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2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure <br />The cost recovery target for each customer class shown in Table 3-13, was allocated between tiers 1 and <br />2 for potable water use based on the percentage of the source of supply costs for each tier. OCWD and <br />pumped water costs total 55.9% of the source of supply cost, with MWD costs making up the remaining <br />44.1 %. The unit cost per CCF was calculated by dividing the revenue requirement by the volume of <br />water consumed in each tier for each customer class. <br />Table 4-6 shows how these steps and the resulting unit rate for each tier for each customer class. <br />Table 4-6: Tier Unit Rate Calculation (FY 2020/21) <br />�AbLllllel <br />Class and <br />me I ell le <br />Recovery <br />Percent <br />Allocation <br />V1 d1el <br />Allocation <br />Percent <br />Allocation <br />Calculated — <br />Unit Rate* <br />Tier <br />Single <br />Requirement <br />$14,688,232 <br />(CCF) <br />5,406,506 <br />Family <br />Tier 1 <br />$8,210,722 <br />55.9% <br />4,053,677 <br />75.0% <br />$2.03 <br />Tier <br />$6,477,510 <br />44.1% <br />1,352,829 <br />25.0% <br />$4.79 <br />Multi- <br />$11,567,253 <br />4,257,723 <br />Family <br />Tier 1 <br />$6,466,094 <br />55.9% <br />3,190,058 <br />75.0% <br />$2.03 <br />Tier <br />$5,101,159 <br />44.1% <br />1,067,665 <br />25.0% <br />$4.79 <br />Non- <br />$13,073,974 <br />4,812,323 <br />Residential <br />Tier 1 <br />$7,308,351 <br />55.9% <br />3,608,602 <br />75.0% <br />$2.03 <br />Tier <br />$5,765,622 <br />44.1% <br />1,203,721 <br />25.0% <br />$4.79 <br />Recycled <br />$268,937 <br />100% <br />124,997 <br />100% <br />$2.15 <br />Water <br />* The calculated unit rate is developed using the non -rounded recommended tier allocations discussed <br />above <br />The Water Usage Charges for the planning horizon are presented in Appendix E (Schedule 13 through <br />Schedule 17). <br />4.6 PASS -THROUGH ADJUSTMENT POLICY <br />In addition to the recommended increases in revenues shown in Section 2.3, this Study proposes to <br />modify the existing Pass -Through Adjustment Policy in order to offset any changes in water supply costs <br />through changes to the Water Usage Charges. The pass -through calculation does not apply to FY <br />2019/20 because revenue requirements and cost recovery were calculated based on the projected FY <br />2019/20 water supply costs. <br />As illustrated in Figure 4-4, tiered rates are adjusted based on the unit price increase corresponding to <br />the water source allocated to each tier. Tier 1 rates are increased (or decreased perhaps) by the change <br />in the unit cost of the groundwater supply cost. This is calculated by adding the OCWD water purchase <br />costs and dividing that cost by the volume of groundwater (in CCF) used by the Water Enterprise. <br />Tier 2 rates are increased (or decreased) by the change in the unit cost charged by MWD (see OCWD <br />example above). <br />City of Santa Ana Stantec 134 <br />