Water Hardness Survey Results

Transcription

1 Water Hardness Survey Results South Adams County Water and Sanitation District REPORT

2 Report June 7, 2017 Water Hardness Survey Results Prepared for South Adams County Water and Sanitation District Prepared by BBC Research & Consulting 1999 Broadway, Suite 2200 Denver, Colorado fax

3 Table of Contents Introduction... 1 Summary of Survey Results... 1 Methodology... 3 Respondent Perceptions and Concerns Regarding Water Quality... 5 Respondents In-home Actions to Improve Water Quality... 8 Use of Bottled Water... 9 Reported Costs of In-home Treatment Systems Willingness to Pay for Centralized Water Treatment to Reduce Hardness Willingness to Pay for Rebate Program Respondent Preferences Between Centralized Treatment and Rebate Program Respondent Preferences for Paying for Centralized Treatment and Rebate Program Respondent Perceptions of the District s Water Rates Respondent Preferences for the District s Goals How Do Customers Prefer to Communicate with the District? How Do Commercial Customers Differ? Who are the Survey Respondents? BBC RESEARCH & CONSULTING i

4 Introduction South Adams County Water and Sanitation District (the District) retained BBC Research & Consulting (BBC) in the spring of 2017 to conduct a telephone survey of its residential and commercial water customers concerning their opinions, attitudes and awareness regarding the hardness of the District s water. Specifically, the survey focused on: Customer s perceptions of water quality. The survey asked respondents how they rated the District s water quality on a 1-to-10 scale as well as the reason for their rating. Customer s in-home actions for managing water hardness. The survey asked respondents if their household uses filters, softeners or a combination of both to manage the hardness of the water they receive from the District. The survey also collected information in the installation and monthly operating costs of each treatment system. Additionally, the survey asked respondents about their use of bottled water for drinking, cooking and other purposes. Willingness and ability to pay for hardness treatment. Respondents were asked about their willingness to pay for central water treatment to reduce hardness as well as their willingness to pay and potentially participate in a rebate program that would pay part of the cost for customers to install in-home treatment systems to reduce hardness. Preferences among the options, perceptions of the District s water rates and goals, and public outreach. The survey collected information about customer preferences regarding each option the District and citizen Hardness Advisory Committee (HAC) are considering to manage the hardness of the District s water as well as how respondents would prefer to pay for each option. The survey also asked respondents about their perceptions of the District s water rates, their rankings of the District s overall goals and their preferred method for receiving information from the District. Basic demographic information. The survey collected basic demographic information on respondents, including but not limited to their age, sex, homeownership status, household income, and which area of the District they live in. The results from the survey will help the District better understand its customer values and preferences for managing the hardness of the District s water. Additionally, the survey results will provide information that could help inform education and outreach efforts regarding the District s efforts to address water hardness. This report documents the survey research and its results. Summary of Survey Results Seventy percent of the survey respondents rated the quality of the water they received from the District as unsatisfactory or very poor (5 or less on the 1-to-10 scale). Only 30 percent of respondents said the water quality was satisfactory or very good (6 or more on the 1-to-10 scale). Most respondents (51 percent) said they gave a low rating because of the hardness of the District s water followed by 43 percent who said the taste of the water influenced their rating. BBC RESEARCH & CONSULTING PAGE 1

5 Other hardness-related factors like appliance and plumbing wear and scaling and crust build-up were also cited as influences over respondent s ratings of the District s water quality. Many of the District s customers are taking their own actions to reduce the hardness of the water they receive. Overall, 52 percent of respondents reported that they are taking some actions to further treat or soften their water. Of the respondents that are taking some actions, 53 percent reported using an in-home water softener to reduce the hardness of their water. Nineteen percent reported using an in-home water softener as well as a water filter and 16 percent reported using only a water filter. The District s customers are also using bottled water to partially avoid the hardness of the water provided by the District. Fifty-nine percent of respondents said they used bottled water as their main source of drinking water. The District s customers are incurring substantial expenses to reduce the hardness of their water. The survey asked respondents about the installation and monthly operating costs of their in-home water treatment systems. Respondents reported spending an average of $1,950 to install an in-home water softener and $1,048 to install in-home filter systems. Households that installed both an in-home softener and a filter system reported spending an average of $1,650 to purchase the system. Respondents said the average monthly cost of operating an in-home water softener was $17 and respondents with in-home water filter systems reported spending an average of $20 per month. Households reported that they spent an average of $12 per week on bottled water. Customers are also willing to pay for the District to take actions to improve the quality of the water it provides to customers. An important focus of the survey was to gauge respondent s preferences and willingness to pay for alternative options to reduce the hardness of the District s water. One of the options the District is considering would add additional treatment to the water at the District s water treatment plant to make the quality of the water more similar to other metro area water providers. The survey asked respondents if they would be willing to pay $12, $21 or $31 more per month for this water quality improvement. Overall, 57 percent of respondents said they would be willing to pay $12 to improve the quality of the water they receive from the District. When the bid amount was raised to $21, 46 percent of the sample indicated they would be willing to pay for improved quality. Only 34 percent of respondents said they would be willing to pay for quality improvements if the cost were $31 per month. A second option the District is considering would offer customers rebates for the purchase cost of in-home treatment systems such as water filters and water softeners. The survey asked respondents if they would be willing to pay $2 or $12 more per month for water service to fund a program that offered rebates of $250 and $1,500, respectfully. The results show that overall 56 percent of respondents would be willing to pay for a rebate program that costs $2 per month (and provides a $250 rebate to participants) or $12 per month (and provides a $1,500 rebate to participants). In the second case, the higher monthly cost of the second rebate offer is offset by the high rebate amount, which made respondents indifferent between the two bid prices. In total, 60 percent of respondents would prefer to address the hardness issue compared to 40 percent who would prefer no action and keeping rates at current levels. BBC RESEARCH & CONSULTING PAGE 2

