American Canyon City Council
April 16, 2024

REGULAR CITY COUNCIL MEETING AGENDA
City Hall - Council Chambers
4381 Broadway St., Suite 201, American Canyon
April 16, 2024
6:30 PM

AMENDED AGENDA
This agenda has been amended by the following: Consent Item No. 11 - revisions were made to the staff report and attachments 1 & 2.

Tonight's mee1ng is a limited public forum. American Canyon promotes respec3ul and responsible behavior among its mee1ng par1cipants, whether they are present in person or remotely. Using offensive language or remarks that promote, foster, or perpetuate discrimina1on based on race, creed, color, age, religion, gender marital status, status regarding public assistance, na1onal origin, physical or mental disability or sexual orienta1on/gender iden1fica1on, as well as any other category protected by federal, state or local laws will not be tolerated. In the case of an occurrence, the speaker will be immediately disconnected from the microphone.

PUBLIC PARTICIPATION
City Council and other public mee"ngs will be conducted in person. This mee"ng is also available via Zoom, is broadcast live to residents on Napa Valley TV, on our website and on YouTube.

Zoom Link: Click here. Webinar ID: 849 9699 3806 Passcode: 12345.Phone in to Zoom: 408-638-0968 Oral comments, during the meeting: Oral comments can be made in person during Open and Closed Session or through Zoom in Open Session only. On Zoom use the "raise your hand" tool during any public comment period.

To avoid confusion, hands raised outside of Public Comment periods will be lowered.

Wri<en comments: Submit wri3en comments by the eComments link, located on the Mee"ngs & Agendas page of our website. eComments are available to council members in real "me. To allow for Council review of comments, eComments will close at 3:00 pm on the day of the meeting.

The above iden"fied measures exceed all legal requirements for par"cipa"on in public comment, including those imposed by the Ralph M. Brown Act. For more informa"on, please call the Office of the City Clerk at (707) 647-4369 or email [email protected].

AGENDA MATERIALS: City Council agenda materials are published 72 hours prior to the mee"ng and are available to the public via the City’s website at www.cityofamericancanyon.org.

AMERICANS WITH DISABILITIES ACT: The City Council will provide materials in appropriate alterna"ve formats to comply with the Americans with Disabili"es Act. Please send a wri3en request to City Clerk at 4381 Broadway, Suite 201, American Canyon, CA 94503 or by email to [email protected]. Include your name, address, phone number and brief descrip"on of the requested materials, as well as your preferred alternative format or auxiliary aid, at least three calendar days before the meeting.

Mayor: Leon Garcia
Vice Mayor: David Oro
Councilmembers: Mariam Aboudamous, Mark Joseph, Pierre Washington CITY COUNCIL MEETING AGENDA APRIL 16, 2024
1 5:30 P.M. – CLOSED SESSION
The mayor will call the meeng to order and conduct roll call. Council will immediately convene into Closed Session aer hearing any public comment on Closed Session items. At 6:30 p.m. the Council will reconvene into Open Session and then resume Closed Session at the end of the meeting to address outstanding items, if necessary.

CALL TO ORDER - CLOSED SESSION

ROLL CALL - CLOSED SESSION

PUBLIC COMMENTS - CLOSED SESSION ITEMS
This me is reserved for members of the public to address the City Council on Closed Session Items only. Comments must be made in person and are limited to 3 minutes. Comments for items on the Open Session agenda will be taken when the item is called in Open Session. Comments for Items not on the Closed Session or Open Session agenda will be heard during the Open Session Public Comment period.

MEETING RECESS - COUNCIL TO CONVENE IN CLOSED SESSION
5:30 P.M. CLOSED SESSION ITEMS

1. Conference with Legal Counsel - Exis1ng Li1ga1on. Authorized pursuant to Government Code Section 54956.9(d)(1):
a. City of American Canyon v. City of Vallejo, et al. (Sacramento Superior Court Case No. 34-2022-00327471).
b. City of American Canyon v. Leon Dale Schmidt (Napa County Superior Court Cases No. 22CV001041 and 23PR00161).
c. City of Vallejo v. City of American Canyon et al . (Napa County Superior Court Case No. 23CV000510) [Giovannoni Project]
d. City of Vallejo v. City of American Canyon et al . (Napa County Superior Court Case No. 23CV001600) [Paoli/Watson Lane Annexation]
e. City of Vallejo v. City of American Canyon et al. (Napa County Superior Court Case No. 24CV000544)[Measure K]

2. Conference with Legal Counsel – An1cipated Li1ga1on. Authorized pursuant to Government Code Section 54956.9 (d)(2). Three (3) Matters. 6:30 P.M. OPEN SESSION - REGULAR MEETING

CALL TO ORDER - COUNCIL TO RECONVENE IN OPEN SESSION

PLEDGE OF ALLEGIANCE

ROLL CALL - OPEN SESSION

REPORT ON CLOSED SESSION/CONFIRMATION OF REPORTABLE ACTION

PROCLAMATIONS AND PRESENTATIONS
CITY COUNCIL MEETING AGENDA APRIL 16, 2024
2 3. Proclamation recognizing National Fair Housing Month

4. Proclamation recognizing April 22, 2024 as National Earth Day

5. Proclamation recognizing April 21-27, 2024 as National Volunteer Week.

6. Presentation - Rotary Club of Napa Spirit Horse Fundraiser

PUBLIC COMMENTS - ITEMS NOT ON CLOSED SESSION OR OPEN SESSION AGENDA This me is reserved for members of the public to address the City Council on items that are not on the Closed Session or Open Session agenda and are within the subject ma(er jurisdicon of the City Council. Comments are limited to 3 minutes. Comments for items on the Open Session agenda will be taken when the item is called in Open Session.The City Council is prohibited by law from taking any acon on ma(ers discussed that are not on the agenda, and no adverse conclusions should be drawn if the City Council does not respond to public comment at this time.

AGENDA CHANGES
The Mayor and Council may change the order of the Agenda or request discussion of a Consent Item. A member of the Public may request discussion of a Consent Item by making that request during Public Comment.

CONSENT CALENDAR

7. Minutes of April 2, 2024
Recommendation: Approve the minutes of the Regular City Council mee"ng of April 2, 2024.

8. Report Upon Return from Closed Session
Recommendation: Approve the Report Upon Return from Closed Session for the Regular City Council meeting of March 19, 2024.

9. 2024 Military Equipment Inventory and Equipment Use Policy Recommendation: Adopt a Minute Order approving the 2024 Military Equipment Inventory and Equipment Use Policy.

10. Utility Rate Municipal Code Updates
Recommendation: Waive final reading, read by "tle only, and adopt an Ordinance by the City Council of the City of American Canyon amending City of American Canyon Municipal Code (ACMC) Chapter 13.06: "Water Rates and Connec"on Fees", Chapter 13.14 "Water Conserva"on Plan", and Chapter 14.04: "Wastewater Rates and Charges" to establish new potable water, recycled water and wastewater property related fees and charges.

11. Proposed Measure U
Recommendation: Adopt a Resolu"on approving the proposed Napa Valley Transporta"on Authority – Tax Agency’s Measure U – Napa Valley Transporta"on Improvement Act, for the purpose of improving local streets and roads and investing in regional capital projects.

12. Amend Terms to Inter-Fund Loans made to the Recycled Water Enterprise from the Water and Sewer Enterprises
Recommendation: Adopt a Resolu"on amending the terms of the Inter-Fund Loans made to CITY COUNCIL MEETING AGENDA APRIL 16, 2024
3 the Recycled Water Enterpise Fund by the Water and Sewer Enterise Funds, seLng the interest rate for these Inter-Fund Loans at 1% and extending the total term to thirity years from date of origination.

PUBLIC HEARINGS

13. Watson Ranch Lot 8 Subdivision
Recommendation: A Resolu"on of the City Council of the City of American Canyon approving a Ves"ng Tenta"ve Subdivision Map for Watson Ranch Lot 8 to create 25 single family home lots on 2.3 acres within the Watson Ranch Specific Plan Medium Density Residen"al-16 zoning district located north of Car"er Street, Assessor’s Parcel Numbers 059-430-012 and 059-430-037 (File No. PL22-0024)

BUSINESS

14. Proposed Staffing FY 24/25 and Beyond
Recommendation: Receive a presenta"on on employee sa"sfac"on surveys, organiza"onal assessments and proposed staffing for Fiscal Year FY 24/25 and beyond.

15. Law Enforcement Services Contract Amendment
Recommendation: Adopt a Resolu"on approving Amendment 20 to the Agreement No. 200005B (previously known as Agreement No. 3220) with the Napa County Sheriff's Office for Law Enforcement Services for the period of July 1, 2024, through June 30, 2027.

MANAGEMENT AND STAFF ORAL REPORTS

MAYOR/COUNCIL COMMENTS AND COMMITTEE REPORTS
The Mayor and Council may comment on ma(ers of public concern and announce ma(ers of public interest; no collective council action will be taken.

1. Napa County Local Agency Formation Commission (Aboudamous)

2. Napa Valley Transportation Authority (Garcia/Joseph)

3. Napa Countywide Climate Action Committee (Garcia/Joseph)

4. Napa Countywide City Select Committee (Garcia)

FUTURE AGENDA ITEMS

16. Future Agenda Items of Note

ADJOURNMENT

CERTIFICATION
I, Cherri Walton, Deputy City Clerk for the City of American Canyon, do hereby declare that the foregoing agenda of the City Council was posted in compliance with the Brown Act prior to the meeting date. ______________________________________
Cherri Walton CMC, Deputy City Clerk
CITY COUNCIL MEETING AGENDA APRIL 16, 2024
4 CITY OF AMERICAN CANYON

PROCLAMATION

NATIONAL FAIR HOUSING MONTH
WHEREAS, on April 11, 1968, President Lyndon B. Johnson signed the Fair Housing Act into federal law to eliminate racial segregation and housing discrimination in the United States; and WHEREAS, the Fair Housing Act prohibits housing discrimination based on race, color, religion, gender, familial status, national origin, and disability, and commits federal funding recipients to affirmatively further fair housing in their communities; and WHEREAS, the City of American Canyon is committed to the mission and intent the Fair Housing Act to provide fair and equal housing opportunities for all; and WHEREAS, our social fabric, economy, health, and environment are strengthened by our diverse and inclusive community; and
WHEREAS, more than fifty years after the passage of the Fair Housing Act, housing discrimination persists; and
WHEREAS, acts of housing discrimination and barriers to equal housing opportunities are repugnant to our common sense of decency and fairness; and
WHEREAS, the City of American Canyon supports and advocates Fair Housing in our community with General Plan Housing Element programs, and partnering with Fair Housing Napa Valley, the Housing Authority of the City of Napa, and the Napa County Continuum of Care.

NOW, THEREFORE, BE IT PROCLAIMED that the City of American Canyon joinsthe Nation in recognizing the Month of April 2024 as National Fair Housing Month.

Date: April 16, 2024
__________________________________________
Leon Garcia, Mayor
5 CITY OF AMERICAN CANYON

PROCLAMATION
April 22, 2024 is National Earth Day
WHEREAS, the global community now faces extraordinary challenges such as environmental and climate change, food and water shortages, and global health issues; and WHEREAS, all people regardless of race, gender, income, or geography, have a right to a healthy, sustainable environment; and
WHEREAS, it is understood that the citizens of the global community must step forward and take action to create positive environmental changes to combat these global changes; and WHEREAS, we are all caretakers of our planet and have an obligation to combat climate change and environmental degradation to preserve the earth’s beauty and resources; and WHEREAS, a sustainable environment can be achieved on the individual level through educational efforts, public policy, and consumer behavior changes; and WHEREAS, it is necessary to broaden and diversify this global movement to achieve maximum success; and
WHEREAS, we encourage business owners, institutions, and individuals of American Canyon to celebrate the Earth and commit to being good stewards of our land and water resources to create a sustainable and healthy community; and
WHEREAS, on Earth Day and every day, the American Canyon community is encouraged to preserve our natural resources by participating in efforts to reduce consumption and waste, encourage to recycle, utilize renewable resources, eliminate pollution, and conserve water, land and energy; and
NOW, THEREFORE, BE IT RESOLVED, that I, Leon Garcia, Mayor of the City of American Canyon on behalf of the City Council, do proclaim April 22, 2024, as National Earth Day in American Canyon and call upon our community to celebrate and participate in Earth Day on April 21st, 2024, at Wetlands Edge Park from 10am-1pm.

Dated: April 16, 2024 ____________________________________ Mayor Leon Garcia
6 CITY OF AMERICAN CANYON

PROCLAMATION
April 21-27, 2024 is National Volunteer Week
WHEREAS, the City of American Canyon recognizes April 21st- 27th, 2024 as National Volunteer Week; and
WHEREAS, experience teaches us that government alone cannot solve all of our social problems and meet all of our opportunities, so we have focused on partnerships with businesses, faith-based organizations, nonprofit organizations, and community members; and WHEREAS, our nonprofit organization and community partners are essential to helping build a stronger community through volunteer projects and special events that help enhance our community’s quality of life; and
WHEREAS, we shine a light on the people who inspire us to serve, recognize and thank volunteers who lend their time, talent, and voice to make a difference within our community; and WHEREAS, volunteers empower others to take action, realize their ability to make a difference and be a force that transforms the world; and
WHEREAS, we recognize and thank the following agencies for their continued support and dedication to our community: American Canyon Troop Support; AHI Swim Team; American Canyon Bocce Ball League; American Canyon Cancer Society; American Canyon 4H; American Canyon Arts Foundation; American Canyon Chamber of Commerce; American Canyon AYSO Soccer League, Region 1187; American Canyon Community Church; American Canyon Community & Parks Foundation; American Canyon Cycling; American Canyon Cub Scouts Troop 7178 and 7062; ACHS Key Club; American Canyon Lions Club; American Canyon Little League; American Canyon VFW Post #1123; American Canyon Youth Football and Cheer; the Boys and Girls Club of American Canyon; Canyon Oaks Elementary PTA; CERT; Kiwanis Club of American Canyon; Donaldson Way Elementary PTA; Family Resource Center; Filipino-American Association of American Canyon; Friends of the Napa River; Friends of the American Canyon Library; Helping Hands Indo American Inc.; LGBTQ+ Connection; Moms Club of American Canyon; Napa Junction Elementary PTA; Soroptimist International; and Spirit Horse.

WHEREAS, through their generosity of time, money, and in-kind services, many opportunities have been afforded to our community, including food and essential service distribution, community and fundraiser events, programs and services, community projects, and so much more; and
7 NOW, THEREFORE, BE IT RESOLVED, that I, Leon Garcia, Mayor of the City of American Canyon on behalf of the City Council, do proclaim April 21
st
-27th, 2024 as National Volunteer Week, and
call upon American Canyon to celebrate the important work that these selfless volunteers do every day throughout our community.

Dated: April 16, 2024 ____________________________________ Mayor Leon Garcia
8 CITY OF AMERICAN CANYON

REGULAR CITY COUNCIL MEETING

ACTION MINUTES
April 2, 2024
5:30 P.M. – CLOSED SESSION

CALL TO ORDER - CLOSED SESSION
The City Council meeting was called to order at 5:30 p.m.

ROLL CALL - CLOSED SESSION

Present: Councilmember Mariam Aboudamous, Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia

Absent: None

PUBLIC COMMENTS - CLOSED SESSION ITEMS
Mayor Garcia called for public comments. Written comments: none. Oral comments: none. The public comments period was closed.

MEETING RECESS - COUNCIL TO CONVENE IN CLOSED SESSION
5:30 P.M. CLOSED SESSION ITEMS

1. Conference with Legal Counsel - Existing Litigation. Authorized pursuant to Government Code Section 54956.9(d)(1):
a) City of American Canyon v. City of Vallejo, et al. (Sacramento Superior Court Case No. 34- 2022-00327471).
b) City of American Canyon v. Leon Dale Schmidt (Napa County Superior Court Cases No. 22CV001041 and 23PR00161).
c) Center for Biological Diversity v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV000511).
d) Golden State Environmental Justice Alliance v. City of American Canyon et al. (Napa Superior Court Case No. 23CV000510).
e) City of Vallejo v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV000517).
f) City of Vallejo v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV001600).
9 2. Conference with Legal Counsel – Anticipated Litigation. Authorized pursuant to Government Code Section 54956.9 (d)(2). Three (3) Matters.
6:30 P.M. OPEN SESSION - REGULAR MEETING

CALL TO ORDER - COUNCIL TO RECONVENE IN OPEN SESSION
The City Council meeting was called to order at 6:35 p.m.

PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was recited.

ROLL CALL - OPEN SESSION

Present: Councilmember Mariam Aboudamous, Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia

Absent: None

REPORT ON CLOSED SESSION/CONFIRMATION OF REPORTABLE ACTION A report on Closed Session and confirmation of reportable action was given by City Attorney William Ross.

PROCLAMATIONS AND PRESENTATIONS

3. Proclamation - Sexual Assault Awareness Month
Mayor Garcia announced the proclamation. It was received by Sexual Assault Victim Services Program Manager Christina Gomez, of Napa NEWS.

4. Proclamation - April 2024 as Arts Month
Mayor Garcia announced the proclamation. It was received by American Canyon Arts Foundation President Clarence Mamaril, and on behalf of the American Canyon High School Visual and Performing Arts, ceramics teacher Adam Musto.

Councilmember Mariam Aboudamous left the meeting at 7:00 p.m.

PUBLIC COMMENTS - ITEMS NOT ON CLOSED SESSION OR OPEN SESSION AGENDA Mayor Garcia called for public comments. Written comments: none. Oral comments: Hugh Marquez was called to speak; Ken Leary was called to speak; Kap Prasad was called to speak; Karen Blandino was called to speak; Beth Marcus was called to speak; Karen Fritz was called to speak. The public comments period was closed.

AGENDA CHANGES
There were no changes to the agenda.
10 CONSENT CALENDAR
Action: Motion to adopt CONSENT CALENDAR made by Vice Mayor David Oro, seconded by Councilmember Mark Joseph, and CARRIED by roll call vote.

Ayes: Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia
Nays: None
Abstain: None

Absent: Councilmember Mariam Aboudamous
Excused: None

5. Minutes of March 19, 2024
Action: Approved the minutes of the Regular City Council meeting of March 19, 2024.

6. Report Upon Return from Closed Session
Action: Approved the Report Upon Return from Closed Session for the Regular City Council meeting of March 19, 2024.

7. Amendment No. 1 of the Melvin Road Sidewalk and Drainage Project (TR24-0200) Action: Adopted Resolution 2024-24 authorizing the City Manager to execute Amendment No. 1 (Agreement 2024-41) to Agreement No. 2023-10 with Coastland Civil Engineering, Inc., in the amount of $19,390, for a total contract amount not to exceed $156,832, for the Melvin Road Sidewalk and Drainage Project (TR24-0200).

8. Housing Element Municipal Code Updates
Action: Waived final reading, read by title only, and adopted Ordinance 2024-04 by the City Council of the City of American Canyon amending American Canyon Municipal Code (ACMC) Chapter 19.39 Accessory Dwelling Units, and additional ACMC amendments consistent with current State Law and Housing Element Implementation Program C.

9. CalOES Designation
Action: Adopted Resolution 2024-26 designating the Authorized Agents with California Governor's Office of Emergency Services (CalOES) for the purpose of obtaining federal and state financial assistance for emergencies.

PUBLIC HEARINGS

10. Utility Rate Increases - Proposition 218 "Protest Hearing" Council received a staff report from City Manager Jason Holley. Mayor Garcia opened the public hearing and called for public comments. Written comments: none. Oral comments: David GarciaArreola was called to speak; Davet Mohammed was called to speak; David Murphy was called to speak; Richard Schram was called to speak; Sharon Robinson was called to speak; Al Donaldson 11 was called to speak; Hugh Marquez was called to speak; Karen Fritz was called to speak; Kap Prasad was called to speak. Public comments and the public hearing were closed.

Action: Motion to adopt Waive first reading and adopt by title only an Ordinance amending City of American Canyon Municipal Code (ACMC) Chapter 13.06: "Water Rates and Connection Fees", Chapter 13.14 "Water Conservation Plan", and Chapter 14.04:
"Wastewater Rates and Charges" to establish new potable water, recycled water and wastewater property related fees and charges made by Councilmember Mark Joseph, seconded by Councilmember Pierre Washington, and CARRIED by roll call vote.

Ayes: Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia
Nays: None
Abstain: None
Excused: Councilmember Mariam Aboudamous
Action: Motion to request an annual review of utility fee information made by Councilmember Mark Joseph, seconded by Vice Mayor David Oro, and CARRIED by roll call vote.

Ayes: Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia
Nays: None
Abstain: None
Excused: Councilmember Mariam Aboudamous

BUSINESS

11. New 'Environmental Sustainability' Goal
Council received a staff report from City Manager Jason Holley. Mayor Garcia called for public comments. Written comments: none. Oral comments: Ken Leary was called to speak; Clarence Mamaril was called to speak; Al Donaldson was called to speak. The public comments period was closed.

Action: Motion to adopt Resolution 2024-27 approving a new 'Environmental Sustainability' Goal and various strategies as amended by City Attorney William Ross, made by Councilmember Mark Joseph, seconded by Councilmember Pierre Washington, and CARRIED by roll call vote.

Ayes: Councilmember Mark Joseph, Councilmember Pierre Washington, Vice Mayor David Oro, Mayor Leon Garcia
Nays: None
Abstain: None
Excused: Councilmember Mariam Aboudamous
12 MANAGEMENT AND STAFF ORAL REPORTS
Council received an oral update from Parks & Recreation Director Alexandra Ikeda.

MAYOR/COUNCIL COMMENTS AND COMMITTEE REPORTS

12. City Council Committee Report - Councilmember Mark Joseph Mayor and Councilmembers commented on items of interest.

FUTURE AGENDA ITEMS

13. Future Agenda Items of Note

ADJOURNMENT
The meeting was adjourned at 9:25 p.m.

CERTIFICATION
Respectfully Submitted,
_____________________________________
Taresa Geilfuss, City Clerk
13 William D. Ross
David P. Schwarz
Kypros G. Hostetter
Christina M. Bellardo
Law Offices of
William D. Ross
400 Lambert Avenue
Palo Alto, California 94306
Telephone: (650) 843-8080
www.lawross.com
Los Angeles Office:
11420 Santa Monica Blvd
#25532
Los Angeles, CA 90025
File No: 199/6
April 8, 2024

VIA E-MAIL
The Honorable Leon Garcia, Mayor
and Members of the City Council
City of American Canyon
4381 Broadway, Suite 201
American Canyon, CA 94503
Re: Report Upon Return from Closed Session; Regular City Council Closed Session Meeting of the American Canyon City Council of April 2, 2024 Dear Mayor Garcia and Members of the City Council:

This communication sets forth reportable action, if any, of the City Council (“Council”) of the City of American Canyon (“City”), consistent with provisions of the Ralph M. Brown Opening Meeting Act (Government Code Section 54950, et seq.) resulting from the Closed Session of the Regular City Council Closed Session Meeting of April 2, 2024, consistent with Government Code Section 54957.1.

At 5:30 p.m. Mayor Garcia convened the Council (including Vice Mayor Oro, Councilmembers Washington and Joseph) in Open Session to determine if there were any comments on the matters agendized for Closed Session, and after concluding that there were none, adjourned to Closed Session at 5:32 p.m. (Councilmember Aboudamous joined the Closed Session at 5:56 p.m.).

There were two matters agendized for City Closed Session consideration:

1. Conference with Legal Counsel – Existing Litigation
Authorized Pursuant to Government Code Section 54956.9(d)(1):
a. City of American Canyon v. City of Vallejo, et al.
(Sacramento Superior Court Case No. 34-2022-00327471);
b. City of American Canyon v. Leon Dale Schmidt, (Napa
County Superior Court Case No. 22CV001041 and
23PR00161);
14 The Honorable Leon Garcia, Mayor
and Members of the City Council
April 8, 2024

c. Center for Biological Diversity v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV000511); d. Golden State Environmental Justice Alliance v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV000510);
e. City of Vallejo v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV000517); and,
f. City of Vallejo v. City of American Canyon et al. (Napa County Superior Court Case No. 23CV001600).

2. Conference with Legal Counsel – Anticipated Litigation Authorized Pursuant to Government Code Section No. 54956.9(d)(2) Three (3) Matters.

With respect to Closed Session Agenda Item No. 1.a., there was no reportable action under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(1).

With respect to Closed Session Agenda Item No. 1.b., there was reportable action in the form of unanimous direction (4-0) to the City Attorney to direct a communication to the Public Guardian and the Counsel concerning the City’s potential foreclosing of its liens on the involved property as a nuisance still exists on the property and that Mr. Schmidt continues to reside in an automobile on the property without any sanitation facilities. Except as indicated, there was no other reportable action under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(1).

With respect to Closed Session Agenda Item No. 1.c. through 1.e, there was reportable action again emphasizing the dismissal of the Center for Biological Diversity as of March 28, 2024, indicating that the City’s response to the Opening Brief of the City of Vallejo would be filed early next week. Except as indicated, there was no other reportable action under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(1).

With respect to Closed Session Agenda Item No. 1.f., there was no reportable action under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(1).

With respect to two of the three matters considered under Closed Session Agenda Item No.

2., there was no reportable action under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(2) with respect to two of the three matters considered. 15 The Honorable Leon Garcia, Mayor
and Members of the City Council
April 8, 2024

With respect to the third matter which was considered between 6:15 p.m. and 6:26 p.m., and in which neither the City Manager nor City Attorney was present, there also was no reportable action as confirmed by Special Counsel under the common law attorney-client privilege and that provided by Government Code Section 54956.9(d)(2).

Your Council concluded the Closed Session at 6:28 p.m.

In Open Session, it was indicated that a written report upon return from Closed Session consistent with Government Code Section 54957.1, would be prepared concerning the matters agendized for Closed Session.

This communication should be reviewed under the Consent portion of the Agenda of your next Regular or Special City Council Meeting.

Should you have questions concerning this Report, it may be taken off the Consent calendar when agendized in the future, or our office may be contacted in the interim.

Very truly yours,
William D. Ross
City Attorney
WDR:jf
cc: Jason B. Holley, City Manager
Maria Ojeda, Assistant City Manager
Taresa Geilfuss, City Clerk
Cherri Walton, Deputy City Clerk
16 CITY COUNCIL AGENDA
APRIL 16, 2024

STAFF REPORT

CONSENT
ITEM NUMBER: 9.

TITLE
2024 Military Equipment Inventory and Equipment Use Policy

RECOMMENDATION
Adopt a Minute Order approving the 2024 Military Equipment Inventory and Equipment Use Policy.

CONTACT
Rick Greenberg, Chief of Police

BACKGROUND & ANALYSIS
Assembly Bill Number 481 (AB 481), codified at Government Code sec5ons 7070 through 7075, required the American Canyon Police Department (ACPD) to obtain approval from City Council of its military equipment use policy; it was adopted it on April 19, 2022. Approval from City Council on an annual basis, with any changes to the policy or the equipment inventory is also required.

The term “military equipment”, as used in AB 481, does not necessarily indicate equipment used by the military. Items deemed to be “military equipment” include, but are not limited to, unmanned aerial or ground vehicles, armored vehicles, command and control vehicles, pepper balls, less lethal shotguns, less lethal 40mm projec5le launchers, long range acous5c devices, and flashbangs. The list of items considered “military equipment” by AB 481 are employed by many law enforcement agencies across the country as best practices to enhance citizen and officer safety.

Provided as an a@achment is the 2024 inventory list of military equipment that the Napa County Sheriff Department (NSD) maintains. Also a@ached is the ACPD and NSD’s military Equipment use policy. The use of the military equipment iden5fied on the inventory list is vital to ACPD’s mission and will continue to be strictly regulated through internal processes and oversight. 2024 General changes/updates:

Replaced policy numbers with names to reduce confusion for when the policy manual changes.

Updates to quantities and costs.

Reorganized to put similar items together for ease of reference. 17 Additional Equipment for 2024:

Robotex Avitar Robot
Electronic Noise / Flash Delivery Device
Incident Command Vehicle

COUNCIL PRIORITY PROGRAMS AND PROJECTS
Public Safety: "Ensure American Canyon remains a safe community."

FISCAL IMPACT
The cost of the current equipment is included in the exis5ng contract with the Napa County Sheriff Department.

ENVIRONMENTAL REVIEW
None.

ATTACHMENTS:

1. Military Equipment Policy

2. AB 481 Equipment 2024 Listing
18 Policy
706
Napa County Sheriff's Office
Napa County SO Policy Manual
Copyright Lexipol, LLC 2022/03/09, All Rights Reserved.

Published with permission by Napa County Sheriff's Office Military Equipment - 1
Military Equipment
706.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072). While the Legislatures defines our equipment as military equipment, this Office defines this equipment as law enforcement equipment. 706.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body – The elected or appointed body that oversees the Office.

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.
19 Napa County Sheriff's Office
Napa County SO Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/09, All Rights Reserved.

Published with permission by Napa County Sheriff's Office Military Equipment - 2
706.2 POLICY
It is the policy of the Napa County Sheriff's Office that members of this office comply with the provisions of Government Code § 7071 with respect to military equipment. 706.3 MILITARY EQUIPMENT COORDINATOR
The Sheriff should designate a member of this office to act as the military equipment coordinator.

The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying office equipment that qualifies as military equipment in the current possession of the Office, or the equipment the Office intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Napa County Sheriff's Office (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the office’s funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Sheriff and ensuring that the report is made available on the office website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Office will respond in a timely manner.
706.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Office:
[Insert attachment here]
706.5 APPROVAL
The Sheriff or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Sheriff or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the office website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
20 Napa County Sheriff's Office
Napa County SO Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/09, All Rights Reserved.

Published with permission by Napa County Sheriff's Office Military Equipment - 3
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this office. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 706.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment used by any member of this jurisdiction shall be approved for use and in accordance with this Office's policy. Military equipment used by other jurisdictions that are providing mutual aid to this jurisdiction shall comply with their respective military equipment use policies in rendering mutual aid.
706.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Sheriff or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Sheriff or the authorized designee should also make each annual military equipment report publicly available on the office website for as long as the military equipment is available for use.

The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in office inventory. 706.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Office shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Office should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.
21 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
1535 AIRPORT BOULEVARD
NAPA, CALIFORNIA 94558-6292
(707) 253-4501

OSCAR ORTIZ
Sheriff - Coroner

Commitment to
Community
Napa County Sheriff
AB 481
Equipment Report
2024
22 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Considerations:

The AB481-reportable equipment inventory sheets contained within this document were compiled during Q1 2024.

With respect to costs, funding, annual upkeep expenses and estimated effective lifespan, every effort has been made to be as accurate as possible while at the same time acknowledging that many factors directly affecting those aforementioned values are unpredictable.

Costs associated with the following items represent the best estimates at the time this document was prepared. Many of these items are not purchased from manufacturers, but from dealers, who adjust costs in accordance with market factors beyond the predictive abilities or control of Napa SO.

Due to the unpredictable nature of the law enforcement profession, many of the item estimated upkeep costs and effective lifespans are best estimates and may vary greatly on a year-to-year basis, due to the availability of training, type of operational incidents or other factors.
“Annual Allocation” refers to the quantity needed “on hand” over the course of a calendar year to meet all reasonably-anticipated operational and training needs. Some items may be carried over in inventory year to year depending on operational/training tempo.

With respect to terminology, “expendable equipment” items are items that typically have a one-time use and then cannot be used again, such as chemical agents or smoke grenades.

In an effort to be as efficient as possible, many items, both “expendable” and otherwise have operational applications across a diverse set of Napa SO missions. For example, “40mm launcher (single and multi-shot capability)” is an item that is utilized by Napa SO Patrol, SWAT, Mobile Field Force and other auxiliary assignments. The cost and unit allocation estimates that state “across all divisions” represents the best estimation of the requirements for those items to fill all needs for the Sheriff’s Office.

Additionally, there are costs for non-AB481 equipment that are intrinsically tied to the costs for the following items. For example, slings, carrying cases, magazines, sighting systems, flashlights, cleaning supplies, batteries and other non-AB481 reportable items are not included in the cost estimations, unit allocation or upkeep portions of this report. 23 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
It should also be noted that the legislature has designated these items as “military equipment”. While the military may use some of the same equipment, the Sheriff’s Office (SO) deems all of this equipment as law enforcement equipment. Much the same as the military using handcuffs, there are items in common. The manner and reason they are used is significantly different.

For many years, this office has also displayed and offered education about our equipment and why we use it. The vast majority of equipment on this list was approved for funding through the County of Napa. From our Citizen’s Academy to National Night Out, we have always been open for discussion and education
24 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community

TABLE OF CONTENTS

1. 40mm launcher

2. Spede-Heat 40mm munitions

3. Ferret Round 40mm munitions

4. 40mm muzzle blast round

5. Smoke – handheld delivered devices

6. 40mm warning/signaling munition

7. Exact/Direct Impact 40mm munitions

8. Pepper Ball launcher and Munitions

9. Chemical Agents – handheld delivered devices

10. Stinger Grenade

11. 12-gauge drag-stabilized munition

12. 12-guage muzzle bang/launching cartridge

13. BP-2 Noise/Flash Diversionary Device (NFDD) Delivery Pole

14. Noise/Flash Diversionary Device (Flashbang)

15. Electronic Noise/Flash Diversionary Device (ENFDD AKA – Flashbangs) – 1.4 gram

16. Recon Robotics Throwbot

17. Robotex Avatar Robot

18. DJI/SKY Hero/Inspired Flight sUAS (AKA – Drones)

19. Zistos Under-the-door Camera

20. Short Barreled select fire AR-15 style rifle (various configurations)

21. Sub-compact select-fire weapon system

22. Firearms suppressor

23. Infrared (IR) laser designator

24. Tactical Bolt-action Rifles

25. Armor Piercing (AP) projectiles

26. Remotec Andros F6 Bomb Squad Robot

27. Det Cord

28. Nonel Detonator

29. Ballistic Breaching Shotgun

30. Ballistic Breaching hollow-point cutter round

31. Ballistic Breaching rounds

32. EVI 2017 HDS Bomb Squad Command Vehicle

33. Lenco Bearcat G3 Armored Vehicle

34. Incident Command Vehicle

35. Rapid Response Incident Command Vehicle
25 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
40 mm launcher (single and multi-shot capability)
Description:

The 40 mm less lethal launcher is device that has the ability to deploy multiple types of 40 mm projectiles.

Purpose & Use:

A 40 mm launcher is used to deploy less lethal munitions and chemical agents for a variety of missions
Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $800.

Annual estimated training and operational allocation of approximately 30 units across all divisions. Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The 40 mm launcher shall be used by NSO Deputies in accordance with all applicable laws and polices during legitimate law enforcement actions.

Training Requirements:

Must complete annual qualification and regularly required refresher training.

Compliance Protocols:

Use of the 40 mm launcher shall conform to all relevant NSO policies, including but not limited to NSO Use of Force, Control Devices and Techniques, SWAT and Crisis Negotiation Teams policies, as well as all local, state and federal use of force laws.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 26 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Spede-Heat 40mm Round
Description:

The Spede-Heat 40mm Round incorporates an aluminum shell and utilizes black powder as the propellant. The Spede-Heat 40mm Round is designed to deliver one dual-ported chemical or smoke canister from a 40mm launcher at various ranges, product dependent.

The Spede-Heat 40mm Round is available in OC (Oleoresin Capsicum) or CS (Chlorobenzylidenemalononitrile) and Saf-Smoke. Spede-Heat 40mm round is deployed from a 40mm launcher.

Purpose & Use:

The Spede-Heat 40mm Round can be used to conceal tactical movement. They can be used in crowd control management during unruly or riot behavior. The purpose of the Spede-Heat 40mm Round is to minimize the risks to all parties through pain compliance, temporary discomfort, and/or incapacitation of potentially violent or dangerous subjects.

The different configurations allows for different distances and chemical agent or smoke deployments.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $25.

Annual estimated training and operational allocation of approximately 4 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the Spede-Heat 40mm Round.

Compliance Protocols:

Use of Spede-Heat 40mm Round shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 27 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Ferret Round-40MM
Description:

The Ferret 40mm Round is a frangible projectile filled with chemical agent. It is designed to deliver chemical agents in barricade situations from a 40mm launcher. It is available with either liquid or powder carrier for the agent. The payload can hold OC (Oleoresin Capsicum) or CS (Chlorobenzylidenemalononitrile). Spin stabilization from barrel rifling affords maximum stand-off distance and accuracy for safety.

Purpose & Use:

The Ferret 40mm Round is non-burning and suitable for indoor use. Used primarily by tactical teams, is designed to penetrate barriers, such as windows, hollow core doors, wallboard and thin plywood. Upon impacting the barrier, the nose cone ruptures and instantaneously delivers a small chemical payload inside of the structure or vehicle. Is primarily used to dislodge barricaded subjects from very small confined areas. Its purpose is to minimize the risks to all parties through pain compliance, temporary discomfort and/or incapacitation of potentially violent or dangerous subjects.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $27.

Annual estimated training and operational allocation of approximately 20 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the Ferret 40mm Round.

Compliance Protocols:

Use of the Ferret 40mm Round shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 28 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
40MM Muzzle Blast Round
Description:

The 40mm Muzzle Blast Rounds incorporate an aluminum shell and utilize smokeless powder as the propellant. The 40mm Muzzle Blast Rounds are designed to deliver chemical agents in the immediate area (30 feet) of the grenadier. The 40mm Muzzle Blast Round is available in OC (Oleoresin Capsicum) or CS (Chlorobenzylidenemalononitrile). 40mm Muzzle Blast is deployed from a 40mm launcher.

Purpose & Use:

The 40mm Muzzle Blast Rounds are widely used as a crowd management solution for the immediate and close deployment of chemical agent in crowd control management during unruly or riot behavior. However, it has proven successful during tactical operations. As a pain compliance round for crowd management, the 40mm Muzzle Blast Rounds are an excellent device for deploying chemical laden powder at close ranges for indoor or outdoor operations. The 40mm Muzzle Blast provides instantaneous emission of chemical agent directly at or on riotous, non-compliant subjects close to the police line or within confined spaces. As a tactical round, the Muzzle Blast Rounds have been used in operations such as barricaded subjects, room clearing, space denial, and a means of contaminating crawl spaces and attics. The purpose of the Muzzle Blast Round is to minimize the risks to all parties through pain compliance, temporary discomfort, and/or incapacitation of potentially violent or dangerous subjects.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $50.00.

Annual estimated training and operational allocation of approximately 10 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the 40mm Muzzle Blast Rounds.

Compliance Protocols:

Use of the 40mm Muzzle Blast Rounds shall conform to all relevant NSO policies, including but not limited to NSO SWAT and Crisis Negotiation Teams, Hostage and Barricade Incidents and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 29 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Smoke- handheld smoke grenade devices
Description:

The handheld smoke grenade devices utilizes an M201A1 Fuze with enclosed canister that come in a variety of sizes, colors, configurations that uses HC (Hexachlorethane) and SAF-Smoke. Smoke is discharged through gas ports located on the canister.

Purpose & Use:

Handheld smoke grenade devices can be used to conceal tactical movement. They can be used in crowd control during unruly or riot behavior. It can be used to detect and/or dislodge a barricaded subject. It can also be used as an emergency signaling device. The different configurations allows for indoor or outdoor deployments.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $43.00. Annual estimated training and operational allocation of approximately 8 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use handheld smoke grenade devices.

Compliance Protocols:

Use of handheld smoke grenade devices shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 30 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
40 MM Warning/Signaling Round
Description:

The 40mm Aerial Warning/Signaling Round series are designed to produce 170 dB of sound, and 5 million candelas of light. Each munition is manufactured to deflagrate at a set distance and altitude and has the option of marking or irritant payloads. These distances are 50,100,200 and 300 meters from the point of origin. The munition is deployed from a 40mm launcher.

Purpose & Use:
40mm Aerial Warning/Signaling Round are used to distract/disorientate individuals and provide less lethal response against potential threats. It is also effective in directing the movement of unruly or riot behavior crowds.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $40.

Annual estimated training and operational allocation of approximately 5 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the 40mm Aerial Warning/Signaling Round.

Compliance Protocols:

Use of the 40mm Aerial Warning/Signaling Round shall conform to all relevant NSO policies, including but not limited to NSO Policy Control Devices and Techniques, SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 31 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Exact/Direct Impact 40MM Sponge Munitions
Description:

The Exact Impact 40 MM Sponge Munition is a lightweight, high-speed projectile consisting of a plastic body and sponge nose. The round utilizes smokeless powder as the propellant, and, therefore, have velocities that are extremely consistent.

The Direct Impact 40 MM Foam Munition is a lightweight projectile that consists of a plastic body and a crushable foam nose that contains a powder payload. This payload area can hold inert, marking, OC (Oleoresin Capsicum) or CS
(Chlorobenzylidenemalononitrile) powder. The crushable foam nose dissipates energy upon impact while releasing the powder payload. The munition is deployed from a 40mm launcher.

Purpose & Use:

The Exact Impact 40 MM Sponge Munition and the Direct Impact 40 MM Foam Round is a point-of-aim, point-of-impact, direct-fire munition that is most commonly used in situations where greater accuracy and deliverable energy is desired for the incapacitation of an aggressive, non-complaint subject at longer distances. These are considered Less Lethal Impact Munitions (LLIM).

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $25.

Annual estimated training and operational allocation of approximately 40 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the Exact Impact 40 MM Sponge munition and the Direct Impact 40 MM Foam munition.

Compliance Protocols:

Use of the Exact Impact 40 MM Sponge munition and the Direct Impact 40 MM Foam munition shall conform to all relevant NSO policies, including but not limited to NSO Policy Control Devices and Techniques, SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force polices.

Must maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 32 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Pepper Ball launcher and Munitions
Description:

The Pepperball launchers are designed to give patrol officers an easy to operate non-lethal option. The launchers uses PepperBall .68 caliber round or VXR projectiles and is powered by either HPA or an 88, 12 or 8 gram single use CO2 cartridge.

Pepperball projectiles contain 2.5-5.0% PAVA. It is effective for direct impact and area saturation. .68 caliber and weigh 2.5 grams.

Purpose & Use:

Lawful application of force delivered with the intent to subdue or render non-threatening.

The less lethal munitions may be used as an option to de-escalate a potentially dangerous/deadly situation, with a reduced potential for death or serious injury to all persons involved. It is accepted that the probability exists for bodily harm to occur.

However, it must also be accepted that the application of such force may be the only alternative to using lethal force to stop the subject’s actions.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Launcher Unit cost of $300 per launcher. Annual estimated training and operations allocation of approximately 10 launchers across all divisions. Estimated effective lifespan for launchers are 10+ years.

Pepperball projectile unit cost is $3.00/ea. Annual estimated training and operational allocation of approximately 400 units. All Pepperball projectiles have a life span of 3 years.

NSO procedural rules that govern use:

The Pepper Ball launcher shall be used by NSO Deputies in accordance with all applicable laws and polices during legitimate law enforcement actions.

Training Requirements:

Must complete annual qualification and regularly required refresher training.

Compliance Protocols:

Use of the Pepper Ball launcher shall conform to all relevant NSO policies, including but not limited to NSO Use of Force, Control Devices and Techniques, SWAT and Crisis Negotiation Teams policies, as well as all local, state and federal use of force laws.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 33 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Chemical Agents- handheld delivered grenade devices
Description:

The Chemical Agents handheld grenade devices utilizes an M201A1 Fuze with enclosed canister that come in a variety of sizes, configurations and irritant payloads. In the OC (Oleoresin Capsicum) or CS (Chlorobenzylidenemalononitrile) configurations, pelletized chemical agent is discharged through a gas port(s) from the canister.

Purpose & Use:

Chemical Agents handheld grenade devices can be used to conceal tactical movement.

They can be used in crowd control management during unruly or riot behavior as well as tactical deployment situations to detect and/or dislodge barricaded subjects. The purpose of Chemical Agents handheld grenade devices is to minimize the risks to all parties through pain compliance, temporary discomfort, and/or incapacitation of potentially violent or dangerous subjects. The different configurations allows for indoor or outdoor deployments.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $45.

Annual estimated training and operational allocation of approximately 15 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use Chemical Agents handheld grenade devices.

Compliance Protocols:

Use of Chemical Agents handheld grenade devices shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 34 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Stinger Grenade
Description:

The Stinger Grenade with Safety Clip is a combination Less Lethal Impact Munitions (LLIM) and Distraction Device that may incorporate optional CS (Chlorobenzylidenemalononitrile) or OC (Oleoresin Capsicum) laden powder, if desired.

The Stinger Grenade is a maximum effect device as it delivers up to four stimuli for psychological and physiological effect: rubber pellets, light, sound, and optional chemical agent or OC.

Purpose & Use:

The Stinger Grenade is most widely used in crowd control management during unruly or riot behavior as well as tactical deployment situations to detect and/or dislodge barricaded subjects. Upon deployment, the blast is sufficient to project the rubber balls (32 cal. /60 cal. Option) and optional chemical agent in a 50 foot radius.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $50.

Annual estimated training and operational allocation of approximately 8 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the Stinger Grenade.

Compliance Protocols:

Use of the Stinger Grenades shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 35 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
12-Gauge-Drag-Stabilized Munition
Description:

The 12-Gauge Drag Stabilized Munition is comprised of a translucent 12-Gauge shell loaded with a 40 gram, tear shaped bag made from a cotton and ballistic material blend and filled with #9 shot. The rounds are also available as green marking powder.

Purpose & Use:
12-Gauge Drag Stabilized Munition is a point-of-aim, point-of-impact, direct-fire munition that is most commonly used in situations where greater accuracy and deliverable energy is desired for the incapacitation of an aggressive, non-complaint subject at longer distances. These are considered Less Lethal Impact Munitions (LLIM). The munition is deployed from a designated and clearly marked less lethal 12-gauge shotgun.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $8.00.

Annual estimated training and operational allocation of approximately 250 units.

Training Requirements:

Deputies must successfully complete department-approved training to be able to use 12- Gauge Drag Stabilized Munitions.

Compliance Protocols:

Use of 12-Gauge Drag Stabilized Munitions shall conform to all relevant NSO policies, including but not limited to NSO Policy Control Devices and Techniques, SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 36 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
12-Gauge Muzzle Bang/Launching Cartridge (1370 Launching Cup) Description:

The 12-Gauge Muzzle Bang / Launching Cartridge incorporates an opaque shell and utilizes black powder as the propellant. It has the ability to be used alone as a Muzzle Bang for crowd management during unruly or riot behavior as well as tactical deployment situations against or for propelling grenades (Chemical Agent/Smoke) when using the 1370 Launching Cup.

Purpose & Use:

The 12-Gauge Muzzle Bang / Launching Cartridge used alone produces 170 dB of sound output. It is designed to be aimed at the floor or wall at a 45° angle. This round should not be direct fired at personnel. It is used as a crowd management tool in crowd control situations as a means of warning, intimidation or diversion. It may be deployed in the air over crowds or to the side for dissuading movement in a given direction. It may also be deployed to the far side of buildings to divert the attention away from an approach or entry.

Launching Cartridge application: The 12-Gauge Muzzle Bang / Launching Cartridge used in conjunction with the 1370 Launching Cup provides the operator with the ability of projecting the Pocket Tactical family of hand delivered grenades. The use of the Launching Cup will project the grenades further than can be hand delivered. This increases the distance between operators and crowds, reducing the chance for injuries to both parties Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $7/ea.

Annual estimated training and operational allocation of approximately 100 units.

Training Requirements:

Deputies must successfully complete department-approved training to be authorized to use the 12- Gauge Muzzle Bang / Launching Cartridge.

Compliance Protocols:

Use of the 12-Gauge Muzzle Bang / Launching Cartridge shall conform to all relevant NSO policies, including but not limited to NSO Use of Force, SWAT and Crisis Negotiation Teams, Hostage and Barricade Incidents and Mobile Field Force policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations and all relevant local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 37 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
BP-2 Noise/Flash Diversionary Device (NFDD) Delivery Pole Description:

The BP-2 NFDD delivery pole enhances safety and performance when delivering a NFDD. The BP-2 allows an operator the most effective way to break and rake a window, deliver a NFDD into an opening and prevent the device from coming in contact with people..

Purpose & Use:

NFDD’s are used to distract suspects during high-risk operations. Use of the BP-2 allows for direct control of the NFDD placement.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $2,000.

Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan approximately 10 years.

NSO procedural rules that govern use:

The BP-2 NFDD delivery pole shall only be handled by trained deputies. NFDD’s will be installed by trained deputies. Members of the SWAT team and auxiliary members have been provided in-person hands-on training on the device.

Training Requirements:

Every operator shall show competency when using the BP-2 NFDD delivery pole.

Deputies must complete training on NFDD’s from certified instructors prior to deployment and receive annual instruction on deployment and use.

Compliance Protocols:

Use of BP-2 NFDD Delivery Pole as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations, as well as all local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 38 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Noise/Flash Diversionary Device (NFDD AKA – Flashbangs) – 12 gram and 4 gram Description:

NFDD utilizes an M201A1 type fuse with Hex design steel body. The bodies are reloadable and are reusable up to 25 times. The charges are available in full 12 gram loads, or 4 gram training charges.

Purpose & Use:

NFDD’s are used to distract suspects during high risk operations.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $40/ea. Annual estimated training and operational allocation of approximately 50 units.

NSO procedural rules that govern use:

NFDD’s shall only be handled by trained deputies. Charges for the NFDD’s will be installed by trained deputies. All devices shall be stored in compliance with ATF regulations and handled in accordance with best practices as established by NFDD training standards.

Training Requirements:

Certified instructors much complete certification every four years. Deputies must complete training to use NFDD from certified instructors prior to deployment, and receive annual instruction on deployment and use.

Compliance Protocols:

Use of NFDD as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations, as well as all local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 39 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Electronic Noise/Flash Diversionary Device (ENFDD AKA – Flashbangs) – 1.4 gram Description:

NFDD utilizes a reusable electronic “smart initiator” with a microprocessor that verifies all safety conditions are met. The body is a single use reload that does not contain flash powder. The ratio of fuel to oxidizer in each body reservoir is designed to reduce sensitivity.

Purpose & Use:

NFDD’s are used to distract suspects during high-risk operations.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $50/ea. Annual estimated training and operational allocation of approximately 50 units.

NSO procedural rules that govern use:

NFDD’s shall only be handled by trained deputies. Charges for the NFDD’s will be installed by trained deputies. All devices shall be stored in compliance with ATF regulations and handled in accordance with best practices as established by NFDD training standards. This specific device is not considered a destructive device until the fuse and reload are assembled.

Training Requirements:

Certified instructors much complete certification every four years. Deputies must complete training to use NFDD from certified instructors prior to deployment and receive annual instruction on deployment and use.

Compliance Protocols:

Use of NFDD as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Must also maintain compliance with local, state and federal storage, transportation and handling regulations, as well as all local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 40 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Recon Robotics Throwbot (AKA- Throwbot)
Description:

The Throwbot is a throwable micro-robot platform that enables operators to obtain instantaneous video and audio reconnaissance within indoor or outdoor environments.

Purpose & Use:

The Throwbot is used to gain mission critical information in harsh or hazardous environments.

Cost & Quantity Allocation:

Any repairs or replacements will be through warranty and if it is not covered through warranty, then funding will come from the SWAT budget/funding source; there are no annual fees associated with this device. Unit cost approximately $15,000. Annual estimated training and operational allocation of approximately 1 units. Estimated effective lifespan 5+ years.

NSO procedural rules that govern use:

The Throwbot shall only be handled and controlled by trained deputies.

Training Requirements:

Deputies do not need to complete any formal training to be able to control the Throwbot with its easy-to-use, handheld controller.

Compliance Protocols:

Use of the Throwbot as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Response to Bomb Calls policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 41 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Robotex Avatar Tactical Robot (AKA- Avatar)
Description:

The Avatar is a robot platform that allows the operator the ability to inspect a dangerous situation through instantaneous video and audio reconnaissance (including push-to-talk/ two-way audio capability) without the need to send personnel in to assess the situation.

Optionally, the Avatar robot can be fitted with a “claw” that can provide limited lift/move/carry/manipulate of small objects.

