2025 Supplemental Report.pdf — Bakersfield City Council, October 22, 2025

WATER DEPARTMENT

DOMESTIC WATER DIVISION
2025 SUPPLEMENTAL REPORT
to
2023 Drinking Water Rate Study

CITY OF BAKERSFIELD

City of Bakersﬁeld 2025 Supplemental Report

LIMITATIONS
This 2025 Supplemental Report to the 2023 Water Rate and Service Connec�on Fee Study was prepared solely for the City of Bakersﬁeld and is not intended for use by any other party for any other person. The 2023 Water Rate and Service Connec�on Fee Study is available upon formal request.

In preparing this report, City Staff relied on information from the management, engineering, and ﬁscal administrative staff from the City of Bakersﬁeld’s Water Department and Finance Department staff.

This page intentionally left blank
City of Bakersﬁeld 2025 Supplemental Report
Page i
TAB

LE OF CONTENTS

1. Executive Summary ...................................................................... 1

1.1 Study Objectives ............................................................................................ 2

1.2 Findings and Recommendations ..................................................................... 2

2. Background .................................................................................. 3

2.1 System Background ........................................................................................ 3

2.2 Revenue at Current Rates ............................................................................... 3

3. Revenue Requirement ................................................................... 6

3.1 Summary of Expenses .................................................................................... 6

3.2 City Operations & Maintenance Expenses ........................................................ 8

3.3 Existing Debt Service ...................................................................................... 9

3.4 Capital Improvements .................................................................................... 9

3.5 Domestic Fund Reserve Target ...................................................................... 10

3.6 Total Revenue Requirement ........................................................................... 12

4. Revenue – Current Rates .............................................................. 13

4.1 Revenue Sources ......................................................................................... 13

4.2 Current Revenue .......................................................................................... 13

4.3 Domestic Water Fund Balance ...................................................................... 13

4.4 Revenue Shortfalls ....................................................................................... 14

5. Rate Options and Recommendations ........................................... 16

5.1 Development of Domestic Water Financial Model Analysis .............................. 16

5.2 Prop 2018 Notice .......................................................................................... 17

5.3 Proposed 2025 Domestic Water Rates ........................................................... 17

5.4 Financial Plan ............................................................................................ 19 City of Bakersﬁeld 2025 Supplemental Report
Page ii
TAB

LE OF EXHIBITS
Exhibit A. Domestic Water Financial Model
Exhibit B. Personnel Memo
Exhibit C. Capital Improvement Projects Memo
Exhibit D. Water Board Presentation
Exhibit E. Council Presentation
Exhibit F. Prop 218 Notice
City of Bakersﬁeld 2025 Supplemental Report
Page iii

TABLE OF FIGURES
Figure 2-1. Current Approved Rate Schedule ..................................................4 Figure 3-1. Annual Escalation Factors ...........................................................6 Figure 3-2. Projected Revenue Requirements ................................................7 Figure 3-3. Projected Revenue Requirements Listed .......................................7 Figure 3-4. Projected Domestic Fund Expenses .............................................8 Figure 3-5. Additional Personnel ...................................................................9 Figure 3-6. Projected Debt Service ................................................................9 Figure 3-7. Water CIP Summary ....................................................................10 Figure 3-8. Reserve Target ............................................................................12 Figure 3-9. Total Revenue Requirement .........................................................12 Figure 4-1. Total Domestic Water Revenue .....................................................13 Figure 4-2. Total Domestic Water Fund Balance with Current Rate Schedule ....14 Figure 4-3. Total Consumption versus Growth ................................................1 5 Figure 5-1. Rate Revenue Increase ................................................................1 7 Figure 5-2. Proposed Quantity Water Rates per HCF .......................................1 7 Figure 5-3. Proposed Montly Readiness-To-Serve Water Charges (inside City) ..18 Figure 5-4. Proposed Montly Private Fireline Water Charges (inside City) ..........18 Figure 5-5. Proposed Montly Readiness-To-Serve Water Charges (outside City) 19 Figure 5-6. Proposed Montly Private Fireline Water Charges (outside City) .......19 Figure 5-7. Domestic Water Financial Plan with Proposed Rate Revenues ........20 Figure 5-8. Domestic Fund Ending Balance vs Required Reserve Target ...........21 Figure 5-9. Comparison of Water Rate with other Bakersﬁeld Water Purveyors .21 This page intentionally left blank
City of Bakersﬁeld 2025 Supplemental Report

Page 1 ends

1. EXECUTIVE SUMMARY
This report is supplemental to the 2023 Water Rate and Service Connec�on Fee Study that was prepared and ﬁnalized by Ra�elis Financial Consultants on June 7th, 2023. The 2025 Supplemental Report will outline what has been studied, evaluated, and updated since the above-men�oned report was ﬁna lized, to determine the appropriate 2025 Domes�c Wa ter Rates.

All processes iden�ﬁed and analyzed in the 2023 Water Rate and Service Connec�on Fee Study will remain in eﬀect unless updated, revised, or changed in this 2025 Supplemental Report. In summary, the focus of this supplemental report is to:
• Iden�fy the appropriate domes�c water ﬁnancial model �me frame • Determine revenue requirements for the domes�c water system opera�ons, maintenance, personnel, and capital improvement
• Determine the reserve target needed to ensure revenue is available to cover annual opera�ons, maintenance, and capital improvement expenses • Evaluate and calculate the appropriate 2025 Domes�c Water Rates to ensure that customers are paying their propor�onal share of the revenue requirement with planned implementa�on eﬀec�ve July 1, 2025
T
he 2023 Water Rate and Service Connec�on Fee Study iden�ﬁed that the domes�c water rates, which includes the readiness to serve [meter] rate and the usage rate, should be increased by the following amounts:
• FY 2022-23 10%
• FY 2023-24 thru FY 2026-27 6%
At the �me of the 2023 Water Rate and Service Connec�on Fee Study, the State had not implemented several new regulatory requirements including Making Water Conserva�on a Way of Life and trea�ng
groundwater for the contaminant Per- and Polyﬂuoroalkyl Substances [PFOS]. These new regula�ons and
the con�nued requirement to treat for Hydrogen
Sulﬁde [H2S], Arsenic, and 1,2,3,-Trichloropropane [123-TCP] have led to performing this analysis as the amount of revenue collected is insuﬃcient and does not cover the costs of opera�ng, maintaining, and
improving the City’s domes�c water system, which has
required the need to evaluate and recommend an increase to the 2025 Domes�c Water Rate.

The Service Connec�on Fee, also known as Water Availability Fee, analyzed in the 2023 Water Rate
and Service Connec�on Fee Study, iden�ﬁed that new meter and ﬁre service connec�ons associated with development needed to be assessed on a meter size basis rather than the current per acre availability fee. This connec�on fee is not evaluated as part of this 2025 Supplemental Report, as staﬀ have prepared a stand -alone report that has evaluated and analyzed this fee which is to be increased at a later �me.

City of Bakersﬁeld 2025 Supplemental Report

Page 2 ends

1.1 Study
Objec�ves
The study’s major objectives remain the same:

1. Development of ﬁnancial plan and associated revenue requirement projec�on

2. Five-year projec�on of water rates

3. The con�nued use of non-�ered water quan�ty rates

4. Readiness-To-Serve charges based on meter size or private ﬁre connec�on size

5. Crea�on of a ﬂexible and user-friendly ﬁnancial model

1.2 Finding
s and Recommenda�ons
In preparing this 2025 Supplemental Report, the following ﬁndings were made.

1. Domes�c Water Financial Model Period
A ﬁnancial model was developed using a ﬁve-year period as these are the limits for the allowable dura�on for a rate increase. Staﬀ prepared a 10-year infrastructure plan to iden�fy
future needs, but this rate increase is designed to collect revenue for the ﬁrst 5 years of that 10-year plan.

2. Revenue Requirements
For this study, the Water Department used the City’ s Opera�on and Maintenance (O&M) budget for FY 2024-25 and applied annual assump�ons for increased costs, the known
debt
service remaining on one bond related to Improvement District No. 4’s Henry
C. Garnet Puriﬁca�on Plant expansion, and the City’s ﬁrst ﬁve (5) years of the 10- year capital
improvements program for the domes�c water system.

The annual revenue requirement, also known as expenses, for the City’s domes�c water system between FY 2025- 26 to FY 2029-30 is determined to be as low as $42.5 million and as high as $61 million.

3. Recommended 2025 Domes�c Water Rates
The pe
rcentage increases in rate revenues developed as an outcome of the ﬁnancial planning process are shown below. These percentage increases are reﬂected in the proposed water rates shown in Sec�on 5.3 below.
• FY 2025-26 34.0%
• FY 2026-27 6.0%
• FY 2027-28 6.0%
• FY 2028-29 2.4%
• FY 2029-30 2.4%
City of Bakersﬁeld 2025 Supplemental Report

Page 3 ends

2. BACKGROUND
This 2025 Supplemental Report thoroughly evaluated current and future opera�ons, maintenance, and capital improvement expenses needed to en sure the opera�ng eﬃciencies of the City’s domes�c water system, which pro vides safe, clean, reliable drinking water to residents.

This eﬀort iden�ﬁed the total annual Revenue Requirement, also known as expenses, needed to ensure the health and safety services con�nue to be provided to the City’s exis�ng residents and growing community.

The City then u�lized the analysis, that was prepared and included in the 2023 Wat er Rate and Service Connec�on Fee Study, to iden�fy the 2025 Domes�c Water Rate. This rate includes the Rea
diness-to-Serve and Volumetric Unit Rate needed to generate suﬃcient revenue to cover all expenses. A�er analyzing mul�ple scenarios, it was determined to inc rease the 2025 Domes�c Water Rate, over the next ﬁve (5) years, as follows: 34%, 6%, 6%, 2.4%, and 2.4%.

The City developed a ﬁve (5) year Financial Plan [2025-2030 ], u�lizing the generated revenues to address the revenue requirement needs . The detailed Domes�c Water Financial Model is atached as Exhibit A.

2.1 System Background
The City of Bakersﬁeld provides drink ing water to approximately 166,000 customers within the City limits and the surrounding unincorporated areas. The City encompasses over 151 square miles and has a popula�on of approximately 412,000, of which the City’s dome s�c water system serves approximately 166,00 0 residents (the remainder of the city is served by other water purveyors). The City’s water system is supplied by 67 domes�c groundwater wells, 2 surface water treatment facili�es (which treat Kern River water & State Water Project water), and over 631 miles of water main pipelines. The City recently added addi�onal treatment processes to certain wells within its system for the removal of TCP (1,2,3-trichloropropane), Arsenic, and PFOS.

