HomeMy WebLinkAboutAgenda Packet - July 7, 1975 - CC FILE
July 7, 1975
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. These two factors along with the general infla-
tionary trend, affecting salaries and every commodity used by the Water Division, necessitates
an increase in water rates.
COST OF WATER PRODUCTION
The cost of production 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 23 per hundred cubic feet.
The City bears a cost of approximately 28 per hundred cubic feet for the very minimum water
users and a cost of approximately 10 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 11 per hundred cubic feet would more accurately
reflect the terms of the agreement.
To: City Council and City Administrator -2- July 7, 1975
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
Alhambra 10k
Pasadena 26.3 32. 1 32. 1 (outside of city)
Arcadia 18 18
Montebello 29
Azusa (presently) 10
Azusa (proposed) 11
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 600 cu. ft. included with Service Charge
Next 9,400 cu. ft. per 100 Cu. Ft. $ .24
Next 990,000 cu. ft., per 100 Cu. Ft. . 16
Over 1,000,000 cu. ft. per 100 Cu. Ft. .12
Golf Course Rate per 100 Cu. Ft. . 11
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.
Respectfu ly su.mitted,
ichael W. Wells
Director of Public Works
MWW:gmr
enc.
EXHIBIT "A"
CITY OF AZUSA
WATER RATE STUDY
BASIC WATER PRODUCTION C OST DATA
BASIC DATA
Azusa Prescriptive Right . . . . . . . . . . . . . . * 3996 Acre Feet
Azusa Agricultural Prescriptive Right * 1893 Acre Feet
Total Prescriptive Right * 5889 Acre Feet
1972 Water Production 7787 Acre Feet
° 1973 Water Production 7429 Acre Feet
Average of two years 7608 Acre Feet
Cost of ground water replenishment $43.00 per Acre Feet
Estimated yearly replenishment = 7608 - 5889 = 1719 Acre Feet
Cost of replenishment = 1719 x $43 = $73,917.00
Average cost per acre feet = 73,917
7608- $9.72 per Acre Feet
COST OF POWER
Cost of Power (1974-75 $20,000
10% increase effective in 1975-76 2,000
Cost per acre feet = 22,000 _$2.89
7608
* Based on safe ground water yield for basin in fiscal year 1974-1975.
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 7608 acre feet per = $9.04 per acre feet
4. Cost of power = $2.89 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 __
7608 $ 29.57
TOTAL COSTS
• Power Costs $ 2.89 per acre foot
Replenishing costs . . 9.72 11 11
Accounting & Administration . . . . . . . . . 0.11
Maintenance - 29.57 " " "
In lieu of taxes 1 .60 " " "
$43.89 per acre foot
Cost of water per 100 cubic feet = $ .100
6% profit per agreement = .006
TOTAL $ .106
Recommended Golf Course water rate $ 0. 11 per hundred cubic feet
EXHIBIT "C"
CITY'S WATER COST FOR LARGE USERS
Cost of Power $ 2.89 per acre foot
Replenishment Costs 9.72 per acre foot
Maintenance 29.57 per acre foot
In lieu of taxes 1 .60 per acre foot
Accounting, administration and depreciation
$ 46.00 per customer = . 17 per acre foot
275.48
(Based on 10,000 hundred cubic feet per month)
TOTAL $43.95
Cost per 100 cubic feet = $ .10
CITY'S AVERAGE COST FOR WATER FOR TOTAL USERS
Water Division Budget $675,000
Water Production per year . . . . 7608
Cost per acre feet $ 88.72 per acre feet
Replenishment Cost 9.72 per acre feet
$ 98.44 per acre feet
Cost per 100 cubic feet = $ .23 per hundred cubic feet