WATER DEPARTMENT
Wastewater Division
2026-2030 SEWER RATES & FEES REPORT
INCLUDING
2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS
2026-2035 SEWER CONNECTION REVENUE ANALYSIS
CITY OF BAKERSFIELD
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LIMITATIONS
This 2026-2030 SEWER RATES & FEES REPORT was prepared solely for the City of Bakersfield as a standalone report and is not intended for use by any other party or any other person. City staff prepared Chapters 1 through 4 which provide the Executive Summary, Background, Expenses, also known as Revenue Requirement, and the proposed Revenue generated. This data was used as the basis for the 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS, which HF&H Consultants developed on behalf of City and is included in this report as Exhibit A.
In April 2025, the 2025 Supplemental Report to the 2021-22
SEWER RATES AND CONNECTION FEES STUDY
was prepared by City staff. Both the 2025 Supplemental Report and the original 2021-22 Sewer Rates and Connection Fees Study are available upon formal request.
In October 2025, the 2026 Sewer Rates & Fees Report was prepared by City staff, with support from HF&H Consultants. This report is a standalone report that includes a full evaluation of the Sewer Connection fee and 2026 Cost of Service Analysis [COSA], which calculates the true costs to provide service without considering bond options and defines what rates are to be paid by the various users. The 2026 Sewer Rates & Fees Report is available upon formal request.
When preparing this 2026-2030 SEWER RATES & FEES REPORT , City staff relied on information and support from hired consultants HF&H Consultants and AECOM and management, engineering, and fiscal administrative staff from the City of Bakersfield ’s Water Department , Public Works Department, and Finance Department, which is considered to be reliable.
Rounding differences caused by stored values in electronic models may exist.
This document represents our understanding of relevant laws, regulations, and court decisions but should not be relied upon as legal advice. Questions concerning the interpretation of legal authorities referenced in this document should be referred to a qualified attorney.
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City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Page i
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ................................................................................. 1
1.1 Study Objectives ........................................................................................... 1
1.2 Findings and Recommendations ..................................................................... 2
2. BACKGROUND .............................................................................................. 4
2.1 Revenue Sources........................................................................................... 4
2.2 Sewer Revenue Increase History .................................................................... 5
2.3 2025 Supplemental Report ............................................................................. 7
2.4 2025 Proposition 218 Process ........................................................................ 7
2.5 2026 Sewer Rates & Fees Report ................................................................... 9
2.6 Public Outreach Effort.................................................................................... 9
2.6.1 Educational Community Meetings ................................................................. 9
2.6.2 Rate Development Community Meetings ..................................................... 10
2.6.3 Tours and Presentations ............................................................................ 11
2.6.4 User Agency Outreach ............................................................................... 11
2.6.5 Social Media Outreach ............................................................................... 14
2.7 2026 Proposition 218 Process ...................................................................... 14
2.7.1 2026 Proposition 218 Approval ................................................................... 14
2.7.2 2026 Proposition 218 Schedule ................................................................... 15
2.8 AECOM Wastewater System Evaluation ......................................................... 15
2.8.1 Major Infrastructure Technical Memo .......................................................... 16
3. REVENUE REQUIREMENT ........................................................................... 17
3.1 Summary of Expenses ................................................................................. 17
3.2 Wastewater Operations & Maintenance Expenses .......................................... 18
3.3 Existing Debt Service ................................................................................... 19
3.4 Capital Improvements ................................................................................. 19
3.5 Wastewater Fund Reserve Target ................................................................. 22
4. CURRENT REVENUE PROJECTIONS ............................................................ 25
4.1 Sewer Service Charge Rate and Revenue [Effective July 1, 2026] ................... 25
4.2 Sewer Connection Fees and Revenue [Effective October 1, 2025] .................. 27
4.3 Miscellaneous Fees and Revenue .................................................................. 29
4.4 Total Projected Annual Revenue [without recommended rate increase] .......... 30
4.5 Sewer Enterprise Fund Balance [without recommended rate increase] ........... 31
5. RECOMMENDED RATE AND BOND .............................................................. 32
5.1 Sewer Service Charge Recommended Rate and Revenue ............................... 32
5.2 Enterprise Revenue ..................................................................................... 33
5.3 2031 Bond Revenue and Debt Service .......................................................... 34
5.4 Total Projected Annual Revenue [with recommended rate increase] ............... 34
6. SEWER ENTERPRISE ................................................................................... 36 City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Page ii
TABLE OF EXHIBITS
Exhibit A. 2026 Recommended Sewer Rate Cost of Service Analysis Exhibit B. 2026-2035 Sewer Connection Revenue Analysis Exhibit C. 10-year Wastewater Financial Plan
Exhibit D. Council – Sewer Enterprise
Exhibit E. Understanding the City’s Sewer System
Exhibit F. Rate Development and Scenarios
Exhibit G. Council – Sewer Recommendations
Exhibit H. Proposition 218 Notice
Exhibit I. AECOM Major Infrastructure Technical Memo
Exhibit J. Personnel Memo
Exhibit K. Capital Improvement Program Memo
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Page iii
TABLE OF FIGURES
Figure 3-1. Rate Modeling Assumptions .................................................................................................... 17 Figure 3-2. Total Projected Revenue Requirements .................................................................................. 17 Figure 3-3. Total Projected Revenue Requirements .................................................................................. 18 Figure 3-4. Additional Personnel ................................................................................................................ 18 Figure 3-5. Projected Operations and Maintenance Expenses .................................................................. 19 Figure 3-6. Current Debt Service ................................................................................................................ 19 Figure 3-7. WWTP 3 Capacity Evaluation ................................................................................................... 20 Figure 3-8a. CIP Summary – Minor Infrastructure – Sewer and Storm ..................................................... 21 Figure 3-8b. CIP Summary – Minor Infrastructure – WWTPs .................................................................... 21 Figure 3-8c. CIP Summary - Major Infrastructure - WWTPs ...................................................................... 22 Figure 3-9. CIP Summary by Cost Category ................................................................................................ 22 Figure 3-10. Annual Reserves - Minimum and Target [All Components] .................................................. 24 Figure 4-1. Projected Current Sewer User Revenue .................................................................................. 25 Figure 4-2. Projected Commercial and Industrial User Surcharge Revenue .............................................. 25 Figure 4-3. Current Sewer User and Surcharge Rates ................................................................................ 26 Figure 4-4. Projected Agreement Revenue ................................................................................................ 26 Figure 4-5. Projected Sewer Service Charge Revenue ............................................................................... 27 Figure 4-6. Residential and Commercial Connection Fee .......................................................................... 27 Figure 4-7. Industrial User Connection Fee ................................................................................................ 28 Figure 4-8. Historical and Current Sewer Connection Fee .......................................................................... 29 Figure 4-9. Projected Sewer Connection Revenue ..................................................................................... 29 Figure 4-10. Non-Operating Commercial and Industrial User Fees ........................................................... 30 Figure 4-11. Non-Operating Septage and Grease Fees .............................................................................. 30 Figure 4-12. Non-Operating Pretreatment Fees ........................................................................................ 30 Figure 4-13. Non-Operating Revenue ........................................................................................................ 30 Figure 4-14. Total Wastewater Revenue [without increase] ..................................................................... 31 Figure 4-15. Annual Fund Balance [without Increase] ............................................................................... 31 Figure 5-1. Recommended Rate Service Charge Revenue ......................................................................... 32 Figure 5-2. User Agencies Proportional WWTP 2 Costs ............................................................................. 33 Figure 5-3. User Agencies Revenue ............................................................................................................ 33 Figure 5-4. Enterprise Interest Earnings Revenue ..................................................................................... 34 Figure 5-5. Debt Service ............................................................................................................................. 34 Figure 5-6. Total Wastewater Revenue [with increase]............................................................................. 35 Figure 6-1. Sewer Enterprise Fund Balance ............................................................................................... 36
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report Page iv
ACRONYMS
ADA Average Daily Attendance, how schools are currently billed for sewer service BOD Biochemical Oxygen Demand
CCI Construction Cost Index
CCF or HCF Hundred cubic feet of metered water sold; 748 gallons CIP Capital Improvement Program
CMO City Management
COSA Cost-of-Service Analysis
CPI Consumer Price Index
CSA-71 Community Service Area 71
EDU Equivalent Dwelling Unit
ENCSD East Niles Community Service District
ENR Engineering News Record
Finance City Finance Department
FY Fiscal Year
GPD Gallons per Day
IU Industrial User
KC-HBA Kern County Home Builders Association
KSA Kern Sanitation Agency
LB or LBS Pound or Pounds
MG Million Gallons
O&M Operations and Maintenance
PAYGo Pay-As-You-Go, in reference to funding capital improvements from cash rather than from borrowed sources of revenue
Prop 218 California Proposition 218
PW Public Works Department
RFQ Request for Qualifications
RV Recreational Vehicle, as in the City’s commercial user group - RV Parks SFDE Single-Family Dwelling Equivalent
TSS Total Suspended Solids
Water City Water Department
WWTP Wastewater Treatment Plant
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
1. EXECUTIVE SUMMARY
This 2026-2030 SEWER RATES & FEES REPORT, herein after referred to as 2026 -2030 Report, was prepared by City of Bakersfield Water Department [Water]. Th e 2026-2030 Report is an update to the 2026 Sewer Rates and Fees Report prepared and finalized in October 2025.
The 2026-2030 Report is a standalone report which includes 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS prepared by HF&H Consultants [HF&H], that reflects the City of Bakersfield recommended 2026 sewer user rate , and the 2026-2035 SEWER CONNECTION REVENUE ANALYSIS prepared by Water staff. Both memorandums are attached as Exhibit A and Exhibit B, respectively.
The purpose of the 2026-2030 Report is to:
• Evaluate the recommended rate s utilizing an appropriate wastewater rate model, financial plan, and cost -of-service analysis [COSA] to determine revenue requirements and revenue generation to ensure the financial sustainability of the Sewer Enterprise • Determine revenue requirement for wastewater collections, storm water collections and treatment, including operations, maintenance, personnel, and capital improvement • Determine the reserve target needed to ensure revenue is available to cover annual operations, maintenance, and capital improvement expenses • Utilize non-operating revenue based on FY 2024-25 adopted fees • Include the 2026-2035 SEWER CONNECTION REVENUE ANALYSIS that determined the sewer connection revenue based on FY 2025-26 adopted fees and implemented policies • Include the 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS that identifies the annual cost to provide the service to the various customer classes The Executive Summary presents the findings and recommendations in this report.
1.1 Study Objectives
The City’s key objectives are:
Provide revenue sufficiency , adequate reserves, and financial stability - Ensure revenue from future sewer rates and fees is able to cover costs, establish adequate reserves and maintain necessary debt service coverage requirements. Revenue requirement projections are increasing with expanded capital program expenses to upgrade infrastructure.
Evaluate and incorporate system needs and improvements – Evaluate the wastewater and storm drain systems, identifying deficiencies and required improvements to ensure the systems can meet current demands and future growth.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Determine the cost of service for all customer classes - Revisit the allocation of the City’s Sewer Enterprise costs to verify each customer class pays their proportionate share of expenses. Each customer within each customer class must pay their proportionate share of expenses for the City’s collection and treatment services.
1.2 Findings and Recommendations
In preparing this 2026-2030 Report, the following findings and recommendations were made.
Wastewater Rate Model Period
The rate model period is a 5 -year evaluation from Fiscal Year [FY] 2026 -2027 through FY 2030- 2031, herein after defined as 2026-2030, which is the timeframe allowed for a Prop osition 218 rate increase. During this period, Water staff will track revenue collection and advance the major infrastructure project costs and they do anticipate that additional rate increases will be needed beyond the five years. City Management and Water s taff acknowledge that this will require another evaluation and Proposition 218 prior to any increases for the next 5-year period, FY 2031- 2032 through FY 2035-2036.
Wastewater Financial Plan Period
The financial plan period is 10 years, from FY 2026-27 through FY 2035-36, herein after defined as 2026-2035, which is the time frame needed to complete significant infrastructure improvements for the wastewater and storm drain systems to meet current demands and future growth, including the expansion of Wastewater Treatment Plant [WWTP] 3 and an upgrade of WWTP 2. In addition, with the support of AECOM, their evaluation of the existing systems identified the need for a new plant due to the aged technology at WWTP 2 and ensuring permit compliance for current and future growth. Funds for the new facility to replace WWTP 2 are included in the 10-year plan to begin environmental, engineering, and permitting work, however, construction will occur outside of this plan period between 2036-2041. The 10-year Financial Plan is attached as Exhibit C.
Cost of Service Analysis Period
The 2026-2030 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS focuses on identifying and evaluating the costs that the various customer classes should pay for the service s to collect and treat their wastewater and storm water during FY 2026- 2027. The recommended rates are incorporated into the 5-year [2026-2030] rate model, which generates revenue required to fund the 10-year [2026-2035] financial plan.
Revenue Requirements
The annual revenue requirement, for the 10-year [2026-2035] period is determined to be as low as $80.5 million and as high as $ 278.6 million, as shown in the financial plan. The revenue requirement includes all costs to operate, maintain, repair, and improve the sewer collections system, storm drain system and wastewater treatment plants.
Non-Operating Fee Rate and Revenue
Effective July 1, 2024, the non-operating fees were increased. The revenue generated from these fees is separate from rate revenue generated by sewer service charges and connection fees. Non- City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
operating fees include industrial discharge permit fees, septage hauler disposal fees, pretreatment inspection fees, rents and royalties. Currently , Water staff has determined that the current fees are in line with actual costs. The non-operating fees will be reevaluated annually to ensure that the staff and equipment costs, required to provide these services, are covered in full by the customer.
Sewer Service Charge Rate and Revenue
On July 1, 2025, the fixed annual Sewer Service Charge was increased by the Consumer Price Index [CPI] to $247.13 for FY 2025-26. It has been one of the lowest fixed annual service charges in the State of California since 2006. This service charge has only been minimally increased over the past 20 years and does not generate sufficient revenue to ensure the wastewater and storm drain systems are properly operated, maintained and improved for the residents of Bakersfield.
Cost of Service Analysis Rate and Revenue
The 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS provides for the re - balancing of revenues between customer classe s (i.e., single -family residents, multi -family residents, commercial office buildings, restaurants, bakeries, industrial accounts, etc.) to realign rates and reflects a scenario where the City saves for future capital infrastructure projects in advance to be able to “cash fund” future work. A COSA determines how much each class should pay based on its respective share of flow and wastewater strength (i.e., biochemical oxygen demand and total suspended solids, the standard measures of wastewater strength). Based on this analysis, which was performed by HF&H, the Sewer User rate is recommended to increase to $475.00 for FY 2026-27 Sewer Service Charge. The rate will then increase by $100 annually for the next 4 years to a maximum rate of $875.00 in FY 2030-31. The analysis also recommended increases to the City’s Commercial Surcharge rates and Industrial User rates.
This standalone analysis is included in 2026-2030 Report as Exhibit A.
Residential Connection Fee Rate and Revenue
Effective October 1, 2025, the residential connection fee was increased to $7,248 by escalating the FY 2024-25 rate of $6,947 by the Engineering News Record Construction Cost Index [ENR-CCI] rate of 4.33%.
Based on a request from the Kern County Home Builders Association [KC -HBA], it is anticipated that the connection fee will be increased annually by the ENR -CCI, which is assumed to be 3.5% for this analysis. Water staff prepared a 2026-2035 SEWER CONNECTION REVENUE ANALYSIS to determine connection fee revenue generated during the 10-year period by:
• Utilizing the current and escalated fee rate structure • Evaluating the impacts of active tentative tracts, also known as vested tracts • Considering growth rates based on guidance from the City’s Development Services Department
This standalone analysis is included in 2026-2030 Report as Exhibit B.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
2. BACKGROUND
In early 2024, there was a restructuring of the Water Resources Department to integrate the Wastewater Division, previously part of the Public Works Department, with the Water Resources Department. This resulted in the formation of the Water Department [Water], whose main purpose is to holistically manage the City of Bakersfield’s water portfolio. Despite the merger, City continues to account for water and wastewater program costs separately. Wastewater programs are funded via the Sewer Enterprise Fund.
2.1 Revenue Sources
The City’s current rate structure collects revenues in multiple ways for the Sewer Enterprise Fund, including:
• Annually, via the Kern County tax roll
• Monthly, based on billings and non-operating fees
• Sporadically, when developers pull building permits
Residential customer rates are designed to generate revenue through collection of fixed sewer service charges solely via the tax roll.
Commercial customer rates are designed to generate sufficient revenues through the collection of fixed service charges via tax roll plus sewer surcharge for those commercial customers who discharge more than their allotted discharge volume. Surcharge revenues are collected monthly from commercial accounts whose water use exceeds the annual amount allowed under the fixed service charge per parcel. Excessive water use anticipates additional demands on the wastewater system to convey and treat excess flows that will occur.
Industrial user rates are designed to generate sufficient revenue through the collection of fixed service charges via tax roll plus sewer surcharge . The sewer surcharge for industrial users is calculated based on metered flow, BOD, and TSS and is billed monthly.
Wastewater systems provide wastewater collection and treatment services to commercial, residential, and industrial developments within and outside its City limits, approximately 125,000 connections. The City provides wastewater treatment services to three use r agencies outside City limits: Community Service Area 71 [CSA-71], East Niles Community Service District [ ENCSD] and Kern Sanitation Agency [ KSA]. Wastewater from within the City and the three agencies outside the City, is treated by the City’s two wastewater treatment facilities: WWTP 2 and WWTP
3. The City maintains agreements with ENCSD, KSA, and CSA- 71 and receives an annual lump sum payment from ENCSD and KSA for their proportionate share of WWTP 2 operations, maintenance and capital expenses. The City bills and receives payment from Kern County to account for services provided to CSA-71 customers.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
New customers , including single -family and multi- family homes, commercial business, and industrial users, connecting to the City of Bakersfield sewer system are charged a one -time fee at the time of connection.
Finally, the City receives additional sources of revenue separate from the rate revenues generated by sewer service charges and connection fees. These include industrial discharge permit fees, septage hauler disposal fees, pretreatment annual fees, and rental income for use of the City’s Wastewater Farm.
2.2 Sewer Revenue Increase History
In 2024, the City identified the need to evaluate and increase the various wastewater rates and fees. Water staff developed a 10-year wastewater financial plan and associated rate model to ensure the future financial health of the Sewer Enterprise was sustainable.
Water staff met with various City Departments, City Management [CMO] and City Council members to prepare the analysis for the various rate and fee adjustments. It was important to ensure that this analysis included all aspects associated with system expenses, revenue collections, and funding options to address the concerns with outdated technology, aging infrastructure and capacity needed for future growth.
Fees and Rates evaluated included:
• Non-Operating Fees – Miscellaneous fees collected
• Sewer Connection Fee – Developer fee
• Sewer Service Charge Rate – Proposition 218 required – collected via tax roll • Commercial Surcharge Rates – Proposition 218 required – collected via monthly billing • Industrial User Rates – Proposition 218 required – collected monthly billing
2.2.1 Non-Operating Fee Increases
Water receives additional sources of sewer revenue from non-operating fees, which is defined in Section 4.3.1Industrial discharge permit fees apply to permitted users, for the Water Department to recover the costs for lab work and additional services incurred by environmental compliance inspections. The City allows septage haulers to dispose of grease and septage waste at either City operated treatment plant and bills each hauler based on truck capacity. Rental income is collected from farmers that grow animal feed crops on the City’s Wastewater Farm.
In May 2024, Council approved a resolution to increase the Non- Operating Fees to properly recover operational costs associated with industrial waste, septage hauling , and environmental compliance inspections. The new approved fees were effective July 1, 2024.
2.2.2 Sewer Connection Fee Increases
Directly following the effort to increase non-operating fees, Water began meeting with CMO and Developers, including the KC -HBA, to discuss the need to increase the Sewer Connection Fee.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Connection fees are a one-time fee assessed by City at the time of vesting and paid by the home builder prior to a customer connecting to the wastewater system. Connection fees vary by customer type , including single -family dwellings, muti- family dwellings, commercial and industrial.
In September 2024, after a formal public hearing, Council approved the increase to the Sewer Connection Fees, such that the connection fee per single -family unit increased to $6,947. This fee became effective as of October 1, 2024. Effective October 1, 2025, the residential connection fee was increased to $7,248 by escalating the FY 2024-25 rate of $6,947 by an ENR -CCI rate of
4.33%.
2.2.3 Sewer Service Charge Rates
Once Non-Operating Fees and Sewer Connection Fee increases were addressed, Water staff turned its focus to evaluating the Sewer Service Charge Rates.
Water prepared a 10-year wastewater budget for the operations, maintenance and capital improvements projects for the following systems:
• WWTP 2 and WWTP 3
• Sewer Collections and Storm Drain Systems
Water met with and collected data from the Public Works Departmen t [PW] staff, who oversee the design and construction of the sewer collections and storm drain systems. Their input was vital to ensure that projects and costs for operations, maintenance, and Capital Improvement Programs [CIPs] of these systems were reflected accurately.
Water met with Finance Department [Finance] staff and CMO staff to discuss the 10-year budget, revenue deficiencies and the need to increase the Sewer Service Charge Rates.
Finance and CMO staff advised Water to analyze different service charge rate increase scenarios, evaluating “bond” and “no bond” rate options, as follows:
• Option 1 – One-time increase to cover all costs – No bond issuance Rate = Increase to $950 – one-time service charge
• Option 2 – Multi-year increase to cover all costs – No bond issuance Rate = Increase to $850 with an annual 4% increase for 5 years, final service charge $1,035 • Option 3 – One-time increase to cover half WWTP 2 construction costs and bond for half Rate = Increase to $705 – one-time service charge
• Option 4 – Multi-year increase to cover half WWTP 2 construction costs and bond for half Rate = FY 25 – Increase to $420, FY 26 – $630, FY 27 – $785, FY 28-30 – remain flat at $785 On March 3, 2025, Water, along with Finance, met with the City Manager to discuss the need for the Sewer Service Charge Rate increase s and the evaluated options. Upon reviewing the City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
evaluation, which identified funding and infrastructure deficiencies, Water was advised to present the data and rate options to the Water Board to obtain guidance and direction.
The Water Board meeting was held on March 12, 2025, at 10:00 am, with Chairman Smith and Members Kaur and Gonzales in attendance. Water presented O ptions 1 - 4 to the Board and it was unanimously recommended for staff to move forward with Option 1 . The Water Board directed staff to take Option 1 to the full Council and request approval to begin the Proposition 218 process.
On March 26, 2025, Water presented the need to increase the Sewer Service Charge Rate to the full Council and recommended Option 1 be selected and included in the Proposition 218 Notice.