2.2 Revenue at
Current Rates
The City’s domes�c water system’s opera�ng and capital e xpenditures are funded by four (4) sources: (1) monthly readiness-to-serve rate depending on the size of the meter and (2) volumetric unit rate
depending on water usage, (3) water availabi lity fee and (4) other non-opera�ng revenue. Current revenues from all four sources in the adopted FY 2024-25 budget is $37.8 million.

2.2.1 Monthly Readiness
-to-Serve Rate
The monthly readiness-to-serve rate for the domes�c system is a ﬁxed fee on customer bills depending on (1) the size of their connec�on that covers the ongoing costs of delivering the water and (2) if the connec�on is within City Limits or within the Fairhaven & Unincorporated Areas.

City of Bakersﬁeld 2025 Supplemental Report

Page 4 ends

These fees cover infrastructure and opera�onal costs regardless of how much water usage is used.

The current approved rates are shown below in Figure 2-1.

Figure 2-1. Current Approved Rate Schedule

2.2.2 Volumetric Unit Rate
The Volumetric Unit rate for the domes�c water sy stem is variable on a customer’s bill and is dependent on water used for each meter. The current volumetric rate, per hundred cubic feet (CCF) is $1.40 per CCF.

2.2.3 Service Connec�on Fee [Water Availability Fee] Revenue Revenue is collecte d from service connec�on fees, also known as water availability fees, ǁŚŝĐŚ contributeƐ to the capital improve ment projects related to growth. The current water availability fee is set at $7,334 per gross acre and this rate has been reviewed and needs to be revised to be a per meter rate to fully recoup growth expenditures. Staﬀ will schedule mee�ngs with the Home Builders Associa�on and local key stakeholders to discuss the proposed
change to the calcula�on and increase the rate. Staﬀ intend to take the increase to City Council prior to the end of 2025.

This revenue is not reﬂected in this 2025 Supplemental Report as what is being factored into the report includes only Non -Growth/Regulatory CIP. The Water Availability Fee r evenue contributes to growth related CIPs and oﬀsets the costs of those projects.

Per 100 cubic ft/month 1.40$ 1.40$ 1.48$ 1.48$ 1.57$ 1.57$ 1.67$ 1.67$ 5/8" x 3/4" Service $12.84 $16.45 $13.61 $17.43 $14.43 $18.48 $15.30 $19.59 1" Service $20.00 $26.01 $21.20 $27.57 $22.47 $29.22 $23.82 $30.98 1-1/2" Service $37.90 $49.91 $40.18 $52.91 $42.59 $56.08 $45.14 $59.45 2" Service $59.38 $78.60 $62.95 $83.32 $66.72 $88.32 $70.73 $93.61 3" Service $116.66 $155.10 $123.66 $164.40 $131.08 $174.27 $138.95 $184.72 4" Service $181.10 $241.16 $191.97 $255.63 $203.49 $270.97 $215.70 $287.22 6" Service $360.10 $480.21 $381.71 $509.03 $404.61 $539.57 $428.89 $571.94 8" Service $574.90 $767.08 $609.39 $813.10 $645.96 $861.89 $684.71 $913.60 10" Service $1,505.69 $1,517.61 $1,596.04 $1,608.66 $1,691.80 $1,705.18 $1,793.31 $1,807.49 1-1/2" Connection $18.73 $18.87 $19.86 $20.00 $21.05 $21.20 $22.31 $22.48 2" Connection $5.53 $6.95 $5.87 $7.37 $6.22 $7.81 $6.59 $8.28 3" Connection $12.07 $12.92 $12.80 $13.70 $13.56 $14.52 $14.38 $15.39 4" Connection $23.35 $25.16 $24.75 $26.66 $26.23 $28.26 $27.81 $29.96 6" Connection $63.81 $69.07 $67.64 $73.21 $71.70 $77.60 $76.00 $82.26 8" Connection $133.61 $144.80 $141.63 $153.49 $150.13 $162.70 $159.13 $172.46 10" Connection $238.60 $258.73 $252.92 $274.25 $268.09 $290.71 $284.18 $308.15 12" Connection $384.11 $416.62 $407.16 $441.62 $431.59 $468.12 $457.48 $496.21 FY 27/28
Monthly Readiness-To-Serve Charge:

Monthly Private Fire Protection
FY 24/25 FY 25/26 FY 26/27
Current Approved Rate Schedule
City of Bakersﬁeld 2025 Supplemental Report

Page 5 ends

2.2.4 Non-Opera�ng Revenue
The Water Department receives addi�onal sources of revenue generated during the planning and development of future residen�al and commercial developers. Non-Opera�ng Revenue includes plan checking fees, ﬁre ﬂow inspec�ons, ﬁre-line inspec�ons, and ﬁre hydrant maintenance fees.

The Department an�cipates collec�ng approximately $250,000 for non-opera�ng revenue.

City of Bakersﬁeld 2025 Supplemental Report

Page 6 ends

3. REVENUE REQUIREMENT
A domestic water financial model was developed to derive the revenue requirements, also known as expenses, for FY 2025-26 through FY 2029-30. This five-year period was chosen as the limits for the model because this is the allowable timeframe for a proposed rate increase.

3.1 Summary of Expenses
The revenue requirements represent the costs that must be covered by revenue from rates and other sources. For this study, the Water Department used the City’s Operation and Maintenance (O&M) budget for FY 2024 -25 and applied the annual assumptions shown i n Figure 3 -1, the known debt service remaining on one bond financed by Kern County Water Agency for Improvement District No. 4’s Henry C. Garnett Purification Plant expansion, and the City’s five - year capital improvements program for the domestic water system.

The escalation factors in Figure 3-1 summarize the effective annual percentage increases in various O&M cost categories.

Figure 3-1. Annual Escala�on Factors
Assumptions
Personnel [includes salaries, benefits, healthcare] 4% annual increase Utilities 3.5% annual increase
Service Contracts 3.5% annual increase
Materials [chemicals, fuel, lubricants] 3.5% annual increase The O&M, debt services, and capital improvement program expenses are summarized graphically in Figure 3-2, listed in Figure 3-3 and are described in more detail below.

City of Bakersﬁeld 2025 Supplemental Report

Page 7 ends

Figure 3-2. Projected
Revenue Requirements
Figure 3-3. Projected
Revenue Requirements Listed

City of Bakersﬁeld 2025 Supplemental Report

Page 8 ends

3.2 City Opera�ons and Maintenance Expenses
Operations and maintenance expenses are the costs incurred and required to ens ure that the domestic water system is functioning efficiently and able to meet all health and safety requirements to deliver safe, clean, and reliable drinking water to residents and businesses.

As shown in Figure 3-4, the domestic water system’s expenses are projected to increas e from approximately $43.3 million to $50.3 million over the next five (5) years.

Operation and maintenance supplies, services, and utilities are projected to increase

3.5%
annually to account for rising service costs during the planning period. Additionally, to address the needs of the department to comply with water conservation and water quality regulations,
and rehabilitating aging infrastructure, additional staff and equipment have been integrated to implement a
water conservation unit and efficient maintenance
program.

Figure 3-4. Projected Domes�c Fund Expenses
The 5-year plan includes an increase of two (2) employees to the Domestic Water Division’s staff: one (1) water planner and
one (1) construction inspector.

Additionally, two (2)
positions will be reclassified,
as shown in Figure 3-5. The analysis includes an annual increase in salaries and benefit costs of approximately 4.0% per year due to anticipated step - raises and potential cost of living increases. In addition, computer equipment and vehicles have been included in the personnel costs for the positions that require the additional equipment. The expenses of adding these positions have been factored into the Department’s revenue requirement projections.

Additional personnel identified are administrative staff and construction inspectors.

The justification and purpose for these additional
staff membe
rs is provided in Exhibit B –
Personnel Memo.

City of Bakersﬁeld 2025 Supplemental Report

Page 9 ends

Figure 3-5. Additional Pe
rsonnel
FY 2025-26 to FY 2029-30
Additional Personnel & Reclassifications
Administrative Personnel 2
Engineering 1
Inspector 1
Total 4

3.3 Existing Debt Service
The Water Department does not hold bonds, rather contributes t o debt service remaining on one bond held by Improvement District No. 4’s Henry C. Garnet Puriﬁca�on Plant expansion.

This debt service is and expense to the City and expected to be paid in full by 2037-2038.

Figure 3-6 summarizes the debt service schedule.

Figure
3-6. Projected Debt Service Expense

3.4 Capital Improvements
The domestic water ﬁnancial model includes CIPs that have been iden�ﬁed by City Engineering staﬀ from the Water Department to comply with regulatory requirements. These CIPs account
for improvements needed to ensure suﬃcient ﬁre ﬂow pressures and water quality in the domes�c water system, which are shown in Figure 3-7 and further explained in Exhibit C – Capital Improvement Projects Memo
.

There are several signiﬁcant capital projects associated with water quality regula�ons.

Eﬀec�ve January 1, 2025, water purveyors must monitor and plan to treat PFOS. The City is aware of nine wells within the domes�c water system that need to have PFOS re moval vessels installed at the well site for well head treatment.

This process needs to be opera�onal by
April 2029 or the well will need to be
taken out of service un�l such �me as treatment can
be added. City plans to address six wells by 2029 and then focus on the remaining three over the next two years.

In addi�on, City has several
wells that treat for H2S and over �me, these vessels are impacted by the gas and begin to erode from the inside. There
are six well sites that need to have H2S
vessels
Line Category FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 1 Debt Service Expense 1,348,617$ 1,349,219$ 1,349,557$ 1,349,940$ 1,349,150$ City of Bakersﬁeld 2025 Supplemental Report

Page 10 ends

replaced to ensure the site does not need to be taken out of service if the treatment process cannot be performed.

Finally, to ensure that City meets America Water Infrastructure Act of 2018 [AWIA], well sites are to have back up generators in case of power failure emergencies. Several of the generators are old and need to be replaced to meet the San Joaquin Valley Ai r Pollu�on Control District ’s air quality requirements. City plans to replace two generators per year to ensure they are compliant and meet all regula�ons.

Figure 3-7. Water CIP Summary

3.5 Domes�c Water Fund Reserve
Target
In ad di�on to covering annual expenses, the readiness -to-serve and volumetric unit rates are required to generate revenues to maintain adequate opera�ons, debt service and capital reserves.

To determine what cons�tutes adequate reserve amounts, the 2023 Water Rate and Service Connec�on Fee Study iden�ﬁed that the City’s domes�c water fund target reserve requirement would be aligned with the industry standard.

