Changes in Water Use & Wastewater Generation and Impact Fee Implications � What We Used To Think � What We’ve Seen � What We’ve Learned � Where Are We Going? � Why Is This Important? � Immediate Practical Issues � Big Picture Implications/Key Issues

What We Used To Think

� Demand from existing homes & businesses relatively stable

� New development flows would more than offset any reductions from existing base

� Focus on short-term, behavioral approaches to reductions

� Water demand & wastewater generation would grow steadily, even with rate increases

What We’ve Seen

� Total water production remains stable even as growth occurs

� Volume to wastewater treatment plants stays about same

� Dry flows in sewers & lift stations in new areas very low

� Low flows lead to problems in water and wastewater systems

Total Water Production Remains Relatively Stable Even As Growth Occurs (1990-2008)

Account Growth and Total Water Consumption

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Num

ber o

f Acc

ount

s (J

uly)

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

Tota

l Met

ered

Con

sum

ptio

n (M

G)

CONSUMPTION

ACCOUNTS

Phoenix Water Consumption: 1996-2009

200,000220,000240,000260,000280,000300,000320,000340,000360,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Wat

er D

eman

d (A

F)

1,000,000

1,100,000

1,200,000

1,300,000

1,400,000

1,500,000

1,600,000

1,700,000

Popu

latio

n150

170

190

210

230

250

270

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Phoenix Per-Capita Use: 1996-2009

0

20

40

60

80

100

120

140

160

180

200

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Fiscal Year

Ave

rage

Dai

ly W

aste

wat

er G

ener

atio

n (M

GD

)

Total Flows to Wastewater Treatment Plants Remain Relatively Constant Even With Growth (1990-2008)

What We’ve Learned

� New development is more efficient than anticipated

� Major efficiency improvements in both indoor & outdoor water use

� Long-term structural shifts more important than short-term behavior

� Elasticity of demand complicated – likely greater at higher rates

The More Recent The Construction, The More Efficient The Water Use

0

50

100

150

200

250

300

350

400

450

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Year of Home Construction

Ave

rage

Gal

lons

per

Hom

e Pe

r Day

(200

8 W

ater

Use

)

Average Daily Water Use (2008) by Year of Home Construction

Land Use UnitAvg Daily

Flow/Unit (gal) Unit

Avg Daily Flow/Unit

(gal) UnitAvg Daily

Flow/Unit (gal)

Single Family Residential dwelling 450 dwelling 320 dwelling 146

Multi-Family Residential1

(Rental Apartments)dwelling 250 dwelling 250 dwelling 143

Commercial(Mall w/ Food Court) 1000 ft2 100 1000 ft2 500 1000 ft2 77

Commercial(Big Box) 1000 ft2 100 1000 ft2 500 1000 ft2 11.7

Schools2

(High School)student 28 student 75 student 21

ADEQ Admin Code, Title 18, Ch. 9

City of Phoenix WSD Design

City of Phoenix Wastewater Generation

2) ADEQ standards for schools distinguish daily f low rates for elementary students (23 gpd), middle/high school students (28 gpd), and staff (20 gpd).

1) ADEQ standard for multifamily is listed as 100 gallons per bedroom per day. The adjustment of 250 gallons per dw elling per day assumes an average of 2.5 bedrooms for multifamily.

Actual Flows For New Development Are Much Lower Than State or City Guidelines Indicate: Wastewater Example

Change in Water Use by Period of Home Construction

Water Use Is Gradually Falling In Existing Homes and Businesses: Single Family Example

0

50

100

150

200

250

300

350

400

450

500

Pre-1960 1960-1975 1976-1990 Post 1990

YEAR OF CONSTRUCTION

GAL

LONS

/DAY

.

1999-2002 Water Use

2004-2006 Water Use

FIXTURE / 1997 2009 CHANGEAPPLIANCE GPHD GPHD GPHD

Leak 34.2 42.6 8.4Toilet* 48.3 35.2 -13.1Shower 33.3 31.3 -2.0Faucet 24.7 28.0 3.3Clothes Washer* 43.5 27.9 -15.6Other 10.1 11.7 1.6Bathtub 3.0 1.8 -1.2Dish Washer 2.2 1.0 -1.2

Total 199.3 179.5 -19.8

COMPARISON OF END-USE STATISTICS 1997 VS. 2009

Behavior Remains Constant – Improved Indoor Efficiency Is Largely Due to Fixtures & Appliances

Outdoor Water Use Is Gradually Declining On A Per Unit Basis In New Development And Existing Areas

Percentage of Homes with Turf Grass by Period of Construction

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

<=1954 1955<=x<=1964 1965<=x<=1974 1975<=x<=1984 1985<=x<=1994 1995<=x<=2004 >=2005

Home Construction Cohort

Perc

ent o

f Hom

es

Preliminary Analyses(280 Households) <1955 55-64 65-74 75-84 85-94 95-04 >2004 All