6 The survey results indicate that 39 percent of respondents would prefer the rebate program compared to 21 percent who would prefer a centralized water treatment program. However, some of the apparent support for the rebate alternative appears counterintuitive. The rebate alternative was strongly supported by respondents who have already installed water softeners or water filter systems in their homes. This could indicate an expectation that rebates would be provided retroactively. While the rebate alternative has not been fully designed at present, retroactive rebates would seem to be unlikely based on typical practices for water provider funded rebate programs. Overall, 50 percent of respondents said they would prefer to pay for either option through increased water rates. Twenty-nine percent of respondents said they prefer to pay through increased property taxes and 6 percent preferred another alternative. The District s customers generally feel that their current water rates are priced about right. Fifty-one percent of respondents said the District s water rates were about right, 44 percent said the water rates were too expensive and 3 thought the District s water rates were inexpensive. Compared to other services, like cable and phone service, the District s customers were more likely to say their water rates were priced about right, although more respondents thought energy services were priced about right than their water service. The survey asked respondents which goals they thought were most important for the District to prioritize. The largest number of respondents felt that the District s main goal should be to provide the highest quality drinking water possible (50 percent). The next most often cited goal was for the District to make sure it has enough water for the future (24 percent). The survey asked respondents how they currently receive information from the District and how they would prefer to receive information from the District in the future. Fifty-percent of respondents currently receive information through the mail/bill stuffers that come with their monthly water bill. Twenty-one percent receive information through the internet or their . In the future respondents said they would prefer to receive information from the District through the mail/bill stuffers that come with their monthly water bill (57 percent). Twenty-six percent said they would prefer to receive information from the internet/ . Methodology The methodology for this study involved development of the survey instrument, design of the survey sample, implementation of the telephone survey, and analysis of the survey results. Each of these topics is discussed below. BBC also met with the HAC on three occasions to discuss the survey instrument, gather input and present preliminary results. Instrument development. One of the most important aspects of any survey-based study is the development of the survey instrument. For this study, the instrument needed to seek information on several different aspects of customer opinions and preferences regarding water hardness issues within a typical timeframe of about 10 minutes. BBC RESEARCH & CONSULTING PAGE 3

7 The process of developing the survey instrument included the following steps: Consultation with District staff and the HAC regarding the general topics to be covered in the survey; Research into the approaches and wording used in similar surveys previously conducted by BBC for other municipal water providers; Revisions in response to comments on the draft survey instrument from the District staff and HAC ; and Pretesting of the survey instrument. The final residential telephone survey instrument is provided as Appendix A to this report, and the final commercial telephone survey instrument is provided as Appendix B to this report. Sample design. The District sought the input from representative samples of its residential and commercial customers from the District s Historic Commerce City Development Area (HCCDA) and Northern Development Area (NDA) (Figure 1). Figure 1. Map of Water Hardness Survey Areas The Historical Development Area is abbreviated throughout the report as HCCDA and the Northern Development Area is abbreviated as NDA. Source: South Adams County Water and Sanitation District BBC RESEARCH & CONSULTING PAGE 4

8 The District provided BBC with a database containing contact information for all of its residential and commercial customers. BBC s subcontractor, Davis Research, selected random samples of both groups for each of the two subareas within the District s overall service area (HCCDA and NDA) to contact for this research. Survey implementation. The telephone survey was conducted in April Davis Research completed 400 telephone surveys of residential customers and 60 telephone surveys of commercial customers in the District s service area. Further information regarding the demographics of the sample is provided later in this report. Survey analysis. Results from the survey were analyzed for the sample as a whole and for selected demographic subgroups. In particular, the analysis compares survey responses from residential and commercial customers living in the HCCDA and the NDA service areas. BBC also compared survey responses among different income groups, and other subgroups of the respondents. Respondent Perceptions and Concerns Regarding Water Quality Several questions in the survey explored respondents perceptions and concerns regarding the quality of the water they receive from the District. Perceptions of water quality between service areas. The first water quality question asked in the survey (to avoid influencing responses based on subsequent questions) was how the respondent rated the quality of the water their household received from the District on a scale of 1 to 10 (Figure 2). Overall, 70 percent of respondents rated the quality of the water they received as unsatisfactory or very poor (5 or lower). Only 30 percent of respondents said the water quality was satisfactory or very good (6 or higher). Figure 2. Ratings of water quality received by households on a scale of 1-10 by service area. *Differences are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, Respondents in the NDA are less satisfied with the quality of water they receive from the District than respondents in the HCCDA. Seventy-seven percent of respondents in the NDA reported that the quality of the water they receive from the District was unsatisfactory or very poor compared BBC RESEARCH & CONSULTING PAGE 5

