HomeMy WebLinkAbout13. Authorize waiver of volumetric fee for commercial recycled water truck fill customers up to specified limit for 2019 and 2020 Page 1 of 3
Item 13.
CENTRAL SAN CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: DECEMBER 6, 2018
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO WAIVE THE VOLUMETRIC
FEE FOR COMMERCIAL RECYCLED WATER TRUCK FILL
CUSTOMERS UP TO A LIMIT OF 100,000 GALLONS PER YEAR, PER
CUSTOMER FOR CALENDAR YEARS 2019 AND 2020
SUBMITTED BY: INITIATING DEPARTMENT:
JUSTIN WAPLES, ASSOCIATE ENGINEER ENGINEERING AND TECHNICAL SERVICES-
PDS-PLANNI NG AND APPLI ED RESEARCH
REVIEWED BY: DAN FROST, SENIOR ENGINEER
DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION
MANAGER
JEAN-MARC PETIT, DIRECTOR OF ENGINEERINGAND TECHNICAL
SERVICES
Roger S. Bailey
General Manager
ISSUE
Since the assessment of recycled water rates is codified in the District Code, the Board of Directors
(Board) must authorize any modifications.
BACKGROUND
I n November 2015, the Board approved a one-year emergency drought relief pilot project to waive the
volumetric fee for the cost of recycled water obtained through Central San's Truck Fill Program as a way
to encourage the use of recycled water to save limited potable water resources. In April 2015, Governor
Jerry Brown issued an executive order directing mandatory water use reductions for the first time in
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California's history, saying the state's four-year drought had reached near-crisis proportions after a winter
of record-low snowfalls. I n that executive order, Governor Brown directed the State Water Resources
Control Board to impose a 25 percent reduction on the state's 400 local water supply agencies. These
restrictions were later lifted in May 2016.
When the one-year pilot was complete, the Board authorized the General Manager to continue to waive the
volumetric fee for both calendar year 2017 and calendar year 2018, as a continued incentive to use
recycled water for construction purposes.
Since the fee waived program was extended in 2017, Central San has dispensed 1,175,695 gallons of
recycled water through the truck fill program. If staff had assessed volumetric fees, it would have
represented approximately$4,207 in revenue to Central San. Currently there are 17 customers, with 2018
usage per customer(to date) ranging from less than 1,000 gallons to more than 500,000 gallons. The
number of customers and level of usage fluctuates greatly each year, as many of the customers have
been contractors who use the service when they are near the Zone 1 system or the automated truck fill
station.
Truck Fill Program (Hydrants and AutoFill Station)
CY 2017 CY 2018 (To Date) Subtotal
Recycled Water- 637,340 538,355 1,175,695
Gallons Used
Approximate
Recycled Water $2,250 $1,957 $4,207
Value
There are several large construction projects that will start soon, including the Highway 4 expansion
projects and the Interstate 680 Southbound Express Lane project. Staff is recommending that if the
recycled water truck fill fee waiver is extended a second time, that a ceiling be placed at 100,000 gallons
per year, per customer, and customers would be charged for any use above that amount. This would
continue to incentivize use of recycled water for construction purposes, but places a limit on the extent to
which Central San provides this valuable resource at no cost to the customer, while recognizing that
producing recycled water comes at a cost.
If the Board approves this extension, staff will return to the Board at the end of calendar year 2020 to seek
direction on this issue for the year 2021.
ALTERNATIVES/CONSIDERATIONS
Alternative 1: The Board could chose to begin re-assessing the volumetric fee for all recycled water
obtained through the Commercial Truck Fill Program and not renew the fee waiver.
Alternative 2: The Board could continue to waive the volumetric fee for all recycled water obtained through
the Commercial Truck Fill Program, regardless of volume used. This is not recommended as some
customers have used up to 500,000 gallons per year, and new customers have been identified that will
likely require over one million gallons per year. These large additional demands would increase the
operational costs to produce recycled water(pumping, filtration, chemicals, power, etc.).
FINANCIAL IMPACTS
Commercial customers obtaining recycled water for truck filling have historically been assessed Central
San's recycled water rate, which is currently$3.69 per 1,000 gallons (effective July 1, 2018). The latest
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effective recycled water rate would be applied to each customer's usage that exceeds the proposed limit
of 100,000 gallons per year. Staff time associated in preparing the customer billings is estimated to be
approximately four hours per month.
COMMITTEE RECOMMENDATION
The Real Estate, Environmental & Planning Committee reviewed this item at its November 14, 2018
meeting, and recommended approval.
RECOMMENDED BOARD ACTION
Authorize the General Manager to waive the volumetric fee for commercial recycled water truck fill
customers up to a limit of 100,000 gallons per year per customer for calendar years 2019 and 2020.
Strategic Plan re-In
GOAL SIX: Embrace Technology, Innovation and Environmental Sustainability
Strategy 1 -Augment the region's water supply
December 6, 2018 Regular Board Meeting Agenda Packet- Page 92 of 202