This industry standard is 25% of the annual opera�on and maintenance budget, any debt service requirement and a ﬁve -year rolling average of Non -Growth/Regulatory Capital Improvement Line Project FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 1 Non-Growth/Regulatory Related Projects
2 CBK-25 PFOS Removal
3 Well Rehabilitation Project - CBK - 9
4 Well Rehabilitation Project - L-201
5 TC P Treatment Program [4 Wells] [C ontinuation]
6 L-208 TCP Removal / H2S Replace 3,000,000$
7 L-211 TCP Removal / H2S Replace 300,000$ 3,070,000$ 8 CBK - 38 T CP Rem o va l 310,500$ 3,177,450$ 9 PFOS Treatment Program [9 Wells] [Compliance 04/2029] 10 PFOs Phase 1 - 6 Wells [Design/ C onstruct 2 well/yea 1,000,000$ 3,300,000$ 3,630,000$ 3,993,000$ 11 H2S Vessel Replacement [CBK 31] 750,000$
12 PFOs Phase 2 - 3 Wells [Design/ C onstruct 2 well/year] 600,000$ 13 H2S Vessel Replacement Program
14 H2S Phase 1 - 5 Wells [Design/ C onstruct 2 well/year] 500,000$ 2,000,000$ 15 Solar Power Project - 1000 Buena Vista 1,500,000$ 1,500,000$ 16 C orp Yard Infrastructure 1,000,000$
17 SJVAPCD Replace Aged out Generators 1,092,650$ 1,130,892$ 1,170,473$ 1,211,440$ 18 C onsolidation Line - OR and SK 6,000,000$
19 Lead & Copper Service Line Inventory 1,000,000$
20 Total 13,500,000$ 6,942,650$ 7,830,892$ 5,973,973$ 6,988,890$ City of Bakersﬁeld 2025 Supplemental Report

Page 11 ends

Projects, which makes the reserve target variable and dependent on the costs of providing the service.

In addi�on, as part of the Kern County Subbasin’s Well Mi�ga�on Program as further explained in Sec�on 3.5.4, Groundwater Sustainability Agencies are required to maintain reserve funds for domes�c well mi�ga�on.

3.5.1. Opera�ng Reserve Target
City follows an Opera�ng Reserve policy of 25% of annual opera�ng expenses as deﬁned by the 2023 Water Rate and Service Connec�on Fee Study and industry standard . This provides a greater ﬁnancial buﬀer to the Domes�c Water Fund, allowing for funding to be available in the event of an emergency. This policy requires that between $11 to $13 million be held in reserves during this 5-year period.

3.5.2. Capital Reserve Target
The Capital Reserve provides liquidity for the City to be able to pay contractors without encroaching on the Opera�ng Reserves. A capital reserve target balance was calculated, based on the 2023 Water Rate and Service Connec�on Fee Study, as a ﬁve-year rolling average of Non- Growth/Regulatory Capital Improvement Projects for the domes�c water system. The average Non-Growth/Regulatory capital improvement project costs from FY 2025- 26 to FY 202 9-30 is approximately $7 million, which is the amount used for the capital reserve target for the 5-year period.

3.5.3. Debt Reserve Target
The Debt Reserve Target accounts for the debt service requirement the City is obligated to meet.

The City currently has debt service related to the Kern County Water Agency bond, as clariﬁed in Sec�on 3.3, and includes the debt service as an expense. If the City were to hold a bond, the debt service will be factored into the debt reserve target.

3.5.4. Domes�c Well Mi�ga�on Reserve Target
In 2024, as part of the Kern County Subbasin’s Well Mi�ga�on Program, Groundwater Sustainability Agencies are covering expenses related to well mi�ga�on that is associated with groundwater management within its boundaries. In accordance with the Subbasin, the domes�c water fund is required to maintain a reserve target of $167,667. This ﬁgure is factored into the domes�c water fund’s reserve target.

3.5.5. Total Domes�c Water Fund Reserve Target
The Total Domes�c Enterprise Fund Reserve Target is determined by compiling the reserve target for opera�ons, debt service, capital improvements, and domes�c well mi�ga�on on an annual City of Bakersﬁeld 2025 Supplemental Report

Page 12 ends

basis. Figure 3-8 summarizes the components of the annual reserve targets and iden�ﬁes the Total Domes�c Enterprise Fund Reserve Target.

The reserve target for the FY 2025-26 through 2029-30 is shown below in Figure 3-8.

Figure 3-8. Reserve Target

3.6 Total Revenue Requi
rement
Revenue that must be collected annually is the summa�on of the annual expenses for O&M, debt service and capital projects, plus the total reserve target. The total r e s e r v e t a r g e t h a s t o b e iden�ﬁed as part of the total revenue requirement as these are the funds needed to maintain compliance with the reserve target as deﬁned above. Figure 3 -9 shows the Total Revenue Requirement, including the reserve target, as deﬁned.

Figure 3-9. Total Revenue Requirement
Line FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
1 Reserve Target
2 25% of Annual O&M Expenses 11,191,420$ 12,138,409$ 12,222,930$ 12,900,352$ 12,924,993$ 3 5-Year Regulatory C IP 8,247,281$ 6,934,101$ 6,931,252$ 6,481,432$ 6,988,890$ 4 Debt Service Reserve -$ -$ -$ -$ -$
5 S G MA Domestic Well
Mitigation 167,667$ 167,667$ 167,667$ 167,667$ 167,667$ 6 Total Target 19,606,368$ 19,240,178$ 19,321,848$ 19,549,450$ 20,081,550$

City of Bakersﬁeld 2025 Supplemental Report

Page 13 ends

4. REVENUE – CURRENT RATES
A domes�c water ﬁnancial model was developed to derive the revenue needed to oﬀset expenses for FY 2025-26 through FY 2029-30. This ﬁve-year period was chosen as the limits for the model because Proposi�on 218 allows for ﬁve -year rate increases. Based on this model, the revenue generated has been analyzed to ensure the fund remains posi�ve at the end of this ﬁve -year period.

4.1 Revenue sources
As the 2023 Water Rate and Service Connec�on Fee Study explains in further detail, the City’s domes�c fund recoups expenditures via two revenue sources: volumetric water quan�ty rates and readiness-to-serve rates. The volumetric water quan�ty rate is a variable rate dependent on the residents’ or business’s consump�on within their property. The readiness -to-serve rate is a ﬁxed rate dependent on the size of the meter that is equitable to the strain placed on the water system.

4.2 Current Revenue
The total revenue discussed above, based on the current rates for readiness-to-serve, usage, and non-opera�onal fees, has been compiled and is shown in Figure 4-1.

Figure 4-1. Total Do
mes�c Water Revenue [Without Service Charge Increase]

4.3 Domes�c Water Fund Balance
The Domes�c Water Fund Balance as of June 30, 2024 is es�mated to be $25 million.

This fund balance total includes revenues from readiness-to-serve, usage, and non-opera�onal fees. This fund balance is considered the star�ng revenue for FY 2025-26 and will be added to as reve nue is collected throughout this ﬁscal year. Any posi�ve balance le� at the end of FY 2025-26 will be the star�ng fund balance for FY 2026-27, and so on and so forth. The total annual revenue requirement, also known as expenses, that was iden�ﬁed and discussed in Sec�on 3 is included in Figure 4-2 to determine if the current revenue collected based on the current rates can maintain a balanced 5-year ﬁnancial model.

Page 14 ends

Figure 4-2. Total Domes�c Water Fund Balance with Current Rate Schedule *Supply expense items include debt service related to KCWA Bond.

4.4 Revenue Shor�alls
As Figure 4.2 shows, City is projec�ng a nega�ve cashﬂow ranging between $9.9 million to $13 million for the next 5 years. City staﬀ has evaluated the reasoning for these shor�alls in the following sec�ons.

4.4.1 Projected Growth of Annual Water Use
The 2023 Water Rate and Service Connec�on Fee Study had used a factor of 2% to account for the projected growth of annual water use, which consists of two factors: growth from new service connec�ons and water demand per connec�on. The 2023 Water Rate and Service Connec�on Fee Study assumed the 2% increase would be completely atributed to new service connec�ons and a 0% change in water demand per connec�on. Upon further inspec�on with updated data, t
he City's domes�c water system has demonstrated consiste nt growth over the past ﬁve ye ars closer to 1.75% in new service connec�ons. While this expansion accounts for slightly less than the assumed 2% increase in revenues from the readiness-to-serve rates, a closer look at the vo
lumetric water quan�ty rate structure in light of the new s t ate water conserva�on legisla�on is impera�ve to ensure long-term ﬁnancial stability.

4.4.2 State Water Conserva�on Regula�ons
Furthermore, compliance with state water conserva�on legisla�on necessitates signiﬁcant investment in conserva�on programs and public outreach. The City has been opera�ng under Stage 2 of its Water Shortage Con�ngency Plan since 2022, reﬂec�ng ongoing eﬀorts to promote Line FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
1 Rate Revenue from Existing Rates without Adjustment
2 Fixed 13,256,692$ 14,299,284$ 15,424,037$ 16,166,964$ 16,939,759$ 3 Variable 26,451,523$ 27,688,132$ 29,478,879$ 29,983,704$ 31,385,443$ 4 Total Operating Revenues 39,708,216$ 41,987,416$ 44,902,915$ 46,150,668$ 48,325,201$ 5 Total Other Revnues 6,384,424$ 420,000$ 450,000$ 450,000$ 450,000$ 6 Total Domestic Fund Revenues 46,092,640$ 42,407,416$ 45,352,915$ 46,600,668$ 48,775,201$ 7 Operation & Maintenance Expenses
8 Supply* 16,389,417$ 16,509,172$ 16,972,733$ 17,422,124$ 17,886,056$ 9 Treatment 5,881,062$ 6,451,983$ 6,457,977$ 6,856,860$ 7,253,339$ 10 C al Water 12,005,010$ 13,124,710$ 13,761,181$ 14,515,093$ 15,187,142$ 11 Repair & Maintenance 5,517,500$ 7,140,613$ 6,213,696$ 6,981,176$ 6,600,028$ 12 Hydra nts 100,000$ 103,500$ 107,123$ 110,872$ 114,752$ 13 General 2,917,287$ 2,876,769$ 2,938,242$ 3,176,886$ 2,017,785$ 14 Salaries 1,955,405$ 2,346,890$ 2,440,766$ 2,538,397$ 2,640,869$ 15Total O&M and Debt Service Expenses 44,765,681$ 48,553,637$ 48,891,718$ 51,601,406$ 51,699,971$ 16 Non-Growth/Regulatory Related CIPs 13,500,000$ 6,942,650$ 7,830,892$ 5,973,973$ 6,988,890$ 17 Total O&M & CIP Expense 58,265,681$ 55,496,287$ 56,722,610$ 57,575,379$ 58,688,861$ 16 Net Cashflow (Net Income) (12,173,042)$ (13,088,872)$ (11,369,695)$ (10,974,711)$ (9,913,660)$ 17 18 Beginning Domestic Fund Balance 25,266,863$ 13,093,821$ 4,949$ (11,364,745)$ (22,339,457)$ 19 Ending Domestic Fund Balance 13,093,821$ 4,949$ (11,364,745)$ (22,339,457)$ (32,253,116)$ City of Bakersﬁeld 2025 Supplemental Report

Page 15 ends

water conserva�on. Projec�ons indicate a required 40% reduc�on in water consump�on by 2040, transla�ng to an average annual reduc�on target of 3% over the next 13 years. Achieving this target is cri�cal to mee�ng regulatory mandates and mi�ga�ng poten�al ﬁnancial penal�es imposed by the State Water Resources Control Board. Therefore, a thorough analysis of the current rate structure, considering both growth and conserva�on -driven usage reduc�ons, is essen�al to ensure equitable cost recovery and sustainable water resource management.