There was an in-depth discussion of the various options that were analyzed and the Council voted to move forward with Option 1, which would entail an increase to a $950 fixed annual service charge for the sewer user and would provide the funds needed to offset expenses in the 10-year plan without requiring a bond.
2.3 2025 Supplemental Report
Once staff received direction from Council to move forward with the increase to $950 fixed annual sewer service charge , the 2025 Supplemental Report to the 2021-22 SEWER RATES AND CONNECTION FEES STUDY was finalized, herein after referred to as 2025 Supplemental Report. Both the 2025 report and the original study are available upon formal request.
The completed 2025 Supplemental Report thoroughly evaluated current and future operations, maintenance, and capital improvement expenses needed to ensure the operational efficiencies of sewer collections, storm drain, and wastewater treatment plant systems. It included the 8- year Financial Plan [2025-2033], which identified the total annual Revenue Requirement and the 5-year rate model, which determined revenue generat ion. This analysis verified that the one- time increase to $950 annually for the sewer service charge would generate sufficient revenue needed to cover the identified expenses, maintain adequate reserves, and ensure the health and safety services can continue to be provided to Bakersfield’s existing residents and growing community.
2.4 2025 Proposition 218 Process
Annual sewer fees are viewed as property -related fees for utility service and are subject to Proposition 218. This requires that fees adopted by the City for services rendered do not exceed the reasonable estimated cost for providing the services. Staff had determined that the proposed rates do not exceed the cost of services.
The Proposition 218 process also requires a public hearing in which the public may support or protest the rate increase. This includes notifying affected property owners of a proposed fee or fee increase, and providing a 45-day period for property owners to submit a written protest if desired. Notices were mailed out in April 2025. The public hearing to consider the proposed update was scheduled to take place during May 28, 2025 City Council meeting.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
2.4.1 2025 Proposition 218 Notice Approval
On March 26,2025, Council took action to authorize staff to mail out Proposition 218 notices to sewer customers notifying them of the proposed Sewer Service Charge Rates beginning FY 2025-
26. The Proposition 218 Notice was mailed on April 11, 2025, and read in part:
NOTICE OF PUBLIC HEARING ON PROPOSED INCREASES TO SEWER 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 May 28, 2025, in the Council Chambers of City Hall located at 1501 Truxtun Avenue, Bakersfield, California, for the purpose of considering increases to Sewer Rates. The new rates, if adopted, will go into effect on July 1, 2025. In compliance with Proposition 218, affected property owners within the City limits of Baker sfield are hereby informed of the proposed increases to Sewer Rates.
Sewer Rate Changes
Residential sewer rates are proposed to increase from $239.00 to $950.00 per year.
Residential customers pay a flat rate for sewer. The sewer fee is collected annually on the property tax bill.
The public response was immediate; on April 14, 2025, residents began to call the Water Department with concerns about and opposition to the proposed increase.
2.4.2 2025 Proposition 218 Notice Rescission
Based on the community’s response, Council opted to reconsider the rate increase and on April 23, 2025, advised the community that the Prop 218 Notice would be rescinded during May 14, 2025, Council meeting. A summary of the Rescission Notice is included below.
Rescinded Proposition 218 Notice Concerning a FY 25/26 Sewer Rate Increase:
Effective May 14th, 2025, the Bakersfield City Council has rescinded the Proposition 218 Notice Concerning a FY 25/26 Sewer Rate Increase that was mailed out on April 11th, 2025.
As a result, the proposed rates that were noticed are now null and void, and the previously scheduled hearing for May 28th, 2025, has been cancelled.
The Council and City Management understood that the Sewer Service Charge R ates needed to be raised; however, they requested Water staff to work with a consultant to have the internal report reviewed and to develop an outreach plan to ensure the community is informed about what the Sewer Service Charge Rate s cover, what service the City provides , and why the rate increases are necessary.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
2.5 2026 Sewer Rates & Fees Report
At the direction of the Council, Water reached out to HF&H and requested they review and provide comments on the Water Department’s prepared 2025 Supplemental Report . Their findings were as follows:
• Overall, the 2025 Supplemental Report provided sufficient detail, and the City used the rate model as intended.
• Revenue projections seemed low and HF&H questioned the future growth rate. • Expenses, especially future CIP costs, should include an escalator to account for inflation to material and labor cost increases.
• HF&H recommended preparing an updated cost-of-service analysis based on the financial plan and the significant infrastructure projects planned.
Water staff and HF&H began collaborating in May 2025 to update the 10 -year Financial Plan [2026-2035] and 5-year Rate Model [2026-2030], incorporating HF&H’s recommendations and preparing an updated standalone rates and fees report, sewer connection fee evaluation, and cost of service analysis . The 2026 plan and 2026 model were the foundational documents that were used by Water staff to prepare the 2026 Sewer Rates & Fees Report and for HF&H to prepare the 2026 Sewer Cost of Service Analysis, which identified the 2026 cost to provide service as $1,087 per sewer user.
The information and conclusions from the 2026 Sewer Rates & Fees Report were presented to City Council on October 22, 2025. In addition, Water staff provided six rate scenarios outlining various 5-year and 7-year rate structures that the Council could consider for the future 2026 Prop 218 process. The Sewer Enterprise – Cost of Service and Rate Scenarios presentation presented to the Council during the meeting is attached as Exhibit D.
2.6 Public Outreach Effort
City staff developed and implemented an Outreach Plan intended to inform and educate the community about the condition of the City’s sewer system, need to increase the sewer service charge rate and obtain feedback from the community as to rate options being proposed.
2.6.1 Educational Community Meetings
At the request of the City Council members, the Water Department and the City Manager’s Office – Communications and Marketing Division scheduled and prepared for community meetings that were hosted in every Council Ward during the month of October 2025.
The focus of these community meetings was to inform the residents about:
• Wastewater Basics
• City’s Wastewater system, facilities and deficiencies • How City growth impacts collection and treatment services • 2025 Sewer Service Charge increase attempt
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
• 2026 Sewer Service Charge Rate next steps
Understanding the City’s Sewer System presentation that was shared during the community meetings is attached as Exhibit E.
The meeting dates and locations where the presentation was shared with the community members were as follows:
• 2025-October 6 Ward 5 Community Meeting
Southwest Library 8301 Ming Ave.
Councilman L. Koman
• 2025-October 13 Ward 1 Community Meeting
South High School
Councilman E. Arias
• 2025-October 15 Ward 7 Community Meeting
Ridgeview High School
Councilwoman M. Kaur
• 2025-October 16 Ward 2 Community Meeting
Mill Creek Park Community House
Councilman A. Gonzales
• 2025-October 20 Ward 3 Community Meeting
Chipman Jr. High School
Councilman K. Weir
• 2025-October 21 Ward 6 Community Meeting
Kern City Civic Association
Councilman Z. Bashirtash
• 2025-October 27 Ward 4 Community Meeting
NOR Recreation Center
Councilman B. Smith
To promote these meetings, flyers were prepared and handed out by Water s taff at the Water Day at the Kern County Fair, hosted by Water Association of Kern County, and posted on the City of Bakersfield Facebook page. In addition, flyers were available at all Community Meetings, so attendees could share future dates with family and friends that may be interested in learning more.
2.6.2 Rate Development Community Meetings
During October 22, 2026, Council Meeting, various City Council members requested Water staff meet with the community again and educate the public as to the rate options and how they were developed. Council also wanted the public to be provided with an opportunity to have input on the rate options that they felt would be the most reasonable.
The focus of these community meetings was to inform the residents about:
• How the cost of service was developed
• Customer classes
• Fixed and surcharge rates
• Major infrastructure project schedules
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
• Proposed rate scenarios and bond amounts
Rate Development and Scenarios presentation that was shared during the community meetings is attached as Exhibit F.
The meeting dates and locations where the presentation was shared with the community members were as follows:
• 2025-November 13
• 2025-December 3
Virtual Meeting
Ward 6 Community Meeting
Kern City Civic Association
Councilman Z. Bashirtash
• 2026-January 8 Ward 2 Community Meeting
Council Chambers
Councilman A. Gonzales
• 2026-January 13 Ward 5 Community Meeting
Southwest Library 8301 Ming Ave.
Councilman L. Koman
• 2026-January 14 Ward 7 Community
Meeting Ridgeview High School
Councilwoman M. Kaur
• 2026-January 15 Ward 1 Community Meeting
South High School
Councilman E. Arias
2.6.3 Tours and Presentations
In addition to the Community Meetings, Water staff also me t with and present to various professional affiliations, key stakeholders and educational programs. The calendar below identifies the additional efforts undertook by Water staff to share the information:
• 2025-August 20 American Society of Civil Engineers
• 2025-October 8 Water Association Kern County
Wastewater Treatment Plant 3 Tour
• 2025-October 14 California Land Surveyors Association • 2025-November 4 Greater Bakersfield Chamber
• 2025-November 4 Do the Math [Live]– Wastewater focus
• 2025-December 3 Rotary Club
• 2025-December 18 Rotary Club
• 2026-January 12 Kern Tax
2.6.4 User Agency Outreach
As stated above in Section 2.1, City maintains agreements with ENCSD, KSA, and CSA -71. KSA and CSA-71 are both managed by County of Kern. ENCSD and KSA pay a share of the operations, City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
maintenance, and capital projects costs on an annual basis to compensate the City for treating the wastewater of the residents within the ENCSD and KSA districts. As far as CSA-71, the County collects revenue from their CSA-71 residents and per the agreement, each resident is to pay the same rate as a City resident for the City’s system to convey and treat their resident’s wastewater.
To ensure that the County and ENSCD are aware of the City’s efforts to increase the sewer user rate, Water staff ensured t hat the County and ENCSD were informed as to the need for the increase and the City’s schedule for the Prop 218 process.
Below is a timeline of meetings that occurred throughout this process in 2025 and 2026:
• 2025-January 22 Water staff called Kern County Public Works Senior Engineer, who is also the KSA representative , herein after referred to as PW Senior Engineer , to advise that the City was evaluating a sewer user rate increase above the typical CPI or CCI amount.
• 2025-Mid-February Water staff called PW Senior Engineer to advise that the City is considering a three digit precent increase but was still working with City Management and Finance staff to determine the exact amount. The PW Senior Engineer was informed that Water staff would be presenting rate increase options to the Water Board on March 12th, 2025.
• 2025 -March 13/14 Water staff called PW Senior Engineer to confirm that the City Water Board directed Water staff to present a proposed rate of $950 to Council during the March 26 meeting and request Council authorization to begin the Prop 218 process. • 2025-March 25 Kern County Assistant PW Director contacted the Water Department requesting additional information about the proposed $950 rate increase.
Water staff advised the Assistant PW Director that Water Staff had been coordinating with County staff and had been providing information and updates to the County. Water staff provided the Water Board presentation and additional information about the recommended rate of $950.
• 2025-April 9 Technical Advisory Committee Meeting
During the Technical Advisory Committee meeting, which was attended by Kern County Public Works Senior Engineer, who is the KSA representative, and ENCSD General Manager, the proposed rate increase to $950 was discussed and data was provided. • 2025-April 22 Meeting with Supervisor David Couch, District 4 Councilman Koman initiated and facilitated this meeting at the request of Supervisor Couch. Water staff were included in the meeting and provided information as to the need for a rate increase and advised that engineering and financial consultants had been hired and construction and rate alternatives were being analyzed. • 2025-July 14 Meeting with Kern County Public Works Director Water Director updated the PW Director as to the current status rate increase effort including working on an update the COSA and preparing a new report with support from hired consultants.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
• 2025-October 1 Meeting with Kern County Public Works Director Water Staff advised Kern County Public Works Director that Outreach Community meetings were beginning and provided a flyer as to the date and locations of all upcoming meetings.
• 2025-October 22 Findings from the 2026 Sewer Rates and Fees Report , COSA and Rate Scenarios were presented to City Council . The report and presentation were uploaded onto the Wastewater Website and made available to the public. • 2025-November 12 AECOM Workshop #1 – WWTP 2
Senior PW Engineer and GM ENCSD were invited and attended the full day workshop to learn about the deficiencies at WWTP 2 and suggestions to address these issues. • 2025-December 18 Water staff email PW Senior Engineer to advise that the sewer rate increase was going to be presented to Council on February 11, 2026. • 2026-January 2 PW Senior Engineer advised Water staff that the County was aware of the City’s work on the sewer rate increase.
• 2026-January 5 Water staff emailed PW Senior Engineer a link to the virtual presentation from November 13, 2026 and provided a timestamp as to the information concerning the rate scenarios.
• 2026-January 20 AECOM Workshop #2 – WWTP2
Senior PW Engineer and GM ENCSD were invited and attended the ½ day workshop to learn about alternatives evaluated to address the WWTP 2 deficiencies and the proposed costs.
2026-January 30 Meeting with Kern County Administrative Officer City Manager had monthly meeting with County Administrative Officer ; one topic of discussion was the City’s proposed rate increase. During the discussion City Manager shared with County Administrative Officer the Recommended Rate Scenario that was later presented to City Council on February 11, 2026.
• 2026-February 11 County Counsel Public Comment Letter County Counsel Paralegal emailed, called, and sent the City a Public Records Request the day of the Council meeting requesting the 2026 Sewer Rates and Fees Report.
Water staff provided a copy of the report to the County Counsel within 1-hour of the ir request.
County Counsel submitted a letter to the City Clerk’s Office one hour prior to the Council Meeting.
Based on the information outlined above, County staff has been advised as to the City’s intent to increase the sewer user rate; informed as to the timing of the Prop 218 process; able to access information, including reports and presentations, as it is all available to the public via a public website; and included in the process by attending engineering workshops.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
2.6.5 Social Media Outreach
In addition to the community and stakeholder meetings, Water staff and the Communications and Marketing teams developed a social media campaign which included a number of additional options for reaching the community:
• 2025-September 15 - Podcast Episode 1
o Wastewater 101
o City’s Facilities
o Cost to Provide Service
• 2026-February 17 – Podcast Episode 2
o Recommended Sewer User Rate
o Council approval to begin Prop 218 process
o Prop 218 Process
• Wastewater Website
o Calendar of Events
o Educational Videos
o Final Reports
• Facebook Posts
o Providing dates and locations for upcoming meetings and events o Sharing links to the website, videos, and presentations o Podcast links
2.7 2026 Proposition 218 Process
This 2026-2030 Report, which includes the 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS, is the document required to justify a modification to the Sewer Service Charge Rates.
In order for the City to modify this rate, the rate [or rates] needs to be presented to Council, Council needs to approve the recommended rate and advise Water staff to move forward with the Proposition 218 process.
2.7.1 2026 Proposition 218 Approval
On February 11, 2026, Water staff updated the City Council during the regular scheduled meeting as to the efforts that had been completed since October 22, 2025, including:
• Public Outreach, as discussed in section 2.6 of this report • AECOM’s Evaluation, as discussed in section 2.8 of this report • Communication, meetings, and data sharing with ENCSD, KSA, and County of Kern City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Water staff also presented to Council a Recommend Sewer User Rate and requested approval to move forward with the Prop osition 218 for this recommended rate. The rate presented was as follows:
• Year 1 – 2026-27 $475 annual rate which equates to $39.58 monthly • Year 2 – 2027-28 $575 annual rate which equates to $47.92 monthly • Year 3 – 2028-29 $675 annual rate which equates to $56.25 monthly • Year 4 – 2029-30 $775 annual rate which equates to $64.58 monthly • Year 5 – 2030-31 $875 annual rate which equates to $72.92 monthly Sewer User Rate Increase Update and Recommendations presentation presented to the Council during the meeting is attached as Exhibit G.
2.7.2 2026 Proposition 218 Schedule
After Water staff’s presentation, Council took action to authorize staff to mail out Proposition 218 notices to sewer user customers. Proposition 218 Notice is included as Exhibit H.
Proposition 218 requires a review period and public hearing in which the public may support or protest the rate increase. This includes notifying affected property owners of a proposed fee or fee increase, and providing a 45-day period for property owners to submit a written protest if desired. Notices were mailed out in early March 2026 . The public hearing to consider the proposed update is scheduled to take place during the April 22, 2026, City Council meeting. If the rate is approved by Council after the public hearing it would be effective July 1, 2026.
Below is the Proposition 218 schedule:
2026-March 2 through 6 Mail Proposition 218 Notice
2026-March 6 through April 22 45-day Public Review Period
2026-April 22 City of Bakersfield Council - 5:15pm Regular Meeting • City Council will hold a Public Hearing
• City Council will need to issue approval to adopt proposed rate • City Council will need to issue approval to provide notice to Kern County Assessors’ Office to include the adopted rates in the Kern County Property Tax.
2026-July 1 Approved Sewer Service Charge Rates would take effect
2.8 AECOM Wastewater System Evaluation
At the direction of City Management and Council, Water staff advertised a Request for Qualifications [RFQ] for a consultant to perform a full evaluation of the entire WWTP 2 and WWTP 3 treatment system, including condition of the infrastructure, capacity, and technology.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
After reviewing proposals and interviewing the top -ranked consultants, Water staff selected AECOM Technical Services, Inc. [AECOM] to perform this evaluation.
City contracted with AECOM in July 2025, field investigations were completed in September, and workshops with Water staff, ENCSD, and County of Kern - KSA were conducted in November 2025 and January 2026. The completed evaluation, assessment and recommendations report will be delivered by April 2026.
The AECOM evaluation has been utilized to determine what improvements are needed at each treatment facility to ensure the plants can provide the necessary services for the growing community. AECOM is currently preparing the draft w astewater system report, which will include their detailed evaluations of WWTP 2 and WWTP 3, the multiple alternatives analyzed, and the selected projects and costs that will meet the City’s requirement to treat 70 MGD by 2050. The final report is anticipated to be complete in April 2026.
2.8.1 Major Infrastructure Technical Memo
As stated above in Section 2.7.1, on February 11, 2026, Water staff provided an update to the City Council about the efforts that had been completed and the recommended sewer user rate.
During this presentation, Water staff identified the four major infrastructure projects that had been analyzed as part of the AECOM effort and were to be included in the 2026- 2030 Report.
Staff shared project costs and schedules with the Council based on information obtained during the January AECOM workshop.
While discussing the development of the 2026-2030 Report with AECOM, it became clear that a technical memo providing additional detail about the major infrastructure projects themselves as well as more detailed project costs would be valuable for the 2026-2030 Report preparation effort.
As a result of this request, AECOM has prepared a Major Infrastructure Technical Memo, which includes project descriptions and more refined cost estimates for the major infrastructure improvements and expansions at WWTP 2 and WWTP 3, and the plan for a new WWTP 4. These updated cost estimates are incorporated in section 3.4 Capital Improvements and reflected throughout the 2026-2030 Report.
AECOM’s Major Infrastructure Technical Memo is included as Exhibit I.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
3. REVENUE REQUIREMENT
A wastewater financial plan was developed to derive the revenue requirements from FY 2026-27 through FY 2035-36. The financial plan is a 10-year budget that includes all expenses associated with operations, maintenance, capital improvements, and debt service for the entire wastewater and storm drain systems. This 10-year period includes the time frame needed to complete significant infrastructure improvements for the two systems to meet current demands and future growth, including the expansion of WWTP 3 , the upgrade s to WWTP 2 and the preliminary engineering and permitting for a new WWTP to replace WWTP 2.
3.1 Summary of Expenses
The revenue requirements represent the costs that must be covered by revenue from rates, fees and other sources. For this study, we used Water ’s Wastewater Division Operations and Maintenance [O&M] budget for FY 2026-27 and applied the annual assumptions shown in Figure 3-1, the known remaining debt service, and the 10-year CIP for sewer collections, storm drain, and wastewater treatment systems.
The escalation factors in Figure 3 -1 summarize effective annual percentage increases in various O&M cost categories.
Figure 3-1. Rate Modeling Assumptions
The annual O&M, current debt service, and capital expenses are listed in Figure 3 -2, and summarized graphically in Figure 3-3, and are described in more detail below.
Figure 3-2. Total Projected Revenue Requirements
Assumptions Annual Escalation
a General Inflation 3. 5%
b Utilities 5.0%
c Salaries 4.0%
d Benefits 4.0%
e Healthcare 4.0%
f Interest on Earnings 2.00%
g Non-rate Revenues 1.0%
h Growth of Accounts 1.45%
j Bad debt (% of revenue) 0.0%
k Construction Cost Inflation 3.50%
FY 2026-27 FY 2027-28 FY 2028-29 F Y 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 TOTAL O&M 34,762,000$ 38, 212,016$ 40,757,212$ 42,924,433$ 46,100,626$ 49,760,006$ 52,656,467$ 58,062,978$ 61,676,900$ 66,347,942$
TOTAL CIP
[w/escalation] 33,438,125$ 36, 988,488$ 76,195,229$ 37,204,570$ 45,330,687$ 150,463,724$ 210,621,355$ 139,404,729$ 172,986,993$ 171,224,941$ TOTAL
DEBT SERVICE 12,265,625$ 12,278,250$ 12,359,250$ 12,362,500$ 12,363,625$ 8,549,125$ 6,631,750$ -$ -$ -$
REVENUE
REQUIREMENT 80,465,750$ 87, 478,754$ 129,311,690$ 92,491,503$ 103,794,937$ 208,772,854$ 269,909,572$ 197,467,707$ 234,663,893$ 237,572,884$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 3-3. Total Projected Revenue Requirements
3.2 Wastewater Operations & Maintenance Expenses
Operations and Maintenance expenses are the costs incurred to ensure that the wastewater and storm drain systems are functioning efficiently to meet all heal th and safety requirements to collect, transport, and treat residential, commercial, and industrial sewage and storm water.
These costs can include personnel, supplies, services, and utilities.
To address the needs of the aging infrastructure and system growth due to City growth, additional staff, reclassification of certain staff positions , and additional equipment have been integrated into the 10-year plan and account for an increase to the personnel complement by 28 employees, shown in Figure 3-4. Additional personnel identified range from administrative staff to mechanics and operators. The justification for these additional staff members is provided in Exhibit J – Personnel Memo.
Figure 3-4. Additional Personnel
2026-2035
Additional Personnel
Adminstrative Personnel 3
Plant Operator IIIs 8
Plant Ele ctrical-CoGe n-Te rtiary w/ve hicle 4
Plant Maintenance 5
Sewer & Storm Drai n Mai ntenance w/vehi cl es 4
Construction & Compliance Inspectors w/vehicle 3
Laboratory Technician 1
TOTAL 28
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
The expense projections include an annual increase in salaries and benefit costs of approximately
4.0% due to increased health costs, anticipated step -raises, reclassifications, and potential cost of living increases. In addition, computer equipment and vehicles have been included in the personnel costs for those positions that require additional equipment. The projected cost and the year in which the additional position is planned to be hired is provided for in Exhibit C – 10- year Financial Plan. These personnel expenses have been factored into the revenue requirement projections.
