SR-505-001-06
EPWM:GB:JH:EPWM/adm/stafrpt/recycledwaterrate
City Council Meeting: October 22, 2002 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Resolution Setting Rate for Recycled Water
Introduction
This report recommends that the City Council adopt the attached resolution
setting the rate for recycled water produced by the City?s Santa Monica Urban
Runoff Reclamation Facility (SMURRF).
Background
The City?s SMURRF plant was completed in early 2001. It produces
approximately 300,000 gallons of recycled water per day. Production of recycled
water reduces the City?s dependence on imported water supplies. A recycled
water rate needs to be established to recoup a portion of the costs of production
while providing a cost incentive to customers to purchase the water.
Currently, recycled water is used to irrigate various City parks. An extended
system will be completed this year to provide recycled water to Woodlawn
Cemetery, Caltrans freeway landscaping and the Water Gardens. Eventually,
the SMURRF plant will deliver water to the City?s Public Safety Facility and the
new Rand headquarters.
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Discussion
Prior to the availability of recycled water, all customers paid for a portion of their
water at the City?s first tier potable rate of $.74 per hundred cubic feet, and a
portion at the second tier of $1.80 per hundred cubic feet depending on water
use and meter size. Since recycled water cannot be used for human
consumption, its use is restricted. As a result, and as an incentive to customers
to use recycled water, staff is recommending that the recycled water rate for
SMURRF be set at a lower rate than potable water. The recommended rate is
$1.30 per hundred cubic foot which represents the costs of recycled water
operations less the revenue from bimonthly service charges, or approximately 70
percent of the second tier potable rate. The users of recycled water will realize a
savings in water costs. Other agencies surveyed charge 65 to 80 percent of their
potable water rates.
Budget and Financial Impact
This is the first year the City will receive revenue from SMURRF recycled water.
Recycled water sales for FY 2002-03 are anticipated to be approximately
$100,000 annually and are budgeted at Revenue Account 34661.407150. Half of
these revenues are credited to the City of Los Angeles, which shares equally in
the costs and revenues associated with the SMURRF plant. The City will receive
$50,000, which is budgeted at Revenue Account 34661.402730 for FY 2002-03.
As with potable water rates, recycled water rates will be revised annually based
on CPI index.
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Recommendation
Staff recommends that the City Council adopt the attached resolution setting the
recycled water rate.
Prepared by: Craig Perkins, Director of Environmental and Public Works Mgmt.
Gil Borboa, Utilities Manager
Jean Higbee, Utilities Business Manager
Attachment: Resolution
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