9 to 63 percent of respondents in the HCCDA. Only 24 percent of respondents in the NDA said the quality of their water was satisfactory or very good compared to 37 percent of respondents in the HCCDA. Perceptions of water quality by household income. Respondents ratings of water quality were analyzed for low, medium, and high household income groups as shown in Figure 3. Low income households were defined as those making less than $49,999 per year; Medium income households were those making between $50,000 and $99,999 and high income households were those making more than $100,000 per year. High income households were more likely to rate their water quality as unsatisfactory or very poor compared to low and medium income households. Fifty-four percent of low income households said the quality of the water they receive from the District was unsatisfactory or very poor, compared to 68 percent of medium income households. Approximately 80 percent of high income households said their water quality was unsatisfactory or very poor. Figure 3. Ratings of water quality received by households on a scale of 1-10 by household income level. Differences in water quality ratings between incomes -groups were not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, Reasons for water quality ratings. After asking respondents to rate the quality of the water their household receives from the District, respondents were asked why they rated the water quality as they did. Respondents were free to cite any reason for their rating and could give more than one reason for the water quality rating. Figure 4 shows the reasons respondents cited. Water hardness was the most commonly cited factor that influenced respondent s ratings of the District s water quality (51 percent). Forty-three percent of respondents reported that their rating was influenced by the taste of the District s water. Appliance and plumbing wear (15 percent), scaling and crust (14 percent), health and safety (10 percent), odor (8 percent) and color and appearance (8 percent) were other commonly cited factors. BBC RESEARCH & CONSULTING PAGE 6

10 Figure 4. Reasons cited for ratings of water quality by service area. Hardness Taste Appliance/ plumbing wear Scaling/ crust Health/ safetfy Odor Color/ appearance Other Overall (n = 400) 51% 43% 15% 14% 10% 8% 8% 10% HCCDA (n = 201) 35% 48% 11% 11% 13% 8% 7% 12% NDA (n = 199) 68% 37% 19% 17% 7% 8% 9% 8% Differences between the HCCDA and NDA are statistically significant at the 5 percent level. Source: BBC Research & Consulting from household telephone survey conducted April, The results show that water quality ratings of respondents in the NDA were most influenced by the hardness of the District s water and respondents in the HCCDA were most influenced by the taste of the water they receive from the District (48 percent). In the NDA, 68 percent of respondents cited the hardness of the District s water as the main influence of their water quality rating. Respondents in the NDA also cited other hardness-related factors such as appliance and plumbing wear (19 percent) and scaling and crust (17 percent) as influences on their rating of water quality. Respondents in the HCCDA rated water hardness (35 percent) and other hardness-related factors as smaller influences of their water quality ratings compared to the NDA. Figure 5 shows the influences on water quality ratings cited by respondents that rated the quality of the water they receive from the District as unsatisfactory or very poor. Water hardness (58 percent) was cited as the main influence of the water quality ratings from this group. Other hardness-related factors, like such as appliance and plumbing wear (19 percent) and scaling and crust (17 percent) were also cited as influences of respondent s ratings of the District s water quality. The taste of the water was also cited as an influence by 48 percent of respondents from this group. Figure 5. Reasons cited for ratings of water quality for respondents who rated water quality as unsatisfactory or very poor. n = 280. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 7

11 Respondents In-home Actions to Improve Water Quality What customers doing to improve water quality in each service area. The survey asked respondents what, if anything, they are doing in their home to further treat or soften the water they receive from the District. The results from this question are shown in Figure 6. Overall, 52 percent of respondents reported that they are taking some action to further treat or soften their water. Of the respondents that are taking some action, 53 percent reported using an in-home water softener to reduce the hardness of their water. Nineteen percent reported using an in-home water softener as well as a water filter, 16 percent reported using only a water filter, seven percent reported using a Brita-type filter, and 5 percent reported taking other actions to further treat or soften the water they receive from the District. Figure 6. Actions taken to further treat or soften water by service area. All differences between the NDA and HCCDA are statistically significant at the 5 percent level. Source: BBC Research & Consulting from household telephone survey conducted April, The results show that 72 percent of respondents in the NDA report taking some action to further treat or soften the water they receive from the District compared to only 32 percent of respondents in the HCCDA. Respondents in the NDA are more likely to use an in-home water softener than respondents in the HCCDA. Sixty-three percent of respondents in the NDA reported using an in-home water softener to further treat or soften the water they receive from the District compared to 31 percent of respondents in the HCCDA. Twenty-three percent of respondents in the NDA use an in-home water softener as well as a water filter compared to 11 percent in the HCCDA, but respondents in the HCCDA are more likely to use an in-home filter alone (30 percent) than respondents in the NDA (10 percent). What customers are doing to improve water quality by household income. Respondent s actions to further treat or soften the water they receive from the District were analyzed by household income (Figure 7). The results show that low-income households are less likely to use an in-home softener and/or filter compared to medium and high income households, potentially due to the high cost of purchasing and operating an in-home softening system. Low-income households are approximately 8 to 10 percent more likely use only an inhome water filter compared to high and medium income households, respectively. BBC RESEARCH & CONSULTING PAGE 8