The 2023 Water Rate and Service Connec�on Fee Study made the inaccurate assump�on of a 0% change in water demand that did not account for ﬂuctua�ons in water consump�on over the years, either increases or decreases. However, recent data da�ng back to 2018 demonstrates a reduc�on in the City’s total wa ter usage, as shown in Figure 4-3, and further declines are an�cipated due to evolving regulatory mandates.

Figure 4-3. Total Consump�on versus Growth
12000
12500
13000
13500
14000
14500
15000
15500
16000
145000
150000
155000
160000
165000
170000
2018 2019 2020 2021 2022 2023 2024
Millions of Gallons
Estimated Population
Consumption Vs. Growth
Estimated Population Total Metered Deliveries
City of Bakersﬁeld 2025 Supplemental Report

Page 16 ends

5. RATE OPTIONS AND RECOMMENDATIONS

5.1 Development of Domestic Water Financial Model Analysis Through the Fiscal Year 2025-26 budget development process, the Water Department iden�ﬁed the need to revise the planned rate increases to address the revenue shor�alls iden�ﬁed. Water Department staﬀ met with various City Departments, City Management and City Council members to ensure that the analysis included all aspects associated with the Domes�c water expenses and revenues.

Finance and
City Management Oﬃce staﬀ advised Water to analyze diﬀerent service charge rate increase scenarios as follows:
• Op�on 1
 FY 25-26 – 34% increase
 FY 26-27– 6% increase
 FY 27-28 – 6% increase
 FY 28-29 & 29-30 – 2.4% increase
 Total 5-yr Increase = 50.8%
• Op�on 2
 FY 25-26 – 20% increase
 FY 26-27 – 20% increase
 FY 27-28 – 5.5% increase
 FY 28-29 & 29-30 – 2.5% increase
 Total 5-yr Increase = 50.5%
• Op�on 3
 FY 25-26 – 18% increase
 FY 26-27 – 16% increase
 FY 27-28 – 10% increase
 FY 28-29 – 3.3% increase
 FY 26-30 - 2.5% increase
 Total 5-yr increase = 49.8%
• Op�on 4
 FY 25-26 – FY 29-30 – 11.8% increase
 Total 5-yr increase = 59%
In March 2025, Water Staﬀ along with Finance, met with the City Manager to discuss the need for the domes�c water service charge rate increase and evaluated op�ons. Upon reviewing the evalua�on iden�fying the funding deﬁciencies and infrastructure requirements, Water was advised
to present the data and rate op�ons to the Water Board to obtain guidance and direc�on.

City of Bakersﬁeld 2025 Supplemental Report

Page 17 ends

A Water Board mee�ng was held on March 12, 2025, at 10:00am. Water staff pre sented op�ons 1 – 4 to the Board and a�er discussion, it unanimously recommended Staﬀ move forward and take the item in front of the City Council to request approval to begin the Proposi�on 218 process. The presenta�on provided during Water Board is attached as EXHIBIT D.

On
March 26, 2025, Water presented to the City Council the need to increase the domes�c water service
charge rate, discussed the various op�ons analyzed, and requested a mo�on recommending which op�on would be described in the Proposi�on 218 no�ce. A�er lengthy discussions, the Council voted to approve Op�on 1. The presenta�on provided during March 26 – Council Mee�ng is attached as EXHIBIT E.

5.2 Proposi�on 218 no�ce
A�er Council’s March 26, 2025 approval, Water prepared to issue the required Proposi�on 218 no�ce. Water did this by obtaining the City Clerk’s signature and u�lizing a third-party company to print copies of the no�ce to be mailed to aﬀected residents. The printed Proposi�on 218 no�ces were mailed April 25, 2025 ini�a�ng the 45-day public review period so residents can submit comments and/or protest the proposed increase in wri�ng. The Public Comment window closes June 11, 2025 coinciding with the public hearing to be held during the regular 5:15 pm City Council mee�ng. The Proposi�on 218 no�ce is atached as EXHIBIT F.

5.3 Proposed 2025 Domes�c Water Rates
The percentage increases in rate revenues for each fiscal year represented as Option 1 is shown below in Figure 5-1. Additionally, the corresponding proposed quantity water rates and readiness to serve water charges are shown in Figures 5-2, 5-3, 5-4, 5-5, and 5-6 Figure 5-1. Rat e Revenue Increase
Figure 5-2. Pro
posed Quan�ty Water Rates per HCF
Description FY 25-26 FY 26-27 FY 27-28 F Y 28-29 FY 29-30 Effective Date July 1, 2025 July 1, 2026 July 1, 2027 July 1, 2028 July 1, 2029 Percent Increase 34.00% 6.00% 6.00% 2.40% 2.40%
Volumetric Rate
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
Inside C ity 1.88$ 1.99$ 2.11$ 2.16$ 2.21$ Outside City 1.88$ 1.99$ 2.11$ 2.16$ 2.21$ City of Bakersﬁeld 2025 Supplemental Report

Page 18 ends

Figure 5-3. Proposed Monthly Readiness-To-Serve Water Charges (Inside City) Figure 5
-4. Proposed Monthly Private Fireline Water Charges (Inside City) Monthly Readiness-To-
Serve Charge (Inside City)
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
5/8" x 3/4" 17.21$ 18.24$ 19.33$ 19. 79$ 20.26$ 1" 26.80$ 28.41$ 30.11$ 30.83$ 31.57$

1.5" 50.79$ 53.84$ 57.07$ 58.44$ 59.84$ 2" 79.57$ 84.34$ 89.40$ 91.55$ 93.75$ 3" 156.32$ 165.70$ 175.64$ 179.86$ 184.18$ 4" 242.67$ 257.23$ 272.66$ 279.20$ 285.90$ 6" 482.53$ 511.48$ 542.17$ 555.18$ 568.50$ 8" 770.37$ 816.59$ 865.59$ 886.36$ 907.63$ 10" 2,017.62 $ 2,138.68 $ 2,267.00 $ 2,321.41 $ 2,377.12 $ Monthly Fire Charge (Inside
City)
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029

1.5" 25.10$ 26.61$ 28.21$ 28.89$ 29.58$ 2" 7.41$ 7.85$ 8.32$ 8.52$ 8.72$ 3" 16.18$ 17.15$ 18.18$ 18.62$ 19.07$ 4" 31.29$ 33.17$ 35.16$ 36.00$ 36.86$ 6" 85.51$ 90.64$ 96.08$ 98.39$ 100.75$ 8" 179.04$ 189.78$ 201.17$ 206.00$ 210.94$ 10" 319.72$ 338.90$ 359.23$ 367.85$ 376.68$ 12" 514.71$ 545.59$ 578.33$ 592.21$ 606.42$ City of Bakersﬁeld 2025 Supplemental Report

Page 19 ends

Figure 5-5. Proposed Monthly Readiness-To-Serve Water Charges (Outside City) Figure 5-

6. Proposed Monthly Private Fireline Water Charges (Outside City)

5.4 Financial Plan
The ﬁnancial plan assesses whether the future revenue associated with the proposed rate increases is sufficient to cover all of the domestic water system expenses, including operating, capital improvement, debt service, and reserve funding. This analysis is shown below in Figure 5-7.

The performance of the Domestic Water Fund Balance with the proposed rate increase is shown below in Figure 5-8 that illustrates the fund’s performance and compliance with the reserve target as previously deﬁned.

As part of this analysis, the Department compared the proposed rates with other water purveyors that service residents in the City of Bakersﬁeld. T his analysis is shown in Figure 5-9.

Monthly Readiness-To-
Serve Charge (Outside City)
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
5/8" x 3/4" 22.04$ 23.36$ 24.76$ 25.35$ 25.96$ 1" 34.86$ 36.95$ 39.17$ 40.11$ 41.07$

1.5" 66.87$ 70.88$ 75.13$ 76.93$ 78.78$ 2" 105.32$ 111.64$ 118.34$ 121.18$ 124.09$ 3" 207.83$ 220.30$ 233.52$ 239.12$ 244.86$ 4" 323.16$ 342.55$ 363.10$ 371.81$ 380.73$ 6" 643.48$ 682.09$ 723.02$ 740.37$ 758.14$ 8" 1,027.89 $ 1,089.56 $ 1,154.93 $ 1,182.65 $ 1,211.03 $ 10" 2,033.60 $ 2,155.62 $ 2,284.96 $ 2,339.80 $ 2,395.96 $

City of Bakersﬁeld 2025 Supplemental Report

Page 20 ends

Figure 5-7 Domes�c Water Financial Plan with Proposed Rate Revenues *Supply expense items include debt service related to KCWA Bond.