Purpose & Use:

The Avatar is used to gain mission critical information in harsh or hazardous environments.

Cost & Quantity Allocation:

Any repairs or replacements will be through warranty and if it is not covered through warranty, then funding will come from the SWAT budget/funding source; there are no annual fees associated with this device. Unit cost approximately $25,000. Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan 5+ years.

NSO procedural rules that govern use:

The Avatar shall only be handled and controlled by trained deputies.

Training Requirements:

Deputies do not need to complete any formal training to be able to control the Avatar with its easy-to-use, handheld controller.

Compliance Protocols:

Use of the Avatar as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Response to Bomb Calls.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 42 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
DJI/SKY Hero/Inspired Flight sUAS (AKA – Drones)
Description:

The Drones are deployable small unmanned aerial systems (sUAS) utilized to keep personnel safe. They are aerial system that the operator can fly at different altitudes, speeds, and into several areas to gain access to video of potentially dangerous or isolated areas. The Drones consist of sUAS produced by DJI, Sky Hero, and Inspired Flight.

Purpose & Use:

The Drones are used in place of a person to gain a video feed of isolated or dangerous areas that could put Deputies and Officers into harm’s way.

Cost & Quantity Allocation:

Drones are purchased through the Drone budget or other grant related funding. Repairs are done in house or sent off to a third-party company at the cost of the Drone budget. At this time, there are no recurring payments or annual fees associated with our sUAS fleet. Estimated effective lifespan 2+ years. The cost of a new sUAS can range from $6,000 for a small individually issued drone to $18,000 for a specific use drone (interior drone). These prices are carefully calculated and planned for the following year unless an emergency arises such as an aircraft becoming inoperable.

NSO procedural rules that govern use:

The Drones shall only be handled and controlled by trained deputies.

Training Requirements:

Deputies on the Drone team are put through a rigorous in-house training obstacle course designed, set up, and proctored by veteran drone pilots. In conjunction with in-house training, Drone pilots are sent to training to gain their Federal Administration of Aviation part 107 remote pilot’s license. Regularly scheduled meetings and trainings are also conducted by the team.

Compliance Protocols:

Use of the Drones as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy sUAS and SWAT policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 43 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Zistos Under-the-Door Camera (AKA- Under-Door-Camera)
Description:

The Under-the-Door Camera provides a safe and covert way to view into a room.

Purpose & Use:

The Under-the-Door Camera provides operators the ability to gain critical mission information with limited penetration.

Cost & Quantity Allocation:

Any repairs or replacements will be through warranty and if it is not covered through warranty, then funding will come from the SWAT budget/funding source; there are no annual fees associated with this device. Annual estimated training and operational allocation of approximately 1 unit at approximately $13,000.00. Estimated effective lifespan 5+ years.

NSO procedural rules that govern use:

The Under-the-Door Camera shall only be handled by trained deputies.

Training Requirements:

Deputies do not need to complete any formal training to be able to control the Under-theDoor-Camera with its easy-to-use, handheld controller.

Compliance Protocols:

Use of the Under-the-Door Camera as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident and Response to Bomb Calls.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 44 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Short barreled select fire AR-15 style rifle (various configurations) Description:

A Short barreled select fire AR-15 style rifle available in a variety of calibers, barrel lengths and configurations.

Purpose & Use:

The short barreled select fire AR-15 style rifle is the type of firearms that SWAT team members are issued and employ for a wide variety of missions.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $1500.

Ongoing costs determined by rounds fired operationally and in training, routine and preventative maintenance. Annual estimated training and operational allocation of approximately 20 units.

Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The rifle shall be assigned and used by NSO Deputies members who meet the departmentset rifle qualifications.

Training Requirements:

Must complete annual rifle qualification and regular firearms training.

Compliance Protocols:

Use of A Short barreled select fire AR-15 style rifle as part of Law Enforcement Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy Firearms policy, as well as all local, state and federal use of force laws.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 45 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Sub-compact select fire weapon system
Description:

A sub-compact select fire weapon system is a shoulder fired weapon system that varies in calibers.

Purpose & Use:

A more compact, more easily concealed weapon system that can be deployed for appropriate situations.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $0.00 – legacy items already exist in inventory. Estimated annual upkeep determined by rounds fired and routine/preventative maintenance. Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The sub-compact select fire weapon system shall be used by SWAT team members under the direction of the SWAT team Commander.

Training Requirements:

Must complete annual SWAT firearms qualification and regularly required firearms training.

Compliance Protocols:

Use of the sub compact select fire weapon system shall conform to all relevant NSO policies, including but not limited to NSO Policy Firearms, SWAT and Crisis Negotiation Teams, as well as all local, state and federal use of force laws.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 46 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Firearms Suppressor (various calibers, lengths, attachment styles) Description:

A suppressor is a device typically attached at the end of a barrel of a firearm.

Purpose & Use:

A suppressor is used to muffle and distort the sound of a firearm as it is fired.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $1000.

Annual estimated training and operational allocation of approximately 20 units (up to 1 unit per rifle). Estimated annual upkeep costs determined by rounds fired and routine/preventative maintenance. Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The suppressor shall be used by NSO Deputies for legitimate law enforcement activities.

Training Requirements:

Must complete annual qualification and regularly required firearms training.

Compliance Protocols:

Use of a suppressor shall conform to all relevant NSO policies, including but not limited to NSO Policy Firearms, SWAT and Crisis Negotiation Teams policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 47 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Infrared laser (IR) designator (various configurations) Description:

Infrared Laser signaling device.

Purpose & Use:

IR laser is used as a “laser pointer” style pointing device that can be seen through night vision and has the capability of attaching to a weapon system. IR lasers are not visible to the naked human eye.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $2000.

Annual estimated training and operational allocation of approximately 4 units. Estimated annual upkeep costs dependent on warranty coverage and routine/preventative maintenance. Estimated lifespan 5+ years.

NSO procedural rules that govern use:

IR laser device shall be used by SWAT team members under the direction of the SWAT team Commander.

Use of the IR Laser designator shall conform to all relevant local, state and federal legislation.

Training Requirements:

Show proficiency in manipulation and annual qualification.

Compliance Protocols:

Use of the IR laser designator shall conform to all relevant NSO policies, including but not limited to NSO Policy Firearms, SWAT and Crisis Negotiation Teams policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 48 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Tactical Bolt-Action Rifles (various calibers/configurations) Description:

The tactical bolt-action rifles are bolt-action firearms of various calibers, barrel lengths, ammunition-feeding mechanisms with optional, interchangeable sighting system(s).

Purpose & Use:

Used by the SWAT Designated Marksman (DM) for a variety of missions to provide a highly precise lethal force option at extended ranges.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $3000.

Annual estimated operational and maintenance cost of $300. Estimated lifespan 10+ years.

NSO procedural rules that govern use:

Tactical bolt-action rifle(s) shall only be used by SWAT team members under the direction of the SWAT team Commander.

Use of tactical bolt-action rifle(s) shall conform to all relevant local, state and federal use of force legislation.

Training Requirements:

Must complete annual SWAT rifle qualification and regularly required firearms training Compliance Protocols:

Use of the tactical bolt-action rifle shall conform to all relevant NSO policies, including but not limited to NSO Policy Firearms, SWAT and Crisis Negotiation Teams policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 49 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Armor Piercing (AP) projectiles (various calibers)
Description:

AP rounds is designed to penetrate through hardened material that other rounds are unable to.

Purpose & Use:

For the designated marksman (DM) to have the capability to stop various types of vehicles and penetrate harden objects.

Cost & Quantity Allocation:

This expendable piece of equipment has no unique or temporary funding source. Unit cost of $2.50/round. Annual estimated training and operational allocation of approximately 500 units.

NSO procedural rules that govern use:

AP rounds shall be used by SWAT team members under the direction of the SWAT team Commander.

Use of AP rounds shall conform to all relevant local, state and federal use of force legislation.

Training Requirements:

Must complete annual SWAT rifle qualification and regularly required firearms training Compliance Protocols:

Use of the AP round shall conform to all relevant NSO policies, including but not limited to NSO Firearms and SWAT and Crisis Negotiation Teams policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 50 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Remotec Andros F6 Bomb Squad Robot
Description
The Remotec Andros F6 is a deployable remote and/or wired unmanned vehicle used for locate and render safe Bomb Squad operations.

Purpose and Use
The Remotec Andros F6 is used to gain mission critical information in harsh or hazardous environments.

Cost & Quantity Allocation:

This equipment has no unique or temporary funding source. Unit cost: $229,968.6. Any repairs or replacements will be through warranty and if it is not covered through warranty, then funding will come from the Bomb Squad budget funding source; there are no annual fees associated with this device. Annual estimated training and operational allocation of approximately 1 units. Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The Remotec Andros F6 is operated by all members of the Bomb Squad. Any auxiliary members have been provided in-person hands-on training on the vehicle and its capabilities.

Training Requirements
Deputies do not need to complete any formal training to be able to control the Remotec Andros F6 with its easy-to-use, handheld controller.

Compliance Protocols
Use of the Remotec Andros F6 robot shall conform to all relevant NSO policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 51 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
DETONATING CORD (DET CORD) (AKA – PRIMACORD) –Various
grain weights per linear foot
Description:

PRIMACORD detonating cords (Det Cord) are flexible linear explosives with a core of PETN explosive encased in a textile outer jacket. They are available in various grain weights per linear foot.

Purpose & Use:

PRIMACORD is an energetic material component in explosive breaching charge construction.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $0.60/linear foot. Annual estimated training and operational allocation of approximately 4000 linear feet across all divisions.

NSO procedural rules that govern use:

Det Cord shall be handled only by Explosive Breaching trained deputies or under their direct supervision and direction while constructing explosive breaching charges. Grain weights, measurement lengths and all calculations shall be verified by a trained Explosive Breacher. All Det Cord shall be stored in compliance with ATF regulations and handled in accordance with best practices as established by Explosive Breaching training standards.

Training Requirements:

Deputies must successfully complete FETT Basic/Intermediate or higher-level Explosive Breacher Course. Must complete required FETT Explosive Breacher re-certification courses at regularly required intervals.

Must maintain compliance with local, state and federal storage, transportation and handling regulations.

Compliance Protocols:

Use of Det Cord as part of SWAT Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies, as well as all local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 52 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
NONEL (NONELECTIC DELAY DETONTOR) –Various lengths of orange shock tube Description:

NONEL nonelectric delay detonator consist of a length of orange shock tube with a High Strength detonator attached to one end. They are available in various lengths.

Purpose & Use:

Nonel is an energetic material component in explosive breaching charge construction.

Cost & Quantity Allocation:

This expendable equipment has no unique or temporary funding source. Unit cost of $10/ea. Annual estimated training and operational allocation of approximately 700 units across all divisions.

NSO procedural rules that govern use:

Nonel shall be handled only by EOD and/or Explosive Breaching trained deputies or under their direct supervision and direction while constructing explosive breaching charges. Grain weights, measurement lengths and all calculations shall be verified by a trained Explosive Breacher. All Nonel shall be stored in compliance with ATF regulations and handled in accordance with best practices as established by Explosive Breaching training standards.

Training Requirements:

Deputies must successfully complete FETT Basic/Intermediate or higher-level Explosive Breacher Course. Must complete required FETT Explosive Breacher re-certification courses at regularly required intervals.

Must maintain compliance with local, state and federal storage, transportation and handling regulations.

Compliance Protocols:

Use of Nonel as part of SWAT Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incidents, Response to Bomb calls policies, as well as all local, state and federal use of force legislation.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 53 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community

BALLISTIC BREACHING SHOTGUN
Description:

A short-barrel pistol-gripped 12-gauge pump action shotgun that has been modified to best perform ballistic breaching tasks. The breaching shotgun is designed to work in correlation with specific breaching rounds or slugs.

Purpose & Use:

When it is properly employed, a breaching shotgun can provide teams with safe and fast door breaching. Ballistic breach may also be employed to breach non-traditional barriers.

Cost & Quantity Allocation:

This piece of equipment has no unique or temporary funding source. Unit cost of $800/ea.

Annual estimated training and operational allocation of approximately 2 units. Annual estimated upkeep costs dependent on rounds fired and preventative maintenance. Estimated effective lifespan 10+ years.

NSO procedural rules that govern use:

The Breaching Shotgun shall be handled only by ballistic breaching trained deputies or under their direct supervision and direction. The firearm shall be handled in accordance with best practices as established by ballistic breaching standards.

Training Requirements:

Deputies must successfully complete a basic or higher-level Ballistic Breaching Course and receive regular refresher training.

Must maintain compliance with local, state and federal use of force requirements.

Compliance Protocols:

Use of the Ballistic Breaching Shotgun as part of SWAT Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 54 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community

BALLISTIC BREACHING ROUND (HOLLOW POINT CUTTER ROUND)
Description:

The Ballistic Breaching Cutter Round is designed to work in correlation with a Ballistic Breaching Shot gun. The Ballistic Breaching Cutter Round is encased in a 12-gauge shotgun casing and usually consists of a hardened steel slug.

Purpose & Use:

A Ballistic Breaching Cutter Round is a shotgun shell specially made to be fired through hardened barriers, cut through concrete re-bar, penetrate security glass, car doors and punch into automotive engine blocks.

Cost & Quantity Allocation:

This expendable piece of equipment has no unique or temporary funding source. Unit cost of $30/box. Annual estimated training and operational allocation of approximately 5 units.

NSO procedural rules that govern use:

The Ballistic Breaching Cutter Round shall be handled only by ballistic breaching trained deputies or under their direct supervision and direction. The firearm shall be handled in accordance with best practices as established by ballistic breaching standards.

Training Requirements:

Deputies must successfully complete a basic or higher-level Ballistic Breaching Course taught by an appropriate training company.

Must maintain compliance with local, state and federal use of force requirements.

Compliance Protocols:

Use of the Ballistic Breaching Round or Slug as part of SWAT Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 55 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
BALLISTIC BREACHING ROUND (various material components) Description:

The Ballistic Breaching Round is designed to work in correlation with a Ballistic Breaching Shotgun. The Ballistic Breaching Round is encased in a 12-gauge shotgun casing and usually consists a variety of different materials allows for versatility of use based on target analysis.

Purpose & Use:

When properly utilized for a ballistic breaching task, it is designed to impact and structurally weaken the object it hits (thereby weakening the structure enough to allow successful tactical breaching) and then disperse into a relatively harmless powder.

Cost & Quantity Allocation:

This expendable piece of equipment has no unique or temporary funding source. Unit cost of $25/box. Annual estimated training and operational allocation of approximately 10 units.

NSO procedural rules that govern use:

The Ballistic Breaching Round or Slug shall be handled only by ballistic breaching trained deputies or under their direct supervision and direction. They shall be handled in accordance with best practices as established by ballistic breaching standards.

Training Requirements:

Deputies must successfully complete a basic or higher-level Ballistic Breaching Course.

Must maintain compliance with local, state and federal use of force requirements.

Compliance Protocols:

Use of the Ballistic Breaching Round or Slug as part of SWAT Operations shall conform to all relevant NSO policies, including but not limited to NSO Policy SWAT and Crisis Negotiation Teams, Hostage and Barricade Incident, Response to Bomb Calls policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 56 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
EVI 2017 HDS Bomb Squad Command Vehicle
Description
Command vehicle equipped with Bomb Squad operational and diagnostic equipment.

Purpose and Use
Command vehicle allows Bomb Squad members to deploy direct to scene with the necessary equipment and tools needed for render safe procedures.

Cost & Quantity Allocation:

This equipment has no unique or temporary funding source. Unit cost of $224.447.21/vehicle. Annual upkeep costs dependent on mileage, fuel, preventative maintenance.

Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan approximately 10 years.

NSO procedural rules that govern use:

The Bomb Squad Command Vehicle is operated by all members of the Bomb Squad and auxiliary members have been provided in-person hands-on training on the vehicle and its capabilities.

Training Requirements
Every driver must possess a valid driver license, show competency when operating the Bomb Squad Command Vehicle, and be up to date on the POST mandated Emergency Vehicle Operator Course (EVOC).

Compliance Protocols
Use of the Bomb Squad Command Vehicle shall conform to all relevant NSO policies, including but not limited to Vehicle Operations and Parking Procedures and Vehicle Use policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 57 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
LENCO BEARCAT G3 ARMORED VEHICLE
Description
Off road and rural mission armored vehicle, seats 10-12 fully equipped officers, open floor plan that allows for rescue of downed personnel.

Purpose and Use
Armored vehicle system in a rugged off-road platform to provide enhanced off-road performance which allows for emergency response in rural regions and natural disasters scenarios for a variety of missions where standard armored SWAT vehicles would experience challenges. Optionally equipped with ram, and additional de-escalation tools which include a “ramcam” that can penetrate a wall to allow live video feed inside a structure, technology meshing to allow the use of advanced technologies on scene, a chemical agents injector unit to allow safe dispersal of chemical agents into a hostile environment, and all steel construction.

Cost & Quantity Allocation:

This equipment has no unique or temporary funding source. Unit cost of $400,000/vehicle.

Annual upkeep costs dependent on mileage, fuel, preventative maintenance. Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan approximately 10 years.

NSO procedural rules that govern use
The Lenco Bearcat G3 is primarily operated by auxiliary drivers whose purpose is to drive and operate equipment on the Bearcat. However, all members of the SWAT team and auxiliary members have been provided in-person hands-on training on the vehicle and its capabilities.

Training Requirements
Every driver must possess a valid driver license, show competency when operating the Lenco Bearcat G3, and be up to date on the POST mandated Emergency Vehicle Operator Course (EVOC).

Compliance Protocols
Use of the Lenco Bearcat shall conform to all relevant NSO policies, including but not limited to Vehicle Operations and Parking Procedures and Vehicle Use policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 58 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Incident Command Vehicle
Description
The incident command vehicle a 2002 Freightliner 33-foot diesel Incident Command Vehicle, and is a public safety command and control vehicle typically used to facilitate public safety communication, provide a temporary command/control location and resources for public safety incidents.

Purpose and Use
The Incident Command Vehicle is typically used for pre-planned or emerging public safety events where a meeting/command post positioned closer to the event/incident best assist with the meeting, command, communication and resources required for the event.

While most events are directly related to law enforcement incidents or disaster response, nothing prevents the Incident Command Vehicle from being utilized as an effective community outreach tool for visibility, security and effective communication during preplanned non-emergency events, which includes multiple workstations for office-type work.

Cost & Quantity Allocation:

This equipment has no unique or temporary funding source. Unit cost of $220,000/vehicle.

Annual upkeep costs dependent on mileage, fuel, preventative maintenance. Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan approximately 10 years.

NSO procedural rules that govern use:

The Incident Command Vehicle has a variety of sub-systems that include communication systems, equipment storage and meeting/briefing supplied that can be operated by all members of the Sheriff Office. Sheriff’s Office members who have been provided inperson hands-on training on the vehicle and its capabilities are authorized to drive the vehicle.

Training Requirements
Every driver must possess a valid driver license, show competency when operating the Incident Command Vehicle, and be up to date on any POST mandated Emergency Vehicle Operator Course (EVOC).

Compliance Protocols
Use of the Incident Command Vehicle shall conform to all relevant NSO policies, including but not limited to Vehicle Operations and Parking Procedures and Vehicle Use policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 59 N

NAPA COUNTY OFFICE OF SHERIFF-CORONER
Commitment to
Community
Rapid Response Incident Command Vehicle
Description
The incident command vehicle a 2022 Ford Transit Van 23-foot high-roof gasoline engine Incident Command Vehicle, and is a public safety command and control vehicle typically used to facilitate public safety communication, provide a temporary command/control location and resources for public safety incidents.

Purpose and Use
The Incident Command Vehicle is typically used for pre-planned or emerging public safety events where a meeting/command post positioned closer to the event/incident best assist with the meeting, command, communication and resources required for the event.

The smaller size allows for faster response, improved maneuverability/accessibility based on location and terrain. While most events are directly related to law enforcement incidents or disaster response, nothing prevents the Incident Command Vehicle from being utilized as an effective community outreach tool for visibility, security and effective communication during pre-planned non-emergency events, which includes multiple workstations for office-type work and emergency dispatch.

Cost & Quantity Allocation:

This equipment has no unique or temporary funding source. Unit cost of $250,000/vehicle.

Annual upkeep costs dependent on mileage, fuel, preventative maintenance. Annual estimated training and operational allocation of approximately 1 unit. Estimated effective lifespan approximately 10 years.

NSO procedural rules that govern use:

The Incident Command Vehicle has a variety of sub-systems that include communication systems, equipment storage and meeting/briefing supplied that can be operated by all members of the Sheriff Office. Sheriff’s Office members who have been provided inperson hands-on training on the vehicle and its capabilities are authorized to drive the vehicle.

Training Requirements
Every driver must possess a valid driver license, show competency when operating the Incident Command Vehicle, and be up to date on any POST mandated Emergency Vehicle Operator Course (EVOC).

Compliance Protocols
Use of the Incident Command Vehicle shall conform to all relevant NSO policies, including but not limited to Vehicle Operations and Parking Procedures and Vehicle Use policies.

Public complaint procedures:

Napa SO Department Personnel Complaint Policy shall apply to all personnel complaints. 60 CITY COUNCIL AGENDA
APRIL 16, 2024

STAFF REPORT

CONSENT
ITEM NUMBER: 10.

TITLE
Utility Rate Municipal Code Updates

RECOMMENDATION
Waive final reading, read by ,tle only, and adopt an Ordinance by the City Council of the City of American Canyon amending City of American Canyon Municipal Code (ACMC) Chapter 13.06: "Water Rates and Connec,on Fees", Chapter 13.14 "Water Conserva,on Plan", and Chapter 14.04:
"Wastewater Rates and Charges" to establish new potable water, recycled water and wastewater property related fees and charges.

CONTACT
Jason Holley, City Manager
Erica Ahmann Smithies, P.E., Public Works Director
Juan Gomez, Finance Director

BACKGROUND & ANALYSIS
On April 2, 2024, the City Council approved the first reading of an Ordinance approving Municipal Code updates to Water Rates and Connec,on Fees, Water Conserva,on Plan, and Wastewater Rates and Charges to establish new potable water, recycled water and wastewater property related fees and charges. The City Council also heard public comment and received wri;en protests from property owners and ratepayers. A majority of wri;en protests was not received and staff recommended adop,ng the Ordinance (A;achment 1) approving increased u,lity rates. Council approved this action.

American Canyon provides potable water, recycled water, and sewer services to proper,es in its "service area". The term "property related fee(s)" is more commonly known as "u,lity rate(s)" and describes the "fees and charges" assessed for those utility services.

If the final reading is approved, the Ordinance shall become effec,ve 30 days a>er its final passage pursuant to Government Code Sec,on 36937 with the adopted new rates becoming effec,ve January 1, 2025. Scheduled inflation increases will also occur in January each year.

Recap of the April 2, 2024 Public Hearing
61 The public hearing represented the final step of a formal, mul,-step process for increasing u,lity rates (i.e. property related fees). Ar,cle XIII D of the California Cons,tu,on - as enumerated by the passage of Proposi,on 218 in 1996 - dictates this process, which includes "majority protest" proceedings involving property owners.

Specifically, the California Constitution requires:

Revenues generated by utility rates to not exceed the cost of the utility service.

A property owner's utility rate to not exceed their proportionate share of the costs.

Utility rates are charged only for services available to the property owner.

Holding a public hearing at least 45-days a>er no,fying property owners and prior to taking action to increase utility rates.

In addi,on, the Council is prohibited from taking ac,on to increase u,lity rates if a majority of property owners submit "written protests".

On January 16, 2024, the Council reviewed proposed u,lity rate increases, authorized propertyowner no,fica,ons and set a hearing date for April 2, 2024. Staff recommended increasing u,lity rates to cover opera,onal expenses and needed capital investments. The amounts of the increases were reviewed and confirmed by a volunteer group of local residents known as the U,lity Rate Advisory Committee and are discussed in more detail below.

Summary of Community Outreach since January 2024
The California Cons,tu,on requires at a minimum a wri;en no,fica,on of proposed increases to property owners. No,ces of proposed u,lity rates increase - including specifically the amounts of the increases - were mailed to all property owners more than 45 days ago (Attachment 3).

Staff has undertaken a robust public outreach centered around the City’s Virtual City Hall (www.cityofamcan.org/water). Property owner no,ces in English, Spanish, and Tagalog versions are available here along with a "rate study" containing the analysis which serves as the basis for rate structure. Customer resources – including Frequently Asked Ques,ons (FAQs), low-income customer op,ons, an online bill impact calculator, a printable protest le;er, visual infographics and cost comparisons are also found here.

A poster with the key messaging is posted in the lobby at City Hall, and other key public areas in the community. In addi,on, a large informa,onal postcard mailer was mailed to all residences and businesses. Lastly, staff included messaging in the City Manager's Update, social media plaMorms, and utility bill inserts.

Background
62 American Canyon’s u,lity infrastructure includes a vast network of pipes, tanks, pump sta,ons, fire hydrants, meters, treatment plants, and other facili,es. This infrastructure delivers safe and reliable drinking water, collects and treats wastewater, and recycles water for non-potable uses. Skilled labor, quality materials, and reliable equipment are necessary to operate and maintain the u,lity systems.

American Canyon provides three (3) dis,nct and separate u,lity services to proper,es within its service area: potable water, recycled water, and sewer (wastewater). Each of these services are operated separately from each other - and separately from other general services (such as public safety, parks and facilities, etc.).

The California Cons,tu,on requires these "enterprises" to operate independently - meaning revenue from one cannot be used for the other. And while private investor-owned u,li,es such as PG&E make a profit on gas and electric services, American Canyon does not. Meaning any surplusage revenue at the end of a fiscal year is retained and re-invested in its respec,ve u,lity operation.

Staff proposes three (3) separate u,lity rates (water, recycled water and wastewater) - one for each enterprise. These rates are further proposed to be delineated between a fixed monthly amount (which does not change based on the volume - i.e. $/month) and a variable amount (based on volume, i.e. $/unit).

It is important to note one classes of ratepayers (e.g. "commercial") cannot be charged a a higher rate to reduce the rate of another (e.g. "residen,al"). Addi,onally, wealthy ratepayers cannot be charged a higher rate in order to subsidize a lower rate for those who might be unable to afford higher rates.

History and Current Challenges
American Canyon last updated water rates in 2019. Wastewater rates have not been updated since 2007. Uniform rates for recycled water were never formally adopted (but are proposed now).

While staff has increased u,lity rates administra,vely - based on the Consumer Price Index (CPI) - American Canyon con,nues to experience external cost pressures exceeding infla,on - and Council approval is now required to increase utility rates.

Example cost pressures include maintenance and construc,on costs, treatment costs, personnel costs, new regulatory costs, water supply challenges, aging infrastructure, water purchases from the Ci,es of Napa and Vallejo, as well as the State Water Project and specifically, par,cipa,on in the Sites Reservoir Project.

Also, there are no established recycled water rates, which is needed to cover opera,onal costs and 63 service loans made to this fund for startup costs.

In summary, the current u,lity rates do not bring in sufficient revenue to cover the cost of providing reliable services. Since rates are the primary funding source the City must consider poten,al rate and charges increases for water service and wastewater service as well as establishing new rates and charges for recycled water service.

Analysis
The Council established a voluntary ci,zen U,lity Rate Advisory Commi;ee on November 15, 2022.

Since then, the Commi;ee has met several ,mes to understand the City’s the costs of providing utility service while collaborating with staff to prepare a recommendation for the Council.

Proposed u,lity rates were developed based on the City's costs to provide the service and considering future annual opera,ng costs and budgeted repair and replacement expenses by evaluating the prior year's audited financial data.

A "Cost of Service Analysis" was prepared by independent consul,ng firm (NBS) and contains a detailed descrip,on of the analysis which serves as the basis for the staff’s recommenda,on (A;achment 2, Exhibit A). The proposed u,lity rate increases will support a cost-of-service structure consistent with current law.

Latest Update since January 2024
In response to Council and public feedback, staff is revising its prior recommenda,on as shown below (in bold):

Potable Water - Fixed Charges
Same increases recommended in the property owner notice shown in Attachment 2.

Potable Water - Variable Rate
New Recommenda on: the Council takes no ac on. The quan,ty rate ($/unit) established in 2018 remains unchanged but the delineation between Tiers 1 and 2 is reduced from 10 units to 6 units.

Of note, staff will con,nue to administra,vely increase quan,ty rate up to 3% each (based on the Consumer Price Index) as currently allowed. As a result, the variable rate in Year 5 will grow up to a maximum of $8.74/unit (instead of $8.99/unit). Said differently, the quan,ty rate will increase by only 15.9% (over 5 years) instead of 19.2%.

Staff believes the addi,onal customers at Watson Ranch (and elsewhere) will broaden the base of customers. And when you broaden the base of customers with a rela,vely smaller quan,ty rate will generate the required revenue to support the operations. 64 Recycled Water - Fixed Charges
Same increases as recommended in the property owner notice shown in Attachment 2.

Recycled Water - Variable Rate
New Recommenda on: the Council takes ac on for a lower volumetric rate. The property owner no,ce listed a proposed volumetric rate of $6.69/unit for delivery and $4.00/unit for self-haul. The revised recommenda,on is a lower volumetric rate of $3.14/unit for delivery and $1.88/unit for selfhaul respectively.

Staff forecasts increased revenue based on the City’s Urban Water Management Plan – which iden,fies an expanded customer base to generate the required revenue to support the opera,ons.

The addi,onal customers are the result of soon to be completed pipeline and service extensions leading to more customers than previously considered.

Sewer – Residential and Commercial Customer Class
Same increases as recommended in the property owner notice shown in Attachment 2.

Sewer – Non-Residential High-Strength Customer Class
New Recommenda on: the Council takes no ac on. The City has three (3) non-residen,al, highstrength customers (known as “significant industrial users” or SIU). To protect the Water Reclama,on Facility (WRF) from high-strength waste, each SIU has a specific sewer service agreement and NPDES discharge permit. Currently each SIU "pre-treats" its wastewater before discharging to the collec,on system. The SIU metered, monitored, and tests the wastewater for a variety of constituents.

At Council’s direc,on as part of an economic development strategy for expanding business opportuni,es in the Green Island Industrial Area, staff is currently exploring op,ons for a new capital project at the WRF that will embrace (rather than reject) an SIU’s discharge of high-strength waste. The revenue to pay for this improvement will be generated by the current SIUs (and hopefully other SIUs) in conjunc,on with a future rate study, but for now, the current wastewater rate for SIU’s will generate adequate revenue over the next 18 to 24 months.

Regional Comparison
Below is comparison of staff recommenda,on to other agencies. The table assumes residen,al use of 7 units per month.

Utility Rates - Regional Comparison
City/Agency
Potable Water
Fixed
Potable Water
Quantity
Wastewater
Fixed
Wastewater
Quantity
Total Monthly
Bill
Petaluma $26.02 $34.99 $39.85 N/A $94.87
65 Napa* $26.02 $28.59 $61.55 N/A $116.16
Yountville $93.76 $22.49 $65.42 N/A $116.25
Benicia $26.59 $38.78 $58.07 $23.80 $123.44
American
Canyon
(Current)
$26.56 $52.78 $60.48 N/A $139.82
Vallejo* $51.72 $33.32 $73.74 N/A $158.78
American
Canyon
(Proposed)
$31.32 $54.99 $74.94 N/A $161.25
Calistoga $62.82 $94.22 $106.24 N/A $263.28
St. Helena $67.75 $41.93 $89.63 $69.23 $268.54
*Note: wastewater service provided by separate special district

COUNCIL PRIORITY PROGRAMS AND PROJECTS
Infrastructure: "Develop and maintain infrastructure resources to support sustainable growth."

FISCAL IMPACT
The City is required to update the Municipal Code to adjust the water, sewer and recycled water rates. The new rates will become effec,ve January 1, 2025. Scheduled infla,on increases will also occur in January each year.

Fiscal impact related this item will result in adequate funding for opera,onal expenses and necessary long-term capital program needs. As Enterprise Funds, the Water, Sewer and Recycled Water Funds should be self-sustaining, this item achieves the goal of long-term fiscal and opera,onal sustainability for the Water and Sewer Enterprises. The Recycled Water Enterprise is a rela,vely new system with significant capital investments made in the last couple of years and these projected increases to the rates would move us closer to achieving a healthy, self-sustaining enterprise.

ENVIRONMENTAL REVIEW
The recommunicated u,lity rate increases are, among other things, for the purpose of con,nuing to provide funds to meet the costs of opera,ng, maintaining and replacing the u,lity facili,es within the service area and to provide funding for capital projects necessary and/or required to maintain service within the exis,ng service area and as such are Categorically Exempt from environmental review (Division 13, Section 21080 (b) (8)) under CEQA.

ATTACHMENTS:

1. Ordinance

2. Exhibit A: American Canyon Rate Study Report 03-20-2024 66 ORDINANCE NO. 2024-

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AMERICAN CANYON AMENDING CITY OF AMERICAN CANYON MUNICIPAL CODE CHAPTER 13.06: "WATER RATES AND CONNECTION FEES", CHAPTER 13.14 "WATER CONSERVATION PLAN", AND CHAPTER 14.04: "WASTEWATER RATES AND CHARGES" TO ESTABLISH NEW POTABLE WATER, RECYCLED WATER AND

WASTEWATER PROPERTY RELATED FEES AND CHARGES
WHEREAS, the City of American Canyon’s utility infrastructure includes a network of treatment plants, pipes, tanks, pump stations, fire hydrants, meters, and other facilities; and WHEREAS, through this valuable infrastructure, the City provides safe and reliable drinking water, collects and treats wastewater, and produces recycled water for reuse, advancing sustainability efforts; and
WHEREAS, skilled labor, quality materials, and reliable equipment are necessary to operate and maintain the utility systems and facilitate water purchases from the Cities of Napa and Vallejo, as well as the State Water Project; and
WHEREAS, the City’s current utility rates and charges, comprised of Water, Wastewater, and Recycled Water Enterprise Funds, do not bring in sufficient revenue to cover operating and capital costs; and
WHEREAS, utility rates and charges have not increased for water since 2018, wastewater since 2009, and there are no established recycled water rates and charges; and WHEREAS, a Utility Rate Study was prepared by an independent consulting firm, NBS, and contains a detailed description and analysis of the proposed utility rates and charges per the respective enterprise fund; and
WHEREAS, the City and the Utility Rate Advisory Committee (URAC) have conducted a detailed fiscal analysis of the utility rates and developed recommendations regarding adjustments to the utility rates and charges in order to comply with state law; and WHEREAS, these rate and charge adjustments will help ensure the health and safety of the community while protecting the City’s financial health; and WHEREAS, Article XIIID, Section 6 of the California Constitution requires that prior to the public hearing to increase utility rates charged by the City, the City mail to each property owner or utility billing customer, at least 45 days prior to such public hearing, a notice describing (a) the amount of the fee or charge to be imposed upon each parcel, (b) the basis upon which the amount of the proposed fee or charge was calculated, (c) the reason for the fee or charge, and (d) the date, time, and location of a public hearing on the proposed fee or charge; and 67 WHEREAS, on February 16, 2024 the City mailed the notice of public hearing to be held on April 2, 2024, relating to the City’s proposed utility rates and charges in accordance with California Constitution Article XIIID Section 6; and
WHEREAS, the City held such public hearing on April 2, 2024, and received and considered all oral and written protests related to the proposed adjustments in the utility rates and charges; and
WHEREAS, the City Council of the City of American Canyon determined that written protests have not been received from property owners or utility billing customers representing a majority of the parcels subject to the proposed fee increase; and
WHEREAS, the City Council intends to adopt a utility rate structure proposed by the analysis following the procedures required by Proposition 218, article XIII D, section 6 of the California Constitution; and
NOW THEREFORE BE IT ORDAINED that the City Council of the City of American Canyon, having considered all the evidence, including any submitted by member of the public, hereby adopts Municipal Code amendments as follows:

SECTION 1: Repeal and replace ACMC 13.06.030.B with the following:
(B) As of the effective date of the ordinance, or January 1, 2025, whichever comes later, the water meter charges for all customers shall be levied according to the following schedule:
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
< 1" meter $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $178.29 $194.33 $211.82 $220.30 $226.91
4" meter $276.27 $301.13 $328.23 $341.36 $351.60
6" meter $548.43 $597.79 $651.59 $677.66 $697.99
8" meter $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65
SECTION 2: Repeal ACMC 13.06.030.C.

SECTION 3: Repeal and replace ACMC 13.06.040.B with the following:
(B) As of the effective date of the ordinance, or January 1, 2019, whichever comes later, customers will pay quantity rates according to the following schedule below:
68 Residential Use 01/01/19 01/01/20 01/01/21 01/01/22 01/01/23 Tier 1 (0 - 6 units) $6.07 $6.42 $6.78 $7.15 $7.54
Tier 2 (> 6 units) $6.50 $7.01 $7.38 $7.76 $8.15
Non-Residential Use 01/01/19 01/01/20 01/01/21 01/01/22 01/01/23 $6.24 $6.59 $6.96 $7.33 $7.72
Raw Water 01/01/19 01/01/20 01/01/21 01/01/22 01/01/23
$3.06 $3.15 $3.24 $3.34 $3.44
Effective January 1, 2024, and on every January 1st thereafter, quantity charges will be adjusted by the percent change in the Bay Area Consumer Price Index over the previous calendar year, or by three percent, whichever is less.

SECTION 4: Repeal and replace ACMC 13.14.100 with the following:

13.14.100 – Drought Surcharge
(A) Customers will receive prior notification of the standard allotment basis, applicable rates, and the opportunity to request exceptions to the standard allotment basis. (B) Water use beyond the maximum allowed for each water conservation stage shall be subject to a drought surcharge pursuant to the schedule set forth below. The customer of record may request an increase in this basic allotment as set forth in Section 13.14.110 hereof. Application forms and instructions will be available at the American Canyon City Hall.
(C) In addition to the quantity rates set forth in ACMC 13.06.040.B, each customer shall pay, during each billing period, a drought surcharge for water delivered in excess of the basic allotment as follows:
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
Stage 1 $0.35 $0.44 $0.53 $0.58 $0.62
Stage 2 $0.79 $0.98 $1.19 $1.30 $1.39
Stage 3 $1.36 $1.68 $2.03 $2.23 $2.39
Stage 4 $2.12 $2.61 $3.16 $3.46 $3.71
Stage 5 $3.17 $3.92 $4.75 $5.20 $5.57
Stage 6 $4.76 $5.88 $7.12 $7.79 $8.36
Customers whose water usage falls in Tier 1 as set forth in in ACMC 13.06.040.B are assumed to have maximized their conservation effort and will not be subject to a drought surcharge if their water consumption is not further reduced. 69 In addition to the drought surcharge, if drought usage exceeds the allowed allotment, a warning will be issued and enforcement actions may be taken as described in Section

13.14.120.

SECTION 5: Modify ACMC 13.14.065 as follows:

Following a public hearing, the city's nonresidential recycled water customers whose properties may be served by recycled water shall connect their property to recycled water for those uses for which the use of potable domestic water would be deemed a waste or unreasonable use of water as specified in Division 7, Chapter 7, of the California Water Code (Section 13550 et seq.). Recycled water customers shall pay for recycled water at the rate established by the city council.

As of the effective date of the ordinance, or January 1, 2025, whichever comes later, recycled water customers shall pay the meter charges and quantity rates for recycled water service as set forth below:

Water Meter Charges
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
< 1" meter $38.89 $42.78 $47.05 $49.41 $51.88
1" meter $64.81 $71.29 $78.42 $82.34 $86.46
1 1/2" meter $129.62 $142.58 $156.84 $164.69 $172.92
2" meter $207.40 $228.14 $250.95 $263.50 $276.67
3" meter $414.79 $456.27 $501.90 $526.99 $553.34
4" meter $648.11 $712.92 $784.22 $823.43 $864.60
6" meter $1,296.23 $1,425.85 $1,568.43 $1,646.85 $1,729.20 8" meter $2,073.96 $2,281.36 $2,509.49 $2,634.97 $2,766.71 Quantity Rates ($/hcf)
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
Delivered $3.14 $3.46 $3.80 $3.99 $4.19
Self-Haul $1.88 $2.07 $2.28 $2.39 $2.51
Effective January 1, 2030, and on every January 1st thereafter, wastewater service charges will be adjusted by the percent change in the Bay Area Consumer Price Index over the previous calendar year, or by three percent, whichever is less.

SECTION 6: Repeal and replace ACMC 14.04.020 as follows:

14.04.020 Wastewater service charges – Residential service 70 (A) As of the effective date of the ordinance, or January 1, 2025, whichever comes later, each residential customer shall pay for wastewater services per dwelling unit per month according to the schedule outlined below:
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
Single Family Residential $74.94 $89.93 $100.72 $112.81 $112.81 Multi-Family Residential $48.70 $58.44 $65.45 $73.31 $73.31 (B) Effective January 1, 2030, and on every January 1st thereafter, wastewater service charges will be adjusted by the percent change in the Bay Area Consumer Price Index over the previous calendar year, or by three percent, whichever is less.

SECTION 7: Repeal and replace ACMC 14.04.030 as follows:

14.04.030 Wastewater service charge—Mobile home residential service. (A) Each mobile home customer with an individual metered account shall be considered a Multi-Family Residential Customer and pay for wastewater services according to the schedule set forth in ACMC 14.040.020.

SECTION 8: Repeal and replace ACMC 14.04.040 as follows:

14.04.040 Wastewater service charge—Multifamily.
(A) Each multi-family residential customer shall pay for wastewater services according to the schedule set forth in ACMC 14.040.020.

SECTION 9: Repeal and replace ACMC 14.04.050 as follows

14.04.050 Wastewater service charges—Nonresidential, normal strength. (A) As of the effective date of the ordinance, or January 1, 2025, whichever comes later, each normal strength, nonresidential customer shall pay both a monthly service charge and a volumetric charge for wastewater services according to the schedule outlined below:
01/01/25 01/01/26 01/01/27 01/01/28 01/01/29
Monthly Service Charge $115.21 $138.25 $154.84 $173.42 $173.42 Volumetric Rate ($/HCF) $1.92 $2.31 $2.58 $2.89 $2.89
The volumetric charge shall be equal to the volumetric rate established by schedule above ($/HCF) multiplied by the quantity of water delivered to the customer pursuant to ACMC 13.04.
71 (B) Effective January 1, 2030, and on every January 1st thereafter, wastewater service charges will be adjusted by the percent change in the Bay Area Consumer Price Index over the previous calendar year, or by three percent, whichever is less.

SECTION 10: EFFECTIVE DATE. This ordinance shall become effective 30 days after its final passage pursuant to Government Code Section 36937.

SECTION 11: SEVERABILITY. If any section, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision f any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.

The City Council hereby declares that it would have passed this Ordinance and adopted this Ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 12: CUSTODIAN OF RECORDS. The documents and materials that constitute the record of proceedings on which this Ordinance is based are located at the City Clerk’s office located at 4381 Broadway, Suite 201, American Canyon, CA 94503. The custodian of these records is the City Clerk.

The foregoing Ordinance was introduced at a regular meeting of the City Council of the City of American Canyon, State of California, held on the 2nd day of April, 2024 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

The foregoing Ordinance was adopted at a regularly scheduled meeting of the City Council of the City of American Canyon held on the 16th day of April, 2024, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
____________________________
Leon Garcia, Mayor
ATTEST: APPROVED AS TO FORM:
_______________________________ _________________________________ Taresa Geilfuss, CMC, City Clerk William D. Ross, City Attorney 72 nbsgov.com
Report for:

Sewer, Water, and Recycled Water Enterprise Rate
Studies
March 2024

73 TABLE OF CONTENTS

1. Purpose and Overview of the Study ................................................................................1

1.1 Purpose......................................................................................................................1

1.2 The City of American Canyon Background................................................................1

1.3 Overview of the Study...............................................................................................2

2. Water Rate Study ...........................................................................................................7

2.1 Key Water Rate Study Issues.....................................................................................7

2.2 Financial Plan.............................................................................................................7

2.3 Cost-of-Service Analysis ............................................................................................9

2.4 Characteristics of Water Customers by Customer Class.........................................11

2.5 Rate Design Analysis................................................................................................13

2.6 Proposed Water Rates ............................................................................................18

2.7 Comparison of Current and Proposed Water Bills..................................................20

2.8 Drought Rates..........................................................................................................21

3. Recycled Water Rate Study ........................................................................................... 23

3.1 Key Recycled Water Rate Study Issues....................................................................23

3.2 Recycled Water Utility Revenue Requirements......................................................23

3.3 Proposed Recycled Water Rates.............................................................................24

3.4 Current vs. Proposed Recycled Water Rates...........................................................24

4. Sewer Rate Study ......................................................................................................... 26

4.1 Key Sewer Rate Study Issues...................................................................................26

4.2 Financial Plan...........................................................................................................26

4.3 Cost-of-Service Analysis ..........................................................................................27

4.4 Rate Design Analysis................................................................................................30 74 4.5 Comparison of Current and Proposed Sewer Bills..................................................31

5. Recommendations and Next Steps................................................................................ 33

5.1 Consultant Recommendations................................................................................33

5.2 Next Steps................................................................................................................33

5.3 NBS’ Principal Assumptions and Considerations ....................................................33 Technical Appendices .......................................................................................................... 34 Appendix A. Water Rate Study Tables and Figures................................................................ 35 Appendix B. Recycled Water Rate Study Tables and Figures ................................................. 81 Appendix C. Sewer Rate Study Tables and Figures.............................................................. 102 75 TABLE OF FIGURES
Figure 1. Primary Components of a Rate Study ................................................................................................. 3 Figure 2. Summary of Water Revenue Requirements........................................................................................ 9 Figure 3. Summary of Primary Water Reserve Funds......................................................................................... 9 Figure 4. Allocation Percentages of Revenue Requirements........................................................................... 11 Figure 5. Allocated Net Revenue Requirements .............................................................................................. 11 Figure 6. Water Consumption by Customer Class............................................................................................ 12 Figure 7. Capacity Factors by Customer Class ……………………………………………………………………………………………..12 Figure 8. Number of Meters by Customer Class............................................................................................... 13 Figure 9. Hydraulic Capacity Factors ................................................................................................................ 14 Figure 10. Equivalent Meters .......................................................................................................................... 14 Figure 11. Calculation of Fixed Service Charges (Residential) ......................................................................... 15 Figure 12. Summary of Supply Sources Allocated to Tiers............................................................................... 15 Figure 13. Allocated Consumption from Each Source of Supply ...................................................................... 16 Figure 14. Tier Breakpoints for Residential Customers.................................................................................... 16 Figure 15. Tiered Rates for FY 2023/24 ............................................................................................................ 16 Figure 16. Uniform Tier Rates for FY 2023/24.................................................................................................. 17 Figure 17. Variable Revenue Comparison ........................................................................................................ 18 Figure 18. Current and Proposed Water Rates - Fixed Charges ...................................................................... 19 Figure 19. Current and Proposed Water Rates - Variable Rates (COSA) ......................................................... 20 Figure 20. Current and Proposed Water Rates - Variable Rates (Alternative 2) ............................................. 20 Figure 21. Monthly Water Bill Comparison for Residential Customers............................................................ 20 Figure 22. Monthly Water Bill Comparison for Commercial Customers.......................................................... 21 Figure 23. Expenses Directly Impacted by Conservation ................................................................................. 21 Figure 24. Projected Consumption at Baseline and Each Successive Drought Stage ...................................... 22 Figure 25. Proposed Drought Surcharges ........................................................................................................ 22 Figure 26. Summary of Recycled Water Revenue Requirements..................................................................... 23 Figure 27. Summary of Recycled Water Revenue Requirements for FY 2023/24 ........................................... 24 Figure 28. Recycled Water Fixed Rate Calculation .......................................................................................... 24 Figure 29. Recycled Water Variable Rate Calculation ..................................................................................... 24 Figure 30. Current and Proposed Recycled Water Rates ................................................................................ 25 Figure 31. Summary of Wastewater Revenue Requirements.......................................................................... 27 Figure 32. Summary of Sewer Reserve Funds.................................................................................................. 27 Figure 33. Allocation of Revenue Requirements by Customer Class ............................................................... 28 Figure 34. Development of the Flow Allocation Factor ................................................................................... 29 Figure 35. Development of the Customer Allocation Factor ........................................................................... 29 Figure 36. Current vs. Proposed Sewer Rates .................................................................................................. 31 Figure 37. Single Family Sewer Bill Comparison............................................................................................... 31 Figure 38. Multi-Family Residential Sewer Bill Comparison............................................................................. 32 Figure 39. Commercial Sewer Bill Comparison................................................................................................. 32 76 Enterprise Rate Study – City of American Canyon
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1. Purpose and Overview of the Study

1.1 Purpose
The City of American Canyon (City) retained NBS to conduct a comprehensive rate study for its water, recycled water, and sewer enterprise funds. The City had a number of objectives and goals in mind for this study including meeting revenue requirements, reviewing current rate structures based on recent consumption data, funding capital improvements and changes in costs, and complying with certain legal requirements (e.g., California Constitution Article XIII D, Section 6, which is commonly referred to as Proposition 218 [Prop 218]). The City’s broader objectives in this study include ensuring adequate funding for operating and capital costs, maintaining reasonable reserves, ensuring revenue stability in utility rates, and developing new recycled water and drought rates to reflect the revenue requirements at various stages of water conservation. The rates resulting from this study were developed in a manner that is consistent with industry standard cost-of-service principles. In addition to documenting the rate study methodology, this report is provided with the intent to assist the City in its continuing effort to maintain transparent communications with the residents and community it serves.

In developing new rates for the City’s enterprise funds, NBS worked cooperatively with City staff and the City Council (Council) in selecting the appropriate rate alternatives that address the City’s goals and objectives. Based on input provided by City staff, NBS proposes the rates summarized in this report. The Council has the final decision regarding the adoption of the proposed rates and whether to proceed with the Proposition 218 approval process.

1.2 The City of American Canyon Background
The City of American Canyon was incorporated in 1992 and is located in southern Napa County about thirtyfive miles northeast of San Francisco.

WATER UTILITY
The City provides potable water service to approximately 6,825 metered customers. Of these potable water customers, residential customers represent approximately 90%, including single-family and multi-family users. Recent consumption records indicate that residential households use 59% of total water sold compared to all other non-residential customers who use the remaining 41%. The City’s existing potable water system includes treatment, storage, pumping, and distribution infrastructure serving residential, industrial, commercial, and agricultural customers.1
The City relies on several sources of water to meet its needs including water from the State Water Project, water from the cities of Vallejo and Napa, and recycled water produced at the City’s Water Reclamation Facility (WRF). The primary source of water is from the State Water Project (61%) via the North Bay Aqueduct, while the remaining supply consists of treated water from the cities of Vallejo and Napa as well as raw water from the City of Vallejo. The City has also partnered with the Sites Reservoir Project in 2017 to construct an off-river reservoir that will capture excess water from major storms that can be utilized during drier periods. This project is in the final stages of environmental review. 1 Source: https://www.cityofamericancanyon.org/ home/showpublisheddocument/17957. 77 Enterprise Rate Study – City of American Canyon
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RECYCLED WATER UTILITY
The City owns and operates a complementary water and wastewater utility infrastructure that includes water reclamation and water reuse within the City limits. The current area served with recycled water is approximately 5 square miles with an overall potential service area of over 14 square miles, including potential customers within Napa County just outside City limits along the northern boundary.2 The City currently serves public schools, public parks, industrial, commercial, and agricultural users, and produces approximately 80 million gallons of recycled water each year primarily for outdoor use. The City provides recycled water service to 76 customers.

Using recycled water for irrigation saves electricity, using one quarter of the energy needed to pump groundwater, and dramatically reduces the consumption of potable water. The additional treatment of wastewater at the reclamation plant also reduces nitrates which could otherwise impact the groundwater basin. As with reclaimed water providers throughout California, the City’s recycled water rates tries to be competitive with other sources of irrigation water while ideally recovering basic operating costs.