12 Figure 7. Actions taken to further treat or soften water by household income. All differences between the household incomes-groups are statistically significant at the 5 percent level. Source: BBC Research & Consulting from household telephone survey conducted April, Use of Bottled Water Main source of household drinking water by area. Respondents were asked if they predominately received their drinking water from their tap or if bottled water was their main drinking water source. The results from that question are reported in Figure 8. Figure 8. Main source of drinking water by service area. *Differences between service areas are statistically significant at the 5 percent level. Results may not add to 100 percent because some respondents did not know their main source of drinking water or refused to answer the question. Source: BBC Research & Consulting from household telephone survey conducted April, The results showed that in the overall sample bottled water was the main source of drinking water for 59 percent of respondents compared to 38 percent who relied on tap water as their main drinking water source. Respondents in the HCCDA were more likely to rely on bottled water as their main source of drinking water compared to respondents in the NDA. Respondents in the NDA were equally likely to rely on bottled water and tap water as their main drinking water source (48 percent). Only 28 percent of respondents in the HCCDA reported using tap water as their main source of drinking water. Main source of household drinking water by household income. Respondents main source of drinking water was analyzed by household income (Figure 9). The results show that low-income households were more likely to use bottled water as their main source of drinking water compared to medium and high income households. Seventy-six percent of low-income BBC RESEARCH & CONSULTING PAGE 9

13 households reported using bottled water as their main source of drinking water compared to 56 percent of medium income households and 45 percent of high-income households. Figure 9. Main source of drinking water by household income. *Differences between and low and medium and high-income groups are statistically significant at the 5 percent level. Source: BBC Research & Consulting from household telephone survey conducted April, Main source of household drinking water by in-home treatment type. Respondents main source of drinking water was analyzed by in-home treatment type (Figure 10). The results show that there are small differences in bottled water use depending on whether or not a respondent s household had installed an in-home water softener, water filter, or used a basic Brita-type filter. Fifty percent of households with basic Brita-type filters reported using bottled water as their main source of drinking water compared to 47 percent of respondents with an inhome softener and/or a water filter and 53 percent of respondents with only an in-home filter. Households without any in-home treatment are much more likely to rely on bottled water as their main source of drinking water (70 percent). Figure 10. Main source of drinking water by in-home treatment type. Differences between the groups are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 10

14 Other uses of bottled water. Respondents were also asked if they used bottled water for other purposes. The results are shown in Figure 11. Overall, 33 percent of respondents who primarily drink bottled water at home said they use bottled water for cooking, 7 percent said they used bottled water for their pets, and 8 percent said they used bottled water for another purpose. Respondents in the HCCDA were more likely to use bottled water for cooking than respondents in the NDA, but there was little difference in the proportion of HCCDA respondents who reported using bottled water for their pets compared to NDA respondents. Figure 11. Other uses of bottled water reported by respondents. *Differences service areas are statistically significant at the 5 percent level. Results may not add to 100 percent because some respondents did not know their main source of drinking water or refused to answer the question. Source: BBC Research & Consulting from household telephone survey conducted April, Reported Costs of In-home Treatment Systems Costs of in-home treatments and bottled water. The survey asked respondents about the installation and monthly operating costs of their in-home water treatment systems. Installation costs are shown in Figure 12 and monthly water expenditures are shown in Figures 13. Respondents reported spending an average of $1,950 to install an in-home water softener (Figure 12). The maximum cost reported in the survey was $11,000 and the minimum cost was $0, which may reflect a response from a household that moved into a home that already had an in-home water softener. Respondents with in-home filter systems reported spending an average of $1,048 to install their systems and the maximum reported value was $3,000. Households that installed both an in-home softener and a filter system reported spending an average of $1,650 on both systems, with a maximum reported installation cost of $5,000. Figure 12. In-home water treatment system installation costs Treatment system Mean Median Maximum Minimum In-home softener $1,950 $1,100 $11,000 $0 In-home filter (exluding Brita) $1,048 $465 $3,000 $15 Both in-home softener and filter $1,650 $850 $5,000 $400 n = 110. Source: BBC Research & Consulting from household telephone survey conducted April, Respondents also reported the monthly operating costs of their in-home treatment systems (Figure 13). Respondents said the average monthly cost of operating an in-home water softener was $17 with a maximum reported value of $70 per month. Respondents with in-home water filter systems reported spending an average of $20 per month with a maximum reported monthly BBC RESEARCH & CONSULTING PAGE 11

15 cost of $100. Respondents who had both in-home water softeners and filter systems reported average monthly operating costs of $39 with maximum monthly operating costs of $100. Figure 13. In-home water treatment system monthly operating costs Treatment system Mean Median Maximum Minimum In-home softener $17 $15 $70 $0 In-home filter (exluding Brita) $20 $10 $100 $0 Both in-home softener and filter $39 $20 $100 $5 n = 160. Source: BBC Research & Consulting from household telephone survey conducted April, Households that primarily drink bottled water at home reported that they spent an average of $12 per week on bottled water (Figure 14). The median weekly household expenditure on bottled water was $8 with a maximum weekly expenditure of $150. Respondents in the HCCDA reported spending an average of $11 per week on bottled water with a maximum reported weekly expenditure of $64. Respondents in the NDA spent slightly more on bottled water compared to respondents from the HCCDA. On average, respondents in the NDA spent $14 per week on bottled water with a maximum reported weekly expenditure of $150. Figure 14. Weekly household expenditures on bottled water by service area n = 221 Source: BBC Research & Consulting from household telephone survey conducted April, Overall HCCDA NDA Mean $12 $11 $14 Median $8 $6 $10 Minimum $1 $1 $2 Maximum $150 $64 $150 Willingness to Pay for Centralized Water Treatment to Reduce Hardness Willingness to pay for centralized treatment by service area. An important focus of the survey was to gauge respondents preferences and willingness to pay for options to reduce the hardness of the District s water. One of the options the District is considering would add additional treatment to the water at the District s water treatment plant to make the quality of the water more similar to other metro area water providers. The survey asked respondents if they would be willing to pay $12, $21 or $31 more per month for this water quality improvement. The amount each respondent was asked to pay was randomly selected from the three options listed above. The results from the question are shown in Figure 15. BBC RESEARCH & CONSULTING PAGE 12

