Water Recharge Rate Analysis

1 | P a g e 
 
TO: 
 
 
Robert Nilles 
Deputy City Manager/Finance Director
 
 
FROM: 
 
Kevin Burnett, Willdan Financial Services 
Pat Walker, Pat Walker Consulting LLC 
 
CC: 
Nick Russo, Public Works Director 
DATE: 
February 18, 2021 
SUBJECT: 
Recharge Rate Analysis Summary - Final 
 
The City of El Mirage (El Mirage) retained Willdan Financial Services and Pat Walker Consulting LLC, collectively the 
“Willdan Team” to calculate recharge fees that could be assessed to El Mirage water only customers as well as City of 
Surprise (Surprise) customers who are provided water service by El Mirage. 
 
Background 
 
The State of Arizona (State) requires El Mirage to recharge water into the State system based upon the amount of 
water drawn annually.  While El Mirage offsets its recharge requirement through it sewer treatment plant in the form of 
reclaimed water, water only customers (as the name implies) are not connected to the sewer system and therefore 
the ability to reclaim the water  as recharge is “lost”.  El Mirage currently has a little under 250 water only customers.  
Similarly, approximately 1,200 customers on the El Mirage water system reside in Surprise but receive sewer service 
from Surprise not El Mirage.  As such the water use of these customers must be recharged by El Mirage while 
Surprise receives the benefit of the reclaimed water through their sewer system. The quantification of the cost or 
value of the “lost” recharge water is the basis of the analysis conducted by the Willdan Team. 
 
Approach 
 
The Willdan Team undertook three steps to develop a recharge fee for El Mirage and Surprise customers (the rate is 
the same regardless of jurisdiction).  The steps were: 
 
1. Identify annual flows for El Mirage and Surprise customers based on winter water use (January through 
March).  The customer classes included: 
a. El Mirage 
i. Residential  
ii. Commercial 
iii. Landscape 
b. Surprise 
i. Residential 
ii. Commercial 
2. Identify the acre foot (AF) value of recharge water that is lost to El Mirage. 
3. Calculate a flow-based rate in dollars per 1,000 gallons ($/kgals) that could be assessed to El Mirage water 
only customers and Surprise water customers reflecting the recharge water cost. 
 
City of El Mirage Water Flows 
 
A review of the City’s billing data indicated that the City provides water only service to just below 250 City of El Mirage 
customers.  The City provided billing data was annualized water use based on winter quarter (January, February and

2 | P a g e 
 
March) use to estimate the amount of water that would be recovered through the City’s sewer system if the City 
provided sewer service to those customers.  As use during those three months represent the estimated sewer flows 
for billing purposes, this was the water use selected to form the basis of amount of lost recharge water for the City.  
The City’s annualized estimate of residential and commercial water (which would otherwise enter the sewer system) is 
31,538,000 gallons.  We also examined the amount of landscape water used by City customers which does not enter 
the sewer system but contributes to the City’s annual recharge requirement.  Landscape customers’ annual flows are 
26,400,000, for total City flows of 57,938,000.  A summary of flows can be found in the appendix. 
 
City of Surprise Water Flows 
 
A similar analysis of Surprise water customers and flows was undertaken.  Landscape service is not provided to any 
Surprise customers.  The review of Surprise’s billing data indicated that the City provides water only service to just 
below 1,200 Surprise customers.  The City provided billing data was annualized using the same winter quarter 
(January, February and March) as was used to estimate sewer flows for City of El Mirage customers.  Surprise’s 
annualized estimate of residential and commercial water (which would otherwise enter the sewer system) is 
187,184,000 gallons.  A summary of flows can be found in the appendix. 
 
Acre Feet (AF) of Recharge Water 
 
An AF of water is equivalent to 325,900 gallons of water.  The 245,122,000 gallons of water (57,938,000 from El 
Mirage and 187,184,000 from Surprise) gallons of discharged water (sewer flows) equates to approximately 752.14 
AF of recharge water.  It was necessary to convert the lost sewer flows or potential recharge water to AF, because 
water is sold on the open market in AF and is assigned a dollar value in that measurement.  The open market AF rate 
of water was taken from the Central Arizona Groundwater Replenishment District (CAGRD) Final 2020/21 – 2025/26 
Rate Schedule for the Phoenix Active Management Area.  The rates are summarized in Table 1 below. 
 
Table 1 
Projected Open Market Rate for Recharge water 
(CAGRD – Phoenix Active Management Area Assessment rates) 
 
Fiscal Year
Projected Value of 
One Acre Foot of Water 
2021-22
$739
2022-23
773
2023-24
791
2024-25
795
2025-26
796
 
As noted in Table 1, the projected range for an AF of water is between $739 and $796. 
 
Recharge Water Flow Based Rate 
 
The final step in the analysis was to determine what a flow-based rate would be for the sewer flows from both entities 
that is not recovered through the City sewer system and therefore needs to be recovered from another source.  The 
annual flows as previously identified are estimated (based on AWC) at 245,122,000 gallons.  It is assumed that these 
flows will remain constant throughout the study period and that there will not be any additional water only customers.  
The estimated water recharge cost by year using annual flows and AF water cost by year is summarized in Table 2.  
Additional detail can be found in the attached appendix.

