Item 08 - Water and Sewer Rate Adjustments

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provide service under the highest water use conditions. The peak capacity costs are applied only to the fixed charges. Base costs are applied to both fixed and variable rates because a portion of those costs can be attributable to increased water demand such as treatment costs and the occurrence of water leaks, which require maintenance as well as development of additional storage to provide water availability. Table 38. System -Wide Delivery Factors Base Delivery 1.00 100.0% 0.0% Delivery Capacity 1.17 85.2% 14.8% The cost causative components include: • Source of Supply — water purchase costs, groundwater procurement, pumping costs, etc. • Base Delivery — delivering water to customers under average demand conditions • Delivery Capacity— the costs of delivering water to customers with the highest demand • Meters — the costs of servicing and reading meters • Customer Service — billing and other customer service -related costs • Recycled Water — costs directly allocated to recycled water customers Water supply and groundwater costs are allocated 100 percent to the Supply component as they relate to purchasing water from other agencies as well as groundwater. Pumping costs are also allocated 100 precent to the supply component as pumping occurs to procure groundwater. Storage, Transmission and Distribution, and Treatment costs are proportionally allocated between base and delivery capacity based on annual water demand patterns shown in Table 38 since all infrastructure is constructed to meet base and capacity water use requirements. The Storage, Treatment, and Maintenance and Engineering (termed Transmission and Distribution in the cost of service analysis) budget categories include costs that may either increase with water use (Base Delivery) or are fixed based on the capacity of system assets (Delivery Capacity). These costs are allocated 85.2 percent to base and 14.8 to capacity. Meter, hydrant, and customer costs are allocated to those categories based on input from City staff. Recycled water costs are allocated between supply (0.8 percent) and recycled water components (99.8 percent) to account for the potable water saved in relation to recycled water consumption. Administrative and general costs are allocated to cost components based on the percentage of the functions allocated to the other cost categories excluding source of supply costs. Table 39 through Table 42 show the percent and total value of functionalized operating costs and assets allocated to the cost causative components. Meter and customer service costs were allocated directly to their respective component. City of Santa Ana - 2026 Water and Sewer Rate Study 30