16 Figure 15. Willingness to pay for centralized treatment to reduce the hardness of the District s water All differences between the service areas are not statistically significant. The sample size of the HCCDA was n = 73 for the $12 bid amount; n = 59 for the $21 bid amount and n = 59 for the $31 bid amount. The sample size for the NDA was n = 60 for the $12 bid amount; n = 65 for the $21 bid amount and n = 74 for the $31 bid amount. Differences between groups are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, Overall, 57 percent of respondents said they would be willing to pay $12 more per month to improve the quality of the water they receive from the District if the water were more similar to other metro area providers. When the monthly increase was raised to $21, 46 percent of the sample indicated they would be willing to pay for improved quality. Only 34 percent of respondents said they would be willing to pay for quality improvements if the additional cost was $31 per month. This trend is typical of willingness to pay responses and follows economic theory, which anticipates that the number of people willing to pay for a good or service will generally go down as the price goes up. The results were also analyzed by service area and indicated that respondents in the HCCDA were generally less willing to pay for additional centralized treatment than respondents in the NDA and were more sensitive to increases in the monthly cost of service. Fifty-two percent of respondents in the HCCDA said they would be willing to pay $12 per month to improve the quality of the water they receive from the District compared to 63 percent of respondents in the NDA. When the bid price was increased to $21 per month 43 percent of respondents in the HCCDA said they were willing to pay for water quality improvements compared to 48 percent of respondents from the NDA. At a bid price of $31 per month only 24 percent of respondents in the HCCDA were willing to pay compared to 41 percent of respondents in the NDA. Willingness to pay for centralized treatment by household income. Respondents willingness to pay for centralized treatment was also analyzed by household income for bid prices of $12, $21, and $31 (Figures 16-18). At a bid price of $12 per month (Figure 16), respondents from high income households were the most willing to pay (66 percent) followed by low income households (56 percent) and medium income households (50 percent). When the bid price was increased to $21 per month the same pattern emerged. Fifty-three percent of high income households were willing to pay, followed by 49 percent of low income households and 44 percent of medium income households. At a bid price of $31 the price sensitivity of low income households led to only 28 percent of low income respondents to agree to pay, followed by 40 percent of high income respondents and 43 percent of medium income respondents. BBC RESEARCH & CONSULTING PAGE 13

17 Figure 16. Willingness to pay for centralized treatment at a cost of $12 per month by household income Differences between income groups are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, Figure 17. Willingness to pay for centralized treatment at a cost of $21 per month by household income Differences between income groups are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, Figure 18. Willingness to pay for centralized treatment at a cost of $31 per month by household income Differences between income groups are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, Willingness to pay for centralized treatment by in-home treatment type. Respondents willingness to pay for centralized treatment was also analyzed for groups of respondents based on their existing in-home treatment actions (Figure 19). At a bid price of $12 per month 86 percent of respondents with in-home filters were willing to pay compared to 67 percent of respondents with Brita-type filters and in-home softeners and filters. Respondents with in-home filters were more sensitive to changes in the bid price. At a bid price of $21 per month 50 percent of respondents with an in-home filter were willing to pay compared to 33 percent of respondents with a Brita-type filters and 48 percent of respondents with in-home softeners and filters. When the bid price was increased to $31 only 23 percent of respondents BBC RESEARCH & CONSULTING PAGE 14

18 with an in-home filter were willing to pay compared to 40 percent of respondents with a Britatype filter and 35 percent of respondents with in-home softeners and filters. Fifty-four percent of households without any in-home treatment system agreed to pay the $12 bid price (54 percent), 47 percent agreed to pay the $21 bid price and 33 percent agreed to pay the $31 bid price. Figure 19. Willingness to pay for centralized treatment by in-home treatment type Treatment Type Yes/lean yes ($12) No/lean no ($12) Yes/lean yes ($21) No/lean no ($21) Yes/lean yes ($31) No/lean no ($31) In-home filter (n=7; 14; 13) 86% 14% 50% 50% 23% 77% Brita filter (n=6; 3; 5) 67% 33% 33% 67% 40% 60% Softener or Softener and Filter (n=47; 46; 57) 67% 33% 48% 52% 35% 65% No in-home treatment (n=69; 68; 55) 54% 46% 47% 53% 33% 67% Differences between treatment types are not statistically significant. Sample sizes correspond to the bid amount. Source: BBC Research & Consulting from household telephone survey conducted April, Willingness to Pay for Rebate Program Willingness to pay for in-home treatment rebates by service area. A second option the District is considering would offer rebates to customers for the purchase cost of in-home treatment devices such as water filters and water softeners. The survey asked respondents if they would be willing to pay $2 or $12 per month for a program that offered rebates of $250 and $1,500, respectfully. The amount each respondent was asked to pay was randomly selected from the two options listed above. The results from the question are shown in Figure 20. Figure 20. Proportion of respondents willing to pay for a rebate program Differences between service areas are not statistically significant. Sample sizes correspond to the bid amount Source: BBC Research & Consulting from household telephone survey conducted April, The results show that overall 56 percent of respondents are willing to pay for a rebate program that costs $2 per month or $12 per month. In this case, the higher monthly cost of the second rebate offer is offset by the high rebate amount, which made respondents indifferent between the two bid prices. The price sensitivity of respondents in the HCCDA is apparent in the results. At a bid price $2 per month 56 percent of respondents in the HCCDA were willing to pay for the program compared to 55 percent of respondents in the NDA. However, at a bid price of $12 per BBC RESEARCH & CONSULTING PAGE 15

