Item 23 - Public Hearing to Consider Proposed Water and Sewer Rate Adjustments

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Water Supply Costs The City's primary water source is local groundwater. The City's water supply agreements require that 15 percent of the annual supply be purchased water, which is more expensive than groundwater. Water supply costs were separated based on whether they were directly attributable to water purchases or if the costs were general to all water supply. Table 62 shows the supply cost categories identified in the City's budget and the total costs allocated to each category. Table 62. Total Supply Costs by Source15 Total Supply Costs $40,993,385 100.0% Groundwater $23,482,100 57.3% Purchased Water $9,719,350 23.7% Other Supply Costs $7,791,935 19.0% In order to identify unit costs for each cost category, available supply was evaluated under each category. Table 63 shows the total available water under each supply category, which is then divided by the total cost of that category to determine a unit cost for supply under each category. Table 63. Water Supply Costs by Water Source and Unit Cost Total $40,993,385 100.0% 13,536,745 $3.03 Groundwater $23,482,100 85.0% 11,506,233 $2.04 Purchased Water $9,719,350 15.0% 2,030,512 $4.79 Unit costs for each tier were determined by including the actual water use per tier using the tier widths under the adjusted tier derivation shown in Table 61. Table 64 shows the calculation used to determine the unit costs for each supply source in each tier. Table 64. Water Supply Unit Costs by Tier Groundwater 11,506,233 Purchased Water 2,030,512 Water Source Unit Cost $2.04 10,156, 619 1,349,615 $4.79 2,030,512 $2.04 $3.69 Other supply costs are divided by the total water use and applied to both tiers evenly. Table 65 shows the other supply cost unit cost. 11 Other supply costs include budgeted costs in the City's supply department which are not directly attributable to water purchase costs. City of Santa Ana - 2026 Water and Sewer Rate Study 43