Line FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
1 Rate Revenue from Existing Rates without Adjustment
2 Fixed 13,256,692$ 14,299,284$ 15,424,037$ 16,166,964$ 16,939,759$ 3 Variab le 26,
451,523$ 27,688,132$ 29,478,879$ 29,983,704$ 31,385,443$ 4 Total Revenues 39,708,216$ 41,987,416$ 44,902,915$ 46,150,668$ 48,325,201$ 5 6 Revenue Adjustments 34.0% 6.0% 6.0% 2.4% 2.4%
7 Total Additional Revenue 10,487,491$ 11,085,283$ 10,821,629$ 10,771,395$ 11,160,133$ 8 Total Rate Revenues w/ Rate Adjustments 50,195,706$ 53,072,699$ 55,724,544$ 56,922,062$ 59,485,335$ 9 10 Other Revenues 6,384,424$ 420,000$ 450,000$ 450,000$ 450,000$ 11 Total Municipal Revenues 56,580,130$ 53,492,699$ 56,174,544$ 57,372,062$ 59,935,335$ 12 13 Operation & Maintenance
14 Supply* 16,389,417$ 16,509,172$ 16,972,733$ 17,422,124$ 17,886,056$ 15 Treatment 5,881,062$ 6,451,983$ 6,457,977$ 6,856,860$ 7,253,339$ 16 C al Water 12,005,010$ 13,124,710$ 13,761,181$ 14,515,093$ 15,187,142$ 17 Repair & Maintenance 5,517,500$ 7,140,613$ 6,213,696$ 6,981,176$ 6,600,028$ 18 Hydra nts 100,000$ 103,500$ 107,123$ 110,872$ 114,752$ 19 General 2,917,287$ 2,876,769$ 2,938,242$ 3,176,886$ 2,017,785$ 20 Salaries 1,955,405$ 2,346,890$ 2,440,766$ 2,538,397$ 2,640,869$ 21 Total O&M Expenses 44,765,681$ 48,553,637$ 48,891,718$ 51,601,406$ 51,699,971$ 22 23 Non-Growth/Regulatory C IP 13,500,000$ 6,942,650$ 7,830,892$ 5,973,973$ 6,988,890$ 24 Total Expenditures 58,265,681$ 55,496,287$ 56,722,610$ 57,575,379$ 58,688,861$ 25 26 Net Cashflow (Net Income) (1,685,551)$ (2,003,589)$ (548,066)$ (203,317)$ 1,246,474$ 27 28 Beginning Balance 25,266,863$ 23,581,312$ 21,577,723$ 21,029,657$ 20,826,340$ 29 Ending Balance 23,581,312$ 21,577,723$ 21,029,657$ 20,826,340$ 22,072,814$ 30 31 Reserve Target
32 25% of Annual O&M 11,191,420$ 12,138,409$ 12,222,930$ 12,900,352$ 12,924,993$ 33 5-Year Regulatory C IP 8,247,281$ 6,934,101$ 6,931,252$ 6,481,432$ 6,988,890$ 34 S G MA Domestic Well Mitigation 167,667$ 167,667$ 167, 667$ 167,667$ 167,667$ 35 Total Target 19,606,368$ 19,240,178$ 19,321,848$ 19,549,450$ 20,081,550$ 36 37 Variance From Target 3,974,943$ 2,337,545$ 1,707,809$ 1,276,890$ 1,991,264$ City of Bakersﬁeld 2025 Supplemental Report

Page 21 ends

Figure 5-8 Domes�c Fund Ending Balance vs Required Reserve Target Figure 5-9 C
omparison of Water Rate with other Bakersﬁeld Water Purveyors. $-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Ending Fund Balance vs Required Reserve Target
Ending Fund Balance Reserve Target

EXHIBIT A. DOMESTIC WATER FINANCIAL MODEL
FY 2025-2026 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 Personnel % Increase 4.00% 4.00% 4.00% 4.00% 4.00%

3.50% 3.50% 3.50% 3.50% 3.50%
$25,266,863 Starting 2024-25 Fund Balance
FY 2025-2026 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 Total Revenue $56,580,134 $53,492,699 $56,174,544 $57,372,062 $59,935,335 Total Expenses $58,265,681 $55,496,287 $56,722,610 $57,575,380 $58,687,925 Fund Balance $23,581,316 $21,577,728 $21,029,661 $20,826,344 $22,073,754 Reserve Target $19,606,368 $19,240,178 $19,321,848 $19,549,450 $20,081,316 $3,974,948 $2,337,550 $1,707,813 $1,276,894 $1,992,438
$ 50,195,706.23 $53,072,699 $55,724,544 $56,922,062 $59,485,335 Non-Operational Revenue $384,428 $420,000 $450,000 $450,000 $450,000 $6,000,000
$56,580,134 $53,492,699 $56,174,544 $57,372,062 $59,935,335 $1,348,617 $1,349,219 $1,349,557 $1,349,940 $1,349,150
$150,000 $150,000 $150,000 $150,000 $150,000
$90,854 $94,489 $98,268 $102,199 $106,287
$1,693,351 $1,761,085 $1,831,528 $1,904,790 $1,980,981
Civil Engineer IV [50%] $0 $133,669 $139,016 $144,576 $150,359 Reclassification FASO II to FASO III [25%] $0 $0 $0 $0 $0 Municipal Water Planner [100%] $171,200 $178,048 $185,170 $192,577 $200,280 Construction Inspector 100% w/ vehicle $0 $179,600 $186,784 $194,255 $202,026 Engineer I/II $0 $0 $0 $0 $0
Maintenance Craft Worker $0 $0 $0 $0 $0
$41,211,659 $44,604,028 $44,844,273 $47,452,198 $47,445,200 $100,000 $103,500 $107,123 $110,872 $114,752
5-YEAR DOMESTIC WATER

FINANCIAL MODEL

PROPOSED RATE INCREASE REVENUE
FUND 4410 - Municipal Water

EXPENSES - DEBT SERVICES
Developer Reimbursement KCWA Water Rights/Capacity

AVAILABLE FUND BALANCE
CCI % Increase
Municipal Water Capital Outlay [Hydrants]

TOTAL ESTIMATED REVENUE

EXPENSES - OPERATIONS AND MAINTENANCE
GRANT REVENUE - Consolidation
Operations OVER Expenditures
Municipal Water Operations
CAO - Deputy City Attorney I [35%]
Additional
Personnel
Municipal Water Personnel
Developer Mainline Extension Reimbursement

EXPENSES - REIMBURSE OTHER CITY DEPTS
Section Project Description
TCP Treatment Program
[4 Wells] [Continuation]
Municipal L-208 TCP Removal / H2S Replace$3,000,000
Municipal L-211 TCP Removal / H2S Replace $300,000 $3,070,000 Municipal CBK-38 TCP Removal $310,500 $3,177,450
Municipal CBK-18 TCP Removal
Municipal CBK-TBD TCP Removal
Municipal CBK-TBD TCP Removal
PFOS Treatment Program
[9 Wells] [Compliance 04/2029]
Municipal PFOs Phase 1 - 6 Wells [Design/ Construct 2 well/year]$1,000,000 $3,300,000 $3,630,000 $3,993,000 Municipal H2S Vessel Replacement [CBK 31] $750,000
Municipal PFOs Phase 2 - 3 Wells [Design/ Construct 2 well/year] $600,000 Municipal PFOs Phase 3 - 2 Wells TBD
H2S Vessel Replacement Program
[Due to Corrosion [Addresses Taste and Odor]]
Municipal H2S Phase 1 - 5 Wells [Design/ Construct 2 well/year] $500,000 $2,000,000 Municipal H2S Phase 2 - 3 Wells [Design/ Construct 1 well/year] Municipal Lead & Copper Service Line Inventory$1,000,000 Municipal Consolidation Line - OR and SK -
McCutcheon Panama to Taft Hwy$6,000,000
Municipal SJVAPCD Replace Aged out Generators
(1 Replacements Per Year til 2030 then 2 per/year) $1,092,650 $1,130,892 $1,170,473 $1,211,440 Municipal Solar Power Project - 1000 Buena Vista$1,500,000 $1,500,000 Municipal Corp Yard Infrastructure $1,000,000
TOTAL EXPENSES $58,265,681 $55,496,287 $56,722,610 $57,575,380 $58,687,925

EXPENSES - CAPITAL IMPROVEMENT PROJECTS
FY 2025-2026 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 418,800 421,500 424,200 426,900 429,600

0.6% 0.6% 0.6% 0.6% 0.6%
Growth - Assumed Municipal System170,971 173,963 177,007 180,104 183,256

