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Analysis of Water and Sewer Rates <br /> Guidelines and Parameters for Water and Sewer Rates <br /> Staff met with the Finance Committee to develop the guidelines and parameters for <br /> structuring the proposed water and sewer rates. These parameters included: <br /> Encourage water conservation <br /> Maintain (to the degree financially possible) senior and low income <br /> discounts <br /> Include funding for a recycled water program <br /> Adhere to existing City fiscal policies <br /> o Enterprise Funds must be self sufficient and fiscally sustainable <br /> cost of services are to be borne by users of the system and <br /> repair and replacement of capital facilities are fully funded <br /> through rates <br /> Establish fair and equitable rates across all customer classifications. <br /> Based on these guidelines and parameters staff proceeded with a study of both the <br /> water and sewer operations to determine if there was a need for an increase in the rates <br /> for these City provided services. <br /> The City retained HDR to prepare a local sewer rate study. A complete copy of their <br /> report is included in Attachment 1. The City retained HF &H Consultants, LLC to <br /> prepare a water rate study. A complete copy of their report is included in Attachment 2. <br /> Audit and Review of Accounts and Expenditures <br /> The first step in the analysis of the current water and sewer rates was to review and <br /> audit existing customer accounts to determine if there were any inconsistencies in the <br /> billing system. This is a routine operating procedure for a utility. Also, staff reviewed <br /> existing expenditures to determine if there were areas where costs could be reduced or <br /> an economy of scale could be realized prior to developing the expenditures for the rate <br /> analysis. In both cases, substantial adjustments were made that resulted in the need for <br /> a lower water rate increase than otherwise would have resulted without the review and <br /> audit. In the case of a sewer rate increase, an increase was avoided all together as a <br /> result of the audit and reduction in expenditures of the sewer enterprise. As is noted <br /> later in this report under the section Proposed Local Sewer Rate Increase, there is a <br /> need to restructure some aspects of the current sewer rates that will result in a rate <br /> increase to a limited number of customers, a pass through of regional sewer rate <br /> increases by the Dublin San Ramon Services District (DSRSD) and the City of <br /> Livermore and to implement an annual consumer price index increase for the next five <br /> years for all customer classes. <br /> Page 2 of 20 <br />