Case Study: Las Virgenes Municipal Water District – Water Budget Development Cost
Submitted by LVMWD
LVMWD developed BBRs for residential, commercial, and irrigation accounts using potable and recycled water. Additionally, the rate restructuring changed the sanitation charge for residential accounts to a “per-person” basis. The previous potable and recycled water rate structure was an increasing block rate structure, while the sanitation service charge was previously based on winter water use, used as a proxy for indoor use. A tabulation of the accounts affected by the change to BBRs is in the table below.
Shown below are actual costs to develop the BBR development and implementation program. Half of the total cost for LVMWD was funded by a $419,407 grant under the 2014 Proposition 84 IRWM Drought Grant program. Concurrent with BBR implementation was a District effort to evaluate deployment of an Automatic Meter Reading/Automated Metering Infrastructure (AMR/AMI). The District had a partial deployment by a vendor who filed for bankruptcy and no longer supported the equipment, so a consultant was hired to assist in evaluating other metering systems. The purpose of the AMR/AMI project was to provide customers with more timely information about their water use and offset some of the costs associated with the transition from bi-monthly to monthly meter reading.
| Task | Description | Cost |
|---|---|---|
| Financial analysis and rate study | Cost of service study and rate design for water, recycled water, and sanitation service. The Request for Proposals describes in further detail the water budget development process as well as the financial analysis and rate study needs. | $111,000 |
| Acquire aerial imagery and data | 6-inch aerial imagery for 122-square mile area; analyze “potentially irrigated” areas using water use; analyze irrigated areas within right-of-way. | $105,170 |
| Advisory consulting services | Expert advisory services for program development. | $19,200 |
| Billing system modifications | Reprogramming of the Customer Information System for monthly billing and rate structure modifications. | $54,250 |
| Monthly meter reading (recurring monthly cost of $14,390 after implementation, service provided by a meter reading company) | Monthly meter reading during transition from bi-monthly to monthly billing (four months) prior to water budget implementation | $57,530 |
| Evapotranspiration data (recurring monthly cost of $10,925 after implementation) | Vendor cost to provide microclimate data during rate structure transition | $2,120 |
| AMR/AMI implementation program | Development of a plan for District-wide deployment | $24,640 |
| LVMWD labor cost | Approximately 6,400 hours (see breakdown in table below) | $459,413 |
| Total | $833,323 |
Shown below are actual costs to develop the BBR development and implementation program. Half of the total cost for LVMWD was funded by a $419,407 grant under the 2014 Proposition 84 IRWM Drought Grant program. Concurrent with BBR implementation was a District effort to evaluate deployment of an Automatic Meter Reading/Automated Metering Infrastructure (AMR/AMI). The District had a partial deployment by a vendor who filed for bankruptcy and no longer supported the equipment, so a consultant was hired to assist in evaluating other metering systems. The purpose of the AMR/AMI project was to provide customers with more timely information about their water use and offset some of the costs associated with the transition from bi-monthly to monthly meter reading.
A detailed breakdown of District staff labor hours is provided below. Program management costs are included with the various work items. The costs include employee salary and benefits.
| Item | Hours | Cost |
|---|---|---|
| Proposition 84 grant application and management | 430 | $37,670 |
| Coordination and management of financial analysis and cost of service study by the consultant | 386 | $46,524 |
| Geographical Information Systems (GIS) coordination with aerial imagery consultant; verification of irrigated area data provided by customers; resolving issues (see Development of Irrigated Area Data in Las Virgenes Municipal Water District) | 2,717 | $153,071 |
| GIS work to manually determine irrigated areas for over 1,000 turf removal program participants. The aerial imagery was taken in 2014 before most projects were completed. | 856 | $61,419 |
| Public outreach to various community groups, public workshops, homeowners associations and Proposition 218 noticing. About 30% of this effort was for individualized outreach at the homeowner level to resolve irrigated area data differences. | 740 | $70,278 |
| Coordination of billing modifications for the transition from bi-monthly to monthly billing and rate structure change, including testing. | 537 | $42,805 |
| Review of appropriate indoor use factor and evapotranspiration data source | 173 | $15,108 |
| Coordination of study conducted by the consultant on AMR/AMI implementation including input on desired infrastructure, features and functions | 77 | $9,173 |
| Total | 6,384 | $459,413 |