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Figure 1-5: Single Family Residential Bill Impacts Customer Impacts at Various Levels of Usage-Single Family Residential.5/8 inch meter $700 $620 $600 Co $500 $399 $446 $400 o $300 $260 $281 m $200 $77 $99 $132 $187 $100 ■. = 0 10 ccf 20 ccf 40 ccf 60 ccf 90 ccf (Very Low Use) (Medium-Low Use Medium-High ( ry ) Use) (High Use) (Very High Use) ■Current Bill $59.23 S9853 $186.93 $280.53 $446.43 ■Proposed Bill $76.80 $131.70 $259.90 $398.70 $61980 Difference($) $1757 $3317 $72.97 $118.17 $17337 Difference(10) 29.700 33.7% 39.011/o 42.1% 38.80,0 11.10. Drought Rates The City engaged Raftelis to conduct a Drought Rate Study as part of the Water and Recycled Water Cost of Service and Rate Study. The City adopted its latest water shortage contingency plan in June of 2021, which details the six drought stages and the corresponding water usage reductions. The resulting drought rates align with Proposition 218 requirements and allow the City to reliably recover the necessary revenue to fully fund the water system in times of drought. The major objectives when developing drought rates include: • Determine water allocations for each customer class during each drought stage based on the 2021 Water Shortage Contingency Plan • Calculate the financial impacts of reduced water sales and changes to water supply sources • Evaluate various drought rate structures to determine the structure best suited to meet the City's needs • Develop drought rates that recover the financial impacts of each drought stage based on the cost of providing service 1.10.1. PROCESS AND APPROACH Drought rates are governed by the requirements of Proposition 218 and Article X of the California Constitution. The development of the drought rates must show the nexus between the costs of providing water service and the rates charged to customers, must maximize the beneficial use of water(often defined as indoor use for health and hygiene), and must encourage conservation. Drought rates are designed to recover lost revenue due to reduction in water use during each stage, to incorporate the potential changes to the City's water supply sources and their corresponding costs, to align with specific drought stages outlined in the 2021 Water Shortage Contingency Plan, and to provide financial flexibility for the City when declaring drought stages and implementing the appropriate drought rates. The proposed rates are based on the City's proposed water rates for FY 2024, which will go into effect January 1, 2024. There are four steps to conducting a drought rate study, which include: 10 CITY OF PLEASANTON