3. Impact of Drought Restrictions and Conservation on Revenue and Rates Drought response and conservation lower revenues Treating and delivering less water reduces some costs, such as treatment chemicals and pumping But savings nowhere near lost revenue Treatment plants, pumping stations and other infrastructure must still operate. Water must still be delivered to all customers through underground pipes and to every faucet. Consequently fixed costs are very high portion of overall costs South Austin Regional Wastewater Treatment Plant Ullrich Water Treatment Plant

4. $38 million loss in FY10 due to weather conditions, drought restrictions, conservation initiatives and economic conditions Water Conservation and Drought Response alter traditional financial patterns Traditional Pattern Dry Year Wet Year New Pattern Dry Year Wet Year $ $ $ $ or

5. Philosophy behind Austin Water rate structure Low cost for low use Safety net for low-income people Increased per unit price as usage increases (residential sector) Assumes conservation in revenue projections and budget accordingly 20% fixed revenues Scour budget for savings before seeking rate increases 5

6. Residential Water Bills 0 – 60,000 Gals.

7. Photo from Austin American- Statesman 7 Leak Response Times FY 2006 FY 2014 through Feb. 3 24% more leaks fixed in 1 day or less! Enhanced Leak Detection, Leak Response