19 month only 55 percent of respondents in the HCCDA were willing to pay for the program compared to 63 percent of respondents in the NDA. Willingness to pay for in-home treatment rebates by household income. Respondents willingness to pay for a rebate program was also analyzed by household income (Figure 21). The results show that high income respondents may expect to benefit more from larger rebate program or are more willing to pay the rate increase to pay for the rebate program compared to low and medium income respondents. At a bid price of $2 per month 60 percent of low income, 63 percent of medium income and 61 percent of high income respondents were willing to pay, respectively. When the bid price was increased to $12 per month 58 percent low income respondents and 59 percent of medium income respondents were willing to pay compared to 72 percent of high income respondents. Figure 21. Proportion of respondents willing to pay for a rebate program by household income Differences between income groups are not statistically significant. Sample sizes correspond to the bid amount Source: BBC Research & Consulting from household telephone survey conducted April, Willingness to pay for in-home treatment rebates by in-home treatment type. Respondents willingness to pay for a rebate program was also analyzed by their in-home treatment actions (Figure 22). The results show that at a bid price of $2 per month, respondents with in-home filters and softeners are more willing to pay for a rebate program than those with Brita-type filters perhaps because they expect to benefit more from a rebate program. When the bid price is increased to $12 per month respondents with in-home filters are less willing to pay. Respondents with in-home softeners, however, are more willing to pay for a larger rebate program. Respondents with no in-home treatment were more willing to pay the $2 bid price than respondents with Brita-type filters and softeners. When the bid price was increased to $12, 59 percent of respondents without an in-home treatment system were willing to pay. BBC RESEARCH & CONSULTING PAGE 16

20 Figure 22. Figure Proportion of respondents willing to pay for a rebate program by type of in-home treatment system Differences between treatment system types are not statistically significant. Sample sizes correspond to the bid amount Source: BBC Research & Consulting from household telephone survey conducted April, Respondent Preferences Between Centralized Treatment and Rebate Program Customer preferences for managing the District s water hardness by service area. The survey asked respondents whether they would prefer a centralized treatment program that would increase their monthly costs the most, a rebate program that would moderately increase their monthly costs, or for the District to not to do anything and leave their monthly costs unchanged. Figure 23 shows that overall respondents prefer to address the hardness issue compared to the option of doing nothing. Thirty-nine percent of respondents would prefer the rebate program over other options compared to 21 percent would prefer a centralized water treatment program. In total, 60 percent of respondents would prefer to address the hardness issue compared to 40 percent who prefer no action and keeping rates at current levels. Figure 23. Customer preference for centralized treatment or rebate program by service area *Differences between service areas are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, Respondents in the NDA have a greater preference for District action on the hardness issue than respondents in the HCCDA. Forty-five percent of respondents in the District s NDA would prefer to provide rebates for softeners and in-home filter systems while 25 percent would prefer a centralized treatment program. In total, 70 percent of respondents in the NDA would prefer the BBC RESEARCH & CONSULTING PAGE 17

21 District do something about the hardness of the District s hard water. Thirty-four percent of respondents in the HCCDA would prefer to provide rebates for softeners and in-home filter systems while 16 percent would prefer a centralized treatment program. In total, 50 percent of respondents in the HCCDA would prefer to do something about the hardness of the District s hard water while 50 percent would prefer neither option. Customer preferences for managing the District s water hardness by household income. Figure 24 shows respondent s preferences for addressing the hardness issue based on their household income. The results show that the preference for the District to take action on water hardness increases with household income. Fifty-three percent of low-income households would prefer to keep rates and taxes down by keeping things the same compared to 34 and 30 percent of medium and high income respondents, respectively. The rebate program is the preferred option by all respondents regardless of income group. Thirty-three percent of low income respondents would prefer the rebate program to a centralized treatment program as would 43 percent of medium and high income respondents. Figure 24. Customer preference for centralized treatment or rebate program by household income *Differences are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, Customer preferences for managing the District s water hardness by in-home treatment type. Figure 25 shows respondent s preferences for addressing the hardness issue based on the type of in-home treatment they use. The majority of respondents with in-home filters and softeners would the District to take action to address water hardness, while respondents with Brita-type filters are evenly split between acting and not acting. Seventy-seven percent of respondents with in-home filters and 70 percent of respondents with in-home softeners would prefer to take some action to reduce the hardness of their water. All three groups of respondents prefer the rebate program to the centralized treatment option. BBC RESEARCH & CONSULTING PAGE 18

22 Figure 25. Customer preference for centralized treatment or rebate program by type of in-home treatment system Differences between in-home treatment systems are not statistically significant. Source: BBC Research & Consulting from household telephone survey conducted April, 2017 Some of the apparent support for the rebate alternative compared to the centralized treatment option appears counterintuitive. As shown in Figure 25, the rebate alternative was strongly supported by respondents who have already installed water softeners or water filter systems in their homes. This could indicate an expectation that rebates would be provided retroactively. While the rebate alternative has not been fully designed at present, retroactive rebates would seem to be unlikely based on typical practices for water provider-funded rebate programs. Respondent Preferences for Paying for Centralized Treatment and Rebate Program How should water quality improvements be paid for by service area? The survey asked respondents whether they would prefer to pay for centralized treatment or a rebate program through their monthly water bill, or property taxes (Figure 26). The results from this question were analyzed by service area and household income. Overall, 50 percent of respondents said they would prefer to pay through increased water rates. Twenty-nine percent of the sample said they prefer to pay through increased property taxes and 21 percent would prefer no action. BBC RESEARCH & CONSULTING PAGE 19