As shown in Figure 3-5, the City’s O&M expenses are projected to increase by an annual average of 8.3% over the next 10 years due to increased capacity at the facilities associated with growth, repairs needed to ensure aging infrastructure is operational, and rising service costs during th is planning period. O&M supplies and services are escalated at an annual rate of 3.5% , property insurance, liability insurance, and workers compensation are escalated by between 5% - 15% depending on the historical costs to the various division and utilities, including electricity and water, are projected to increase 5% annually.
Figure 3-5. Projected Operations and Maintenance Expenses
3.3 Existing Debt Service
The Sewer E nterprise had two wastewater revenue bonds: 2015A and 2020A . In June 2025, Finance began the process to refinance these two bonds . On August 6, 2025, Finance signed a Bond Purchase agreement and obtained 2025A Bonds in the amount of $55,290,000. Figure 3-6 summarizes the debt service payment schedule for the 2025A Bond . This bond is scheduled to be paid off by the end of FY 2032-33.
Figure 3-6. Current Debt Service
At the request of the Council, in an effort to reduce the overall annual sewer user rate, the financial plan developed for the 2026-2030 Report does consider issuing additional debt to fund wastewater capital improvements during th is 10-year planning period. The proposed bond revenue and debt service is included and analyzed in Section 5.
3.4 Capital Improvements
The wastewater financial model includes a CIP that includes projects which have been identified by Engineering staff from the Water and Public Works Departments. These projects account for FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
SALARIES &
BENEFITS 10,598,037$ 12,248,569$ 14,237,586$ 15,125,270$ 15,517,461$ 16,783,956$ 18,411,729$ 19,044,198$ 19,805,966$ 20,598,204$ 22,222,132$
O&M SUPPLY/
SERVICES/
UTILITIES
19,516,854$ 22,513,431$ 23,974,430$ 25,631,941$ 27,406,972$ 29,316,670$ 31,348,277$ 33,612,269$ 38,257,012$ 41,078,696$ 44,125,810$ TOTAL
OPERATING
EXPENSES
30,114,891$ 34,762,000$ 38,212,016$ 40,757,212$ 42,924,433$ 46,100,626$ 49,760,006$ 52,656,467$ 58,062,978$ 61,676,900$ 66,347,942$ Annual % Increase 15.4% 9.9% 6.7% 5.3% 7.4% 7.9% 5.8% 10.3% 6.2% 7.6% FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 2025A BOND
PAYMENTS 12,265,625$ 12,278,250$ 12,359,250$ 12,362,500$ 12,363,625$ 8,549,125$ 6,631,750$ -$ -$ -$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
infrastructure improvements need ed to ensure efficient operations of the WWTPs , sewer collections, and storm drain systems.
Through this effort, staff identified minor infrastructure projects, like rehabilitating pumps and motors at the WWTPs, updating lift stations, replacing manholes, or lining sewer lines, and major infrastructure projects that are associated with significant upgrades or expansion of the WWTP facilities. Both WWTP 2 and WWTP 3 will require an upgrade due to the facility exceeding its operation life for certain structures, mechanical and electrical equipment, and technology.
In addition, a WWTP 3 expansion is needed to address capacity and operational issues . The growth in s outhwest Bakersfield continues , and it is anticipate d that the number of homes constructed annually will gradually increase from 1,500 homes per year to 2,400 homes per year over the next 10 years. With this growth and the build out of the California Dairies industrial plant, it is anticipated that WWTP 3 will be at capacity by FY 2030-31, but Water will continue to perform annual flow assessments to monitor and verify.
Figure 3-7. WWTP 3 Capacity Evaluation
3.4.2. Wastewater CIP Cost Overview
In addition to minor and major WWTP projects, there are infrastructure improvements identified for the sewer collections and sto rm drain systems. PW – Streets Operations Division maintains both these systems and PW Engineering works closely with Operations staff to identify lift stations and lines that need to be repaired, rehabilitated, upgraded, or replaced as part of the CIP. The entire CIP is summarized in Figures 3-8a, 3-8b, 3-8c. 10 15
20 25
30 35
40 45
50 2009 2012 2014 2017 2020 2023 2025 2028 2031
Flow (MGD)
Year
WWTP #3 Actual and Future Capacity
Influent at 1,500 houses/yr Influent at 2,400 houses/yr Influent at 4,700 houses/yr Plant Design
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 3-8a. CIP Summary – Minor Infrastructure – Sewer and Storm
Figure 3-8b. CIP Summary – Minor Infrastructure – WWTPs
FY 2026-27 FY 2027-28 F Y 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 WWTP2 Septage Processing Unit Replacement $2, 000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 Clam Shell - Grit System $250, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 Plant Lighting Upgrades $200, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 Clarifyer Rehabilitation $1, 000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 Site Infrastructure $750, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 Annual Capital Improvement Projects $1, 500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 WWTP3 Grit Classifier Replace Construction $0 $500, 000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Digester Dome Rehab Construction $150, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Secondary Clarifier Rehab Construction $25, 000 $425,000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Septage Processing Unit Upgrade $1, 150,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Flare Replacement $150, 000 $1,500,000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 BioFilter Fans - Procure & Install $600, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 H2S Damage Repair $150, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Cloth Media Filter Replacement $0 $60, 000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Plant Lighting Upgrade $100, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Primary Influent Gate $100, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP 3 EV Charging for Trucks $0 $0 $0 $1, 000,000 $1,000,000 $0 $0 $0 $0 $0 WWTP3 Site Infrastructure $250, 000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Annual Capital Improvement Projects $1, 500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 CIP Sub-total $9,875,000 $7,485,000 $5, 000,000 $6,000,000 $6,000,000 $5,000,000 $5,000,000 $5,000,000 $5,000,000 $5,000,000 Escalation Factor 1.035 1.071 1. 109 1.148 1.188 1.229 1.272 1.317 1.363 1.411 MINOR INFRASTRUCTURE WWTPs $10,220,625 $8,018,119 $5, 543,589 $6,885,138 $7,126,118 $6,146,277 $6,361,396 $6,584,045 $6,814,487 $7,052,994
CAPITAL IMPROVEMENT PROJECTS
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 3-8c. CIP Summary - Major Infrastructure - WWTPs
Note: The Major Infrastructure estimates shown above include the 3.5% annual escalation factor.
The justifications for the projects are provided in Exhibit K – Capital Improvement Program Memo.
Figure 3-9. CIP Summary by Cost Category
As part of the HF&H review of the 2025 Supplemental Report , it was recommended to add an annual escalator to the CIP to account for increases in material and labor costs. All CIP estimates have been escalated annually at a rate of 3.5%, as summarized above in Figure 3-9.
3.5 Wastewater Fund Reserve Target
In addition to covering annual expenses, sewer service charges need to generate revenue to maintain adequate operations, debt service, and capital reserves. To determine what constitutes adequate reserve amounts, the City’s Sewer Enterprise Fund balance is divided into Operating, Capital, and Debt Service Reserves. Recommended target balances are set to fund each reserve, and when combined, account for the Total Reserve Target.
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 WWTP2 P0-Upgrade RFQ & PDR $1,000,000 $2,000,000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP2 P0-Upgrade Design/Enviro $0 $0 $10,000,000 $9,000,000 $0 $0 $0 $0 $0 $0 WWTP2 P0-Upgrade Pre-Purchase [Elec-Mech Equip] $0 $0 $0 $0 $25,000,000 $0 $0 $0 $0 $0 WWTP2 P0-Upgrade-Construction $0 $0 $0 $0 $0 $80,000,000 $84,000,000 $0 $0 $0 WWTP2 P0-Upgrade-Construction Mgmt $0 $0 $0 $0 $0 $7,500,000 $7,500,000 $0 $0 $0 WWTP3 P0-32MGD RFQ & PDR & Design $1,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 P0-32MGD Pre-Purchase [Elec-Mech Equip] $0 $2,600,000 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 P0-32MGD-Construction $0 $0 $30,500,000 $0 $0 $0 $0 $0 $0 $0 WWTP3 P0-32MGD-Construction Mgmt $0 $0 $2,600,000 $0 $0 $0 $0 $0 $0 $0 WWTP3 EXP40 RFQ & PDR $0 $0 RFQ $2,000,000 $1,000,000 $0 $0 $0 $0 $0 WWTP3 EXP40 Design/ Enviro/ Permits $0 $0 $0 $0 $0 $25,000,000 $14,000,000 $0 $0 $0 WWTP3 EXP40 Purshase 160 Acres $0 $0 $0 $0 $0 $0 $2,500,000 $0 $0 $0 WWTP3 EXP40 Pre-Purchase [Elec-Mech Equip] $0 $0 $0 $0 $0 $0 $40,000,000 $0 $0 $0 WWTP3 EXP40-Construction $0 $0 $0 $0 $0 $0 $0 $103,000,000 $104,000,000 $80,000,000 WWTP3 EXP40-Construction Mgmt $0 $0 $0 $0 $0 $0 $0 $10,000,000 $10,000,000 $6,000,000 WWTP4 @P2 RFQ/ PDR/ Enviro/ Legal $0 $0 RFQ $4,000,000 $3,000,000 $0 $0 $0 $0 $0 WWTP4 @P2 Design & Permits $0 $0 $0 $0 $0 $21,000,000 $20,000,000 $13,500,000 $0 $0 WWTP4 @P2 Pre-Purchase [Elec-Mech Equip] $0 $0 $0 $0 $0 $0 $0 $0 $35,000,000 $30,000,000 MAJOR INFRASTRUCTURE WWTPs $2,000,000 $4,600,000 $43,100,000 $15,000,000 $29,000,000 $133,500,000 $168,000,000 $126,500,000 $149,000,000 $116,000,000
CAPITAL IMPROVEMENT PROJECTS
FY 2026-27 FY 2027-28 FY 2028-29 F Y 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
SEWER &
STORM
SYSTEMS
$21,217,500 $24,370,369 $27,551,639 $15, 319,432 $9,204,569 $10,817,447 $36,259,959 $6,320,683 $17,172,507 $48,171,948 WWTP 2
TREATMENT $6,899,500 $4,678,063 $12,771,795 $11, 868,808 $27,969,216 $90,573,138 $94,680,698 $3,292,023 $3,407,243 $3,526,497 WWTP 3
TREATMENT $5,321,125 $7,940,057 $35,871,795 $6, 016,331 $5,156,902 $28,073,138 $59,680,698 $116,292,023 $117,407,243 $89,526,497 WWTP 4
TREATMENT $0 $0 $0 $4, 000,000 $3,000,000 $21,000,000 $20,000,000 $13,500,000 $35,000,000 $30,000,000 TOTAL
CIP COSTS $33,438,125 $36,988,488 $76,195,229 $37, 204,570 $45,330,687 $150,463,724 $210,621,355 $139,404,729 $172,986,993 $171,224,941
CAPITAL IMPROVEMENT
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
3.5.1. Operating Reserve Target
Operating Reserves serve multiple purposes ranging from monthly to annual cash flow management. On a monthly basis, the Operating Reserve provides working capital to cover the lag between when the City incurs operating expenses and when it receives revenue from sewer service charges. Providing adequate funding for Operating R eserves is the highest priority.
Because the City bills customers for base sewer service on the County tax roll, there is a nine - month lag between when sewer service charges are billed , and payment is received from the County Assessor. The City does receive monthly revenues from commercial customers who pay sewer surcharges, but tax roll revenues comprise the largest portion of revenues received.
To provide working capital during the nine months between payments from the County Assessor, the City follows an Operating Reserve policy of nine months for its annual operating expenses.
This provides a greater financial buffer to the Sewer Enterprise Fund, decreasing the likelihood that temporary funding from the General Fund will be required to meet operating cash flow needs during the period between service billing and collection. This policy requires that between $26 to $50 million be held in reserves during the planning period.
3.5.2. Debt Reserve Target
The Debt Reserve Target accounts for the current debt service requirement City is obligated to meet. The City’s policy is to keep $1 2.5 million in reserve to make annual payments on the existing Wastewater Revenue Bonds. As shown in Figure 3-6 above, the 2025A bond is to be paid in full by FY 2032-33.
3.5.3. Capital Reserve Target
The Capital Reserve provides liquidity to fund construction for projects that are funded on a PAYGo basis (as opposed to those that are funded from debt). For this analysis, Water plans to fund the next ten years of capital improvement expenditures from the combination of a PAYGo approach and the issuance of a $150 million bond in FY 2031-32. Therefore, the capital expenses funded on a PAYGo basis take the form of even annual contributions of rate revenue for the Capital Reserve, which is equal to the 10-year average projected expenditure. In this way, rates can be modulated smoothly using the Capital Reserve and, in effect, are the capital expenses.
An annual CIP target reserve balance of $92.8 million is used ($928 million in total CIP over the 10-year planning period ÷ 10 years = $92.8 million per year). Maintaining the target balance for the Capital Reserve is recommended after meeting the minimum balance for the Debt Service and Operating Reserves.
3.5.4. Total Sewer Enterprise Fund Reserve Target
The Total Sewer Enterprise Fund Reserve Target is determined by compiling the reserve minimum for operations and debt service, then incorporating capital improvements to obtain the reserve target on an annual basis. Figure 3 -10 summarizes the components of the annual reserve and identifies the Total Sewer Enterprise Fund Reserve Minimum and Target.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 3-10. Annual Reserves - Minimum and Target [All Components]
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 O&M RESERVE 26,071,500$ 28,659,012$ 30,567,909$ 32,193,325$ 34, 575,469$ 37,320,004$ 39,492,350$ 43,547,234$ 46,257,675$ 49,760,957$ DEBT RESERVE 12,265,625$ 12,278,250$ 12,359,250$ 12,362,500$ 12, 363,625$ 8,549,125$ 6,631,750$ -$ -$ -$
TOTAL RESERVE
MINIMUM $ 38,337,125 $40,937,262 $42,927,159 $44,555,825 $46,939,094 $45,869,129 $46,124,100 $43,547,234 $46,257,675 $49,760,957 CIP RESERVE 92,385,884$ 92,385,884$ 92,385,884$ 92,385,884$ 92, 385,884$ 92,385,884$ 92,385,884$ 92,385,884$ 92,385,884$ 92,385,884$
TOTAL RESERVE
TARGET $ 130,723,009 $133,323,146 $135,313,043 $136,941,709 $139,324,978 $138,255,014 $138,509,984 $135,933,118 $138,643,559 $142,146,841 City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
4. CURRENT REVENUE PROJECTIONS
The City’s analysis of revenues from current fees and rates, to support the Wastewater revenue requirement discussed in Section 3, includes:
• Sewer Service Charges and Surcharge Rates
• Sewer Connection Fees
• Miscellaneous Fees
All revenue sources were evaluated based on current fees and rates and the Total Revenue generated is discussed in this section.
4.1 Sewer Service Charge Rate and Revenue [Effective July 1, 2026]
4.1.1. Sewer User Rate and Revenue – Residential and Commercial Effective July 1, 2025, the fixed annual Sewer User Rate for residential and commercial service is $247.13.
Utilizing the current Sewer User Rate of $2 47.13, for approximately 106,000 residential and commercial connections, the rate model calculated the proposed annual revenue from FY 2026- 27 to FY 2035-36, which is shown in Figure 4-1. This annual revenue total assumes no increase to the current sewer user rate during the 10-year financial plan period.
Figure 4-1. Projected Sewer User Revenue at Current Rates
The minor annual increase is a result of additional residential and commercial accounts as the city grows. The projected growth rate of 1.45% was determined by using data from County of Kern, Kern Council of Government, and tentative and active tract map data.
4.1.2. Commercial and Industrial User Surcharge Revenue Based on the current surcharge rate effective July 1, 202 5, shown in Figure 4-3, the rate model calculated proposed annual revenue for FY 2026- 27 to FY 2035 -36 to be received from Commercial and Industrial Surcharge billings, which is shown in Figure 4-2. This annual revenue total assumes no increase to the current surcharge rate during the 10-year financial plan period.
The minor annual increase is a result of additional commercial accounts as the city grows.
Figure 4-2. Projected Commercial and Industrial User Surcharge Revenue
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 F Y 2033-34 FY 2034-35 FY 2035-36
TOTAL SEWER
USER REVENUE 32,450,088$ 33,248,259$ 33,834,238$ 34,288,960$ 34,901,917$ 35,453,136$ 35,992,769$ 36,560,705$ 37,113,635$ 37,667,134$ FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 TOTAL
SURCHARGE
REVENUE
5,640,922$ 5,515,294$ 5,505,599$ 5,553,939$ 5,524,944$ 5,528,161$ 5,535,681$ 5,529,595$ 5,531,146$ 5,532,141$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 4-3. Current Sewer User and Surcharge Rates
4.1.3. Agreements Revenue – ENCSD, KSA, CSA71
Based on the current S ewer User and Surcharge Rates shown in Figure 4 -3, the rate model calculated the projected annual revenue from user agency agreements for FY 2026-27 to FY 2035- 36, which is shown in Figure 4-4.
Figure 4-4. Projected Agreement Revenue
The revenue identified in Figure 4-4 for ENCSD and KSA is the typical revenue collected based on a percentage of operations, maintenance, and minor capital projects costs at WWTP2. The CSA71 revenue is the sewer user rate paid by those that send their wastewater to the City’s system.
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 ENCSD & KSA 1,077,373$ 1,078,167$ 1,079,227$ 1,078,256$ 1,078,550$ 1,078,678$ 1,078,495$ 1,078,574$ 1,078,582$ 1,078,550$ CSA71 160,442$ 161,428$ 160,765$ 160,878$ 161,023$ 160,889$ 160,930$ 160,947$ 160,922$ 160,933$ TOTAL
AGREEMENT
REVENUE
1,237,814$ 1,239,595$ 1,239,992$ 1,239,134$ 1,239,574$ 1,239,567$ 1,239,425$ 1,239,522$ 1,239,504$ 1,239,484$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
4.1.4. Sewer Service Charge Revenue Summary
In summary, the revenue generated at the current sewer service charges and fees is not sufficient to cover each customer’s share of the O&M, debt service, capital project expenses, and minimum reserve target, based on the revenue shown in Figure 4-5.
Figure 4-5. Projected Sewer Service Charge Revenue
Rate increases are recommended in order to generate the revenue needed over the next 5 years to cover the costs for continued operations of the w astewater and storm drain. This action will ensure City continues to provide critical health and safety services to residents.
4.2 Sewer Connection Fees and Revenue [Effective October 1, 2025] N
ew customers connecting to the City of Bakersfield sewer system are charged a one-ti me fee at
the time of connection to reimburse current rate payers for costs they incurred to provide capacity for future growth. Connection fees are paid prior to a customer connecting to the wastewater systems.
C
onnection fees vary by customer type, including Residential, Commercial, and Industrial.
Residential customers pay a flat rate per dwelling unit. Commercial customers pay based on the number of fixture units per dwelling unit or business. Industrial customers pay based on the approximate demands their wastewater will place on the wastewater system according to the volume and strength of the wastewater assumed.
Effective October 1, 2025, the Sewer Connection Fee was increased by 4.33% using the one-year change from the July 2024 ENR-CCI to the July 2025 ENR-CCI.
4.2.1. Sewer Residential and Commercial Connection Fees Figure 4-6. Residential and Commercial Connection Fee
Effective Date
Single Family
Dwelling
Multiple
Family
Dwellings
Dwellings with
14 or less
Fixture Units
Per Fixture Unit
for Commercial
09/30/2024 $5,000 $3,600 $3,181 $227
10/1/2024 $6,947 $5,002 $4,420 $278
10/1/2025 $7,248 $5,218 $4,613 $329.50
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
TOTAL SEWER
USER REVENUE 32,450,088$ 33,248,259$ 33,834,238$ 34,288,960$ 34,901,917$ 35, 453,136$ 35,992,769$ 36,560,705$ 37,113,635$ 37,667,134$ TOTAL
SURCHARGE
REVENUE
5,640,922$ 5,515,294$ 5,505,599$ 5,553,939$ 5,524,944$ 5, 528,161$ 5,535,681$ 5,529,595$ 5,531,146$ 5,532,141$ TOTAL
AGREEMENT
REVENUE
1,237,814$ 1,239,595$ 1,239,992$ 1,239,134$ 1,239,574$ 1, 239,567$ 1,239,425$ 1,239,522$ 1,239,504$ 1,239,484$
TOTAL SERVICE
CHARGE
REVENUE
39,328,825$ 40,003,148$ 40,579,829$ 41,082,032$ 41,666,434$ 42, 220,863$ 42,767,874$ 43,329,822$ 43,884,284$ 44,438,758$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Commercial connection fees rely on the number of fixture units per customer. The commercial sewer connection fees identified in Figure 4-6 were divided by the assumed number of fixture units per Equivalent Dwelling Unit [EDU], 22.
4.2.2. Industrial User Connection Fee
Industrial User [IU] connection fees are calculated according to the projected level of flow and wastewater loading a customer will discharge to the City’s sewer system. The City of Bakersfield currently only has 19 IU connections and the staff is not aware of any future IU planning to come into City. Therefore, revenue collected for the IU Connection Fee is not part of the revenue projections in the 10 -year wastewater financial model. However, City does have set rates that are used to calculate the connection fee, based on flow, BOD, and TSS, for IUs. The current 2025 Industrial Connection fees are shown in Figure 4-7.
Figure 4-7. Industrial User Connection Fee
Flow $28/gallons per day
Biochemical Oxygen Demand [BOD] $1,500/ pounds per day Total Suspended Solids [TSS] $769/ pounds per day
4.2.3. Sewer Connection Fee Revenue Analysis
Revenue generated by sewer connection fees is used to recover growth’s fair share of the costs of existing facilities that were funded by rate payers and that provide capacity for growth.
Connection fees can also be used to recover growth’s fair share of the costs of future capital improvements that are identified in a facilities master plan or similar capital improvement plan.
The combination of the existing and future facilities comprises the facilities that will be needed to serve existing and future customers within the foreseeable planning horizon.
To determine a reasonable projection of sewer connection revenue, during the 10-year financial plan period, staff prepared a thorough analysis, specifically associated with active tentative tracts and vest ed fees . Even though the current sewer connection fee is $7,248 per single -family dwelling, the previous 5 -year average fee collected, based on historical data, is approximately $3,726. The future projected connection fee per single-family dwelling collected for FY 2026 -27 through FY 2029-30 is projected to be $3,925. These lower connection fee values are due to the timing of when the connection fee was calculated. In some cases, there are active tentative tracts that have vested fees as far back as 2005 and 2006, when connection fees were much lower than current fees, as shown in Figure 4-8.