SEWER UTILITY
The City currently provides sewer service to customers located within the City limits, as well as the Airport Industrial Area and a few areas within the unincorporated County area. The City completed construction of the Water Reclamation Facility (WRF) in 2002 to treats domestic and industrial wastewater flows.

Currently, the sewer utility services approximately 6,100 connections; the vast majority (77%) of which are single-family residential users. The remainder of the customers are primarily multi-family residential users (21%) and a handful of commercial and industrial users (3%). The current area served is approximately 6.3 square miles with an overall potential service area of over 8.5 square miles and includes approximately 53 miles of sewer mains, five pump stations, and 5 miles of sewer force main.3

1.3 Overview of the Study
Comprehensive rate studies, such as this one, typically include three components: (1) preparation of a financial plan that identifies the net revenue requirements for the utility; (2) analysis of the cost to serve each customer class; and (3) the rate structure design. These steps are shown in Figure 1 and are intended to follow industry standards. They reflect the fundamental principles of cost-of-service rate making embodied in the American Water Works Association’s (AWWA) Principles of Water Rates, Fees, and Charges,
4 also referred to as Manual M1 for water rates and the Water Environment Federation’s (WEF) Financing and Charges for Wastewater Systems, Manual of Practice No. 275for sewer rates. They also address requirements under Proposition 218 that rates do not exceed the cost of providing the service and be proportionate to the cost of providing service for all customers. In terms of the chronology of the study, these three steps represent the order in which they were performed in this Study.
2 Source: https://www.cityofamericancanyon.org/home/showpublisheddocument/9735. 3 Source: https://www.cityofamericancanyon.org/home/showpublisheddocument/9733. 4 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, Manual M1, American Water Works Association, 7
th Edition, 2017.
5 Financing and Charges for Wastewater Systems, Manual of Practice No. 27, Water Environment Federation, 4th Edition, 2018. 78 Enterprise Rate Study – City of American Canyon
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Figure 1. Primary Components of a Rate Study
NBS projected revenues and expenditures, developed net revenue requirements, performed cost-of-service rate analyses, and developed new water, recycled water, and sewer rates for the City using this approach.

The following sections in this report present an overview of the methodologies, assumptions, and data used along with the financial plans and rates developed. Detailed tables and figures documenting the development of the proposed rates are provided in the Appendices.

The City provided NBS with the data necessary to conduct the study, including historical, current, and projected revenues and expenditures, number of customer accounts, and water consumption data along with other operational and capital cost information.

FINANCIAL PLAN
As a part of the rate study, NBS projected revenues and expenditures on a cash-flow basis for the next five (5) years. The amount of rate revenue required that will allow reserves to be maintained at the recommended levels is known as the net revenue requirement. As current rate revenue falls short of the net revenue requirement, rate adjustments - or more accurately, adjustments in the total revenue collected from rates - are recommended. This report presents an overview of the methodologies, assumptions, and data used along with the financial plan and proposed rates developed in this study.6

COST-OF-SERVICE ANALYSIS
The basic purpose of the cost-of-service analysis (COSA) is to fairly and equitably allocate costs to customer classes. The cost-of-service analysis consists of two major components: (1) the classification of expenses, and (2) the allocation of costs to customer classes. For example, a key task is the “classification” of the water revenue requirements into the following categories:
• Commodity related costs
• Recycled water related costs
• Capacity related costs
• Customer service related costs
• Fire Protection related costs
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In addition, here are the categories used in the “classification” of the sewer revenue requirements :
• Flow related costs
• Strength related costs
• Customer service related costs
These cost allocation factors represent the types of cost allocations in the cost of service. Further details are discussed below and documented in the Appendices.

RATE DESIGN ANALYSIS
During the rate design phase of the study, NBS and City staff worked together to develop rate alternatives to meet the City’s objectives. It is important for the City to send proper price signals to its customers about the actual cost of providing service. This objective is typically addressed through both the magnitude of the rate adjustments and the rate structure design. In other words, both the amount of revenue collected and the way in which the revenue is collected from customers are important.

Several criteria are typically considered in setting rates and developing sound rate structures. The fundamentals of this process have been well documented in a number of rate-setting manuals, such as AWWA’s Manual M1. The foundation for evaluating rate structures is generally credited to James C.

Bonbright in Principles of Public Utility Rates,
7 which outlines pricing policies, theories, and economic concepts along with various rate designs. The following is a simplified list of the attributes of a sound rate structure:
• Rates should be easy to understand from the customer’s perspective. • Rates should be easy to administer from the utility’s perspective. • Rates should promote the efficient allocation of the resource. • Rates should be equitable and non-discriminating (i.e., cost based). • There should be continuity in the rate making philosophy over time. • Addressing other utility policies (e.g., conservation and economic development). • Rates should provide month-to-month and year-to-year revenue stability.

RATE STRUCTURE TERMINOLOGY
This section covers basic rate design criteria that NBS and City staff considered as a part of their review of the rate structure alternatives. One of the most fundamental points in considering rate structures is the relationship between fixed and variable costs. Fixed costs, such as debt service and personnel costs, typically do not vary with the amount of water consumed. In contrast, variable costs, such as the cost of purchased water, chemicals, and electricity, tend to change with the quantity of water sold. The vast majority of rate structures contain a fixed, or minimum, charge in combination with a volumetric charge. • Fixed Charges – Fixed charges can be called base charges, minimum monthly charges, customer charges, fixed meter charges, etc. Fixed charges for water utilities typically increase by meter 7 James C. Bonbright, Albert L. Danielsen, and David R. Kamerschen, Principles of Public Utility Rates, Arlington, VA: Public Utilities Report, Inc., Second Edition, 1988, pp. 383-384.
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size. For example, a customer with a 2-inch meter has a fixed meter charge that is more than five times greater than the typical residential customer based on the safe operating capacity of the meter.
8 Since a large portion of utility costs are typically related to meeting capacity requirements, individual capacity demands are important in establishing equitable rates for customers.
• Variable (Consumption-Based) Charges – In contrast to fixed charges, variable costs, such as purchased water, groundwater replenishment costs, and the cost of electricity used in pumping water and chemicals for treatment, tend to change with the quantity of water produced. For a water utility, variable charges are calculated based on a metered consumption per unit price (e.g., per 100 cubic feet, or HCF).
• Uniform (Single-Tier) Water Rates – There are significant variations in the basic philosophy of variable charge rate structure alternatives. Under a uniform (single tier) rate structure, the cost per unit does not change with consumption and, therefore, provides a simple and straightforward approach from the customer’s perspective and in terms of the City’s rate administration.
• Tiered Water Charges – In contrast to a uniform tier, a tiered (or inclining block) rate structure attempts to send a price signal to customers that the cost of water increases as more water is consumed and is considered to be a more conservation-oriented rate structure. Tiered water rates are encouraged by state law and regulatory mandates but are also intended to represent the higher costs for customers who contribute more to peak usage and place greater demands on the system. The types of higher costs reflected in the higher tiers may include:
• Conservation Program Costs - These are costs intended to encourage customers to eliminate inefficient and wasteful water use, and otherwise reduce consumption during peak periods.
• Purchased Water Costs - When consumption exceeds the amount of water rights the City is allocated, the City may incur additional costs for replacement water in order to meet that increased demand. That replacement water comes at a higher cost. • Energy Costs - During summer months, the City may pay more in electric charges to pump, treat, and deliver water, and have a higher percentage of its energy bill in higher electricity “tiers.”
• Higher Maintenance Costs - Peak periods tend to have a higher number of service calls, capacity costs, and system maintenance issues when the water system is running at peak demand.

REGULATORY ISSUES
Drought and Water Conservation – On January 17, 2014, Governor Jerry Brown declared a State of Emergency throughout California due to severe drought conditions. On April 1, 2015, the Governor issued Executive Order B-29-15 mandating statewide water conservation of 25 percent. The specific conservation mandate for each community in California varied from 4 to 36 percent. Beginning in June 2016, 8 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, Manual M1, AWWA, 7th Edition, 2017, pp. 151- 152.
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communities like the City were allowed to “self-certify” that they had sufficient supply to meet customer demand for three years but were no longer mandated to achieve a specific conservation target.

While conservation is good from a supply and environmental standpoint, it places added financial pressure on the water utility. Consumption impacts both revenue and expenses and, with positive conservation efforts continuing to be a priority for the City, revenue declines could put the water utility at risk in the future without changes in the consumption charges. To help offset these risks, the drought rates proposed in this study account for various stages of water conservation to allow the City to continue meeting its financial obligations going forward. The drought rates would be intended to go into effect whenever the City declares it is in a specific stage of its adopted drought mitigation plan.

KEY FINANCIAL ASSUMPTIONS
The following is a summary of the key financial assumptions used in the analyses. The following capital and operational fund targets reflect input from City staff in order to meet specific utility objectives:
• Funding of Capital Projects – The capital improvement costs will be funded with a combination of cash in reserves and the additional revenue generated from the proposed rate increases.

The capital projects listed in the financial plan are from the City’s capital improvement plan.

The analysis assumes:
• Capital costs attributable to existing customers are funded by rate revenue. • Capital costs attributable to growth are funded through revenue from the capacity fee reserves.
• Reserve Targets – For each utility (i.e., water, recycled water, and sewer), the City maintains reserves for operations, capital, and other specific needs. The details of each utility’s reserve targets are covered in their respective section of this report. • Inflation and Growth Projections – Assumptions were made in the analysis with regard to cost inflation in order to project future revenues and expenses for the study period. The following inflation factors were used in the analysis:
• Customer growth is estimated at 1.80% per year.
• General cost inflation is set at 3.0% annually.
• Labor cost inflation is set at 3.5% annually.
• Energy cost inflation is set at 7.44% annually.
• Electricity cost inflation is set at 5.64% annually.
• Fuel & Utilities cost inflation is set at 5.24% annually. • Construction cost inflation is set at 3.5% annually.

These inflation factors are based on long-term trends; therefore, the City should re-examine these factors in another year to assess whether short-term trends are a better reflection of the costs going forward. 82 Enterprise Rate Study – City of American Canyon
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2. Water Rate Study

2.1 Key Water Rate Study Issues
The City’s water rate analysis was undertaken with a few specific objectives, including:
• Generating sufficient revenue to meet anticipated operating and maintenance costs and fund necessary capital improvement projects for the next five years. • Continuing with a rate design that promotes revenue stability. • Developing drought rates.
• Verifying that the City’s tiered volumetric rates are cost of service based. • Encouraging water conservation with a tiered rate structure. • Maintaining adequate reserve levels to ensure continuity in operations. • Complying with the legal requirements of Proposition 218 to ensure the cost of providing service is properly allocated amongst user classifications.

NBS developed various water rate alternatives as requested by City staff over the course of this study. All rate structure alternatives relied on industry standards and cost-of-service principles. The fixed charges and volume-based rates were calculated based on the net revenue requirements, number of customer accounts, water consumption and estimated water discharge, and other relevant data provided by the City.

The following are the basic components included in this analysis:
• Developing Cost Allocations – The water revenue requirements were “functionalized” into five categories: (1) commodity (or volume-based) costs; (2) recycled water costs; (3) fixed capacity costs; (4) customer service costs; and (5) fire protection costs. These functionalized costs were then used to develop unit costs based on various factors, such as water consumption, peaking factors, and number of accounts by meter size.
• Determining Revenue Requirements by Customer Class – The total revenue that needs to be collected from each customer class was determined using the functional costs and allocation factors. For example, customer costs are allocated based on the number of meters, while volume-related costs are allocated based on the water consumption of each customer class.

Once the costs are allocated and the net revenue requirement for each customer class is determined, collecting the revenue requirements from each customer class is addressed within the rate design.
• Evaluating Rate Design (Fixed vs. Variable Charges) – The revenue requirements for each customer class are collected through a combination of fixed monthly service charges and volumetric rates.

2.2 Financial Plan
It is important for municipal utilities to not only collect sufficient revenues every year, but to also maintain reasonable reserves to handle emergencies, fund working capital, maintain a good credit rating, and generally follow sound financial management practices. Rate adjustments are governed by the need to meet operating and capital costs as well as maintain reasonable reserve funds. The current state of the City’s water utility, with regard to these objectives, is as follows:
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• Meeting Net Revenue Requirements: For FY 2023/24 through FY 2027/28, the projected net revenue requirement (that is, total annual expenses plus debt service and rate-funded capital costs, less non-rate revenues) for the water system is approximately $13.4 million per year. The net revenue requirement includes interfund transfers for debt service and capital projects totaling $4.0 million annually and are expected to continue over the next five years. As a result, the water utility is financially sound and requires only minimal rate adjustments over the 5-year rate adoption period. However, it is important to note that the utility would be facing a deficit that would grow to $3.8 million by the end of this period if these contributions were to cease. • Building and Maintaining Reserve Funds: Reserve funds provide a basis for a utility to cope with fiscal emergencies, such as revenue shortfalls, asset failure, and natural disasters, among other events. Reserve policies provide guidelines for sound financial management, with an overall long-range perspective to maintain financial solvency and mitigate financial risks associated with revenue instability, volatile capital costs, and unexpected emergencies. • NBS along with City staff have chosen to set the following reserve targets:
• Operating Reserve set equal to 90 days of operating and maintenance expenses, or approximately $1.9 million in FY 2023/24. An operating reserve is intended to promote financial viability in the event of any short-term fluctuation in revenues and/or expenditures, such as those caused by weather patterns, the natural inflow and outflow of cash during billing cycles, natural variability in demand-based revenue streams (e.g., volumetric charges), and - particularly in periods of economic distress - changes or trends in the age of receivables.
• Capital Rehabilitation & Replacement Reserve, at a minimum, should equal 3% of net capital assets, or approximately $1.9 million in FY 2023/24. This reserve is intended to be a cash resource set aside to address long-term capital system replacement and rehabilitation needs.
• Funding Capital Improvement Projects: The City must also be able to fund necessary capital improvements in order to maintain current service levels. City staff has identified roughly $20.2 million in expected capital expenditures for the next five years (FY 2023/24 through FY 2027/28) which is an average of $4 million in capital expenditures annually. Beyond FY 2027/28, an average of $4 million in capital expenditures is expected annually (future year value). With the recommended rate increases, these capital expenditures can be funded without draining existing reserves.
• Inflation and Growth Projections: Assumptions regarding cost inflation were made in order to project future revenues and expenses for the study period. Customer growth is expected to be nearly 1.80% annually. This factor was used in the analysis for some revenues and expenses, and all other inflation factors are based on the Consumer Price Index for all urban consumers in the San Francisco area.9
• Impact of Annual Rate Adjustment Date: The financial plan assumes that rate adjustments occur in January of each year. This means that only about half of the planned revenue to be collected from the rate adjustment listed for one fiscal year will be collected in that year.

However, the rated adjustment in Year 1 is scheduled to occur in April 2024 which means that 9 Website: https://www.bls.gov/cpi/.
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the 9.0% increase in rate revenue planned will result in rates that recover $10.3 million. In other words, due to the timing of when the rates will go into effect, the financial plan results in only $9.4 million in rate revenue that will be collected for FY 2023/24 due to the end of year implementation.
• Figure 2 summarizes the sources and uses of funds, net revenue requirements, and the annual percentage adjustments in total rate revenue recommended for the next 5 years.

Figure 2. Summary of Water Revenue Requirements
Figure 3 summarizes the projected reserve fund balances and reserve targets for the City’s unrestricted funds. A detailed version of the proposed 5-year financial plan is included in Appendix A. The tables in the appendix include the revenue requirement, reserve funds, revenue sources, proposed rate adjustments, capital improvement program, and the proposed rate adjustments needed to meet City’s funding requirements.

Figure 3. Summary of Primary Water Reserve Funds

2.3 Cost-of-Service Analysis
Once the net revenue requirements are determined, the cost-of-service analysis (COSA) proportionately distributes the revenue requirements to each of the customer classes. The COSA consists of two major Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sources of Water Funds
Rate Revenue Under Prevailing Rates $ 8,410,172 $ 8,544,184 $ 9,441,640 $ 9,611,590 $ 9,774,987 $ 9,941,161 $10,110,161 Non-Rate Revenues 664,001 448,314 473,600 482,125 490,321 498,656 507,134 Interest Earnings (212,625) 215,995 275,008 87,285 61,319 56,589 58,325 Total Sources of Funds $ 8,861,548 $ 9,208,492 $10,190,248 $10,180,999 $10,326,626 $10,496,407 $10,675,619 Uses of Water Funds
560 - Water Treatment Plant $ 1,483,133 $ 1,788,187 $ 2,088,189 $ 3,357,121 $ 2,228,382 $ 2,302,054 $ 2,378,221 565 - Water Distribution 991,284 1,013,187 1,536,149 1,586,987 1,639,520 1,693,803 1,749,895 50 - Public Works 1,356,080 1,616,039 366,768 378,613 390,854 403,506 416,582 Water Purchases 3,380,850 4,035,407 3,602,218 3,674,262 3,747,748 3,822,703 3,899,157 Non-Operating Expenses 1,263,894 1,798,674 2,206,123 2,207,963 2,171,674 2,237,313 2,304,938 Debt Service 523,735 744,109 820,140 823,637 1,468,278 2,523,408 3,014,261 Rate-Funded Capital Expenses 251,795 2,790,541 4,566,877 1,523,075 1,565,040 754,328 665,707 Total Use of Funds $ 9,250,771 $13,786,145 $15,186,464 $13,551,658 $13,211,497 $13,737,114 $14,428,761 Surplus (Deficiency) before Rate Increase $ (389,223) $ (4,577,653) $ (4,996,216) $ (3,370,659) $ (2,884,870) $ (3,240,707) $ (3,753,142) Additional Revenue from Rate Increases1
- - 212,437 1,336,492 2,361,290 3,190,413 3,710,759
Surplus (Deficiency) after Rate Increase $ (389,223) $ (4,577,653) $ (4,783,779) $ (2,034,168) $ (523,580) $ (50,295) $ (42,383) Projected Annual Rate Increase 0.00% 0.00% 9.00% 9.00% 9.00% 4.00% 3.00% Cumulative Rate Increases 0.00% 0.00% 9.00% 18.81% 29.50% 34.68% 38.72% Net Revenue Requirement2 $ 8,799,395 $13,121,837 $14,393,795 $12,938,188 $12,610,375 $13,132,387 $13,813,821

1. Assumes new rates are implemented April 1, 2024.

2. Total use of funds less non-rate revenues and interest earnings.

Summary of Sources and Uses of Funds and
Net Revenue Requirements
5-Year Projected Rate Period Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Operating Reserve
Ending Balance $ 3,245,347 $ 5,727,496 $ 4,142,536 $ 2,278,487 $ 1,930,446 $ 2,055,691 $ 2,188,848 Recommended Minimum Target 1,803,000 2,113,000 1,898,000 2,249,000 2,002,000 2,056,000 2,111,000 Capital Rehabilitation & Replacement Reserve
Ending Balance $ 35,571 $ 3,488,438 $ 2,118,478 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 Recommended Minimum Target 1,420,700 1,548,600 1,870,900 2,079,900 2,260,500 2,370,700 2,458,100 Total Ending Balance $ 3,280,918 $ 9,215,935 $ 6,261,013 $ 4,358,387 $ 4,010,346 $ 4,135,591 $ 4,268,748 Total Recommended Minimum Target $ 3,223,700 $ 3,661,600 $ 3,768,900 $ 4,328,900 $ 4,262,500 $ 4,426,700 $ 4,569,100 Beginning Reserve Fund Balances and
Recommended Reserve Targets
5-Year Projected Rate Period
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components: (1) the classification of expenses, and (2) the allocation of costs to each customer class. Costs are classified corresponding to the function they serve. All costs in the City’s budget are allocated to each component of the rate structure in proportion to the level of service required by customers. The level of service is related to the volume and strength of the water treated, infrastructure capacity, and customer service. These costs are based on allocation factors, such as water consumption, number of meters, and customer class. Ultimately, a COSA is intended to result in rates that are proportional to the cost of providing service to each customer class.

FUNCTIONALIZATION AND CLASSIFICATION OF COSTS
Most costs are not typically allocated just to fixed or variable categories but allocated to multiple functions of water service. The functionalization and classification process provides the basis for allocating costs to various customer classes based on the cost causation (classification) components described below:
• Commodity related costs are costs associated with the change in the volume of water produced and delivered. These commonly include the costs of water quality testing, energy related to pumping for transmission and distribution, and source of supply. • Capacity related costs are costs associated with sizing facilities to meet the maximum, or peak, demand. This includes both operating costs and capital infrastructure costs incurred to accommodate peak system capacity events.
• Customer related costs are costs associated with having a customer connected to the water system, such as meter reading, postage, billing, and other administrative duties. • Recycled Water related costs are costs associated with the collection, treatment, and delivery of recycled water. Recycled water customers have separate fixed and volumetric rates which are discussed further in Section 3.
• Fire Protection related costs are costs associated with providing sufficient capacity in the system for fire meters and other operating and maintenance costs of providing water to properties for private fire service protection.

The City’s budgeted costs were reviewed and allocated to these cost causation components which are used as the basis for establishing new water rates and translated to fixed and variable charges. Tables in the Appendices show how the City’s expenses were classified and allocated to these cost causation components. In the analysis, these cost causation components are also considered to be either fixed or variable.

FIXED AND VARIABLE COSTS
Ideally, utilities should recover all of their fixed costs from fixed charges and all of their variable costs from volumetric rates. When this is the case, fluctuations in water sales revenues would be directly offset by reductions or increases in variable expenses. When rates are set in this manner, they provide greater revenue stability for the utility. However, other factors are often considered when designing water rates, such as community values, water conservation goals, ease of understanding, and ease of administration.10 10 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, Manual M1, AWWA, 7th Edition, 2017, pp. 6 and

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NBS functionalized the City’s costs into categories that can be more generally grouped into fixed and variable costs. This analysis resulted in a cost distribution that is approximately 56% fixed and 44% variable (i.e., volumetric or source specific). However, the City has decided on a rate structure that collects 40% of the net revenue requirement from fixed charges and 60% from volumetric rates. This rate structure will provide financial stability for the City, while maintaining a tiered rate structure that encourages water conservation. The proposed new rates are based on these allocations.

Figure 4 summarizes how costs are allocated to each cost component and used to establish new water rates. Figure 5 shows the resulting cost allocation to each cost classification component. The remaining revenue requirements are allocated to capacity, customer, and fire protection cost categories.

Figure 4. Allocation Percentages of Revenue Requirements Figure 5. Allocated Net Revenue Requirements

2.4 Characteristics of Water Customers by Customer Class Customer classes are typically determined by grouping customers with similar demand characteristics into categories that reflect the cost differentials to serve each type of customer. Customer classes are most often identified as single family, multi-family, commercial, landscape, etc., and the City follows this common methodology. The rates proposed in this report follow a similar structure where the fixed charges within each customer class vary by meter size. Variable rates are tiered (two tiers) for single family residential (SFR); all other customers are charged a uniform volumetric rate.

The amount of consumption, the peaking factors, and the number of meters by size are used to allocate costs as a part of COSA to allocate costs to customer classes and determine the appropriate rate structures for each. These components of the COSA are presented in the following figures.

Commodity-Related Costs $ 6,174,833 60.0%
Capacity-Related Costs 3,709,181 36.0%
Customer-Related Costs 300,640 2.9%
Fire Protection-Related Costs 106,734 1.0%
Net Revenue Requirement $ 10,291,388 100.0%
Classification Components

PROPOSED ALTERNATIVE
Cost-of-Service Net Revenue
Requirements (FY 2023/24)

VARIABLE
Residential $ 3,092,204 $ 1,565,159 $ 214,963 $ - $ 4,872,326 47.3% Multi-Family 546,290 1,777,034 56,075 - 2,379,400 23.1% Commercial 1,943,118 221,463 15,109 - 2,179,689 21.2%
Landscape 323,989 38,794 3,216 - 365,999 3.6%
Private Fire Protection 139,154 77,779 10,792 106,734 334,458 3.2% Temporary Hydrant Meters 50,606 16,254 352 67,213 0.7%
Raw Water 79,472 12,699 132 - 92,303 0.9%
Total Net Revenue Requirement $ 6,174,833 $ 3,709,181 $ 300,640 $ 106,734 $ 10,291,388 100% Customer Classes Cost of Service
Net Rev. Req'ts
% of COS Net
Revenue
Req'ts
CapacityRelated Costs
Classification Components
CustomerRelated CostsFire ProtectionRelated CostsCommodityRelated Costs FIXED
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Commodity related costs are costs associated with the total annual consumption of water by customer class. Figure 6 below summarizes the most recent consumption data by customer class and represents the expected percent of consumption over the 5-year rate period.

Figure 6. Water Consumption by Customer Class
Figure 7 shows the capacity allocation factors for each customer class.

Figure 7. Capacity Factors by Customer Class
Customer Class
FY 2021/22
Consumption
(hcf)
% Adjustment for
Conservation2
Est. FY 2021/22
Volume
Adjusted for
Conservation
FY 2021/22
% of Total
Volume
Residential 507,339 20.0% 405,871 50.1%
Multi-Family 89,630 20.0% 71,704 8.8%
Commercial 318,808 20.0% 255,046 31.5%
Landscape 53,157 20.0% 42,526 5.2%
Private Fire Protection 22,831 20.0% 18,265 2.3%
Temporary Hydrant Meters 8,303 20.0% 6,642 0.8%
Raw Water 13,039 20.0% 10,431 1.3%
Total 1,013,107 810,486 100%

1. Consumption data is based on the City of American Canyon's billing data.

2. A conservation factor of 20% included in table above based on the "20 by 2020" law passed in 2009.

Source: https://www.ca-ilg.org .

Customer Class Meter Size1 No. of Meters
Hydraulic
Capacity
Factors2
Total
Equivalent
Meters
% of EDUs
Residential 4,880 4,930 42.2%
< 1" meter 1,986 1.00 1,986
1" meter 2,875 1.00 2,875
1 1/2" meter 7 2.00 14
2" meter 9 3.20 29
3" meter 1 6.40 6
4" meter 2 10.00 20
Multi-Family 556 5,598 47.9%
1 1/2" meter 20 2.00 40
2" meter 201 3.20 643
3" meter 96 6.40 614
4" meter 48 10.00 480
6" meter 191 20.00 3,820
Commercial 343 698 6.0%
< 1" meter 102 1.00 102
1" meter 88 1.00 88
1 1/2" meter 54 2.00 108
2" meter 81 3.20 259
3" meter 11 6.40 70
4" meter 7 10.00 70
Landscape 73 122 1.0%
< 1" meter 13 1.00 13
1" meter 30 1.00 30
1 1/2" meter 14 2.00 28
2" meter 16 3.20 51
Private Fire Protection 245 245 2.1%
< 1" meter 245 1.00 245
Temporary Hydrant Meters 8 51 0.4%
3" meter 8 6.40 51
Raw Water 3 40 0.3%
4" meter 2 10.00 20
6" meter 1 20.00 20
Total 6,108 11,684 100%

1. Meter by class and size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1. 88 Enterprise Rate Study – City of American Canyon
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Figure 8 shows the number of meters for each customer class. The percentage of total customers by customer class is then used to develop the customer allocation factors in order to allocate customer costs.

Customer costs are those costs associated with having customers connected to the water system and include costs related to meter reading, postage, and billing.

Figure 8. Number of Meters by Customer Class

2.5 Rate Design Analysis
The process of evaluating the water rate structure provides the opportunity to review and incorporate ratedesign objectives and policies, including revenue stability, equity among customers, and water conservation. NBS discussed several water rate alternatives and methodologies with City Staff over the course of this study, such as the percentage of revenue collected from fixed charges vs. variable rates and differentiating rates by customer class. Ultimately, City staff selected a rate alternative that is similar to the results of the COSA that includes a fixed service charge based on customer class and meter size. The following sections describe this process. The selected rate structure also maintains the existing two tiers for single family residential customers and proposes a uniform tier for all other customer classes.

The following sections describe how the proposed water rates were developed.

DEVELOPMENT OF PROPOSED RATES
Fixed Service Charges
The fixed meter charge recognizes that the water utility incurs fixed costs regardless of whether customers actually use water. There are two components that comprise the fixed meter charge: (1) the customer component, and (2) the capacity component. The customer components are those costs related to reading and maintaining meters, customer billing and collection, and other customer service-related costs. The capacity component recovers costs associated with sizing the water system to ensure there is sufficient capacity in the system to meet peak demand. A user class with higher peaking (capacity) needs is allocated a proportionately higher share of the capacity related costs compared to customer classes with lower peaking needs.

Customer Class
No. of
Meters/Accounts
FY 2021/221
% of Total Meters
Residential 4,880 71.5%
Multi-Family21,273 18.7%
Commercial 343 5.0%
Landscape 73 1.1%
Private Fire Protection 245 3.6%
Temporary Hydrant Meters 8 0.1%
Raw Water 3 0.0%
Total 6,825 100.0%

1. Meter count data is based on the City's billing data for June 2022.

2. Multi-family residential customers are by dwelling units. 89 Enterprise Rate Study – City of American Canyon
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Meter sizes have different fixed charges based on their capacity requirements, where larger meters have the potential to use more of the system’s capacity11 or, said differently, they can have higher peaking factors compared to smaller meters. The potential capacity demanded (peaking) is proportional to the maximum hydraulic flow through each meter size based on the hydraulic capacity ratios established by AWWA.
12 The AWWA capacity ratios used for this report are shown in Figure 9.

Figure 9. Hydraulic Capacity Factors
The actual number of meters by size is multiplied by the corresponding capacity ratios to calculate equivalent meters. The number of equivalent meters is used as a proxy for the potential demand that each customer can place on the water system. Figure 10 summarizes the number of meters, the hydraulic capacity factors, and the number of equivalent meters (i.e., the number of meters multiplied by the hydraulic capacity factor) by customer class and meter size.

Figure 10. Equivalent Meters
Using the costs allocated to each customer class from Figure 5, Figure 11 shows the calculation of the fixed monthly service charges for all customer classes based on meter size. As previously mentioned, the customer service charge is calculated by dividing the customer service-related costs by the total number of 11 System capacity is the system’s ability to supply water to all delivery points at the time when demanded. 12 Principles of Water Rates, Fees and Charges, Manual of Water Supply Practices, Manual M1, AWWA, 7th Edition, 2017, p. 386.

Water Meters – Selection, Installation, Testing and Maintenance, Manual M6, AWWA, 5th Edition, 2012, pp. 63-65. 5/8 inch 20 1.00
3/4 inch 30 1.00
1 inch 50 1.00
1 1/2 inch 100 2.00
2 inch 160 3.20
3 inch 320 6.40
4 inch 500 10.00
6 inch 1,000 20.00
8 inch 1,600 32.00
10 inch 4,200 84.00
12 inch 5,300 106.00

1. Per AWWA, M1 Manual, Table B-1.

Compound Class I Meters
Turbine Class II Meters
Meter Capacity
(gpm)1
Meter Size Equivalency
to 1 inch
Displacement Meters
Standard Meters
< 1" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter Residential 1,986 2,875 7 9 1 2 0 0 4,880
Multi-Family 0 0 20 201 96 48 191 0 556
Commercial 13 30 14 16 0 0 0 0 73
Commercial 102 88 54 81 11 7 0 0 343
Private Fire Protection 245 0 0 0 0 0 0 0 245
Temporary Hydrant Meters 0 0 0 0 8 0 0 0 8
Raw Water 0 0 0 0 0 2 1 0 3
Total Meters/Accounts 2,346 2,993 95 307 116 59 192 0 6,108 Hydraulic Capacity Factor 2 1.00 1.00 2.00 3.20 6.40 10.00 20.00 32.00 Total Equivalent Meters 2,346 2,993 190 982 742 590 3,840 0 11,684

1. Meter by Class and Size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

Number of Meters by Class and Size Total 1 FY 2023/24
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meters, whereas the fixed capacity charge is calculated by dividing the capacity-related costs by the total number of equivalent meters for each meter size.

Figure 11. Calculation of Fixed Service Charges (Residential) Volumetric Rates
Currently, the City uses a 2-tier rate structure for residential customers (i.e., single family customers), while all other customers are charged a uniform, or single tier, volumetric rate. The following sections of this report describe how the tiered rates were developed.

Source of Supply
The City has three primary sources of supply: (1) State Water Project (SWP); (2) Cities of Napa and Vallejo treated water; and (3) City of Vallejo raw water. Figure 12 shows how these supply sources are allocated to each tier. A description of how this allocation was developed is included in Appendix A.

Figure 12. Summary of Supply Sources Allocated to Tiers Figure 13 shows the amount of each source of supply that is included in the tiers for residential customers. < 1" meter 1" meter 1 1/2" 2" meter 3" meter 4" meter 6" meter 8" meter Monthly Fixed Service Charges
Customer Costs ($/Acct/month) $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 Capacity Costs ($/Acct/month) $27.22 $27.22 $54.43 $87.09 $174.19 $272.17 $544.33 $870.93 Total Monthly Meter Charge $31.32 $31.32 $58.53 $91.19 $178.29 $276.27 $548.43 $875.03 Annual Fixed Costs Allocated to Monthly Meter Charges
Customer Costs $ 300,640
Capacity Costs 3,815,915
Total Fixed Meter Costs $4,116,555
Annual Revenue from Monthly Meter Charges
Customer Charges $ 115,491 $ 147,298 $ 4,676 $ 15,111 $ 5,710 $ 2,904 $ 9,450 $ - $ 300,640 Capacity Charges $ 766,330 $ 977,381 $ 62,054 $ 320,851 $ 242,467 $ 192,693 $1,254,139 $ - $3,815,915 Total Revenue from Monthly Meter Charges $ 881,821 $1,124,680 $ 66,730 $ 335,961 $ 248,177 $ 195,597 $1,263,590 $ - $4,116,555 Number of Meters by Class and Size Total FY 2023/24
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Figure 13. Allocated Consumption from Each Source of Supply Residential Tiered Rates
Before the tiered rates could be developed, expected consumption in each tier was determined, and tier breakpoints were established. The breakpoint for Tier 1 was set so that expected consumption within each tier would most closely match the allocated consumption by that source. That is, the amount of expected consumption in Tier 1 would correspond to the amount of water that the SWP and the City of Vallejo (raw water) could supply. Similarly, expected consumption in Tier 2 corresponds to the amount of treated water supply from the cities of Napa and Vallejo.

For residential customers, the tier breakpoints were identified by first determining the quantity available in each tier (see Figure 13). Once the quantity of water by tier is determined, individual customer billing records are analyzed to determine what tier breakpoint would maximize the use of water in each tier. The resulting breakpoint was determined to be the 6 HCF as shown in Figure 14. The amount of estimated consumption in Tier 1 differs slightly from the allocated consumption due to the fact that monthly reads for all customers are not precise.

Figure 14. Tier Breakpoints for Residential Customers
Once the expected consumption by tier was determined, the expenses assigned to commodity-related costs, previously shown in Figure 4, were spread over the expected consumption resulting in the rates shown in Figure 15.

Figure 15. Tiered Rates for FY 2023/24
Uniform Rates
Expected consumption in the uniform tier accounts for the remaining amount of supply from all three water sources. Figure 16 identifies the uniform tier rate per unit of water for all non-residential customers.

In AF In HCF
SWP (Contracted Purchase) 3,590 1,563,804 81.5%
Vallejo Raw Water (Contracted Purchase) 500 217,800 11.4% Treated Water (Contracted Purchase)1 313 136,181 7.1%
Totals 4,403 1,917,785 100.0%
Source of Supply
Total Contracted Purchases Acre Feet as a
% of Total
Tier 1 - SWP & Vallejo Raw Water 322,836 79.5%
Tier 2 - Treated Water (Napa & Vallejo) 83,035 20.5%
Total 405,871 100.0% 7.0
% of
Consumption
Consumption
Avg. Monthly
Consumption
FY 2020/21 (hcf)
Tier
Breakpoint
(hcf)

6.00 Residential Tiers
Supply Costs
Allocated to
Residential
Tiered Rates
Source of
Supply Costs
Other Costs
Allocated to
Vol. Rates
Total Costs
Allocated
FY 2020/21
Consumption
Residential
Rates ($/HCF)
Residential Tiered Rate Costs (1) (2) (3) (4) (5) (6)
Tier 1 - SWP & Vallejo Raw Water 79.5% $ 565,431 $ 1,716,250 $ 2,281,681 322,836 $7.07 Tier 2 - Treated Water (Napa & Vallejo) 20.5% 369,096 441,426 810,523 83,035 $9.76 Total Residential Tiered Rate Costs 100.0% $ 934,527 $ 2,157,676 $ 3,092,204 405,871 Source of Supply
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Figure 16. Uniform Tier Rates for FY 2023/24
The rate for each unit of water is determined by dividing costs to recover, or total target revenue requirements, per tier by the estimated consumption. The tiered rates per HCF are identified as follows:
• Residential Tier 1 is equal to the costs for water from the SWP and the raw water from the City of Vallejo.
• Residential Tier 2 is equal to the treated water costs for the cities of Napa and Vallejo. • Uniform Tier is equal to all remaining water supply costs not allocated to residential customers from SWP and the cities of Napa and Vallejo.

In addition to developing the uniform volumetric rates shown in Figure 16, the City Council requested an alternative analysis that was based on the City’s current volumetric water rate increased by three percent a year, with the fixed charges remaining as proposed. This analysis compared the revenue generated from the cost of service volumetric rates with the rates generated using three percent escalation. Figure 17 compares the revenue generation from the two approaches.

Customer Classes
Number of
Meters1
Water
Consumption
(hcf/yr)2
Total Target
Rev. Req't from
Vol. Charges
% of Total Rate
Revenue
Uniform
Commodity
Rates ($/hcf)
Proposed Rate
Structure
Residential 4,880 405,871 $ 3,092,204 30.0% n/a 2 Tiers Multi-Family 1,273 71,704 546,290 5.3% $7.619 Uniform
Commercial 343 255,046 1,943,118 18.9% $7.619 Uniform
Landscape 73 42,526 323,989 3.1% $7.619 Uniform
Private Fire Protection 245 18,265 139,154 1.4% $7.619 Uniform Temporary Hydrant Meters 8 6,642 50,606 0.5% $7.619 Uniform Raw Water 3 10,431 79,472 0.8% $7.619 Uniform
Total Potable Water 6,825 810,486 $ 6,174,833 60%

1. Consumption data is based on the City of American Canyon's billing data.

2. Water consumption is actual consumption for FY 2021/22 and includes an adjustment of 20% for conservation. See Table 28. 93 Enterprise Rate Study – City of American Canyon
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Figure 17. Variable Revenue Comparison

2.6 Proposed Water Rates
Currently, all customers are subject to a fixed service charge that varies by meter size and volumetric rates based on consumption for the various customer classes. The cost-of-service analysis (COSA) by nature “rebalances” how costs are allocated between customer classes and, as a result, there are uneven adjustments in the first year of the 5-year rate adoption period. In contrast, in the subsequent four years of the rate planning period, proposed charges are simply adjusted by the proposed adjustment in total rate revenue needed to meet projected revenue requirements.

The following figures provide a comparison of the current and proposed water rates for FY 2023/24 through 2027/28 for each customer class and meter size. Projected rates for FY 2023/2413 reflect adjustments based on the COSA. More detailed tables on the development of the proposed water rates are documented in Appendix A.
13 All rate adjustments are scheduled to be effective on January 1st except Year 1 which will be implemented on April 1, 2024.

ALTERNATIVE 1 (COSA)
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Residential
Tier 1 - SWP & Vallejo Raw Water $ 2,459,588 $ 2,487,033 $ 2,710,866 $ 2,819,300 $ 2,903,879 Tier 2 - Treated Water (Napa & Vallejo) 632,616 883,470 962,982 1,001,501 1,031,546 Multi-Family 546,290 595,456 649,047 675,009 695,259
Commercial 1,943,118 2,117,998 2,308,618 2,400,963 2,472,992 Landscape 323,989 353,148 384,931 400,329 412,339
Private Fire Protection 139,154 151,678 165,329 171,942 177,100 Temporary Hydrant Meters 50,606 55,161 60,125 62,530 64,406 Raw Water 79,472 86,624 94,421 98,198 101,143
Total $ 6,174,833 $ 6,730,567 $ 7,336,319 $ 7,629,771 $ 7,858,664 ALTERNATIVE 2 - INCREASE CURRENT VARIABLE RATES BY 3% ANNUALLY FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Residential
Tier 1 - SWP & Vallejo Raw Water $ 2,507,212 $ 2,582,428 $ 2,659,901 $ 2,739,698 $ 2,821,889 Tier 2 - Treated Water (Napa & Vallejo) 697,036 717,947 739,485 761,670 784,520 Multi-Family 570,162 587,266 604,884 623,031 641,722
Commercial 2,028,027 2,088,868 2,151,534 2,216,080 2,282,562 Landscape 338,147 348,291 358,740 369,502 380,587
Private Fire Protection 72,617 74,796 77,040 79,351 81,731 Temporary Hydrant Meters 52,818 54,402 56,034 57,715 59,447 Raw Water 36,960 38,069 39,211 40,387 41,599
Total $ 6,302,977 $ 6,492,067 $ 6,686,829 $ 6,887,434 $ 7,094,057 Difference $ (128,145) $ 238,501 $ 649,490 $ 742,338 $ 764,608 Customer Class COSA Revenue
Customer Class COSA Revenue
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Figure 18. Current and Proposed Water Rates - Fixed Charges FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Monthly Fixed Service Charges (in $/mo)
Residential Use
< 1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $26.56 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $26.56 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $26.56 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $26.56 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $26.56 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $26.56 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Multi-Family, Commercial and Landscape
< 1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter (Residential) $26.56 $31.32 $34.14 $37.21 $38.70 $39.86 1" meter (Commercial) $44.42 $31.32 $34.14 $37.21 $38.70 $39.86 1 1/2" meter $88.75 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $141.99 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $283.98 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $443.74 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $887.48 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $1,420.06 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Private Fire Protection
< 1" meter $13.28 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $13.28 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $13.28 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $13.28 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $13.28 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $13.28 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $13.28 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $13.28 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Temporary Hydrant Meters
< 1" meter $283.98 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $283.98 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $283.98 $58.53 $63.80 $69.55 $72.33 $74.50 2" meter $283.98 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $283.98 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $283.98 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $283.98 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $283.98 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Raw Water
< 1" meter n/a $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $44.42 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter n/a $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $141.99 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter n/a $178.29 $194.33 $211.82 $220.30 $226.91
4" meter $443.74 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $887.48 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter n/a $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Water Rate Schedule Current Proposed Rates
Rates
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Figure 19. Current and Proposed Water Rates - Variable Rates (COSA) Figure 20. Current and Proposed Water Rates - Variable Rates (Alternative 2)

2.7 Comparison of Current and Proposed Water Bills
Figure 21 and Figure 22 compare a range of monthly water bills under the current and proposed water rates for residential and commercial customers. These monthly bills are based on typical meter sizes and highlight the average consumption levels for each customer.

Figure 21. Monthly Water Bill Comparison for Residential Customers FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Residential Use
Tier 1 (0 - 6 units) $7.54 $7.07 $7.70 $8.40 $8.73 $8.99 Tier 2 (> 6 units) $8.15 $9.76 $10.64 $11.60 $12.06 $12.42 Multi-Family, Commercial and Landscape $7.72 $7.62 $8.30 $9.05 $9.41 $9.70 Private Fire Protection $3.86 $7.62 $8.30 $9.05 $9.41 $9.70 Temporary Hydrant Meters $7.72 $7.62 $8.30 $9.05 $9.41 $9.70 Raw Water $3.44 $7.62 $8.30 $9.05 $9.41 $9.70
Variable Rates for All Water Consumed (in $/hcf)
Water Rate Schedule Current
Rates
Proposed Rates
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Residential Use
Tier 1 (0 - 6 units) $7.54 $7.77 $8.00 $8.24 $8.49 $8.74 Tier 2 (> 6 units) $8.15 $8.39 $8.65 $8.91 $9.17 $9.45
Multi-Family, Commercial and Landscape $7.72 $7.95 $8.19 $8.44 $8.69 $8.95 Private Fire Protection $3.86 $3.98 $4.10 $4.22 $4.34 $4.47 Temporary Hydrant Meters $7.72 $7.95 $8.19 $8.44 $8.69 $8.95 Raw Water $3.44 $3.54 $3.65 $3.76 $3.87 $3.99
Water Rate Schedule Current
Rates
Proposed Rates
Variable Rates for All Water Consumed (in $/hcf)
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Figure 22. Monthly Water Bill Comparison for Commercial Customers

2.8 Drought Rates
The City is obligated to meet its annual net revenue requirements to keep the utility operating and functional regardless of whether consumption levels decline due to conservation or other unexpected events (e.g., unseasonal weather, natural disasters, etc.). At the request of the City, drought rates have been developed so that if total consumption should decrease further due to an increase in conservation required by the state, another regulatory agency, or if the City Council declares that it is in more severe drought stages, the City’s water utility would still be kept whole, financially. In the event that consumption decreases beyond projected baseline consumption levels, some costs will also decrease, and the proposed drought rates have taken this reduced revenue need into consideration.14 Figure 23 shows the expenses directly impacted by conservation over the next five years. Because these expenses are a significant portion of the City’s budget, drought rates will offset the loss of variable revenue, if needed and implemented by the City in different stages of drought severity.

Figure 23. Expenses Directly Impacted by Conservation
14 Details regarding the calculation of the drought rates can be found in Appendix A.

FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
City of Napa $ 278,000 $ 283,560 $ 289,231 $ 295,016 $ 300,916 North Bay Aqueduct 3,203,000 3,267,060 3,332,401 3,399,049 3,467,030 City of Vallejo 121,218 123,642 126,115 128,638 131,210 Total: $ 3,602,218 $ 3,674,262 $ 3,747,748 $ 3,822,703 $ 3,899,157 Description
Commodity-Related Costs
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Figure 24 shows the calculation of the updated commodity costs for each percentage of conservation the City is looking to achieve with the drought rates for FY 2023/24. Figure 25 presents the proposed drought surcharge that would replace the uniform volumetric rate (shown in Figures 19 and 20) at each stage of conservation through FY 2027/28.

The projected monthly revenues should be based on the FY 2020/21 monthly consumption levels adjusted for conservation and the volumetric rate. Key aspects of the drought rates include:
• The drought surcharge was developed using water usage for FY 2020/21, the same assumption used in the proposed volumetric rates.
• The City Council must activate the drought rate surcharge. If the surcharge is activated, it will remain in effect as necessary and will be reviewed by the City Council at a minimum of every six (6) months for determination of necessity until the surcharge is deactivated. • The drought rate surcharge is added to the uniform volumetric rate on a per unit basis to cover the cost of water service during times of mandated conservation and/or extreme water supply shortage.

Figure 24. Projected Consumption at Baseline and Each Successive Drought Stage Figure 25. Proposed Drought Surcharges
Shortage
Level
Percent Shortage
Range
Potable Water
Consumption
(AF/yr.)
Potable Water
Consumption
(hcf/yr.)
Difference to
Baseline (hcf)
Baseline Consumption2 1,861 810,486 0
1 Up to 10% Voluntary Conservation 1,675 729,437 (81,049) 2 Up to 20% Water Alert 1,488 648,388 (162,097)
3 Up to 30% Water Emergency 1,302 567,340 (243,146)
4 Up to 40% Critical Water Emergency 1,116 486,291 (324,194) 5 Up to 50% Severe Water Emergency 930 405,243 (405,243) 6 >50% Catastrophic Interruption of Water Supplies 744 324,194 (486,291)

1. Drought stages based on the City's Water Conservation Plan. Source files: 2._Redlines_Ordinance_Water_Conservation_Plan_Chapter_13.14 (4).pdf & 3._Table_8-1_Water_Shortage_Contingency_Plan_Levels.pdf .

2. This represents the baseline consumption for FY 2021/22 consumption (excludes recycled water). Conservation percentage for each drought stage is relative to the baseline consumption.

Shortage Response Action
2021/22 Consumption Assumptions1
Drought Rate Schedule (in $/hcf) Current
Rates
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
10% Conservation n/a $0.35 $0.44 $0.53 $0.58 $0.62
20% Conservation n/a $0.79 $0.98 $1.19 $1.30 $1.39
30% Conservation n/a $1.36 $1.68 $2.03 $2.23 $2.39
40% Conservation n/a $2.12 $2.61 $3.16 $3.46 $3.71
50% Conservation n/a $3.17 $3.92 $4.75 $5.20 $5.57
60% Conservation n/a $4.76 $5.88 $7.12 $7.79 $8.36
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3. Recycled Water Rate Study

3.1 Key Recycled Water Rate Study Issues
Recycled water rates face a unique set of challenges in determining what rates should be charged.

Regardless of actual system costs, rates cannot exceed what the “market” can bear, or else recycled water customers will likely use alternative sources. This has often resulted in setting these rates arbitrarily low so that they do not exceed the costs of alternative sources (or exceed potable prices). Actual costs are also unclear because typically wastewater customers often benefit from reclaimed water as it tends to reduce wastewater disposal costs.

The primary issues addressed in this study for the recycled water system were: (1) ensuring rates generate a reasonable level of revenue to pay for operating costs of the system, and (2) establishing reasonable rates that are competitive with other sources of irrigation water while ideally recovering basic operating costs.

Currently, the City does not have separate fixed charges and volumetric rates for recycled water customers, so NBS worked with City staff to determine the appropriate cost allocations of sewer treatment and distribution costs that recycled water customers should pay. The following sections describe the results of this analysis.

3.2 Recycled Water Utility Revenue Requirements
A cost-of-service analysis was performed, and rates were designed to collect 80% of the rate revenue from variable rates and 20% from fixed rates. Recycled water connections represent about 1.1% of all the City’s meters. Figure 26 summarizes the sources and uses of funds, net revenue requirements, and the annual percentage adjustments in total rate revenue recommended for the next 5 years, and Figure 27 summarizes the recycled water revenue requirements for FY 2023/24.

Figure 26. Summary of Recycled Water Revenue Requirements Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sources of Water Funds
Rate Revenue Under Prevailing Rates $ 151,038 $ 226,361 $ 207,000 $ 210,726 $ 214,308 $ 217,952 $ 221,657 Interest Earnings 4,101 12,392 22,343 2,195 7,873 4,912 2,640 Total Sources of Funds $ 155,140 $ 238,753 $ 229,343 $ 212,921 $ 222,182 $ 222,864 $ 224,297 Uses of Water Funds
Fund 580 - Recycled Water Operations $ 272,644 $ 1,632,152 $ 893,163 $ 797,921 $ 823,477 $ 849,857 $ 877,086 Interfund Loan Repayment - - 198,566 198,566 267,497 267,497 267,497 Rate-Funded Capital Expenses - - - - - - -
Total Use of Funds $ 272,644 $ 1,632,152 $ 1,091,728 $ 996,487 $ 1,090,974 $ 1,117,354 $ 1,144,583 Surplus (Deficiency) before Rate Increase $ (117,504) $ (1,393,399) $ (862,386) $ (783,566) $ (868,793) $ (894,490) $ (920,286) Additional Revenue from Rate Increases1 - - 129,375 563,692 652,033 728,149 788,637 Surplus (Deficiency) after Rate Increase $ (117,504) $ (1,393,399) $ (733,011) $ (219,874) $ (216,759) $ (166,341) $ (131,650) Projected Annual Rate Increase 0.00% 0.00% 250.00% 10.00% 10.00% 5.00% 5.00% Cumulative Rate Increases 0.00% 0.00% 250.00% 285.00% 323.50% 344.68% 366.91% Net Revenue Requirement2 $ 268,543 $ 1,619,760 $ 1,069,386 $ 994,292 $ 1,083,101 $ 1,112,441 $ 1,141,943

1. Assumes new rates are implemented April 1, 2024.

2. Total use of funds less interest earnings.

Summary of Sources and Uses of Funds and
Net Revenue Requirements
5-Year Projected Rate Period
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Figure 27. Summary of Recycled Water Revenue Requirements for FY 2023/24

3.3 Proposed Recycled Water Rates
Fixed Charges
Fixed charges have been calculated in the same manner as potable water fixed charges. Figure 28 shows the calculation of the monthly fixed meter charges. In total, the fixed and variable charges collect the target revenue from recycled water customers as shown previously in Figure 27.

