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2019 Water, Recycled Water, and Sewer Rate Study <br />Executive Summary <br />3. Rate Structure Analysis —The Study developed specific rate schedules to recover the identified level <br />of required rate revenue as identified by the COSA analysis from the appropriate customers. The <br />recommended rate schedules were designed to: <br />➢ Fairly and equitably recover costs through rates, <br />➢ Conform to accepted industry practice and legal requirements, and <br />➢ Provide fiscal stability and recovery of fixed costs of the system. <br />The existing water rates have a two-part structure comprised of a fixed service charge that is assessed <br />based on meter size and a consumption -based rate (as measured in hundred cubic feet or "CCF") that is <br />assessed based on the total amount of water that is used during the billing period. Additional details that <br />describe the current rate structure are included in the full report. This Study recommends implementing <br />the following changes to the existing water rate structure: <br />1. Update the meter equivalency schedule, <br />2. Establish four Customer Classes: Single Family, Multi -Family, Non -Residential, and Recycled <br />Water, <br />3. Enhance the connection between water rates and the cost to provide water service by primarily <br />recovering water supply costs through the Water Usage Charge as well as calculating the tiered <br />rates based on the cost of the Water Utility's two sources of water supply, <br />4. Update the Tier 1 water allocation for each customer class to enhance the connection of water <br />use in each tier to reflect the Water Enterprise's utilization of each source of supply, and <br />5. Update the Pass -Through Adjustment Policy, which updates Water Usage Charges based on <br />actual changes to water supply costs. <br />This Study recommends implementing the following changes to the existing sewer rate structure: <br />1. Create three customer classes: Single Family, Multi -Family, and Non -Residential based on their <br />respective "Return -to -Sewer Factors", and <br />2. Establish a single fixed Sewer Utility Charge to replace the existing rate structure. <br />Tables ES-2 through ES-5 indicate the proposed rates for FY 2019/20 through FY 2023/24. Note that the <br />Pass -Through Adjustment Policy would adjust rates in addition to the proposed rate revenue increases <br />shown in Table ES-1 <br />City of Santa Ana Stantec I ES-4 <br />