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 4-8. Historical and Current Sewer Connection Fee
In addition to the fee, the analysis also included a growth component to estimate how many single-family homes, multi- family communities, and commercial business are going to be constructed annually. Based on historical data and conversations with Development Services staff, and discussed above in section 4.1.1, this analysis determined the projected growth rate to be approximately 1.45%.
The historical and current conditions, approach, and assumptions are incorporated into the 2026- 2035 SEWER CONNECTION REVENUE ANALYSIS , which is attached as Exhibit B . There are a number of assumptions in this report and the revenue could be impacted drastically based on unknowns associated with vesting tract and phased development; City and County growth and annexations; and State Assembly Bills, State Senate Bills, City Council and Planning Commission policies, which all have the ability to extend vesting tract maps and fees. Ultimately, the analysis projected the annual connection revenue that is shown below in Figure 4.9.
Figure 4-9. Projected Sewer Connection Revenue
4.3 Miscellaneous Fees and Revenue
4.3.1. Non-Operating Fees
City receives additional sources of revenue separate from the revenue generated by sewer service charges, sewer surcharge and connection fees. These include industrial discharge permit fees, septage hauler disposal fees, pretreatment annual fees , and rental income for use of the City’s Wastewater Farm.
Commercial and industrial discharge permit fees apply to permitted users to recover the costs for lab work and additional services incurred by environmental compliance inspections. Industrial users will also be charged for violating or exceeding their allowable capacity.
Effective Date SFD Fee Effective Date SFD Fee
9/15/1997 $1,500 2011 No Increase
1998 No Increase 2012 No Increase
7/1/1999 $2,000 2013 No Increase
7/1/2000 $2,100 2014 No Increase
2001 No Increase 2015 No Increase
7/1/2002 $2,300 2016 No Increase
7/1/2003 $2,400 7/1/2017 $4,200
7/1/2004 $2,500 7/1/2018 $4,400
2005 No Increase 7/1/2019 $4,600
7/1/2006 $2,800 7/1/2020 $4,800
7/1/2007 $3,100 7/1/2021 $5,000
7/1/2008 $3,400 2022 No Increase
2009 No Increase 2023 No Increase
7/1/2010 $4,000 10/1/2024 $6,947
10/1/2025 $7,248
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 F Y 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 SEWER
CONNECTION
REVENUE
8,088,050$ 8,512,458$ 8,937,329$ 9,362,669$ 15,926,602$ 23,030,145$ 24,836,532$ 26,742,328$ 28,752,338$ 30,871,583$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 4-10. Non-Operating Commercial and Industrial User Fees
The City allows septage haulers to dispose of grease and septage waste at either treatment plant and bill each hauler based on truck capacity.
Figure 4-11. Non-Operating Septage and Grease Fees
The Wastewater Pretreatment Unit works with Commercial and Industrial Users to ensure they are following the ir permit requirements and requirements set in the City’s Municipal Code .
Annual and inspection fees are collected along with violation fees to fund this unit.
Figure 4-12. Non-Operating Pretreatment Fees
The Wastewater enterprise has over 5,000 acres of land that are used to dispose of biosolids and effluent. The City has lease agreements with a local farmer that operates and maintains the farm fields in compliance with the City’s waste discharge permit and environmental regulations.
City anticipates collecting approximately $2 .5 to $3 .0 million annually in N on-Operating Revenues during this 10-year period, as shown in Figure 4-13.
Figure 4-13. Non-Operating Revenue
4.4 Total Projected Annual Revenue [without recommended rate increase] The annual revenue discussed above, based on the current rates for sewer service charges, connection fees, and non-operational fees, has been compiled and is shown in Figure 4-14.
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 NON-
OPERATING
REVENUE
2,670,729$ 2,692,410$ 2,714,308$ 2,736,425$ 2,758,763$ 2,781,324$ 2,804,111$ 2,827,125$ 2,850,370$ 2,850,370$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 4-14. Total Wastewater Revenue [without increase]
4.5 Sewer Enterprise Fund Balance [without recommended rate increase] Fund Balance as of June 30, 2026 is estimated to be $48 million. This fund balance total includes revenue from all revenue sources including sew er service charges, collection fees, and non - operating fees. This fund balance will be added to as revenue is collected throughout th e fiscal year. Any balance left at the end of FY 2026 -27 will become the starting fund balance for FY 2027-28, and so on and so forth.
The total annual revenue requirement, also referred to as total expenses, that was identified and discussed in Section 3 , is included in Figure 4 -15 to determine if the current revenue collected based on the current rates and fees can maintain a balanced 10-year financial plan.
Figure 4-15. Annual Fund Balance [without Increase]
Based on the total expenses anticipated to ensure the wastewater system s continue to operate efficiently and to provide services to the residents of Bakersfield, without increases to the sewer services charges and fees, the City’s Sewer Enterprise Fund will generate a negative fund balance in FY 2027-28.
It must be noted that Figure 4 -14 does not account for the Minimum Reserves, discussed in Section 3, that are needed to ensure funds are available to cover 9 months of O&M costs and the current debt service payments. Taking this into account, the Sewer Enterprise Fund would not be able to meet even the Minimum Reserves requirement at the end of FY 2026-27.
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
TOTAL SERVICE
CHARGE
REVENUE
39,328,825$ 40,003,148$ 40,579,829$ 41,082,032$ 41,666,434$ 42,220,863$ 42,767,874$ 43, 329,822$ 43,884,284$ 44,438,758$ TOTAL
CONNECTION
REVENUE
8,088,050$ 8,512,458$ 8,937,329$ 9,362,669$ 15,926,602$ 23,030,145$ 24,836,532$ 26, 742,328$ 28,752,338$ 30,871,583$
TOTAL NON-
OPERATING
REVENUE
2,670,729$ 2,692,410$ 2,714,308$ 2,736,425$ 2,758,763$ 2,781,324$ 2,804,111$ 2, 827,125$ 2,850,370$ 2,850,370$ TOTAL
REVENUE 50,087,605$ 51,208,016$ 52,231,466$ 53,181,125$ 60,351,799$ 68,032,332$ 70,408,517$ 72, 899,276$ 75,486,993$ 78,160,712$ FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 F Y 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
STARTING FUND
BALANCE $48,686,111 $18,307,965 ($17,962,773) ($95,042,998) ($134,353,375) ($177,796,513) ( $318,537,036) ($518,038,091) ($642,606,522) ($801,783,423) TOTAL REVENUE $50,087,605 $51,208,016 $52,231,466 $53,181,125 $60,351,799 $68,032,332 $70, 408,517 $72,899,276 $75,486,993 $78,160,712 TOTAL EXPENSES ($80,465,750) ($87,478,754) ($129,311,690) ($92,491,503) ($103,794,937) ($208,772,854) ( $269,909,572) ($197,467,707) ($234,663,893) ($237,572,884) TOTAL
AVAILABLE
FUND BALANCE
$18,307,965 ($17,962,773) ($95,042,998) ($134,353,375) ($177,796,513) ($318,537,036) ( $518,038,091) ($642,606,522) ($801,783,423) ($961,195,595) City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
5. RECOMMENDED RATES AND BOND
As stated in Section 2 of this report, the City Council authorized Water staff to begin the Proposition 218 process for the recommended rate s, including the sewer user rate, commercial surcharge rates, and industrial user rates, which were presented during the February 11, 2026, Council meeting. The recommended sewer user rate is summarized below:
• Year 1 – 2026-27 $475 annual rate which equates to $39.58 monthly • Year 2 – 2027-28 $575 annual rate which equates to $47.92 monthly • Year 3 – 2028-29 $675 annual rate which equates to $56.25 monthly • Year 4 – 2029-30 $775 annual rate which equates to $64.58 monthly • Year 5 – 2030-31 $875 annual rate which equates to $72.92 monthly Once the recommended rates were authorized by the Council, Water staff were able to finalize the 5-year rate model and 10-year financial plan because the sewer user rate revenue was able to be calculated. The financial plan and rate model were then provided to HF& H so that they would be able to prepare the 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS.
As part of the sewer user rate evaluation, Council requested Water staff include a Bond option to reduce the amount of sewer user rate increase. The bond amount proposed, to ensure the enterprise can meet the revenue requirement , is $150 million, which is included in the department revenue and debt service sections below.
5.1 Sewer Service Charge Recommended Rate and Revenue
Based on the cost of service rates determined as part of the 2026 RECOMMENDED SEWER RATE COST OF SERVICE ANALYSIS, additional revenue will be generated. To determine the additional service charge revenue amount starting FY 2026-27 through FY 2035-36, utilizing the 5-year rate model, the recommend rate of $475 increasing by $100 annually to $875 was inputted. The additional revenue generated and total revenue are shown in Figure 5-1.
Figure 5-1. Recommended Rate Service Charge Revenue
5.1.1. KSA and ENCSD Revenue
The revenue identified in Figure 4-4 is the typical revenue collected from KSA and ENCSD based on a percentage of the operations, maintenance, and CIP costs at WWTP2. The CIP projects, in this case, would be considered minor infrastructure improvements. With the major
SERVICE CHARGE
REVENUE @ $247 $39,328,825 $40,003,148 $40,579,829 $41,082,032 $41,666,434 $42,220,863 $42,767,874 $43, 329,822 $43,884,284 $44,438,758
ADDITIONAL
SERVICE CHARGE
REVENUE @
RECOMMENDED
RATE
$32,192,390 $48,059,617 $64,288,486 $80,812,415 $97,914,048 $103,460,062 $109,227,535 $115, 282,504 $121,560,869 $128,123,537
TOTAL SERVICE
CHARGE
REVENUE
$71,521,215 $88,062,764 $104,868,316 $121,894,447 $139,580,482 $145,680,925 $151,995,410 $158, 612,326 $165,445,154 $172,562,295 City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
infrastructure upgrade project that is anticipated for WWTP 2, KSA and ENCSD will need to pay a percentage of those costs as well. KSA currently pays approximately 4% of the annual O&M and CIP costs, whereas ENCSD currently pays 18% of those costs.
Since ENCSD does have the option to send some of their flows to KSA, they may choose to do this to reduce the percentage of the O&M and major infrastructure costs they would have to pay.
Based on this option, Water staff has assumed that ENCSD would remove half of their flow from the City’s system so their percentage and ultimately their cost would be reduced by half. Based on this assumption, KSA would continue to pay 4% and ENCSD would pay 9% for a total of 13%.
The amount to be paid by each agency is shown in Figure 5-2.
Figure 5-2. User Agencies Proportional WWTP 2 Costs
Water staff acknowledge that the proportional share that the user agencies are t o pay for the major infrastructure project in 203 1 through 2033 is significant. To assist the user agencies, Water staff propose a more levelized payment plan and have spread those amounts over 10 years. The agencies and City will need to enter into some type of reimbursement agreement but for the sake of this report, revenue generated from the user agencies in FY 2030 -2031 and FY 2032-2033 as shown in Figure 5-2 will be budgeted over 10 years as identified in Figure 5-3.
Figure 5-3. User Agencies Revenue
5.2 Enterprise Revenue
With the recommended sewer rate increases and the need to generate significant revenue to cover the costs of the upcoming major infrastructure projects, the enterprise fund balance will grow, which will ensure the fund is sustainable for the future. With the growth of the fund, it is assumed that the fund will earn 2% interest on the earnings. This amount would be accounted for as revenue and is shown in Figure 5-4.
FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 F Y 2035-36 WWTP 2 MAJOR
UPGRADE COST 1,000,000$ 2,000,000$ 10,000,000$ 9, 000,000$ 25,000,000$ 87,500,000$ 91,500,000$ -$ -$ -$ KSA [4%]
PROPORTIONAL
COST
40,000$ 80,000$ 400,000$ 360, 000$ 1,000,000$ 3,500,000$ 3,660,000$ -$ -$ -$ ENCSD [9%]
PROPORTIONAL
COST
90,000$ 180,000$ 900,000$ 810, 000$ 2,250,000$ 7,875,000$ 8,235,000$ -$ -$ -$
TOTAL USER
AGENCY COST 130,000$ 260,000$ 1,300,000$ 1, 170,000$ 3,250,000$ 11,375,000$ 11,895,000$ -$ -$ -$ FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
ENCSD & KSA
MAJOR CIP
REVENUE
130,000$ 260,000$ 1,300,000$ 1,170,000$ 3,250,000$ 2, 327,000$ 2,327,000$ 2,327,000$ 2,327,000$ 2,327,000$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 5-4. Enterprise Interest Earnings Revenue
5.3 2031 Bond Revenue and Debt Service
A bond is a loan made to an organization, such as a government, local agency, or a company.
Bonds may be used by local agencies (e.g., the City of Bakersfield) to distribute the cost of long - term infrastructure over time in place of cash funding. Cash funding the necessary wastewater treatment plant assets would place the burden of financing these assets, which benefit both current and future ratepayers, all on current ratepayers. Instead of a one -time payment, agencies choose to debt -finance the assets to spread the repayment over a scheduled payback period. For utilities, the debt service is incorporated into the cost of service which is paid for by sewer user rates. In effect, debt issuances spread the cost of an investment so that both current users and future users share in paying for this expense.
As part of this sewer rates evaluation, Council requested Water staff to include a bond option in order to reduce the amount that the sewer rates needed to be increased. Water staff analyzed a variety of scenarios, determining the revenue generated from increasing the sewer rate s and identifying the additional bond revenue needed to cover the revenue requirements. These rate scenarios can be found in Exhibit D, Exhibit F, and Exhibit G. Ultimately, it was determined that the bond amount needed to provide the additional revenue above what the recommended rate can generate is $150 million.
Based on the schedule of the major infrastructure capital improvement projects, shown above in Figure 3-8c., Water staff anticipates that the bond will be needed in FY 2030-2031.
Once a bond is obtained, funds are lent to City, and in return, the City promises to pay back the principal amount by a specific date, along with regular interest payments over a scheduled period of time. Typically, interest payments are calculated according to a fixed interest rate. Investors serve as the lender of the bond w hile the organization acts as the borrower. Based on the City obtaining a $150 million bond, the payback period and amount is reflected in Figure 5-6.
Figure 5-5. Debt Service
5.4 Total Projected Annual Revenue [with recommended rate increase] The additional revenue discussed above generated by the recommended rates for sewer service charges, enterprise interest earnings, and bond revenue , plus the sewer connection fee and miscellaneous fee revenue, which are not impacted by the recommended rate increase, has been compiled and is shown in Figure 5-5.
FY 2026-27 FY 2027-28 FY 2028-29 F Y 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36
ENTERPRISE
REVENUE 1,411,822$ 2, 742,865$ 3,681,451$ 4,645,150$ 5,840,415$ 6,816,993$ 7,168,867$ 6,925,489$ 6,342,746$ 5,471,439$ FY 2026-27 FY 2027-28 FY 2028-29 F Y 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 2031 BOND
PAYMENTS -$ -$ -$ -$ -$ -$ 8,674,515$ 8,674,515$ 8,674,515$ 8,674,515$ City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
Figure 5‐6. Total Wastewater Revenue [with increase]
City of Bakersfield – Water Department 2026-2030 Sewer Rates & Fees Report
6. SEWER ENTERPRISE
In summary, with the additional revenue generated from the various sources discussed in Section 5, the revenue requirement, which now includes debt service for a 2031 Bond, has been met.
The 10 -year financial plan is fully funded, which will allow the enterprise to meet minimum reserve requirements within the 10-year planning period as shown below in Figure 6-1.
It must be noted that the 10-year Financial Plan does include an assumed escalation factor of 3% annually in the rate model starting FY 2031-32 to FY 2035-36. This cost escalation ensures that as construction costs for labor and materials increase that enterprise revenues follow suit.
However, rate increases after FY 2030 -31 will require another Prop osition 218 process to implement the projected inflationary increases or any newly identified rate that is needed to ensure the financial health of the sewer enterprise.
Figure 6-1. Sewer Enterprise Fund Balance
EXHIBIT A. 2026 RECOMMENDED SEWER RATE COST OF
SERVICE ANALYSIS
HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
1 March 4, 2026
Kristina Budak
Water Director
City of Bakersfield
6901 McCutchen Road
Bakersfield, CA 93313
Subject: Cost-of-Service Sewer Rates for 2026
Kristina Budak:
HF&H is pleased to submit this analysis as Exhibit A to the City of Bakersfield’s 2026 Sewer Rates & Fees Report concerning FY 2026-27 through FY 2030-31 sewer rates. The report summarizes the analysis that was conducted to develop the recommended rates through FY 2030-31. We recommend a re-balancing of revenues between customer classes to realign rates with the cost of service. In addition, as detailed in the 2026 Report, the City has significant capital infrastructure planned in the next 10-15 years. Revenue increases are recommended to fund these critical projects associated with the City’s existing treatment plants and the addition of a new treatment plant. As a result, increases to total revenue are recommended from FY 2026-27 through FY 2030-31.
Since our previous communication in October 2025, the cost-of-service analysis has been revised and now reflects the City’s plan to issue debt to reduce the amount of cash funding of future capital projects. The reduction of cash funding helps reduce initial increases to rate payers over the next five years that were previously contemplated.
Thank you for the opportunity to assist the City with this study. We express our appreciation to staff for their support of our analysis.
Sincerely,
HF&H CONSULTANTS, LLC
Rick Simonson
Senior Vice President
City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
1 1. COST-OF-SERVICE ANALYSIS
A cost-of-service analysis is a rate-making technique that is used to derive reasonable rates. Reasonable rates are defined by the courts as not being capricious, arbitrary, or discriminatory. Rates are not capricious if there is a clear rationale supporting the analysis. Rates are not arbitrary if there is a sound basis for choosing among alternatives. Rates are not discriminatory if they allocate costs proportionately to customers.
The City’s current rates determine how much of the total revenue requirement is paid by each customer class (i.e., single-family residents, multi-family residents, commercial office buildings, restaurants, bakeries, industrial accounts, etc.). A cost-of-service analysis determines how much each class should pay based on its respective share of flow and wastewater strength (i.e., biochemical oxygen demand and total suspended solids, the standard measures of wastewater strength).
A cost-of-service analysis should be conducted periodically to account for any material changes in the loadings from each class.
1.1 Allocation of Costs to Functions
The cost-of-service analysis is a process by which projected expenses (i.e., the City’s FY 2026-27 revenue requirement) are allocated to the four functions that represent the services the City provides to customers. Three of the functions are related to the “loading” on the collection system produced by the volume and strength of wastewater; the fourth function is related to customer accounts.
The $71.5 million revenue requirement for FY 2026-27 is allocated to functional categories that represent the functions performed by the City’s facilities: customer accounts (i.e., customer service activities, which include billing), flow, Biochemical Oxygen Demand (BOD), and Total Suspended Solids (TSS). This revenue requirement reflects the City’s plan to issue debt in conjunction with cash funding future capital infrastructure projects identified in the next ten years.
Figure 1-1 shows the allocation factors that were applied to each line item of the City’s direct expenses related to the maintenance, replacement, and repair of the City’s wastewater collection and treatment facilities, as well as stormwater collection facilities. With the exception of administrative expenses and labor expenses, allocations of each expense line item were developed according to the specific City account associated with the expense. This means that expenses budgeted for the City’s treatment plants are captured in the Treatment Plant cost category below. All administrative and labor expenses were assigned to the City Operating Expenses category so that all customer accounts would pay for these expenses, regardless of the use of the wastewater system. The total allocations for each of the four functional categories are summed up at the bottom of the figure. These amounts indicate how much of the City’s revenue requirements are associated with each of the four functions.
City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
2 Figure 1-1. Revenue Requirement Functional Cost Allocation Allocation Factors: 1. Sewer Conveyance, 2. Sewer Treatment, 3. Customer Accounts, 4. CIP Composite (see Figure 1-2), 5. Expense Composite (from Subtotal of O&M Expenses)
The composite allocation attributed to capital expenses was derived from a multi-step process. First, the ten-year inflated Capital Improvement Program (CIP) costs for FY 2026-27 through FY 2035-36 were summarized by the three cost category allocations shown in Figure 1-2. City staff provided input on how to allocate capital project costs among the three cost categories. A ten-year average was used to capture the significant treatment plant expenses that will begin in 2031.
Figure 1-2. CIP PAYGo Allocations (FY 2026-27 through FY 2035-36)
Figure 1-2 derived the percentage attributable to each of the three CIP cost category allocations. As shown in Figure 1-3, these percentages were applied to the average annual CIP pay-as-you-go (PAYGo or “cash funded”) amount, $92,385,884. The resulting average annual PAYGo components were assigned to one of three allocation types used in Figure 1-1, based on the functions each group of costs provided.
This exercise determined the amount of average annual CIP PAYGo costs to be apportioned between the four functional allocations of accounts, flow, BOD, and TSS. The CIP composite allocation is the resulting percentage of each of the four functional allocations of average annual PAYGo costs.
FY 2026-27Alloc.Rev. Req.TypeAcctsFlowBODTSSTotalAccountsFlowBODTSSTotalSewer Conveyance Costs$5,938,7511 0.0% 100.0% 0.0% 0.0% 100%$0 $5,938,751 $0 $0 $5,938,751Stormwater Conveyance Costs$406,2383 100.0% 0.0% 0.0% 0.0% 100%$406,238 $0 $0 $0 $406,238Treatment Plant Costs$11,394,4262 0.0% 67.7% 20.3% 12.1% 100%$0 $7,711,747 $2,308,511 $1,374,168 $11,394,426City Operating Expenses$17,022,5863 100% 0.0% 0.0% 0.0% 100%$17,022,586 $0 $0 $0 $17,022,586Subtotal O&M Expenses $34,762,000$17,428,824 $13,650,498 $2,308,511 $1,374,168 $34,762,000Expense Composite 50.1% 39.3% 6.6% 4.0% 100.0%City Capital ExpensesTrans. to Capital Projects Fund $92,385,8844 2.9% 71.3% 16.2% 9.6% 100%$2,692,309 $65,851,723 $14,945,418 $8,896,434 $92,385,884Debt Service 12,265,6254 2.9% 71.3% 16.2% 9.6% 100%$357,445 $8,742,813 $1,984,231 $1,181,136 $12,265,625Total $104,651,509 $3,049,754 $74,594,536 $16,929,649 $10,077,570 $104,651,509Non-Operating Exp/(Rev)Transfer to/(from) Cap Reserves($46,485,210)4 2.9% 71.3% 16.2% 9.6% 100%($1,354,672) ($33,134,187) ($7,519,990) ($4,476,361) ($46,485,210)Transfer to/(from) Op Reserves($18,606,354)5 50.1% 39.3% 6.6% 4.0% 100%($9,328,775) ($7,306,427) ($1,235,630) ($735,523) ($18,606,354)Non-Operating Revenue(2,800,729)5 50.1% 39.3% 6.6% 4.0% 100%($1,404,218) ($1,099,803) ($185,994) ($110,715) ($2,800,729)Subtotal Non-O&M Expenses $36,759,215 ($9,037,911) $33,054,119 $7,988,036 $4,754,971 $36,759,215Total Expenses $71,521,215 $8,390,913 $46,704,618 $10,296,546 $6,129,139 $71,521,215Cost Categories Allocation Factors Allocated Costs CIP Cost Category Allocations FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31Five-Year TotalSewer Conveyance $17,853,750 $20,085,469 $27,551,639 $15,003,863 $4,602,284 $85,097,006Stormwater Conveyance $3,363,750 $4,284,900 $0 $315,569 $4,602,284 $12,566,503Treatment Conveyance $12,220,625 $12,618,119 $48,643,589 $21,885,138 $36,126,118 $131,493,589Total Inflated CIP PAYGo $33,438,125 $36,988,488 $76,195,229 $37,204,570 $45,330,687 $229,157,098CIP Cost Category Allocations FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-3610-Year Total % of TotalSewer Conveyance $6,945,293 $34,033,470 $3,160,342 $10,630,599 $45,244,955 $185,111,665 17.2%Stormwater Conveyance $3,872,154 $2,226,489 $3,160,342 $6,541,907 $2,926,992 $31,294,388 2.9%Treatment Conveyance $139,646,277 $174,361,396 $133,084,045 $155,814,487 $123,052,994 $857,452,788 79.8%Total Inflated CIP PAYGo $150,463,724 $210,621,355 $139,404,729 $172,986,993 $171,224,941 $1,073,858,840 100.0% City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
3 Figure 1-3. Average Annual PAYGo Composite
The Expense Composite allocation in Figure 1-1 is the fifth and final allocation type and was applied to non-operating revenue and expense entries during the process of the revenue requirement allocation.