23 Figure 26. Customer preference of payment vehicle for central treatment or rebate program by service area *Differences are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, The majority of respondents in the HCCDA and NDA preferred paying for the costs with increases in water rates. Forty percent of respondents in the HCCDA preferred this approach, as did 59 percent of respondents in the NDA. Thirty-six percent of respondents in the HCDDA would prefer paying the costs through an increase in property taxes compared to 21 percent of respondents in the NDA. How should water quality improvements be paid for by household income? The results from this question were analyzed by household income (Figure 27). The majority of respondents from all income levels preferred paying for the costs through increases in their water rates. Medium and high-income households strongly preferred paying the costs through increases in their water rates (55 and 54 percent, respectively), but the preferences of lowincome households were not as firm. Forty percent of low-income households preferred paying for the costs through increases in their water rates, but 35 percent preferred paying through increased property taxes. Figure 27. Customer preference of payment vehicle for central treatment or rebate program by household income *Differences are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 20

24 Respondent Perceptions of the District s Water Rates How are the District s water rates perceived? The survey asked respondents how they perceived the cost of the District s water rates. The results are shown in Figure 28. Overall, only 3 percent of respondents thought the District s water rates were inexpensive. Fifty-one percent of respondents said the District s water rates were about right, 44 percent said the water rates were too expensive and 2 percent of respondents were not sure. Figure 28. Customer perception of the District s water rates by service area Differences between service areas are not statistically significant. Responses of I don t know were not included in the figure and accounted for 9 responses. Source: BBC Research & Consulting from household telephone survey conducted April, The majority of respondents in the NDA felt that the District s water rates were priced about right (55 percent). Forty-one percent of respondents in the NDA said the District s rates too expensive and only 3 percent said the rates were inexpensive. Respondents in the HCCDA were more evenly split. Forty-seven percent of respondents in the NDA said water rates were about right compared to 46 percent who said they were too expensive. Only 2 percent of respondents in the HCCDA said the District s water rates were inexpensive. The survey also asked respondents how they perceived the costs of other services their household receives (Figure 29). Respondents rated the costs of telephone service (including cell phone service) in much the same way as they rated the costs of water service. Respondents were less likely to consider their energy service to be too expensive, and more likely to consider their cable service to be too expensive compared to water and telephone service. Figure 29. Customer perception of the District s water rates compared to other services n = 362. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 21

25 Respondent Preferences for the District s Goals Which goal do you think should be most important for the District? The survey asked respondents which goals they thought were most important for the District to pursue. The results are shown in Figure 30. Overall, 49 percent of respondents said the District s primary goal should be to provide the highest quality water possible. Twenty-four percent of respondents said the District s primary goal should be to make sure it has adequate water supplies, 15 percent said the District should keep customer s water rates as low as possible and 10 percent said the District should focus on replacing aging pipes and infrastructure. Figure 30. Customer opinion of most important goals for the District by service area Service Area Provide the highest quality water possible Make sure the district has adequate supplies Keep customers water rates as low as possible Replace aging pipes and infrastructure Overall (n = 396) 49% 24% 15% 10% HCCDA (n = 197) 42% * 25% 18% * 12% NDA (n = 195) 56% * 23% 11% * 8% *Differences are statistically significant at the 5% level. Responses of I don t know where removed from the sample and accounted for 4 responses. Source: BBC Research & Consulting from household telephone survey conducted April, Respondents prioritization of the District s goals varied with income (Figure 31). The majority of respondents from medium and high-income households felt that the District s main goal should be to provide the highest quality drinking water possible (54 and 59 percent, respectfully). Twenty-four and 25 percent of respondents from high and medium-income households, respectfully, said the District s primary goal should be to make sure the district has enough water for the future. Approximately 10 percent of respondents from medium and highincome households said the District s primary goals should be to keep water rates as low as possible or replace aging pipes and infrastructure. Figure 31. Customer opinion of most important goals for the District by household income *Differences are statistically significant at the 5% level. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 22