Figure 28. Recycled Water Fixed Rate Calculation
Given the amount of consumption relative to the number of meters in the recycled water system, it is expected that 80% of the rate revenue will be collected from the variable charge. Figure 29 calculates the volumetric rate per HCF and the fixed monthly charge per equivalent meter (monthly fixed charges will be based on meter size).

Figure 29. Recycled Water Variable Rate Calculation

3.4 Current vs. Proposed Recycled Water Rates
Using the same hydraulic capacity factors listed in Figure 9, monthly fixed charges were developed for each meter size. Figure 30 shows the current and proposed recycled water rates for FY 2023/24 through FY Variable (Collected from Vol. Rates) $ 855,509 80%
Fixed (Collected from Fixed Charges) 213,877 20%
Net Revenue Requirement $ 1,069,386 100%
Recycled Water
Classification Components
Cost-of-Service Net Revenue
Requirements (2023/24)
Total
< 1" meter 1" meter 1 1/2" 2" meter 3" meter 4" meter 6" meter 8" meter Recycled Water
Recycled Water 2 13 14 28 13 6 0 0 76
Total Meters/Accounts 2 13 14 28 13 6 0 0 76
Hydraulic Capacity Factor 2 1.00 1.67 3.33 5.33 10.67 16.67 33.33 53.33 Total Equivalent Meters 2 22 47 149 139 100 0 0 458
Monthly Fixed Service Charges
Fixed Charge ($/EM/month)3 $38.89 $38.89 $38.89 $38.89 $38.89 $38.89 $38.89 $38.89 Fixed Monthly Charge $38.89 $64.81 $129.62 $207.40 $414.79 $648.11 $1,296.23 $2,073.96 Annual Fixed Costs Allocated to Monthly Meter Charges
Total Revenue from RW Meter Charges $ 933 $ 10,111 $ 21,777 $ 69,685 $ 64,708 $ 46,664 $ - $ - $ 213,877

1. Meter by Class and Size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

3. Cost per month per equivalent meter. Monthly fixed charges are set for each meter size using the hydraulic capacity factors and total equivalent meters.

Number of RW Meters
by Class and Size1
FY 2023/24
Recycled Water
Recycled Water 272,268 458 100.0% $ 855,509 $ 213,877 $ 1,069,386 $3.14 $38.89 Total Net Revenue Requirement 272,268 458 100.0% $ 855,509 $ 213,877 $ 1,069,386 -- --

1. Source file: 2020 Urban Water Management Plan , Figure 6.4.

2. Number of meters by size times the hydraulic capacity factor for each meter size. Source: AWWA, Manual M1, Table B-1 & AWWA, Manual M6, Table 5-3.

3. Total Variable Costs times the proportional share of annual RW consumption.

4. Fixed costs times the percent of equivalent meters.

5. Total Variable Costs divided by Total Annual RW Consumption.

6. Total Fixed Costs divided by total Equivalent Meters. This provides the basis for monthly fixed charges for each meter size.

RW Fixed
Charges
($/Eq. Meter/
Month) 6
RW
Volumetric
Rate
($/hcf)5
No. of Equiv.

Meters
Equivalent Meters2
% of Equiv.

Meters
Recycled Water Customers
Cost Allocation Factors
Net Revenue
Req'ts
Annual RW
Consumption1
Fixed
Costs4
Variable
Costs3
Cost Classifications
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2027/28. The self-haul rate was based on the current self-rate, then escalated at the same rate as the delivered recycled water.

Figure 30. Current and Proposed Recycled Water Rates
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Monthly Fixed Service Charges (in $/mo)
< 1" meter $26.56 $38.89 $42.78 $47.05 $49.41 $51.88
1" meter $44.42 $64.81 $71.29 $78.42 $82.34 $86.46
1 1/2" meter $88.75 $129.62 $142.58 $156.84 $164.69 $172.92 2" meter $141.99 $207.40 $228.14 $250.95 $263.50 $276.67 3" meter $283.98 $414.79 $456.27 $501.90 $526.99 $553.34 4" meter $443.74 $648.11 $712.92 $784.22 $823.43 $864.60 6" meter $887.48 $1,296.23 $1,425.85 $1,568.43 $1,646.85 $1,729.20 8" meter $1,420.06 $2,073.96 $2,281.36 $2,509.49 $2,634.97 $2,766.71 Commodity Charges for All Water Consumed (in $/hcf)
Variable Charge $0.90 $3.14 $3.46 $3.80 $3.99 $4.19
Variable Charge - Self-Haul n/a $1.88 $2.07 $2.28 $2.39 $2.51 Recycled Water Rate Schedule Current
Rates
Proposed Rates
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4. Sewer Rate Study

4.1 Key Sewer Rate Study Issues
The City manages a wastewater system for approximately 6,150 customers within its service area. The City owns and operates the American Canyon Water Reclamation Facility (WRF) that collects and treats wastewater for both domestic and industrial customers. The City’s wastewater rate analysis was undertaken with a few specific objectives, including:
• Ensure equity among customer classes by collecting rate revenue through the cost-of-service process based on both fixed monthly charges and volumetric rates. • Maintain adequate reserve levels to ensure continuity in operations. • Provide greater revenue stability for the utility, due to the level of capital investment planned over the next five years.
• Comply with Prop 218 requirements to ensure cost-of-service are properly allocated amongst user classifications.

4.2 Financial Plan
Similar to the water utility, it is important for the wastewater utility to ensure rates provide sufficient funding to cover operating and maintenance costs, planned capital expenditures, and maintain reasonable reserves. The wastewater utility’s rate increases are governed by these needs, and the current state of City’s wastewater utility is as follows:
• Meeting Net Revenue Requirements: For FY 2023/24 through FY 2027/28, the projected net revenue requirements (that is, total operating expenses plus rate-funded capital costs less nonrate revenues) for the City averages approximately $8.5 million, annually. If no rate adjustments are implemented, the City is projected to average a $3.3 million deficit each year. • Maintaining Reserve Funds: Reserve funds provide a basis for a utility to cope with fiscal emergencies such as revenue shortfalls, asset failure, and natural disasters, among other events. Reserve policies provide guidelines for sound financial management, with an overall long-range perspective to maintain financial solvency and mitigate financial risks associated with revenue instability, volatile capital costs, and emergencies. NBS recommends that the City target a minimum of approximately $2.9 million in unrestricted reserve funds over the 5-year period. The reserve funds for the sewer utility are considered unrestricted reserves and consist of the following:
• Operating Reserve should equal approximately 90 days of operating expenses, or approximately $1.8 million annually. An operating reserve is intended to promote financial viability in the event of any short-term fluctuation in revenues and/or expenditures. Fluctuations in revenue can be caused by weather patterns, the natural inflow and outflow of cash during billing cycles, natural variability in demand-based revenue streams (such as volumetric charges), and – particularly in periods of economic distress – changes or trends in age of receivables.
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• Capital Rehabilitation & Replacement Reserve should equal approximately 3% of net capital assets which is approximately $936,000 in FY 2023/24. This reserve is set aside to address long-term capital system replacement and rehabilitation needs.

Rate revenue increases will be needed throughout the 5-year rate adoption period in order to fully fund all operating expenses and planned capital projects as well as maintain reserves at the recommended targets.

Figure 31 summarizes the sources and uses of funds, net revenue requirements, and the recommended annual increases in wastewater rate revenue proposed for the next 5 years.

Figure 31. Summary of Wastewater Revenue Requirements
Figure 32 summarizes the projected reserve fund balances and reserve targets for the sewer utility’s unrestricted funds. A more detailed version of the utility’s proposed 5-year financial plan is included in Appendix C. The appendix tables include revenue requirements, reserve funds, revenue sources, proposed rate increases, and the City’s capital improvement program. As Figure 32 shows, given the proposed rate increases, reserves are well over the minimum target balances.

Figure 32. Summary of Sewer Reserve Funds

4.3 Cost-of-Service Analysis
Once the net revenue requirements are determined, the cost-of-service analysis (COSA) proportionately distributes the revenue requirements to each of the customer classes. COSA consists of the classification of Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Sources of Sewer Funds
Rate Revenue Under Prevailing Rates1 $ 4,824,937 $ 4,940,178 $ 5,042,690 $ 5,128,416 $ 5,215,599 $ 5,304,264 $ 5,394,436 Additional Revenue from Rate Increases2
- - 630,336 1,923,156 3,077,203 4,141,569 4,755,735
Total: Rate Revenue 4,824,937 4,940,178 5,673,026 7,051,572 8,292,802 9,445,833 10,150,172 Interest Earnings 28,277 166,693 120,000 22,911 22,211 24,657 21,576 Total: Sources of Funds $ 4,853,213 $ 5,106,871 $ 5,793,026 $ 7,074,483 $ 8,315,013 $ 9,470,491 $10,171,748 Uses of Sewer Funds
Operating Expenses $ 5,819,790 $ 2,105,714 $ 6,260,396 $ 6,503,425 $ 6,723,889 $ 9,410,800 $ 7,188,544 Rate-Funded Capital Expenses 345,549 3,201,161 2,573,447 197,942 1,111,368 14,992 2,230,867 Total: Use of Funds $ 6,165,340 $ 5,306,875 $ 8,833,843 $ 6,701,367 $ 7,835,256 $ 9,425,791 $ 9,419,410 Projected Increases in Rate Revenue 0.00% 0.00% 25.00% 20.00% 12.00% 12.00% 0.00% Cumulative Rate Increases 0.00% 0.00% 25.00% 50.00% 68.00% 88.16% 88.16% Net Revenue Requirement3 $ 7,169,511 $ 5,175,276 $ 8,830,324 $ 6,802,043 $ 7,935,240 $ 9,536,723 $ 9,541,748

1. Revenue and expenses for FY 2021/22 and FY 2022/23 provided by the City. Source files: 1 - Budget - Wastewater.xlsx, 2022.03.08 Revenue Budget FY 2021-22 Midyear.xlsx & REV EXP ACTUALS - FY22 and FY23_NBS .

2. Revenue from rate increases assumes an implementation date of January 1, 2024. For each year thereafter, the assumption is that new rates will be implemented on Ja nua ry 1s t of e a ch ye a r.

3. Total Use of Funds less non-rate revenues and interest earnings. This is the annual amount needed from sewer rates.

Summary of Sources and Uses of Funds
and Net Revenue Requirements
5-Year Projected Rate Period Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Unrestricted Reserves
Operating Reserve
Ending Balance $ 1,455,000 $ 2,627,989 $ 1,677,226 $ 1,626,000 $ 1,805,087 $ 1,579,529 $ 1,797,000 Recommended Minimum Target 1,455,000 526,000 1,565,000 1,626,000 1,681,000 2,353,000 1,797,000 Capital Rehabilitation & Replacement Reserve
Ending Balance $ 5,016,223 $ 5,049,669 $ 882,962 $ 1,047,302 $ 1,088,664 $ 1,088,664 $ 1,341,869 Recommended Minimum Target 759,000 852,000 936,000 968,000 1,060,000 1,156,000 1,255,000 Total Ending Balance $ 6,471,223 $ 7,677,658 $ 2,560,188 $ 2,673,302 $ 2,893,751 $ 2,668,194 $ 3,138,869 Total Recommended Minimum Target $ 2,214,000 $ 1,378,000 $ 2,501,000 $ 2,594,000 $ 2,741,000 $ 3,509,000 $ 3,052,000 Beginning Reserve Fund Balances and 5-Year Projected Rate Period Recommended Reserve Targets
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expenses and then the allocation of those expenses to customer classes based on allocation factors, such as water consumption and number of equivalent dwelling units (EDUs), or accounts. Ultimately, a COSA is intended to result in rates that are proportional to the cost of providing service to each customer class.

CLASSIFICATION OF COSTS
As previously noted, costs are classified into the following categories: (1) flow-related costs; (2) strengthrelated costs (BOD and TSS); and (3) customer-related costs. Most costs are typically allocated to more than one of these categories. The City’s budgeted costs were reviewed and allocated to these basic categories which serve as the basis for calculating the fixed and variable charges. Tables in Appendix C show how the City’s expenses were classified and allocated to these cost-causation components.

Based on the City’s projected costs, the COSA resulted in a distribution that is approximately 45% fixed and 55% variable. Currently, the City’s rate structure collects 100% of the rate revenue from fixed charges for residential customers and either fixed or variable rates for commercial customers, depending on which is greater.

Figure 33 summarizes the allocation of the net revenue requirements to each cost causation component for the proposed rate structure. More detail on the development of the allocation factors that resulted in this summary will be covered in the following section.

Figure 33. Allocation of Revenue Requirements by Customer Class

CHARACTERISTICS OF CUSTOMERS BY CLASS
Customer classes are determined by combining customers with similar demand characteristics and types of use into categories that reflect the cost differentials to serve each type of customer. The most recent water consumption data was used to estimate the amount of flow that each customer class sends to the City’s Water Reclamation Facility (WRF). Volumetric rates for all customer classes were based on the average winter water consumption for the three lowest months of use.15 For non-residential customers that do not 15 Lowest consecutive winter months are January through March 2021.

Volume BOD TSS Customer
Net Revenue Requirements 1 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 $ 6,303,363 --

55.3% 20.9% 20.9% 2.9% 100.0%
Residential Customers
Single Family Residential $ 2,337,493 $ 878,986 $ 876,669 $ 142,186 $ 4,235,335 67.2% Multi-Family Residential 400,385 150,560 150,163 38,188 739,296 11.7% All Other Customers
Commercial $ 324,130 $ 208,946 $ 208,395 $ 5,343 $ 746,815 11.8% Industrial
Hess Collection Winery $ 24,149 $ 1,207 $ 620 $ 30 $ 26,006 0.4% AmCan Beverage (Coca-Cola) 302,695 55,832 52,026 30 410,583 6.5% Mezzetta Processing Facility 98,322 19,659 27,316 30 145,327 2.3% Total: $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 $ 6,303,363 100%

1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost classification by the allocation factors for each customer class.
% of COS
Net Revenue
Reqts.

Customer Class
Cost Classification Components Cost-ofService Net
Revenue
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have typical (i.e., residential) effluent strengths, volumetric rates reflect both their estimated flow and the appropriate non-residential effluent strengths.

Figure 34 shows the development of the flow (or volume) allocation factors by customer class calculated by taking the lowest consecutive 3-month water usage for FY 2020/21 and annualizing the usage per customer class.

Figure 34. Development of the Flow Allocation Factor
Determining Customer Class Effluent Strengths
Effluent strength factors for each customer class were estimated by using the Revenue Program Guidelines16 issued by the State Water Resources Control Board (SWRCB) as described below:
• Residential customers were assigned BOD and TSS strength factors of 175 mg/l which is within the normal range for residential users.
• Commercial customers were assigned BOD and TSS strength factors of 300 mg/l.

Figure 35 summarizes the development of the customer allocation factor.

Figure 35. Development of the Customer Allocation Factor 16 Revenue Program Guidelines: Commercial User Strength Characteristics, State Water Resources Control Board, Appendix G, page G-21. Site: https://www.waterboards.ca.gov/publications_forms/publications/general/docs/srf_wastewater_facilities _b.pdf.

Customer Class1 Flow
MGD
BOD
mg/l
TSS
mg/l
BOD
lbs/day
TSS
lbs/day
Flow
MG
BOD
mg/l2
BOD
lbs
% of
Total
BOD
TSS
mg/l2
TSS
lbs
% of
Total TSS
Residential Customers
Single Family Residential 0.97 175 175 1,409 1,409 352 n/a 514,224 69.4% n/a 514,224 69.8% Multi-Family Residential 0.17 175 175 241 241 60 n/a 88,080 11.9% n/a 88,080 12.0% All Other Customers
Commercial 0.13 300 300 335 335 49 n/a 122,237 16.5% n/a 122,237 16.6% Industrial3
Hess Collection Winery 0.01 50 30 4 2 3.64 8.6 260 0.0% 2.3 70 0.0% AmCan Beverage (Coca-Cola) 0.13 200 220 209 229 45.63 23.1 8,782 1.2% 5.3 1,998 0.3% Mezzetta Processing Facility 0.04 150 220 51 74 14.82 61.7 7,631 1.0% 81.2 10,035 1.4% Total: 1.44 2,248 2,291 526 741,214 100.0% 736,644 100.0%

1. Customer data provided by the City for FY 2021/22. Source file: FY 2021-22 Summary by Rate Code - Detailed v2.xlsx .

2. Annual volume and strength factors provided by the City. Source file: SIU 2 year data.xlsx .

3. Flow for industrial customer is based on wastewater flow. Strength factors are based on input from City staff and lower than expected due to customers' pretreatment process.

Source file: INF-001 & SIU Flow.xlsx .

Design Capacity Total Annual Volume
Customer Class
Number of
Dwelling Units
/ Accounts1
Percent
of Total
Residential Customers
Single Family Residential 4,710 76.5%
Multi-Family Residential 1,265 20.6%
All Other Customers
Commercial 177 2.9%
Industrial
Hess Collection Winery 1 0.0%
AmCan Beverage (Coca-Cola) 1 0.0%
Mezzetta Processing Facility 1 0.0%
Total: 6,155 100.0%

1. SFR, MFR, and Industrial customers are based on the number of dwelling units and all other customers are based on the number of accounts. 105
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4.4 Rate Design Analysis
The process of evaluating the sewer rate structure provides the opportunity to incorporate a number of rate-design objectives and policies, including revenue stability, equity among customer classes, and water conservation. The overall objective is to improve the fairness and equity of the rate design and ensure costs were being appropriately collected from each customer class. During the course of the study, NBS discussed several sewer rate alternatives and methodologies with City staff, such as the percentage of revenue collected from fixed vs. variable charges and differentiating rates by customer class. The proposed rates were developed based on input provided by City staff and the City Council.

FIXED CHARGES
The fixed charge recognizes that the sewer utility incurs fixed costs regardless of whether customers send any wastewater into the City’s collection system. There are three factors used to develop the fixed charge:
1) the number of dwelling units for residential customers; 2) the number of accounts for non-residential customers; and 3) the annual revenue requirement. The monthly fixed charge is calculated by taking the 45% fixed charge multiplied by the annual revenue requirement which is then divided by the number of dwelling units for residential customers and accounts for commercial customers and billing periods per year.

VARIABLE RATES
The variable rates, on the other hand, are calculated by taking the remaining 55% portion of the net revenue requirement in each customer class and dividing it by the estimated effluent volume produced based on annualized average winter water use for both residential and non-residential customer classes.

The proposed sewer rates in this study were developed with the goal of developing a new rate structure that consists of both a fixed and variable rate component based on the number of dwelling units or accounts (for customer-related costs) and the water consumption for all customer classes. Figure 36 compares the current and proposed rates for FY 2023/24 through FY 2027/28 by customer class. Projected rates for future years, with implementation date of April 1 in Year and then January 1 each year thereafter.

These rates reflect adjustments based on the following factors: 1) the cost-of-service analysis, 2) the 45% fixed and 55% variable rate design structure; and 3) the recommended annual percentage increases in rate revenue. More detailed tables on the development of the proposed rates are documented in Appendix C. 106
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Figure 36. Current vs. Proposed Sewer Rates

4.5 Comparison of Current and Proposed Sewer Bills
The following figures compare monthly sewer bills under current and proposed rates for various customers over the 5-year rate period.

Figure 37. Single Family Sewer Bill Comparison
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28

25.00% 20.00% 12.00% 12.00% 0.00%
Residential - Monthly Fixed Service Charges
Single Family Residential Per Dwelling Unit $60.48 $74.94 $89.93 $100.72 $112.81 $112.81 Multi-Family Residential Per Dwelling Unit $45.36 $48.70 $58.44 $65.45 $73.31 $73.31 Commercial Customers 3
Monthly Fixed Service Charge Per Account $60.48 $115.21 $138.25 $154.84 $173.42 $173.42 Volumetric Rate Per HCF $5.40 $1.92 $2.31 $2.58 $2.89 $2.89 Industrial Customers
Monthly Fixed Administrative Charge Per Account n/a $2.52 $3.02 $3.38 $3.79 $3.79 Fixed Charges
Flow - per HCF per day Per HCF per day Sewage Flow n/a $517 $620 $695 $778 $778 BOD - per pound per day Per pound per day n/a $221 $266 $297 $333 $333 TSS - per pound per day Per pound per day n/a $217 $261 $292 $327 $327 Sewer Use Charges
Flow - per HCF Per HCF Sewage Flow n/a $3.54 $4.24 $4.75 $5.32 $5.32 BOD - per pound Per pound n/a $1.10 $1.32 $1.48 $1.66 $1.66 TSS - pound Per pound n/a $1.11 $1.33 $1.49 $1.67 $1.67

1. Sewer rates are set according to the average monthly water use for January to March of the previous calendar year. New customers are charged at the average winter water use rate (standard) and adjusted the following year if applicable.

2. The fixed charge includes a monthly customer charge per account.

3. Current rates for commercial customers are charged the higher of the fixed or variable rate. Proposed rates have both a fixed and volumetric charge per commercial customer.

Proposed Sewer Rates Current
Rates Sewer Rate Schedule1,2 Description
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Figure 38. Multi-Family Residential Sewer Bill Comparison Figure 39. Commercial Sewer Bill Comparison
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5. Recommendations and Next Steps

5.1 Consultant Recommendations
NBS recommends the City take the following actions:
• Approve and Accept this Study: NBS recommends the City Council formally approve and adopt this Study and its recommendations and proceed with the next steps outlined below to implement the proposed rates. This will provide documentation of the rate study analyses and the basis for analyzing potential changes to future rates. • Implement Recommended Levels of Rate Increases and Proposed Rates: Based on successfully meeting the Proposition 218 procedural requirements, the City should proceed with implementing the 5-year schedule of proposed rates (including drought rates) and rate increases previously shown in Figure 18, Figure 19, Figure 20, Figure 25, Figure30, and Figure

36. This will help ensure the continued financial health of City’s utilities.

5.2 Next Steps
Annually Review Rates and Revenue – Any time an agency adopts new utility rates or rate structures, those new rates should be closely monitored over the next several years to ensure the revenue generated is sufficient to meet the annual revenue requirements. Changing economic and water consumption patterns underscore the need for this review, as well as potential and unseen changing revenue requirements— particularly those related to environmental regulations that can significantly affect capital improvements and repair and replacement costs.

Note: The attached Technical Appendices provide more detailed information on the analysis of the financial plan, revenue requirements, cost-of-service, and the rate design analyses that have been summarized in this report.

5.3 NBS’ Principal Assumptions and Considerations
In preparing this report and the opinions and recommendations included herein, NBS has relied on a number of principal assumptions and considerations with regard to financial matters, conditions, and events that may occur in the future. This information and these assumptions, including the City’s budgets, capital improvement costs, customer accounts and consumption, and information from City staff were provided by sources we believe to be reliable, although NBS has not independently verified this data.

While we believe NBS’ use of such information and assumptions is reasonable for the purpose of this report and its recommendations, some assumptions will invariably not materialize as stated herein and may vary significantly due to unanticipated events and circumstances. Therefore, the actual results can be expected to vary from those projected to the extent that actual future conditions differ from those assumed by us or provided to us by others.
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Technical Appendices
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Appendix A. Water Rate Study Tables and Figures
111
CITY OF AMERICAN CANYON Financial Plan & Reserve Summary

WATER RATE STUDY
Financial Plan and Reserve Projections
TABLE 1 : FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Sources of Water Funds
Rate Revenue: 1
Water Sales - Meter Use Fees $ 8,362,554 $ 8,485,676 $ 9,360,200 $ 9,528,684 $ 9,690,671 $ 9,855,413 $ 10,022,955 $ 10,193,345 $ 10,366,632 $ 10,532,498 $ 10,701,018 $ 10,872,234 Water Sales - Metered Water 47,619 58,508 81,440 82,906 84,315 85,749 87,206 88,689 90,197 91,640 93,106 94,596 Non-Rate Revenue:

Grant - State/Local $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest Earnings2 (212,625) 215,995 275,008 87,285 61,319 56,589 58,325 60,169 56,736 48,854 37,654 23,863 Miscellaneous Revenues 570,024 319,827 359,300 365,767 371,985 378,309 384,740 391,281 397,933 404,300 410,769 417,341 Late Penalties / Interest 93,977 128,487 114,300 116,357 118,335 120,347 122,393 124,474 126,590 128,615 130,673 132,764 Interfund Transfer In (Loan Repayment) - - 44,061 44,061 49,482 49,482 49,482 49,482 49,482 49,482 49,482 49,482 Total Sources of Funds $ 8,861,548 $ 9,208,492 $ 10,234,309 $ 10,225,060 $ 10,376,108 $ 10,545,889 $ 10,725,101 $ 10,907,439 $ 11,087,569 $ 11,255,388 $ 11,422,701 $ 11,590,279 Uses of Water Funds
Operating Expenses: 1
Water Operations:
560 - Water Treatment Plant $ 1,483,133 $ 1,788,187 $ 2,088,189 $ 3,357,121 $ 2,228,382 $ 2,302,054 $ 2,378,221 $ 2,456,970 $ 2,538,391 $ 2,622,580 $ 2,709,633 $ 2,799,651 565 - Water Distribution 991,284 1,013,187 1,536,149 1,586,987 1,639,520 1,693,803 1,749,895 1,807,858 1,867,753 1,929,647 1,993,606 2,059,700 50 - Public Works 1,356,080 1,616,039 366,768 378,613 390,854 403,506 416,582 430,096 444,064 458,500 473,420 488,842 Water Purchases 3,380,850 4,035,407 3,602,218 3,674,262 3,747,748 3,822,703 3,899,157 3,977,140 4,056,683 4,137,816 4,220,573 4,304,984 Subtotal: Water Supply & Distribution: Expenses: $ 7,211,347 $ 8,452,821 $ 7,593,324 $ 8,996,983 $ 8,006,504 $ 8,222,065 $ 8,443,854 $ 8,672,063 $ 8,906,891 $ 9,148,543 $ 9,397,232 $ 9,653,176 Non-Operating Expenses: 3
Transfer To General Fund 1,263,894 1,798,674 2,206,123 2,207,963 2,171,674 2,237,313 2,304,938 2,374,610 2,446,390 2,520,343 2,596,533 2,675,030 Subtotal: Non-Operating Expenses: $ 1,263,894 $ 1,798,674 $ 2,206,123 $ 2,207,963 $ 2,171,674 $ 2,237,313 $ 2,304,938 $ 2,374,610 $ 2,446,390 $ 2,520,343 $ 2,596,533 $ 2,675,030 Other Expenditures:

Existing Debt Service $ 523,735 $ 744,109 $ 820,140 $ 823,637 $ 1,468,278 $ 2,523,408 $ 3,014,261 $ 3,269,396 $ 3,287,122 $ 3,227,021 $ 3,128,082 $ 103,586 New Debt Service - - - - - - - - - - - -
Rate-Funded Capital Expenses 251,795 2,790,541 4,566,877 1,523,075 1,565,040 754,328 665,707 952,128 1,201,396 1,421,386 1,618,317 1,797,260 Subtotal: Other Expenditures $ 775,530 $ 3,534,650 $ 5,387,017 $ 2,346,712 $ 3,033,319 $ 3,277,736 $ 3,679,968 $ 4,221,524 $ 4,488,517 $ 4,648,407 $ 4,746,399 $ 1,900,846 Total Uses of Water Funds $ 9,250,771 $ 13,786,145 $ 15,186,464 $ 13,551,658 $ 13,211,497 $ 13,737,114 $ 14,428,761 $ 15,268,197 $ 15,841,798 $ 16,317,293 $ 16,740,164 $ 14,229,052 plus: Revenue from Rate Increases4 - - 212,437 1,336,492 2,361,290 3,190,413 3,710,759 3,981,564 4,049,251 4,114,039 4,179,863 4,246,741 Annual Surplus/(Deficit) $ (389,223) $ (4,577,653) $ (4,739,718) $ (1,990,107) $ (474,099) $ (813) $ 7,099 $ (379,194) $ (704,979) $ (947,866) $ (1,137,600) $ 1,607,968 Net Revenue Req't. (Total Uses less Non-Rate Revenue) $ 8,799,395 $ 13,121,837 $ 14,393,795 $ 12,938,188 $ 12,610,375 $ 13,132,387 $ 13,813,821 $ 14,642,792 $ 15,211,058 $ 15,686,042 $ 16,111,587 $ 13,605,603 Total Rate Revenue After Rate Increases $ 8,410,172 $ 8,544,184 $ 10,291,388 $ 11,419,530 $ 12,658,891 $ 13,389,056 $ 14,025,170 $ 14,263,598 $ 14,506,079 $ 14,738,176 $ 14,973,987 $ 15,213,571 Projected Annual Rate Revenue Increase 0.00% 0.00% 9.00% 9.00% 9.00% 4.00% 3.00% 0.00% 0.00% 0.00% 0.00% 0.00% Cumulative Increase from Annual Revenue Increases 0.00% 0.00% 9.00% 18.81% 29.50% 34.68% 38.72% 38.72% 38.72% 38.72% 38.72% 38.72% Debt Coverage After Rate Increase N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Revenues and expenses for all other years are escalated based on the forecasting assumptions located in Table 10. Source files: Fund 510 Water Operations.xlsx , FY2023-24 Exp Budget Water.xlsx , and Fund 510 - 580 FY 23-24 Budget Status as of 09-19-2023.xlsx .

2. Interest earnings for FY 2021/22 and FY 2022/23 are from the City's Budget. For all other years, it is calculated based on historical LAIF returns.

3. These expenses are from source file: 1 - Budget - Water.xlsx .

4. Revenue from rate increases assumes an implementation date of April 1, 2024 for new rates. For each year thereafter, the assumption is that new rates will be implemented on January 1st of each year.

RATE REVENUE REQUIREMENTS SUMMARY
5-Year Projected Rate Period Projected
Prepared by NBS
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WATER RATE STUDY
Financial Plan and Reserve Projections
1 <-- Select Financial Plan Scenario Here
Financial Plan Alternatives FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 1 Alternative 1 - Full Cost Recovery Rate Increases1

0.00% 0.00% 9.00% 9.00% 9.00% 4.00% 3.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 Alternative 2 - Phased-in Rate Increases2

0.00% 0.00% 7.00% 7.00% 7.00% 7.00% 6.00% 0.00% 0.00% 0.00% 0.00% 0.00% 3 Alternative 3 - Minimal Rate Increases3

0.00% 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4 Alternative 4 - No Rate Increases 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Alternative 1: Scenario 1 - Rates needed to meet all revenue requirements and meet the target reserve levels (Large increase followed by smaller increases).

2. Alternative 2: Scenario 2 - Large increases phased In over two years, followed by smaller increases (Reserves drop below target level).

3. Alternative 3: Scenario 3 - Smaller increases (Reserves drop below target level).

TABLE 2 : RESERVE FUND SUMMARY
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Unrestricted Reserve:

Total Beginning Cash1 $ 3,670,141 $ 13,667,530 $ 10,874,673 Operating Reserve
Beginning Reserve Balance $ 3,634,570 $ 13,667,530 $ 10,874,673 $ 4,142,536 $ 2,278,487 $ 1,930,446 $ 2,055,691 $ 2,188,848 $ 1,935,712 $ 1,356,792 $ 534,984 $ (476,558) Plus: Net Cash Flow (After Rate Increases) (389,223) (4,577,653) (4,739,718) (1,990,107) (474,099) (813) 7,099 (379,194) (704,979) (947,866) (1,137,600) 1,607,968 Plus: Transfer in of Debt Reserve Surplus - - - - - - - - - - - - Plus: Transfer in from Capital and Infrastructure Reserve - - - - - - - - - - - - Plus: Transfer in from Capacity Fee Reserve (Interfund Loan) - 126,058 126,058 126,058 126,058 126,058 126,058 126,058 126,058 126,058 126,058 - Less: Transfer out to Capital and Infrastructure Reserve - (3,488,438) (2,118,478) - - - - - - - - - Ending Operating Reserve Balance $ 3,245,347 $ 5,727,496 $ 4,142,536 $ 2,278,487 $ 1,930,446 $ 2,055,691 $ 2,188,848 $ 1,935,712 $ 1,356,792 $ 534,984 $ (476,558) $ 1,131,410 Target Ending Balance (90-days of O&M) 2 $ 1,803,000 $ 2,113,000 $ 1,898,000 $ 2,249,000 $ 2,002,000 $ 2,056,000 $ 2,111,000 $ 2,168,000 $ 2,227,000 $ 2,287,000 $ 2,349,000 $ 2,413,000 Capital Rehabilitation & Replacement Reserve
Beginning Reserve Balance $ 35,571 $ - $ - $ 2,118,478 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 Plus: Grant Proceeds - - - - - - - - - - - -
Plus: Transfer of Operating Reserve Surplus - 3,488,438 2,118,478 - - - - - - - - - Less: Transfer out to Operating Reserve - - - - - - - - - - - - Less: Use of Reserves for Capital Projects - - - (38,578) - - - - - - - - Ending Capital and Infrastructure Reserve Balance $ 35,571 $ 3,488,438 $ 2,118,478 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 $ 2,079,900 Target Ending Balance (3% of net assets) 3 $ 1,420,700 $ 1,548,600 $ 1,870,900 $ 2,079,900 $ 2,260,500 $ 2,370,700 $ 2,458,100 $ 2,548,200 $ 2,641,000 $ 2,736,700 $ 2,835,300 $ 2,937,000 Ending Balance - Excl. Restricted Reserves $ 3,280,918 $ 9,215,935 $ 6,261,013 $ 4,358,387 $ 4,010,346 $ 4,135,591 $ 4,268,748 $ 4,015,612 $ 3,436,692 $ 2,614,884 $ 1,603,342 $ 3,211,310 Min. Target Ending Balance -Excl. Restricted Reserves $ 3,223,700 $ 3,661,600 $ 3,768,900 $ 4,328,900 $ 4,262,500 $ 4,426,700 $ 4,569,100 $ 4,716,200 $ 4,868,000 $ 5,023,700 $ 5,184,300 $ 5,350,000 Ending Surplus/(Deficit) Compared to Reserve Targets $ 57,218 $ 5,554,335 $ 2,492,113 $ 29,487 $ (252,154) $ (291,109) $ (300,352) $ (700,588) $ (1,431,308) $ (2,408,816) $ (3,580,958) $ (2,138,690)

1. Beginning cash balances provided by City staff for Fund 510 - Water Operations. Source files: 4 - Current Cash and Fund Balance - Water 12062021.xlsx & Beg Fund Balance FY23- Water.xls .

2. The target ending balance is set equal to 90-days of O&M expenses. Source file: 4 - Current Cash and Fund Balance - Water 12062021.xlsx .

3. The target ending balance is set equal to 3% of net capital assets. See Exhibit 2 (CIP) for details. 5-Year Projected Rate Period

SUMMARY OF CASH ACTIVITY
Projected
Prepared by NBS
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WATER RATE STUDY
Financial Plan and Reserve Projections
TABLE 3 : RESERVE FUND SUMMARY, cont.

Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Restricted Reserve: 1
Capacity Fee Reserve
Beginning Reserve Balance $5,688,050 $6,284,390 $6,333,173 $ 6,397,366 $ 11,290,006 $ 9,761,564 $ 8,534,556 $ 7,552,200 $ 6,768,455 $ 6,145,989 $ 5,653,746 $ 5,267,306 Plus: Interest Earnings 77,699 157,110 158,329 87,388 154,221 133,343 116,582 103,163 92,457 83,954 77,230 71,951 Plus: Capacity Fee Revenue 1,252,878 332,954 1,662,778 7,785,325 915,300 930,860 946,685 962,778 979,146 994,812 1,010,729 1,026,901 Less: Transfer out to Operating Reserve (Interfund Loan) - (126,058) (126,058) (126,058) (126,058) (126,058) (126,058) (126,058) (126,058) (126,058) (126,058) - Less: Use of Reserves for Capital Projects - - (1,630,856) (2,854,016) (2,471,905) (2,165,153) (1,919,564) (1,723,628) (1,568,012) (1,444,951) (1,348,341) (1,273,232) Ending Connection Fee Fund Balance $ 7,018,626 $ 6,648,395 $ 6,397,366 $ 11,290,006 $ 9,761,564 $ 8,534,556 $ 7,552,200 $ 6,768,455 $ 6,145,989 $ 5,653,746 $ 5,267,306 $ 5,092,926 Target Ending Balance (3% of net assets) 3 $ 1,420,700 $ 1,548,600 $ 1,870,900 $ 2,079,900 $ 2,260,500 $ 2,370,700 $ 2,458,100 $ 2,548,200 $ 2,641,000 $ 2,736,700 $ 2,835,300 $ 2,937,000 Debt Reserve
Beginning Reserve Balance $ 1,151,405 $ 122,586 $ 125,651 $ 128,792 $ 130,551 $ 132,335 $ 134,142 $ 135,975 $ 137,832 $ 139,715 $ 141,623 $ 143,558 Plus: Reserve Funding from New Debt Obligations - - - - - - - - - - - - Plus: Interest Earnings 15,728 3,065 3,141 1,759 1,783 1,808 1,832 1,857 1,883 1,909 1,935 1,961 Less: Transfer of Surplus to Operating Reserve - - - - - - - - - - - - Ending Debt Reserve Balance $ 1,167,133 $ 125,651 $ 128,792 $ 130,551 $ 132,335 $ 134,142 $ 135,975 $ 137,832 $ 139,715 $ 141,623 $ 143,558 $ 145,519 Target Ending Balance $ 71,827 $ 72,068 $ 72,053 $ 71,580 $ 70,175 $ 66,417 $ 53,204 $ - $ - $ - $ - $ - Annual Interest Earnings Rate 2 1.37% 2.50% 2.50% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37%

1. The beginning cash balances provided by the City. Source file: 4 - Current Cash and Fund Balance - Water 12062021.xlsx , Beg Fund Balance FY23- Water.xls, & Beg Fund Balance FY23- Recycled Water.xls .

2. The target ending balance is set equal to 3% of net capital assets. See Exhibit 2 (CIP) for details.

3. Historical interest earning rates are per the average annual yields for funds invested in LAIF (2017-2021). The source is the California State Treasurer's website: https://www.treasurer.ca.gov/pmia-laif/historical/annual.asp .

SUMMARY OF CASH ACTIVITY
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 Financial Plan, Page 3 of 45 114 CITY OF AMERICAN CANYON Charts & Tables

WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 1
$ mil.
$3 mil.
$5 mil.
$8 mil.
$10 mil.
$13 mil.
$15 mil.
$18 mil.
$20 mil.
2022 2023 2024 2025 2026 2027 2028
Annual Obligations
Fiscal Year Ending June 30
Water Revenue Requirements vs.

Revenue Under Existing and Increased Rates
Cash Funded Capital Expenses
Debt Service
O&M Expenses
Revenues under Existing Rates
Revenues under Increased Rates
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 Charts and Tables, 4 of 45115 CITY OF AMERICAN CANYON Charts & Tables

WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 2
$.0 Mil.
$2.0 Mil.
$4.0 Mil.
$6.0 Mil.
$8.0 Mil.
$10.0 Mil.
$12.0 Mil.
2022 2023 2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Ending Cash Balances vs.

Recommended Reserve Targets
Ending Cash Balance (Unrestricted Reserves) Minimum Target Reserve Balance Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 Charts and Tables, 5 of 45116 CITY OF AMERICAN CANYON Charts & Tables

WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 3

9.0% 9.0% 9.0%

4.0%

3.0%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Projected Increases to Rate Revenue
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 Charts and Tables, 6 of 45117 CITY OF AMERICAN CANYON Charts & Tables

WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 4
$6.2 Mil
$4.4 Mil
$4.0 Mil
$2.9 Mil
$2.6 Mil
$2.7 Mil
$2.8 Mil
$2.9 Mil
$3.0 Mil
$3.1 Mil
$.0 Mil.
$1.0 Mil.
$2.0 Mil.
$3.0 Mil.
$4.0 Mil.
$5.0 Mil.
$6.0 Mil.
$7.0 Mil.
$8.0 Mil.
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
City of American Canyon
Capital Improvement Projects
5-Year Project Rate Period
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 Charts and Tables, 7 of 45118 CITY OF AMERICAN CANYON Exhibit 1 - O&M

WATER RATE STUDY
Operating Revenue and Expenses
TABLE 4 : REVENUE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Rate Revenue
Water Service Charge - Potable 1 $ 8,362,554 $ 8,485,676 $ 9,360,200 $ 9,528,684 $ 9,690,671 $ 9,855,413 $ 10,022,955 $ 10,193,345 $ 10,366,632 $ 10,532,498 $ 10,701,018 $ 10,872,234 Water Service Charge - Raw 1 47,619 58,508 81,440 82,906 84,315 85,749 87,206 88,689 90,197 91,640 93,106 94,596 Other Revenue
Grant - State/Local 1 - - - - - - - - - - - -
Interest Earnings See FP (212,625) 215,995 - - - - - - - - - - Charges for Services 9 329,720 - - - - - - - - - - -
Miscellaneous Revenues 1 240,304 319,827 359,300 365,767 371,985 378,309 384,740 391,281 397,933 404,300 410,769 417,341 Late Penalties / Interest 1 93,977 128,487 114,300 116,357 118,335 120,347 122,393 124,474 126,590 128,615 130,673 132,764 Insurance Reimbursements 9 - - - - - - - - - - - -
Fund Transfer In
Interfund Transfer In (Loan Repayment) 9 - - 44,061 44,061 49,482 49,482 49,482 49,482 49,482 49,482 49,482 49,482 Capacity Fee Revenue
Water Capacity Fees 1 1,252,878 332,954 1,662,778 7,785,325 915,300 930,860 946,685 962,778 979,146 994,812 1,010,729 1,026,901 Interest Earnings 1 114,219 282,378 50,000 50,900 51,765 52,645 53,540 54,450 55,376 56,262 57,162 58,077 TOTAL: REVENUE $ 10,228,645 $ 9,823,824 $ 11,672,079 $ 17,974,001 $ 11,281,855 $ 11,472,805 $ 11,667,002 $ 11,864,499 $ 12,065,355 $ 12,257,609 $ 12,452,939 $ 12,651,394 TABLE 5 : REVENUE SUMMARY
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Rate Revenue
Water Service Charge - Potable $ 8,362,554 $ 8,485,676 $ 9,360,200 $ 9,528,684 $ 9,690,671 $ 9,855,413 $ 10,022,955 $ 10,193,345 $ 10,366,632 $ 10,532,498 $ 10,701,018 $ 10,872,234 Water Service Charge - Raw 47,619 58,508 81,440 82,906 84,315 85,749 87,206 88,689 90,197 91,640 93,106 94,596 Other Revenue
Grant - State/Local - - - - - - - - - - - -
Interest Earnings (212,625) 215,995 - - - - - - - - - - Miscellaneous Revenues 570,024 319,827 359,300 365,767 371,985 378,309 384,740 391,281 397,933 404,300 410,769 417,341 Late Penalties / Interest 93,977 128,487 114,300 116,357 118,335 120,347 122,393 124,474 126,590 128,615 130,673 132,764 Interfund Transfer In (Loan Repayment) - - 44,061 44,061 49,482 49,482 49,482 49,482 49,482 49,482 49,482 49,482 Capacity Fee Revenue
Water Capacity Fees 1,252,878 332,954 1,662,778 7,785,325 915,300 930,860 946,685 962,778 979,146 994,812 1,010,729 1,026,901 Interest Earnings 114,219 282,378 50,000 50,900 51,765 52,645 53,540 54,450 55,376 56,262 57,162 58,077 TOTAL: REVENUE $ 10,228,645 $ 9,823,824 $ 11,672,079 $ 17,974,001 $ 11,281,855 $ 11,472,805 $ 11,667,002 $ 11,864,499 $ 12,065,355 $ 12,257,609 $ 12,452,939 $ 12,651,394 Projected
5-Year Projected Rate Period Projected
Basis DESCRIPTION
DESCRIPTION Basis
5-Year Projected Rate Period
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 1 (O&M), 8 of 45 119 CITY OF AMERICAN CANYON Exhibit 1 - O&M

WATER RATE STUDY
Operating Revenue and Expenses
TABLE 6 : OPERATING EXPENSE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Fund 510 - Water Operations
560 - Water Treatment Plant
Wages - Full time 3 $ 419,960 $ 552,331 $ 612,238 $ 633,667 $ 655,845 $ 678,800 $ 702,558 $ 727,147 $ 752,597 $ 778,938 $ 806,201 $ 834,418 Wages - Overtime 3 10,703 14,204 9,000 9,315 9,641 9,978 10,328 10,689 11,063 11,451 11,851 12,266 Health Insurance 3 73,246 91,247 95,546 98,890 102,351 105,933 109,641 113,478 117,450 121,561 125,815 130,219 Health-In-Lieu 3 - - 9,690 10,029 10,380 10,743 11,119 11,509 11,911 12,328 12,760 13,206 Cafeteria Plan Section 125 3 15,149 19,673 24,587 25,448 26,338 27,260 28,214 29,202 30,224 31,282 32,377 33,510 Social Security & Medicare 3 6,835 8,573 9,374 9,703 10,042 10,394 10,757 11,134 11,524 11,927 12,344 12,776 Worker Comp Insurance 3 32,904 36,686 49,859 51,604 53,410 55,280 57,215 59,217 61,290 63,435 65,655 67,953 Benefits - Other 3 1,125 1,705 1,106 1,145 1,185 1,226 1,269 1,314 1,360 1,407 1,457 1,508 Info Tech Support Services 2 40,818 2,424 116,200 119,686 123,277 126,975 130,784 134,708 138,749 142,911 147,199 151,615 Professional Services 2 132,912 128,160 366,400 377,392 388,714 400,375 412,386 424,758 437,501 450,626 464,145 478,069 Temp Agency Services 2 - 1,066 - - - - - - - - - -
Misc Contractual Services 2 4,962 66,347 59,200 60,976 62,805 64,689 66,630 68,629 70,688 72,809 74,993 77,243 General Repairs & Maint 2 220,338 114,331 53,800 55,414 57,076 58,789 60,552 62,369 64,240 66,167 68,152 70,197 Advertising 2 4,908 1,279 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 Postage/Mail/Copy/Printing Svc 2 8,482 3,887 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 Membership Dues & Subscription 2 2,430 1,369 3,200 3,296 3,395 3,497 3,602 3,710 3,821 3,936 4,054 4,175 Conferences - Training 2 8,946 15,126 13,500 13,905 14,322 14,752 15,194 15,650 16,120 16,603 17,101 17,614 Rentals - Equipment/Space 2 4,305 9,134 3,700 3,811 3,925 4,043 4,164 4,289 4,418 4,551 4,687 4,828 Regulatory Compliance Permits 2 29,461 205 - - - - - - - - - - Office Supplies 2 2,929 2,645 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 Operating Supplies 2 347,712 406,005 488,400 503,052 518,144 533,688 549,699 566,189 583,175 600,670 618,691 637,251 Water Plant Membrane Filters 2 - - - 1,200,000 - - - - - - - - Utilities - Gas & Elec 5 61,656 61,456 73,000 77,116 81,465 86,059 90,912 96,038 101,454 107,175 113,218 119,603 Util-PhonesPgrsInternetCable 2 5,422 6,589 5,800 5,974 6,153 6,338 6,528 6,724 6,926 7,133 7,347 7,568 Major Equipment 2 15,000 152,253 - - - - - - - - - -
Capital Outlay-Contra Account 9 (40,761) - - - - - - - - - - - PERS Retirement 3 73,689 91,491 60,588 62,708 64,903 67,175 69,526 71,959 74,478 77,085 79,783 82,575 Subtotal - Water Treatment Plant $ 1,483,133 $ 1,788,187 $ 2,088,189 $ 3,357,121 $ 2,228,382 $ 2,302,054 $ 2,378,221 $ 2,456,970 $ 2,538,391 $ 2,622,580 $ 2,709,633 $ 2,799,651 DESCRIPTION Basis
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 1 (O&M), 9 of 45 120 CITY OF AMERICAN CANYON Exhibit 1 - O&M

WATER RATE STUDY
Operating Revenue and Expenses
TABLE 7 : OPERATING EXPENSE FORECAST, cont.1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 565 - Water Distribution
Wages - Full time 3 $ 426,369 $ 436,850 $ 544,808 $ 563,876 $ 583,612 $ 604,038 $ 625,180 $ 647,061 $ 669,708 $ 693,148 $ 717,408 $ 742,517 Wages - Overtime 3 24,335 14,875 3,000 3,105 3,214 3,326 3,443 3,563 3,688 3,817 3,950 4,089 Health Insurance 3 43,356 53,367 110,792 114,670 118,683 122,837 127,137 131,586 136,192 140,959 145,892 150,998 Health-In-Lieu 3 14,200 11,400 - - - - - - - - - -
Cafeteria Plan Section 125 3 21,165 21,467 27,459 28,420 29,415 30,444 31,510 32,613 33,754 34,936 36,158 37,424 Social Security & Medicare 3 7,057 7,005 8,298 8,588 8,889 9,200 9,522 9,855 10,200 10,557 10,927 11,309 Worker Comp Insurance 3 44,905 37,930 58,411 60,455 62,571 64,761 67,028 69,374 71,802 74,315 76,916 79,608 Benefits - Other 3 1,354 7,974 1,901 1,968 2,036 2,108 2,182 2,258 2,337 2,419 2,503 2,591 Info Tech Support Services 2 5,422 31,462 84,600 87,138 89,752 92,445 95,218 98,075 101,017 104,047 107,169 110,384 Professional Services 2 932 10,305 52,000 53,560 55,167 56,822 58,526 60,282 62,091 63,953 65,872 67,848 Misc Contractual Services 2 6,051 3,952 9,300 9,579 9,866 10,162 10,467 10,781 11,105 11,438 11,781 12,134 General Repairs & Maint 2 177,364 86,880 375,100 386,353 397,944 409,882 422,178 434,844 447,889 461,326 475,165 489,420 Reimbursable Repairs 2 - - 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 26,095 Postage/Mail/Copy/Printing Svc 2 - 224 3,499 3,604 3,712 3,823 3,938 4,056 4,178 4,303 4,432 4,565 Membership Dues & Subscription 2 1,312 390 3,200 3,296 3,395 3,497 3,602 3,710 3,821 3,936 4,054 4,175 Conferences - Training 2 8,755 3,806 7,000 7,210 7,426 7,649 7,879 8,115 8,358 8,609 8,867 9,133 Rentals - Equipment/Space 2 5,206 4,996 13,000 13,390 13,792 14,205 14,632 15,071 15,523 15,988 16,468 16,962 Office Supplies 2 1,660 4,778 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 Operating Supplies 2 15,671 37,392 33,200 34,196 35,222 36,279 37,367 38,488 39,643 40,832 42,057 43,318 Water Meters 7 98,208 104,845 100,000 103,500 107,123 110,872 114,752 118,769 122,926 127,228 131,681 136,290 Util-PhonesPgrsInternetCable 5 3,960 4,825 4,100 4,331 4,575 4,833 5,106 5,394 5,698 6,019 6,359 6,717 Major Equipment 2 15,000 54,531 - - - - - - - - - -
PERS Retirement 3 69,004 73,933 74,481 77,088 79,786 82,578 85,468 88,460 91,556 94,760 98,077 101,510 Subtotal -Water Distribution $ 991,284 $ 1,013,187 $ 1,536,149 $ 1,586,987 $ 1,639,520 $ 1,693,803 $ 1,749,895 $ 1,807,858 $ 1,867,753 $ 1,929,647 $ 1,993,606 $ 2,059,700 DESCRIPTION Basis
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 1 (O&M), 10 of 45 121 CITY OF AMERICAN CANYON Exhibit 1 - O&M

WATER RATE STUDY
Operating Revenue and Expenses
TABLE 8 : OPERATING EXPENSE FORECAST, cont.1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 50 - Public Works
810 - Non Departmental
Wages - Full time 3 $ 113,357 $ 136,471 $ 128,293 $ 132,783 $ 137,430 $ 142,240 $ 147,219 $ 152,371 $ 157,704 $ 163,224 $ 168,937 $ 174,850 Wages - Overtime 3 954 178 - - - - - - - - - -
Allowances 3 1,811 1,920 1,920 1,987 2,057 2,129 2,203 2,280 2,360 2,443 2,528 2,617 Health Insurance 3 18,856 20,841 21,244 21,987 22,757 23,553 24,378 25,231 26,114 27,028 27,974 28,953 Cafeteria Plan Section 125 3 4,227 4,452 4,312 4,463 4,619 4,781 4,948 5,122 5,301 5,486 5,678 5,877 Social Security & Medicare 3 1,747 2,069 2,038 2,109 2,183 2,259 2,338 2,420 2,505 2,592 2,683 2,777 Worker Comp Insurance 3 7,901 7,096 9,825 10,169 10,525 10,893 11,274 11,669 12,077 12,500 12,937 13,390 OPEB 3 80,835 (8,807) 47,537 49,201 50,923 52,705 54,550 56,459 58,435 60,480 62,597 64,788 Pension Expense 3 (223,456) 37,354 - - - - - - - - - -
Benefits - Other 3 1,371 1,421 - - - - - - - - - -
Info Tech Support Services 2 - - 33,414 34,416 35,449 36,512 37,608 38,736 39,898 41,095 42,328 43,598 Professional Services 2 42,173 47,333 66,586 68,584 70,641 72,760 74,943 77,191 79,507 81,892 84,349 86,880 Postage/Mail/Copy/Printing Svc 2 - 9,000 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 Bad Debt Expense 2 (11,826) 14,649 - - - - - - - - - -
Membership Dues & Subscription 2 425 767 2,600 2,678 2,758 2,841 2,926 3,014 3,105 3,198 3,294 3,392 Regulatory Compliance Permits 2 - - - - - - - - - - - - Services - Cash for Grass 2 17,463 8,815 30,000 30,900 31,827 32,782 33,765 34,778 35,822 36,896 38,003 39,143 Services - Toilet Rebates 9 5,300 5,800 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Services - Washer Rebates 2 - - - - - - - - - - - -
Office Supplies 2 - - 500 515 530 546 563 580 597 615 633 652 Operating Supplies 2 750 637 - - - - - - - - - -
Utilities - Water 5 2,155 2,563 2,500 2,641 2,790 2,947 3,113 3,289 3,474 3,670 3,877 4,096 City of Napa 8 178,426 305,944 278,000 283,560 289,231 295,016 300,916 306,934 313,073 319,335 325,721 332,236 North Bay Aqueduct 8 2,142,501 2,330,665 3,203,000 3,267,060 3,332,401 3,399,049 3,467,030 3,536,371 3,607,098 3,679,240 3,752,825 3,827,881 City of Vallejo 8 1,059,922 1,398,799 121,218 123,642 126,115 128,638 131,210 133,834 136,511 139,241 142,026 144,867 AC Recycled Water 2 10,000 49,405 - - - - - - - - - -
Depreciation 2 1,282,037 1,274,074 - - - - - - - - - -
Transfer to Gen Fund Support Sv 2 766,412 942,449 1,124,203 1,157,929 1,192,667 1,228,447 1,265,300 1,303,259 1,342,357 1,382,628 1,424,107 1,466,830 Transfer To General Fund - Oth 9 57,195 319,586 160,000 100,000 - - - - - - - - Retiree Health Benefits 3 60,100 53,849 74,980 77,605 80,321 83,132 86,042 89,053 92,170 95,396 98,735 102,191 PERS Retirement 3 17,037 18,820 16,257 16,826 17,415 18,024 18,655 19,308 19,984 20,683 21,407 22,156 ISF - Bldg Maint 2 77,400 218,948 325,219 334,976 345,025 355,376 366,037 377,018 388,328 399,978 411,978 424,337 ISF - Fleet 2 238,950 178,624 354,173 364,798 375,742 387,014 398,625 410,584 422,901 435,588 448,656 462,115 ISF - Info Tech 2 18,000 44,795 54,709 56,350 58,041 59,782 61,575 63,423 65,325 67,285 69,304 71,383 ISF - Legal Services 2 28,800 21,603 96,582 99,479 102,464 105,538 108,704 111,965 115,324 118,784 122,347 126,018 Subtotal - Non Departmental $ 6,000,824 $ 7,450,121 $ 6,175,109 $ 6,260,838 $ 6,310,276 $ 6,463,522 $ 6,620,677 $ 6,781,846 $ 6,947,136 $ 7,116,658 $ 7,290,526 $ 7,468,856 TOTAL: WATER OPERATIONS EXPENSES $ 8,475,241 $ 10,251,496 $ 9,799,447 $ 11,204,947 $ 10,178,178 $ 10,459,378 $ 10,748,792 $ 11,046,673 $ 11,353,281 $ 11,668,886 $ 11,993,765 $ 12,328,206 TABLE 9 : OPERATING EXPENSE FORECAST, cont.1(for information only) Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33

CAPITAL PROJECTS
Intra-fund Transfer Out Water 7 $ 89,642 $ 85,675 $ 2,038,185 $ 2,109,521 $ 2,183,355 $ 2,259,772 $ 2,338,864 $ 2,420,724 $ 2,505,450 $ 2,593,141 $ 2,683,900 $ 2,777,837 Intra-fund Transfer Out Recycled 7 - - 120,000 124,200 128,547 133,046 137,703 142,522 147,511 152,674 158,017 163,548 Misc. Contractual Services (Dept 450) 2 400,000 50,000 - - - - - - - - - - Transfer Cap Projs Fund - Gen 7 - - 596,000 616,860 638,450 660,796 683,924 707,861 732,636 758,278 784,818 812,287 Transfer Cap Proj - Water 7 - - - - - - - - - - - -
Transfer Cap Proj - Wastewater 7 (155,893) 412,280 250,000 258,750 267,806 277,179 286,881 296,922 307,314 318,070 329,202 340,724 Transfer Cap Proj - Recycled 7 - - 917,509 949,622 982,859 1,017,259 1,052,863 1,089,713 1,127,853 1,167,328 1,208,185 1,250,471 Subtotal - Capital Projects $ 333,749 $ 547,955 $ 3,921,694 $ 4,058,954 $ 4,201,017 $ 4,348,053 $ 4,500,235 $ 4,657,743 $ 4,820,764 $ 4,989,490 $ 5,164,123 $ 5,344,867 DESCRIPTION Basis
DESCRIPTION Basis
5-Year Projected Rate Period Projected
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 1 (O&M), 11 of 45 122 CITY OF AMERICAN CANYON Exhibit 1 - O&M

WATER RATE STUDY
Operating Revenue and Expenses
TABLE 10 : FORECASTING ASSUMPTIONS
Basis 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Customer Growth31 -- 1.80% 1.80% 1.80% 1.70% 1.70% 1.70% 1.70% 1.70% 1.60% 1.60% 1.60% General Cost Inflation42 -- 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Labor Cost Inflation53 -- 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Energy64 -- 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% Electricty75 -- 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% Fuel & Utilities86 -- 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% Construction Cost Inflation97 -- 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Water Purchases10 8 -- 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% No Escalation 9 -- 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Revenues and expenses for all other years are escalated based on the forecasting assumptions located in Table 10. Source files: Fund 510 Water Operations.xlsx , FY 22 Fund 520 Water Cap Revenue Detailed Trial Balance , FY 23 Fund 520 Water Cap Revenue Detailed Trial Balance, & REV EXP ACTUALS - FY22 and FY23_NBS.