1.2 Units of Service
The units of service provided by the City to its customers are the sum of the services provided to each of the City’s customer classes.
Estimates of residential and commercial customer flow, BOD, and TSS associated with each customer class are summarized in Figure 1-4. Estimates of industrial user flow, BOD, and TSS associated with each customer are summarized in Figure 1-5. Figure 1-6 provides a summary of all three customer classes.
Figure 1-4. Summary of Customer Class Wastewater Units of Service – Residential & Commercial
Avg. Annual Alloc. Allocation FactorsCIP PAYGo Allocations % of Total PAYGoTypeAccts Flow BOD TSS TotalSewer Conveyance17.2% $15,925,468 1 0% 100% 0% 0% 100%Treatment Plants 79.8% $73,768,107 2 0% 68% 20% 12% 100%Stormwater Conveyance2.9% $2,692,309 3 100% 0% 0% 0% 100%Average Annual CIP PAYGo 100.0% $92,385,884 % of CIP Composite ExpensesAllocation FactorsAccts Flow BOD TSS TotalSewer Conveyance 17.2% $15,925,468 $0 $15,925,468 $0 $0 $15,925,468Treatment Plants 79.8% $73,768,107 $0 $49,926,255 $14,945,418 $8,896,434 $73,768,107Stormwater Conveyance2.9% $2,692,309 $2,692,309 $0 $0 $0 $2,692,309Average Annual CIP PAYGo 100.0% $92,385,884$2,692,309 $65,851,723 $14,945,418 $8,896,434 $92,385,884CIP Composite Allocation (to Figure 1-1)2.9% 71.3% 16.2% 9.6%100.0%Discharge Characteristics per Acct/DU Total System-wide Units of ServiceRate Code Avg Flow BOD TSS Annual Flow Annual BOD Annual TSSCustomer Class (gpd) (mg/l) (mg/l) (hcf) (lbs) (lbs)A B C D = sumE = F = G = A*D*365÷748.052 E*748.052÷1M*B*8.345 E*748.052÷1M*C*8.345Single Family Dwelling 1 220 240 280 91,524 9,824,688 14,719,333 17,172,555Multiple Dwelling (unit) 2 165 240 280 34,818 2,803,166 4,199,699 4,899,649Mobile Home Park (unit) 29 165 240 280 2,328 187,425 280,800 327,600Subtotal - Residential 12,815,279 19,199,832 22,399,804Schools on tax roll 4 45,097 130 100 21 462,093 374,999 288,461Hospital 5 9,611 250 100 31 145,374 226,874 90,749Churches 6 810 150 150 216 85,391 79,957 79,957Rest Home 7 6,992 210 100 56 191,047 250,449 119,261Small Store or Office 11 205 150 150 1,229 123,104 115,271 115,271Combination Store & Res 12 238 180 150 129 14,963 16,813 14,011Large Store 13 837 150 150 226 92,275 86,404 86,404Markets 14 2,793 800 800 59 80,413 401,583 401,583Shopping Center w/ Dining 15 808 600 400 664 261,854 980,774 653,850Office Bldg. 16 843 130 80 891 366,417 297,356 182,988Mortuary 17 684 800 800 7 2,336 11,663 11,663Food or Beverage 18 1,374 1,000 600 412 276,287 1,724,719 1,034,832Recreational 19 775 200 250 131 49,558 61,873 77,342Medical Lab 20 904 200 100 62 27,340 34,134 17,067Car Wash 21 4,651 20 150 31 69,210 8,641 64,806Service Shop 22 443 180 280 518 111,932 125,773 195,646Petroleum 23 720 180 280 112 39,173 44,016 68,470Sales 24 542 150 150 110 29,075 27,225 27,225Nurseries 26 80 150 180 7 272 255 306Hotel-Motels, RV Parks 27 2,544 310 120 167 207,338 401,235 155,317Light & Heavy Industry 31 1,597 180 150 70 54,552 61,297 51,081Timber & Produce Plant 33 823 180 150 1 401 451 376Food Processing 35 21,864 180 150 5 53,340 59,935 49,946Storage-Warehouse 36 548 180 280 392 104,894 117,864 183,345Hotel-Motels, RV Parks w/ Rest. 37 6,193 500 600 18 54,395 169,780 203,736Big Box Store 39 4,248 500 600 13 26,947 84,108 100,930Subtotal - Commercial 2,929,981 5,763,452 4,274,623Total Current Accts/Units City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
4 Residential flow estimates were calculated by applying the 2022 cost-of-service study discharge characteristics per account to the current number of dwelling units. For example, Single family dwelling flow and loading estimates reflect the assumptions that each single family dwelling account discharges 220 gallons per day (gpd) of wastewater flow with a BOD concentration of 240 g/mL and a TSS concentration of 280 g/mL.
Loading characteristics used in the previous 2022 rate study were used whenever possible for non- residential customer classes. However, flow data for non-residential customers were based on 2023 water meter readings that were used to calculate FY 2023-24 sewer charges. The 2022 cost-of-service study simplified several types of non-residential user groups such that these groups are charged on a per account basis rather than a smaller unit (e.g. students for schools, rooms for hotels, and beds for hospitals). In turn, the number of accounts/units per non-residential user group changed significantly from the previous 2022 study.
The flow (in million gallons per year) and strength concentrations (in milligrams per liter) for industrial customers were based on actual measurements for each Monitored Industrial User customer taken in 2023 and billed accordingly. The product of these concentrations multiplied by each class’s estimated flow yielded the class’s pounds of BOD and TSS.
Figure 1-5. Summary of Customer Class Wastewater Units of Service – Industrial
Discharge Characteristics per Acct/DU Total System-wide Units of ServiceRate Code Avg Flow BOD TSS Annual Flow Annual BOD Annual TSSCustomer Class(gpd)(mg/l)(mg/l)(hcf)(lbs)(lbs)ABCD = sumE = F = G = A*D*365÷748.052 E*748.052÷1M*B*8.345 E*748.052÷1M*C*8.345Industrial UsersAlfred Louie Inc (domestic) 271 130 80 1 132 107 66Alfred Louie Inc (industrial) 20,333 12 7 9,921 743 434American Yeast 4,922 886 384 1 2,402 13,284 5,757Aramark Uniform (domestic) 784 130 80 1 383 310 191Aramark Uniform (industrial) 20,223 1,104 442 9,867 68,003 27,226ENSCD - Bolthouse 16,446 281 290 1 8,024 14,076 14,527CA Water 19,868 58 8 1 9,694 3,510 484Cintas (domestic) 1,568 130 80 1 765 621 382Cintas (industrial) 65,430 676 295 31,925 134,722 58,792Crystal Geyser (domestic) 628 130 80 1 306 249 153Crystal Geyser (industrial) 79,596 117 39 38,837 28,366 9,455Culligan 20,378 2 15 1 9,943 93 931Dreyers Ice Cream (domestic) 26,588 130 80 1 12,973 10,528 6,479Dreyers Ice Cream (industrial) 369,848 3,194 909 180,461 3,598,131 1,024,014Ennis Paint (domestic) 657 130 80 1 321 260 160Ennis Paint (industrial) 1,499 768 27 731 3,507 123Great Change Brew 103 3,680 275 1 50 1,152 86Heritage-Crystal Clean 969 293 79 1 473 865 233Jimmy Ash (domestic) 184 130 80 1 90 73 45Jimmy Ash (industrial) 2,912 770 610 1,421 6,830 5,411Kern Oil 122,746 555 30 1 59,892 207,501 11,216Lengthwise Brewing (domestic) 1,983 1,000 600 1 968 6,040 3,624Lengthwise Brewing (industrial) 984 1,002 392 480 3,004 1,175Mission Linen (domestic) 760 130 80 1 371 301 185Mission Linen (industrial) 30,601 448 134 14,931 41,758 12,490Sparkle Cleaners (industrial) 19,420 1,912 935 9,476 113,099 55,307Tailored Brands (domestic) 2,325 130 80 1 1,134 921 566Tailored Brands (industrial) 3,923 1,160 558 1,914 13,862 6,668Temblor Brewing (domestic) 5,967 130 80 1 2,912 2,363 1,454Temblor Brewing (industrial) 486 137 146 237 203 216Tree Nuts LLC (domestic) 77 1,000 600 1 37 234 140Tree Nuts LLC (industrial) 6,955 1,668 151 3,394 35,338 3,199Backwash 3,713 240 280 0 1,812 2,714 3,167Bulkwater Sellers 7,603 240 280 0 3,710 5,558 6,484Subtotal - Industrial 19 419,989 4,318,325 1,260,842 Total Current Accts/Units
City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
5 Figure 1-6. Summary of Customer Class Wastewater Units of Service Source: Figures 1-4 and 1-5
The number of customer accounts/dwelling units is based on the City’s most-recent billing data provided. Figure 1-7 provides a summary of users that determines how costs allocated to account functions in Figure 1-1 were allocated in the cost-of-service analysis. For each customer class, the City bills the specific unit per account according to a specified Single Family Dwelling Equivalent (SFDE) ratio.
As discussed previously, the SFDE ratio for all non-residential user groups was simplified to one SFDE per account during the 2022 study.
Figure 1-7. Current Customer Accounts Units of Service
Figure 1-8 summarizes the total number of SFDEs by customer class. One SFDE per business was assigned to each Industrial User customer. The Residential customer class includes Single Family Dwellings, Multiple Dwelling Units, and Mobil Home Park dwellings (classified per City billing records as rate codes 1, 2, and 29, respectively).
FlowBODTSSCustomer Class Rate Codes(hcf) (lbs) (lbs)Residential 1, 2, 2912,815,279 19,199,832 22,399,804 Commercial 4-27, 31-572,929,981 5,763,452 4,274,623 Industrial N/A419,989 4,318,325 1,260,842 Total 16,165,248 29,281,609 27,935,270ProposedRate per TotalUnits SFDE SFDE/Unit SFDESingle Family Dwelling 91,524 $475.00 1.00 91,524 Multiple Dwelling 34,818 $475.00 0.75 26,114 Mobile Home Park 2,328 $475.00 0.75 1,746 Subtotal Residential 128,670 119,384 Schools 21 $475.00 1.00 21 Hospital 31 $475.00 1.00 31 Churches 216 $475.00 1.00 216 Rest Home 56 $475.00 1.00 56 Small Store or Office 1,229 $475.00 1.00 1,229 Combination Store & Res 129 $475.00 1.00 129 Large Store 226 $475.00 1.00 226 Markets 59 $475.00 1.00 59 Shopping Center w/ Dining 664 $475.00 1.00 664 Office Bldg. 891 $475.00 1.00 891 Mortuary 7 $475.00 1.00 7 Food or Beverage (Restaurant) 412 $475.00 1.00 412 Recreational 131 $475.00 1.00 131 Medical Lab 62 $475.00 1.00 62 Car Wash 31 $475.00 1.00 31 Service Shop 518 $475.00 1.00 518 Petroleum 112 $475.00 1.00 112 Sales 110 $475.00 1.00 110 Nurseries 7 $475.00 1.00 7 Hotel-Motels, RV Parks 185 $475.00 1.00 185 Light & Heavy Industry 70 $475.00 1.00 70 Timber & Produce Plant 1 $475.00 1.00 1 Food Processing 5 $475.00 1.00 5 Storage-Warehouse 392 $475.00 1.00 392 Big Box Store 13 $475.00 1.00 13 Subtotal Commercial 5,577 5,577 Total Commercial and Residential 134,247 124,960 User Group
City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
6 Figure 1-8. Customer Accounts Units of Service by Customer Class
1.3 Unit Costs of Service
The units of service for customer SFDE, flow, BOD, and TSS for each customer class in Figure 1-6 and Figure 1-8 are combined with the functionalized costs in Figure 1-1 to determine the unit costs in Figure 1-9. These unit costs are the costs of providing the units of service to all customer classes without exception, thereby ensuring that all customer classes pay their share in proportion to their respective units of service.
Figure 1-9. Unit Costs of Service
1.4 Revenue Requirement by Customer Class
In cost-of-service analyses, all customer classes are treated equally through the application of the same unit costs to all customers, which is the fundamental purpose of cost-of-service analysis. In this way, the cost-of-service analysis proportionally distributes the revenue requirement to each customer class without discrimination, after which rates can be designed to generate the revenue required to provide the necessary level of service to each class. Figure 1-10 shows the result of applying the unit costs from Figure 1-9 to the units of service for each customer class in Figure 1-6 and Figure 1-8 to distribute the respective shares of the revenue requirement.
Customer Class SFDEResidential 119,384Commercial 5,577Industrial 19Total SFDE 124,979SFDEs Flow BOD TSS TotalAllocated Functional Costsa$8,390,913 $46,704,618 $10,296,546 $6,129,139 $71,521,215(from Figure 1-1)Units of Serviceb124,979 16,165,248 29,281,609 27,935,270(from Figures 1-6, 1-8) SFDE hcf lbs lbsUnit Costsa/b$67.14 $2.89 $0.35 $0.22per SFDE per hcf per lb per lb City of Bakersfield Exhibit A 2026 Report
Final Report 1. Cost-of-Service Analysis
7 Figure 1-10. Revenue Requirement Allocations
¹Refer to Figure 1-6 for Units of Service by Customer Class for Flow, BOD, and TSS. ²Refer to Figure 1-8 for Units of Service by Customer Class for SFDEs.
The revenue requirement allocations are compared with the current revenue at current rates in Figure 1-11. A difference greater than or less than 0% indicates whether current rates of each customer class would result in paying more or less, respectively, than its share of the FY 2026-27 cost of service.
Figure 1-11. Current Revenue Compared with Cost-of-Service (by Customer Class)
Functional AllocationsSFDEs Flow BOD TSS Totala b c d e1Unit Cost of Service $67.14 $2.89 $0.35 $0.222 per SFDE per hcf per lb per lb3Units of Service by Customer Class 1, 24 Residential 119,384 12,815,279 19,199,832 22,399,8045 Commercial 5,577 2,929,981 5,763,452 4,274,6236 Industrial 19 419,989 4,318,325 1,260,8427124,979 16,165,248 29,281,609 27,935,27089Cost of Service by Customer Class10 Residential $8,015,239 $37,025,890 $6,751,404 $4,914,630 $56,707,16311 Commercial $374,398 $8,465,297 $2,026,653 $937,874 $11,804,22112 Industrial $1,276 $1,213,431 $1,518,490 $276,635 $3,009,83213$8,390,913 $46,704,618 $10,296,546 $6,129,139 $71,521,215Cost CurrentCustomer Classes of Service Revenue $ Change % Changea bc=a-b d=c/b1Residential$56,707,163 $29,913,347 $26,793,816 90%2Commercial$11,804,221 $6,478,731 $5,325,490 82%3Industrial$3,009,832 $1,558,984 $1,450,847 93%4Total $71,521,215 $37,951,062 $33,570,15388% City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
8 2. RATE DESIGN
2.1 Rate Design
After the share of the revenue requirement for each customer class is determined in the cost-of-service analysis, rates are designed to ensure that rates for each customer class generate its respective share of the cost of service.
The City’s present rate structures collect rate revenues via the tax roll and/or on a monthly basis.
Residential customer rates are designed to generate their respective share of the cost of service through collection of fixed sewer service charges solely via the tax roll. Commercial customers rates are designed to generate sufficient revenues to cover their respective share of the cost of service through annual tax roll collection, to cover fixed sewer service charges and a minimum level of wastewater discharge, and through monthly billing for those commercial customers who discharge more than the minimum level of discharge. The commercial tax roll charge covers the fixed sewer service charge based on a ratio that reflects their theoretical discharge versus that of a typical single-family residence. Again, commercial customers who discharge more than their allotted discharge volume pay an additional sewer surcharge.
Comparison of actual water use to annualized winter water use serves as a proxy; commercial wastewater discharge is not metered, and their flows are not sampled for BOD and TSS concentrations.
Industrial user charges are structured similarly to commercial customers. Customers pay a fixed annual sewer service charge via the tax roll and all surcharge revenues are collected monthly according to metered flow, BOD, and TSS.
The following analysis and proposed rates maintain the overarching structure of current rates.
2.1.1. Calculation of FY 2026-27 Fixed Sewer Service Charge Rate As shown in Figure 2-1, The fixed annual service charge is the result of applying the unit costs from Figure 1-9 to the residential units of service in Figure 1-6 and Figure 1-8. The FY 2026-27 fixed sewer service charge, per SFDE, would increase from $247.13 to $475.00 per year to meet the cost of service.
Figure 2-1. FY 2026-27 Calculation of Fixed Service Charge Rate per SFDE 1Unit Costs derived in Figure 1-9.
Totals may vary slightly due to rounding.
SFDE Flow BOD TSSSingle Family 1 220 240 280CharacteristicsAnnualize 1 107 161 188hcf/yr lbs/yr lbs/yrUnit Costs¹ $67.14 $2.89 $0.35 $0.22Annual Cost per SFDE $67.14 $310.14 $56.55 $41.17Fixed Service Charge per SFDE $475.00 City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
9 2.1.2. Calculation of FY 2026-27 Commercial Sewer Surcharge Rates The Commercial cost of service shown in Figure 1-10 is $11,804,221. After collection of the fixed service charge revenues, revenues from commercial surcharges comprise the remainder of the commercial cost of service, identified in Figure 1-10. Figure 2-2 calculates the remainder of the cost of service ($9,155,384, see line 8) to be made up by the commercial surcharge rate revenues once the revised fixed service revenues are accounted for. The unit rates specific to the commercial surcharge are calculated from the cost of service attributable to each of the flow functions.
Figure 2-2. Commercial Surcharge Cost of Service
¹Flat rate revenue of $2,648,838 collected from the SFDE charge assessed to commercial parcels reduces the surcharge cost of service. This flat rate revenue is allocated based on line 4 percentages to calculate the surcharge cost of service on line 8.
Totals may vary slightly due to rounding.
Commercial customers are classified into user groups which reflect the BOD and TSS concentrations expected from such activities of that customer class (i.e., retail, restaurants, hospitals, etc.). The BOD and TSS concentrations for the City’s commercial customer classes are based on State guidelines1. The City charges each user group a specific surcharge rate based on one of four user group designations.
Each user group is classified according to low, medium, medium-high, or high strength according to the wastewater characteristics defined. The definitions between each user group are based on the combined BOD and TSS concentrations. Figure 2-3 lays out how each user group is classified. There are no proposed changes to the existing surcharge user group designations.
Figure 2-4 calculates the unit surcharge rates. All calculated wastewater discharge2 exceeding 107 HCF in a given year would be billed according to the surcharge rate assigned to a customer’s assigned user group. The cost to collect and treat a commercial customer’s initial wastewater volume of 107 HCF and treat 161 pounds of BOD and 188 pounds of TSS is accounted for by the fixed service charge. Any additional wastewater discharged beyond this allotted volume will be billed at the surcharge rate corresponding to the wastewater effluent strength user group.
1 State Water Resources Control Board. Revenue Program Guidelines. Appendix G.
2 Each commercial customer is assigned a returned flow percentage that modifies the amount of metered water consumption counted as wastewater discharge.
Functional AllocationsAccounts Flow BOD TSS Total1Commercial Costs of Service$374,398 $8,465,297 $2,026,653 $937,874 $11,804,2212($374,398) ($374,398)3 Flow-Related Expenses Only $0 $8,465,297 $2,026,653 $937,874 $11,429,8234 Proportionate Share of Flow-Related Expenses74.1% 17.7% 8.2%5 Reallocated Account Component($374,398)$277,292 $66,386 $30,721 $06 Adjusted Cost of Service $8,742,588 $2,093,038 $968,595 $11,804,2217 (less Other Flat Rate Revenue)¹($1,961,815) ($469,672) ($217,350) ($2,648,838)8 Surcharge Cost of Servicea$6,780,773 $1,623,366 $751,245 $9,155,3849Units of Service by Customer ClassFlow (HCF)BOD (lbs)TSS (lbs)10 Commercial Surcharge - Totalb2,368,943 4,784,019 3,151,10011Surcharge Unit Ratesc=a/b$2.86 $0.34 $0.2412 per HCF per lb per lb City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
10 Figure 2-3. Strength Classification of Commercial User Groups
BOD TSS Combined StrengthUser Group (mg/L) (mg/L) Loading ClassificationSchools 130 100 230 lowChurches 150 150 300 lowSmall Store 150 150 300 lowCombination Store & Residence 180 150 330 lowLarge Store 150 150 300 lowOffice Bldg. 130 80 210 lowCar Wash 20 150 170 lowSales 150 150 300 lowNurseries 150 180 330 lowLaundromat 180 150 330 lowHospital 250 100 350 lowNursing Home 210 100 310 lowMedical Lab 200 100 300 lowService Shop 180 280 460 lowLight & Heavy Industry 180 150 330 lowTimber & Produce Plant 180 150 330 lowFood Processing 180 150 330 lowOS - Commercial/Industrial 180 150 330 lowRecreational 200 250 450 mediumStorage-Warehouse 180 280 460 mediumPetroleum 180 280 460 mediumHotel-Motels, RV Parks without restaurant 310 120 430 mediumBig Box Store 500 600 1,100 medium-highShopping Center w/ Dining 600 400 1,000 medium-highHotel-Motels, RV Parks (w/ restaurant) 500 600 1,100 medium-highMortuary 800 800 1,600 highFood or Beverage 1,000 600 1,600 highMarkets (Grocery Store) 800 800 1,600 high City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
11 Figure 2-4. Surcharge Rate Calculations
¹Accounts for units of service for additional wastewater discharged beyond the allotted volume per account. Thus units of service are less than those shown in Figure 1-5.
