65B - PROPOSED WATER AND SEWER RATE ADJ

Home Browse Search

IIA WATER RATE STUDY I City of Santa Ana, CA Water Rate Study REVENUE AND REVENUE REQUIREMENTS To meet the costs associated with providing water services to its customers, the Water Enterprise derives revenue from a variety of sources including water sales charges, basic service charges, reconnection fees, penalties, tag fees, rental of property, interest earned from the investment of available funds, and other miscellaneous revenues. The level of future revenue generated in the study is projected through a combination of an analysis of historical and future system growth in terms of number of accounts and water consumption. With revenue derived from the various sources, the Water Enterprise meets the cash requirements of operation and maintenance (0 &M); principal, interest, and reserve payments on revenue and other bond indebtedness; and recurring annual capital expenditures for replacements, system betterments, and extensions not debt financed. Operation and maintenance expenses are those expenditures necessary to maintain the system in good working order. Routine annual capital expenditures, which include equipment replacements, consist of recurring annual replacements, minor extensions, and betterments which are normally revenue financed. Other capital costs include principal and interest payments, bond covenant - required payments, and cash financed capital improvements. Accounts and Customer Usage Projections To forecast revenue, the customer accounts and billed water sales volume needs to be determined within the Water Enterprise's service area. Billed water is incorporated into the equation by projecting the average number of customer accounts illustrated in Table 1 and assessing an average use per account to produce the billed water volumes shown in Table 2. Based on the Urban Water Management Plan, discussions with City staff and the impact of the drought, water growth is estimated to remain constant at 15,948,300 hundred cubic feet (HCF) or 36,612 acre -feet (AF) between FY 14/15 and FY 18/19. The City under State mandate must comply with Senate Bill x7 -7, which stipulates a mandatory reduction of 20 percent water used by 2020 for all water purveyors in California. The City is at near built - out conditions and increase in water flow will result of increased density or infill of vacant properties. [INTENTIONALLY LEFT BLANK] 65B -30 NOVEMBER 2014