Amador County – Amador Water Agency board of directors received a preliminary report on a system-wide water rate consolidation study Thursday which recommended a 5 percent increase overall, if consolidation occurs.
Agency Counsel Stephen Kronick said the report was preliminary, and would be brought back after work is completed on two proposed Community Facilities Districts, in Amador Water System and Central Amador Water Project.
AWA General Manager Gene Mancebo said the study was a continuation of 2002 Grand Jury recommendation to consolidate Agency rates. The study included costs with and without a Central Amador Gravity Supply Line.
Consultant Bob Reed of The Reed Group said the study estimated just under $8 million dollars in water system costs for fiscal year 2012-2013. Offsetting “non-rate revenue” totaled $1.18 million dollars. Operation and maintenance constituted 71 percent of costs, and debt service payments made up 24 percent, making total revenue requirement $6.8 million dollars.
The study broke down agency costs to get shared costs, and individual system costs, and proposed an overall rate increase of 5 percent to meet revenue requirements. The breakdown showed $5 million in system-wide costs, and debt service of $1.6 million, the bulk being Amador Water System, plus debts in Camanche, La Mel Heights and CAWP Wholesale.
For consolidated costs, Reed recommended dividing rates with 50 percent based on water usage, and 50 percent as fixed service charges. He said a “best management practice” would recommend 70 percent based on usage, to encourage conservation, but he did not believe AWA should go above 50 percent because of its lack of operating reserve and “you need to have the income.”
He proposed a 3-tiered rated structure for all residential customers, a uniform rate for all customer classes, and different rates for treated, and untreated, resale customers, and Mule Creek State Prison. He recommended monthly service charges based on the size of the meter.
Director Robert Manassero said the board last year reached the bottom line for reductions, and “nobody in this room wants a rate increase.” It was a conservative study, but “it will help in the survival of the water agency as we see it today. Should it be more aggressive? We’ll leave that to the taxpayers.” Director Paul Molinelli Senior said the agency is headed in the right direction, and it has taken 10 years to follow the Grand Jury.
Cooper asked about the 70-30 state recommendation for volumetric uses. Reed said customers do have more control of their bill, but the economy can affect overall demands.
He said the agency doesn’t have the buffer of reserves “to lean back on,” and he would not suggest having a usage rate higher than 50 percent of total customer bills.
Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.