Totals may vary slightly due to rounding.
Figure 2-5 summarizes the changes for each of the commercial user groups, comparing current surcharge rates to proposed surcharge rates.
Surcharge Functional AllocationsFlow BOD TSS TotalSurcharge Costs of Service(Figure 2-2, row 8) $6,780,773 $1,623,366 $751,245 $9,155,384Units of Service by Strength¹Low Strength 1,583,650 1,273,730 834,243Medium Strength 261,440 493,194 330,711Medium High Strength 216,128 956,004 627,754High Strength 307,724 2,061,092 1,358,391Total Commercial 2,368,943 4,784,019 3,151,100Surcharge Unit Costs $2.86 $0.34 $0.24(Figure 2-2, row 11) per HCF per lb per lbCost of Service - Commercial SurchargeLow Strength $4,532,981 $432,216 $198,889 $5,164,087Medium Strength $748,335 $167,356 $78,844 $994,535Medium High Strength $618,638 $324,402 $149,661 $1,092,700High Strength $880,819 $699,392 $323,850 $1,904,061Total Commercial $6,780,773 $1,623,366 $751,245 $9,155,384COS Surcharge SurchargeSurcharge Flow RateLow Strength $5,164,087 1,583,650$3.26per HCFMedium Strength $994,535 261,440$3.80per HCFMedium High Strength $1,092,700 216,128$5.06per HCFHigh Strength $1,904,061 307,724$6.19per HCF City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
12 Figure 2-5. Current and Proposed FY 2026-27 Commercial Surcharge Rates
2.1.3. Calculation of FY 2026-27 Industrial User Sewer Charges Industrial customers are billed based on BOD and TSS concentration sampling data for each customer.
With this data, it is possible to bill each industrial customer using the cost-of-service per-unit costs for flow, BOD and TSS from Figure 1-9, instead of developing aggregate rates per HCF, as is done for the commercial customers. Figure 2-6 summarizes the proposed rates for Industrial customers. As a customer class, revenues from proposed rates, designed to meet the cost of service, would be required to increase 93% more than existing revenues collected. This percentage change is cited in Figure 1-11.
Current Proposed Change StrengthUser Group Surcharge Surcharge in Rate % Difference ClassificationSchools $1.89 $3.26 $1.37 72.1% lowChurches $1.89 $3.26 $1.37 72.1% lowSmall Store $1.89 $3.26 $1.37 72.1% lowCombination Store & Residence $1.89 $3.26 $1.37 72.1% lowLarge Store $1.89 $3.26 $1.37 72.1% lowOffice Bldg. $1.89 $3.26 $1.37 72.1% lowCar Wash $1.89 $3.26 $1.37 72.1% lowSales $1.89 $3.26 $1.37 72.1% lowNurseries $1.89 $3.26 $1.37 72.1% lowLaundromat $1.89 $3.26 $1.37 72.1% lowHospital $1.89 $3.26 $1.37 72.1% lowNursing Home $1.89 $3.26 $1.37 72.1% lowMedical Lab $1.89 $3.26 $1.37 72.1% lowService Shop $1.89 $3.26 $1.37 72.1% lowLight & Heavy Industry $1.89 $3.26 $1.37 72.1% lowTimber & Produce Plant $1.89 $3.26 $1.37 72.1% lowFood Processing $1.89 $3.26 $1.37 72.1% lowOS - Commercial/Industrial $1.89 $3.26 $1.37 72.1% lowRecreational $2.08 $3.80 $1.72 83.0% mediumStorage-Warehouse $2.08 $3.80 $1.72 83.0% mediumPetroleum $2.08 $3.80 $1.72 83.0% mediumHotel-Motels, RV Parks without restaurant $2.08 $3.80 $1.72 83.0% mediumBig Box Store $2.68 $5.06 $2.38 89.1% medium highShopping Center w/ Dining $2.68 $5.06 $2.38 89.1% medium highHotel-Motels, RV Parks (w/ restaurant) $2.68 $5.06 $2.38 89.1% medium highMortuary $3.47 $6.19 $2.72 78.5% highFood or Beverage $3.47 $6.19 $2.72 78.5% highMarkets (Grocery Store) $3.47 $6.19 $2.72 78.5% high City of Bakersfield Exhibit A 2026 Report
Final Report 2. Rate Design
13 Figure 2-6. Current and FY 2026-27 Industrial User Sewer Rates Totals may vary slightly due to rounding.
2.2. Neighboring Agency Comparison
Based on available sources, Figure 2-7 shows the recent charges for sewer service among various Central California agencies. Figure 2-7 indicates that the City’s current sewer rates are currently the lowest single family residential rates in this comparison. The proposed rates account for the capital investment the City plans to make into its treatment plants to continue to serve a growing population.
Figure 2-7. Comparison of Annual Residential Bills
Flow BOD TSSUnit Cost of Service $2.89 $0.35 $0.22per hcf per lb per lbProposed Rates $3,862.30 $351.64 $219.41$/MG $/1,000 lbs $/1,000 lbsCurrent $2,150.60 $169.92 $102.25$ Difference $1,711.69 $181.72 $117.15
EXHIBIT B. SEWER CONNECTION REVENUE ANALYSIS
WATER DEPARTMENT
Wastewater Division
2026-2035 SEWER CONNECTION
REVENUE ANALYSIS
CITY
OF BAKERSFIELD
SEWER CONNECTION REVENUE ANALYSIS
The sewer connection fee is the one -time cost for a developer to connect a single -family dwelling [SFD], apartment complex, commercial or industrial building to the City ’s sewer and storm drain systems, which includes:
• sto
rm drain collections,
• sump maintenance,
• sewer collections, and
• wastewater treatment.
The revenue generated from this connection is to pay for growth related project s, like expansion of the treatment plants or sewer and storm collection systems. It is not used to support the operations and maintenance of the sewer and storm drain systems.
SEWER CONNECTION FEE DEVELOPMENT
The sewer connection fee must be reasonable and related to facilities that benefit growth.
Industry standard practices to determine the fee include:
• Deriving the cost of City facilities [assets, debt service, future growth CIP] • Determine capacity of facilities
• Identify existing connections
• Calculate unit cost of capacity
The City has always taken actions to ensure they remain developer friendly. The benefit to this approach is to encourage development and facilitate growth within City; howeve r, at times, decisions were made that resulted in the fees not generating enough revenue to cover the cost of services for this growth.
In 2010, the City completed a $238 million expansion of Wastewater Treatment Plant 3 [WWTP3], to expand the plant from 16 MGD to 32 MGD. This expansion was needed to be able to provide capacity for future connections to the sewer collection and treatment systems. Upon completion of the plant expansion , the sewer connection fee was set at $4000 per connection from July 2010 through June 2016. Th is fee only generated approximately half of the revenue needed to pay the $12.5 million annual debt service fee associated with the bond that was obtained for the WWTP3 Expansion.
In 2017, staff evaluated the sewer connection fee and recommended that based on their assessment of cost to p
rovide service for growth, the fee should be increased to $5,377 per connection. City opted to phase the increase over five-y ears by increasing the fee by $200/year with the 5 th year being capped at $5,000, shown in Exhi bit B. Again, the revenue generated would not cover the cost for growth based on the evaluation.
In 2022, Public Works – Wastewater hired HF&H to evaluate the wastewater collections and treatment systems to determine the reasonable sewer connection fee based on:
• Identify facilities that benefit growth
• Value of current facilities
• Capacity of facilities
HF&H determined the sewer connection fee should be $6,399.
In 2024, Water Department escalated the $6,399 fee, that was calculated in 2022, by 2-years of Construction Cost Index [CCI], using the Engineering News -Record [ENR]. This resulted in a 2024 fee of $6,947. In September 2024, staff met with Kern County Home Builders Association [KC-HBA] to advise them of the proposed increase to the sewer connection fee.
KC-HBA requested that moving forward, the fee should be increased annually by a CCI instead of large increases spaced out over years. The proposed fee was approved by City Council through a public hearing process and took effect October 1, 2024.
In September 2025, staff once again met with KC-HBA to advise them of the proposed annual increase to the sewer connection fee . The sewer connection fee was increased by CCI , which was determined to be 4.33% based on the July 2024 to June 2025 ENR range. This resulted in the proposed sewer connection fee being $7,248. The proposed fee was approved by City Council through a public hearing process and took effect October 1, 2025.
Per direction and guidance from KC-HBA in 2024, Water staff plan to continue increasing the sewer connection fee by CCI annual ly to ensure that the fee continues to generate the revenue needed to pay for the growth of the system.
Previous and Current Residential Sewer Connection Fees
To estimate sewer connection revenue , that could be collected over the next 1 0 years, historical and current development tract data needs to be analyzed and assumptions have to be made.
Effective Date SFD Fee
9/15/1997 $1,500
7/1/1999 $2,000
7/1/2000 $2,100
7/1/2002 $2,300
7/1/2003 $2,400
7/1/2004 $2,500
7/1/2005 $2,500
7/1/2006 $2,800
7/1/2007 $3,100
7/1/2008 $3,400
7/1/2009 $3,400
7/1/2010 - 6/31/2016 $4,000
7/1/2016 $4,000
7/1/2017 $4,200
7/1/2018 $4,200
7/1/2019 $4,600
7/1/2020 $4,800
7/1/2021 $5,000
7/1/2022 $5,000
7/1/2023 $5,000
10/1/2024 $6,947
10/1/2025 $7,248
The focus of this exercise is to determine the projected sewer connection revenue based on development tracts that are currently Active tentative and Active/Recorded and the fee that the developer will pay at the time of connection.
ACTIVE TENTATIVE TRACTS AND RATES OVERVIEW
The sewer connection fee is set on the date that a developer application is deemed complete and accepted by the Development Services [DS] - Planning [aka. Accepted tentative t ract] but is not paid until the time the developer applies for a building permit to begin construction. Accepted tentative tracts are considered vested tracts, which means the developer is assured that the rights granted will not be affected by future changes in laws or regulations, provided the development proceeds within a specified time frame. Vesting fees are one of these granted rights, which includes the sewer connection fee.
When the Accepted tentative tract is conditionally approved by the Planning Commission it becomes an Active tentative tract and an Active date is set. For clarity, the Accepted tentative tract date sets the date for the vesting rights and the Active tentative tract date sets the date for extensions and expirations.
As explained in the Active Tentative Tract Memo FINAL [attached as Exhibit A] , Active tentative tracts are to remain active for 3 years to allow the developer time to prepare their plans and record the tract so construction can begin. The maximum total years that an Active tentative tract is to remain active is 10 years, which includes two 3-year extensions by the City Planning C ommission. However, in addition to the Planning Commission extensions, the State can pass an Assembly or Senate Bill at any time to extend Active tentative tracts, which typically allows for additional 1- or 2-year extension.
There are approximately 70 Active tentative tracts, which encompass 11,000 lots at an average vested fee of $ 3,036, that have remained active for more than 10 years and the majority of the tracts are more than 18 years. In addition, there are approximately 20 Active tentative tracts, which encompass 2,500 lots at an average vested fee of $5,8 41, that have been active for 10 years or less.
For this sewer connection revenue evaluation, Water Dept. staff is going to assume that 60% of the Active tentative tracts that have been active for more than 10 years and are supposed to expire in 2026 and 2027, will expire. Forty-three [43] of the seventy [70] Active tentative tracts have already received their a llowable two extensions from the Planning Commission. The State may opt to generate another Extension Bill or the developer may request an extension, but with the anticipated support of CMO and Council, staff anticipate 60% will expire. As far as the Active tentative tracts that have been active for 10 years or less, Water Dept. will assume that 100% of these will be included in this revenue evaluation.
These assumptions result in the incorporation of 4,370 Active tentative tracts [10+ years] with a weighted average vesting fee of $3,035 and 2,500 Active tentative tracts [10- years] with a weighted average vesting fee of $5,8 40 into the sewer connection revenue projections.
ACTIVE/RECORDED TRACTS AND RATES OVERVIEW
Once a developer has an Active tentative tract, they have 10 years to decide on when they want to prepare the plans and move forward with recording the tract. That decision could be based on when the Active tentative tract would expire, the housing market, how close utilities are to the tract and if financing can be obtained.
Once the decision is made to move forward with recordation, the developer will submit their construction plans to DS – Land Development Engineering [LDE] [previously PW - Subdivisions] for review and approval. The developer is required to meet all the conditions outlined by DS - Planning in the Accepted tentative tract and Planning Commission in the conditionally approved Active tentative tract. LDE staff will work with the various City departments to obtain input on the plans during the Plan Review process . Once the developer has addressed all the various City department’s comments and mark -ups and met all requirements, LDE will record the final map.
O
n the day the map is recorded, a Map Recordation date is set. In order for the developer to pay the vesting fee , that was set by DS - Planning, the developer has to pull building permits prior to the Vesting Expiration date. The Vesting Expiration date, for maps that are recorded after September 14, 2019, is set for two [2] years after the Map Recordation d ate.
DS - LDE
DS - LDE
Basically, developers have 2 years to apply for a building permit in order to pay the vesting fee. If they do not pull permits within those two [2] years, then they lose the vesting fee and have to pay today’s sewer connection fee, which is $7,248.
To encourage development and be developer friendly, City allows developers to record their Active tentative tract in phases. This is referred to as an Active/Recorded tract. Instead of a developer recording their entire Active tentative tract, which could be in excess of 200 lots, the City allows for phases with only a portion of the lots to be recorded at a time . Every recorded phase will allow the developer two [2] years to pull building permits for that phase, so some tracts will have 8 – 10 phases and will be built over 5 – 7 years. This ensures that the developer can protect and pay the vesting fee for all those phases instead of the current fee.
Currently, there are approximately 2,100 Active/Recorded tracts. It should be noted that this is a point in time number as building permits are being pulled at the same time certificates of occupancy are being approved, so the number will always be in flux. Water staff is assuming that the developer will apply for the building permit prior to the Vesting Expiration date and pay the vesting fee ; therefor, the weighted average vesting fee for these 2,100 lots is approximately $3,500.
SEWER CONNECTION FEE REVENUE
All Active tentative tracts and Active/Recorded tracts are going to be compiled and one weighted average vesting fee calculated. It is assumed t hat all 8,970 homes will be constructed at this vested rate prior to the current sewer connection fee taking effect.
Weighted Vested Connection Fee
In
addition to the vesting rate, sewer connection revenue is dependent on the number of homes built per year. Over the past 5 years, on average, approximately 1,400 homes were constructed annually. Since this is a key component needed to calculate revenue, staff consulted the Development Services Department about the proposed future annual construction rate. Development Services staff advised that the number of homes constructed per year was to increase to 2,400 homes.
Due to current growth rates, this evaluation assume s that the number of homes per year would increase to 2,400 homes annually and gradually between FY2026-27 and FY 2035-36.
It is anticipated that during 2030 -31, the Active tentative tracts and Active/Recorded tracts with the Weighted Vested Connection Fee [shown in the table above] will have all been constructed and the current sewer connection fee will be collected on all SFDs moving forward.
Type of Tract # of Lots Wt. Average
Vesting Fee
Active Tentative [10+ yrs] 4,370 $3, 035
Active Tentative [10- yrs] 2,500 $5,840
Active/Recorded 2,100 $3,500
8,970 $3,925
In addition to SFD sewer connection fee s, there are also connection fees for accessory dwelling units (ADUs), commercial properties, and multi -family dwellings (MFD). It is difficult to project how many of each category will be built annually so historical data was used to determine the average annual revenue collected and the average annual number of permits pulled. Utilizing this data, the average annual sewer connection fee was calculated for each category. The numbers in the table below were used to project the additional sewer connection revenue for these categories.
B
ased on the assumptions discussed in this section, the total Sewer Connection Revenue for FY 2026-27 through 2035-36 is $185 million.
2026-27 to 2035-36 Sewer Connection Revenue
Row Labels Average Revenue Average Permit Count Average Cost per Connection
Building ADU $195,457.67 36 $5, 480.12
Building Commercial Application $979,256.38 131 $7,452.48 Building MFD Application [per connection] $910,174.40 29 $30,958.31 2020-21 to 2024-25 [5-year Annual Average]
FUND 4190 - Sewer Connection Revenue FY 2025-2026 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 Residential SFD(homes/year) 1,400 1,500 1,600 1,700 1,800 1,900 Estimated Fee per SFD $3,726 $3,925 $3,925 $3,925 $3,925 $6,417 2024 Connection Fee (w/ Annual CCI) $7,248 $7,501 $7,764 $8,036 $8,317 $8,608 SFD Revenue $5,216,155 $5,887,500 $6,280,000 $6,672,500 $7,065,000 $12,192,683 Estimated Cost per ADU [w/ new home] $5,480 $5,758 $5,758 $5,758 $5,758 $7,334 Estimates ADUs / year 36 35 36 36 37 37
ADU Revenue $195,458 $201,537 $204,460 $207,424 $210,432 $271,898 2024 Avg Rate [inc. by Res. Incremental inc.] $30,958 $32,613 $32,613 $32,613 $32,613 $53,321 increase by growth rate with rounding 29 30 30 31 31 32 Multi-Family Revenue $910,174 $978,399 $992,585 $1,006,978 $1,021,579 $1,694,455 2024 Avg Rate $7,452 $7,851 $7,851 $7,851 $7,851 $12,836 increase by growth rate with rounding 131 130 132 134 136 138 Commercial Connection Revenue $979,256 $1,020,614 $1,035,413 $1,050,427 $1,065,658 $1,767,567 TOTAL SEWER CONNECTION REVENUE $7,301,043 $8,088,050 $8,512,458 $8,937,329 $9,362,669 $15,926,602 FUND 4190 - Sewer Connection Revenue FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 Residential SFD(homes/year) 2,000 2,100 2,200 2,300 2,400 Estimated Fee per SFD
2024 Connection Fee (w/ Annual CCI) $8,909 $9,221 $9,544 $9,878 $10,224 SFD Revenue $17,818,806 $19,364,587 $20,996,746 $22,719,433 $24,536,988 Estimated Cost per ADU [w/ new home] $8,909 $9,221 $9,544 $9,878 $10,224 Estimates ADUs / year 38 38 39 39 40
ADU Revenue $335,102 $351,860 $369,455 $387,931 $407,330 2024 Avg Rate [inc. by Res. Incremental inc.] $74,029 $76,620 $79,302 $82,078 $84,950 increase by growth rate with rounding 32 33 33 34 34
Multi-Family Revenue $2,386,629 $2,505,979 $2,631,296 $2,762,881 $2,901,046 2024 Avg Rate $17,821 $18,445 $19,090 $19,758 $20,450
increase by growth rate with rounding 140 142 144 146 148 Commercial Connection Revenue $2,489,607 $2,614,106 $2,744,831 $2,882,093 $3,026,220 TOTAL SEWER CONNECTION REVENUE $23,030,145 $24,836,532 $26,742,328 $28,752,338 $30,871,583
IMPACTS ON SEWER CONNECTION REVENUE
It should be noted that the above assumptions and analysis are based on growth trends, historical data and future assumptions. If the City’s growth rate changes or the City’s growth patterns change from growing out to growing up and/or the tracts that have vested fees do not expire it will impact the revenue.
Recent changes to the development process that should be studied and monitored are the push to construct more Accessory Dwelling Units (ADUs) and the reduction of the allowable lot size for a SFD to as low as 2,800 sqft. Both of these options have been approved to address the affordable housing crisis in California. Both options will impact the sewer connection revenue. With the construction of high- density housing, 10 + homes per acre, there will be more connections which results in more revenue. Whereas, ADUs constructed with new builds will be required to pay the sewer connection fee but ADUs constructed in an existing home or on the property of an existing home may not have to pay the sewer connection fee if they can connect into the existing sewer line from the home to the main.
Over time, these changes could have an impact on the estimated Sewer Service Charge fee that is paid by the user because the single-family dwelling flow and loading estimates reflect the assumptions that each single -family dwelling account discharges 220 gallons per day (gpd) of wastewater flow with a BOD concentration of 240 mg/L and a TSS concentration of 280 mg/L. If there are more fixtures and more flow from a single-family dwelling with an ADU, this may result in SFD+ADU having a different SFDE ratio as defined in Chapter 5 of the 2026 SEWER RATES/FEES STUDY AND COST OF SERVICE ANALYSIS REPORT. The other option would be to recalculate the typical flow and loading for an SFD+ADU.
Ultimately, sewer connection revenu e can be impacted by so many variables that it is important to monitor and revisit the revenue annual ly and adjust projects and plans accordingly.
Exhibit A
Active Tentative Tract Memo_FINAL
Active Tentative Tract Memo
Planning process for Tentative Tracts that set Vested Rates:
• APPLICATION – Developer submits tentative tract map application to Planning Dept. o Planning Dept. determines connection fee, ordinances, conditions, etc • ACCEPTED DATE – Date Planning Dept. deems the APPLICATION is complete o The Accepted tentative tract date sets the rates
o Staff refers to the tentative tract at this stage as a Vested Tract • ACTIVE DATE – Date Planning Commission (PC) conditionally approves tentative tract map A
CTIVE TENTATIVE TRACT
• Conditionally approved tentative tract maps are valid or Active for 3 years per the Subdivision Map Act (SMA)
• Planning Commission can approve two 3-year extensions • Tentative tract maps can be Active for a maximum of 10 years • Connection fee rates are set for as long as the tentative tract map remains Active S
TATE IMPACTS ON EXTENDING ACTIVE TENTATIVE TRACTS
• State of California has approved several Assembly Bills/Senate Bills to provide automatic extensions, to all Statewide Active tentative tract maps, based on certain criteria • State automatic extensions occur for various reasons, some include:
o 2008 downturn of the housing market
o 2020 during Covid
o Lobbyist impacts/influences on Politicians
• As a result, there are Active tentative tracts that are vested as far back as 2005 and 2006 at a rate of $2,500 and $2,800 respectively per sewer connection
ACTIVE TENTATIVE TRACTS TO EXPIRE IN 2025
• In January 2025 there were 37 Active tentative tracts that were scheduled to expire • The majority of these tentative tracts have been Active for more than 17-years • Active tentative tracts less than 10 years are not included in this evaluation because per SMA they are still allowed to extend.
