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5/21/2025 <br />Drought Rate Implementation <br />•Drought Rate Implementation <br />•City declares a water shortage emergency, then takes action to implement drought rates <br />•The rates shown in this presentation are the maximum that the City can elect to implement in <br />each stage <br />•Drought rates are one of many tools that the City can use to respond to droughts <br />•Options for Drought Response <br />•Implementing a full or partial drought rate <br />•Reducing CIP spending <br />•Using reserve funds <br />•A combination of any of the above <br />11 <br />Drought Rate Allotment Policy <br />•Option 1: Maintain drought rate allotment policy <br />•Current policy includes 10 ccf allotment for all customers <br />•Due to water conservation and changes to usage characteristics, proposed allotment is 8 ccf <br />•Benefits: Recognizes that low water users have less ability to reduce water usage during <br />drought compared to high water users, responds to customer concerns <br />•Challenges: Increases unit cost for drought rates for all usage over 8 ccf <br />•Option 2: Remove drought usage allotment for all customers <br />•All units of water usage during drought would be charged a drought rate <br />•Benefits: Slightly increases financial stability by collecting drought revenues on all usage <br />•Challenges: Increases financial impact to low water users <br />12 <br />11 <br />12 <br />Page 210 of 226