Percentage of Sample 13.31% 20.50% 12.23% 12.23% 13.67% 15.47% 12.59% 100.00%Low-Flow Toilets (1.6 gpf) 58.21% 67.89% 66.67% 64.94% 75.79% 97.39% 100.00% 77.78%Shower Heads (2.5 gpm) 80.30% 86.14% 71.64% 92.00% 74.16% 92.16% 96.47% 85.30%Bathroom Faucets (2.0gpm) 60.98% 60.34% 64.44% 80.19% 56.72% 68.86% 76.64% 67.19%HET Clothes Washers 13.79% 15.69% 12.90% 18.75% 38.89% 26.19% 39.39% 23.62%HET Dish Washers 9.52% 6.90% 8.70% 13.79% 19.44% 13.95% 34.29% 16.20%Irrigation Timer 24.32% 28.07% 41.18% 64.71% 78.95% 83.72% 91.43% 57.19%Pool 18.92% 19.30% 41.18% 52.94% 63.16% 44.19% 28.57% 37.05%Evap Cooler 27.03% 33.33% 35.29% 20.59% 5.26% 2.33% 2.86% 18.71%Turf 86.49% 77.19% 79.41% 73.53% 68.42% 48.84% 51.43% 69.42%Rock 21.62% 15.79% 26.47% 47.06% 57.89% 86.05% 71.43% 45.32%Cactus 29.73% 14.04% 41.18% 20.59% 34.21% 53.49% 37.14% 32.01%

PENETRATION RATE BY COHORT

Trend: Gradual Implementation of More Efficient Technologies in Households

Utility State Historical PeriodPrice Elasticity of Demand Factor

Correlation of Price and Demand Data

Las Vegas Valley Water District NV 2000-2009 -0.49 Strong Correlation

City of Abilene TX 1997-2007 -0.39 Moderate Correlation

Fort Wayne Water Utilities IN 1999-2008 -0.46 Moderate Correlation

Boston Water & Sewer Commission MA 2001-2008 -0.17 Strong Correlation

Greater Cincinnati Water Works OH 1999-2008 -0.43 Poor Correlation

Louisville Water Company KY 2004-2008 -0.02 Very Poor Correlation

City of Peoria AZ 2000-2008 -0.37 Poor Correlation

City of Glendale AZ 2005-2009 -0.27 Strong Correlation

Metropolitan Water District (Tucson) AZ 2006-2009 -0.77 Strong Correlation

Phoenix Water AZ 1998-2008 -0.23 Strong Correlation

Elasticity Of Demand Appears To Be Higher Than Anticipated In Phoenix and Elsewhere

Where Are We Going?

� New development will continue to be more efficient than existing base

� Efficiency gains in existing base will likely continue for decades

� Networks will continue to expand but per unit flows will fall

� All other things being equal, rate revenue will fall unless rates are increased, and when rates are increased, demand will fall again

Why Is This Important?

� Design guidelines for new construction � Infrastructure plans – existing & new units

future demand � Water quality issues � Water resource planning � Long-term financial planning for growth � Major implications for impact fee programs

Immediate Practical Issues

� Increasingly difficult to tie burden of new demand to water use proxies (meter size, fixture unit counts, etc.)

� Fire flow requirements, chlorine residual issues means lower volume not always leading to significantly less facility costs

� Falling demand affects treatment and network costs differently

Immediate Practical Issues

� Least beneficial effect of falling demand is on water network portion of water facility fees

� Some beneficial effect on water treatment and wastewater treatment/network costs

� Most beneficial effect of falling demand is on water resource fees

� Revisions to plans needed to take into account changes in per unit demand and facility requirements

Big Picture Implications/Key Issues

� If full cost fees not used larger burden placed on existing base if rates volume-based

� In Phoenix homes built in 70s, 80s use around 440 gpd; new homes use less than 300

� Aside from equity issues reliance on rates now difficult because of decline in revenues

� With revenues falling around 1% year and heavy fixed costs no funding for growth

Big Picture Implications/Key Issues

� In 1990-2010 period water, wastewater, water resource fees critical source of revenue

� City of Phoenix water-related fees produced almost $400 million in collections and probably $100 million in facilities

� Impact fee programs now under siege – in Arizona 10 yr requirement will be difficult

� When growth comes back where does funding come from – rates out, fees difficult?

Big Picture Implications/Key Issues

� Implications of back-ending facility costs and then recouping through rates now apparent

� Some private utilities now raising rates 40, 50, 60% per year in Phoenix area

� By time public understands implications, often too late

Current Research

� Using existing historical water meter data in conjunction with other databases & GIS

� Collecting data on fixtures & appliances used by customers (site visits, sales, etc.)

� Using data loggers to track specific uses � Using sub-meters to discern indoor/outdoor � Doing sewer metering to track flows � Modeling to bridge macro/micro divide

New Ways of Tracking Customer Use

Data Logging � Trace Analysis � Discreet End-Use Information

Example of trace analysis from City of Phoenix, Re-Log Study 2009