2. Expenses are inflated each year by the following annual inflation factor categories.

3. Customer growth is based on service area population growth through FY 2039/40. Source file: American Canyon 2015 UWMP.pdf , page 26.

4. General cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

5. Labor cost inflation is based on the 5-year average annual change in the Quarterly Census of Employment and Wages for San Francisco County, CA.

6. Energy cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

7. Electricity cost inflation is based on the 5-year average change in the Consumer Price Index for San Francisco County.

8. Fuel & Utilities cost inflation is based on the 5-year average annual change in the Consumer Price Index - Average Price Data for Fuels and related products and power. This factor is used for utility costs other than electricity.

9. Construction cost Inflation is the 10-year average change in the Construction Cost Index for 2012-2022. Source: Engineering News Record website (http://enr.construction.com ).

10. Water purchases growth is estimated at 2% annually. Source file: Water cost projections.xlsx .

INFLATION FACTORS2
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 1 (O&M), 12 of 45 123 CITY OF AMERICAN CANYON Exhibit 2 - CIP

WATER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 11 : CAPITAL FUNDING SUMMARY
CAPITAL FUNDING FORECAST Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Grants $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Use of Capacity Fee Reserves - - 1,630,856 2,854,016 2,471,905 2,165,153 1,919,564 1,723,628 1,568,012 1,444,951 1,348,341 1,273,232 SRF Loan Funding - - - - - - - - - - - -
Use of New Revenue Bond Proceeds - - - - - - - - - - - - Use of Capital Rehabilitation and Replacement Reserve - - - 38,578 - - - - - - - - Rate Revenue 251,795 2,790,541 4,566,877 1,523,075 1,565,040 754,328 665,707 952,128 1,201,396 1,421,386 1,618,317 1,797,260 Total Sources of Capital Funds $ 251,795 $ 2,790,541 $ 6,197,733 $ 4,415,669 $ 4,036,946 $ 2,919,481 $ 2,585,271 $ 2,675,756 $ 2,769,407 $ 2,866,337 $ 2,966,658 $ 3,070,492 Uses of Capital Funds:

Total Project Costs $ 251,795 $ 2,790,541 $ 6,197,733 $ 4,415,669 $ 4,036,946 $ 2,919,481 $ 2,585,271 $ 2,675,756 $ 2,769,407 $ 2,866,337 $ 2,966,658 $ 3,070,492 Capital Funding Surplus (Deficiency) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

CAPITAL IMPROVEMENT PROGRAM FUNDING OPTIONS
Capital Improvement Program Funding Choice FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Effective Annual Funding Amount $ 251,795 $ 2,790,541 $ 6,197,733 $ 4,415,669 $ 4,036,946 $ 2,919,481 $ 2,585,271 $ 2,675,756 $ 2,769,407 $ 2,866,337 $ 2,966,658 $ 3,070,492 5-Year Projected Rate Period Projected
Funding Sources:

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 2 (CIP), 13 of 45 124 CITY OF AMERICAN CANYON Exhibit 2 - CIP

WATER RATE STUDY
Capital Improvement Plan Expenditures

CAPITAL IMPROVEMENT PROGRAM
TABLE 12 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Current-Year Dollars ) 1 Project No. Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects 2
TR23-0100 Knightsbridge Rehab and Water Main Replacement $ - $ - $ 505,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - TR24-0300 ARPA Rancho Del Mar Paving and Utility Improvements - - 1,162,000 - - - - - - - - - WW16‐0300 SCADA - 250,000 - - - - - - - - -
UM20‐0100 Engi Energy Services Contract Budget Expense Remaining 162,280 - - - - - - - - - - - WA24-0100 Rio Del Mar Water Main Upgrade - - 45,000 360,000 - - - - - - - - WA24-0200 North Kelly Road Water Main - - - 145,000 - - - - - - - - WA25-0100 Hanna Drive Water Main Repl. - - - - 550,000 - - - - - - - WA26-0100 Northampton Water Main Repl. - - - - - 650,000 - - - - - - NEW Water Treatment Plant Shop - - 75,000 - - - - - - - - - NEW WTP Filter Media Replacement and Underdrain Repair - - 350,000 - - - - - - - - - NEW Parks - Irrigation Controller Upgrade (RW) - - 200,000 - - - - - - - - - NEW Solids Handling at WTP - - 100,000 900,000 - - - - - - - - Master Plan Projects - Potable Water 3
W1 Zone 1 Storage $ - $ - $ 343,000 $ 343,000 $ 343,000 $ 343,000 $ - $ - $ - $ - $ - $ - W2 Annual Water Main Replacements - 1,500,000 1,455,000 995,000 950,000 850,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 W3 Annual Water Service Replacements 81,000 81,000 81,000 81,000 - - - - - - - - W4 High Pressure Zone System - 1,024,000 1,024,000 1,024,000 1,024,000 - - - - - - - W8 Replace Transmission Mains Near SR29 - - - - 196,000 196,000 196,000 196,000 196,000 196,000 196,000 196,000 W9 Replace Oat Hill Transmission Main - - - - 128,000 128,000 128,000 128,000 128,000 128,000 128,000 128,000 W11 Fire Flows in Hess Drive - - - - 79,000 79,000 79,000 79,000 79,000 79,000 79,000 79,000 W13 Main Zone Reliability Improvements - - - - 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 Estimated Future Projects
Future Projects4 - - - - - - - - - - - -
Total: CIP Program Costs (Future-Year Dollars) $ 243,280 $ 2,605,000 $ 5,590,000 $ 3,848,000 $ 3,399,000 $ 2,375,000 $ 2,032,000 $ 2,032,000 $ 2,032,000 $ 2,032,000 $ 2,032,000 $ 2,032,000 Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 2 (CIP), 14 of 45 125 CITY OF AMERICAN CANYON Exhibit 2 - CIP

WATER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 13 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Future-Year Dollars ) 5 Project No. Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects 2
TR23-0100 Knightsbridge Rehab and Water Main Replacement $ - $ - $ 559,903 $ - $ - $ - $ - $ - $ - $ - $ - $ - TR24-0300 ARPA Rancho Del Mar Paving and Utility Improvements - - 1,288,330 - - - - - - - - - WW16‐0300 SCADA - - 277,179 - - - - - - - - -
UM20‐0100 Engi Energy Services Contract Budget Expense Remaining 167,960 - - - - - - - - - - - WA24-0100 Rio Del Mar Water Main Upgrade - - 49,892 413,108 - - - - - - - - WA24-0200 North Kelly Road Water Main - - - 166,391 - - - - - - - - WA25-0100 Hanna Drive Water Main Repl. - - - - 653,227 - - - - - - - WA26-0100 Northampton Water Main Repl. - - - - - 799,016 - - - - - - NEW Water Treatment Plant Shop - - 83,154 - - - - - - - - - NEW WTP Filter Media Replacement and Underdrain Repair - - 388,051 - - - - - - - - - NEW Parks - Irrigation Controller Upgrade (RW) - - 221,744 - - - - - - - - - NEW Solids Handling at WTP - - 110,872 1,032,771 - - - - - - - - Master Plan Projects - Potable Water 3
W1 Zone 1 Storage $ - $ - $ 380,290 $ 393,600 $ 407,376 $ 421,635 $ - $ - $ - $ - $ - $ - W2 Annual Water Main Replacements - 1,606,838 1,613,185 1,141,785 1,128,302 1,044,867 1,908,419 1,975,214 2,044,346 2,115,898 2,189,955 2,266,603 W3 Annual Water Service Replacements 83,835 86,769 89,806 92,949 - - - - - - - - W4 High Pressure Zone System - 1,096,934 1,135,327 1,175,064 1,216,191 - - - - - - - W8 Replace Transmission Mains Near SR29 - - - - 232,787 240,934 249,367 258,095 267,128 276,477 286,154 296,169 W9 Replace Oat Hill Transmission Main - - - - 152,024 157,345 162,852 168,552 174,451 180,557 186,876 193,417 W11 Fire Flows in Hess Drive - - - - 93,827 97,111 100,510 104,028 107,669 111,437 115,338 119,374 W13 Main Zone Reliability Improvements - - - - 153,212 158,574 164,124 169,868 175,814 181,967 188,336 194,928 Estimated Future Projects
Future Projects4 - - - - - - - - - - - -
Total: CIP Program Costs (Future-Year Dollars) $ 251,795 $ 2,790,541 $ 6,197,733 $ 4,415,669 $ 4,036,946 $ 2,919,481 $ 2,585,271 $ 2,675,756 $ 2,769,407 $ 2,866,337 $ 2,966,658 $ 3,070,492 TABLE 14 : FORECASTING ASSUMPTIONS
Economic Variables FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Annual Construction Cost Inflation, Per Engineering News Record63.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Cumulative Construction Cost Multiplier from FY 2021/22 1.04 1.07 1.11 1.15 1.19 1.23 1.27 1.32 1.36 1.41 1.46 1.51

1. Capital project costs were provided by City Staff in source file: Water Projects.pdf.

2. Capital projects costs for FY 2021/22 and FY 2022/23 are from source files: 11. CIP Budget vs Expense Report FY 2021-2022 through Oct 2021.pdf & Water FY 2023-2027.xlsx .

3. The City's Water Master Plan projects were scheduled to begin in 2016; however, the study only includes costs from FY 2021/22 through FY 2034/35. Source file: 2016 Potable Water Master Plan.pdf , page 53.

4. Future project costs beyond FY 2034/35 are calculated based on the City's 10-year average.

5. Capital improvement projects are inflated to future year estimated costs with ENR CCI for the region. Source: Engineering News Record website (http://enr.construction.com ).

6. For reference purposes, the annual Construction Cost Inflation percentage is the 10-year average change in the Construction Cost Index for September 2012-2022 (3.5%). Source: Engineering News Record website (http://enr.construction.com).

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 2 (CIP), 15 of 45 126 CITY OF AMERICAN CANYON Exhibit 3 - Debt

WATER RATE STUDY
Debt Service
TABLE 15 : EXISTING DEBT OBLIGATIONS
EXISTING DEBT OBLIGATIONS Actuals Actuals
Annual Repayment Schedules: FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 SWRCB (California Department of Water Resources): Contract No. D-GLC 461 Principal Payment $ 70,382 $ 72,142 $ 73,946 $ 75,794 $ 77,689 $ 79,631 $ 53,204 $ - $ - $ - $ - $ - Interest Payment 24,084 22,324 20,521 18,672 16,777 14,835 12,844 - - - - - Subtotal: Annual Debt Service $ 94,466 $ 94,466 $ 94,466 $ 94,466 $ 94,466 $ 94,466 $ 66,048 $ - $ - $ - $ - $ - Coverage Requirement ($-Amnt above annual payment) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement2$ 71,827 $ 72,068 $ 72,053 $ 71,580 $ 70,175 $ 66,417 $ 53,204 $ - $ - $ - $ - $ - Banc of America Public Capital Corp Agreement (ENGIE) - Loan Amount $5,209,2093 Principal Payment $ 5,520 $ 66,788 $ 63,992 $ 68,673 $ 73,583 $ 75,042 $ 82,720 $ 88,430 $ 78,658 $ 84,010 $ 89,620 $ 94,771 Interest Payment 23,749 22,854 21,682 20,498 19,229 17,900 16,494 14,966 13,463 12,011 10,462 8,815 Subtotal: Annual Debt Service $ 29,269 $ 89,642 $ 85,674 $ 89,171 $ 92,812 $ 92,941 $ 99,214 $ 103,396 $ 92,122 $ 96,021 $ 100,082 $ 103,586 Coverage Requirement ($-Amnt above annual payment) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement (total fund balance) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Sites Reservoir Project - Debt Amount $20,586,0004
Principal Payment $ 400,000 $ 560,000 $ 640,000 $ 640,000 $ 1,281,000 $ 2,336,000 $ 2,849,000 $ 3,166,000 $ 3,195,000 $ 3,131,000 $ 3,028,000 $ - Interest Payment - - - - - - - - - - - -
Subtotal: Annual Debt Service $ 400,000 $ 560,000 $ 640,000 $ 640,000 $ 1,281,000 $ 2,336,000 $ 2,849,000 $ 3,166,000 $ 3,195,000 $ 3,131,000 $ 3,028,000 $ - Coverage Requirement ($-Amnt above annual payment) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement (total fund balance) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Grand Total: Existing Annual Debt Service $ 523,735 $ 744,109 $ 820,140 $ 823,637 $ 1,468,278 $ 2,523,408 $ 3,014,261 $ 3,269,396 $ 3,287,122 $ 3,227,021 $ 3,128,082 $ 103,586 Grand Total: Existing Annual Coverage Requirement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Grand Total: Existing Debt Reserve Target $ 71,827 $ 72,068 $ 72,053 $ 71,580 $ 70,175 $ 66,417 $ 53,204 $ - $ - $ - $ - $ - 5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 3 (Debt), 16 of 45 127 CITY OF AMERICAN CANYON Exhibit 3 - Debt

WATER RATE STUDY
Debt Service
TABLE 16 : WATER UTILITY EXISTING DEBT OBLIGATIONS, cont.

EXISTING DEBT OBLIGATIONS Actuals Actuals
Annual Repayment Schedules: FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Interfund Loans (For Information Only)
Water Operations to Water Capacity Fund
Advance from Water Operations 510 to Water Capacity 520 Original Loan Amount (June 1, 2008) $ 1,000,000
Accrued Interest (LAIF Rate + 2%) 132,325
Annual Debt Service5 $126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ 126,058 $ - Water Operations to Recycled Water Fund
Advance from Water Operations 510 to Recycled Water Operations 580 Original Loan Amount (September 21, 2021) $ 128,189
Accrued Interest (LAIF Rate + 2%) 11,706
Annual Debt Service6 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 Water Operations to Recycled Water Fund
Advance from Water Operations 510 to Recycled Water Operations 580 Original Loan Amount (June 20, 2023) $ 1,136,140
Accrued Interest (LAIF Rate + 2%) 981
Annual Debt Service7 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061

1. Construction loan issued by the State under the Davis-Grunsky Act. Source files: 5 - Debt Service Schedules.xlsx & 6 - Davis Grunsky Agreement $2,050,000 Loan Dec 9 1974.pdf .

2. The City is required to maintain a debt reserve fund equal to the average annual payment of the total outstanding loan balance. Source file: 6 - Davis Grunsky Agreement $2,050,000 Loan Dec 9 1974.pdf , pp. 11-12 .

3. Equipment lease/purchase loan issued by the Banc of America Public Capital Corp to cover energy efficiency projects to City facilities. Water utility portion is 24.64%, or $1,283,549.10 (Principal). Source file: 6 - ENGIE Closing Documents.pdf .

4. Debt service for the City's portion of costs related to the Sites Reservoir Project. Source files: Email from City staff dated 9-19-2022 & Sites-2021-Draft-Plan-of-Finance.pdf , Table 6A, page 27.

5. Funds advanced to purchase water rights. Repayment scheduled to begin FY 2022/23.

6. Funds advanced for Green Island Recycled Waterline Project. Repayment scheduled to begin FY 2025/26.

7. Funds advanced for the Recycled Water Expansion Project, Project no. RW17-0100. Repayment scheduled to begin FY 2023/24.

TABLE 17 : EXISTING ANNUAL DEBT OBLIGATIONS TO BE SATISFIED BY WATER RATES Annual Obligations FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Existing Annual Debt Service $ 523,735 $ 744,109 $ 820,140 $ 823,637 $ 1,468,278 $ 2,523,408 $ 3,014,261 $ 3,269,396 $ 3,287,122 $ 3,227,021 $ 3,128,082 $ 103,586 Existing Annual Coverage Requirement $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Existing Debt Reserve Target $ 71,827 $ 72,068 $ 72,053 $ 71,580 $ 70,175 $ 66,417 $ 53,204 $ - $ - $ - $ - $ - 5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 3 (Debt), 17 of 45 128 CITY OF AMERICAN CANYON Exhibit 4 - Currents Rates

WATER RATE STUDY
Projected Water Rates Under Existing Rate Schedule
TABLE 18 : CURRENT WATER RATE SCHEDULE
Current Rates
Jan. 1, 2023
Monthly Fixed Service Charges
Residential Use $26.56
Multi-Family, Commercial and Landscape
< 1" meter $26.56
1" meter (Residential) $26.56
1" meter (Commercial) $44.42
1 1/2" meter $88.75
2" meter $141.99
3" meter $283.98
4" meter $443.74
6" meter $887.48
8" meter $1,420.06
Private Fire Protection $13.28
Temporary Hydrant Meters $283.98
Raw Water
1" meter $44.42
2" meter $141.99
4" meter $443.74
6" meter $887.48
Variable Rates for All Water Consumed (in $/hcf) 2
Residential Use
Tier 1 (0 - 10 units) $7.54
Tier 2 (> 10 units) $8.15
Multi-Family, Commercial and Landscape $7.72
Private Fire Protection $3.86
Temporary Hydrant Meters
Potable $7.72
Recycled $0.90
Raw Water $3.44

1. Rates available on the City website. Source: https://www.cityofamericancanyon.org .

2. HCF = hundred cubic feet (748 gallons).

Water Rate Schedule1
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 4 (Current Rates), 18 of 45129 CITY OF AMERICAN CANYON Functionalization & Classification

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 19 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (COM) (CAP) (CA) (FP) (COM) (CAP) (CA) (FP)
Fund 510 - Water Operations
560 - Water Treatment Plant
Wages - Full Time $ 612,238 $ 306,119 $ 223,160 $ 61,224 $ 21,736 50.0% 36.4% 10.0% 3.6% Wages - Overtime 9,000 4,500 3,280 900 320 50.0% 36.4% 10.0% 3.6% Health Insurance 95,546 47,773 34,826 9,555 3,392 50.0% 36.4% 10.0% 3.6% Health-In-Lieu 9,690 4,845 3,532 969 344 50.0% 36.4% 10.0% 3.6% Cafeteria Plan Section 125 24,587 12,294 8,962 2,459 873 50.0% 36.4% 10.0% 3.6% Social Security & Medicare 9,374 4,687 3,417 937 333 50.0% 36.4% 10.0% 3.6% Worker Comp Insurance 49,859 24,930 18,174 4,986 1,770 50.0% 36.4% 10.0% 3.6% Benefits - Other 1,106 553 403 111 39 50.0% 36.4% 10.0% 3.6% Info Tech Support Services 116,200 58,100 42,355 11,620 4,125 50.0% 36.4% 10.0% 3.6% Professional Services 366,400 183,200 133,552 36,640 13,008 50.0% 36.4% 10.0% 3.6% Misc Contractual Services 59,200 29,600 21,578 5,920 2,102 50.0% 36.4% 10.0% 3.6% General Repairs & Maint 53,800 26,900 19,610 5,380 1,910 50.0% 36.4% 10.0% 3.6% Advertising 6,000 3,000 2,187 600 213 50.0% 36.4% 10.0% 3.6% Postage/Mail/Copy/Printing Svc 2,000 1,000 729 200 71 50.0% 36.4% 10.0% 3.6% Membership Dues & Subscription 3,200 1,600 1,166 320 114 50.0% 36.4% 10.0% 3.6% Conferences - Training 13,500 6,750 4,921 1,350 479 50.0% 36.4% 10.0% 3.6% Rentals - Equipment/Space 3,700 1,850 1,349 370 131 50.0% 36.4% 10.0% 3.6% Office Supplies 25,000 12,500 9,112 2,500 888 50.0% 36.4% 10.0% 3.6% Operating Supplies 488,400 244,200 178,021 48,840 17,339 50.0% 36.4% 10.0% 3.6% Water Plant Membrane Filters - - - - - 50.0% 36.4% 10.0% 3.6% Utilities - Gas & Elec 73,000 36,500 26,608 7,300 2,592 50.0% 36.4% 10.0% 3.6% Util-Phonespgrsinternetcable 5,800 2,900 2,114 580 206 50.0% 36.4% 10.0% 3.6% Pers Retirement 60,588 30,294 22,084 6,059 2,151 50.0% 36.4% 10.0% 3.6% Subtotal - Water Treatment Plant $ 2,088,189 $ 1,044,094 $ 761,140 $ 208,819 $ 74,135 50.0% 36.4% 10.0% 3.6% Fire
Protection
Capacity Customer Budget Categories
Total Revenue
Requirements
Commodity Basis of Classification
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Funct. & Classification, 19 of 45 130 CITY OF AMERICAN CANYON Functionalization & Classification

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 20 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS, cont.

Classification of Expenses
FY 2023/24 (COM) (CAP) (CA) (FP) (COM) (CAP) (CA) (FP)
Fund 510 - Water Operations
565 - Water Distribution
Wages - Full Time $ 544,808 $ 272,404 $ 198,581 $ 54,481 $ 19,342 50.0% 36.4% 10.0% 3.6% Wages - Overtime 3,000 1,500 1,093 300 107 50.0% 36.4% 10.0% 3.6% Health Insurance 110,792 55,396 40,384 11,079 3,933 50.0% 36.4% 10.0% 3.6% Cafeteria Plan Section 125 27,459 13,730 10,009 2,746 975 50.0% 36.4% 10.0% 3.6% Social Security & Medicare 8,298 4,149 3,025 830 295 50.0% 36.4% 10.0% 3.6% Worker Comp Insurance 58,411 29,205 21,291 5,841 2,074 50.0% 36.4% 10.0% 3.6% Benefits - Other 1,901 951 693 190 67 50.0% 36.4% 10.0% 3.6% Info Tech Support Services 84,600 42,300 30,837 8,460 3,003 50.0% 36.4% 10.0% 3.6% Professional Services 52,000 26,000 18,954 5,200 1,846 50.0% 36.4% 10.0% 3.6% Misc Contractual Services 9,300 4,650 3,390 930 330 50.0% 36.4% 10.0% 3.6% General Repairs & Maint 375,100 187,550 136,723 37,510 13,317 50.0% 36.4% 10.0% 3.6% Reimbursable Repairs 20,000 10,000 7,290 2,000 710 50.0% 36.4% 10.0% 3.6% Postage/Mail/Copy/Printing Svc 3,499 1,750 1,275 350 124 50.0% 36.4% 10.0% 3.6% Membership Dues & Subscription 3,200 1,600 1,166 320 114 50.0% 36.4% 10.0% 3.6% Conferences - Training 7,000 3,500 2,551 700 249 50.0% 36.4% 10.0% 3.6% Rentals - Equipment/Space 13,000 6,500 4,738 1,300 462 50.0% 36.4% 10.0% 3.6% Office Supplies 2,000 1,000 729 200 71 50.0% 36.4% 10.0% 3.6% Operating Supplies 33,200 16,600 12,101 3,320 1,179 50.0% 36.4% 10.0% 3.6% Water Meters 100,000 50,000 36,450 10,000 3,550 50.0% 36.4% 10.0% 3.6% Util-Phonespgrsinternetcable 4,100 2,050 1,494 410 146 50.0% 36.4% 10.0% 3.6% Pers Retirement 74,481 37,240 27,148 7,448 2,644 50.0% 36.4% 10.0% 3.6% Subtotal -Water Distribution $ 1,536,149 $ 768,074 $ 559,923 $ 153,615 $ 54,537 50.0% 36.4% 10.0% 3.6% Fire
Protection
Customer Budget Categories
Total Revenue
Requirements
Commodity Capacity Basis of Classification
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Funct. & Classification, 20 of 45 131 CITY OF AMERICAN CANYON Functionalization & Classification

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 21 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS, cont.

Classification of Expenses
FY 2023/24 (COM) (CAP) (CA) (FP) (COM) (CAP) (CA) (FP)
50 - Public Works
810 - Non Departmental
Wages - Full Time $ 128,293 $ 64,146 $ 46,762 $ 12,829 $ 4,555 50.0% 36.4% 10.0% 3.6% Allowances 1,920 960 700 192 68 50.0% 36.4% 10.0% 3.6%
Health Insurance 21,244 10,622 7,743 2,124 754 50.0% 36.4% 10.0% 3.6% Cafeteria Plan Section 125 4,312 2,156 1,572 431 153 50.0% 36.4% 10.0% 3.6% Social Security & Medicare 2,038 1,019 743 204 72 50.0% 36.4% 10.0% 3.6% Worker Comp Insurance 9,825 4,912 3,581 982 349 50.0% 36.4% 10.0% 3.6% Opeb 47,537 23,769 17,327 4,754 1,688 50.0% 36.4% 10.0% 3.6% Info Tech Support Services 33,414 16,707 12,179 3,341 1,186 50.0% 36.4% 10.0% 3.6% Professional Services 66,586 33,293 24,270 6,659 2,364 50.0% 36.4% 10.0% 3.6% Postage/Mail/Copy/Printing Svc 6,000 3,000 2,187 600 213 50.0% 36.4% 10.0% 3.6% Membership Dues & Subscription 2,600 1,300 948 260 92 50.0% 36.4% 10.0% 3.6% Services - Cash For Grass 30,000 15,000 10,935 3,000 1,065 50.0% 36.4% 10.0% 3.6% Services - Toilet Rebates 10,000 5,000 3,645 1,000 355 50.0% 36.4% 10.0% 3.6% Office Supplies 500 250 182 50 18 50.0% 36.4% 10.0% 3.6% Utilities - Water 2,500 1,250 911 250 89 50.0% 36.4% 10.0% 3.6% City Of Napa 278,000 278,000 - - - 100.0% 0.0% 0.0% 0.0% North Bay Aqueduct 3,203,000 3,203,000 - - - 100.0% 0.0% 0.0% 0.0% City Of Vallejo 121,218 121,218 - - - 100.0% 0.0% 0.0% 0.0% Transfer To Gen Fund Support Sv 1,124,203 562,102 409,770 112,420 39,912 50.0% 36.4% 10.0% 3.6% Transfer To General Fund - Oth 160,000 80,000 58,320 16,000 5,680 50.0% 36.4% 10.0% 3.6% Retiree Health Benefits 74,980 37,490 27,330 7,498 2,662 50.0% 36.4% 10.0% 3.6% Pers Retirement 16,257 8,128 5,926 1,626 577 50.0% 36.4% 10.0% 3.6% Isf - Bldg Maint 325,219 162,610 118,542 32,522 11,546 50.0% 36.4% 10.0% 3.6% Isf - Fleet 354,173 177,087 129,095 35,417 12,574 50.0% 36.4% 10.0% 3.6% Isf - Info Tech 54,709 27,355 19,941 5,471 1,942 50.0% 36.4% 10.0% 3.6% Isf - Legal Services 96,582 48,291 35,204 9,658 3,429 50.0% 36.4% 10.0% 3.6% Subtotal - Non Departmental $ 6,175,109 $ 4,888,664 $ 937,813 $ 257,289 $ 91,343 79.2% 15.2% 4.2% 1.5% Total: Water Operations Expenses $ 9,799,447 $ 6,700,833 $ 2,258,877 $ 619,723 $ 220,015 68.4% 23.1% 6.3% 2.2% TOTAL: WATER OPERATIONS EXPENSES $ 9,799,447 $ 6,700,833 $ 2,258,877 $ 619,723 $ 220,015 68.4% 23.1% 6.3% 2.2% Capacity Fire
Protection
Customer Budget Categories
Total Revenue
Requirements
Commodity Basis of Classification
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Funct. & Classification, 21 of 45 132 CITY OF AMERICAN CANYON Functionalization & Classification

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 22 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS, cont.

Classification of Expenses, continued
FY 2023/24 (COM) (CAP) (CA) (FP) (COM) (CAP) (CA) (FP)
Debt Service Payments
Outstanding Debt $ 820,140 $ - $ 820,140 $ - $ - 0.0% 100.0% 0.0% 0.0% New Debt Issue - SRF Loan - - - - - 0.0% 100.0% 0.0% 0.0% New Debt Issue - Revenue Bond - - - - - 0.0% 100.0% 0.0% 0.0% Total Debt Service Payments $ 820,140 $ - $ 820,140 $ - $ - 0.0% 100.0% 0.0% 0.0% Capital Expenditures
Rate Funded Capital Expenses $ 4,566,877 $ - $ 4,566,877 $ - $ - 0.0% 100.0% 0.0% 0.0% TOTAL REVENUE REQUIREMENTS $ 15,186,464 $ 6,700,833 $ 7,645,894 $ 619,723 $ 220,015 44.1% 50.3% 4.1% 1.4% Less: Non-Rate Revenues
Other Revenue
Grant - State/Local $ - $ - $ - $ - $ - 44.1% 50.3% 4.1% 1.4% Interest Earnings (275,008) (121,344) (138,458) (11,222) (3,984) 44.1% 50.3% 4.1% 1.4% Miscellaneous Revenues (359,300) (158,537) (180,896) (14,662) (5,205) 44.1% 50.3% 4.1% 1.4% Late Penalties / Interest (114,300) (50,433) (57,546) (4,664) (1,656) 44.1% 50.3% 4.1% 1.4% Interfund Transfer In (Loan Repayment) (44,061) (19,441) (22,183) (1,798) (638) 44.1% 50.3% 4.1% 1.4% NET REVENUE REQUIREMENTS $ 14,393,795 $ 6,351,077 $ 7,246,811 $ 587,376 $ 208,531 Allocation of Revenue Requirements 100.0% 44.1% 50.3% 4.1% 1.4% TABLE 23 : ADJUSTMENT TO CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses, continued
Adjustments to Classification of Expenses
Adjustment for Current Rate Level: Total (COM) (CAP) (CA) (FP) Test Year (FY 2023/24) Target Rate Rev. After Rate Increases $ 10,291,388 Projected Rate Revenue at Current Rates $ 9,441,640
Test Year (FY 2023/24) Projected Rate Adjustment 9.00%
Adjusted Net Revenue Req'ts $ 10,291,388 $ 4,540,943 $ 5,181,381 $ 419,967 $ 149,097 Percent of Revenue 100.0% 44.1% 50.3% 4.1% 1.4%
TABLE 24 : NET REVENUE REQUIREMENTS PER COSA RESULTS
SWP Raw Water
Treated
Water
Capacity
Related Costs
Customer
Related Costs
Fire
Protection
Related Costs
Rate-Design Adjustments to Fixed/Variable % 100.0% 50.3% 4.1% 1.4% Rate-Design Adjustments to Fixed/Variable ($) $10,291,388 $3,702,785 $515,708 $322,450 $5,181,381 $419,967 $149,097 TABLE 25 : NET REVENUE REQUIREMENTS PER COSA RESULTS - ALTERNATIVE 1 (COSA) Rate-Design Adjustments to Fixed/Variable % 100.0% 36.0% 2.9% 1.0% Rate-Design Adjustments to Fixed/Variable ($) $10,291,388 $5,035,095 $701,267 $438,471 $3,709,181 $300,640 $106,734

60.0%
Total Rate
Revenue
Requirements
FY 2023/24
(Excluding
Recycled Water)
Commodity Capacity
Commodity Related Costs

44.1%
Fire
Protection
Customer
Net Revenue Requirements - Per COSA Results
56% Fixed / 44% Variable
Fixed Costs
Budget Categories
Total Revenue
Requirements Basis of Classification
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Funct. & Classification, 22 of 45 133 CITY OF AMERICAN CANYON Allocation Factors

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 26 : DEVELOPMENT OF THE COMMODITY ALLOCATION FACTOR Development of the Volumetric/Variable Allocation Factor1 Customer Class
FY 2021/22
Consumption
(hcf)
% Adjustment for
Conservation2
Est. FY 2021/22
Volume Adjusted
for Conservation
FY 2021/22
% of Total
Volume
Residential 507,339 20.0% 405,871 50.1%
Multi-Family 89,630 20.0% 71,704 8.8%
Commercial 318,808 20.0% 255,046 31.5%
Landscape 53,157 20.0% 42,526 5.2%
Private Fire Protection 22,831 20.0% 18,265 2.3%
Temporary Hydrant Meters 8,303 20.0% 6,642 0.8%
Raw Water 13,039 20.0% 10,431 1.3%
Total 1,013,107 810,486 100%

1. Consumption data is based on the City of American Canyon's billing data.

2. A conservation factor of 20% included in table above based on the "20 by 2020" law passed in 2009.

Source: https://www.ca-ilg.org .

Commodity Related Costs: Costs associated with the
total consumption (flow) of water over a specified period of time (e.g. annual).

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Allocation Factors, 23 of 45134 CITY OF AMERICAN CANYON Allocation Factors

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 27 : DEVELOPMENT OF THE CAPACITY ALLOCATION FACTORS Development of the CAPACITY Allocation Factors
Customer Class Meter Size1 No. of Meters
Hydraulic
Capacity Factors2
Total
Equivalent
Meters
% of EDUs
Residential 4,880 4,930 42.2%
< 1" meter 1,986 1.00 1,986
1" meter 2,875 1.00 2,875
1 1/2" meter 7 2.00 14
2" meter 9 3.20 29
3" meter 1 6.40 6
4" meter 2 10.00 20
Multi-Family 556 5,598 47.9%
1 1/2" meter 20 2.00 40
2" meter 201 3.20 643
3" meter 96 6.40 614
4" meter 48 10.00 480
6" meter 191 20.00 3,820
Commercial 343 698 6.0%
< 1" meter 102 1.00 102
1" meter 88 1.00 88
1 1/2" meter 54 2.00 108
2" meter 81 3.20 259
3" meter 11 6.40 70
4" meter 7 10.00 70
Landscape 73 122 1.0%
< 1" meter 13 1.00 13
1" meter 30 1.00 30
1 1/2" meter 14 2.00 28
2" meter 16 3.20 51
Private Fire Protection 245 245 2.1%
< 1" meter 245 1.00 245
Temporary Hydrant Meters 8 51 0.4%
3" meter 8 6.40 51
Raw Water 3 40 0.3%
4" meter 2 10.00 20
6" meter 1 20.00 20
Total 6,108 11,684 100%

1. Meter by class and size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

Capacity Related Costs: Costs associated with the
maximum demand required at one point in time or the
maximum size of facilities required to meet this demand.

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Allocation Factors, 24 of 45135 CITY OF AMERICAN CANYON Allocation Factors

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 28 : DEVELOPMENT OF THE CUSTOMER ALLOCATION FACTORS Development of the Customer Allocation Factor
Customer Class
No. of
Meters/Account
s FY
2021/221
% of Total Meters
Residential 4,880 71.5%
Multi-Family21,273 18.7%
Commercial 343 5.0%
Landscape 73 1.1%
Private Fire Protection 245 3.6%
Temporary Hydrant Meters 8 0.1%
Raw Water 3 0.0%
Total 6,825 100.0%

1. Meter count data is based on the City's billing data for June 2022.

2. Multi-family residential customers are by dwelling units.

Customer Related Costs: Costs associated with having a
customer on the water system. These costs vary with the addition or deletion of customers on the system.

Examples: Meter-reading, Postage and billing.

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Allocation Factors, 25 of 45136 CITY OF AMERICAN CANYON Source of Supply

WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 29 : FY 2023/24 WATER SUPPLY BY SOURCE
In AF In HCF
SWP (Contracted Purchase) 3,590 1,563,804 81.5% $ 2,727,590 75.7% Vallejo Raw Water (Contracted Purchase) 500 217,800 11.4% 138,033 3.8% Treated Water (Contracted Purchase)1 313 136,181 7.1% 737,049 20.5% Totals 4,403 1,917,785 100.0% $ 3,602,672 100%

1. This includes Vallejo Treated Water and City of Napa Treat and Wheel. Source files: Water cost projections.xlsx .

TABLE 30 : UNIT COSTS BY SOURCE OF SUPPLY
Source of Supply Quantity (AF) Total Cost Rate ($/AF)
SWP (Tier 1) 3,590 $ 2,727,590 $ 760
Vallejo Raw Water (Tier 1) 500 138,033 $ 276
Treated Water (Tier 2) 313 737,049 $ 2,358
Total Water Supply (AF) 4,403 $ 3,602,672
Unit Costs ($/HCF) Quantity (HCF) Total Cost Rate ($/HCF) Tier 1 - SWP & Vallejo Raw Water 1,781,604 $ 1,129,112 $ 0.63 Tier 2 - Treated Water (Napa & Vallejo) 136,181 737,049 $ 5.41 Blended Cost (all water) per hcf $ 1.88
Total Estimated Quantity (hcf) 1,917,785 $ 1,866,161 810,486 Estimated Residential Consumption 405,871
Total FY 2023/24 % of Total Volume 50.1%
Source of Supply
Total Contracted Purchases Acre Feet as a
% of Total
Total Cost
(FY 2023/24)
Cost as a % of
Total Cost
Vallejo Raw
Water in AF
500
SWP in AF 3,590
Treated Water
Contracted in AF
313
0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
In AF
FY 2023/24 Source of Supply in
Acre Feet and % of Total

53.7%

69.9%

25.6%
Tier 1
Tier 2

49.9%

4.5%
Tier 2 - 7.1%
Tier 1 - Vallejo Raw
Water 11.4%
Tier 1 - SWP

81.5%
0%
20%
40%
60%
80%
100%
Source of Supply
Tier 1 - SWP Tier 1 - Vallejo Raw Water Tier 2 - Treated Water Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 31 : ALLOCATION OF WATER REVENUE REQUIREMENTS
Commodity-Related Costs $ 6,174,833 60.0%
Capacity-Related Costs 3,709,181 36.0%
Customer-Related Costs 300,640 2.9%
Fire Protection-Related Costs 106,734 1.0%
Net Revenue Requirement $ 10,291,388 100.0%

60.0% total variable

40.0% total fixed
100.0%
`
TABLE 32 : ALLOCATION OF UNADJUSTED NET REVENUE REQUIREMENTS - FY 2023/24 Net Revenue Requirements (COSA)

VARIABLE
Residential $ 3,092,204 $ 1,565,159 $ 214,963 $ - $ 4,872,326 47.3% Multi-Family 546,290 1,777,034 56,075 - 2,379,400 23.1% Commercial 1,943,118 221,463 15,109 - 2,179,689 21.2%
Landscape 323,989 38,794 3,216 - 365,999 3.6%
Private Fire Protection 139,154 77,779 10,792 106,734 334,458 3.2% Temporary Hydrant Meters 50,606 16,254 352 67,213 0.7%
Raw Water 79,472 12,699 132 - 92,303 0.9%
Total Net Revenue Requirement $ 6,174,833 $ 3,709,181 $ 300,640 $ 106,734 $ 10,291,388 100%

VARIABLE
$6,174,833
Cost of Service
Net Rev. Req'ts
$10,291,388
% of COS Net
Capacity- Revenue Req'ts
Related Costs
Classification Components
CustomerRelated CostsFire ProtectionRelated CostsCommodityRelated Costs FIXED
Classification Components

PROPOSED ALTERNATIVE
(40% Fixed / 60% Variable)
Cost-of-Service Net Revenue
Requirements (FY 2023/24)
Unadjusted Net Rev. Req'ts.

Customer Classes
Total Net Revenue Requirement
by Classification Component $4,116,555
FIXED
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 33 : COST-OF-SERVICE SUMMARY OF REVENUE REQUIREMENTS Residential $ 4,872,326 47.3%
Multi-Family 2,379,400 23.1%
Commercial 2,179,689 21.2%
Landscape 365,999 3.6%
Private Fire Protection 334,458 3.2%
Temporary Hydrant Meters 67,213 0.7%
Raw Water 92,303 0.9%
Total $ 10,291,388 100%
TABLE 34 : METER EQUIVALENCY FACTORS USED IN FIXED CHARGES CALCULATION 5/8 inch 20 1.00
3/4 inch 30 1.00
1 inch 50 1.00
1 1/2 inch 100 2.00
2 inch 160 3.20
3 inch 320 6.40
4 inch 500 10.00
6 inch 1,000 20.00
8 inch 1,600 32.00
10 inch 4,200 84.00
12 inch 5,300 106.00

1. Per AWWA, M1 Manual, Table B-1.

Compound Class I Meters
Turbine Class II Meters
Meter Capacity
(gpm)1
Meter Size Equivalency
to 1 inch
Displacement Meters
Standard Meters
Customer Class FY 2023/24 COS
Rev. Req't
Proposed Alternative
Allocated Costs
% of COS
Rev. Req't.

Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 35 : CALCULATION OF MONTHLY FIXED METER SERVICE CHARGES FOR FY 2023/24 ALTERNATIVE 1 (COSA)
< 1" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter Residential 1,986 2,875 7 9 1 2 0 0 4,880
Multi-Family 0 0 20 201 96 48 191 0 556
Commercial 13 30 14 16 0 0 0 0 73
Commercial 102 88 54 81 11 7 0 0 343
Private Fire Protection 245 0 0 0 0 0 0 0 245
Temporary Hydrant Meters 0 0 0 0 8 0 0 0 8
Raw Water 0 0 0 0 0 2 1 0 3
Total Meters/Accounts 2,346 2,993 95 307 116 59 192 0 6,108 Hydraulic Capacity Factor 21.00 1.00 2.00 3.20 6.40 10.00 20.00 32.00 Total Equivalent Meters 2,346 2,993 190 982 742 590 3,840 0 11,684 Monthly Fixed Service Charges
Customer Costs ($/Acct/month)3
$4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4.10 $4.10
Capacity Costs ($/Acct/month)4$27.22 $27.22 $54.43 $87.09 $174.19 $272.17 $544.33 $870.93 Total Monthly Meter Charge $31.32 $31.32 $58.53 $91.19 $178.29 $276.27 $548.43 $875.03 Annual Fixed Costs Allocated to Monthly Meter Charges
Customer Costs $ 300,640
Capacity Costs 3,815,915
Total Fixed Meter Costs $ 4,116,555
Annual Revenue from Monthly Meter Charges
Customer Charges $ 115,491 $ 147,298 $ 4,676 $ 15,111 $ 5,710 $ 2,904 $ 9,450 $ - $ 300,640 Capacity Charges $ 766,330 $ 977,381 $ 62,054 $ 320,851 $ 242,467 $ 192,693 $ 1,254,139 $ - $ 3,815,915 Total Revenue from Monthly Meter Charges $ 881,821 $ 1,124,680 $ 66,730 $ 335,961 $ 248,177 $ 195,597 $ 1,263,590 $ - $ 4,116,555

1. Meter by Class and Size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

3. Customer costs are allocated to each customer by dividing the total customer costs by the total number of customers.

4. Capacity costs are allocated by meter size and the hydraulic capacity of the meter.

Number of Meters by Class and Size Total 1 FY 2023/24
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 36 : FIXED CHARGES REVENUE CHECK
< 1" 1" 1 1/2" 2" 3" 4" 6" 8"
Potable Water
Residential 1,986 2,875 7 9 1 2 0 0 4,880
Multi-Family 0 0 20 201 96 48 191 0 556
Commercial 102 88 54 81 11 7 0 0 343
Landscape 13 30 14 16 0 0 0 0 73
Private Fire 245 0 0 0 0 0 0 0 245
Temp Meter 0 0 0 0 8 0 0 0 8
Raw Water 0 0 0 0 0 2 1 0 3
Recycled Water
Recycled Water 2 13 14 28 13 6 0 0 76
Total Meters/Accounts 2,348 3,006 109 335 129 65 192 0 6,184 TABLE 37 : PROJECTED FIXED REVENUE CHECK
< 1" 1" 1 1/2" 2" 3" 4" 6" 8"
All Customers by Meter Size $31.32 $31.32 $58.53 $91.19 $178.29 $276.27 $548.43 $875.03 Revenue from Fixed Charges
Potable Water
Residential $ 746,526 $ 1,080,333 $ 4,917 $ 9,849 $ 2,139 $ 6,630 $ - $ - $ 1,850,395 Multi-Family - - 14,048 219,962 205,387 159,130 1,257,008 - 1,855,536 Commercial 38,334 33,072 37,931 88,641 23,534 23,206 - - 244,718 Landscape 4,886 11,275 9,834 17,509 - - - - 43,503
Private Fire 92,076 - - - - - - - 92,076
Temp Meter - - - - 17,116 - - - 17,116
Raw Water - - - - - 6,630 6,581 - 13,212
Total Revenue - Fixed Charges $ 4,116,555
TABLE 38 : PROJECTED FIXED REVENUE CHECK
`
Potable Water
Residential $ 1,780,122 $ 1,850,395 $ 70,272
Multi-Family 1,833,110 1,855,536 22,426
Commercial 236,572 244,718 8,146
Landscape 42,010 43,503 1,494
Private Fire 195,304 92,076 (103,229)
Temp Meter 16,607 17,116 509
Raw Water 12,831 13,212 381
Total $ 4,116,555 $ 4,116,555 $ -
Customer Class
Net Revenue Requirements (COSA)
COS
Rev. Req't
Expected
Revenue
Over/(Under)
Collected
Number of Meters by Class and Size Total
Projected Revenue From Fixed Charges
by Customer Class
FY 2023/24
FY 2023/24
Net Revenue Requirements (COSA)
Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 39 : PROPOSED VOLUMETRIC CHARGES FOR FY 2023/24
Net Revenue Requirements (COSA)
Customer Classes
Number of
Meters1
Water
Consumption
(hcf/yr)2
Total Target
Rev. Req't from
Vol. Charges
% of Total Rate
Revenue
Uniform
Commodity
Rates ($/hcf)
Proposed Rate
Structure
Residential 4,880 405,871 $ 3,092,204 50.1% n/a 2 Tiers Multi-Family 1,273 71,704 546,290 8.8% $7.619 Uniform
Commercial 343 255,046 1,943,118 31.5% $7.619 Uniform
Landscape 73 42,526 323,989 5.2% $7.619 Uniform
Private Fire Protection 245 18,265 139,154 2.3% $7.619 Uniform Temporary Hydrant Meters 8 6,642 50,606 0.8% $7.619 Uniform Raw Water 3 10,431 79,472 1.3% $7.619 Uniform
Total Potable Water 6,825 810,486 $ 6,174,833 100%

1. Consumption data is based on the City of American Canyon's billing data.

2. Water consumption is actual consumption for FY 2021/22 and includes an adjustment of 20% for conservation. See Table 26.

