GrokSurf's San Diego

Local observations on water, environment, technology, law & politics

New funds for San Diego recycled water pricing study will bring total expense to $400,000

Posted by George J Janczyn on May 18, 2010

The San Diego City Council will vote to adopt an ordinance today that will authorize an additional $50,000 to the previously approved $350,000 for a Recycled Water Rate Structuring Model (Item 50 on the Council Docket). The ordinance is on the routine consent portion of the agenda, having been introduced and passed (7-0, Emerald absent) at the May 4 meeting.

From the Executive Summary:

In December 2004, the City entered into an agreement with RFC to conduct a Recycled Water Pricing Study for $250,000 to provide a comprehensive analysis of recycled water costs and revenues, provide rate structure recommendations, and document findings in a Recycled Water Pricing Study Report. The agreement also provided for the development of the recycled water rate structuring model and training of City staff to administer the rate model.

In February 2006, the City entered into the First Amendment with RFC in order to extend the
term of the Agreement through December 2007. In December 2007, the City entered into the
Second Amendment with RFC in order to update project costs, update the original analysis of
recycled water demands, provide modifications to the draft recycled water rate structuring
model, and provide a draft version of the Recycled Water Pricing Study Report. The Second
Amendment increased the Agreement compensation amount by $100,000 to a not-to-exceed
amount of $350,000 and extended the term of the Agreement to December 2009.

To date, RFC has reviewed all financial aspects of the recycled water operations and capital
program to provide a financial plan for the recycled water system, analyzed revenue
requirements and revenue off-sets, reviewed alternative rate structures to encourage recycled
water demand, provided a recycled water rate structuring model, and a draft Pricing Study
Report based upon a single rate for all recycled water customers to recover all costs associated
with producing and distributing recycled water. However, as the City endeavors to incorporate
customer concerns, additional modifications to the current recycled water rate structuring model and recommended recycled water pricing structure are required. The anticipated modifications will result in a revised Recycled Water Pricing Study Report. RFC has worked on incorporating the proposed modifications up to December 2009. RFC has delayed continuing the modifications until receiving authority from the City to continue. This amendment is to extend the term of the Agreement with RFC to allow for completion of the proposed modifications. The amendment would extend the term of the Agreement to December 31, 2010 and authorize additional compensation of an amount not to exceed $50,000 for the completion of the scope of services.

 

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