3 Your Agency Your Agency Command & Control Historical Usage Efficiency Standards Financial Contribution Economic Efficiency
4 Your Agency Your Agency Command & Control Historical Usage The Criteria that are most important will help guide an agency to the right policy approach. Goal: To determine a set of criteria that can evaluate these policy approaches.
5 How do you allocate resources to end users? Who should pay for drought penalty? If one views the additional charge as a penalty, it does not fall under Proposition 218. Confirm with your Legal Counsel
6 Enough to meet Water needs? In proportion to financial contribution? As much as customers are willing to pay for?
7 Easy to implementEasy to administerEasy to understandFreedom of choiceNexus for drought pricing
8 Policy: Majority of cut back should occur in outdoor water use Sanitary UseEconomicDiscretionary or Aesthetic
9 Target “Wasteful Water Use” by adopting Drought Ordinance Limit outdoor irrigation No driveway hose-offs No car washing Example: City of Los Angeles No residential sprinklers between 9AM – 4 PM No car washing or hosing off driveway
21 Allocate water in proportion to customers’ financial contribution to the system Allocate water in proportion to customers’ financial contribution to the system More water will be allocated to the largest meters More water will be allocated to the largest meters
23 Price water based on willingness to pay and the desired level of aggregate consumption Based on economic theory that resources can be allocated efficiently based on price Some water should be provided economically to provide for basic, sanitary needs P1P1 P2P2 Q2Q2 Q1Q1