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Home My WebLink About10. Authorize continuing a waiver on volumetric fees for the Commercial Truck Fill Program Page 1 of 4 Item 10. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: DECEMBER 1, 2022 SUBJECT: AUTHORIZE THE GENERAL MANAGER TO CONTINUE TO WAIVE THE VOLUMETRIC FEE FOR COMMERCIAL RECYCLED WATER TRUCK FILL PROGRAM FOR CUSTOMERS UP TO A LIMIT OF 100,000 GALLONS PER YEAR, PER CUSTOMER FOR CALENDAR YEARS 2023, 2024 AND 2025 SUBMITTED BY: INITIATING DEPARTMENT: RICHARD FOSS, 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 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 California continues to experience unprecedented drought conditions, and in 2021 Governor Newsom issued multiple Executive Orders addressing water shortages across the state. During the prior drought in 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 Commercial Recycled Water Truck Fill Program as a way to encourage the use of recycled water to save limited potable water resources. The Commercial Recycled Water Truck Fill Program provides high quality, disinfected tertiary-treated recycled water to licensed contractors, government agencies, and commercial businesses for uses such as dust control, soil compaction, and hand applied landscape irrigation. Truck Fill customers may obtain water either from hydrant meters in the Zone 1 recycled water distribution system or from the Automated Commercial Truck December 1, 2022 Regular Board Meeting Agenda Packet- Page 76 of 157 Page 2 of 4 Fill Station located on Central San's "Kiewit" buffer property. Following the one-year pilot in 2015, the Board authorized the General Manager to continue to waive the volumetric fee as an incentive to use recycled water. The previous two Board authorizations were for two- year terms to continue to waive the volumetric fee up to 100,000 gallons of recycled water used per calendar year per customer. Staff is requesting that the Board continue to waive the volumetric fee up to 100,000 gallons of recycled water used per calendar year per customer, for a three-year term. Given the trend in program usage, staff is comfortable continuing the program for the next three years, and will return to the Board prior to that term if there are any significant changes in program needs or usage that warrant a change in the fee waiver. The number of customers and usage by customers fluctuates each year, and total program usage is mostly influenced by three factors: 1) large construction projects that elect to use recycled water(e.g. nearby State Route 4/1 nterstate 680 highway Interchange projects); 2)the proximity of customers use to Central San's fill station compared to potable water hydrants, and 3) drought restrictions that require contractors to use recycled water in lieu of potable water. With construction ending for the State Route 4/1 nterstate 680 highway Interchange projects, there has been a noticeable decrease in usage to-date in 2022.Attachment 1 is a table summarizing the Commercial Recycled Water Truck Fill Program usage for the last six years. Staff continues to maintain contact with potable water agencies to understand current and upcoming water restrictions. To promote additional commercial recycled water use, staff plans to undergo additional outreach and look for opportunities to advertise the program. I n the summer of 2022, staff reviewed the program's customer eligibility requirements with risk management and legal counsel and expanded its potential customer base by allowing commercial customers without a contractor's license to apply to the program. Previously, Commercial Recycled Water Truck Fill Program customers were limited to other public agencies and licensed contractors. Staff will also explore other opportunities to optimize and expand program usage such as changes to program monitoring and reporting practices and additional program advertisement and outreach. The current fee waiver provides an incentive for non-residential customers to use recycled water, similar to residential customers, 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 the calendar year 2025 to seek direction on this issue for calendar year 2026. ALTERNATIVES/CONSIDERATIONS Alternative 1: The Board could choose to begin re-assessing the volumetric fee for all recycled water obtained through the Commercial Recycled Water 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 Recycled Water Truck Fill Program, regardless of volume used. FINANCIAL IMPACTS Commercial customers obtaining recycled water for truck filling have historically been assessed Central San's recycled water rate, which is currently$4.15 per 1,000 gallons (effective July 1, 2022). The latest effective recycled water rate would be applied to each customer's usage that exceeds the limit of 100,000 gallons per year. Staff time associated in preparing the customer billings is estimated to be approximately four hours per month. December 1, 2022 Regular Board Meeting Agenda Packet- Page 77 of 157 Page 3 of 4 COMMITTEE RECOMMENDATION The Real Estate, Environmental & Planning Committee reviewed this item at its November 16, 2022 meeting and recommended Board approval. RECOMMENDED BOARD ACTION Authorize the General Manager to continue to waive the volumetric fee for Commercial Recycled Water Truck Fill Program customers up to a limit of 100,000 gallons per year, per customer for calendar years 2023, 2024 and 2025. Strategic Plan re-In GOAL ONE: Customer and Community Strategy 1—Deliver high-quality customer service, Strategy 2- Promote initiatives to advance affordable and equitable access to services GOAL SEVEN: Innovation and Agility Strategy 1 - Leverage data analytics to become a more efficient utility ATTACHMENTS: 1. Commercial Recycled Water Truck Fill Program Usage December 1, 2022 Regular Board Meeting Agenda Packet- Page 78 of 157 Page 4 of 4 Attachment 1 Commercial Recycled Water Truck Fill Program Usage Calendar Years 2017 through 2022 637,340 600,240 4,679,814 4,817,019 5,237,618 555,704 fill $2,242 $2,201 $17,662 $18,580 $20,874 $2,273 No Limit No Limit 100,000 100,000 100,000 100,000 $0 $0 $16,499 $16,942 $18,812 $731 11 11 12 10 12 13 Number of Customers Using F- 100,000 Gallons 1 1 3 2 4 1 ProvidedRecycled Water . Customers Using Less than 59,473 39,537 12,394 229,379 122,805 277,274 100,000 Gallons per Year(gallons) I Value of Recycled Water Not $2,242 $2,201 $1,163 $1,638 $2,062 $1,542 Billed to Customers *as of 10/25/2022 December 1, 2022 Regular Board Meeting Agenda Packet- Page 79 of 157