Skip Navigation
Water Treatment Plant City of San Luis Obispo
Utilities Department

SearchContact UsCity Home

Water Rate Structure Study 2012

The City is reviewing the water rate structure to see if modifications should be made and we want you, the residents, to be a part of it. 

Why? During the presentation of the 2011-2013 Water Fund Analysis last June, Council expressed its desire to review the current water rate structure to determine if modifications should be made to enhance revenue stability for the water utility. The current rate structure has been in place, with a minor modification in 2007, since 1993. It is a prudent business practice to revisit rate structures on a periodic basis to ensure that the Council’s and community’s goals and objectives are being met.

How can I get involved? The public is invited to four   sessions planned between July and October, and one wrap-up meeting that will be scheduled before the end of the year. These sessions will introduce the rate setting process and ultimately guide Council through its selection of a water rate structure.




July 10

Fundamentals of Water Rate Structures

Basic understanding of rate structure design - CLICK HERE FOR MEETING NOTES

Aug 7

Rate Design Goals and Objectives

Review and set the Council’s goals and objectives - MEETING NOTES

Sep 18

Developing Conceptual Rate Structures

Review up to ten conceptual rate structures

Oct 16

Technical Review of Rate Structures

Review the final selected conceptual rate structures - MEETING NOTES

Dec 4

Selection of a Water Rate Structure

Receive a report with a final recommended rate structure- MEETING NOTES

Study Session 1. Fundamentals of Water Rate Structures – July 10, 2012. The City's consultant, HDR Engineering, will present a thorough discussion on the fundamentals of developing cost-based water rate structures and the philosophy of rate setting, the underlying rate setting goals and objectives, terminology, and technical aspects of rate structure design. The presentation and interactive dialogue with the Council members and community will guide participants through an overview of the rate setting methodology and the correlation between rate structure design and revenue generation which will lay the foundation for the process.

Study Session 2. Rate Design Goals and Objectives – August 7, 2012. A discussion of commonly accepted rate design goals and objectives, their meanings and implications to an overall rate structure design and review and discuss typical rate design goals. From this dialogue, the Council will be asked to prioritize its top six rate structure goals for use in developing the conceptual rates structures for Council members review and discussion at Study Session 3.

Study Session 3. Developing Conceptual Rate Structures – September 18, 2012 (tentative). The results of the Council weighting of recommended rate structure goals will be presented and discussed. Based on the prioritized rate design goals and objectives of the City, up to ten conceptual water rate designs (rate structures only, no actual rates, meaning no dollars) will be presented. Based on input from the meeting, HDR and staff will then narrow the field and select the top three rate structures. These three rate structures will be evaluated and presented to the Council in Study Session 4.

Study Session 4. Technical Review of Rate Structures – October (tentative). A “road test” of the final selected conceptual rate structures which will support the prioritized goals and financial policies. Actual rates and bill comparisons will be used to review any impacts to customers. Although there will be numbers associated with the “road test”, it is not an exercise in setting the actual rates. A recommendation on the rates will be presented to the Council as part of the 2013-2015 financial planning process.

Meeting 5. Selection of the Final Rate Structure – TBD. After completion of the study sessions, HDR will provide the Council with a report summarizing the steps taken to review the rate structure, an overview of the rate structures reviewed during the study, recommendations of the analysis HDR will undertake, and a recommended final proposed rate structure.

After each meeting, information regarding the outcome of the discussion will be posted along with any presentation materials that are available.  If you have questions and/or want to provide input, please email Ron Munds at

Billing & Rates | Water | Wastewater | Conservation
Documents Online | FAQs | What’s New | Department Home

About the City | Visiting SLO | City Government | Employment
Bids & Proposals | FAQs | Press Room | How are we doing?

©2014 City of San Luis Obispo