• These 37 Active tentative tracts account for 5,945 lots or Single-Family Homes • T
he connection fee vested rate ranges from 2005 – 2016
• The weighted average sewer connection fee for these homes is $3,1 25/home as shown in the revised chart below
• Per AB2729, ALL 2025 Active tentative tract maps automatically extended 18-months • 2025 Active tentative tracts are now scheduled to expire in 2026 or 2027 Tent. Tract Tent. Tract Tent. Tract Lots Vested Tract # Years Legislative Number Active Date 2025 Expiration [#] Sewer Rate Extended Extentions 6571 2005-11-03 2025-05-01 138 $2,500 21.01 5
6515 2006-01-05 2025-07-03 240 $2,500 21.01 5
6645 2006-02-16 2025-08-14 128 $2,500 21.01 5
6730 2006-03-02 2025-07-31 73 $2,500 21.02 5
6433 2006-03-08 2025-09-07 22 $2,500 21.01 5
6780 2007-02-01 2025-01-31 73 $2,800 19.51 4
6766 2007-02-15 2025-02-13 320 $2,800 19.50 4
6866 2007-03-28 2025-03-27 310 $2,800 19.52 4
6858 2007-06-06 2025-06-05 86 $2,800 19.51 4
6861 2007-07-06 2025-07-05 78 $2,800 19.52 4
7056 2007-08-16 2025-08-15 166 $3,100 19.52 4
6807 2007-09-06 2025-09-05 315 $3,100 19.51 4
6755 2007-10-01 2025-09-30 91 $2,800 19.51 4
6860 2007-11-06 2025-11-05 268 $2,800 19.51 4
6465 2007-11-15 2025-11-14 174 $3,100 19.51 4
6939 2008-05-28 2025-05-27 172 $2,800 18.51 4
6969 2008-08-19 2025-08-18 92 $2,800 18.51 3
7153 2008-09-12 2025-09-11 180 $3,100 18.50 3
7152 2008-09-12 2025-09-11 171 $3,100 18.50 3
6736 2008-11-06 2025-11-05 17 $3,100 18.50 3
7190 2009-04-16 2025-12-14 88 $3,400 18.17 3
7192 2009-04-16 2025-12-14 82 $3,400 18.17 3
7142 2009-06-30 2025-12-29 214 $3,100 18.01 4
6745 2010-01-06 2025-01-05 205 $2,800 17.50 2
6750 2010-01-06 2025-01-05 273 $2,800 17.01 2
6749 2010-01-06 2025-01-05 194 $2,800 17.01 2
6747 2010-01-06 2025-01-05 192 $2,800 17.01 2
6746 2010-01-06 2025-01-05 154 $3,100 17.01 2
6748 2010-01-06 2025-01-05 132 $3,100 17.01 2
6616 2010-10-07 2025-10-06 347 $4,000 16.51 2
7167 2015-04-02 2025-10-01 186 $4,000 12.01 1
7168 2015-04-02 2025-10-01 165 $4,000 12.01 1
7169 2015-04-02 2025-10-01 151 $4,000 12.01 1
7170 2015-04-02 2025-10-01 31 $4,000 12.01 1
7251 2016-02-05 2025-02-05 308 $4,000 10.59 0
7252 2016-11-10 2025-11-10 50 $4,000 10.50 0
6617 2016-12-01 2025-11-30 59 $4,000 10.50 0
5,945 $3,125
ACTIVE TRACTS that have been EXTENDED more than 10 Years that were to EXPIRE in 2025 but were EXTENDED
EXTENSION LIFE OF ONE ACTIVE TENTATIVE TRACT
• Planning Dept. staff provided the following breakdown of how one tract has been extended 9 times for a total of 21 years.
o Accepted Date: 2005-07-25 [Vesting Tract Date]
o Active Date: 2005-11-03
o Expiration Date: 2008-11-03
o 1st Ext Date: Extended to 2009-11-01
Reason: SB 1185 Automatic 1 yr extension
o 2nd Ext Date: Extended to 2011-10-31
Reason: AB 333 Automatic 2 yr extension
o 3rd Ext Date: Extended to 2013-11-02
Reason: AB 208 Automatic 2 yr extension
o 4th Ext Date: Extended to 2015-11-02
Reason: AB 116 Automatic 2 yr extension
o 5th Ext Date: Extended to 2018-11-02
Reason: First 3 yr interval EOT allowed by SMA & BMC o 6th Ext Date: Extended to 2020-11-02
Reason: AB 1303 Automatic 2 yr extension
o 7th Ext Date: Extended to 2022-0501
Reason: AB 1561 Automatic 18-month extension
o 8th Ext Date: Extended to 2025-0501
Reason: Second 3 yr interval EOT allowed by SMA & BMC
o 9th Ext Date: Extended to 2026-1101
Reason: State AB2729 – 18-month extension
This Active tentative tract from 2005 could have expired in 2015 or 2022 if the Planning Commission did not automatically extend the Active tentative tract. The 2005 Active tentative tract would have met the maximum 10-year criteria in both cases.
ACTIV
E TENTATIVE TRACTS NOW SCHEDULED TO EXPIRE IN 2026
• 21 Active tentative tracts are scheduled to expire in 2026 • The majority of these tentative tracts have been Active for more than 19-years • Active tentative tracts less than 10 years are not included in this evaluation because per SMA they are still allowed to extend
• Of the 21 identified below, 7 of these were extended from 2 025 [highlighted gray] • These 21 Active tentative tracts account for 4,127 lots or Single-Family Homes • The connection fee vested rate ranges from 2005 – 2016 • The weighted average sewer connection fee for these homes is $2,904/home as shown in the revised chart below
• By expiring these 2026 Active tentative tract maps, the 2005-2016 average sewer rate of $2,904 could be replaced with the current sewer rate of $6,947 if new applications for these tentative tracts were submitted to Planning Dept. and deemed complete • Potentially an additional $16.7 million in sewer connection revenue could be generated by removing the lots that would pay a vested rate instead of the new current rate ACTI
VE TENTATIVE TRACTS NOW SCHEDULED TO EXPIRE IN 2027
• 32 Active tentative tracts are scheduled to expire in 2027 • The majority of these tentative tracts have been Active for more than 18-years • Active tentative tracts less than 10 years are not included in this evaluation because per SMA they are still allowed to extend
• Of the 32 identified below, 30 of these were extended from 2025 [highlighted gray] • The 32 Active tentative tracts account for 4,685 lots or Single-Family Homes • The connection fee vested rate ranges from 2005 – 2016 • The weighted average sewer connection fee for these homes is $3,138/home as shown in the revised chart below
Tent. Tract Tent. Tract Tent. Tract Lots Vested Tract Current Tract Potential # Years Legislative Number Active Date Expiration [#] Sewer Rate Sewer Rate ++ Revenue Extended Extentions 6571 2005-11-03 2026-11-01 138 $2,500 $6,947 $613,686 21.01 6 6839 2006-08-03 2026-02-02 108 $2,500 $6,947 $480,276 19.52 5 6840 2006-08-03 2026-02-02 101 $2,500 $6,947 $449,147 19.52 5 6843 2006-08-03 2026-02-02 89 $2,500 $6,947 $395,783 19.52 5 6842 2006-08-03 2026-02-02 82 $2,500 $6,947 $364,654 19.52 5 6841 2006-08-03 2026-02-02 80 $2,500 $6,947 $355,760 19.52 5 6844 2006-08-17 2026-02-16 104 $2,500 $6,947 $462,488 19.52 5 6182 2006-09-07 2026-03-06 366 $2,800 $6,947 $1,517,802 19.51 5 6521 2006-09-07 2026-03-06 425 $2,800 $6,947 $1,762,475 19.51 5 6876 2006-11-16 2026-05-14 373 $2,800 $6,947 $1,546,831 19.50 5 6567 2006-12-07 2026-06-06 298 $2,800 $6,947 $1,235,806 19.51 5 6568 2006-12-07 2026-06-06 95 $2,800 $6,947 $393,965 19.51 5 6871 2006-12-07 2026-06-06 223 $2,800 $6,947 $924,781 19.51 5 6397 2006-12-28 2026-06-26 122 $2,500 $6,947 $542,534 19.51 5 6780 2007-02-01 2026-07-31 73 $2,800 $6,947 $302,731 19.51 5 6766 2007-02-15 2026-08-13 320 $2,800 $6,947 $1,327,040 19.50 5 6866 2007-03-28 2026-09-27 310 $2,800 $6,947 $1,285,570 19.52 4 6858 2007-06-06 2026-12-05 86 $2,800 $6,947 $356,642 19.51 5 6939 2008-05-28 2026-11-27 172 $2,800 $6,947 $713,284 18.51 6 7235 2014-01-16 2026-06-15 254 $4,000 $6,947 $748,538 12.42 1 7251 2016-02-05 2026-09-05 308 $4,000 $6,947 $907,676 10.59 0 4,127 $2,904 $16,687,469
ACTIVE TRACTS that have been EXTENDED more than 10 Years that are scheduled to EXPIRE in 2026
• By expiring these Active tentative tract maps, the 2005-2016 average sewer rate of $3,138 could be replaced with the current sewer rate of $6,947 if new applications for these tentative tracts are submitted to Planning Dept. and deemed complete • Potentially an additional $17.8 million in sewer connection revenue could be generated by removing the lots that would pay a vested rate instead of the new current rate A
CTIVE TENTATIVE TRACTS THAT DO NOT EXPIRE
• 17 Active tentative tracts are scheduled to expire in 2999 [990 years] • According to Planning Dept. staff these are Development Agreements (DAs) which are managed by the City Manager’s Office
• These DAs have special rates incorporated for Police, Fire and Rec&Parks • However, the sewer connection fee was not included as having a special rate • This is for information only as unsure how to address these tracts • The 2,106 lots are not included in the 2026 and 2027 Active tentative tract totals • However, these lots are incorporated in the TOTAL ACTIVE TENTATIVE TRACTS below Tent. Tract Tent. Tract Tent. Tract Lots Vested Tract Current Tract Potential # Years Legislative Number Active Date Expiration [#] Sewer Rate Sewer Rate ++ Revenue Extended Extentions 6515 2006-01-05 2027-01-03 240 $2,500 $6,947 $1,067,280 21.01 6 6645 2006-02-16 2027-02-14 128 $2,500 $6,947 $569,216 21.01 6 6730 2006-03-02 2027-03-03 73 $2,500 $6,947 $324,631 21.02 6 6433 2006-03-08 2027-03-07 22 $2,500 $6,947 $97,834 21.01 6 6861 2007-07-06 2027-01-05 78 $2,800 $6,947 $323,466 19.52 5 7056 2007-08-16 2027-02-15 166 $3,100 $6,947 $638,602 19.52 5 6807 2007-09-06 2027-03-05 315 $2,800 $6,947 $1,306,305 19.51 5 6755 2007-10-01 2027-03-30 91 $2,800 $6,947 $377,377 19.51 5 6860 2007-11-06 2027-05-05 268 $2,800 $6,947 $1,111,396 19.51 5 6465 2007-11-15 2027-05-14 174 $3,100 $6,947 $669,378 19.51 5 6950 2008-02-07 2029-12-31 63 $3,100 $6,947 $242,361 21.91 4 6969 2008-08-19 2027-02-18 92 $2,800 $6,947 $381,524 18.51 5 7153 2008-09-12 2027-03-11 180 $3,100 $6,947 $692,460 18.50 5 7152 2008-09-12 2027-03-11 171 $3,100 $6,947 $657,837 18.50 4 6736 2008-11-06 2027-05-05 17 $3,100 $6,947 $65,399 18.50 4 7190 2009-04-16 2027-06-14 88 $3,400 $6,947 $312,136 18.17 4 7192 2009-04-16 2027-06-14 82 $3,400 $6,947 $290,854 18.17 4 7196 2009-05-21 2027-06-14 84 $3,400 $6,947 $297,948 18.08 4 7142 2009-06-30 2027-06-29 214 $3,100 $6,947 $823,258 18.01 5 6745 2010-01-06 2027-07-05 205 $2,800 $6,947 $850,135 17.50 4 6750 2010-01-06 2027-01-05 273 $2,800 $6,947 $1,132,131 17.01 4 6749 2010-01-06 2027-01-05 194 $2,800 $6,947 $804,518 17.01 4 6747 2010-01-06 2027-01-05 192 $2,800 $6,947 $796,224 17.01 4 6746 2010-01-06 2027-01-05 154 $3,100 $6,947 $592,438 17.01 4 6748 2010-01-06 2027-01-05 132 $3,100 $6,947 $507,804 17.01 4 6616 2010-10-07 2027-04-06 347 $4,000 $6,947 $1,022,609 16.51 4 7167 2015-04-02 2027-04-01 186 $4,000 $6,947 $548,142 12.01 2 7168 2015-04-02 2027-04-01 165 $4,000 $6,947 $486,255 12.01 2 7169 2015-04-02 2027-04-01 151 $4,000 $6,947 $444,997 12.01 2 7170 2015-04-02 2027-04-01 31 $4,000 $6,947 $91,357 12.01 2 7252 2016-11-10 2027-05-10 50 $4,000 $6,947 $147,350 10.50 1 6617 2016-12-01 2027-05-30 59 $4,000 $6,947 $173,873 10.50 2 4,685 $3,138 $17,847,095
ACTIVE TRACTS that have been EXTENDED more than 10 Years that are scheduled to EXPIRE in 2027
T
OTAL ACTIVE TENTATIVE TRACTS 2005 - 2025
It needs to be noted that the Total Number of Active tentative tract maps, including those that have been active for more than and less than 10 years totals:
More than 10-years 2005 – 2016 10,918 lots [homes]
Less than 10- years 2017 – 2025 2,493 lots [homes]
Total Active Tentative Tract Maps 2005 – 2025 13,411 lots [homes] Using this data and the known rate for each year, a weighted sewer connection fee rate will be calculated and used in the evaluation when determining future Sewer Connection Revenue.
S
UMMARY
Water Staff has requested that the Planning Dept. provide any information about future State authorized bills that will continue to extend these Active tentative tracts.
It would be beneficial if Planning Commission did not take any further action to automatically extend these Active tentative tracts that are:
• scheduled to expire in 2026 and 2027
• exceed the Active 10-year maximum
Tent. Tract Tent. Tract Tent. Tract Lots Vested Tract Current Tract Potential # Years Number Active Date Expiration [#] Sewer Rate Sewer Rate ++ Revenue Extended 6719 2006-12-28 2999-12-31 19 $2,800 $6,947 $78,793 993.67 6792 2006-12-28 2999-12-31 13 $2,800 $6,947 $53,911 993.67 6827 2006-12-28 2999-12-31 174 $2,800 $6,947 $721,578 993.67 6815 2007-01-18 2999-12-31 170 $2,800 $6,947 $704,990 993.61 6826 2007-01-18 2999-12-31 135 $2,800 $6,947 $559,845 993.61 7020 2007-02-15 2999-12-31 209 $2,800 $6,947 $866,723 993.53 6816 2007-04-19 2999-12-31 183 $2,800 $6,947 $758,901 993.36 7041 2007-05-17 2999-12-31 142 $2,800 $6,947 $588,874 993.28 7019 2007-07-19 2999-12-31 122 $2,800 $6,947 $505,934 993.11 7191 2009-04-16 2999-12-31 133 $3,400 $6,947 $471,751 991.37 7195 2009-05-21 2999-12-31 152 $3,400 $6,947 $539,144 991.27 7193 2009-05-21 2999-12-31 150 $3,400 $6,947 $532,050 991.27 7194 2009-05-21 2999-12-31 89 $3,400 $6,947 $315,683 991.27 7017 2009-06-04 2999-12-31 119 $3,400 $6,947 $422,093 991.23 7018 2009-06-04 2999-12-31 104 $3,400 $6,947 $368,888 991.23 7015 2009-06-04 2999-12-31 103 $3,400 $6,947 $365,341 991.23 7016 2009-06-04 2999-12-31 89 $3,400 $6,947 $315,683 991.23 2,106 $3,068 $8,170,182
Active tentative tracts that were approved 10++ years ago, when they were further away from City services, become more viable, valuable and profitable to develop as the City grows towards them.
If these active tentative tracts opt to Record, there will be a significant impact on the sewer connection fee revenue.
It is vital that fees paid to connect to the City’s sewer system pay the cost for such service at the time of connection, which is now $7,248 per connection.
The information in this memo will be used to evaluate potential sewer connection fee revenue along with Recorded Map Data.
Using the Recorded Map data and the known rate for each year, a weighted sewer connection fee rate will be calculated and used in the evaluation when determining future Sewer Connection Revenue.
Next Memo: Estimated Sewer Connection Revenue Analysis [2026-2035] Exhibit B
Public Works Memo
PUBLIC WORKS DEPARTMENT
MEMORANDUM
TO: Alan Tandy, City Manager
FROM: Nick Fidler, Public Works Director
DATE: April 18, 2017
SUBJECT: Proposed Residential and Commercial Sewer Connection Fee Increase (Excludes Industrial Users)
Resolution No. 159-06, which was adopted by Council on June 7, 2006, approved a five- year phased approach for the sewer connectio n fee. This five-year phased approach coincided with Plant 3’s expansion project. Per this Resolution, the last update to the residential and commercial sewer connection fees was effective July 1, 2010, which set the current $4,000 residential connection fee.
Staff has recently evaluated both residential and commercial connection fees. Public Works staff met with both the Assistant City Manager and the Finance Director to discuss the proposed methodology used to establish proposed connection fees. Staff proposes to set connection fees based upon the “buy-in” cost to connect to the City’s treatment system. Both the Assistant City Manager and the Finance Director concur with the proposed “buy-in” approach. Although this methodology yielded a residential connection fee of $5,377, staff proposes phasing the increase over five years with a cap of $5,000. Therefore, the annu al increase would be limited to $200. As with the current fee structure, commercial connection fees wo uld be set proportional to the residential connection fee. Proposed increases are listed in the following table.
Staff surveyed other agencies to determine how the proposed residential connection fee compared with other agencies. Attached are the results of this survey. If the $200 increase was approved for FY 17/18, the City of Bakersfield would still remain one of the lowest of the surveyed agencies. Over a five-year period, it can be expected that many of the surveyed cities would also have increases to their connection fees.
Existing vested maps would vest under the current rate structure. The proposed connection fee would apply only to non-vested developments or developments with expired vesting rights.
Staff proposes no changes to the connection fees for Industrial Users (IU’s) at this time.
IU connection fees will require considerable more research and will be the next fee reviewed by staff.
Please advise if you would like a meeting set up to discuss.