3 | P a g e 
 
 
Table 2 
Projected Recharge Water Cost 
 
Fiscal Year
Projected Annual  
Cost of Recharge Water 
2021-22
$555,830
2022-23
581,403
2023-24
594,942
2024-25
597,950
2025-26
598,702
 
The values in Table 2 which range from a low of $555,830 per year (FY 2021-22) to a high of $598,702 per year (FY 
2025-26) were converted to a rate per 1,000 gallons to be assessed to water only customers, in addition to the rates 
currently being assessed for water service.  In addition to the value of recharge water identified in Table 2, the cost to 
the City to complete the recharge study analysis (a cost of $7,000) was added to the FY 2021-22 costs to be 
recovered.  The cost for FY 2021-22 including the cost of the recharge study was $562,830.  The calculated fees per 
1,000 gallons are summarized in Table 3 below. 
 
Table 3 
Projected Recharge Water Rates 
 
Fiscal Year
Projected Recharge  
Water Rate ($/kgals)
2021-22
$2.30
2022-23
2.37
2023-24
2.43
2024-25
2.44
2025-26
2.44
 
The rates identified in Table 3, represent the projected cost to the City per 1,000 gallons of water that is provided to 
water only customers that is not recaptured through the City’s sewer system, which would be used to ultimately offset 
the annual recharge requirements the City must meet.  The rate would be assessed a s a uniform rate per 1,000 
gallons of average winter quarter average water use non water only customers and should be updated annually in 
much the same manner that the City currently uses to determine sewer use for their customers.  Using the average 
use per account per month (calculation shown in the appendix) the average monthly cost (FY 2021-22) for customers 
are summarized in Table 4. 
 
Table 4 
Projected Average Monthly Recharge Water Bill 
 
Customer 
FY 2021-22 
(Rate per kgals)
Average Flows 
(kgals)
Monthly Bill 
City of El Mirage
Residential 
$2.30
8.83
$20.28 
Commercial 
2.30
24.49
56.23 
Landscape 
2.30
31.88
73.21 
 
 
City of Surprise
Residential 
$2.30
6.38
$14.64 
Commercial 
2.30
43.60
100.12

Average Use FY 2021‐22
Average
per Account
Average
Average 
Customer Type
Class
Period
Year
Annual Use Monthly Use
Per Month
Monthly Bill Accounts
El Mirage Water Only
Residential
Annualized AWC
2020
11,554
963
8.83
$20.28
109
El Mirage Water Only
Commercial
Annualized AWC
2020
19,984
1,665
24.49
56.23
68
El Mirage Water Only
Landscape
Annualized AWC
2020
26,400
2,200
31.88
73.21
69
City of Surprise
Residential
Jan‐Mar
2020
75,212
6,268
6.38
14.64
983
City of Surprise
Commercial
Jan‐Mar
2020
111,972
9,331
43.60
100.12
214
Total (Kgals)
245,122
20,427
Acre Feet
752.14
62.68
Gals/AF
325,900
325,900
Thousands of Gallons
FINAL - Recharge Rate Calculation
1

Assessment Rates of
Projected Recharge
Projected Recharge
Fiscal Year One Acre Foot of Water
Water Cost
Water Rate per 1,000 Gals
2021‐22
$739
$555,830
$2.27
2022‐23
773
581,403
2.37
2023‐24
791
594,942
2.43
2024‐25
795
597,950
2.44
2025‐26
796
598,702
2.44
FINAL - Recharge Rate Calculation
2

Description
FY 2021‐22 FY 2022‐23 FY 2023‐24 FY 2024‐25 FY 2025‐26
Revenue
Recharge Fee ($/Kgals)
$2.30
$2.37
$2.43
$2.44
$2.44
Projected Flows (Kgals)
245,122
245,122
245,122
245,122
245,122
Projected Revenue
562,830
581,403
594,942
597,950
598,702
Expenses
Fee Study Cost
7,000
0
0
0
0
Projected Expenses
7,000
0
0
0
0
Net Cashflow to Offset Recharge Costs
$555,830
$581,403
$594,942
$597,950
$598,702
Description
FY 2021‐22 FY 2022‐23 FY 2023‐24 FY 2024‐25 FY 2025‐26
Cost per Acre Foot
$739
$773
$791
$795
$796
Acre Feet of Recharge Water
752.14
752.14
752.14
752.14
752.14
Total Cost of Recharge
555,830
581,403
594,942
597,950
598,702
Add: Fee Study Cost
7,000
0
0
0
0
Total Cost of Recharge
562,830
581,403
594,942
597,950
598,702
Projected Flows (Kgals)
245,122
245,122
245,122
245,122
245,122
Water Recharge Cost ($ per Kgals)
$2.30
$2.37
$2.43
$2.44
$2.44
Recharge Cashflow Analysis
FINAL - Recharge Rate Calculation
3