TABLE 40 : RESIDENTIAL & MOBILE HOME TIER BREAK ADJUSTMENTS Tier 1 - SWP & Vallejo Raw Water 322,836 79.5%
Tier 2 - Treated Water (Napa & Vallejo) 83,035 20.5%
Total 405,871 100.0% 7.0

1. SWP & Vallejo raw water are included in Tier 1 and all treated water (Napa & Vallejo) is in Tier 2. The FY 2021/22 consumption data are actuals and includes a 20% conservation factor. See Allocation Factors Tab, Table 26.

2. See Source of Supply Tab for details on how the percentage of consumption was calculated.

3. Annual residential consumption divided by total residential meters divided by 12 months.

4. Tier 2 breakpoint is the percentage of Tier 1 consumption times the Avg. Monthly Consumption , rounded to the nearest integer in hcf.

TABLE 41 : ALLOCATION OF SOURCE OF SUPPLY COSTS TO SINGLE FAMILY TIERED RATES Source of Supply
Water Supply by
Source (hcf)1
% Alloc. by
Class2 Cost ($/hcf)3 Total Supply
Costs
Residential
Share of Supply
Residential 892,183 50.1% $0.63 $ 565,431 $ 565,431
All Other Classes 889,421 49.9% $0.63 563,680 N.A.
1,781,604 100.0% N.A. $ 1,129,112 N.A.

Residential 68,196 50.1% $5.41 $ 369,096 $ 369,096
All Other Classes 67,985 49.9% $5.41 367,953 N.A.
136,181 100.0% N.A. $ 737,049 N.A.

Grand Total 1,917,785 $ 1,866,161 $ 934,527

1. Total Contracted Supply Purchase Costs are from the Source of Supply Tab, Table 29.

2. Residential consumption for FY 2021/22 is from the Allocation Factors Tab, Table 26.

3. Contracted Supply Costs are from the Source of Supply Tab, Table 30. % of
Consumption2
Consumption
Avg. Monthly
Consumption FY
2020/21 (hcf)3
Tier 1 - SWP & Vallejo Raw Water
Tier Breakpoint
(hcf)4

6.00 Tier 2 - Treated Water (Napa & Vallejo)
Total SWP & Vallejo Raw Water
Total Treated Water (Napa & Vallejo)
Residential Tiers1
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 42 : RESIDENTIAL TIERED RATES
Supply Costs
Allocated to
Residential
Tiered Rates1
Source of
Supply Costs2
Other Costs
Allocated to
Vol. Rates
Total Costs
Allocated3
FY 2020/21
Consumption4
Residential
Rates ($/HCF)5
Residential Tiered Rate Costs (1) (2) (3) (4) (5) (6)
Tier 1 - SWP & Vallejo Raw Water 79.5% $ 565,431 $ 1,716,250 $ 2,281,681 322,836 $7.07 Tier 2 - Treated Water (Napa & Vallejo) 20.5% 369,096 441,426 810,523 83,035 $9.76 Total Residential Tiered Rate Costs 100.0% $ 934,527 $ 2,157,676 $ 3,092,204 405,871

1. Percentage of annual supply based on contracted purchases from Source of Supply Tab, Table 29.

2. See Table 41.

3. Total Variable Costs allocated to residential customers (Proposed Fixed Charges Tab, Table 33) less their Source of Supply Costs. NBS assumed these other costs are proportionally allocated to Tier 1 and Tier 2.

4. FY 2021/22 volume adjusted for conservation is from the Allocation Factors Tab, Table 26.

TABLE 43 : ESTIMATED VOLUMETRIC REVENUE BY CUSTOMER CLASS - PROPOSED ALTERNATIVE ALTERNATIVE 1 (COSA)
Residential
Tier 1 - SWP & Vallejo Raw Water 322,836 $ 2,459,588 40% $ 1,471,833 $ 3,931,421 $ 3,875,526 Tier 2 - Treated Water (Napa & Vallejo) 83,035 632,616 10% 378,561 1,011,177 996,800 Multi-Family 71,704 546,290 9% 1,855,536 2,401,826 2,379,400 Commercial 255,046 1,943,118 31% 244,718 2,187,836 2,179,689 Landscape 42,526 323,989 5% 43,503 367,493 365,999
Private Fire Protection 18,265 139,154 2% 92,076 231,229 334,458 Temporary Hydrant Meters 6,642 50,606 1% 17,116 67,722 67,213 Raw Water 10,431 79,472 1% 13,212 92,684 92,303
Grand Total 810,486 $ 6,174,833 100% $ 4,116,555 $ 10,291,388 $ 10,291,388 TABLE 44 : PROPOSED VOLUMETRIC CHARGES FOR FY 2023/24
ALTERNATIVE 2 - INCREASE CURRENT VARIABLE RATES BY 3% ANNUALLY Customer Classes Number of
Meters
Water
Consumption
(hcf/yr)
Total Target
Rev. Req't from
Vol. Charges
% of Total Rate
Revenue
Proposed
Commodity
Rates ($/hcf)
Revised Revenue
from Vol.

Charges
Residential 4,880
Tier 1 - SWP & Vallejo Raw Water 322,836 $ 2,459,588 39.8% $7.766 $ 2,507,212 Tier 2 - Treated Water (Napa & Vallejo) 83,035 632,616 10.2% $8.395 697,036 Multi-Family 1,273 71,704 546,290 8.8% $7.952 570,162
Commercial 343 255,046 1,943,118 31.5% $7.952 2,028,027 Landscape 73 42,526 323,989 5.2% $7.952 338,147
Private Fire Protection 245 18,265 139,154 2.3% $3.976 72,617 Temporary Hydrant Meters 8 6,642 50,606 0.8% $7.952 52,818 Raw Water 3 10,431 79,472 1.3% $3.543 36,960
Grand Total 6,825 810,486 $ 6,174,833 100% $ 6,302,977
Cost of Service
Net Revenue
Req'ts
Estimated
Fixed
Revenue
% of Variable
Rate Revenue
Total
Estimated
Revenue
Estimated
Variable Revenue Customer Class
Estimated
Consumption
(hcf)
Source of Supply
Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 45 : ASSUMPTIONS USED IN DROUGHT RATE ANALYSIS
Shortage Level Percent Shortage Range Potable Water
Consumption (AF/yr.)
Potable Water
Consumption
(hcf/yr.)
Difference to
Baseline (hcf)
Baseline Consumption2
1,861 810,486 0
1 Up to 10% Voluntary Conservation 1,675 729,437 (81,049) 2 Up to 20% Water Alert 1,488 648,388 (162,097)
3 Up to 30% Water Emergency 1,302 567,340 (243,146)
4 Up to 40% Critical Water Emergency 1,116 486,291 (324,194) 5 Up to 50% Severe Water Emergency 930 405,243 (405,243) 6 >50% Catastrophic Interruption of Water Supplies 744 324,194 (486,291)

1. Drought stages based on the City's Water Conservation Plan. Source files: 2._Redlines_Ordinance_Water_Conservation_Plan_Chapter_13.14 (4).pdf & 3._Table_8-1_Water_Shortage_Contingency_Plan_Levels.pdf .

2. This represents the baseline consumption for FY 2021/22 consumption (excludes recycled water). Conservation percentage for each drought stage is relative to the baseline consumption.

TABLE 46 : EXPENSES DIRECTLY IMPACTED BY FUTURE MANDATED WATER USE REDUCTION Expenses Directly Effected By Consumption Changes
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
City of Napa $ 278,000 $ 283,560 $ 289,231 $ 295,016 $ 300,916 North Bay Aqueduct 3,203,000 3,267,060 3,332,401 3,399,049 3,467,030 City of Vallejo 121,218 123,642 126,115 128,638 131,210 Total: $ 3,602,218 $ 3,674,262 $ 3,747,748 $ 3,822,703 $ 3,899,157 TABLE 47 : CALCULATION OF DROUGHT RATES FOR FY 2023/24
ALTERNATIVE 1 (COSA)
Conservation
Goal
Water Consumption
(hcf/yr.)
Baseline Rev. Req't
from Vol. Charges
Cost Reduction Due
to Conservation1
Target Rev. Req't
from Vol. Charges
Drought Surcharge
($/hcf)
Uniform
Commodity Rates
($/hcf)
0% 810,486 $ 6,174,833 $ - $ 6,174,833 $0.00 $7.62
Up to 10% 729,437 6,174,833 (360,222) 5,814,611 $0.35 $7.97 Up to 20% 648,388 6,174,833 (720,444) 5,454,389 $0.79 $8.41 Up to 30% 567,340 6,174,833 (1,080,665) 5,094,167 $1.36 $8.98 Up to 40% 486,291 6,174,833 (1,440,887) 4,733,945 $2.12 $9.73 Up to 50% 405,243 6,174,833 (1,801,109) 4,373,724 $3.17 $10.79 >50% 324,194 6,174,833 (2,161,331) 4,013,502 $4.76 $12.38

1. Cost reduction equals the conservation goal percentage multiplied by expenses directly effected by consumption charges.

Description Commodity-Related Costs
Shortage Response Action
2021/22 Consumption Assumptions1
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 48 : CALCULATION OF DROUGHT RATES FOR FY 2024/25
ALTERNATIVE 1 (COSA)
Conservation
Goal
Water Consumption
(hcf/yr.)
Baseline Rev. Req't
from Vol. Charges
Cost Reduction Due
to Conservation1
Target Rev. Req't
from Vol. Charges
Drought Surcharge
($/hcf)
Uniform
Commodity Rates
($/hcf)
0% 810,486 $ 6,851,718 $ - $ 6,851,718 $0.00 $8.45
Up to 10% 729,437 6,851,718 (367,426) 6,484,291 $0.44 $8.89 Up to 20% 648,388 6,851,718 (734,852) 6,116,865 $0.98 $9.43 Up to 30% 567,340 6,851,718 (1,102,279) 5,749,439 $1.68 $10.13 Up to 40% 486,291 6,851,718 (1,469,705) 5,382,013 $2.61 $11.07 Up to 50% 405,243 6,851,718 (1,837,131) 5,014,587 $3.92 $12.37 >50% 324,194 6,851,718 (2,204,557) 4,647,160 $5.88 $14.33

1. Cost reduction equals the conservation goal percentage multiplied by expenses directly effected by consumption charges.

TABLE 49 : CALCULATION OF DROUGHT RATES FOR FY 2025/26
ALTERNATIVE 1 (COSA)
Conservation
Goal
Water Consumption
(hcf/yr.)
Baseline Rev. Req't
from Vol. Charges
Cost Reduction Due
to Conservation1
Target Rev. Req't
from Vol. Charges
Drought Surcharge
($/hcf)
Uniform
Commodity Rates
($/hcf)
0% 810,486 $ 7,595,335 $ - $ 7,595,335 $0.00 $9.37
Up to 10% 729,437 7,595,335 (374,775) 7,220,560 $0.53 $9.90 Up to 20% 648,388 7,595,335 (749,550) 6,845,785 $1.19 $10.56 Up to 30% 567,340 7,595,335 (1,124,324) 6,471,010 $2.03 $11.41 Up to 40% 486,291 7,595,335 (1,499,099) 6,096,236 $3.16 $12.54 Up to 50% 405,243 7,595,335 (1,873,874) 5,721,461 $4.75 $14.12 >50% 324,194 7,595,335 (2,248,649) 5,346,686 $7.12 $16.49

1. Cost reduction equals the conservation goal percentage multiplied by expenses directly effected by consumption charges.

TABLE 50 : CALCULATION OF DROUGHT RATES FOR FY 2026/27
ALTERNATIVE 1 (COSA)
Conservation
Goal
Water Consumption
(hcf/yr.)
Baseline Rev. Req't
from Vol. Charges
Cost Reduction Due
to Conservation1
Target Rev. Req't
from Vol. Charges
Drought Surcharge
($/hcf)
Uniform
Commodity Rates
($/hcf)
0% 810,486 $ 8,033,434 $ - $ 8,033,434 $0.00 $9.91
Up to 10% 729,437 8,033,434 (382,270) 7,651,163 $0.58 $10.49 Up to 20% 648,388 8,033,434 (764,541) 7,268,893 $1.30 $11.21 Up to 30% 567,340 8,033,434 (1,146,811) 6,886,623 $2.23 $12.14 Up to 40% 486,291 8,033,434 (1,529,081) 6,504,353 $3.46 $13.38 Up to 50% 405,243 8,033,434 (1,911,351) 6,122,082 $5.20 $15.11 >50% 324,194 8,033,434 (2,293,622) 5,739,812 $7.79 $17.70

1. Cost reduction equals the conservation goal percentage multiplied by expenses directly effected by consumption charges.

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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 51 : CALCULATION OF DROUGHT RATES FOR FY 2027/28
ALTERNATIVE 1 (COSA)
Conservation
Goal
Water Consumption
(hcf/yr.)
Baseline Rev. Req't
from Vol. Charges
Cost Reduction Due
to Conservation1
Target Rev. Req't
from Vol. Charges
Drought Surcharge
($/hcf)
Uniform
Commodity Rates
($/hcf)
0% 810,486 $ 8,415,102 $ - $ 8,415,102 $0.00 $10.38
Up to 10% 729,437 8,415,102 (389,916) 8,025,186 $0.62 $11.00 Up to 20% 648,388 8,415,102 (779,831) 7,635,271 $1.39 $11.78 Up to 30% 567,340 8,415,102 (1,169,747) 7,245,355 $2.39 $12.77 Up to 40% 486,291 8,415,102 (1,559,663) 6,855,439 $3.71 $14.10 Up to 50% 405,243 8,415,102 (1,949,578) 6,465,524 $5.57 $15.95 >50% 324,194 8,415,102 (2,339,494) 6,075,608 $8.36 $18.74

1. Cost reduction equals the conservation goal percentage multiplied by expenses directly effected by consumption charges.

Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 52 : CURRENT VS. PROPOSED WATER RATES - FIXED CHARGES FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Monthly Fixed Service Charges (in $/mo)
Residential Use
< 1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $26.56 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $26.56 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $26.56 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $26.56 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $26.56 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $26.56 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Multi-Family, Commercial and Landscape
< 1" meter $26.56 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter (Residential) $26.56 $31.32 $34.14 $37.21 $38.70 $39.86 1" meter (Commercial) $44.42 $31.32 $34.14 $37.21 $38.70 $39.86 1 1/2" meter $88.75 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $141.99 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $283.98 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $443.74 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $887.48 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $1,420.06 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Private Fire Protection
< 1" meter $13.28 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $13.28 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $13.28 $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $13.28 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $13.28 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $13.28 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $13.28 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $13.28 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Temporary Hydrant Meters
< 1" meter $283.98 $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $283.98 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter $283.98 $58.53 $63.80 $69.55 $72.33 $74.50 2" meter $283.98 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter $283.98 $178.29 $194.33 $211.82 $220.30 $226.91 4" meter $283.98 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $283.98 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter $283.98 $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Raw Water
< 1" meter n/a $31.32 $34.14 $37.21 $38.70 $39.86
1" meter $44.42 $31.32 $34.14 $37.21 $38.70 $39.86
1 1/2" meter n/a $58.53 $63.80 $69.55 $72.33 $74.50
2" meter $141.99 $91.19 $99.40 $108.35 $112.68 $116.06
3" meter n/a $178.29 $194.33 $211.82 $220.30 $226.91
4" meter $443.74 $276.27 $301.13 $328.23 $341.36 $351.60 6" meter $887.48 $548.43 $597.79 $651.59 $677.66 $697.99 8" meter n/a $875.03 $953.78 $1,039.63 $1,081.21 $1,113.65 Water Rate Schedule Current Proposed Rates
Rates
ALTERNATIVE 1 (COSA)
Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 53 : CURRENT VS. PROPOSED WATER RATES - VARIABLE RATES FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Projected Increase in Rate Revenue per Financial Plan: 9.00% 9.00% 9.00% 4.00% 3.00% Residential Use
Tier 1 (0 - 6 units) $7.54 $7.07 $7.70 $8.40 $8.73 $8.99 Tier 2 (> 6 units) $8.15 $9.76 $10.64 $11.60 $12.06 $12.42 Multi-Family, Commercial and Landscape $7.72 $7.62 $8.30 $9.05 $9.41 $9.70 Private Fire Protection $3.86 $7.62 $8.30 $9.05 $9.41 $9.70 Temporary Hydrant Meters $7.72 $7.62 $8.30 $9.05 $9.41 $9.70 Raw Water $3.44 $7.62 $8.30 $9.05 $9.41 $9.70
TABLE 54 : CURRENT VS. PROPOSED WATER RATES - VARIABLE RATES FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Projected Increase in Rate Revenue per Financial Plan: 3.00% 3.00% 3.00% 3.00% 3.00% Residential Use
Tier 1 (0 - 6 units) $7.54 $7.77 $8.00 $8.24 $8.49 $8.74 Tier 2 (> 6 units) $8.15 $8.39 $8.65 $8.91 $9.17 $9.45
Multi-Family, Commercial and Landscape $7.72 $7.95 $8.19 $8.44 $8.69 $8.95 Private Fire Protection $3.86 $3.98 $4.10 $4.22 $4.34 $4.47 Temporary Hydrant Meters $7.72 $7.95 $8.19 $8.44 $8.69 $8.95 Raw Water $3.44 $3.54 $3.65 $3.76 $3.87 $3.99
TABLE 55 : CURRENT VS. PROPOSED DROUGHT RATES
Drought Rate Schedule (in $/hcf) Current
Rates
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
10% Conservation n/a $0.35 $0.44 $0.53 $0.58 $0.62
20% Conservation n/a $0.79 $0.98 $1.19 $1.30 $1.39
30% Conservation n/a $1.36 $1.68 $2.03 $2.23 $2.39
40% Conservation n/a $2.12 $2.61 $3.16 $3.46 $3.71
50% Conservation n/a $3.17 $3.92 $4.75 $5.20 $5.57
60% Conservation n/a $4.76 $5.88 $7.12 $7.79 $8.36
ALTERNATIVE 2 - INCREASE CURRENT VARIABLE RATES BY 3% ANNUALLY Water Rate Schedule Current
Rates
Proposed Rates
Variable Rates for All Water Consumed (in $/hcf)
Variable Rates for All Water Consumed (in $/hcf)
Water Rate Schedule Current
Rates
Proposed Rates
ALTERNATIVE 1 (COSA)
ALTERNATIVE 1 (COSA)
Prepared by NBS
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WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 56 : RATES AND DROUGHT SURCHARGE FOR EACH DROUGHT STAGE Drought Rate Schedule1
No Conservation $0.00 $7.62 $0.00 $8.45 $0.00 $9.37 $0.00 $9.91 $0.00 $10.38 Up to 10% $0.35 $7.97 $0.44 $8.89 $0.53 $9.90 $0.58 $10.49 $0.62 $11.00 Up to 20% $0.79 $8.41 $0.98 $9.43 $1.19 $10.56 $1.30 $11.21 $1.39 $11.78 Up to 30% $1.36 $8.98 $1.68 $10.13 $2.03 $11.41 $2.23 $12.14 $2.39 $12.77 Up to 40% $2.12 $9.73 $2.61 $11.07 $3.16 $12.54 $3.46 $13.38 $3.71 $14.10 Up to 50% $3.17 $10.79 $3.92 $12.37 $4.75 $14.12 $5.20 $15.11 $5.57 $15.95 >50% $4.76 $12.38 $5.88 $14.33 $7.12 $16.49 $7.79 $17.70 $8.36 $18.74

1. ACTIVATION - The Drought Surcharge will NOT be added on water bills unless approved by the City Council. If the surcharge is activated, it will remain in effect as necessary and will be reviewed by the City Council at least monthly for a determination of necessity until the surcharge is deactivated.

2. Baseline water consumption is based on water usage for FY 2020/21, the same assumption used in the proposed volumetric rates.

3. Drought Surcharge is added to the Uniform Rate on a per unit basis to cover the cost of water service during times of State mandated conservation and/or extreme water supply shortage, resulting in water consumption below the established baseline.

4. The Drought Rate equals the Volumetric Rate plus Volumetric Surcharge. This does not include pumping charges which will apply where applicable. 810,486 hcf 810,486 hcf
Proposed Drought Rates
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
810,486 hcf 810,486 hcf 810,486 hcf
Conservation Target
Drought
Surcharge 3 Drought Rate 4
Drought
Surcharge 3 Drought Rate 4
Drought
Surcharge 3 Drought Rate 4
Drought
Surcharge 3 Drought Rate 4
Drought
Surcharge 3 Drought Rate 4
Water Consumption
Baseline (hcf/yr)2
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Current & Proposed Rates, 38 of 45149 Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #1, Page 39 of 45 $655.33 $660.24 $784.38$959.40 $1,001.82 $1,035.72 $1,020.48 $1,221.03 $1,275.01 $1,316.16 $1,394.94 $1,884.48 $0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
City of
Napa
City of
Petaluma
City of
Benicia
City of
American
Canyon
(Current)
City of
American
Canyon
(Alt. #1 -
Year 1)
City of
American
Canyon
(Alt. #2 -
Year 1)
City of
Vallejo
City of
American
Canyon
(Alt. #2 -
Year 5)
City of
American
Canyon
(Alt. #1 -
Year 5)
City of St.

Helena
Town of
Yountville
City of
Calistoga
City of American Canyon (Year 1)
Annual Water Bill Comparison - Single Family Accounts
150
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #2, Page 40 of 45 $54.61 $55.02 $65.37$79.95 $83.49 $86.31 $85.04$101.75 $106.25 $109.68 $116.25 $157.04 $0
$25
$50
$75
$100
$125
$150
$175
$200
City of
Napa
City of
Petaluma
City of
Benicia
City of
American
Canyon
(Current)
City of
American
Canyon
(Alt. #1 -
Year 1)
City of
American
Canyon
(Alt. #2 -
Year 1)
City of
Vallejo
City of
American
Canyon
(Alt. #2 -
Year 5)
City of
American
Canyon
(Alt. #1 -
Year 5)
City of St.

Helena
Town of
Yountville
City of
Calistoga
City of American Canyon (Year 1 & 5)
Monthly Water Bill Comparison - Single Family Accounts
151
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #3, Page 41 of 45 $60.58$77.70 $78.50 $79.95 $83.49 $86.31 $85.04 $101.75 $106.25 $116.25 $174.99 $217.53 $0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
City of
Petaluma
(July 2027)
City of
Benicia
(January
2026)
City of
Napa
(October
2027)
City of
American
Canyon
(Current)
City of
American
Canyon
(Alt. #1 -
Year 1)
City of
American
Canyon
(Alt. #2 -
Year 1)
City of
Vallejo
(July 2023)
City of
American
Canyon
(Alt. #2 -
Year 1)
City of
American
Canyon
(Alt. #1 -
Year 1)
Town of
Yountville
(January
2027)
City of St.

Helena
(July 2027)
City of
Calistoga
(January
2028)
City of American Canyon (Year 1 & 5)
Monthly Water Bill Comparison - Single Family Accounts
152
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 SFR Bill Comp Tiers, 42 of 45 $63.65 $79.95 $96.25$120.70 $185.90 $226.65 $63.96$83.49 $103.01$132.29 $210.38 $259.19 $69.52$86.31 $103.10$128.28 $195.44 $237.41 $0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
$275
$300
5 7 9 12 20 25
Monthly Bill
Monthly Water Consumption (HCF)
Single-Family Residential Water Bill Comparison
Current vs. Proposed FY 2023/24 Rates (1" Meter)
Residential Bill - Current Rates
Residential Bill - Alternative 1
Residential Bill - Alternative 2
Average
ANNUAL Bill
Average (9 hcf/mo.)
WINTER Bill
(7 hcf/mo.)
Average
SUMMER Bill
(12 hcf/mo.)
153
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 MFR Bill Comp, 43 of 45 $119.63 $127.35 $135.07 $142.79$165.95 $204.55 $89.01 $96.63 $104.25 $111.87$134.72 $172.82 $90.34 $98.29 $106.24 $114.20$138.05 $177.81 $0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
4 5 6 7 10 15
Monthly Bill
Monthly Water Consumption (CCF)
Multi-Family Residential Water Bill Comparison
Current vs. Proposed FY 2023/24 Rates (1.5" Meter)
Multi-Family Residential Bill - Current Rates
Multi-Family Residential Bill - Alternative 1
Multi-Family Residential Bill - Alternative 2
Average
ANNUAL Bill
Average (6 hcf/mo.)
WINTER Bill
(5 hcf/mo.)
Average
SUMMER Bill
(7 hcf/mo.)
154
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Commercial Bill Comp, 44 of 45 $527.99 $620.63 $736.43 $875.39$1,106.99 $1,299.99 $472.13 $563.55 $677.83 $814.97$1,043.53 $1,234.00 $488.77 $584.19 $703.47 $846.60$1,085.14$1,283.93 $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
50 62 77 95 125 150
Monthly Bill
Monthly Water Consumption (CCF)
Commercial Water Bill Comparison
Current vs. Proposed FY 2023/24 Rates (2" Meter)
Commercial Bill - Current Rates
Commercial Bill - Alternative 1
Commercial Bill - Alternative 2
Average
WINTER Bill
(62 hcf/mo.)
Average
ANNUAL Bill
(77 hcf/mo.)
Average
SUMMER Bill
(95 hcf/mo.)
155
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Commercial Bill Comp (2), 45 of 45 $1,273.48 $1,366.12 $1,481.92 $1,620.88 $1,852.48 $2,045.48 $929.37 $1,020.79 $1,135.07 $1,272.21 $1,500.77 $1,691.24 $946.01 $1,041.43 $1,160.71 $1,303.84 $1,542.38 $1,741.17 $0
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
50 62 77 95 125 150
Monthly Bill
Monthly Water Consumption (CCF)
Commercial Water Bill Comparison
Current vs. Proposed FY 2023/24 Rates (6" Meter)
Commercial Bill - Current Rates
Commercial Bill - Alternative 1
Commercial Bill - Alternative 2
Average
ANNUAL Bill
(77 hcf/mo.)
156
Enterprise Rate Study – City of American Canyon
Prepared by NBS – February 2024 93
Appendix B. Recycled Water Rate Study Tables and Figures 157
CITY OF AMERICAN CANYON Financial Plan & Reserve Summary

RECYCLED WATER RATE STUDY
Financial Plan and Reserve Projections
TABLE 1 : FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Sources of Water Funds
Rate Revenue: 1
Water Sales - Recycled Water Charges $ 151,038 $ 226,361 $ 207,000 $ 210,726 $ 214,308 $ 217,952 $ 221,657 $ 225,425 $ 229,257 $ 232,925 $ 236,652 $ 240,439 Non-Rate Revenue:

Interest Earnings2
4,101 12,392 22,343 2,195 7,873 4,912 2,640 842 - - - - Total Sources of Funds $ 155,140 $ 238,753 $ 229,343 $ 212,921 $ 222,182 $ 222,864 $ 224,297 $ 226,267 $ 229,257 $ 232,925 $ 236,652 $ 240,439 Uses of Water Funds
Operating Expenses: 1
Water Operations:

Fund 580 - Recycled Water Operations $ 272,644 $ 1,632,152 $ 893,163 $ 797,921 $ 823,477 $ 849,857 $ 877,086 $ 905,193 $ 934,206 $ 964,155 $ 995,069 $ 1,026,980 Other Expenditures:

Existing Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Interfund Loan Repayment3
- - 198,566 198,566 267,497 267,497 267,497 267,497 267,497 267,497 267,497 267,497 Rate-Funded Capital Expenses - - - - - - - - - - - -
Subtotal: Other Expenditures $ - $ - $ 198,566 $ 198,566 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 Total Uses of Water Funds $ 272,644 $ 1,632,152 $ 1,091,728 $ 996,487 $ 1,090,974 $ 1,117,354 $ 1,144,583 $ 1,172,690 $ 1,201,703 $ 1,231,652 $ 1,262,566 $ 1,294,477 plus: Revenue from Rate Increases4 - - 129,375 563,692 652,033 728,149 788,637 827,104 841,165 854,623 868,297 882,190 Annual Surplus/(Deficit) $ (117,504) $ (1,393,399) $ (733,011) $ (219,874) $ (216,759) $ (166,341) $ (131,650) $ (119,320) $ (131,281) $ (144,103) $ (157,617) $ (171,849) Net Revenue Req't. (Total Uses less Non-Rate Revenue) $ 268,543 $ 1,619,760 $ 1,069,386 $ 994,292 $ 1,083,101 $ 1,112,441 $ 1,141,943 $ 1,171,848 $ 1,201,703 $ 1,231,652 $ 1,262,566 $ 1,294,477 Total Rate Revenue After Rate Increases $ 151,038 $ 226,361 $ 724,500 $ 811,295 $ 907,596 $ 969,176 $ 1,034,935 $ 1,052,529 $ 1,070,422 $ 1,087,548 $ 1,104,949 $ 1,122,628 Projected Annual Rate Revenue Increase 0.00% 0.00% 250.00% 10.00% 10.00% 5.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% Cumulative Increase from Annual Revenue Increases 0.00% 0.00% 250.00% 285.00% 323.50% 344.68% 366.91% 366.91% 366.91% 366.91% 366.91% 366.91%

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Revenues and expenses for all other years are escalated based on the forecasting assumptions located in Table 61. Source files: Fund 580 Recycled Water Operations.xlsx & FY2023-24 Exp Budget Recycled Water.xlsx .

2. Interest earnings for FY 2021/22 and FY 2022/23 are from the City's Budget. For all other years, it is calculated based on historical LAIF returns.

3. Repayment of interfund loans advanced by Wastewater Capacity 550 to Recycled Water Operations 540 for various project. See Exhibit 3 (Debt) for more details.

4. Revenue from rate increases assumes an implementation date of April 1, 2024 for new rates. For each year thereafter, the assumption is that new rates will be implemented on January 1st of each year. 1 <-- Select Financial Plan Scenario Here
Financial Plan Alternatives FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 1 Alternative 1 - Full Cost Recovery Rate Increases1

0.00% 0.00% 250.00% 10.00% 10.00% 5.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 Alternative 2 - Phased-in Rate Increases2

0.00% 0.00% 20.00% 20.00% 5.00% 2.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00% 3 Alternative 3 - Minimal Rate Increases3

0.00% 0.00% 15.00% 15.00% 10.00% 5.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4 Alternative 4 - No Rate Increases 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Alternative 1: Scenario 1 - Rates needed to meet all revenue requirements and meet the target reserve levels (Large increase followed by smaller increases).

2. Alternative 2: Scenario 2 - Large increases phased In over two years, followed by smaller increases (Reserves drop below target level).

3. Alternative 3: Scenario 3 - Smaller increases (Reserves drop below target level).

RATE REVENUE REQUIREMENTS SUMMARY
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 RW - Financial Plan, Page 1 of 21 158 CITY OF AMERICAN CANYON Financial Plan & Reserve Summary

RECYCLED WATER RATE STUDY
Financial Plan and Reserve Projections
TABLE 2 : RESERVE FUND SUMMARY
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Unrestricted Reserve:

Total Beginning Cash1
$ 105,383 $ 549,510
Operating Reserve
Beginning Reserve Balance $ 105,383 $ 549,510 $ 650,000 $ (83,011) $ (302,885) $ (519,644) $ (685,985) $ (817,634) $ (936,954) $ (1,068,236) $ (1,212,339) $ (1,369,955) Plus: Net Cash Flow (After Rate Increases) (117,504) (1,393,399) (733,011) (219,874) (216,759) (166,341) (131,650) (119,320) (131,281) (144,103) (157,617) (171,849) Plus: Transfer in from Capital and Infrastructure Reserve - - - - - - - - - - - - Less: Transfer out to Capital and Infrastructure Reserve - - - - - - - - - - - - Ending Operating Reserve Balance $ (12,121) $ (843,889) $ (83,011) $ (302,885) $ (519,644) $ (685,985) $ (817,634) $ (936,954) $ (1,068,236) $ (1,212,339) $ (1,369,955) $ (1,541,804) Target Ending Balance (90-days of O&M) 2
$ 68,000 $ 408,000 $ 223,000 $ 199,000 $ 206,000 $ 212,000 $ 219,000 $ 226,000 $ 234,000 $ 241,000 $ 249,000 $ 257,000 Capital Rehabilitation & Replacement Reserve
Beginning Reserve Balance $ - $ - $ 243,704 $ 243,704 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 Plus: Transfer of Operating Reserve Surplus - - - - - - - - - - - - Less: Transfer out to Operating Reserve - - - - - - - - - - - - Less: Use of Reserves for Capital Projects - - - - - - - - - - - - Ending Capital and Infrastructure Reserve Balance $ - $ 243,704 $ 243,704 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 $ 879,258 Target Ending Balance (3% of net assets) 3
$ 1,420,700 $ 1,548,600 $ 1,870,900 $ 2,079,900 $ 2,260,500 $ 2,370,700 $ 2,458,100 $ 2,548,200 $ 2,641,000 $ 2,736,700 $ 2,835,300 $ 2,937,000 Ending Balance - Excl. Restricted Reserves $ (12,121) $ (600,185) $ 160,693 $ 576,373 $ 359,614 $ 193,273 $ 61,624 $ (57,696) $ (188,977) $ (333,081) $ (490,697) $ (662,546) Min. Target Ending Balance -Excl. Restricted Reserves $ 1,488,700 $ 1,956,600 $ 2,093,900 $ 2,278,900 $ 2,466,500 $ 2,582,700 $ 2,677,100 $ 2,774,200 $ 2,875,000 $ 2,977,700 $ 3,084,300 $ 3,194,000 Ending Surplus/(Deficit) Compared to Reserve Targets $ (1,500,821) $ (2,556,785) $ (1,933,207) $ (1,702,527) $ (2,106,886) $ (2,389,427) $ (2,615,476) $ (2,831,896) $ (3,063,977) $ (3,310,781) $ (3,574,997) $ (3,856,546) Annual Interest Earnings Rate 4

1.37% 2.50% 2.50% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37%

1. Beginning cash balances provided by City staff for Fund 580 - Recycled Water Operations. Source file: 4 - Current Cash and Fund Balance - Recycled Water 12062021.xlsx , Beg Fund Balance FY23- Water.xls , & Beg Fund Balance FY23- Recycled Water.xls .

2. The target ending balance is set equal to 90-days of O&M expenses. Source file: 4 - Current Cash and Fund Balance - Water 12062021.xlsx .

3. The target ending balance is set equal to 3% of net capital assets. See Exhibit 2 (CIP) for details.

4. Historical interest earning rates are per the average annual yields for funds invested in LAIF (2017-2021). The source is the California State Treasurer's website: https://www.treasurer.ca.gov/pmia-laif/historical/annual.asp .

SUMMARY OF CASH ACTIVITY
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 RW - Financial Plan, Page 2 of 21 159 CITY OF AMERICAN CANYON Charts & Tables

RECYCLED WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 1
$.0 Mil.
$.5 Mil.
$1.0 Mil.
$1.5 Mil.
$2.0 Mil.
$2.5 Mil.
2022 2023 2024 2025 2026 2027 2028
Annual Obligations
Fiscal Year Ending June 30
Water Revenue Requirements vs.

Revenue Under Existing and Increased Rates
Interfund Loan Repayment
O&M Expenses
Revenues under Existing Rates
Revenues under Increased Rates
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 RW - Charts and Tables, 3 of 21160 CITY OF AMERICAN CANYON Charts & Tables

RECYCLED WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 2
$.0 Mil.
$.5 Mil.
$1.0 Mil.
$1.5 Mil.
$2.0 Mil.
$2.5 Mil.
$3.0 Mil.
2022 2023 2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Ending Cash Balances vs.

Recommended Reserve Targets
Ending Cash Balance (Unrestricted Reserves) Minimum Target Reserve Balance Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 RW - Charts and Tables, 4 of 21161 CITY OF AMERICAN CANYON Charts & Tables

RECYCLED WATER RATE STUDY
Rate Adjustment Charts and Report Tables
CHART 3
250.0%

10.0% 10.0% 5.0% 5.0%
0%
50%
100%
150%
200%
250%
300%
2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Projected Increases to Rate Revenue
Prepared by NBS
www.nbsgov.com | Toll-free: 800.676.7516 RW - Charts and Tables, 5 of 21162 CITY OF AMERICAN CANYON Exhibit 1 - O&M

RECYCLED WATER RATE STUDY
Operating Revenue and Expenses
TABLE 3 : REVENUE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Rate Revenue
Water Service Charge - Recycled Water 1 $ 151,038 $ 226,361 $ 207,000 $ 210,726 $ 214,308 $ 217,952 $ 221,657 $ 225,425 $ 229,257 $ 232,925 $ 236,652 $ 240,439 Other Revenue
Interest Earnings See FP 4,101 12,392 - - - - - - - - - - TOTAL: REVENUE $ 155,140 $ 238,753 $ 207,000 $ 210,726 $ 214,308 $ 217,952 $ 221,657 $ 225,425 $ 229,257 $ 232,925 $ 236,652 $ 240,439 TABLE 4 : OPERATING EXPENSE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Fund 580 - Recycled Water Operations
Wages - Full time 3 $ - $ 217 $ 209,085 $ 216,403 $ 223,977 $ 231,816 $ 239,930 $ 248,327 $ 257,019 $ 266,015 $ 275,325 $ 284,961 Health Insurance 3 - - 35,576 36,821 38,109 39,443 40,824 42,253 43,731 45,262 46,846 48,486 Health-In_Lieu 3 - - 2,280 2,360 2,442 2,528 2,616 2,708 2,803 2,901 3,002 3,107 Cafeteria Plan Section 125 3 - - 9,599 9,935 10,282 10,642 11,015 11,400 11,799 12,212 12,640 13,082 PERS Retirement 3 - 1,246 26,843 27,782 28,755 29,761 30,803 31,881 32,997 34,152 35,347 36,584 Benefits - Other 3 - - 471 488 505 522 541 560 579 599 620 642 Social Security & Medicare 3 - 3 3,204 3,316 3,432 3,552 3,677 3,805 3,938 4,076 4,219 4,367 Worker Comp Insurance 3 - 526 22,467 23,254 24,067 24,910 25,782 26,684 27,618 28,585 29,585 30,621 Info Tech Support Services 2 - - 54,000 55,620 57,289 59,007 60,777 62,601 64,479 66,413 68,406 70,458 Professional Services 2 13,511 16,694 51,000 52,530 54,106 55,729 57,401 59,123 60,897 62,724 64,605 66,543 Misc Contractual Services 2 - 117,361 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 Temp Agency Services 2 - - - - - - - - - - - -
General Repairs & Maint 2 - 727 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 26,095 Postage/Mail/Copy/Printing Svc 2 - 36 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Membership Dues & Subscription 2 - - 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 Conferences - Training 2 - - 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 Office Supplies 2 - - 500 515 530 546 563 580 597 615 633 652 Operating Supplies 2 - 7,594 123,000 126,690 130,491 134,405 138,438 142,591 146,868 151,274 155,813 160,487 AC Recycled Water 2 36,360 18,437 - - - - - - - - - -
Depreciation 2 222,773 222,255 - - - - - - - - - -
Depreciation - Infrastructure 2 - - - - - - - - - - - - Vehicles 2 - - - - - - - - - - - -
Major Equipment 8 - - 70,000 - - - - - - - - -
Transfers Out To Other Funds 8 - 1,196,580 50,000 - - - - - - - - - Retiree Health Benefits 3 - 134 1,973 2,042 2,114 2,188 2,264 2,344 2,426 2,510 2,598 2,689 OPEB 3 - 1,115 1,251 1,295 1,340 1,387 1,436 1,486 1,538 1,592 1,647 1,705 ISF - Bldg Maint 2 - 26,844 39,873 41,069 42,301 43,570 44,877 46,224 47,610 49,039 50,510 52,025 ISF - Legal Services 2 - 514 23,705 24,416 25,149 25,903 26,680 27,481 28,305 29,154 30,029 30,930 Capital Outlay-Contra Account 8 - - - - - - - - - - - - Transfer to Gen Fnd Support Sv 2 - 21,869 138,336 142,486 146,761 151,163 155,698 160,369 165,180 170,136 175,240 180,497 Interest Payments for Internal Loans See Exh. 3 - - - - - - - - - - - - TOTAL: RECYCLED WATER OPERATIONS EXPENSES $ 272,644 $ 1,632,152 $ 893,163 $ 797,921 $ 823,477 $ 849,857 $ 877,086 $ 905,193 $ 934,206 $ 964,155 $ 995,069 $ 1,026,980 DESCRIPTION Basis
5-Year Projected Rate Period Projected
DESCRIPTION Basis
5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 1 (O&M), 6 of 21 163 CITY OF AMERICAN CANYON Exhibit 1 - O&M

RECYCLED WATER RATE STUDY
Operating Revenue and Expenses
TABLE 5 : FORECASTING ASSUMPTIONS
Basis 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Customer Growth31 -- 1.80% 1.80% 1.80% 1.70% 1.70% 1.70% 1.70% 1.70% 1.60% 1.60% 1.60% General Cost Inflation42 -- 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Labor Cost Inflation53 -- 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Energy64 -- 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% Electricty75 -- 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% Fuel & Utilities86 -- 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% Construction Cost Inflation97 -- 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% No Escalation 8 -- 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Revenues and expenses for all other years are escalated based on the forecasting assumptions located in Table 61. Source files: Fund 580 Recycled Water Operations.xlsx & FY2023-24 Exp Budget Recycled Water.xlsx .

2. Expenses are inflated each year by the following annual inflation factor categories.

3. Customer growth is based on service area population growth through FY 2039/40. Source file: American Canyon 2015 UWMP.pdf , page 26.

4. General cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

5. Labor cost inflation is based on the 5-year average annual change in the Quarterly Census of Employment and Wages for San Francisco County, CA.

6. Energy cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

7. Electricity cost inflation is based on the 5-year average change in the Consumer Price Index for San Francisco County.

8. Fuel & Utilities cost inflation is based on the 5-year average annual change in the Consumer Price Index - Average Price Data for Fuels and related products and power. This factor is used for utility costs other than electricity.

9. Construction cost Inflation is the 10-year average change in the Construction Cost Index for 2012-2022. Source: Engineering News Record website (http://enr.construction.com ).

INFLATION FACTORS2
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 1 (O&M), 7 of 21 164 CITY OF AMERICAN CANYON Exhibit 2 - CIP

RECYCLED WATER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 6 : CAPITAL FUNDING SUMMARY
CAPITAL FUNDING FORECAST Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Grants1$ 235,463 $ 243,704 $ 385,279 $ 635,554 $ - $ - $ - $ - $ - $ - $ - $ - Use of Capacity Fee Reserves - - - 16,812 1,989,375 2,059,003 2,131,068 1,756,623 1,818,105 1,881,739 1,947,600 2,015,766 SRF Loan Funding - - - - - - - - - - - -
Use of New Revenue Bond Proceeds - - - - - - - - - - - - Use of Capital Rehabilitation and Replacement Reserve - - - - - - - - - - - - Rate Revenue - - - - - - - - - - - -
Total Sources of Capital Funds $ 235,463 $ 243,704 $ 385,279 $ 652,367 $ 1,989,375 $ 2,059,003 $ 2,131,068 $ 1,756,623 $ 1,818,105 $ 1,881,739 $ 1,947,600 $ 2,015,766 Uses of Capital Funds:

Total Project Costs $ 235,463 $ 243,704 $ 385,279 $ 652,367 $ 1,989,375 $ 2,059,003 $ 2,131,068 $ 1,756,623 $ 1,818,105 $ 1,881,739 $ 1,947,600 $ 2,015,766 Capital Funding Surplus (Deficiency) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

1. Grant from American Rescue Plan Act (ARPA) Funds through Napa County for the Recycled Water System Expansion Project (RW17-0100). Source file: RESOLUTION 2022-58.pdf .

CAPITAL IMPROVEMENT PROGRAM FUNDING OPTIONS
Capital Improvement Program Funding Choice FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Effective Annual Funding Amount $ 235,463 $ 243,704 $ 385,279 $ 652,367 $ 1,989,375 $ 2,059,003 $ 2,131,068 $ 1,756,623 $ 1,818,105 $ 1,881,739 $ 1,947,600 $ 2,015,766

CAPITAL IMPROVEMENT PROGRAM
TABLE 7 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Current-Year Dollars) 1 Project No. Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects 2
NEW Recycled Water Fill Stations $ - $ - $ 120,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - Master Plan Projects - Recycled Water 3
RW1 Tower / Devlin / South Kelly Road $ 137,500 $ 137,500 $ 137,500 $ 137,500 $ - $ - $ - $ - $ - $ - $ - $ - RW2 Spikerush Circle 31,000 31,000 31,000 31,000 - - - - - - - - RW3 Benton Way 59,000 59,000 59,000 59,000 - - - - - - - - RW4 Pelleria Drive - - - 32,000 32,000 32,000 32,000 - - - - - RW5 Jim Oswald Way / Mezzetta Court / Green Island Road - - - 121,000 121,000 121,000 121,000 - - - - - RW6 Hanna Drive - - - 76,000 76,000 76,000 76,000 - - - - - RW7 Dodd / Klamath Court - - - 24,000 24,000 24,000 24,000 - - - - - RW8 Lombard / Hess Road - - - 88,000 88,000 88,000 88,000 - - - - - RW9 Watson Lane - - - - 135,000 135,000 135,000 135,000 135,000 135,000 135,000 135,000 RW10 Main / South Napa Junction Road - - - - 299,000 299,000 299,000 299,000 299,000 299,000 299,000 299,000 RW11 Newell Drive - - - - 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 RW12 PS Upgrade - - - - 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 RW13 Paoli Loop Road / Northern Vineyards - - - - 140,000 140,000 140,000 140,000 140,000 140,000 140,000 140,000 RW14 Eucalyptus Drive - - - - 128,000 128,000 128,000 128,000 128,000 128,000 128,000 128,000 RW15 Broadway / Donaldson Way - - - - 347,000 347,000 347,000 347,000 347,000 347,000 347,000 347,000 Estimated Future Projects
Future Projects4 - - - - - - - - - - - -
Total: CIP Program Costs (Future-Year Dollars) $ 227,500 $ 227,500 $ 347,500 $ 568,500 $ 1,675,000 $ 1,675,000 $ 1,675,000 $ 1,334,000 $ 1,334,000 $ 1,334,000 $ 1,334,000 $ 1,334,000 5-Year Projected Rate Period Projected
Funding Sources:

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 2 (CIP), 8 of 21 165 CITY OF AMERICAN CANYON Exhibit 2 - CIP

RECYCLED WATER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 8 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Future-Year Dollars) 5 Project No. Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects 2
NEW Recycled Water Fill Stations $ - $ - $ 133,046 $ - $ - $ - $ - $ - $ - $ - $ - $ - Master Plan Projects - Recycled Water 3
RW1 Tower / Devlin / South Kelly Road $ 142,313 $ 147,293 $ 152,449 $ 157,784 $ - $ - $ - $ - $ - $ - $ - $ - RW2 Spikerush Circle 32,085 33,208 34,370 35,573 - - - - - - - - RW3 Benton Way 61,065 63,202 65,414 67,704 - - - - - - - - RW4 Pelleria Drive - - - 36,721 38,006 39,336 40,713 - - - - - RW5 Jim Oswald Way / Mezzetta Court / Green Island Road - - - 138,850 143,710 148,740 153,946 - - - - - RW6 Hanna Drive - - - 87,212 90,264 93,423 96,693 - - - - - RW7 Dodd / Klamath Court - - - 27,541 28,504 29,502 30,535 - - - - - RW8 Lombard / Hess Road - - - 100,982 104,516 108,174 111,961 - - - - - RW9 Watson Lane - - - - 160,338 165,949 171,758 177,769 183,991 190,431 197,096 203,994 RW10 Main / South Napa Junction Road - - - - 355,118 367,547 380,411 393,726 407,506 421,769 436,531 451,810 RW11 Newell Drive - - - - 243,476 251,997 260,817 269,946 279,394 289,173 299,294 309,769 RW12 PS Upgrade - - - - 95,015 98,340 101,782 105,345 109,032 112,848 116,798 120,885 RW13 Paoli Loop Road / Northern Vineyards - - - - 166,276 172,096 178,119 184,353 190,806 197,484 204,396 211,550 RW14 Eucalyptus Drive - - - - 152,024 157,345 162,852 168,552 174,451 180,557 186,876 193,417 RW15 Broadway / Donaldson Way - - - - 412,127 426,552 441,481 456,933 472,925 489,478 506,609 524,341 Estimated Future Projects
Future Projects4 - - - - - - - - - - - -
Total: CIP Program Costs (Future-Year Dollars) $ 235,463 $ 243,704 $ 385,279 $ 652,367 $ 1,989,375 $ 2,059,003 $ 2,131,068 $ 1,756,623 $ 1,818,105 $ 1,881,739 $ 1,947,600 $ 2,015,766 TABLE 9 : FORECASTING ASSUMPTIONS
Economic Variables FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Annual Construction Cost Inflation, Per Engineering News Record63.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Cumulative Construction Cost Multiplier from FY 2021/22 1.04 1.07 1.11 1.15 1.19 1.23 1.27 1.32 1.36 1.41 1.46 1.51

1. Capital project costs were provided by City Staff in source file: Water Projects.pdf.

2. Capital projects costs for FY 2021/22 and FY 2022/23 are from source files: 11. CIP Budget vs Expense Report FY 2021-2022 through Oct 2021.pdf .

3. The City's Recycled Water Master Plan projects were scheduled to begin in 2016; however, the study only includes costs from FY 2021/22 through FY 2034/35. Source file: 2016 Recycled Water Master Plan.pdf , page 63.

4. Future project costs beyond FY 2034/35 are calculated based on the City's 10-year average.

5. Capital improvement projects are inflated to future year estimated costs with ENR CCI for the region. Source: Engineering News Record website (http://enr.construction.com ).

6. For reference purposes, the annual Construction Cost Inflation percentage is the 10-year average change in the Construction Cost Index for September 2012-2022 (3.5%). Source: Engineering News Record website (http://enr.construction.com).

Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 2 (CIP), 9 of 21 166 CITY OF AMERICAN CANYON Exhibit 3 - Debt

RECYCLED WATER RATE STUDY
Debt Service
TABLE 10 : EXISTING DEBT OBLIGATIONS
EXISTING DEBT OBLIGATIONS Actuals Actuals
Annual Repayment Schedules: FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Interfund Loans
Water Operations to Recycled Water Fund
Advance from Water Operations 510 to Recycled Water Operations 580 Original Loan Amount (June 20, 2023) $ 1,136,140
Accrued Interest (LAIF Rate + 2%) 981
Annual Debt Service1
$44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 $44,061 Water Operations to Recycled Water Fund
Advance from Water Operations 510 to Recycled Water Operations 580 Original Loan Amount (September 21, 2021) $ 128,189
Accrued Interest (LAIF Rate + 2%) 11,706
Annual Debt Service2
$ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 $ 5,421 Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (March 17, 2011) $ 1,070,000
Accrued Interest (LAIF Rate + 2%) 205,869
Annual Debt Service3
$ 49,438 $ 49,438 $ 49,438 $ 49,438 $ 49,438 $ 49,438 $ 49,438 $ 49,438 Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (December 15, 2009) $ 304,614
Accrued Interest (LAIF Rate + 2%) 58,577
Annual Debt Service4
$ 14,073 $ 14,073 $ 14,073 $ 14,073 $ 14,073 $ 14,073 $ 14,073 $ 14,073 Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (December 15, 2009) $ 3,532,410
Accrued Interest (LAIF Rate + 2%) 454,994
Annual Debt Service5
$ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504 $ 154,504

1. Funds advanced for the Recycled Water Expansion Project. Repayment scheduled to begin FY 2023/24.

2. Funds advanced for Green Island Recycled Waterline Project. Repayment scheduled to begin FY 2025/26.

3. Funds advanced for the Green Island Road Recycled Waterline Project. Repayment scheduled to begin FY 2025/26.

4. Funds advanced for the Recycled Water Pump Station Upgrade. Repayment scheduled to begin FY 2025/26.

5. Funds advance for various CIP projects. Repayment scheduled to begin FY 2025/26.

TABLE 11 : EXISTING ANNUAL DEBT OBLIGATIONS TO BE SATISFIED BY WATER RATES Annual Obligations FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Existing Interfund Loan Repayment $ - $ - $ 198,566 $ 198,566 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 $ 267,497 5-Year Projected Rate Period Projected
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 3 (Debt), 10 of 21 167 CITY OF AMERICAN CANYON Exhibit 4 - Current Rates

RECYCLED WATER RATE STUDY
Projected Water Rates Under Existing Rate Schedule
TABLE 12 : CURRENT RECYCLED WATER RATE SCHEDULE
Current Rates
Jan. 1, 2023
Monthly Fixed Service Charges
Recycled Water2
< 1" meter $26.56
1" meter $44.42
1 1/2" meter $88.75
2" meter $141.99
3" meter $283.98
4" meter $443.74
6" meter $887.48
8" meter $1,420.06
Variable Rates for All Water Consumed (in $/hcf) 3
Recycled Water $0.90

1. Rates available on the City website. Source: https://www.cityofamericancanyon.org .

2. Green Island Vineyard is charged different rates based on contract terms.

3. HCF = hundred cubic feet (748 gallons).

Recycled Water Rate Schedule1
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Exhibit 4 (Current Rates), 11 of 21168 CITY OF AMERICAN CANYON Functionalization & Classification

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 13 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (COM) (CAP) (CA) (COM) (CAP) (CA)
Fund 580 - Recycled Water Operations
Wages - Full time $ 209,085 $ 104,543 $ 83,634 $ 20,909 50.0% 40.0% 10.0% Health Insurance 35,576 17,788 14,230 3,558 50.0% 40.0% 10.0% Health-In_Lieu 2,280 1,140 912 228 50.0% 40.0% 10.0%
Cafeteria Plan Section 125 9,599 4,799 3,839 960 50.0% 40.0% 10.0% PERS Retirement 26,843 13,421 10,737 2,684 50.0% 40.0% 10.0% Benefits - Other 471 236 188 47 50.0% 40.0% 10.0%
Social Security & Medicare 3,204 1,602 1,282 320 50.0% 40.0% 10.0% Worker Comp Insurance 22,467 11,234 8,987 2,247 50.0% 40.0% 10.0% Info Tech Support Services 54,000 27,000 21,600 5,400 50.0% 40.0% 10.0% Professional Services 51,000 25,500 20,400 5,100 50.0% 40.0% 10.0% Misc Contractual Services 2,000 1,000 800 200 50.0% 40.0% 10.0% General Repairs & Maint 20,000 10,000 8,000 2,000 50.0% 40.0% 10.0% Postage/Mail/Copy/Printing Svc 5,000 2,500 2,000 500 50.0% 40.0% 10.0% Membership Dues & Subscription 1,000 500 400 100 50.0% 40.0% 10.0% Conferences - Training 2,000 1,000 800 200 50.0% 40.0% 10.0% Office Supplies 500 250 200 50 50.0% 40.0% 10.0%
Operating Supplies 123,000 61,500 49,200 12,300 50.0% 40.0% 10.0% Major Equipment 70,000 35,000 28,000 7,000 50.0% 40.0% 10.0% Transfers Out To Other Funds 50,000 25,000 20,000 5,000 50.0% 40.0% 10.0% Retiree Health Benefits 1,973 987 789 197 50.0% 40.0% 10.0% OPEB 1,251 625 500 125 50.0% 40.0% 10.0%
ISF - Bldg Maint 39,873 19,937 15,949 3,987 50.0% 40.0% 10.0% ISF - Legal Services 23,705 11,853 9,482 2,371 50.0% 40.0% 10.0% Transfer to Gen Fnd Support Sv 138,336 69,168 55,334 13,834 50.0% 40.0% 10.0% Total: Recycled Water Operations Expenses $ 893,163 $ 446,581 $ 357,265 $ 89,316 50.0% 40.0% 10.0% Total: Recycled Water Operations Expenses $ 893,163 $ 446,581 $ 357,265 $ 89,316 50.0% 40.0% 10.0% Current Allocation Total: Operations Expenses - Delivered1
$ 732,393 $ 366,197 $ 292,957 $ 73,239 50.0% 40.0% 10.0% 82% Total: Operations Expenses - Self-Haul1
$ 160,769 $ 80,385 $ 64,308 $ 16,077 50.0% 40.0% 10.0% 18%

1. Delivered and self-haul recycled water rates based on direction provided by City staff; that is, 82 % of O&M costs attributed to delivered water and 18% to self-haul.

Budget Categories
Total Revenue
Requirements
Commodity Capacity Customer Basis of Classification
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Funct. & Classification, 12 of 21 169 CITY OF AMERICAN CANYON Functionalization & Classification

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 14 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS, cont.

Classification of Expenses, continued
FY 2023/24 (COM) (CAP) (CA) (COM) (CAP) (CA)
Debt Service Payments
Outstanding Debt $ - $ - $ - $ - 0.0% 100.0% 0.0%
Interfund Loan Repayment 198,566 - 198,566 - 0.0% 100.0% 0.0% Total Debt Service Payments $ 198,566 $ - $ 198,566 $ - 0.0% 100.0% 0.0% Current Allocation Total Debt Service Payments - Delivered $ 99,283 $ - $ 99,283 $ - 0.0% 100.0% 0.0% 50% Total Debt Service Payments - Self-Haul $ 99,283 $ - $ 99,283 $ - 0.0% 100.0% 0.0% 50% Capital Expenditures
Rate Funded Capital Expenses $ - $ - $ - $ - 0.0% 100.0% 0.0% Current Allocation Total Capital Expenditures - Delivered $ - $ - $ - $ - 0.0% 100.0% 0.0% 50% Total Capital Expenditures - Self-Haul $ - $ - $ - $ - 0.0% 100.0% 0.0% 50% TOTAL REVENUE REQUIREMENTS $ 1,091,728 $ 446,581 $ 555,831 $ 89,316 40.9% 50.9% 8.2% TOTAL REVENUE REQUIREMENTS - Delivered $ 831,676 $ 366,197 $ 392,240 $ 73,239 44.0% 47.2% 8.8% TOTAL REVENUE REQUIREMENTS - Self-Haul $ 260,052 $ 80,385 $ 163,591 $ 16,077 30.9% 62.9% 6.2% Less: Non-Rate Revenues
Other Revenue
Interest Earnings (22,343) (9,139) (11,375) (1,828) 40.9% 50.9% 8.2% NET REVENUE REQUIREMENTS $ 1,069,386 $ 437,442 $ 544,455 $ 87,488 Allocation of Revenue Requirements 100.0% 40.9% 50.9% 8.2% Current Allocation NET REVENUE REQUIREMENTS - Delivered $ 813,355 $ 358,702 $ 382,912 $ 71,740 44.1% 47.1% 8.8% 82% NET REVENUE REQUIREMENTS - Self-Haul $ 256,030 $ 78,740 $ 161,543 $ 15,748 9.7% 19.9% 1.9% 18% TABLE 15 : ADJUSTMENT TO CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses, continued
Adjustments to Classification of Expenses
Adjustment for Current Rate Level: Total (COM) (CAP) (CA) Test Year (FY 2023/24) Target Rate Rev. After Rate Increases$ 1,069,386 Projected Rate Revenue at Current Rates $ 207,000
Test Year (FY 2023/24) Projected Rate Adjustment 417%
Adjusted Net Revenue Req'ts $ 1,069,386 $ 437,442 $ 544,455 $ 87,488 Percent of Revenue 100.0% 40.9% 50.9% 8.2%
TABLE 16 : NET REVENUE REQUIREMENTS PER COSA RESULTS
Total Rate
Revenue
Requirements
FY 2023/24
Commodity
Related Costs
Capacity
Related Costs
Customer
Related Costs
Rate-Design Adjustments to Fixed/Variable % 100.0% 40.9% 50.9% 8.2% Rate-Design Adjustments to Fixed/Variable ($) $1,069,386 $437,442 $544,455 $87,488 Basis of Classification
Net Revenue Requirements - Per COSA Results
59% Fixed / 41% Variable
Budget Categories
Total Revenue
Requirements
Commodity Capacity Customer
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Funct. & Classification, 13 of 21 170 CITY OF AMERICAN CANYON Functionalization & Classification

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 17 : REVISED NET REVENUE REQUIREMENTS PER COSA RESULTS Rate-Design Adjustments to Fixed/Variable % 100.0% 40.9% 50.9% 8.2% Rate-Design Adjustments to Fixed/Variable ($) $1,069,386 $437,442 $544,455 $87,488 TABLE 18 : REVISED NET REVENUE REQUIREMENTS - (40% FIXED/60% VOLUMETRIC) - ALTERNATIVE 2 Rate-Design Adjustments to Fixed/Variable % 100.0% 60.0% 34.5% 5.5% Rate-Design Adjustments to Fixed/Variable ($) $1,069,386 $641,631 $368,535 $59,220 TABLE 19 : REVISED NET REVENUE REQUIREMENTS - (20% FIXED/80% VOLUMETRIC) - ALTERNATIVE 3 Rate-Design Adjustments to Fixed/Variable % 100.0% 80.0% 17.2% 2.8% Rate-Design Adjustments to Fixed/Variable ($) $1,069,386 $855,509 $184,267 $29,610 Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Funct. & Classification, 14 of 21 171 CITY OF AMERICAN CANYON Cost-of-Service Analysis

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 20 : ALLOCATION OF RECYCLED WATER REVENUE REQUIREMENTS

PROPOSED ALTERNATIVE
Variable (Collected from Vol. Rates) $ 855,509 80%
Fixed (Collected from Fixed Charges) 213,877 20%
Net Revenue Requirement $ 1,069,386 100%

1. For calculation, see the RW - Funct. & Classification tab.

TABLE 21 : ALLOCATION OF NET REVENUE REQUIREMENTS - FY 2023/24

PROPOSED ALTERNATIVE
Recycled Water
Recycled Water 272,268 458 100.0% $ 855,509 $ 213,877 $ 1,069,386 $3.14 $38.89 Total Net Revenue Requirement 272,268 458 100.0% $ 855,509 $ 213,877 $ 1,069,386 -- --

1. Source file: 2020 Urban Water Management Plan , Figure 6.4.

2. Number of meters by size times the hydraulic capacity factor for each meter size. Source: AWWA, Manual M1, Table B-1 & AWWA, Manual M6, Table 5-3.

3. Total Variable Costs times the proportional share of annual RW consumption.

4. Fixed costs times the percent of equivalent meters.

5. Total Variable Costs divided by Total Annual RW Consumption.

6. Total Fixed Costs divided by total Equivalent Meters. This provides the basis for monthly fixed charges for each meter size.

TABLE 22 : CALCULATION OF MONTHLY FIXED METER SERVICE CHARGES FOR FY 2023/24

PROPOSED ALTERNATIVE
Total
< 1" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter Recycled Water
Recycled Water 2 13 14 28 13 6 0 0 76
Total Meters/Accounts 2 13 14 28 13 6 0 0 76
Hydraulic Capacity Factor 21.00 1.67 3.33 5.33 10.67 16.67 33.33 53.33 Total Equivalent Meters 2 22 47 149 139 100 0 0 458
Monthly Fixed Service Charges
Fixed Charge ($/EM/month)3
$38.89 $38.89 $38.89 $38.89 $38.89 $38.89 $38.89 $38.89 Fixed Monthly Charge $38.89 $64.81 $129.62 $207.40 $414.79 $648.11 $1,296.23 $2,073.96 Annual Fixed Costs Allocated to Monthly Meter Charges
Total Revenue from RW Meter Charges $ 933 $ 10,111 $ 21,777 $ 69,685 $ 64,708 $ 46,664 $ - $ - $ 213,877

1. Meter by Class and Size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

3. Cost per month per equivalent meter. Monthly fixed charges are set for each meter size using the hydraulic capacity factors and total equivalent meters.

RW Fixed
Charges
($/Eq. Meter/
Month) 6
RW
Volumetric
Rate ($/hcf) No. of Equiv. 5
Meters
Recycled Water
Classification Components
Number of RW Meters
by Class and Size1
Cost-of-Service Net Revenue
Requirements (2023/24) 1
Equivalent Meters2
% of Equiv.

Meters
FY 2023/24
Recycled Water Customers
Cost Allocation Factors
Net Revenue
Req'ts
Annual RW
Consumption1
Fixed
Costs4
Variable
Costs3
Cost Classifications
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW- COSA, 15 of 21172 CITY OF AMERICAN CANYON Cost-of-Service Analysis

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 23 : METER EQUIVALENCY FACTORS USED IN FIXED CHARGES CALCULATION Meter
Capacity
Equivalency
to 3/4 inch
5/8 inch 20 1.00
3/4 inch 30 1.00
1 inch 50 1.67

1.5 inch 100 3.33
2 inch 160 5.33
3 inch 320 10.67
4 inch 500 16.67
6 inch 1,000 33.33
8 inch 1,600 53.33
10 inch 4,200 140.00
12 inch 5,300 176.67

1. Per AWWA, M1 Manual, Table B-1.

Turbine Class II Meters
Meter Size
Standard Meters
Displacement Meters
Compound Class I Meters
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW- COSA, 16 of 21173 CITY OF AMERICAN CANYON Cost-of-Service Analysis

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 24 : ALLOCATION OF RECYCLED WATER REVENUE REQUIREMENTS Variable (Collected from Vol. Rates) $ 437,442 $ 650,684 80% $ 256,030 100% Fixed (Collected from Fixed Charges) 631,944 162,671 20% - 0% Net Revenue Requirement $ 1,069,386 $ 813,355 100% $ 256,030 100%

1. For calculation, see the RW - Funct. & Classification tab.

TABLE 25 : ALLOCATION OF NET REVENUE REQUIREMENTS - FY 2023/24 Recycled Water
Delivered 136,134 458 100.0% $ 650,684 $ 162,671 $ 813,355 $4.78 $29.58 Self-Haul 136,134 0 0.0% 256,030 - 256,030 $1.88 n/a
Total Net Revenue Requirement 272,268 458 0.0% $ 256,030 $ - $ 256,030 -- --

1. Source file: 2020 Urban Water Management Plan , Figure 6.4.

2. Number of meters by size times the hydraulic capacity factor for each meter size. Source: AWWA, Manual M1, Table B-1 & AWWA, Manual M6, Table 5-3.

3. Total Variable Costs times the proportional share of annual RW consumption.

4. Fixed costs times the percent of equivalent meters.

5. Total Variable Costs divided by Total Annual RW Consumption.

6. Total Fixed Costs divided by total Equivalent Meters. This provides the basis for monthly fixed charges for each meter size.

TABLE 26 : CALCULATION OF MONTHLY FIXED METER SERVICE CHARGES FOR FY 2023/24 Total
< 1" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter Recycled Water
Delivered 2 13 14 28 13 6 0 0 76
Total Meters/Accounts 2 13 14 28 13 6 0 0 76
Hydraulic Capacity Factor 21.00 1.67 3.33 5.33 10.67 16.67 33.33 53.33 Total Equivalent Meters 2 22 47 149 139 100 0 0 458
Monthly Fixed Service Charges
Fixed Charge ($/EM/month)3
$29.58 $29.58 $29.58 $29.58 $29.58 $29.58 $29.58 $29.58 Fixed Monthly Charge $29.58 $49.29 $98.59 $157.74 $315.48 $492.94 $985.89 $1,577.42 Annual Fixed Costs Allocated to Monthly Meter Charges
Total Revenue from RW Meter Charges $ 710 $ 7,690 $ 16,563 $ 53,001 $ 49,215 $ 35,492 $ - $ - $ 162,671

1. Meter by Class and Size are based on June 2022 customer billing data.

2. Source: Principles of Water Rates, Fees, and Charges , Manual M1, AWWA, Table B-1.

3. Cost per month per equivalent meter. Monthly fixed charges are set for each meter size using the hydraulic capacity factors and total equivalent meters.

RW Fixed
Charges
($/Eq. Meter/
Month) 6
Annual RW
Consumption1
Equivalent Meters2
Variable
Costs3
Fixed
Costs4
Net Revenue
Req'ts No. of Equiv.

Meters
% of Equiv.

Meters
RW
Volumetric
Rate ($/hcf)5
Number of RW Meters
by Class and Size1
FY 2023/24
Recycled Water Customers
Cost Allocation Factors Cost Classifications
Net Revenue Requirements -
Delivered (2023/24)
Net Revenue Requirements -
Self-Haul(2023/24) Total
Recycled Water 1
Classification Components
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW- COSA (2), 17 of 21174 CITY OF AMERICAN CANYON Cost-of-Service Analysis

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 27 : METER EQUIVALENCY FACTORS USED IN FIXED CHARGES CALCULATION Meter
Capacity
Equivalency
to 3/4 inch
5/8 inch 20 1.00
3/4 inch 30 1.00
1 inch 50 1.67

1.5 inch 100 3.33
2 inch 160 5.33
3 inch 320 10.67
4 inch 500 16.67
6 inch 1,000 33.33
8 inch 1,600 53.33
10 inch 4,200 140.00
12 inch 5,300 176.67

1. Per AWWA, M1 Manual, Table B-1.

Turbine Class II Meters
Meter Size
Standard Meters
Displacement Meters
Compound Class I Meters
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW- COSA (2), 18 of 21175 CITY OF AMERICAN CANYON Current vs. Proposed Rates

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 28 : CURRENT VS. PROPOSED RATES
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Projected Increase in Rate Revenue per Financial Plan: 250.00% 10.00% 10.00% 5.00% 5.00% Monthly Fixed Service Charges (in $/mo) - Delivered Only < 1" meter $26.56 $29.58 $32.53 $35.79 $37.58 $39.46
1" meter $44.42 $49.29 $54.22 $59.65 $62.63 $65.76
1 1/2" meter $88.75 $98.59 $108.45 $119.29 $125.26 $131.52 2" meter $141.99 $157.74 $173.52 $190.87 $200.41 $210.43 3" meter $283.98 $315.48 $347.03 $381.73 $400.82 $420.86 4" meter $443.74 $492.94 $542.24 $596.46 $626.28 $657.60 6" meter $887.48 $985.89 $1,084.47 $1,192.92 $1,252.57 $1,315.20 8" meter $1,420.06 $1,577.42 $1,735.16 $1,908.67 $2,004.11 $2,104.31 Commodity Charges for All Water Consumed (in $/hcf)
Variable Charge - Delivered $0.90 $4.78 $5.26 $5.78 $6.07 $6.38 Variable Charge - Self-Haul n/a $1.88 $2.07 $2.28 $2.39 $2.51

PROPOSED ALTERNATIVE
Recycled Water Rate Schedule Current
Rates
Proposed Rates
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Current & Prop. Rates (2), 19 of 21176 CITY OF AMERICAN CANYON Current vs. Proposed Rates

RECYCLED WATER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 29 : CURRENT VS. PROPOSED RATES
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Projected Increase in Rate Revenue per Financial Plan: 250.00% 10.00% 10.00% 5.00% 5.00% Monthly Fixed Service Charges (in $/mo)
< 1" meter $26.56 $38.89 $42.78 $47.05 $49.41 $51.88
1" meter $44.42 $64.81 $71.29 $78.42 $82.34 $86.46
1 1/2" meter $88.75 $129.62 $142.58 $156.84 $164.69 $172.92 2" meter $141.99 $207.40 $228.14 $250.95 $263.50 $276.67 3" meter $283.98 $414.79 $456.27 $501.90 $526.99 $553.34 4" meter $443.74 $648.11 $712.92 $784.22 $823.43 $864.60 6" meter $887.48 $1,296.23 $1,425.85 $1,568.43 $1,646.85 $1,729.20 8" meter $1,420.06 $2,073.96 $2,281.36 $2,509.49 $2,634.97 $2,766.71 Commodity Charges for All Water Consumed (in $/hcf)
Variable Charge $0.90 $3.14 $3.46 $3.80 $3.99 $4.19
Variable Charge - Self-Haul n/a $1.88 $2.07 $2.28 $2.39 $2.51 Recycled Water Rate Schedule Current
Rates
Proposed Rates

PROPOSED ALTERNATIVE
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 RW - Current & Proposed Rates, 20 of 21177 Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Recycled Water Bill Comp, 21 of 21 $155.49 $168.99$267.99 $343.59 $366.99 $389.49 $254.53 $301.66 $647.30 $911.24 $992.94 $1,071.49 $235.61 $263.82 $470.70 $628.68 $677.58 $724.60 $0
$200
$400
$600
$800
$1,000
$1,200
15 30 140 224 250 275
Monthly Bill
Monthly Water Consumption (CCF)
Recycled Water Bill Comparison
Current vs. Proposed FY 2023/24 Rates (2" Meter)
Recycled Water Bill - Current Rates
Recycled Water Bill - Delivered
Recycled Water Bill - Self-Haul
Average
ANNUAL Bill
(140 ccf/mo.)
Average
WINTER Bill
(30 ccf/mo.)
Average
SUMMER Bill
(224 ccf/mo.)
178
Enterprise Rate Study – City of American Canyon
Prepared by NBS – February 2024 115
Appendix C. Sewer Rate Study Tables and Figures
179
CITY OF AMERICAN CANYON Financial Plan & Reserve Summary

SEWER RATE STUDY
Financial Plan and Reserve Projections
TABLE 1 : FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Sources of Funds 1
Rate Revenue:

Sewer Rate Revenue $ 4,824,937 $ 4,940,178 $ 5,042,690 $ 5,128,416 $ 5,215,599 $ 5,304,264 $ 5,394,436 $ 5,486,142 $ 5,573,920 $ 5,663,103 $ 5,753,713 $ 5,845,772 Other Revenue 82,867 171,545 98,593 100,269 101,974 103,707 105,470 107,263 108,979 110,723 112,495 114,295 Interest Earnings 28,277 166,693 120,000 22,911 22,211 24,657 21,576 24,547 25,380 26,255 27,142 28,071 Total: Sources of Funds $ 4,936,080 $ 5,278,416 $ 5,261,283 $ 5,251,596 $ 5,339,784 $ 5,432,629 $ 5,521,483 $ 5,617,952 $ 5,708,280 $ 5,800,081 $ 5,893,350 $ 5,988,138 Uses of Water Funds
Operating Expenses:
570 - Wastewater Treatment Plant $ 3,075,847 $ (1,723,127) $ 1,952,137 $ 2,041,362 $ 2,121,194 $ 4,663,008 $ 2,291,046 $ 2,381,374 $ 2,475,521 $ 2,573,662 $ 2,675,976 $ 2,782,656 575 - Wastewater Collections 509,518 1,181,331 835,861 873,335 902,822 933,308 964,830 997,421 1,031,118 1,065,960 1,101,985 1,139,234 585 - Wastewater Environmental Compliance 414,090 489,734 856,655 887,901 915,994 944,981 974,890 1,005,750 1,037,594 1,070,451 1,104,354 1,139,337 810 - Non Departmental 1,820,335 2,157,776 2,615,743 2,700,825 2,783,879 2,869,503 2,957,779 3,048,788 3,142,618 3,239,356 3,339,093 3,441,923 Subtotal: Operating Expenses $ 5,819,790 $ 2,105,714 $ 6,260,396 $ 6,503,425 $ 6,723,889 $ 9,410,800 $ 7,188,544 $ 7,433,334 $ 7,686,851 $ 7,949,428 $ 8,221,408 $ 8,503,149 Other Expenditures:

Existing Debt Service $ 1,115,315 $ 206,640 $ 215,074 $ 223,856 $ 224,168 $ 239,297 $ 249,385 $ 222,191 $ 231,597 $ 241,391 $ 249,843 $ 259,060 Future Debt Service - - - - - - - - - - - -
Rate-Funded Capital Expenses 345,549 3,201,161 2,573,447 197,942 1,111,368 14,992 2,230,867 1,406,839 332,901 - - - Subtotal: Other Expenditures $ 1,460,864 $ 3,407,800 $ 2,788,521 $ 421,799 $ 1,335,536 $ 254,288 $ 2,480,251 $ 1,629,030 $ 564,498 $ 241,391 $ 249,843 $ 259,060 Total: Uses of Funds $ 7,280,654 $ 5,513,515 $ 9,048,917 $ 6,925,223 $ 8,059,425 $ 9,665,088 $ 9,668,795 $ 9,062,364 $ 8,251,349 $ 8,190,819 $ 8,471,251 $ 8,762,209 Plus: Revenue from Rate Increases2 - - 630,336 1,923,156 3,077,203 4,141,569 4,755,735 4,836,583 4,913,968 4,992,591 5,072,473 5,153,633 Annual Surplus/(Deficit) $ (2,344,574) $ (235,099) $ (3,157,298) $ 249,528 $ 357,562 $ (90,890) $ 608,423 $ 1,392,171 $ 2,370,899 $ 2,601,853 $ 2,494,572 $ 2,379,561 Net Revenue Reqt. (Total Uses less Non-Rate Revenue) $ 7,169,511 $ 5,175,276 $ 8,830,324 $ 6,802,043 $ 7,935,240 $ 9,536,723 $ 9,541,748 $ 8,930,554 $ 8,116,989 $ 8,053,841 $ 8,331,613 $ 8,619,843 Total Rate Revenue After Rate Increases $ 4,824,937 $ 4,940,178 $ 6,303,363 $ 7,692,624 $ 8,762,206 $ 9,980,503 $ 10,150,172 $ 10,322,725 $ 10,487,888 $ 10,655,694 $ 10,826,185 $ 10,999,404 Projected Annual Rate Revenue Increase 0.00% 0.00% 25.00% 20.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Cumulative Increase from Annual Revenue Increases 0.00% 0.00% 25.00% 50.00% 68.00% 88.16% 88.16% 88.16% 88.16% 88.16% 88.16% 88.16% Debt Coverage After Rate Increase N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Source files: Fund 540 Wastewater Operations & Fund 510 - 580 FY 23-24 Budget Status as of 09-19-2023 .

2. Revenue from rate increases assumes an implementation date of January 1, 2024. For each year thereafter, the assumption is that new rates will be implemented on January 1st of each year.

Selection of Financial Plan Alternative 1
Financial Plan Alternatives FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 1 Alternative 1 - Full Cost Recovery Rates10.00% 0.00% 25.00% 20.00% 12.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 Alternative 2 - Phased-in Rate Increases20.00% 0.00% 15.00% 15.00% 15.00% 15.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 3 Alternative 3 - Minimal Rate Increases30.00% 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% 4 No Rate Increases 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Alternative 1: Scenario 1 - Rates needed to meet all revenue requirements and meet the target reserve levels (Large increase followed by smaller increases).

2. Alternative 2: Scenario 2 - Large increases phased In over two years, followed by smaller increases (Reserves drop below target level).

3. Alternative 3: Scenario 3 - Smaller increases (Reserves drop below target level).

RATE REVENUE REQUIREMENTS SUMMARY
5-Year Projected Rate Period Projected
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www.nbsgov.com | Toll-Free: 800.676.7516 Financial Plan, 1 of 37 180 CITY OF AMERICAN CANYON Financial Plan & Reserve Summary

SEWER RATE STUDY
Financial Plan and Reserve Projections
TABLE 2 : EXCLUDED PLEDGE SUMMARY RESERVE FUND SUMMARY
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Total Beginning Cash1 $ 8,702,214
Unrestricted Reserves:

Operating Reserve
Beginning Reserve Balance $ 8,314,998 $ 7,733,712 $ 5,200,513 $ 1,677,226 $ 1,626,000 $ 1,805,087 $ 1,579,529 $ 1,797,000 $ 1,858,000 $ 1,922,000 $ 1,987,000 $ 2,055,000 Plus: Net Cash Flow (After Rate Increases) (2,344,574) (235,099) (3,157,298) 249,528 357,562 (90,890) 608,423 1,392,171 2,370,899 2,601,853 2,494,572 2,379,561 Plus: Transfer of Debt Reserve Surplus - - - - - - - - - - - - Plus: Interest Earnings 113,583 193,343 130,013 22,911 22,211 24,657 21,576 24,547 25,380 26,255 27,142 28,071 Less: Transfer out to Capacity Fee Reserve (Interfund Loan) - (159,325) (159,325) (159,325) (159,325) (159,325) (159,325) (159,325) (159,325) (159,325) (159,325) - Less: Transfer Out to Capital Replacement Reserve (4,629,007) (4,904,642) (336,678) (164,341) (41,362) - (253,205) (1,196,393) (2,172,955) (2,403,783) (2,294,390) (2,336,632) Ending Operating Reserve Balance $ 1,455,000 $ 2,627,989 $ 1,677,226 $ 1,626,000 $ 1,805,087 $ 1,579,529 $ 1,797,000 $ 1,858,000 $ 1,922,000 $ 1,987,000 $ 2,055,000 $ 2,126,000 Target Ending Balance (90 days of O&M) 2 $ 1,455,000 $ 526,000 $ 1,565,000 $ 1,626,000 $ 1,681,000 $ 2,353,000 $ 1,797,000 $ 1,858,000 $ 1,922,000 $ 1,987,000 $ 2,055,000 $ 2,126,000 Capital Rehabilitation & Replacement Reserve
Beginning Reserve Balance $ 387,216 $ 145,027 $ 546,284 $ 882,962 $ 1,047,302 $ 1,088,664 $ 1,088,664 $ 1,341,869 $ 2,527,393 $ 3,580,955 $ 4,447,200 $ 5,116,353 Plus: Grant Proceeds - - - - - - - - - - - -
Plus: Transfer of Operating Reserve Surplus 4,629,007 4,904,642 336,678 164,341 41,362 - 253,205 1,196,393 2,172,955 2,403,783 2,294,390 2,336,632 Less: Use of Reserves for Capital Projects - - - - - - - (10,869) (1,119,393) (1,537,538) (1,625,237) (1,715,751) Ending Capital Rehab & Replacement Reserve Balance $ 5,016,223 $ 5,049,669 $ 882,962 $ 1,047,302 $ 1,088,664 $ 1,088,664 $ 1,341,869 $ 2,527,393 $ 3,580,955 $ 4,447,200 $ 5,116,353 $ 5,737,234 Target Ending Balance (3% of Assets) 3 $ 759,000 $ 852,000 $ 936,000 $ 968,000 $ 1,060,000 $ 1,156,000 $ 1,255,000 $ 1,331,000 $ 1,408,000 $ 1,487,000 $ 1,569,000 $ 1,655,000 Ending Cash Balance - Excl. Restricted Reserves $ 6,471,223 $ 7,677,658 $ 2,560,188 $ 2,673,302 $ 2,893,751 $ 2,668,194 $ 3,138,869 $ 4,385,393 $ 5,502,955 $ 6,434,200 $ 7,171,353 $ 7,863,234 Min. Target Ending Cash Balance -Excl. Restricted Reserves $ 2,214,000 $ 1,378,000 $ 2,501,000 $ 2,594,000 $ 2,741,000 $ 3,509,000 $ 3,052,000 $ 3,189,000 $ 3,330,000 $ 3,474,000 $ 3,624,000 $ 3,781,000 Ending Surplus/(Deficit) Compared to Reserve Targets $ 4,257,223 $ 6,299,658 $ 59,188 $ 79,302 $ 152,751 $ (840,806) $ 86,869 $ 1,196,393 $ 2,172,955 $ 2,960,200 $ 3,547,353 $ 4,082,234 Days Cash on Hand 384 529 106 146 135 104 122 182 251 296 319 338 Annual Interest Earnings Rate 4 1.37% 2.50% 2.50% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37% 1.37%

1. Beginning cash balance for FY 2021/22 and FY 2022/23 provided by City staff. Source file: Cash Balances - Enterprise Funds.xlsx .

2. The Operating Reserve target is set equal to 3 months, or 90 days, of operating expenditures.

3. The Capital Rehabilitation & Replacement Reserve target is set to 3% of net assets. Source files: 8 - City of American Canyon Annual Report FYE 2021.pdf , page 51.

4. Historical interest earning rates are per the average annual yields for funds invested in LAIF (2017-2021). The source is the California State Treasurer's website: https://www.treasurer.ca.gov/pmia-laif/historical/annual.asp .

SUMMARY OF CASH ACTIVITY

SEWER FUND RESERVES
5-Year Projected Rate Period Projected
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SEWER RATE STUDY
Financial Plan Charts
CHART 1
$.0 Mil
$2.0 Mil
$4.0 Mil
$6.0 Mil
$8.0 Mil
$10.0 Mil
$12.0 Mil
2022 2023 2024 2025 2026 2027 2028
Annual Obligations
Fiscal Year Ending June 30
Sewer Revenue Requirements vs.

Revenue Under Existing and Increased Rates
Debt Service
Rate Funded Capital Expenses
Reserve Funded Capital Expenses
O&M Expenses
Revenues under Existing Rates
Revenues under Increased Rates
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Charts and Tables, 3 of 37182
CITY OF AMERICAN CANYON Charts & Tables

SEWER RATE STUDY
Financial Plan Charts
CHART 2
$.0 Mil
$1.0 Mil
$2.0 Mil
$3.0 Mil
$4.0 Mil
$5.0 Mil
$6.0 Mil
$7.0 Mil
$8.0 Mil
$9.0 Mil
$10.0 Mil
2022 2023 2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Ending Cash Balances vs.

Recommended Reserve Targets
Sewer Fund - Unrestricted Reserves
Ending Cash Balance Minimum Target Reserve Balance
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CITY OF AMERICAN CANYON Charts & Tables

SEWER RATE STUDY
Financial Plan Charts
CHART 3

25.00%

20.00%

12.00% 12.00%

0.00%
0%
5%
10%
15%
20%
25%
30%
2024 2025 2026 2027 2028
Fiscal Year Ending June 30
Projected Increases to Rate Revenue
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Charts and Tables, 5 of 37184
CITY OF AMERICAN CANYON Charts & Tables

SEWER RATE STUDY
Financial Plan Charts
CHART 4
$2.9 Mil
$1.1 Mil
$3.2 Mil
$3.3 Mil
$3.4 Mil
$2.6 Mil
$2.6 Mil
$2.7 Mil
$2.8 Mil
$2.9 Mil
$.0 Mil.
$.5 Mil.
$1.0 Mil.
$1.5 Mil.
$2.0 Mil.
$2.5 Mil.
$3.0 Mil.
$3.5 Mil.
$4.0 Mil.
$4.5 Mil.
$5.0 Mil.
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
City of American Canyon
Capital Improvement Projects
5-Year Project Rate Period
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Charts and Tables, 6 of 37185
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 3 : REVENUE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Rate Revenue
Sewer Service Charge 1 $ 4,824,937 $ 4,940,178 $ 5,042,690 $ 5,128,416 $ 5,215,599 $ 5,304,264 $ 5,394,436 $ 5,486,142 $ 5,573,920 $ 5,663,103 $ 5,753,713 $ 5,845,772 Other Revenue
Misc. Revenues - Other 1 17,936 89,761 8,593 8,739 8,888 9,039 9,192 9,349 9,498 9,650 9,805 9,961 Late Penalties / Interest 1 64,931 81,785 90,000 91,530 93,086 94,668 96,278 97,915 99,481 101,073 102,690 104,333 Interest Income See FP 28,277 166,693 120,000 - - - - - - - - - Capacity Fee Revenue
Capacity Fees 1 573,335 235,879 835,413 4,563,228 508,500 517,145 525,936 534,877 543,435 552,130 560,964 569,939 Interfund Transfer In (Loan Repayment) 8 - - - - 453,816 453,816 453,816 453,816 453,816 453,816 453,816 453,816 Interest Income See FP 26,256 157,984 136,186 198,000 - - - - - - - - TOTAL: REVENUE $ 5,535,672 $ 5,672,278 $ 6,232,882 $ 9,989,913 $ 6,279,888 $ 6,378,931 $ 6,479,658 $ 6,582,098 $ 6,680,150 $ 6,779,771 $ 6,880,987 $ 6,983,822 TABLE 4 : REVENUE SUMMARY
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Rate Revenue
Sewer Service Charge $ 4,824,937 $ 4,940,178 $ 5,042,690 $ 5,128,416 $ 5,215,599 $ 5,304,264 $ 5,394,436 $ 5,486,142 $ 5,573,920 $ 5,663,103 $ 5,753,713 $ 5,845,772 Other Revenue
Interest Income 28,277 166,693 120,000 - - - - - - - - - Other Revenue 82,867 171,545 98,593 100,269 101,974 103,707 105,470 107,263 108,979 110,723 112,495 114,295 Capacity Fee Revenue
Capacity Fees 573,335 235,879 835,413 4,563,228 508,500 517,145 525,936 534,877 543,435 552,130 560,964 569,939 Interfund Transfer In (Loan Repayment) - - - - 453,816 453,816 453,816 453,816 453,816 453,816 453,816 453,816 Interest Income 26,256 157,984 136,186 198,000 - - - - - - - - TOTAL: REVENUE $ 5,535,672 $ 5,672,278 $ 6,232,882 $ 9,989,913 $ 6,279,888 $ 6,378,931 $ 6,479,658 $ 6,582,098 $ 6,680,150 $ 6,779,771 $ 6,880,987 $ 6,983,822

DESCRIPTION
DESCRIPTION Basis
5-Year Projected Rate Period
5-Year Projected Rate Period
Basis Projected
Projected
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Exhibit 1 (O&M), 7 of 37 186
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 5 : OPERATING EXPENSE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Fund 540 - Wastewater Operations
570 - Wastewater Treatment Plant
Wages - Full time 3 $ 495,550 $ 554,877 $ 602,884 $ 633,028 $ 655,184 $ 678,115 $ 701,849 $ 726,414 $ 751,839 $ 778,153 $ 805,388 $ 833,577 Wages - Overtime 3 13,725 27,777 - - - - - - - - - -
Health Insurance 3 58,890 74,134 77,250 81,112 83,951 86,889 89,931 93,078 96,336 99,708 103,197 106,809 Health-In-Lieu 3 3,200 - 6,840 7,182 7,433 7,694 7,963 8,242 8,530 8,829 9,138 9,457 Cafeteria Plan Section 125 3 18,409 19,246 21,712 22,798 23,596 24,422 25,277 26,161 27,077 28,025 29,006 30,021 Social Security & Medicare 3 8,120 9,039 9,156 9,614 9,950 10,298 10,659 11,032 11,418 11,818 12,231 12,659 Worker Comp Insurance 3 32,204 29,763 39,875 41,869 43,334 44,851 46,421 48,045 49,727 51,467 53,269 55,133 Benefits - Other 3 - 280 1,135 1,192 1,233 1,276 1,321 1,367 1,415 1,465 1,516 1,569 Info Tech Support Services 2 7,478 5,486 73,500 75,705 77,976 80,315 82,725 85,207 87,763 90,396 93,108 95,901 Professional Services 2 34,840 52,991 187,138 192,752 198,535 204,491 210,625 216,944 223,453 230,156 237,061 244,173 Temp Agency Services 2 - 1,066 - - - - - - - - - -
Misc. Contractual Services 2 8,911 8,380 17,900 18,437 18,990 19,560 20,147 20,751 21,374 22,015 22,675 23,355 General Repairs & Maint 2 307,866 145,560 201,500 207,545 213,771 220,184 226,790 233,594 240,602 247,820 255,254 262,912 Postage/Mail/Copy/Printing Svc 2 759 254 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 Membership Dues & Subscription 2 21,708 1,315 12,700 13,081 13,473 13,878 14,294 14,723 15,164 15,619 16,088 16,571 Conferences - Training 2 3,357 1,440 14,500 14,935 15,383 15,845 16,320 16,809 17,314 17,833 18,368 18,919 Rentals - Equipment/Space 2 4,193 7,848 11,600 11,948 12,306 12,676 13,056 13,448 13,851 14,267 14,695 15,135 Office Supplies 2 4,298 4,668 4,000 4,120 4,244 4,371 4,502 4,637 4,776 4,919 5,067 5,219 Operating Supplies 2 52,947 65,278 56,000 57,680 59,410 61,193 63,028 64,919 66,867 68,873 70,939 73,067 WW Treatment Plant Membranes 2 - - - - - $2,458,636 - - - - - - Utilities - Gas & Elec 5 330,471 300,152 484,200 511,504 540,348 570,818 603,006 637,010 672,931 710,877 750,964 793,311 Util-PhonesPgrsInternetCable 5 16,694 18,326 19,000 20,071 21,203 22,399 23,662 24,996 26,406 27,895 29,468 31,129 Depreciation 2 1,561,144 1,746,613 - - - - - - - - - -
Major Equipment 2 19,460 - - - - - - - - - - -
Capital Outlay-Contra Account 2 (31,535) (4,906,869) - - - - - - - - - - PERS Retirement 3 103,159 109,251 110,247 115,760 119,811 124,005 128,345 132,837 137,486 142,298 147,279 152,433 Subtotal - Wastewater Treatment Plant $ 3,075,847 $ (1,723,127) $ 1,952,137 $ 2,041,362 $ 2,121,194 $ 4,663,008 $ 2,291,046 $ 2,381,374 $ 2,475,521 $ 2,573,662 $ 2,675,976 $ 2,782,656 DESCRIPTION Basis 5-Year Projected Rate Period Projected Prepared by NBS
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Exhibit 1 (O&M), 8 of 37 187
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 6 : OPERATING EXPENSE FORECAST1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 575 - Wastewater Collections
Wages - Full time 3 $ 268,022 $ 248,676 $ 411,834 $ 432,425 $ 447,560 $ 463,225 $ 479,438 $ 496,218 $ 513,586 $ 531,561 $ 550,166 $ 569,422 Wages - Overtime 3 7,125 1,721 5,000 5,250 5,434 5,624 5,821 6,024 6,235 6,454 6,679 6,913 Health Insurance 3 41,952 37,937 46,756 49,094 50,812 52,591 54,432 56,337 58,308 60,349 62,461 64,648 Health-In-Lieu 3 4,800 5,700 14,250 14,963 15,486 16,028 16,589 17,170 17,771 18,393 19,036 19,703 Cafeteria Plan Section 125 3 12,646 11,364 19,245 20,208 20,915 21,647 22,404 23,189 24,000 24,840 25,710 26,609 Social Security & Medicare 3 4,244 3,868 6,457 6,780 7,017 7,263 7,517 7,780 8,053 8,335 8,626 8,928 Worker Comp Insurance 3 30,604 32,837 36,753 38,591 39,941 41,339 42,786 44,283 45,833 47,438 49,098 50,816 Benefits - Other 3 1,319 1,471 1,918 2,014 2,084 2,157 2,233 2,311 2,392 2,475 2,562 2,652 Info Tech Support Services 2 302 702 94,600 97,438 100,361 103,372 106,473 109,667 112,957 116,346 119,836 123,432 Professional Services 2 - 4,425 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 26,095 Misc. Contractual Services 2 3,852 4,253 5,600 5,768 5,941 6,119 6,303 6,492 6,687 6,887 7,094 7,307 General Repairs & Maint 2 35,466 7,405 24,000 24,720 25,462 26,225 27,012 27,823 28,657 29,517 30,402 31,315 Membership Dues & Subscription 2 2,165 1,606 4,900 5,047 5,198 5,354 5,515 5,680 5,851 6,026 6,207 6,393 Conferences - Training 2 2,303 17,724 5,200 5,356 5,517 5,682 5,853 6,028 6,209 6,395 6,587 6,785 Rentals - Equipment/Space 2 - - 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Office Supplies 2 1,121 396 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 Operating Supplies 2 27,795 32,450 42,100 43,363 44,664 46,004 47,384 48,805 50,270 51,778 53,331 54,931 Util-PhonesPgrsInternetCable 5 1,498 1,833 1,500 1,585 1,674 1,768 1,868 1,973 2,085 2,202 2,326 2,458 Major Equipment 2 19,460 709,259 - - - - - - - - - -
PERS Retirement 3 44,845 57,704 75,748 79,535 82,319 85,200 88,182 91,268 94,463 97,769 101,191 104,733 Subtotal - Wastewater Collections $ 509,518 $ 1,181,331 $ 835,861 $ 873,335 $ 902,822 $ 933,308 $ 964,830 $ 997,421 $ 1,031,118 $ 1,065,960 $ 1,101,985 $ 1,139,234 DESCRIPTION Basis 5-Year Projected Rate Period Projected Prepared by NBS
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Exhibit 1 (O&M), 9 of 37 188
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 7 : OPERATING EXPENSE FORECAST, cont.1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 585 - Wastewater Environmental Compliance
Wages - Full time 3 $ 175,790 $ 144,748 $ 194,374 $ 204,093 $ 211,236 $ 218,630 $ 226,282 $ 234,202 $ 242,399 $ 250,883 $ 259,664 $ 268,752 Wages - Overtime 3 - 182 500 525 543 562 582 602 624 645 668 691 Health Insurance 3 16,273 23,843 23,378 24,547 25,406 26,296 27,216 28,168 29,154 30,175 31,231 32,324 Health-In-Lieu 3 3,200 - 2,280 2,394 2,478 2,565 2,654 2,747 2,843 2,943 3,046 3,152 Cafeteria Plan Section 125 3 6,651 6,232 8,828 9,270 9,594 9,930 10,277 10,637 11,009 11,395 11,794 12,206 Social Security & Medicare 3 2,685 2,190 2,980 3,128 3,238 3,351 3,469 3,590 3,716 3,846 3,980 4,120 Worker Comp Insurance 3 5,101 11,826 18,594 19,524 20,208 20,915 21,647 22,404 23,189 24,000 24,840 25,710 Benefits - Other 3 - 559 641 673 696 721 746 772 799 827 856 886 Info Tech Support Services 2 368 - 59,650 61,440 63,283 65,181 67,137 69,151 71,225 73,362 75,563 77,830 Professional Services 2 115,883 108,682 253,000 260,590 268,408 276,460 284,754 293,296 302,095 311,158 320,493 330,108 General Repairs & Maint 2 8,426 9,674 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 Postage/Mail/Copy.Printing Svc 2 103 6,182 13,000 13,390 13,792 14,205 14,632 15,071 15,523 15,988 16,468 16,962 Membership Dues & Subscription 2 822 11,770 12,600 12,978 13,367 13,768 14,181 14,607 15,045 15,496 15,961 16,440 Conferences - Training 2 275 7,531 21,800 22,454 23,128 23,821 24,536 25,272 26,030 26,811 27,616 28,444 Regulatory Compliance Permits 2 32,062 84,279 157,300 162,019 166,880 171,886 177,043 182,354 187,824 193,459 199,263 205,241 Operating Supplies 2 14,672 20,594 27,000 27,810 28,644 29,504 30,389 31,300 32,239 33,207 34,203 35,229 Major Equipment 2 - 9,918 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 Intra-fund Transfer Out Wastewater 2 - - - - - - - - - - - - PERS Retirement 3 31,779 41,525 25,730 27,016 27,962 28,941 29,953 31,002 32,087 33,210 34,372 35,575 Subtotal - Wastewater Environmental Compliance $ 414,090 $ 489,734 $ 856,655 $ 887,901 $ 915,994 $ 944,981 $ 974,890 $ 1,005,750 $ 1,037,594 $ 1,070,451 $ 1,104,354 $ 1,139,337 DESCRIPTION Basis 5-Year Projected Rate Period Projected Prepared by NBS
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Exhibit 1 (O&M), 10 of 37 189
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 8 : OPERATING EXPENSE FORECAST, cont.1
Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Fund 80 - Non Departmental
810 - Non Departmental
Wages - Full time 3 $ 113,357 $ 136,471 $ 128,293 $ 134,707 $ 139,422 $ 144,302 $ 149,352 $ 154,580 $ 159,990 $ 165,590 $ 171,385 $ 177,384 Wages - Overtime 3 954 178 - - - - - - - - - -
Allowances 3 1,811 1,920 1,920 2,016 2,087 2,160 2,235 2,313 2,394 2,478 2,565 2,655 Health Insurance 3 18,856 20,840 21,244 22,306 23,087 23,895 24,731 25,596 26,492 27,420 28,379 29,373 Cafeteria Plan Section 125 3 4,228 4,452 4,312 4,528 4,686 4,850 5,020 5,196 5,378 5,566 5,761 5,962 Social Security & Medicare 3 1,747 2,069 2,038 2,139 2,214 2,292 2,372 2,455 2,541 2,630 2,722 2,817 Worker Comp Insurance 3 7,901 7,096 9,825 10,316 10,677 11,051 11,438 11,838 12,252 12,681 13,125 13,584 OPEB 3 44,764 44,160 49,726 52,213 54,040 55,931 57,889 59,915 62,012 64,183 66,429 68,754 Pension Expense 3 (163,418) 47,287 - - - - - - - - - -
Benefits - Other 3 1,371 1,421 - - - - - - - - - -
Professional Services 2 - - 100,000 103,000 106,090 109,273 112,551 115,927 119,405 122,987 126,677 130,477 Temp Agency Services 2 - - 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 Bad Debt Expense 2 (13,591) 9,434 - - - - - - - - - -
Membership Dues & Subscription 2 197 457 1,400 1,442 1,485 1,530 1,576 1,623 1,672 1,722 1,773 1,827 Conferences - Training 2 30 - 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Office Supplies 2 - 625 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 Utilities - Water 5 11,868 14,702 14,000 14,789 15,623 16,504 17,435 18,418 19,457 20,554 21,713 22,938 Intra-fund Transfer Out Wastewater 2 605,656 281,641 290,090 298,793 307,757 316,989 326,499 336,294 346,383 356,774 367,478 378,502 Transfer to Gen Fnd Support Sv 2 763,512 985,309 1,123,854 1,157,570 1,192,297 1,228,066 1,264,908 1,302,855 1,341,940 1,382,199 1,423,665 1,466,375 Transfer To General Fund - Other 2 2,394 481 - - - - - - - - - - Trans to Other Funds 2 - 17,129 - - - - - - - - - -
Services - Other 2 20,296 812 - - - - - - - - - -
Retiree Health Benefits 3 60,317 60,646 78,433 82,355 85,238 88,221 91,309 94,504 97,812 101,235 104,779 108,446 PERS Retirement 3 17,037 18,820 16,257 17,070 17,667 18,286 18,926 19,588 20,274 20,983 21,717 22,478 ISF - Bldg Maint 2 59,800 176,525 262,206 270,072 278,174 286,520 295,115 303,969 313,088 322,480 332,155 342,119 ISF - Fleet 2 138,950 106,843 163,573 168,480 173,535 178,741 184,103 189,626 195,315 201,174 207,209 213,426 ISF - Info Tech 2 93,500 194,110 237,073 244,185 251,511 259,056 266,828 274,833 283,078 291,570 300,317 309,326 ISF - Legal Services 2 28,800 24,347 99,499 102,484 105,558 108,725 111,987 115,347 118,807 122,371 126,042 129,824 Subtotal - Non Departmental $ 1,820,335 $ 2,157,776 $ 2,615,743 $ 2,700,825 $ 2,783,879 $ 2,869,503 $ 2,957,779 $ 3,048,788 $ 3,142,618 $ 3,239,356 $ 3,339,093 $ 3,441,923 GRAND TOTAL: SEWER EXPENSES $ 5,819,790 $ 2,105,714 $ 6,260,396 $ 6,503,425 $ 6,723,889 $ 9,410,800 $ 7,188,544 $ 7,433,334 $ 7,686,851 $ 7,949,428 $ 8,221,408 $ 8,503,149 5-Year Projected Rate Period Projected DESCRIPTION Basis Prepared by NBS
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Exhibit 1 (O&M), 11 of 37 190
CITY OF AMERICAN CANYON Exhibit 1 - O&M

SEWER RATE STUDY
Operating Revenue and Expenses
TABLE 9 : FORECASTING ASSUMPTIONS
Basis FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Customer Growth41 -- 1.80% 1.80% 1.70% 1.70% 1.70% 1.70% 1.70% 1.60% 1.60% 1.60% 1.60% General Cost Inflation52 -- 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Labor Cost Inflation63 -- 3.50% 5.00% 5.00% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Energy74 -- 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% 7.44% Electricty85 -- 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% 5.64% Fuel & Utilities96 -- 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% 5.24% Construction Cost Inflation10 7 -- 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% No Escalation 8 -- 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Revenue and expenses for FY 2021/22 through FY 2023/24 provided by the City. Revenues and expenses for all other years are escalated based on the forecasting assumptions located in Table 9 above . Source files: Fund 540 Wastewater Operations Fund 510 - 580 FY 23-24 Budget Status as of 09-19-2023 , FY 22 Fund 550 Wastewater Cap Revenue Detail Trial Balance , FY 23 Fund 550 Wastewater Cap Revenue Detail Trial Balance, & REV EXP ACTUALS - FY22 and FY23_NBS

2. Expenses are inflated each year by the following annual inflation factor categories.

3. Customer growth is based on service area population growth through FY 2039/40. Source file: American Canyon 2015 UWMP.pdf , page 26.

