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1 RiversideCA.gov
1 RiversideCA.gov
WATER COST OF SERVICE ANALYSIS
AND RATE DESIGN
City Council
February 21, 2023
Public Utilities Department
RiversideCA.gov
2 1. March 14, 2022, Board approved Water Cost of Service Analysis (COSA) and Rate Design Project with Carollo
• Support for next 5-year water rate plan
2. Water Rate Trend Study presented to Board on August
8, 2022
BACKGROUND
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3 1. Comprehensive review of all rate schedules
2. Forecasts future revenue requirements
3. Equitable allocation of costs among customer classes
4. Water utility rate trends study
5. Five-year proposed rate design recommendation
6. Customer impact analysis
7. Recycled water rate design recommendation
8. Budget-based rate design and implementation plan
WATER COSA AND RATE DESIGN PROJECT
RiversideCA.gov
4 Considerations:
1. Changing Industry and Regulatory Requirements –The
impacts of drought mandates and treatment
requirements
2. Operating and Infrastructure Costs – Production,
transmission, distribution, and capital improvements
3. Essential to identify the cost to serve the City’s customers and ensure equitable allocation of cost responsibility
among customer rate classes.
FUTURE WATER REVENUE REQUIREMENTS
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5 Additional cost of service and rate design analysis
required
1. Sales forecasts and customer usage projections
2. Cost of service allocations including allocation of
capital improvement projects
3. Rate design considerations and associated customer
bill impacts
PROJECT AMENDMENTS
RiversideCA.gov
6 WATER COSA AND RATE DESIGN PROJECT
Consultant: Carollo Engineers, Inc Amount
Phases I, II, and III- Cost of Service Analysis, Rate Trends Study, Rate Design, Recycled Water Rate Design, Budget-Based
Rate Design and Implementation Plan
$153,100
Subtotal $153,100
In Person Meetings (Two) $8,040
Total $161,140
First Amendment- Additional Cost of Service and Rate Design Analysis $13,692
Second Amendment- Additional Cost of Service and Rate
Design Analysis $40,000
Final Total $214,832
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7 PROJECT TIMELINE
Project Phase Jan Feb Mar Apr May June
I Cost of Service
II Rate Trend Study
III Rate Design
IV Recycled Water Rate Design
V Budget Based Rate Design
Note: Timeline includes completing draft reports pending recommendations from City Council and RPU Board, community outreach and feedback, and final approval.
Complete
After review, not proposed at this time
RiversideCA.gov
8 Priority 6 – Infrastructure, Mobility & Connectivity
Goal 6.2 – Maintain, protect and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability, and facilitate connectivity.
Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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9 That the City Council:
1.Approve a Second Amendment t o the Professional Consultant Services Agreement for Water Cost of Service Analysis and Rate Design with Carollo Engineers, Inc., of Riverside, California, increasing the contract amount by $40,000 for a revised total contract amount of $214,732; and
2.Authorize the City Manager, or designee, to execute the Second Amendment, including making minor and non-
substantive changes.
RECOMMENDATIONS
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