1.75% 1.75% 1.75% 1.75% 1.75%
Personnel % Increase4.00% 4.00% 4.00% 4.00% 4.00%

3.50% 3.50% 3.50% 3.50% 3.50%
Section Project Description
11 Admin All - Overhead $440,000 $457,600 $475,904 $494,940 $514,738 12 Direct Allocation $14,000 $14,560 $15,142 $15,748 $16,378 34 Legal [85%] $850,000 $1,050,000 $1,050,000 $1,225,000 39 Other Professional - KRGSA Consultants $200,000 $208,000 $216,320 $224,973 $233,972 39 Other Professional - Non-CIP Special Project $200,000 $208,000 $216,320 $224,973 $233,972 39 Other Professional - UWMP $300,000
TOTAL $2,004,000 $1,938,160 $1,973,686 $2,185,634 $999,059 Section Project Description
21 Internal Vehicle $90,000 $93,150 $96,410 $99,785 $103,277 24 Internal Telephone $4,200 $4,347 $4,499 $4,657 $4,820 31 - R&M Service Line Replacement $2,000,000 $3,000,000 $2,500,000 $2,587,500 $2,678,063 31 - R&M TCP GAC [35 Sites] Changeouts $1,750,000 $2,000,000 $2,070,000 $2,142,450 $2,217,436 31 - R&M PFOS GAC [1 to 9 sites] Changeouts $100,000 $103,500 $107,123 $321,368 $535,613 31 - R&M On-call Electrical $517,500 $535,613 $554,359 $573,762 $593,843 31 - R&M On-call Electrical - Generators $500,000 $550,000 31 - R&M On-call Well and Pump [BKFLD&S.Val]
Well Maintenance Program $1,500,000 $1,552,500 $1,552,500 $1,606,838 $1,606,838 31 - R&M Badger AMI Meters [per Water Board] $1,500,000 $1,552,500 $1,606,838 $1,663,077 $1,721,285 31 - R&M Street Permits/ Organic Waste $30,000 $31,050 $32,137 $33,262 $34,426 TOTAL $7,491,700 $9,372,660 $8,523,865 $9,582,696 $9,495,598 40-[21-31] INTERNAL / REPAIR & MAINTENANCE
5-YEAR WATER OPERATIONS
30 - ADMIN
Growth - Assumed Residential
Growth Rate %
Growth Rate %
CCI % Increase
Section Project Description
11 Liability Insurance $150,000 $155,250 $160,684 $166,308 $172,128 12-66 Miscellaneous [line items less than $10,000] $35,000 $36,225 $37,493 $38,805 $40,163 91 - Other CWS O&M $10,405,010 $10,821,210 $11,254,058 $11,704,221 $12,172,390 91 - Other X-Connection & TCP/Arsenic/PFOS
GAC Oversight and Regulatory Sampling$1,000,000 $1,200,000 $1,400,000 $1,700,000 $1,900,000 91 - Other TCP Monitor [FGL] Sampling $200,000 $208,000 $216,320 $224,973 $233,972 91 - Other PFOS Monitor Sampling $15,000 $15,600 $16,224 $48,672 $81,120 91-Other Water Conservation Administration $100,000 $103,500 $107,123 $110,872 $114,752 91 - Other Water Conservation & Rebates [CWS] $500,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 91 - Other Water Conservation [WAKC] $6,000 $6,000 $6,000 $6,000 $6,000 91 - Other Water Conservation [ID4] $2,000 $2,000 $2,000 $2,000 $2,000 91 - Other SWRCB Large Water System Fees $165,000 $170,000 $175,000 $180,000 $185,000 91 - Other Site Security [65%] $62,400 $64,896 $67,492 $70,192 $72,999 91 - Other Landscrape Services [75%] $8,190 $8,518 $8,858 $9,213 $9,581 91 - Other Janitor Services [75%] $5,616 $5,841 $6,074 $6,317 $6,570 91 - Other Printing Supplies $5,200 $5,408 $5,624 $5,849 $6,083 91 - Other Pest Control $910 $946 $984 $1,024 $1,065
91 - Other Professional Memberships: $2,000 $2,100 $2,100 $2,100 $2,100 TOTAL $12,662,326 $13,805,494 $14,466,035 $15,276,545 $16,005,923 Section Project Description
21-Water CWS - Treated Water [4,500 AF @ $400/AF]$1,800,000 $1,800,000 $1,800,000 $1,800,000 $1,800,000 21-Water KCWA - Treated Water [6,500 AF-Capital $] $1,514,500 $1,651,000 $1,690,000 $1,735,500 $1,774,500 21-Water ID4 - Northwest Feeder Power $386,755 $406,093 $426,397 $447,717 $470,103 21-Water ID4 - Northwest Feeder O&M $113,807 $117,790 $121,913 $126,180 $130,596 21-Water ID4 Solar O&M $1,000 $150,000 $10,000 $10,000 $10,000 21-Water RAW Surface Water/Groundwater Replenish
[35,000 AF @ $55/AF] [Municipal Cost]$1,925,000 $1,925,000 $1,925,000 $1,925,000 $1,925,000 21-Water KD Canal Recharge [10,000AFX($24/AF + $4/AF Admin)] $280,000 $289,800 $299,943 $310,441 $321,306 22 Natural Gas $7,000 $7,245 $7,499 $7,761 $8,033
23 Electricity $11,988,800 $12,097,908 $12,521,335 $12,959,581 $13,413,167 50-[11-91] OUTSIDE SERVICES
60-[21-61] UTILITIES & SUPPLIES
31 Office Supplies $4,000 $4,140 $4,285 $4,435 $4,590
32 Maintenance [Sampling NPDES & Sumps] $61,000 $63,135 $65,345 $67,632 $69,999 38 Uniforms & Accessories $2,500 $2,588 $2,678 $2,772 $2,869 39 Computer Supplies $1,000 $1,035 $1,071 $1,109 $1,148 51 Other Material Supplies - Misc Equip $105,000 $108,675 $112,479 $116,415 $120,490 61 Furniture & Equipment [Minor] $1,000 $1,035 $1,071 $1,109 $1,148 TOTAL $18,191,362 $18,625,444 $18,989,016 $19,515,652 $20,052,948 Section Project Description
9 Bad Debt $20,000 $20,000 $20,000 $20,000 $20,000
11 Taxes [ ID4 Pump Tax] $840,000 $840,000 $869,400 $869,400 $869,400 11 Taxes [ Property Tax] $2,271 $2,271 $2,271 $2,271 $2,271 TOTAL $862,271 $862,271 $891,671 $891,671 $891,671
TOTAL OPERATIONS EXPENSES $41,211,659 $44,604,028 $44,844,273 $47,452,198 $47,445,200 70 - DEBT / TAXES / DEPRECIATION
EXHIBIT B. PERSONNEL MEMO

MEMORANDUM

MEMORANDUM
TO: Kristina Budak, Water Director
FROM: Dawn Spangler, Fiscal & Administrative Services Officer II DATE: March 7, 2025
SUBJECT: FY 2025-2026 to FY 34-35 Personnel Requests
As part of the Water department’s commitment to enhancing the operational capacity and sustainability of the wastewater treatment facilities, we initiated an 10 -yr infrastructure improvement plan aimed at optimizing performance, compliance, and long -term service reliability. To ensure the successful implementation and management of this plan the need for additional personnel has become critical. These skilled professionals will be essential to support both the day-to-day operations, ensuring the project is executed on schedule, within budget, and with the highest standards of safety and environmental stewardship.

This personnel request outlines the specific roles, responsibilities, and expertise required to complement the engineering, technical, and operational teams responsible for executing the 10-year infrastructure plan. By securing the necessary talent we will be positioned to maintain uninterrupted service, enhance treatment capabilities, and align with future regulatory standards.

Position: Civil Engineer IV
Justification:

This addition to the Water Department personnel is needed to address the engineering needs of the Water Department’s based on the complexity and amount of capital improvement projects in the short term and the long term. With the significant population growth of the City of Bakersfield, the constant changes and restrictions of state and federal regulations on the Water and Wastewater Industry, and the aging infrastructure, there is a need for an experienced Water Industry engineering manager to oversee the current workload and the significant increase in the near future due to multi-year projects. This position will be funded with sewer enterprise funds in FY 2025-26 and then the cost will be shared by Domestic Water and Sewer Enterprise from FY 2026-27 on.

Position: Supervisor I to Supervisor II
Justification:

This reclassification request is based on Omar consistently exceeding expectations in his current role as Water Resources Supervisor I and assuming responsibilities that clearly align with the requirements of a Water Resources Supervisor II. Omar consistently oversees both maintenance and water operations, managing a combined team of 20 staff. He has successfully led and managed several projects;

Water Department Page 2
New Positions Request
regularly prepare s comprehensive reports on expenditures for both internal and external grant reporting; interacts and collaborates with local, state and federal agencies ; successfully negotiating agreements; and resolving conflicts to ensure the water resource management remains compliance.

Omar has taken a lead role in recruiting, training, and development of staff and oversees contractors in the removal of aquatic weeds and rodents throughout the Kern River system and canals. His performance has consistently demonstrated a capacity for strategic planning, project management, and administrative oversight well beyond the scope of his current position and for these reasons, Omar should be reclassed to a Supervisor II.

Position: Clerk Typist I to Administrative and Fiscal Services Specialist I Justification:

With the implementation of Oracle, management had to adjust Evelyn's duties of Clerk Typist to Administrative & Fiscal Services Specialist I to ensure the department can perform the work and meet the deadlines and expectations of the Finance Department . Evelyn , under direction, provides administrative support for assigned department projects and programs; prepares a variety of reports and documents in support of departmental goals; generates, processes, and maintains administrative and fiscal transactions; responsible for departments record keeping and document control by organizing, filing and maintaining historical and current agreement, financial, planning documents; and performs related work as required. Evelyn’s current work falls within the duties of the services specialist and that is why she should be reclassed.

Position: Domestic Water Planner
Justification:

The Domestic Water Planner is required to meet the demands of State water conservation regulations that have been placed on municipalities, including the City of Bakersfield. The City is required to reduce residential water usage by 40% by 2040 and coordinate and educate all Commercial, Industrial, and Institutional (CII) business about their requirements to reduce water use within their site. The Domestic Water Planner will be responsible to oversee the City's water conservation program, which includes outreach and monitoring of residents and CII, water usage reporting, and overall compliance. The position will also take over tasks that Cal Water currently performs on behalf of the Water Department which will result in savings of approximately $100,000 annually for the Department.

Position: Construction Inspector
Justification:

The Water Resources Department is preparing for a significant increase in its workload due to a series of capital improvement projects (CIPs) planned over the next 10 years. These projects include essential infrastructure improvements, such as PFOS treatment for wells, H2S vessel replacement, and interface improvements. To ensure the efficient, high-quality completion of these projects, it is crucial to have a dedicated Construction Inspector on staff.

The Construction Inspector will provide oversight during all phases of construction, ensuring that projects are completed on time, within budget, and in full compliance with regulatory standards. This position will be critical in managing the risks associated with these large-scale initiatives, ensuring the integrity and sustainability of the infrastructure improvements.

EXHIBIT C. CAPITAL IMPROVEMENT PROJECTS MEMO
MEMORA
NDUM
TO: Kristina Budak, Water Department Director
FROM: D
aniel Maldonado, Water Department Assistant Director
DATE: F
ebruary 25, 2025
SUB
JECT: Proposed Capital Improvement Budget
The cost estimates for the Water Department Capital Improvement projects were based on recent price quotes and costs from similar projects that were recently completed. By looking at current market prices and using examples from real projects, we were able to make sure the estimates are accurate.

This approach helps us better understand the expected costs of the projects and account for any changes in material and labor prices.

Project Title:

L-208 TCP Removal and H2S Vessel Replacement
Amount: FY 25-26 $ 3,000,000
Council Goal: Reliable Infrastructure & Quality of Life Justification:

This well site has identified TCP in the source water and has been offline. Upon evaluation of the well site, it has also been identified the existing H2S Vessels are in need of replacement.

This is a project that consists of furnishing and installing GAC Treatment Vessels and replace the existing H2S Vessels to bring the well back on-line and provide safe reliable drinking water through the City’s Domestic Water System.

Project Title: PF
Os Treatment Program – Phase 1
Amount: FY 25-26 $ 1,000,000 FY 26-27 $3,300,000
FY 27-28 $3,630,000 FY 28-29 $3,993,000
Council Goal: Reliable Infrastructure & Quality of Life Justification:

The EPA has implemented Maximum Contaminant Levels for PFOs constituents and have given purveyors four years to become in compliance. The City has numerous well sites that are at or near the MCL, which requires GAC Treatment Vessels to be installed to bring the wells in compliance by the date the EPA has recommended. This Project consists of designing PFOs treatment facilities at existing well sites, with Construction to be phased beginning in FY26-27.

Water Department
Proposed Capital Improvement Projects

Page 2 ends

Project Title: Water Resources Solar Power Project
Amount: FY 25-26 $1,5 00,000 FY 26-27 $1,500,000
Council Goal: Efficient Government & Reliable Infrastructure Justification:

The Water Resources Administration Office at 1000 Buena Vista Road is at the location of the City’s Interface Water System and Tank that are vital to providing safe and reliable drinking water in the western part of the Municipal Water System. This tank and booster station are operating 24 hours a day, 7 days per week to meet the existing demands. Due to the significant power consumption, this Project provides on-site solar to offset rising electrical costs at its 1000 Buena Vista Road location. This investment will provide electrical savings of the Water Department.

