Despite higher variable rates, Rancho Yolo residents will pay less overall for water

Last week, Jerry Hallee, president of the Yolo Rancho Community Association, publicly raised concerns that he and his neighbors at the East Davis mobile home park would be charged unfair rates for water over the next two years under the city’s proposed water billing models.

When Hallee got ahold of one the Proposition 218 notices that the city sent out late last month to notify property owners of the pending rate increases, the fact that those water customers classified as multi-family ratepayers — like Rancho Yolo’s property owner — would pay more per hundred cubic feet for water than single-family residences caught his eye.

The owner of Rancho Yolo passes on, dollar for dollar, the park’s costs for water evenly to the residents who live there through rent increases.

But while multi-family ratepayers will pay a higher rate per ccf, for Rancho Yolo residents, the economies of scale achieved through sharing fixed costs will drop the community’s average water bill lower than what a single-family home would pay for the same usage.

Rancho Yolo is classified by the city as a multi-family ratepayer because its 262 individual homes all connect to only two water meters that track the entire community’s water consumption.

As Hallee points out, the property owner, and eventually through rent increases, the homeowners, will pay $1.81 per ccf under the multi-family rate compared to the $1.23 that single-family homes would pay when the first rate increase kicks in on May 1. Currently, the multi-family rate is $1.90 per ccf.

When water rates jump up again Jan. 1, 2014, the multi-family rate rises to $2.24, compared to $1.53 for single-family homes.

Generally, a city’s water utility will charge more to larger water consumers such as apartment complexes or commercial properties because those types of properties drive up the cost of delivering water at peak usage times.

But in addition to the variable rates, single-family homes also have to pay for their entire share of the fixed costs. Multi-family users at Rancho Yolo divide those costs equally.

So, when the first rate increases hit on May 1, if each Rancho Yolo home paid monthly, the average bill would be $18.36 per month, based on their 9.5 ccf annual average usage and dividing up the distribution costs of their two 3-inch meters.

For that same amount of consumption — even though single-family homes use an average of 11 ccf per month — single-family homes with 3/4-inch meters would pay $28.99.

In the summertime, when the average Rancho Yolo home consumes 13.6 ccf per month, the average bill would rise to about $26.30 compared to $34.03 for the single-family home. Single-family homes on average consume 17 ccf in the summer, according to the city.

The following January, rates would increase again, with multi-family homes paying $2.24 per ccf and single-family homes $1.53.

The average bill at 9.5 ccf per month would be $22.64 for Rancho Yolo residents and $34.22 for single-family homes.

During the summer, Rancho Yolo would pay $31.82 for water, compared to single-family homes at the same rate paying $40.49.

But regardless of the fixed costs, Hallee told The Enterprise on Tuesday he believes the variable rates charged to multi-family homes compared to single-family homes are still unfair.

“I just don’t understand why the city can’t use a simpler method,” Hallee said.

Matt Williams, creator of the consumption-based fixed rate model, says, however, that if Rancho Yolo were to be charged as a single-family development, its 262 homes’ worth of water consumption would easily surpass Tier 3 rates, which in the first year sit at $2.33 compared to $1.81 for multi-family.

— Reach Tom Sakash at tsakash@davisenterprise.net or 530-747-8057. Follow him on Twitter at @TomSakash

Tom Sakash

Tom Sakash covers the city beat for The Davis Enterprise. Reach him at tsakash@davisenterprise.net, (530) 747-8057 or @TomSakash.

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