect the terms of the agreement.
To: City Council and City Administrator -2- May 5,1976
Re: Water Rate Study
The water rates charged by cities and private water companies to other golf courses in the
surrounding area are given in the table below. It is apparent from this data that even with
the increased golf course water rate, our price is the lowest charged in the area.
Figures are for 100 cubic feet of water
City Owned Private County
South Pasadena 24
Monterey Park 28 - 194
Pasadena 29c 32.1 33 (outside of city)
Arcadia 18 18
Montebello 29
Azusa (presently) 10
Azusa (proposed) 15
RECOMMENDATION: It is the recommendation of the Director of Public Works that the
City Council revise the existing water rate resolution to reflect the following costs:
SERVICE CHARGE:
For 5/8" or 3/4" Meter $ 3.00
For 1" Meter 3.50
For 1-1/2" Meter 6.00
For 2" Meter 8.50
For 3" Meter 15.50
For 4" Meter 25.00
For 6" Meter 45.00
For 8" Meter 70.00
For 10" Meter 95.00
For 12" Meter 120.00
QUANTITY RATES:
First 300 cubic feet included with Service Charge
Next 19,700 cubic feet per 100 Cu. Ft. $ .26
Next 800,000 cubic feet per 100 Cu. Ft. 20
Over 1 ,000,000 cubic feet per 100 Cu. Ft . .14
Golf course rate per 100 Cu. Ft. .15
Agricultural Rate .15*
*The agricultural water served by the City of Azusa is served mainly outside the City.
The covering resolution provides that the double water rates do not apply to agricultural rates.
Respectfully submitted,
7.4deYAlli-et
Michael W. Wells
Director of Public Works
MWW:es
EXHIBIT "A"
CITY OF AZUSA
WATER RATE STUDY
BASIC WATER PRODUCTION COST DATA
BASIC DATA
Azusa Prescriptive Right * 2775 Acre Feet
Azusa Agricultural Prescriptive Right . * 1315 Acre Feet
Total Prescriptive Right * 4690 Acre Feet
1975 Water Production 8003 Acre Feet
1974 Water Production 8047 Acre Feet
Average of two years . 8025 Acre Feet
Cost of ground water replenishment $42.00 per Acre Ft.
Estimated yearly replenishment = 8025 - 4690 = 3335 Acre Feet
Cost of replenishment = 3335 X $42.00 = $140,070.00
Average cost per acre feet = $140,070.00 =$17.46 per Acre Feet
8025
COST OF POWER
Cost of Power 1975 - 76 $100,000.00
10% increase effective in 1976 - 77 10,000.00
Cost per Acre Feet = $110,000.00 =$13.70
8025
* Based on safe ground water yield for basin in fiscal year 1976 - 1977
EXHIBIT "B"
GOLF COURSE WATER
COST ANALYSIS
BASIC DATA
1 . Agreement dated March 1964
2. Annual use 180,000 hundreds of cubic feet, 413.22 acre feet
3. Average cost of replenishment based on 8025 acre feet per = $17.46
4. Cost of power = $13.70 per acre foot
Estimated cost of customer accounting $ 77,000
General Administrative Expense . . . 76,000
Depreciation . . . . 77,000
TOTAL $ 230,000
Cost per customer = $230,000 = $ 46.00
5000 customers
Cost per acre feet =$ 46.00
413.22 = $ 0.11 per acre foot
Maintenance of source of supply $ 30,000
Maintenance of transmission and distribution system .. . . 195,000
TOTAL $ 225,000
Cost per acre feet = 225,000 = $ 28.04
8025
TOTAL COSTS
Power Costs $ 13.70 per acre foot
Replenishing costs 17.46 " "
Accounting and Administration . . . . 0.11 " "
Maintenance . . . 28.04 " "
In lieu of taxes 1 60 " "
$ 60.91 per acre foot
Cost of water per 100 cubic feet = $ .139
6% profit per agreement = .008
TOTAL .147
Recommended Golf Course water rate $ 0.15 per hundred cubic feet
EXHIBIT "C"
CITY'S WATER COST FOR LARGE USERS
Cost of Power $ 13.70 per acre foot
Replenishment Costs 17.46 " " "
Maintenance 28.04 " " "
In lieu of taxes 1 .60 " "
Accounting, administration and depreciation
$ 46.000Q per customer = . 17 per acre foot
(Based on 10.000 hundred cubic feet per7monOfh)
TOTAL $ 60.97
Cost per 100 cubic feet = $ .14
CITY"S AVERAGE COST FOR WATER FOR TOTAL USERS
Water Division Budget * $ 1 .212,259.00
Water Production per year . . . .. . . . 8025
Cost per acre feet * $ 151 .06
Cost per 100 cubic feet = * $ 0.35 per hundred cubic feet (including capital improvement)
Cost per 100 cubic feet = 0.20 per hundred cubic feet (not including capital improvement)
* Includes $ 510,200.00 in capital improvements.