Project Title:

Lead and Copper Service Line Inventory
Amount: FY 25-26 $1,000,000
Council Goal: Reliable Infrastructure & Quality of Life Justification:

As required by the USEPA and implemented by California Department of Drinking Water [DDW], the Lead and Copper Rule Improvements require all purveyors to develop a plan to identify the materials of service lines connected to the public water distribution system . Staff evaluated the City’s Municipal Water System connections and identified just less than 500 service lines that needed to be visually inspected to determine the material used to connect the water service from the meter to the home. DDW is requiring this evaluation to determine if there are any lead service lines within the Municipal System.

Project Title:

Corporation Yard Infrastructure
Amount: FY 25-26 $1,000,000
Council Goal: Efficient Government & Reliable Infrastructure Justification:

In anticipation of the City purchasing and developing a new location for the City’s Corporation Yard, funds have been identified to support this effort by constructing the necessary water supply infrastructure for the facility.

Project Title:

L- 211 TCP Removal and H2S Vessel Replacement
Amount: FY 26-27 $300,000 FY 27-28 $3,070,000
Council Goal: Reliable Infrastructure & Quality of Life Justification:

This well site has identified TCP in the source water and has been offline. Upon evaluation of the well site, it has also been identified the existing H2S Vessels are in need of replacement.

This is a project that consists of design of furnishing and installing GAC Treatment Vessels and replace the existing H2S Vessels to bring the well back on-line and provide safe reliable drinking water through the City’s Domestic Water System. Construction is anticipated to begin in FY27-

28. Water Department
Proposed Capital Improvement Projects

Page 3 ends

Project Title: Wellsite Generator Replacement Project
Amount: FY 26-27 $1,092,650 FY 27-28 $1,130,892
FY 28-29 $1,170, 473 FY 29-30 $1,211,440
FY 30-31 $621,000 FY 31-32 $642,735
FY 32-33 $665,231 FY 33-34 $688,514
FY 34-35 $712,612
Council Goal: Reliable Infrastructure
Justification:

The City utilizes generators at most of its well sites for emergency shutdowns that would allow the wellsite to continue to meet water demands. These generators have a certain lifespan to meet both energy loads and regulatory requirements. The City’s generators will begin to reach their lifespan and will be required to be replaced with those meeting current regulatory standards and the need of the Department. The City is anticipating replacing two (2) aged out generators beginning in FY27 to FY30, with one (1) generator replacement occurring every subsequent year.

Project Title: CBK-3
1 H2S Vessel Replacement
Amount: FY 26-27 $ 750,000
Council Goal: Reliable Infrastructure & Quality of Life Justification:

CBK-31 is a City wellsite that has H2S Vessels installed to treat the contaminant. The vessel has reached its useful life and needs to be replaced to maintain clean drinking water supplies to the surrounding community. This Project will be completed in FY27.

Project Title: CBK-3
8 TCP Removal Project
Amount: FY 28-29 $310,500 FY 29-30 - $3,177,450
Council Goal: Reliable Infrastructure & Quality of Life Justification:

This well site has identified TCP in the source water and has been offline. This is a project that consists of design of furnishing and installing GAC Treatment Vessels to bring the well back on-line and provide safe reliable drinking water through the City’s Domestic Water System.

Design will be completed in FY 29, with Construction anticipated to begin in FY30.

Project Title: H2S
Vessel Replacement Project – Phase 1
Amount: FY 28-29 $500,000 FY 29-30 $2,000,000
FY 30-31 $2,000,000 FY 31-32 $1,000,000
Council Goal: Reliable Infrastructure
Justification:

The City currently treats H2S at various well sites throughout its distribution system. These vessels have been regularly maintained; however, they are near the end of their design life and need replacement. This Project consists of evaluating and designing the replacement of five (5) of these vessels in FY29, with FY30 beginning construction and replacement of two (2) H2S Vessels per year through FY32.

Water Department
Proposed Capital Improvement Projects

Page 4 ends

Project Title: PFOs Treatment Program – Phase 2 - CONSTRUCTION Amount: FY 29-30 $ 600,000 FY 30-31 $4, 392,300
FY 31-32 $ 2,415,765
Council Goal: Reliable Infrastructure & Quality of Life Justification:

Project Title: CBK-18 T
CP Removal Project
Amount: FY 30-31 $ 321,368 FY 31-32 $3,288,661
Council Goal: Reliable Infrastructure & Quality of Life Justification:

Design will be completed in FY 31, with Construction anticipated to begin in FY32.

Project Title: TCP R
emoval Project
Amount: FY 32-33 $ 332,615 FY 33-34 $3,403,764
FY 34-35 $344,257
Council Goal: Reliable Infrastructure & Quality of Life Justification:

Well sites have been identified with TCP in the source water. This is a project that consists of design of furnishing and installing GAC Treatment Vessels to bring the well back on-line and provide safe reliable drinking water through the City’s Domestic Water System.

Project Title: H2S
Vessel Replacement Project – Phase 2
Amount: FY 32-33 $ 550,000 FY 33-34 $ 1,100,000
FY 34-35 $ 2,420,000
Council Goal: Reliable Infrastructure
Justification:

The City currently treats H2S at various well sites throughout its distribution system. These vessels have been regularly maintained, however, they are near the end of their design life and need replacement. This Project consists of evaluating and designing the replacement of five (5) of these vessels in FY29, with FY30 beginning construction and replacement of two (2) H2S Vessels.

Project Title: PFO
s Treatment Program – Phase 3 - CONSTRUCTION
Amount: FY 32-33 $ 600,000 FY 33-34 $ 2,657,342
FY 34-35 $ 2,923,076
Council Goal: Reliable Infrastructure & Quality of Life Justification:

Page 5 ends

near the MCL, which requires GAC Treatment Vessels to be installed to bring the wells in compliance by the date the EPA has recommended.

EXHIBIT D. WATER BOARD PRESENTATION

WATER DEPARTMENT
Water Rate Increase
Water Board Meeting
March 12, 2025
Municipal Services Responsibilities
• Provide safe clean drinking water to over 165,000 residents o Acquire surface water and treated water supplies
 Well field - 35,000 ac-ft recovered surface water
 KCWA-ID4 6,500 ac-ft treated water
 CWS NETP 11,000 ac-ft and CWS NGTP 6,000 ac-ft treated water o Meet all State and Federal regulatory requirements:
 Groundwater quality regulations – Arsenic, H2S, TCP 123, and PFOs  Treatment installation, Regulatory sampling and Monitor sampling  Conservation regulations– reduce residential use by 40% by 2040  Sustainable Groundwater Mgmt. Act
o Maintain the system and address aging infrastructure:
 CWS O&M cost increases annually
 Service Line replacements – poly to municipex
 Well rehabilitations – total of 58 operational wells – rehabilitate 2 a year Enterprise Funds
• WATER RATES are Included in the monthly
residential billing
 Readiness-to-Serve – 1” meter [incl. 6% rate]
2025 - $15.83
2026 - $19.15
2027 - $23.17
 Meter consumption – cost / CCF [incl. 6%
rate]
2025 - $1.40
2026 - $1.69
2027 - $2.05

Development of Rate Increases
• Develop a 10-year
Infrastructure Master Plan
o Identify maintenance, regulatory
and growth projects
o Include staffing needed to
operate expanded facilities and
manage projects
• Develop a 10-year Budget
o Evaluate and analysis O&M
line-item expenses
• Prepare rate studies
o Incorporate costs identified in
the master plan
o Determine revenue needed to
meet O&M and CIP expenses

• Required and Significant CIP Costs
o 9 Wells - PFOs treatment by April 2029
$2,000,000/ well + ongoing costs
o 8 Wells - H2S vessels – replacements
$1,000,000/ well + ongoing costs
o 4 Wells - TCP treatment – continue
$2,000,000/ well + ongoing costs
o Replace 2 aged out Generators / year
$500,000/ generator
Impacts Requiring
Water Rate Increase
• Required and Significant O&M Costs
o Water Quality:
regulatory and monitor sampling annual costs
ongoing media change outs costs
o Lead Service Line Inventory – meter to home
o Conservation – 40% reduction by 2040
o Advanced Metering Infrastructure installation
o Cost for Water – surface, treated, ground
o Electrical costs
Water Rate Increase Comparing Different Rate Options
Estimated Annual Expenses - Staff, O&M, & CIP
Estimated Annual Revenue - Meter Cost + Meter Consumption Short Fall - Approximately $12 - $15 million / year
Annual % Increase:

Current FY 26 –6% increase
FY 27– 6% increase
FY 28– 6% increase
FY 29 & 30 – 3% increase
Option 1: FY 26 – 34% increase
FY 27– 6% increase
FY 28 – 6% increase
FY 29 & 30 – 2.4% increase
Total 5-yr Increase = 50.8%
Option 2: FY 26 – 20% increase
FY 27 – 20% increase
FY 28 – 5.5% increase
FY 29 & 30 – 2.5% increase
Total 5-yr Increase = 50.5%
Option 3: FY 26 – 18% increase
FY 27 – 16% increase
FY28 – 10% increase
FY29 – 3.3% increase
FY30 - 2.5% increase
Total 5-yr increase = 49.8%
Option 4: FY 26 – 30 – 11.8% increase
Total 5-yr increase = 59%

ADD BAR CHART
comparing
proposed rate to
other
Cities/Purveyors
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
FY 25 FY 26 FY 27 FY 28 FY 29 FY 30
Reserve Target vs Ending Fund Balance for
Rate Options
Reserve Target Current Option 1
Option 2 Option 3 Option 4
Water Rate Increase
New Meter Consumption Rate Comparison

ADD IN GRAPH

ADD BAR CHART
comparing
proposed rate to
other
Cities/Purveyors $43.46 $48.38 $49.20 $52.30 $54.94
$80.79
$118.32
$142.70
0 20
40 60
80 100
120
140
160
Current
Rate
Increase
City Option
3 City Option
2 Oildale
Mutual
City Option
1 Vaughn
Water
Cal Water East Niles
Dollars
Water Purveyor
Avg. Water Bill 25/26 – Bakersfield Water Purveyors
Using 1” meter and 15 CCF usage and
City Preferred Options Compared to Cal Water
• Monthly Billing @15CCF & 1-inch meter
• 2021 – 2025 Actuals, 2026-2028 using Rate Case, assume recent average of 8% inc. for 2029-30 0 20
40 60
80 100
120
140
160
180
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
City & Cal Water Average Water Bill
Cal Water City-Opt1 City-Opt2 City-Opt3
Timeline to Achieve Increase
• March 3 Meet with CMO
• March 12 Water Board presentation
• March 14 Admin due for Rate Increase - Prop 218
• March 26 Council Meeting – Prop 218 request
• April 7 Cal Water Billing Mailers
• June 11 Prop 218 – Water Rate
• July 1 New rates are in effect

