Pre-Submittal Conference Comprehensive Cost of Service and Rate Design Study July 1, 2013

Page 2 The purpose of the rate design study is to provide SAWS with information regarding the rate structure for water delivery, water resource development, recycled water, and wastewater Review by Rate Advisory Committee (RAC) comprised of ten citizens nominated by City Council with five SAWS Board-appointed at-large community members; the committee will: –Review, discuss, and analyze rate structure, fee structure, and charges in public meetings –Assist staff in selection of Rate Study Consultant Purpose

July 1, 2013 Page 3 Rate Advisory Committee(RAC) Members would represent different parts of our customer base Examples: Structure – Council Districts – Neighborhood Association – Business Leader/Chamber – High User – Developer / Economic Development – Academics / Religious – Industrial (SAMA) – Apartment/Multi Family – Environmentalist – Community Activist – At Large – Outside City Limits – Affordability Customers

July 1, 2013 Page 4 Major Issues to be addressed: Overall rate structure Integration of SAWS and District Special Project (DSP – former BexarMet) water rate structures Rate development - Cost of service Wholesale customers (water supply/ wastewater) ICL/OCL rate differential Recycle Rates Apartment Rate Class Sewer Surcharge Affordability Program Special Funding process for Sanitary Sewer Overflows (SSO) and Water Management Plan (WMP) Proposed Rate Analysis

July 1, 2013 Page 5 Water Delivery Issues Raw water rate Seasonal rate Conservation Rate Drought Surcharge rates Proposed Rate Analysis Issues

July 1, 2013 Page 6 Wastewater Issues Winter average Surcharges –Total Suspended Solids (TSS) / Biochemical Oxygen Demand (BOD) –Fats / Oils / Grease Waste Hauling SSO Funding Proposed Rate Analysis Issues

July 1, 2013 Page 7 Water Supply Issues Conservation rate Recycle rate Water Management Plan Funding Proposed Rate Analysis Issues

July 1, 2013 Page 8 Rate Structure Design Objectives Rate structure design objectives include:  Cost of service recovery  Minimizing customer impact  Legality  Consumption/Demand management  Rate Stability  Revenue Stability  Ease to understand  Ease to update  Ease to implementation  Affordability to disadvantaged customer To be ranked by the City Council, SAWS Board and the RAC

July 1, 2013 Page 9 Schedule Written questions from potential proposers due - 8 Jul 2013 Answers to questions posted on SAWS website – 15 Jul 2013 RFP Responses due – 24 Jul 2013 SAWS Board appoints RAC Members – Aug 2013 Selection process for Rate Consultant – Aug/Sep 2013 Board selects Rate Consultant – Nov 2013 Orientation meetings with Consultant – Nov 2013 Consultant meets with RAC for first time – Dec 2013 Tentative

July 1, 2013 Page 10 Schedule – cont. RAC Meeting - SAWS issues and challenges – Dec 2013 City Council Rate Study Priorities Input – Jan 2014 SAWS Board Rate Study Priorities Input – Jan 2014 RAC Meetings – Rates discussions – Feb to Sep 2014 Brief SAWS Board about RAC Results – Sep 2014 Brief City Council about RAC Results – Sep 2014 SAWS Board considers new Rate Structure – Oct 2014 City Council considers new Rate Structure – Oct 2014 Tentative

Pre-Submittal Conference Comprehensive Cost of Service and Rate Design Study July 1, 2013