4. General cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

5. Labor cost inflation is based on the 5-year average annual change in the Quarterly Census of Employment and Wages for San Francisco County, CA.

6. Energy cost inflation is based on the 5-year average annual change in the Consumer Price Index for all Urban Consumers in the San Francisco-Oakland-Hayward, CA area.

7. Electricity cost inflation is based on the 5-year average change in the Consumer Price Index for San Francisco County.

8. Fuel & Utilities cost inflation is based on the 5-year average annual change in the Consumer Price Index - Average Price Data for Fuels and related products and power. This factor is used for utility costs other than electricity.

9. Construction cost Inflation is the 10-year average change in the Construction Cost Index for 2012-2022. Source: Engineering News Record website (http://enr.construction.com ).

INFLATION FACTORS3
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Exhibit 1 (O&M), 12 of 37 191
CITY OF AMERICAN CANYON Exhibit 2 - CIP

SEWER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 10 : CAPITAL FUNDING SUMMARY
CAPITAL FUNDING FORECAST Actuals Actuals
FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Grants $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Use of Capacity Fee Reserves - - 291,480 897,942 2,070,444 3,278,183 1,177,570 1,181,673 1,187,638 1,194,792 1,202,725 1,211,189 SRF Loan Funding - - - - - - - - - - - -
Use of Future Revenue Bond Proceeds - - - - - - - - - - - - Use of Capital Rehabilitation and Replacement Reserve - - - - - - - 10,869 1,119,393 1,537,538 1,625,237 1,715,751 Rate Revenue 345,549 3,201,161 2,573,447 197,942 1,111,368 14,992 2,230,867 1,406,839 332,901 - - - Total Sources of Capital Funds $ 345,549 $ 3,201,161 $ 2,864,927 $ 1,095,884 $ 3,181,812 $ 3,293,175 $ 3,408,436 $ 2,599,381 $ 2,639,932 $ 2,732,330 $ 2,827,961 $ 2,926,940 Uses of Capital Funds:

Total Project Costs $ 345,549 $ 3,201,161 $ 2,864,927 $ 1,095,884 $ 3,181,812 $ 3,293,175 $ 3,408,436 $ 2,599,381 $ 2,639,932 $ 2,732,330 $ 2,827,961 $ 2,926,940 Capital Funding Surplus (Deficiency) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

CAPITAL IMPROVEMENT PROGRAM FUNDING OPTIONS
Capital Improvement Program Funding Choice 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Effective Annual Funding Amount $ 345,549 $ 3,201,161 $ 2,864,927 $ 1,095,884 $ 3,181,812 $ 3,293,175 $ 3,408,436 $ 2,599,381 $ 2,639,932 $ 2,732,330 $ 2,827,961 $ 2,926,940 TABLE 11 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Current-Year Dollars ) 1 Project Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects
2020 Annual Pavement Management Project $ 42,008 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - TR24-0300 ARPA Rancho Del Mar Paving and Utility Improvements - - 1,334,000 - - - - - - - - - WW16-0300 SCADA Improvements - 250,000 250,000 - - - - - - - - - WW20-0100 SS4 Broadway Sewer Rehabilitation (Crawford to Poco) - 375,000 1,000,000 250,000 - - - - - - - - WW22-0100 UV Disinfection - 500,000 - - - - - - - - - - WW22-0200 Blower Replacement - 500,000 - - - - - - - - - - WW21-0400 Sanitary Sewer Manhole Rehab - 100,000 - - - - - - - - - - UM20-0100 Engie Energy Services Contract 291,856 122,618 - - - - - - - - - - Master Plan Projects - Wastewater Collection System 2
SS1 Rio Del Mar Basin $ - $ - $ - $ 500,000 $ 500,000 $ 500,000 $ 500,000 $ - $ - $ - $ - $ - SS2 Napa Logistics and Green Island Pump Station - 1,140,700 - - - - - - - - - - SS3 Huntington Way (Rio Del Mar to W American Canyon Road) - - - - 458,000 458,000 458,000 458,000 458,000 458,000 458,000 458,000 SS5 Summerfield Project - - - - 37,000 37,000 37,000 37,000 - - - - SS6 Theresa Avenue and Los Altos Drive - - - 205,000 205,000 205,000 205,000 - - - - - SS7 Main Basin Pump Station - - - - 1,199,000 1,199,000 1,199,000 1,199,000 1,199,000 1,199,000 1,199,000 1,199,000 SS8 Broadway, Cartagena Way to Mobile Home Park Entrance - - - - 68,000 68,000 68,000 68,000 68,000 68,000 68,000 68,000 SS9 Elliott Drive south of Northampton - - - - 109,000 109,000 109,000 109,000 109,000 109,000 109,000 109,000 SS10 Broadway north of Rio Del Mar - - - - 103,000 103,000 103,000 103,000 103,000 103,000 103,000 103,000 Estimated Future Projects
Future Projects3 - - - - - -
Total: Capital Improvement Program Costs (Current-Year Dollars) $ 333,864 $ 2,988,318 $ 2,584,000 $ 955,000 $ 2,679,000 $ 2,679,000 $ 2,679,000 $ 1,974,000 $ 1,937,000 $ 1,937,000 $ 1,937,000 $ 1,937,000 5-Year Projected Rate Period Projected
Funding Sources:

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Exhibit 2 (CIP), 13 of 37 192
CITY OF AMERICAN CANYON Exhibit 2 - CIP

SEWER RATE STUDY
Capital Improvement Plan Expenditures
TABLE 12 : CAPITAL IMPROVEMENT PROGRAM COSTS (in Future-Year Dollars ) 4 Project Description FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Capital Projects
2020 Annual Pavement Management Project $ 43,478 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - TR24-0300 ARPA Rancho Del Mar Paving and Utility Improvements - - 1,479,030 - - - - - - - - - WW16-0300SCADA Improvements - 267,806 277,179 - - - - - - - - - WW20-0100SS4 Broadway Sewer Rehabilitation - 401,709 1,108,718 286,881 - - - - - - - - WW22-0100UV Disinfection - 535,613 - - - - - - - - - -
WW22-0200Blower Replacement - 535,613 - - - - - - - - - - WW21-0400Sanitary Sewer Manhole Rehab - 107,123 - - - - - - - - - - UM20-0100 Engie Energy Services Contract 302,071 131,351 - - - - - - - - - - Master Plan Projects - Wastewater Collection System 2
SS1 Rio Del Mar Basin $ - $ - $ - $ 573,762 $ 593,843 $ 614,628 $ 636,140 $ - $ - $ - $ - $ - SS2 Napa Logistics and Green Island Pump Station - 1,221,946 - - - - - - - - - - SS3 Huntington Way - - - - 543,960 562,999 582,704 603,099 624,207 646,054 668,666 692,069 SS5 Summerfield Project - - - - 43,944 45,482 47,074 48,722 - - - - SS6 Theresa Avenue and Los Altos Drive - - - 235,242 243,476 251,997 260,817 - - - - - SS7 Main Basin Pump Station - - - - 1,424,036 1,473,877 1,525,463 1,578,854 1,634,114 1,691,308 1,750,504 1,811,771 SS8 Broadway, Cartagena Way to Mobile Home Park Entrance - - - - 80,763 83,589 86,515 89,543 92,677 95,921 99,278 102,753 SS9 Elliott Drive south of Northampton - - - - 129,458 133,989 138,678 143,532 148,556 153,755 159,137 164,706 SS10 Broadway north of Rio Del Mar - - - - 122,332 126,613 131,045 135,631 140,378 145,292 150,377 155,640 Estimated Future Projects
Future Projects3 - - - - - - - - - - - -
Total: Capital Improvement Program Costs (Future-Year Dollars) $ 345,549 $ 3,201,161 $ 2,864,927 $ 1,095,884 $ 3,181,812 $ 3,293,175 $ 3,408,436 $ 2,599,381 $ 2,639,932 $ 2,732,330 $ 2,827,961 $ 2,926,940 TABLE 13 : FORECASTING ASSUMPTIONS
Economic Variables FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33

3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Cumulative Construction Cost Multiplier from FY 2021/22 1.04 1.07 1.11 1.15 1.19 1.23 1.27 1.32 1.36 1.41 1.46 1.51

1. Capital project costs were provided by City staff. Source files: 11. CIP Budget vs Expense Report FY 2021-2022 through Oct 2021.pdf & Wastewater FY 2023-2027.xlsx .

2. The City's Wastewater Collection System Master Plan projects were scheduled to begin in 2016; however, the study only includes costs from FY 2021/22 through FY 2034/35. Source file: 2016 Sewer Master Plan.pdf , page 52.

3. Future project costs beyond FY 2034/35 are calculated based on the City's 10-year average.

4. Capital improvement projects are inflated to future year estimated costs with ENR CCI for the region. Source: Engineering News Record website (http://enr.construction.com ).

5. For reference purposes, the annual Construction Cost Inflation percentage is the 10-year average change in the Construction Cost Index for September 2012-2022 (3.50%). Source: Engineering News Record website (http://enr.construction.com).

Annual Construction Cost Inflation, Per Engineering News Record5 Prepared by NBS
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Exhibit 2 (CIP), 14 of 37 193
CITY OF AMERICAN CANYON Exhibit 3 - Debt

SEWER RATE STUDY
Debt Service
TABLE 14 : SEWER UTILITY EXISTING DEBT OBLIGATIONS
EXISTING DEBT OBLIGATIONS Actuals Actuals
Annual Repayment Schedules: FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 City National Bank - Loan Amount $2,004,2001
Principal Payment $ 155,243 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest Payment 1,979 - - - - - - - - - - -
Subtotal: Annual Debt Service $ 157,222 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Coverage Requirement ($-Amnt above annual payment)2 $ 180,805 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement (total fund balance)2$ 157,222 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SWRCB: Project No. C-06-4666-110 & Agreement No. 99819-550-03 Principal Payment $ 722,377 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Interest Payment - - - - - - - - - - - -
Other Charges 19,504 - - - - - - - - - - -
Subtotal: Annual Debt Service $ 741,881 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Coverage Requirement ($-Amnt above annual payment) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement (total fund balance) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Bank of America Public Capital Corp Agreement (ENGIE) - Loan Amount $5,209,2094 Principal Payment $ 161,088 $ 154,345 $ 165,634 $ 177,478 $ 180,996 $ 199,515 $ 213,287 $ 189,719 $ 202,626 $ 216,158 $ 228,580 $ 241,999 Interest Payment 55,123 52,295 49,440 46,378 43,173 39,781 36,097 32,472 28,971 25,233 21,262 17,061 Subtotal: Annual Debt Service $ 216,211 $ 206,640 $ 215,074 $ 223,856 $ 224,168 $ 239,297 $ 249,385 $ 222,191 $ 231,597 $ 241,391 $ 249,843 $ 259,060 Coverage Requirement ($-Amnt above annual payment) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reserve Requirement (total fund balance) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Grand Total: Existing Annual Debt Service $ 1,115,315 $ 206,640 $ 215,074 $ 223,856 $ 224,168 $ 239,297 $ 249,385 $ 222,191 $ 231,597 $ 241,391 $ 249,843 $ 259,060 Grand Total: Existing Annual Coverage Requirement $ 180,805 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Grand Total: Existing Debt Reserve Target $ 157,222 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 5-Year Projected Rate Period Projected
Prepared by NBS
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Exhibit 3 (Debt), 15 of 37 194
CITY OF AMERICAN CANYON Exhibit 3 - Debt

SEWER RATE STUDY
Debt Service
TABLE 15 : SEWER UTILITY EXISTING DEBT OBLIGATIONS, cont.

EXISTING DEBT OBLIGATIONS Actuals Actuals
Annual Repayment Schedules: FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 Interfund Loans (For information only )
Wastewater Capacity to Wastewater Fund
Advance from WW Capacity 550 to Wastewater Operations 540 Original Loan Amount (December 1, 2008) $ 1,285,000
Interest (for budget purposes only) 146,147
Annual Debt Service5 $159,325 $159,325 $159,325 $159,325 $159,325 $159,325 $159,325 $159,325 $159,325 $159,325 $ - Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (March 11, 2011) $ 1,070,000
Interest (for budget purposes only) 205,869
Annual Debt Service6 $ - $ - $ - $99,295 $99,295 $99,295 $99,295 $99,295 $99,295 $99,295 $99,295 Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (December 15, 2009) $ 304,614
Interest (for budget purposes only) 58,577
Annual Debt Service7 $ - $ - $ - $ 28,266 $ 28,266 $ 28,266 $ 28,266 $ 28,266 $ 28,266 $ 28,266 $ 28,266 Wastewater Capacity to Recycled Water Fund
Advance from WW Capacity 550 to Recycled Water Operations 580 Original Loan Amount (December 15, 2009) $ 3,532,410
Interest (for budget purposes only) 659,727
Annual Debt Service8 $ - $ - $ - $ 326,255 $ 326,255 $ 326,255 $ 326,255 $ 326,255 $ 326,255 $ 326,255 $ 326,255

1. Loan originally issued between Municipal Finance Corporation, City National Bank, and the City of American Canyon. Source files: 5 - Debt Service Schedules.xlsx & 6 - Wastewater Membrane Agreement.pdf .

2. Coverage and reserve requirements were provided by the City. Source files: 6 - Wastewater Membrane Agreement.pdf , pages 9 & 12.

3. State Revolving Fund Loan issued in September 1999 in that amount of $10,859,470. Source file: 6 - SWRCB Agreement 99-819-550-0 4666-110 Executed Amendment #2_11-12-14.pdf .

4. Equipment lease/purchase loan issued by Bank of America for equipment upgrades, replacements and installation to provide energy savings for the City. Sewer utility portion is 59.43%, or $3,095,832.91 (Principal).

Source file: 6 - ENGIE Closing Documents.pdf .

5. Funds advanced for capital projects. Repayment scheduled to begin FY 2022/23.

6. Funds advanced for Green Island Recycled Waterline Project. Repayment scheduled to begin FY 2025/26.

7. Funds advance for Recycled Water Pump Station Upgrade. Repayment scheduled to begin FY 2025/26.

8. Funds advanced for various CIP projects. Repayment scheduled to begin FY 2025/26.

TABLE 16 : EXISTING ANNUAL DEBT OBLIGATIONS TO BE SATISFIED BY SEWER RATES Annual Obligations 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Existing Annual Debt Service $ 1,115,315 $ 206,640 $ 215,074 $ 223,856 $ 224,168 $ 239,297 $ 249,385 $ 222,191 $ 231,597 $ 241,391 $ 249,843 $ 259,060 Existing Annual Coverage Requirement $ 180,805 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Existing Debt Reserve Target $ 157,222 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 5-Year Projected Rate Period Projected
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Exhibit 3 (Debt), 16 of 37 195
CITY OF AMERICAN CANYON Exhibit 4 - Current Rates

SEWER RATE STUDY
Projected Sewer Rates Under Existing Rate Schedule
TABLE 17 : CURRENT SEWER RATE SCHEDULE
Single-Family Residential - Monthly Fixed Service Charges Low Winter Water Use 4 units or less $56.79
Average Winter Water Use (Standard) 4.1 – 13 units $60.48 High Winter Water Use 13.01 units and above $62.65
All Other Monthly Fixed Service Charges
Multi-Family Residential Per Dwelling Unit $45.36
Commercial Whichever is greater $60.48 or $5.40 per unit

1. Sewer rates are set according to the average monthly water use for January to March of the previous calendar year. New customers are charged at the average winter use rate (standard) and adjusted the following year, if applicable.

Sewer Rate Schedule1 Current Rates
Jan. 1, 2023
Description
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www.nbsgov.com | Toll-Free: 800.676.7516 Exhibit 4 (Current Rates), 17 of 37196 CITY OF AMERICAN CANYON Functionalization & Classification

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 18 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fund 540 - Wastewater Operations
570 - Wastewater Treatment Plant
Wages - Full time $ 602,884 $ 307,471 $ 132,634 $ 132,634 $ 30,144 51% 22% 22% 5% Health Insurance 77,250 39,397 16,995 16,995 3,862 51% 22% 22% 5% Health-In-Lieu 6,840 3,488 1,505 1,505 342 51% 22% 22% 5% Cafeteria Plan Section 125 21,712 11,073 4,777 4,777 1,086 51% 22% 22% 5% Social Security & Medicare 9,156 4,669 2,014 2,014 458 51% 22% 22% 5% Worker Comp Insurance 39,875 20,336 8,772 8,772 1,994 51% 22% 22% 5% Benefits - Other 1,135 579 250 250 57 51% 22% 22% 5%
Info Tech Support Services 73,500 37,485 16,170 16,170 3,675 51% 22% 22% 5% Professional Services 187,138 95,440 41,170 41,170 9,357 51% 22% 22% 5% Misc. Contractual Services 17,900 9,129 3,938 3,938 895 51% 22% 22% 5% General Repairs & Maint 201,500 102,765 44,330 44,330 10,075 51% 22% 22% 5% Postage/Mail/Copy/Printing Svc 1,000 510 220 220 50 51% 22% 22% 5% Membership Dues & Subscription 12,700 6,477 2,794 2,794 635 51% 22% 22% 5% Conferences - Training 14,500 7,395 3,190 3,190 725 51% 22% 22% 5% Rentals - Equipment/Space 11,600 5,916 2,552 2,552 580 51% 22% 22% 5% Office Supplies 4,000 2,040 880 880 200 51% 22% 22% 5%
Operating Supplies 56,000 28,560 12,320 12,320 2,800 51% 22% 22% 5% WW Treatment Plant Membranes - - - - - 51% 22% 22% 5%
Utilities - Gas & Elec 484,200 246,942 106,524 106,524 24,210 51% 22% 22% 5% Util-PhonesPgrsInternetCable 19,000 9,690 4,180 4,180 950 51% 22% 22% 5% PERS Retirement 110,247 56,226 24,254 24,254 5,512 51% 22% 22% 5% Subtotal - Wastewater Treatment Plant $ 1,952,137 $ 995,590 $ 429,470 $ 429,470 $ 97,607 51% 22% 22% 5% Strength Customer Basis of Classification Budget Categories Total Revenue
Requirements
Flow
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Funct. & Classification, 18 of 37197
CITY OF AMERICAN CANYON Functionalization & Classification

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 19 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fund 540 - Wastewater Operations
575 - Wastewater Collections
Wages - Full time $ 411,834 $ 411,834 $ - $ - $ - 100% 0% 0% 0% Wages - Overtime 5,000 5,000 - - - 100% 0% 0% 0%
Health Insurance 46,756 46,756 - - - 100% 0% 0% 0%
Health-In-Lieu 14,250 14,250 - - - 100% 0% 0% 0%
Cafeteria Plan Section 125 19,245 19,245 - - - 100% 0% 0% 0% Social Security & Medicare 6,457 6,457 - - - 100% 0% 0% 0% Worker Comp Insurance 36,753 36,753 - - - 100% 0% 0% 0% Benefits - Other 1,918 1,918 - - - 100% 0% 0% 0%
Info Tech Support Services 94,600 94,600 - - - 100% 0% 0% 0% Professional Services 20,000 20,000 - - - 100% 0% 0% 0% Misc. Contractual Services 5,600 5,600 - - - 100% 0% 0% 0% General Repairs & Maint 24,000 24,000 - - - 100% 0% 0% 0% Membership Dues & Subscription 4,900 4,900 - - - 100% 0% 0% 0% Conferences - Training 5,200 5,200 - - - 100% 0% 0% 0%
Rentals - Equipment/Space 5,000 5,000 - - - 100% 0% 0% 0% Office Supplies 15,000 15,000 - - - 100% 0% 0% 0%
Operating Supplies 42,100 42,100 - - - 100% 0% 0% 0%
Util-PhonesPgrsInternetCable 1,500 1,500 - - - 100% 0% 0% 0% PERS Retirement 75,748 75,748 - - - 100% 0% 0% 0%
Subtotal - Wastewater Collections $ 835,861 $ 835,861 $ - $ - $ - 100% 0% 0% 0% Strength Customer Basis of Classification Budget Categories Total Revenue
Requirements
Flow
Prepared by NBS
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Funct. & Classification, 19 of 37198
CITY OF AMERICAN CANYON Functionalization & Classification

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 20 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fund 540 - Wastewater Operations
585 - Wastewater Environmental Compliance
Wages - Full time $ 194,374 $ 99,131 $ 42,762 $ 42,762 $ 9,719 51% 22% 22% 5% Wages - Overtime 500 255 110 110 25 51% 22% 22% 5%
Health Insurance 23,378 11,923 5,143 5,143 1,169 51% 22% 22% 5% Health-In-Lieu 2,280 1,163 502 502 114 51% 22% 22% 5%
Cafeteria Plan Section 125 8,828 4,502 1,942 1,942 441 51% 22% 22% 5% Social Security & Medicare 2,980 1,520 655 655 149 51% 22% 22% 5% Worker Comp Insurance 18,594 9,483 4,091 4,091 930 51% 22% 22% 5% Benefits - Other 641 327 141 141 32 51% 22% 22% 5%
Info Tech Support Services 59,650 30,422 13,123 13,123 2,983 51% 22% 22% 5% Professional Services 253,000 129,030 55,660 55,660 12,650 51% 22% 22% 5% General Repairs & Maint 10,000 5,100 2,200 2,200 500 51% 22% 22% 5% Postage/Mail/Copy.Printing Svc 13,000 6,630 2,860 2,860 650 51% 22% 22% 5% Membership Dues & Subscription 12,600 6,426 2,772 2,772 630 51% 22% 22% 5% Conferences - Training 21,800 11,118 4,796 4,796 1,090 51% 22% 22% 5% Regulatory Compliance Permits 157,300 80,223 34,606 34,606 7,865 51% 22% 22% 5% Operating Supplies 27,000 13,770 5,940 5,940 1,350 51% 22% 22% 5% Major Equipment 25,000 12,750 5,500 5,500 1,250 51% 22% 22% 5% PERS Retirement 25,730 13,122 5,661 5,661 1,286 51% 22% 22% 5% Subtotal - Wastewater Environmental Compliance $ 856,655 $ 436,894 $ 188,464 $ 188,464 $ 42,833 51% 22% 22% 5% Budget Categories
Total Revenue
Requirements
Flow Strength Customer Basis of Classification
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Funct. & Classification, 20 of 37199
CITY OF AMERICAN CANYON Functionalization & Classification

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 21 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses
FY 2023/24 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fund 80 - Non Departmental
810 - Non Departmental
Wages - Full time $ 128,293 $ 65,429 $ 28,224 $ 28,224 $ 6,415 51% 22% 22% 5% Allowances 1,920 979 422 422 96 51% 22% 22% 5%
Health Insurance 21,244 10,834 4,674 4,674 1,062 51% 22% 22% 5% Cafeteria Plan Section 125 4,312 2,199 949 949 216 51% 22% 22% 5% Social Security & Medicare 2,038 1,039 448 448 102 51% 22% 22% 5% Worker Comp Insurance 9,825 5,011 2,161 2,161 491 51% 22% 22% 5% OPEB 49,726 25,360 10,940 10,940 2,486 51% 22% 22% 5%
Professional Services 100,000 51,000 22,000 22,000 5,000 51% 22% 22% 5% Temp Agency Services 6,000 3,060 1,320 1,320 300 51% 22% 22% 5% Membership Dues & Subscription 1,400 714 308 308 70 51% 22% 22% 5% Conferences - Training 5,000 2,550 1,100 1,100 250 51% 22% 22% 5% Office Supplies 1,000 510 220 220 50 51% 22% 22% 5%
Utilities - Water 14,000 7,140 3,080 3,080 700 51% 22% 22% 5% Intra-fund Transfer Out Wastewater 290,090 147,946 63,820 63,820 14,505 51% 22% 22% 5% Transfer to Gen Fnd Support Sv 1,123,854 573,166 247,248 247,248 56,193 51% 22% 22% 5% Retiree Health Benefits 78,433 40,001 17,255 17,255 3,922 51% 22% 22% 5% PERS Retirement 16,257 8,291 3,577 3,577 813 51% 22% 22% 5% ISF - Bldg Maint 262,206 133,725 57,685 57,685 13,110 51% 22% 22% 5% ISF - Fleet 163,573 83,422 35,986 35,986 8,179 51% 22% 22% 5% ISF - Info Tech 237,073 120,907 52,156 52,156 11,854 51% 22% 22% 5% ISF - Legal Services 99,499 50,744 21,890 21,890 4,975 51% 22% 22% 5% Subtotal - Non Department $ 2,615,743 $ 1,334,029 $ 575,463 $ 575,463 $ 130,787 51% 22% 22% 5% Total: Sewer Operations Expenses $ 6,260,396 $ 3,602,374 $ 1,193,398 $ 1,193,398 $ 271,227 58% 19% 19% 4% Strength Customer Basis of Classification Budget Categories Total Revenue
Requirements
Flow
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Funct. & Classification, 21 of 37200
CITY OF AMERICAN CANYON Functionalization & Classification

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 22 : CLASSIFICATION OF EXPENSES FOR COST OF SERVICE ANALYSIS Classification of Expenses, cont.

FY 2023/24 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Debt Service Payments
Outstanding Debt 215,074 107,537 53,768 53,768 - 50% 25% 25% 0% New Debt Issue - SRF Loan - - - - - 50% 25% 25% 0%
New Debt Issue - Revenue Bond - - - - - 50% 25% 25% 0%
Total Debt Service Payments $ 215,074 $ 107,537 $ 53,768 $ 53,768 $ - 50% 25% 25% 0% Capital Expenditures
Rate Funded Capital Expenses $ 2,573,447 $ 1,286,724 $ 643,362 $ 643,362 $ - 50% 25% 25% 0% TOTAL REVENUE REQUIREMENTS $ 9,048,917 $ 4,996,634 $ 1,890,528 $ 1,890,528 $ 271,227 55% 21% 21% 3% Less: Non-Rate Revenues
Rate Revenue
Interest Income $ (120,000) $ (61,200) $ (26,400) $ (26,400) $ (6,000) 51% 22% 22% 5% Other Revenue (98,593) (50,282) (21,690) (21,690) (4,930) 51% 22% 22% 5% NET REVENUE REQUIREMENTS $ 8,830,324 $ 4,885,152 $ 1,842,438 $ 1,842,438 $ 260,297 Allocation of Revenue Requirements 100.0% 55.3% 20.9% 20.9% 2.9% TABLE 23 : ADJUSTMENT TO CLASSIFICATION OF EXPENSES FOR COST-OF-SERVICE ANALYSIS Adjustment to Current Rate Level: Total (VOL) (BOD) (TSS) (CA) FY 2023/24 Target Rate Rev. After Rate Increases $ 6,303,363 Projected Rate Revenue at Current Rates $ 5,042,690
FY 2023/24 Projected Rate Increase 25%
Adjusted Net Revenue Req'ts $ 6,303,363 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 Percent of Revenue 55.3% 20.9% 20.9% 2.9%
TABLE 24 : NET REVENUE REQUIREMENTS PER COSA RESULTS - PROPOSED ALTERNATIVE Net Revenue Requirements (PROPOSED ALTERNATIVE - 45% Fixed / 55% Variable) Rate-Design Adjustments to Percentages 100.0% 55.3% 20.9% 20.9% 2.9% Rate-Design Adjustments to Dollars $ 6,303,363 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 TABLE 25 : ADJUSTMENT TO COST OF SERVICE RATES 71.38%
Ratio of Targeted Rate Revenue to Net Revenue Requirements Total (VOL) (BOD) (TSS) (CA) Actual Total Fixed Costs $ 2,788,521 $ 1,394,261 $ 697,130 $ 697,130 $ - Adjusted Total Fixed Costs $ 1,990,534 $ 995,267 $ 497,633 $ 497,633 $ - Total Operating Costs $ 6,260,396 $ 3,602,374 $ 1,193,398 $ 1,193,398 $ 271,227 Less: Non Rate Revenue $ (218,593) $ (111,482) $ (48,090) $ (48,090) $ (10,930) Actual Net Operating Costs $ 6,041,803 $ 3,490,891 $ 1,145,307 $ 1,145,307 $ 260,297 Adjusted Net Operating Costs $ 4,312,829 $ 2,491,908 $ 817,556 $ 817,556 $ 185,808 Actual Net Revenue Requirements $ 8,830,324 $ 4,885,152 $ 1,842,438 $ 1,842,438 $ 260,297 Adjusted Net Revenue Requirements $ 6,303,363 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 Flow Strength Customer Basis of Classification Budget Categories Total Revenue
Requirements
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Funct. & Classification, 22 of 37201
CITY OF AMERICAN CANYON Allocation Factors

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 26 : DEVELOPMENT OF THE FLOW ALLOCATION FACTOR
Customer Class1
Number of
Dwelling Units
/ Accounts2
Consumption
(hcf/year)
Winter
Consumption
(Jan-Mar. '22)
Annualized
Winter
Consumptio
n (hcf)
Adjusted
Winter
Volume
(gallons)3
Flow
MGD
BOD
mg/l
TSS
mg/l
BOD
lbs/day
TSS
lbs/day
Flow
MG
BOD
mg/l4
BOD
lbs
% of
Total
BOD
TSS
mg/l4
TSS
lbs
% of
Total
TSS
Residential Customers
Single Family Residential 4,710 507,339 117,749 470,996 352,328,558 0.97 175 175 1,409 1,409 352 n/a 514,224 69.4% n/a 514,224 69.8% Multi-Family Residential 1,265 89,630 20,169 80,676 60,349,682 0.17 175 175 241 241 60 n/a 88,080 11.9% n/a 88,080 12.0% All Other Customers
Commercial 177 318,808 65,311 261,244 195,423,574 0.13 300 300 335 335 49 n/a 122,237 16.5% n/a 122,237 16.6% Industrial5
Hess Collection Winery n/a n/a n/a n/a n/a 0.01 50 30 4 2 3.64 8.6 260 0.0% 2.3 70 0.0% AmCan Beverage (Coca-Cola) n/a n/a n/a n/a n/a 0.13 200 220 209 229 45.63 23.1 8,782 1.2% 5.3 1,998 0.3% Mezzetta Processing Facility n/a n/a n/a n/a n/a 0.04 150 220 51 74 14.82 61.7 7,631 1.0% 81.2 10,035 1.4% Total: 6,152 915,777 203,229 812,916 608,101,814 1.44 2,248 2,291 526 741,214 100.0% 736,644 100.0%

1. Customer data provided by the City for FY 2021/22. Source file: FY 2021-22 Summary by Rate Code - Detailed v2.xlsx .

2. SFR, MFR, and Industrial customers are based on the number of dwelling units and all other customers are based on the number of accounts.

3. Annual consumption for all customer classes based on average winter water consumption.

4. Annual volume and strength factors provided by the City. Source file: SIU 2 year data.xlsx .

5. Flow for industrial customer is based on wastewater flow. Strength factors are based on input from City staff and lower than expected due to customers' pretreatment process. Source file: INF-001 & SIU Flow.xlsx .

TABLE 27 : DEVELOPMENT OF THE CUSTOMER ALLOCATION FACTOR Customer Class
Number of
Dwelling Units
/ Accounts1
Percent
of Total
Residential Customers
Single Family Residential 4,710 76.5%
Multi-Family Residential 1,265 20.6%
All Other Customers
Commercial 177 2.9%
Industrial1
Hess Collection Winery 1 0.0%
AmCan Beverage (Coca-Cola) 1 0.0%
Mezzetta Processing Facility 1 0.0%
Total: 6,155 100.0%

1. SFR, MFR, and Industrial customers are based on the number of dwelling units and all other customers are based on the number of accounts.

TABLE 28 : ESTIMATED FLOW PER DWELLING UNIT
Customer Class
Est. Annual
Wastewater
Flow (hcf)
Est.

Flow/DU/
Day (gallons)
Percent
of Total
Residential Customers
Single Family Residential 470,996 205 --
Multi-Family Residential 80,676 131 63.78%
Design Capacity Total Annual Volume
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Allocation Factors, 23 of 37 202
CITY OF AMERICAN CANYON COSA - Sewer Rates

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 29 : ALLOCATION OF SEWER REVENUE REQUIREMENTS Total (FLOW) (BOD) (TSS) (CA) Total Fixed Costs $ 1,990,534 $ 995,267 $ 497,633 $ 497,633 $ - Net Operating Costs $ 4,312,829 $ 2,491,908 $ 817,556 $ 817,556 $ 185,808 Net Revenue Requirements $ 6,303,363 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 Capacity Charges to recover Fixed Costs Flow ($/MGD) BOD ($/lbs/day) TSS ($/lbs/day) Fixed Costs $ 995,267 $ 497,633 $ 497,633
Design Capacity 1.44 2,248 2,291
$ 691,132.43 $ 221.32 $ 217.18
User Charges Flow ($/MG) BOD ($/lb) TSS ($/lb)
Net operating Costs $ 2,491,908 $ 817,556 $ 817,556
Annual Volumes 526 741,214 736,644
$ 4,740.90 $ 1.10 $ 1.11
Acct. Charge ($/yr)
Customer Costs $ 185,808
Number of Accounts 6,155
$ 30.19
TABLE 30 : ALLOCATION OF SEWER REVENUE REQUIREMENTS
Development of Allocation Factors
Customer Class Total Volume BOD TSS Customer
Residential Customers
Single Family Residential $ 1,284,903 $ 667,139 $ 311,800 $ 305,964 $ - Multi-Family Residential 220,089 114,273 53,408 52,408 - All Other Customers
Commercial $ 239,360 $ 92,509 $ 74,119 $ 72,731 $ -
Industrial
Hess Collection Winery $ 8,355 $ 6,892 $ 920 $ 542 $ -
AmCan Beverage (Coca-Cola) 182,346 86,392 46,145 49,809 - Mezzetta Processing Facility 55,483 28,062 11,242 16,179 - Total: $ 1,990,534 $ 995,267 $ 497,633 $ 497,633 $ -
TABLE 31 : ALLOCATION OF SEWER REVENUE REQUIREMENTS
Development of Allocation Factors
Customer Class Total Volume BOD TSS Customer
Residential Customers
Single Family Residential $ 2,808,246 $ 1,670,355 $ 567,186 $ 570,705 $ - Multi-Family Residential 481,019 286,112 97,152 97,755 - All Other Customers
Commercial $ 502,112 $ 231,621 $ 134,827 $ 135,664 $ -
Industrial
Hess Collection Winery $ 17,621 $ 17,257 $ 286 $ 78 $ - AmCan Beverage (Coca-Cola) 228,207 216,304 9,687 2,217 - Mezzetta Processing Facility 89,814 70,260 8,417 11,137 - Total: $ 4,127,020 $ 2,491,908 $ 817,556 $ 817,556 $ -
Net Revenue Requirements - Design Capacity
Net Revenue Requirements - Operating Costs
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COSA - Sewer Rates, 24 of 37203
CITY OF AMERICAN CANYON COSA - Sewer Rates

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 32 : ALLOCATION OF SEWER REVENUE REQUIREMENTS
Development of Allocation Factors
Customer Class Total Volume BOD TSS Customer
Residential Customers
Single Family Residential $ 142,186 $ - $ - $ - $ 142,186 Multi-Family Residential 38,188 - - - 38,188
All Other Customers
Commercial $ 5,343 $ - $ - $ - $ 5,343
Industrial
Hess Collection Winery $ 30 $ - $ - $ - $ 30
AmCan Beverage (Coca-Cola) 30 - - - 30
Mezzetta Processing Facility 30 - - - 30
Total: $ 185,808 $ - $ - $ - $ 185,808
Grand Total: $ 6,303,363 $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 TABLE 33 : ALLOCATION OF NET REVENUE REQUIREMENTS TO CUSTOMER CLASSES - PROPOSED ALTERNATIVE Volume BOD TSS Customer
Net Revenue Requirements 1
$ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 $ 6,303,363 --

55.3% 20.9% 20.9% 2.9% 100.0%
Residential Customers
Single Family Residential $ 2,337,493 $ 878,986 $ 876,669 $ 142,186 $ 4,235,335 67.2% Multi-Family Residential 400,385 150,560 150,163 38,188 739,296 11.7% All Other Customers
Commercial $ 324,130 $ 208,946 $ 208,395 $ 5,343 $ 746,815 11.8% Industrial
Hess Collection Winery $ 24,149 $ 1,207 $ 620 $ 30 $ 26,006 0.4% AmCan Beverage (Coca-Cola) 302,695 55,832 52,026 30 410,583 6.5% Mezzetta Processing Facility 98,322 19,659 27,316 30 145,327 2.3% Total: $ 3,487,175 $ 1,315,190 $ 1,315,190 $ 185,808 $ 6,303,363 100%

1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost classification by the allocation factors for each customer class.

TABLE 34 : CALCULATION OF PROPOSED SEWER RATES FOR RESIDENTIAL CUSTOMERS Customer Class No. of Dwelling
Units
Annual Revenue
Requirement
Monthly Fixed
Charge Per
Dwelling Unit
Residential Customers
Single Family Residential 4,710 $ 4,235,335 $74.94
Multi-Family Residential 1,265 739,296 $48.70
Subtotal: Residential 5,975 $ 4,974,631
% of COS
Net Revenue
Reqts.

Net Revenue Requirements - Customer Costs
Customer Class
Cost Classification Components Cost-of-Service
Net Revenue
Reqts.

Prepared by NBS
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COSA - Sewer Rates, 25 of 37204
CITY OF AMERICAN CANYON COSA - Sewer Rates

SEWER RATE STUDY
Cost-of-Service Analysis
TABLE 35 : CALCULATION OF PROPOSED SEWER RATES FOR COMMERCIAL CUSTOMERS - PROPOSED ALTERNATIVE Customer Class No. of Accounts Annual Volume
(hcf)
Total Annual
Revenue
Requirement
Monthly
Capacity Per
Account
Monthly
Customer Charge
Per Account
Monthly Fixed
Charge Per
Account1
Volumetric
Charge
Per hcf
Commercial
Commercial 177 261,244 $ 746,815 $112.69 $ 2.52 $115.21 $1.92

1. Monthly fixed charge is the based fixed charge plus the monthly customer charge per the number of accounts.

TABLE 36 : CALCULATION OF PROPOSED SEWER RATES FOR INDUSTRIAL CUSTOMERS Customer Class
Total Annual
Revenue
Requirement
Annual Volumes Proposed Rates
Industrial
Monthly Fixed Administrative Charge $ 91 $3
Fixed Charges (Design Capacity)
Flow - per HCF per day $ 121,346 235 HCF per day $517
BOD - per pound per day 58,307 263 lbs./day $221
TSS - per pound per day 66,530 306 lbs./day $217
Sewer Use Charges
Flow - per HCF $ 303,821 85,675 HCF $3.54
BOD - per pound 18,390 16,673 lbs. $1.10
TSS - pound 13,432 12,103 lbs. $1.11
Prepared by NBS
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COSA - Sewer Rates, 26 of 37205
CITY OF AMERICAN CANYON Current vs. Proposed Rates

SEWER RATE STUDY
Cost-of-Service Analysis & Rate Design
TABLE 37 : CURRENT VS. PROPOSED SEWER RATES
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28

25.00% 20.00% 12.00% 12.00% 0.00%
Residential - Monthly Fixed Service Charges
Single Family Residential Per Dwelling Unit $60.48 $74.94 $89.93 $100.72 $112.81 $112.81 Multi-Family Residential Per Dwelling Unit $45.36 $48.70 $58.44 $65.45 $73.31 $73.31 Commercial Customers 3
Monthly Fixed Service Charge Per Account $60.48 $115.21 $138.25 $154.84 $173.42 $173.42 Volumetric Rate Per HCF $5.40 $1.92 $2.31 $2.58 $2.89 $2.89 Industrial Customers
Monthly Fixed Administrative Charge Per Account n/a $2.52 $3.02 $3.38 $3.79 $3.79 Fixed Charges
Flow - per HCF per day Per HCF per day Sewage Flow n/a $517 $620 $695 $778 $778 BOD - per pound per day Per pound per day n/a $221 $266 $297 $333 $333 TSS - per pound per day Per pound per day n/a $217 $261 $292 $327 $327 Sewer Use Charges
Flow - per HCF Per HCF Sewage Flow n/a $3.54 $4.24 $4.75 $5.32 $5.32 BOD - per pound Per pound n/a $1.10 $1.32 $1.48 $1.66 $1.66 TSS - pound Per pound n/a $1.11 $1.33 $1.49 $1.67 $1.67

1. Sewer rates are set according to the average monthly water use for January to March of the previous calendar year. New customers are charged at the average winter water use rate (standard) and adjusted the following year if applicable.

2. The fixed charge includes a monthly customer charge per account.

3. Current rates for commercial customers are charged the higher of the fixed or variable rate. Proposed rates have both a fixed and volumetric charge per commercial customer.

Proposed Sewer Rates Current
Rates Sewer Rate Schedule1,2 Description
Prepared by NBS
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Current & Proposed Rates, 27 of 37206
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #1, Page 28 of 37 $725.76 $738.60 $785.04 $884.88 $899.28 $982.38$1,272.00 $1,274.88 $1,906.32 $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
City of American
Canyon (Current)
Napa Sanitation
District
Town of
Yountville
Vallejo Flood &
Wastewater
District
Proposed Rates City of Benicia City of Petaluma City of Calistoga City of St. Helena City of American Canyon (Year 1)
Annual Sewer Bill Comparison - Single Family Accounts
207
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #2, Page 29 of 37 $60.48 $61.55 $65.42 $73.74 $74.94 $81.87$106.00 $106.24 $158.86 $0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
City of American
Canyon (Current)
Napa Sanitation
District
Town of
Yountville
Vallejo Flood &
Wastewater
District
Proposed Rates City of Benicia City of Petaluma City of Calistoga City of St. Helena City of American Canyon (Year 1)
Monthly Sewer Bill Comparison - Single Family Accounts
208
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Regional Bill Comp #3, Page 30 of 37 $60.48 $61.55 $73.74 $81.51 $89.49$112.81 $114.68 $145.14 $186.00 $0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
City of American
Canyon (Current)
Napa Sanitation
District
(July 2023)
Vallejo Flood &
Wastewater
District
(July 2023)
Town of
Yountville
(January 2027)
City of Benicia
(January 2026)
Proposed Rates City of Petaluma
(July 2027)
City of Calistoga
(January 2028)
City of St. Helena
(July 2027)
City of American Canyon (Year 5)
Monthly Sewer Bill Comparison - Single Family Accounts
209
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 SFR Bill Comp #1, Page 31 of 37 $60.48 $74.94 $60.48 $89.93 $60.48 $100.72 $60.48 $112.81 $60.48 $112.81 $0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
Current Rates Proposed Rates
Single Family Residential Monthly Sewer Bills - 5-Year Projections FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
210
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 MFR Bill Comp #1, Page 32 of 37 $45.36 $48.70 $45.36 $58.44 $45.36 $65.45 $45.36 $73.31 $45.36 $73.31 $0
$10
$20
$30
$40
$50
$60
$70
$80
Current Rates Proposed Rates
Multi-Family Residential Monthly Sewer Bills - 5-Year Projections FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
211
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Comm Bill Comp #1, Page 33 of 37 $60.48 $138.75 $60.48 $166.50 $60.48 $186.48 $60.48 $208.86 $60.48 $208.86 $0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
$275
Current Rates - 100% Fixed Proposed Rates
Commercial Monthly Sewer Bills - 5-Year Projections
FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
Note: Commercial customer bills are based on average annual consumption of 147 HCF per month. 212
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Comm Bill Comp #2, Page 34 of 37 $60.48 $60.48 $60.48 $60.48 $60.48 $60.48 $211.31 $307.41$347.77$397.74 $466.94 $499.61 $0
$100
$200
$300
$400
$500
$600
50 100 121 147 183 200
Annual Bill
Consumption (HCF)
Commercial Sewer Bill Comparison
Current vs. Proposed Rates (FY 2023/24)
Current Rates - 100% Fixed
Proposed Rates
Average
WINTER Bill
(121 HCF/mo.)
Average
ANNUAL Bill
(147 HCF/mo.)
213
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Industrial Bill Comp, Page 35 of 37 $15,023.34 $17,704.24 $15,023.34 $20,917.84 $15,023.34 $23,237.95 $15,023.34 $25,822.27 $15,023.34 $25,822.27 $0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Current Rates Proposed Rates
AmCan Beverages Inc. Monthly Sewer Bills - 5-Year Projections FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28
214
Prepared by NBS
www.nbsgov.com | Toll-Free: 800.676.7516 Combined Bill #1, Page 36 of 37 $60.48
$74.94
$89.93 $100.72 $112.81 $112.81
$79.95
$83.49
$91.00
$99.19
$103.16 $106.25
$140.43
$158.43
$180.93
$199.91
$215.96 $219.06
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
Current FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Annual Bill
Single Family Residential Utility Bill
Water* Sewer**
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Current FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 Annual Bill
Single Family Residential Utility Bill
Water* Sewer**
* Water bill is calculated using a 1" Meter and monthly winter water use of 7 HCF (Alternative 2). ** Sewer bill is based on COSA - 55% Fixed / 45% Variable. 216

CITY COUNCIL AGENDA
APRIL 16, 2024

STAFF REPORT

CONSENT
ITEM NUMBER: 11.

TITLE
Proposed Measure U

RECOMMENDATION
Adopt a Resolu#on approving the proposed Napa Valley Transporta#on Authority – Tax Agency’s Measure U – Napa Valley Transporta#on Improvement Act, for the purpose of improving local streets and roads and investing in regional capital projects.

CONTACT
Erica Ahmann Smithies, P.E., Public Works Director

BACKGROUND & ANALYSIS
On February 21, 2024, the Napa Valley Transporta#on-Tax Agency (NVTA-TA) released a Sales Tax Replacement Measure Dra9 Ordinance and Expenditure Plan set forth therein, for inclusion on the November 5, 2024 ballot.

NVTA-TA in coordina#on with each member jurisdic#on (Napa County, American Canyon, Calistoga, Napa, St. Helena and Yountville) have developed a proposed Ordinance and Expenditure Plan that would replace Measure T, the Countywide Road Maintenance Act, passed in 2012, so that transporta#on sales tax revenues work be=er for residents, visitors, and the workforce by improving roadway conditions and reducing traffic congestion.

The proposed sales tax replacement measure has been discussed extensively by NVTA-TA Board of Directors and technical steering committees made up of jurisdiction public works staff members. On March 19, 2024, NVTA Execu#ve Director, Kate Miller provided City Council a presenta#on on the Measure. In addi#on, the Napa Area Manager’s group made up of city/town managers and the county executive have been regularly briefed on the proposed measure.

The following are the highlights of the Sales Tax Replacement Measure (Measure U):

No tax increase, the sales tax measure would remain a ½ cent The measure would be a 30-year measure, from 2025-2055
Generate approximately $1.2 billion in transportation funds Jurisdic#ons have the opportunity to bond, to bring revenues forward to complete longawaited maintenance projects 217
90% of revenues will be dedicated to fund Local Streets and Roads (LSR) countywide The LSR distribu#on formula will be updated every five years to account for actual sales tax revenue generation
No jurisdiction will receive less than 3% of LSR funds
There will be some flexibility within a jurisdic#on’s LSR revenue to use funds on other transportation improvements, including capacity
Administration costs will be capped at 2%
The measure requires local jurisdic#ons to make investments in bike and pedestrian infrastructure, indexed to 7% of measure revenue, but using other eligible fund sources To ensure funds are spent locally and responsibly, an Independent Taxpayer Oversight Committee will have oversight of the measure
Staff recommends approving Measure U on the November 2024 ballot.

COUNCIL PRIORITY PROGRAMS AND PROJECTS
Transporta#on: "Improve the transporta#on network within the City to alleviate conges#on and enhance the quality of life for the community."

FISCAL IMPACT
The Recommended Action will have no fiscal impact on the Fiscal Year 23/24 budget.

ENVIRONMENTAL REVIEW
15378(b) - The ac#on is not a "Project" subject to the California Environmental Quality Act ("CEQA") because it does not qualify as a "Project" under Public Resources Code Sec#ons 21065 and 21080 and in Section 15378(b) of Title 14 of the California Code of Regulations.

ATTACHMENTS:

1. Resolution Measure U

2. EXHIBIT A - Napa Valley Transportation Improvement Act Expenditure Plan.pdf

3. Measure U Fact Sheet
218
RESOLUTION NO. 2024- XX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AMERICAN CANYON, CALIFORNIA APPROVING THE

NAPA VALLEY TRANSPORTATION AUTHORITY-TAX AGENCY NAPA VALLEY TRANSPORTATION IMPROVEMENT ACT “MEASURE U” CONTINUING A TRANSACTION AND USE TAX EXPENDITURE PLAN WHEREAS, on November 15, 2005, the Napa County Board of Supervisors created the Napa Valley Transportation Authority- Tax Agency ("Authority"), a local transportation authority with all the powers and functions set forth in Division 19 (commencing with Section 180000) of the California Public Utilities Code. Among the powers of the Authority is the ability to adopt, upon voter approval, a retail transactions and use tax ordinance to provide a local transportation funding source; and WHEREAS, a component of the tax ordinance is an adopted county transportation Expenditure Plan detailing the purposes for which the tax revenues may be expended; and WHEREAS, prior to Authority adoption of a county transportation expenditure plan, the Expenditure Plan must receive the approval of the Board of Supervisors and of the city councils representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of Napa County; and
WHEREAS, the continuation of a local transportation funding source in Napa County is critical to address local transportation funding shortfalls, to provide local match funds for state and federal transportation funds, and to maintain Napa County’s quality of life and economic viability by providing funds for local streets and roads maintenance and critical capital infrastructure; and WHEREAS, the Authority is proposing to replace the Countywide Road Maintenance Act, passed in 2012, with the Expenditure Plan attached herein; and
WHEREAS, the Authority and member agencies, have devised an Expenditure Plan that works better for residents, workers and visitors in Napa County by improving roadway conditions and reducing traffic congestion without a sales tax increase; and
WHEREAS, at its February 21, 2024, meeting the Authority gave approval to circulate the Expenditure Plan to member jurisdictions for approval.

NOW THEREFORE BE IT RESOLVED by the City Council of the City of American Canyon as follows:

1. The foregoing recitals are true and correct.

2. The City Council of the City of American Canyon approves the Authority’s proposed Transportation Improvement Act “Measure U” Expenditure Plan attached hereto as Exhibit A for the purposes of adoption by the Authority as provided in Public Utilities Code section 180206(b). 219
PASSED, APPROVED and ADOPTED at a regularly scheduled meeting of the City Council of the City of American Canyon held on the 16th day of April, 2024, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
____________________________
Leon Garcia, Mayor
ATTEST: APPROVED AS TO FORM:
_______________________________ _________________________________ Taresa Geilfuss, CMC, City Clerk William D. Ross, City Attorney 220

EXHIBIT A