Questions

EXHIBIT E. COUNCIL PRESENTATION

WATER DEPARTMENT
Water Rate Increase
City Council Meeting
March 26, 2025
Municipal Services Responsibilities
• Provide safe clean drinking water to over 165,000 residents o Acquire surface water and treated water supplies
 Well field - 35,000 ac-ft recovered surface water
 KCWA-ID4 6,500 ac-ft treated water
 CWS NETP 11,000 ac-ft and CWS NGTP 6,000 ac-ft treated water o Meet all State and Federal regulatory requirements:
 Groundwater quality regulations – Arsenic, H2S, 1,2,3-TCP , and PFOs  Treatment installation, Regulatory sampling and Monitor sampling  Conservation regulations– reduce residential use by 40% by 2040  Sustainable Groundwater Mgmt. Act
o Maintain the system and address aging infrastructure:
 CWS O&M cost increases annually
 Service Line replacements – poly to municipex
 Well rehabilitations – total of 58 operational wells – rehabilitate 2 a year WARD 3
WARD 5
WARD 7
WARD 6
WARD 1
WARD 2
WARD 4
City Domestic Service Area
• Required and Significant CIP Costs
o 9 Wells - PFOs treatment by April 2029
$2,000,000/ well + ongoing costs
o 8 Wells - H2S vessels – replacements
$1,000,000/ well + ongoing costs
o 4 Wells - TCP treatment – continue
$2,000,000/ well + ongoing costs
o Replace 2 aged out Generators / year
$500,000/ generator
Impacts Requiring
Water Rate Increase
• Required and Significant O&M Costs
o Water Quality:
regulatory and monitor sampling annual costs
ongoing media change outs costs
o Lead Service Line Inventory – meter to home
o Conservation – 40% reduction by 2040
o Advanced Metering Infrastructure installation
o Cost for Water – surface, treated, ground
o Electrical costs
Water Rate Increase
Estimated Annual Expenses - Staff, O&M, & CIP
Estimated Annual Revenue - Meter Cost + Meter
Consumption
Short Fall - Approximately $12 - $15 million / year
Annual % Increase:

Current FY 26 – 6% increase
FY 27 – 6% increase
FY 28 – 6% increase
FY 29 – 3% increase
FY30 – 3% increase
Proposed: FY 26 – 34% increase
FY 27– 6% increase
FY 28 – 6% increase
FY 29 - 2.4% increase
FY30 - 2.4% increase
Total 5-yr Compounded
Rate Increase = 57.87%

ADD BAR CHART
comparing
proposed rate to
other
Cities/Purveyors
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
FY 25 FY 26 FY 27 FY 28 FY 29 FY 30
Reserve Target vs Ending Fund Balance for Proposed Rate Reserve Target Current Proposed
Water Rate Increase
New Meter Cost and Consumption Rate Comparison

ADD IN GRAPH

ADD BAR CHART
comparing
proposed rate to
other
Cities/Purveyors $43.46
$52.30 $54.94
$80.79
$118.32
$142.70
0 20
40 60
80 100
120
140
160
Current Rate
Increase
Oildale Mutual Proposed Rate
Increase
Vaughn Water Cal Water East Niles
Dollars
Water Purveyor
Avg. Water Bill 25/26 – Bakersfield Water Purveyors
Using 1” meter and 15 CCF usage and
Questions

EXHIBIT F. PROP 218 NOTICE

CITY OF BAKERSFIELD

NOTICE OF PUBLIC HEARING ON PROPOSED INCREASES TO DOMESTIC WATER RATES NOTICE IS HEREBY GIVEN that a public hearing accepting testimony will be held before the Bakersfield City Council at 5:15 p.m., or as soon thereafter as the matter may be heard, on Wednesday June 11, 2025 in the Council Chambers of City Hall located at 1501 Truxtun Avenue, Bakersfield, California, for the purpose of considering increases to Domestic Water Rates. The new rates, if adopted, will go into effect on July 1, 2025. In compliance with Proposition 218, affected propert y owners within the City of Bakersfield’s Domestic Water Service area are hereby informed of the proposed increase to Domestic Water Rates.

Background:

Pursuant to Chapters 14.04, 14.06, and 14.08 of Title 14 of the Bakersfield Municipal Code, the City of Bakersfield Domestic Water System provides residents and customers with a firm, reliable, high quality water supply in quantities and under sufficient pressure to meet customer demands. Charges for water service are paid directly by property owners and/or occupants through bills rendered monthly. In compliance with Proposition 218, property owners and/or customers of the City of Bakersfield Domestic Water System are hereby informed of a proposed increase in the Domestic Water Rates. Your water service is included in this action and is identified in the accompanying bill enclosed in this mailing.

City staff have performed a thorough evalua tion of current expenses and capital improvement projects for the Domestic Water System and have developed a ten-year infr astructure master plan and operating budget. Based on this thorough evaluation, the proposed changes will ensure that the cost of service is fairly and equitably recovered from all customer groups in proportion to the service each is receiving, and that total revenue is sufficient to fund operational and capital costs, as well as ensure suffic ient reserves to meet long-term needs.

Proposed Rate Changes:

The proposed increases will help meet the costs of operation and maintenance, meeting water quality standards, and funding for capital costs for a five-year period.

SCHEDULE OF RATES

Within City
Limits
Fairhaven &
Unincorporated
Area s
Within City
Limits
Fairhaven &
Unincorporated
Areas
Within City
Limits
Fairhaven &
Unincorporated
Areas
Within City
Limits
Fairhaven &
Unincorporated
Areas
Within City
Limits
Fairhaven &
Unincorporated
Areas
Within City
Limits
Fairhaven &
Unincorporated
Areas
Quantity Rates:

Per 100 cubic ft/month $1.40 $1.40 1.88 $ 1.88 $ 1.99 $ 1.99$ 2.11 $ 2.11$ 2.16 $ 2.16$ 2.21 $ 2.21$ 5/8" x 3/4" Service $12.84 $16.45 $17.21 $22.04 $18.24 $23.36 $19.33 $24.76 $19.79 $25.35 $20.26 $25.96 1" Service $20.00 $26.01 $26.80 $34.86 $28.41 $36.95 $30.11 $39.17 $30.83 $40.11 $31.57 $41.07 1-1/2" Service $37.90 $49.91 $50.79 $66.87 $53.84 $70.88 $57.07 $75.13 $58.44 $76.93 $59.84 $78.78 2" Service $59.38 $78.60 $79.57 $105.32 $84.34 $111.64 $89.40 $118.34 $91.55 $121.18 $93.75 $124.09 3" Service $116.66 $155.10 $156.32 $207.83 $165.70 $220.30 $175.64 $233.52 $179.86 $239.12 $184.18 $244.86 4" Service $181.10 $241.16 $242.67 $323.16 $257.23 $342.55 $272.66 $363.10 $279.20 $371.81 $285.90 $380.73 6" Service $360.10 $480.21 $482.53 $643.48 $511.48 $682.09 $542.17 $723.02 $555.18 $740.37 $568.50 $758.14 8" Service $574.90 $767.08 $770.37 $1,027.89 $816.59 $1,089.56 $865.59 $1,154.93 $886.36 $1,182.65 $907.63 $1,211.03 10" Service $1,505.69 $1,517.61 $2,017.62 $2,033.60 $2,138.68 $2,155.62 $2,267.00 $2,284.96 $2,321.41 $2,339.80 $2,377.12 $ 2,395.96 1-1/2" Connection $18.73 $18.87 $25.10 $25.28 $26.61 $26.80 $28.21 $28.41 $28.89 $29.09 $29.58 $29.79 2" Connection $5.53 $6.95 $7.41 $9.32 $7.85 $9.88 $8.32 $10.47 $8.52 $10.72 $8.72 $10.98 3" Connection $12.07 $12.92 $16.18 $17.31 $17.15 $18.35 $18.18 $19.45 $18.62 $19.92 $19.07 $20.40 4" Connection $23.35 $25.16 $31.29 $33.72 $33.17 $35.74 $35.16 $37.88 $36.00 $38.79 $36.86 $39.72 6" Connection $63.81 $69.07 $85.51 $92.55 $90.64 $98.10 $96.08 $103.99 $98.39 $106.49 $100.75 $109.05 8" Connection $133.61 $144.80 $179.04 $194.03 $189.78 $205.67 $201.17 $218.01 $206.00 $223.24 $210.94 $228.60 10" Connection $238.60 $258.73 $319.72 $346.70 $338.90 $367.50 $359.23 $389.55 $367.85 $398.90 $376.68 $408.47 12" Connection $384.11 $416.62 $514.71 $558.27 $545.59 $591.77 $578.33 $627.28 $592.21 $642.33 $606.42 $657.75 FY 29/30
Current Rates Proposed Future Water Rates
Monthly Readiness-To-Serve Charge:

Monthly Private Fire Protection Service Charge:

FY 25/26 FY 26/27 FY 27/28 FY 28/29

If you have questions regarding this notice or how it may affect your property, call (661) 326-3715 Monday through Friday from 7:00 a.m. to 4:00 p.m. or email staff at [email protected]. Supporting documentation is availabl e for review at the City Clerk’s Office, City Hall, 1600 Truxtun Avenue, Bakersfield, California 93301.

PUBLIC COMMENT will be accepted in writing on or before the hearing date indicat ed above at the City Clerk’s Office. Any interested person, including property owners, may appear and be heard to protest against the increase to the Domestic Water Rates. Protests to the proposed increases must be delivered in writing to the City Clerk, City of Bakersfield, 1600 Truxtun Avenue, Bakersfield California 93301, prior to the conclusion of the public hearing on June 11, 2025.

All written protests must: 1) identify the assessor’s parcel number 2) identify the address of the parcel and 3) include the name and signature of the property owner submitting the protest. If written protests are receiv ed from a majority of owners of the affe cted parcels, the proposed rate increases will not be approved. In accordance with the California Constitution, as amended by Proposition 218, only one protest is allowed per parcel.

Please take notice that there is a 120-day statute of limitations for challenging any new, increased, or extended fee or charge.

Bakersfield City CouncilOctober 22, 2025

Bakersfield City Council
October 22, 2025