HomeMy WebLinkAboutInfo Item - Increase of Water Svc-Cnsmptn ChargesCITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
STAFF REPORT
REQUEST: RECEIVE AND FILE INFORMATION REGARDING THE IMPACT
FROM THE INCREASE IN WATER SERVICE AND
CONSUMPTION CHARGES BY THE COACHELLA VALLEY
WATER DISTRICT
SUBMITTED BY: Mark Greenwood, P.E., Director of Public Works
DATE: March 9, 2017
CONTENTS: Water Rate Increase Impact Analysis
Recommendation
Receive and file information regarding the impact from the increase in
water service and consumption charges by the Coachella Valley Water
District.
Strategic Plan Obiective
The immediate reduction of water worked towards Priority 1 of the Energy and
Sustainability goal: "reduce per capita consumption of energy and water." Priority 1 of
the Parks and Recreation is being highlighted, since the goal mandates that "existing
parks be maintained at the highest level of service."
Background
In 2010, the Coachella Valley Water District (CVWD) implemented tiered water rates
that penalize excessive water use by charging higher rates for higher usage. The tier
categories ranged from "Excellent" (Tier 1) to "Wasteful" (Tier 5). In April 2015,
Governor Brown implemented a mandatory 25 percent statewide water reduction to
reduce potable urban water usage. The state -set goal for water usage reduction for
CVWD was set at 36 percent, which was extended through October 2016. On July 1,
2015, a Tier 2 Drought Penalty was implemented for customers that failed to reduce
their outdoor water budget by 36 percent.
Staff Report
Receive and File Information Regarding CVWD Increases
March 9, 2017
Page2of3
on July 1, 2016, with subsequent increases over the next four years. Staff evaluated
and presented on May 26, 2016, an informational staff report to City Council regarding
the potential impacts to landscaping budgets. It was noted that there would be a more
than 275 percent increase in water cost over the next 5 years: from approximately
$235,000 in 2015 to more than $650,000 by 2020.
Since the first tier rate structure went into effect, the Landscape Services Division has
implemented measures to reduce irrigation by the required percentages. The water
consumption between July and December 2015 decreased by 27 percent, and cost
decreased by 20 percent compared to July through December 2014. However, the
water savings came at a cost. The turf severely deteriorated and the soil became so
compacted on actively used parks that it was either too dusty or too wet when in use.
Staff also received many complaints regarding the lack of turf, including calls from
Washington Charter School parents reporting an increase in asthma -related incidences
as a result of the additional dust. To properly correct the issues, the Washington
Charter Park was sodded this year, and watering was increased in other heavily used
park areas in an attempt to keep the Bermuda grass viable.
During the budget process of FY 2016/17, the budget was adjusted to account for the
newly implemented increases; although, it was difficult to accurately predict the actual
additional costs with the continual rate changes. Now, staff has six months of data to
use to compare to previous years, and to better understand the impact CVVVD's
adjustments will have on the City's budget. As mentioned before, water consumption
and cost decreased from 2014 to 2015. Between July and December 2015,
consumption increased by 32 percent; yet due to the new tier rate structure, the cost
increased by 71 percent. If 2014 is compared to 2016, the Public Works Department
water usage has decreased by 4,327 CCFs (3.3 percent), while the cost increased by
$57,577, or 37 percent. The variance does not include the changes to the meter fixed
charges, which in some cases have already increased 233 percent, and will continue to
gradually increase over the next five years.
Staff will continue to make the necessary budget adjustments over the next five years.
Yet it is important to keep in mind that the general fund will be significantly impacted by
this new rate structure.
Staff Report
Receive and File Information Regarding CVWD Increases
March 9, 2017
Page 3 of 3
Fiscal Analysis
With the approved increases by the CVWD Board of Directors, the future fiscal impact
will be significant.
Prepared by:
r
(Bertha A. onzal
Accounting Technician
Jiine-eM. Moore, Director o Finance
Approval:
Lauri Aylaian, City Manager
Department Ha
Mark Gwood, P
Direct of/Public Works
c
cr. A W■ N3 LT A CO N N -• = 3 [n A W N -
3
a n g
m, mi., . m. >mm to gmj cm a
mm � y _y n C n: m m = O 5m m .<
. m
m" m m co.ro __
to o�° ' to ° ' 3
[Q
—EA fA ffl 59 EA C 0 —1 fR CA 69 EA EA EA C 0 — cfl 6969 69 fA C 0
m 7
rnAN ya m -1 ocn WN-•-} A A1U.- r•
b
r — Q). 0) (0 a w�a1ro� n �� o No
r p r p r p
m m m
0 0 0
uo
- nm co nm PO n m
N O D a CO 'CO W Cp Q W O 1 co CU
-a.
A CA N [31 [11 m A 0, O 93 cn A W m A A. CO m
W N A CO N XI CA W ❑'i N Cn rD CO CO a W X
IR) N f\)
Q 0 0
69 69EL' _a
a n a
i - N A W 3 N 69 fA fA 19 IDD 3 rn fA EA -. N 3
W V W Q c Gil Co A V CO CO Cr) A V cr. cofA °
m cn a Lin CO fA a W rn a ID co ic. fA ? iv in as =- in
W 0) Cn O CO A A V N O (0 O W 0) W CO CO d
74 0F) W —ca 0 pW00) co co O mO -..I(DA
CD -+ V cn rD A W (JD pp acr. V W b ivW ivCO C�,�
co. co A A CO d R.) CO CO A N d) CD 0 A NI 01 N W
v a a
co coW
1 W 1 0 A O $ -) d O N V (0 O f O N V W d
0 A iD iv = O W co iv 6CJ O V V d d �77 a
N N 0 CD CA CO CO CO A E Q 93 A A O
° ° e o ° o a ° o 0 0 0 0 ° a o o a o
0
■
§
§
A p:
0
0
m
§
N N
0 d o m
a
rn cn a �
A co co x
-co A
R] O Cr
A .
N V
ii o
_
7�i chi �
1 m �
0'
SISAIVNH NOS1zIVdIN00 JIVE! E1311
131H151❑ E131VM A311VA V113H0V00