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5/21/2025 <br />Drought Rates <br />Drought Rate Methodology <br />•What are Drought Rates? <br />•Drought rates are temporary surcharges applied on top of regular water rates during water <br />shortage emergencies <br />•Based on City’s Water Shortage Contingency Plan (Stages 1-6) <br />•Incorporates the following components: 1) variable charge revenue loss from reduced usage <br />and 2) variable cost savings from purchasing less Zone 7 water <br />•Drought Rate Design <br />•Drought rates are designed to maintain the City’s financial position during drought <br />•Higher fixed charges on regular water rates = lower drought rates <br />•Current policy includes a 10 ccf usage allotment that is not charged a drought rate <br />10 <br />9 <br />10 <br />Page 209 of 226