Water Survey Finds Cost Differential Between Northern and Southern Calif. Widens
Black & Veatchs Management Consulting Division recently completed its 1999 California Water Charge Survey, which provides comparative information on water charges for single family residential customers. The survey consisted of 436 cities or service areas served by 326 water utilities.
California cities and water providers use a variety of rate structures and methods for determining water charges. In order to develop a uniform comparison of typical residential water charges, survey findings are based on what a typical single family residence is charged for water service each month in the various cities and service areas for usage of 1,500 cubic feet (11,000 gallons).
Trends in Rates
The survey found that average monthly water charge in California increased from $25.77 in 1997 to $27.04 in 1999, for a total percentage increase of 4.9 percent over the two-year period. These findings indicate that water rate adjustments continue to be very modest, averaging just above inflation.
Trends in Rates
Water charges are also compared among four regions: Northern, Coastal (Santa Barbara, San Luis Obispo and Monterey Counties), San Joaquin Valley (Merced County and south), and Southern. Based on the findings, coastal communities continue to have the highest average residential monthly water charge in the state and the Northern region has the widest range. The San Joaquin Valley has consistently had the lowest average residential monthly water charge in the surveys. The highest percentage increase in the average residential monthly water charge occurred in the Southern region. In 1997, for the first time in the survey, the average residential monthly water charge in Southern California exceeds the average in Northern California. The 1999 survey finds that difference has increased.
Trends in Rates
The survey also compares rate structures by the four regions. Tiered rate structures continue to predominate in the Northern and Coastal areas of the state, showing a slight increase between 1997 and 1999. In the San Joaquin Valley, where many water utilities do not have meters for residential customers, flat rates continue to dominate. Uniform rates continue to be the most common rate structure in Southern California.
Connection Fees
Many cities and districts require payment of a one-time connection fee from new customers. The water connection fee is a charge for a share of the costs of facilities necessary to serve new development. The costs included in the survey are those related to the production, treatment and transmission of water to customers and do not include the costs for the service line from the street to the house, the cost of the meter itself, or the cost of installing the meter. Other common terminology used for connection fees are expansion fees, impact fees, hookup fees, capacity fees and capital improvement fees.
Connection Fees
Connection fees vary significantly between cities depending on several factors, such as magnitude of the capital improvement program, method of financing facilities, and projected growth. Approximately 26 percent of the cities on the survey do not charge a water connection fee for major facilities. Many of those are served by private water companies which typically do not charge a connection fee.
Connection Fees
The findings indicate that the average single family (5/8 or 3/4-in. meter) connection fee has increased by only four percent from the 1997 survey to $2,796. Connection fees range from $100 to $9,420. In general, connection fees, like rates, have been very stable the last several years.
Connection Fees
The survey is available free of charge to cities and districts. To request a copy of the survey, please call or write to Mr. Andi Budianto (e-mail: [email protected], 949-788-4229) or Ms. Hang Tran (e-mail: [email protected], 949-788-4231.