26 Respondents from low-income households were more evenly split regarding their preferences for the District s primary goals. The most common response (37 percent) was that the District should prioritize providing the highest quality water possible. Twenty-five percent of respondents said the District should make sure the district has enough water for the future and another 25 percent said the District should keep customer s water rates as low as possible. Twelve percent of respondents from low-income households said the District s main goal should be to replace aging pipes and infrastructure. How Do Customers Prefer to Communicate with the District? The survey asked how respondents currently receive information from the District and how they would prefer to receive information from the District in the future. The results are shown in Figure 32. Fifty-percent of respondents currently receive information through the mail/bill stuffers that come with their monthly water bill. Twenty-one percent receive information through the internet or their , 8 percent receive information through the newspaper, 6 percent from flyers, and 2 percent through phone calls, social media and television, respectfully. Nine percent currently receive information from another source not listed. Figure 32. Current and preferred mode of communication with the District Currently receive information (n = 363) Would like to receive information (n = 134) Source: BBC Research & Consulting from household telephone survey conducted April, Mail/Bill stuffers 50% 57% Internet/ 21% 26% Newspaper 8% 2% Flyers 6% 3% A phone call 2% 4% Social media 2% 2% Television 2% 1% Text message 0% 2% Radio 0% 0% Other 9% 2% In the future respondents said they would prefer to receive information from the District through the mail/bill stuffers that come with their monthly water bill (57 percent). Twenty-six percent said they would prefer to receive information from the internet/ . Only 2 percent said they would prefer to receive future information from the newspaper, 3 percent from flyers, 4 percent from a phone call, 2 percent from social media, 1 percent from television, 2 percent from a text message and 2 percent from another source. How Do Commercial Customers Differ? A survey of 60 of the District s commercial customers was conducted alongside the residential survey. The survey instrument was very similar to the residential survey and asked many of the same questions, although some questions were modified slightly to reflect the differences between commercial and residential customers. The commercial sample was composed of 43 percent industrial businesses, 21 percent multi-family residential management companies, 15 percent retail businesses and 8 percent bars, restaurants and lodging. BBC RESEARCH & CONSULTING PAGE 23

27 The commercial customers generally rated the quality of the water they received from the District higher than residential customers. Overall, 28 percent said the hardness of their water was the major influence of the rating they gave the District s water. Twenty-eight percent of commercial customers are further treating the water they receive from the District by either filtering it or using some sort of water softener. This compares to 53 percent of residential customers. When asked about their preference for doing something to reduce the hardness of the District s water, 62 percent of commercial customers said they would prefer centralized treatment or a rebate program to no action. More than 40 percent of commercial customers would be willing to pay a 15 percent rate increase on their monthly water bill to improve the quality of the water they receive from the District through additional centralized treatment, 25 percent of commercial customers would accept a 25 percent rate increase on their monthly water bill and 15 percent would be willing to pay a 35 percent increase. In general, commercial customers were less willing to pay for a $250 rebate program and more willing to pay for a $1,200 rebate program compared to residential customers. When asked about their willingness to pay for a rebate program, 41 percent of commercial customers said they would be willing to pay $2 per month if they would be eligible for a $250 rebate on the purchase price of a water filtration or water softening system. Approximately 66 percent of commercial customers said they would be willing to pay $12 per month if they would be eligible for a $1,200 rebate on the purchase price of a water filtration or water softening system. Who are the Survey Respondents? During April 2017, telephone surveys were completed with adult individuals living in 400 different households in the District s service area. Fifty-one percent of survey respondents were female, forty-nine percent were male. The survey was specifically targeted at the District s residential water customers (and the sample was developed from the District s corresponding water billing data). Since survey respondents were restricted, by design, to people who directly pay their water bills (as opposed to having water service included in their monthly rental payments), most respondents were homeowners. Consequently, the demographics of the survey respondents are more reflective of the average characteristics of homeowners in Commerce City than the average characteristics of Commerce City residents overall. Approximately 83 percent of the respondents reported that they owned their home and 17 percent reported renting. In Commerce City as a whole, about 70 percent of households own their homes, and about 30 percent rent their homes. 1 Respondent ages. While very few individual respondents were under the age of 25 (less than two percent), 44 percent of the individuals responding to the survey were under the age of 45. Thirty-eight percent of respondents were between the ages of 45 and 64, and 18 percent of respondents were age 65 and older. Figure 33 provides a graphic depiction of the age distribution of survey respondents. 1 American Community Survey, year estimates. BBC RESEARCH & CONSULTING PAGE 24

28 Figure 33. Age distribution of survey respondents 65 or older 18% 18 to 24 2% 25 to 34 18% n = 400. Source: BBC Research & Consulting from household telephone survey conducted April, to 64 14% 35 to 44 25% 45 to 54 24% Household income. Figure 34 depicts the distribution of household incomes among the respondents. Thirteen percent of survey respondents indicated their household income was under $25,000. Seventeen percent of survey respondents indicated their household income was between $25,000 and $49,999. Fifty-eight percent of survey respondents reported that their household income was over $50,000. Figure 34. Household incomes of survey respondents Notes: n = 352. Numbers may not add to 100% due to refusals and non-responses being omitted from the figure. Source: BBC Research & Consulting from household telephone survey conducted April, Race and Ethnicity. Figure 35 depicts the distribution of the race and ethnicity of respondents. 65 percent of respondents who reported their race and ethnicity as white (non- Hispanic), 29 percent were Hispanic, 1 percent were African American, 1 percent were American Indian, 1 percent were Asian and 2 percent stated they were of more than one race. BBC RESEARCH & CONSULTING PAGE 25

29 Figure 35. Race and ethnicity of respondents n = 368. Source: BBC Research & Consulting from household telephone survey conducted April, Amount of time living in Commerce City. Figure 36 depicts the length of time respondents have lived in Commerce City. Forty-six percent of respondents have lived in the area for between 0 to 4 years, while 23 percent of respondents have lived in Commerce City for 5 to 10 years. Fifteen percent of respondents have lived in Commerce City for 11 to 15 years and only 4 percent of respondents have lived in the area for 16 to 20 years. Approximately 12 percent of respondents have lived in Commerce City for 21 or more years. Figure 36. Length of time living in Commerce City n = 115. Source: BBC Research & Consulting from household telephone survey conducted April, BBC RESEARCH & CONSULTING PAGE 26