Current July 1, 2017 July 1, 2018 July 1, 2019 July 1, 2020 July 1, 2021 $4,000 $4,200 $4,400 $4,600 $4,800 $5,000
Proposed Increases to Sewer Connection Fee - Sin gle Family Home EXHIBIT C. 10-YEAR FINANCIAL PLAN
1.45% 1.45% 1.45% 1.45% 1.45% 1.45% 1.45% 1.45% 1.45% 1.45%
4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%
Sewer Service Charge Rate $ 475.00 $ 575.00 $ 675.00 $ 775.00 $ 875.00 $ 901.25 $ 928.29 $ 956.14 $ 984.82 $ 1,014.36 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 Sewer Service Charge [Total System] $71,521,215 $88,062,764 $104,868,316 $121, 894,447 $139,580,482 $145,680,925 $151,995, 410 $158,612,326 $165,445,154 $172,562,295 Miscellaneous Fees [Total System] $2,800,729 $2,952,410 $4,014,308 $3, 906,425 $6,008,763 $5,108,324 $5,131, 111 $5,154,125 $5,177,370 $5,177,370 Bond Revenue - Plant 2 $0 $0 $0 $0 $0 $150,000,000 $0 $0 $0 $0 Bond Revenue - Plant 4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Connection Fee $8,088,050 $8,512,458 $8,937,329 $9, 362,669 $15,926,602 $23,030,145 $24,836, 532 $26,742,328 $28,752,338 $30,871,583 Enterprise [Loan repayment-Interest Earnings] $1,411,822 $2,742,865 $3,681,451 $4, 645,150 $5,840,415 $6,816,993 $7,168, 867 $6,925,489 $6,342,746 $5,471,439 Fund 4110 - Plant 2 ($23,947,481) ($21,722,054) ($29,922,673) ( $33,486,741) ($43,552,138) ($102,709,404) ($120, 117,374) ($30,172,121) ($26,166,781) ($32,776 ,501) Fund 4120 - Plant 3 ($56,518,269) ($65,756,700) ($99,389,017) ( $55,004,762) ($57,242,800) ($85,063,450) ($138, 466,713) ($162,470,100) ($182,171,627) ($183,4 70,898) Fund 4140 - Plant 4 $0 $0 $0 ($4,000,000) ($3,000,000) ($21,000,000) ($20, 000,000) ($13,500,000) ($35,000,000) ($30,000,000) $52,042,177 $66,833,920 $59,023,633 $106, 340,821 $169,902,145 $291,765,676 $202,313, 508 $193,605,556 $155,984,756 $123,820,045 MINIMUM RESERVES - O&M [9 mo.] + DS $38,337,125 $40,937,262 $42,927,159 $44, 555,825 $46,939,094 $45,869,129 $54,798, 615 $52,221,748 $54,932,190 $58,435,472 $13,705,052 $25,896,658 $16,096,474 $61, 784,996 $122,963,050 $245,896,547 $147,514, 893 $141,383,808 $101,052,566 $65,384,574 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 Non-Operating Revenue [incl. KSA+ENCSD 13%] $990,249 $1,124,989 $2,169,776 $2,044, 611 $4,129,495 $3,211,427 $3,216,409 $3,221,440 $3,226,522 $3,226,522 2031/32 Bond Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2031/32 Bond - pay off 30-yrs $0 $0 $0 $0 $0 $0 $8,674,515 $8,674,515 $8,674,515 $8,674,515 WWTP2 Personnel [Current] $2,540,003 $2,641,604 $2,747, 268 $2,857,158 $2,971,445 $3,090,303 $3,213,915 $3,342,471 $3,476,170 $3, 615,217 CAO - Deputy City Attorney II $46,488 $48,347 $50,281 $52,292 $54,384 $56,559 $58,822 $61,174 $63,621 $66,166 Additional - Civil Eng. IV [ 25% RAW/W/WW] $69,523 $72,304 $75,196 $78,204 $81,332 $84,586 $87,969 $91,488 $95,147 $98,953 Additional Engineer III [50%] $0 $0 $119,000 $123,760 $128,710 $133, 859 $139,213 $144,782 $150,573 $156,596 Reclass FASO II to Fiscal Manager [50% of increase] $7,344 $7,638 $7,943 $8,261 $8,591 $8,935 $9,293 $9,664 $10,051 $10,453 Additional - Fiscal Supervisor [50%] $79,560 $82,742 $86,052 $89,494 $93,074 $96,797 $100,669 $104,696 $108,883 $113,239 Additional - Admin Fiscal Services Specialist [50%] $0 $0 $0 $0 $0 $60,909 $63,345 $65,879 $68,514 $71,254 Additional - Plant Operator III $146,227 $152,076 $158,159 $164,486 $171,065 $177,908 $185,024 $192,425 $200,122 $208,127
TOTAL AVAILABLE FUND BALANCE
PLANT 2 - DEBT SERVICES
PLANT 2 - OPERATIONS AND MAINTENANCE
10-YEAR WASTEWATER FINANCIAL PLAN
TOTAL BUDGET
Growth of Accounts [Connections] %
Personnel % Increase
PLANT 2 - REVENUE
TOTAL FUND BALANCE
CCI % Increase
FUND 4110 - SEWER SERVICE - PLANT 2
REVENUE
EXPENSES
Additional - Plant Operator III $146,227 $152,076 $158,159 $164,486 $171,065 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Plant Operator III $0 $0 $0 $0 $0 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Senior E&I Tech $0 $156,489 $162,749 $169,259 $176,029 $183, 070 $190,393 $198,009 $205,929 $214,166 Additional - Senior Plant Mechanic $150,470 $156,489 $162,749 $169,259 $176,029 $183,070 $190,393 $198,009 $205,929 $214,166 Additional - Service Maintenance Worker $93,860 $97,614 $101,519 $105,579 $109, 802 $114,195 $118,762 $123,513 $128,453 Additional - Maintenance Supervisor [50%] $0 $0 $0 $0 $97,370 $101,265 $105,315 $109,528 $113,909 $118,465 Additional - Senior Lab Tech [50%] $0 $0 $72,436 $75,334 $78,347 $81, 481 $84,740 $88,130 $91,655 $95,321 Additional - COGEN/Tertiary Technician w/ vehicle $0 $0 $0 $0 $0 $214,008 $170,569 $177,391 $184,487 $191,867 Additional - Construct Inspector [50%] w/ vehicle $0 $107,057 $80,139 $83,344 $86,678 $90, 145 $93,751 $97,501 $101,401 $105,457 Additional - Construct Inspector [50%] w/ vehicle $0 $0 $0 $0 $146,678 $90,145 $93,751 $97,501 $101,401 $105,457 Additional Personnel Years 2036-2041 $0 $0 $0 $0 $0 $0 $0 $0 $0 $400,000 WWTP2 Operations $4,789,638 $5,064,122 $5,358,851 $5,673, 472 $6,010,799 $6,373,832 $6,762,780 $7,181,087 $7,631,459 $8,116,892 WWTP2 Vehicles OVER Expenditures $250,000 $250,000 $250,000 $250,000 $250,000 $250, 000 $250,000 $250,000 $250,000 $250,000 WWTP2 Capital Outlay $25,000 $25,000 $25, 000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 WWTP2 Septage Processing Unit Replacement $2,000,000
WWTP2 Clam Shell - Grit System $250,000
WWTP2 Plant Lighting Upgrades $200,000
WWTP2 Clarifyer Re habilitation $1,000,000
WWTP2 Site Infrastructure $750,000
WWTP2 Annual Capital Improvement Projects $1,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500, 000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 Engineering Sewer Lift Station Rehab Rio Mirada $250,000 $3,000,000 Engineering Storm Lift Station Rehab Chester Ave $1,000,000 Engineering Storm Lift Station Rehab Sandra/Meredith $250,000 $2,800,000 Engineering Sewer Line Improvements Panama St $5,000,000 Engineering Storm Drain Improvements D St. [23rd south] $500,000 $6,000,000 Engineering Sewer Line Improvements Alley $250,000 $3,000,000 Engineering Sewer Line Improvements K Street/34th Street $300,000 $4,000,000 Engineering Storm Drain Improvements Q St/20th St. $250,000 $4,000,000 Engineering Storm Drain Improvements L St-O/Trux-24 $2,000,000 Engineering Sewer/Storm Lift Station Rehab $300,000 $3,250,000 $350,000 $3,750,000 Engineering Sewer/Storm Line Improvements $250,000 $4,000,000 $250,000 $4,000,000 $400,000 CIP Sub-total $14,200,000 $10,000,000 $9,300,000 $12,550,000 $6,500,000 $2,800,000 $6,000,000 $6,500,000 $2,850,000 $6,650,000 Escalation Factor 1.035 1.071 1.109 1.148 1.188 1.229 1.272 1.317 1.363 1.411 MINOR INFRASTRUCTURE PLANT 2 CIP $14,697,000 $10, 712,250 $10,311,076 $14,401,414 $7,719,961 $3,441,915 $7,633,676 $8,559,259 $3, 884,257 $9,380,482 WWTP2 Upgrade RFQ & Project Design Report [PDR] $1,000,000 $2,000,000 WWTP2 Upgrade Design/Enviro $10,000,000 $9,000,000
WWTP2 Upgrade Pre-Purchase [Elec-Mech Equip] $25,000,000 WWTP2 Upgrade-Construction $80,000,000 $84,000,000
WWTP2 Upgrade-Construction Mgmt $7,500,000 $7,500,000
MAJOR INFRASTRUCTURE PLANT 2 CIP $1,000,000 $2, 000,000 $10,000,000 $9,000,000 $25,000, 000 $87,500,000 $91,500,000 $0 $0 $0 TOTAL PLANT 2 EXPENSES $23,947,481 $21,722,054 $29,922, 673 $33,486,741 $43,552,138 $102,709, 404 $120,117,374 $30,172,121 $26,166 ,781 $32,776,501 ASSUME 3.5% ANNUAL ESCALATION ON CAPITAL IMPROVEMENTS
PLANT 2 - CAPITAL IMPROVEMENT PROJECTS
FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 Non-Operating Revenue [incl. KSA+ENCSD 13%] $1, 810,480 $1,827,421 $1,844,532 $1,861,813 $1,879,268 $1,896,897 $1,914,702 $1,932, 685 $1,950,848 $1,950,848 Plant 3 Bond Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Fund Transfer from 4190 (+/-) $8,088,050 $8,512,458 $8, 937,329 $9,362,669 $15,926,602 $23,030, 145 $24,836,532 $26,742,328 $28,75 2,338 $30,871,583 2025 Bond - paid off FY 32/33 $12,265,625 $12,278,250 $12,359, 250 $12,362,500 $12,363,625 $8, 549,125 $6,631,750 $0 $0 $0 WWTP3 Personnel [Current] $3,732,941 $3,882,258 $4,037, 549 $4,199,051 $4,367,013 $4,541,693 $4,723,361 $4,912,295 $5,108,787 $5, 313,139 Assistant Director/Director Compaction [actual 6.2%] $29,438 $30,615 $31,840 $33,113 $34,438 $35,815 $37,248 $38,738 $40,287 $41,899 Additional- Civil Eng. IV [ 25% RAW/W/WW] $69,523 $72,304 $75,196 $78,204 $81,332 $84,586 $87,969 $91,488 $95,147 $98,953 Additional Engineer III [50%] $0 $0 $119,000 $123,760 $128,710 $133, 859 $139,213 $144,782 $150,573 $156,596 Assistant Director/ Director Compaction [actual 6.2%] $34,100 $35,464 $36,883 $38,358 $39,892 $41,488 $43,147 $44,873 $46,668 $48,535 Reclass FASO II to Fiscal Manager [50% of increase] $7,344 $7,638 $7,943 $8,261 $8,591 $8,935 $9,293 $9,664 $10,051 $10,453 Additional - Fiscal Supervisor [50%] $79,560 $82,742 $86,052 $89,494 $93,074 $96,797 $100,669 $104,696 $108,883 $113,239 Additional- Admin Fiscal Services Specialist [50%] $0 $0 $0 $0 $0 $58,566 $60,909 $63,345 $65,879 $68,514 Additional - Plant Operator III $146,227 $152,076 $158,159 $164,486 $171,065 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Plant Operator III $146,227 $152,076 $158,159 $164,486 $171,065 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Plant Operator III $146,227 $152,076 $158,159 $164,486 $171,065 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Plant Operator III $0 $0 $0 $0 $0 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Plant Operator III $0 $0 $0 $0 $0 $177,908 $185,024 $192,425 $200,122 $208,127 Additional - Senior E&I Tech $0 $156,489 $162,749 $169,259 $176,029 $183, 070 $190,393 $198,009 $205,929 $214,166 Additional - Plant Mechanic $0 $140,195 $145,803 $151,635 $157,700 $164, 008 $170,569 $177,391 $184,487 $191,867 Additional - Plant Mechanic $0 $0 $0 $0 $157,700 $164,008 $170,569 $177,391 $184,487 $191,867 Additional - Maintenance Supervisor [50%] $0 $0 $0 $0 $97,370 $101,265 $105,315 $109,528 $113,909 $118,465 Additional - Senior Lab Tech [50%] $0 $0 $72,436 $75,334 $78,347 $81, 481 $84,740 $88,130 $91,655 $95,321 Additional - COGEN/Tertiary Technician w/ vehicle $0 $0 $0 $0 $0 $214,008 $170,569 $177,391 $184,487 $191,867 Additional - Construct Inspector [50%] w/ vehicle $0 $107,057 $80,139 $83,344 $86,678 $90, 145 $93,751 $97,501 $101,401 $105,457 Additional - Construct Inspector [50%] w/ vehicle $0 $0 $0 $0 $146,678 $90,145 $93,751 $97,501 $101,401 $105,457 Additional Personnel Years 2036-2041 $0 $0 $0 $0 $0 $0 $0 $0 $0 $400,000 Finance Direct Charge - AR $18,791 $19,542 $20,324 $21,137 $21,982 $22,862 $23,776 $24,727 $25,716 $26,745 WWTP3 Operations $10,635,557 $11,317,208 $12,072,434 $12, 904,194 $13,744,392 $14,650,808 $15, 629,739 $18,911,757 $20,177,416 $21 ,542,271 WWTP3 Vehicles OVER Expenditures $325,000 $325,000 $325,000 $325,000 $325,000 $325, 000 $325,000 $325,000 $325,000 $338,000 WWTP3 Capital Outlay $25,000 $25,000 $25, 000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $26,000 WWTP3 Pretreatment Personnel $1,052,130 $1,094,215 $1,137,983 $1,183,503 $1,230,843 $1,280, 076 $1,331,279 $1,384,531 $1,439,912 $1,497,508 Additional - Enviro Compliance Inspector $133,746 $139,095 $144,659 $150,446 $156, 464 $162,722 $169,231 $176,000 $183,040 WWTP3 Pretreatment Operations $443,170 $479, 545 $525,687 $578,322 $619,812 $666,256 $716,102 $770,851 $831,068 $897,388 WWTP3 Pretreatment Capital Outlay $10,000 $10,000 $10,000 $10,000 $10,000 $10, 000 $10,000 $10,000 $10,000 $10,400 WR Sump Maintenance $400,000 $400,000 $450, 000 $450,000 $500,000 $500,000 $550,000 $550,000 $600,000 $600,000 PLANT 3 - OPERATIONS AND MAINTENANCE
PLANT 3 - REVENUE
FUND 4120 - SEWER SERVICE PLANT 3
PLANT 3 - DEBT SERVICES
Streets - Sewer Maintenance Personnel $2,274,349 $2,365,323 $2,459,936 $2,558,333 $2,660, 667 $2,767,093 $2,877,777 $2,992,888 $3 ,112,604 $3,237,108 Additional - Sewer Maintainer II + Combo Truck $0 $510,323 $110,323 $114,736 $119,326 $124, 099 $129,063 $134,225 $139,594 $145,178 Additional - SMW $0 $93,860 $97,614 $101,519 $105,579 $109, 802 $114,195 $118,762 $123,513 $128,453 Additional - Sewer Maintainer III + Camera Truck $0 $0 $320,507 $120,507 $125,327 $130, 340 $135,554 $140,976 $146,615 $152,480 Additional - SMW $0 $0 $97,614 $101,519 $105,579 $109, 802 $114,195 $118,762 $123,513 $128,453 Additional Personnel Years 2036-2041 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Streets - Sewer Maintenance Operations $4,571,743 $4,960,714 $5,393,819 $5, 873,208 $6,406,776 $7,002,565 $7,666, 591 $8,408,996 $9,240,202 $10,172,099 Streets - Sewer Maintenance Capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,800 Streets - Storm Drain Personnel $1,325,870 $1,378,905 $1,434,061 $1, 491,423 $1,551,080 $1,613,124 $1,677, 649 $1,744,754 $1,814,545 $1,887,126 Additional Personnel Years 2036-2041 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Streets - Storm Drain Operations $1,018,322 $1,097, 841 $1,176,150 $1,272,776 $1,379,891 $1, 499,816 $1,632,056 $1,779,320 $1,943, 551 $2,126,959 Streets - Storm Drain Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 WWTP3 Grit Classifier Re place Construction $500,000
WWTP3 Digester Dome Rehab Construction $150,000
WWTP3 Secondary Clarifier Rehab Construction $25,000 $425,000 WWTP3 Septage Processing Unit Upgrade $1,150,000
WWTP3 Flare Replacement - SJVAP CD Requirement $150,000 $1,500,000 WWTP3 BioFilter Fans - Procur ement & Installation $600,000 WWTP3 H2S Damage Repair $150,000
WWTP3 Cloth Media F ilter Replacement $60,000
WWTP3 Plant Lighting Upgrade $100,000
WWTP3 Primary Influent Gate $100,000
WWTP 3 EV Charging for Trucks $1,000,000 $1,000,000
WWTP3 Site Infrastructure $250,000
WWTP3 Annual Capital Improvement Projects $1,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500, 000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000 Engineering Sewer Lift Station Rehab
(McCutchen/Gosford) $7,000,000
Engineering Sewer Lift Station Rehab (Taft/South H) $250,000 $3,000,000 Engineering Sewer Lift Station Rehab
(Mt.Vista/Grand Lks) $250,000 $2,800,000
Engineering BV Trunk Line Capacity Improvements $15,000,000 $15,000,000 Engineering Downtown Manho le Rehabilitation $2,400,000 Engineering Storm Drain CIPP Liner - Auburn $1,100,000
Engineering Lift Station Rehab $1,500,000
Engineering Sewer Line Downtown Rehabilitation $2,500,000 $25,000,000 Engineering Sewer/Storm Lift Station Rehab $300,000 $3,250,000 $300,000 $3,250,000 Engineering Sewer/Storm Line Improvements $500,000 $6,000,000 $500,000 $6,000,000 Engineering Sewer Trunk Line Improvements $3,000,000 $30,000,000 CIP Sub-total $16,175,000 $20,235,000 $20,550,000 $6,800,000 $7,250, 000 $11,000,000 $27,500,000 $3, 300,000 $14,750,000 $32,500,0 00 Escalation Factor 1.035 1.071 1.109 1.148 1.188 1.229 1.272 1.317 1.363 1.411 MINOR INFRASTRUCTURE PLANT 3 CIP $16,741,125 $21, 676,238 $22,784,152 $7,803,156 $8,610,726 $13,521,809 $34,987,680 $4,345,470 $2 0,102,736 $45,844,460 WWTP3 P0-32MGD RFQ & PDR & Design $1,000,000
WWTP3 P0-32MGD Pre-Purchase [Elec-Mech Equip] $2,600,000 WWTP3 P0-32MGD-Construction $30,500,000
WWTP3 P0-32MGD-Construction Mgmt $2,600,000
PLANT 3 - CAPITAL IMPROVEMENT PROJECTS
ASSUME 3.5% ANNUAL ESCALATION ON CAPITAL IMPROVEMENTS
WWTP3 EXP40 RFQ & Project Design Report [PDR] RFQ $2,000,000 $1,000,000 WWTP3 EXP40 Design/ Envir/ Permits $25,000,000 $14,000,000 WWTP3 EXP40 Purshase 160 Acres $2,500,000
WWTP3 EXP40 Pre-Purchase [Elec-Mech Equip] $40,000,000
WWTP3 EXP40-Construction $103,000,000 $104,000,000 $80,000,000 WWTP3 EXP40-Construction Mgmt $10,000,000 $10,000,000 $6,000,000 MAJOR INFRASTRUCTURE PLANT 3 CIP $1,000,000 $2, 600,000 $33,100,000 $2,000,000 $1,000,000 $25,000,000 $56,500,000 $113,000,000 $1 14,000,000 $86,000,000 TOTAL PLANT 3 EXPENSES [O&M+CIP] $56,518,269 $65, 756,700 $99,389,017 $55,004,762 $57,242, 800 $85,063,450 $138,466,713 $162,470,1 00 $182,171,627 $183,470,898 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 Non-Operating Revenue [1% esc]
2037/38 Bond Revenue
Fund Transfer from 4190 (+/-)
2037/38 Bond - pay off 30-yrs
WWTP4 Personnel
WWTP4 Operations
WWTP4 Operations OVER Expenditures
WWTP4 Capital Outlay
WWTP4 @P2-Move/Rebuild Effluent Ponds
WWTP4 Annual CIP Budget - Projects TBD
CIP Sub-total $0 $0 $0 $0 $0 $0 $0 $0
Escalation Factor 1.109 1.148 1.188 1.229 1.272 1.317 1.363 1.411 MINOR INFRASTRUCTURE PLANT 4 CIP $0 $0 $0 $0 $0 $0 $0 $0 WWTP4 @P2 RFQ/ Design Rpt/ Enviro/ Legal RFQ $4,000,000 $3,000,000 WWTP4 @P2 Design & Permits $21,000,000 $20,000,000 $13,500,000 WWTP4 @P2 Pre-Purchase [Elec-Mech Equip] $35,000,000 $30,000,000 WWTP4 @P2-Construction
WWTP4 @P2-Construction Mgmt.
MAJOR INFRASTRUCTURE PLANT 4 CIP $0 $4,000, 000 $3,000,000 $21,000,000 $20,000,000 $13,500,000 $35,000,000 $30,000,000 TOTAL PLANT 4 EXPENSES $0 $4,000,000 $3,000, 000 $21,000,000 $20,000,000 $13, 500,000 $35,000,000 $30,000,000 FY 2026-2027 FY 2027-2028 FY 2028-2029 FY 2029-2030 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-2036 $8,088,050 $8,512,458 $8,937,329 $9, 362,669 $15,926,602 $23,030,145 $24,836, 532 $26,742,328 $28,752,338 $30,871,583 Fund Transfer 4120 (+/-) ($8,088,050) ($8,512,458) ($8,937,329) ($9, 362,669) ($15,926,602) ($23,030,145) ($24,836, 532) ($26,742,328) ($28,752,338) ($30,871,583) Fund Transfer 4140 (+/-) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
($8,088,050) ($8,512,458) ($8,937,329) ($9, 362,669) ($15,926,602) ($23,030,145) ($24,836, 532) ($26,742,328) ($28,752,338) ($30,871,583) ASSUME 3.5% ANNUAL ESCALATION ON CAPITAL IMPROVEMENTS
PLANT 4 - OPERATIONS AND MAINTENANCE
PLANT 4 - DEBT SERVICES
PLANT 4 - CAPITAL IMPROVEMENT PROJECTS
TOTAL REVENUE
FUND TRANSFERS TOTAL
FUND 4190 - Sewer Connection Fees [Developer]
FUND 4140 - SEWER SERVICE - PLANT 4
PLANT 4 - REVENUE
EXHIBIT D. COUNCIL – SEWER ENTERPRISE
SEWER ENTERPRISE
COST OF SERVICE AND RATE SCENARIOS
Presentation Outline
• Update on Water Department and HF&H Consultants coordination. • 2026 Cost of Service Analysis [COSA]
• 5-year Rate Scenarios [FY2026-27 to FY2030-31]
• 7-year Rate Scenarios [FY2026-27 to FY2032-33]
• Outreach Plan
• Next Steps
WATER DEPARTMENT 2
Water and HF&H Coordination
• HF&H reviewed the Water Department
2025 Report and provided some
revisions
• Water utilized HF&H recommendations
to update FY2026-27 to FY2035-36
Financial Plan [10-years]
• HF&H prepared 2026 COSA using the
Rate Model with Financial Plan
expenses
• HF&H staff to present 2026 COSA
findings
3 WATER DEPARTMENT
Wastewater Rates Background
Wastewater customer classes:
HF&H CONSULTANTS 4
Residential
Commercial
Industrial
Wastewater Rates Background
Current Rate Structure:
• Annual Fixed Charge via the Kern County tax roll
• Fixed service charge rate x Single-Family Dwelling Equivalent (SFDE) Ratio • Commercial Surcharge via monthly bills for excessive discharge • Flow in excess x flow surcharge rate
• Industrial Surcharge via monthly bills for excessive discharge • Flow in excess x flow surcharge rate
• Loading in excess x loading surcharge rates (BOD and TSS) • BOD – Biochemical Oxygen Demand – waste, pollution use up more oxygen, leaving less for aquatic life when discharged
• TSS – total suspended solids – debris floating in the water requiring filtration/removal HF&H CONSULTANTS 5
Wastewater Rates Background
HF&H CONSULTANTS 6
IndustrialCommercialResidentialRate Structure
Each account = 1 SFDEEach account = 1 SFDE
(Schools, shops,
restaurants, hotels,
businesses, hospitals)
Single Family = 1 SFDE
Multi-Family, mobile
Home Park units = 0.75
SFDE each
Fixed Service Charge
1 customer class, 3
surcharge rates:
• Flow ($/MG)
• BOD ($/1,000 lbs)
• TSS ($/1,000 lbs)
1 surcharge rate for each
of 4 customer classes for
WW strength ($/HCF):
• Low
• Medium
• Medium-high
• High
Not chargedMonthly Surcharge
Wastewater Rates Background
HF&H CONSULTANTS 7
Commercial user groups:
Strength
User Group Classification
Schools low
Churches low
Small Store low
Combination Store & Re sidence low
Large Store l ow
Office Bldg. low
Car Wash low
Sales low
Nurseri es low
Laundromat low
Hospital low
Nursi ng Home low
Medical Lab low
Service Shop low
Light & Heavy Industry low
Timber & Produce Plant low
Food Processing low
OS - Com m e rcial/Industrial low
Recreational medium
Storage-Warehouse medium
Petrol eum medi um
Hotel-Motels, RV Parks without restaurant medium
Big Box Store medium high
Shopping Center w/ Dining medium high
Hotel-Motels, RV Parks (w/ restaurant) medium high
Mortuary high
Food or Beverage high
Markets (Grocery Store) high
Rate Study Process
Comprehensive rate study comprises three steps:
HF&H CONSULTANTS 8
Revenue
Requirement
Projections
•H o w m u c h
revenue is
needed from
sewer rates?
Cost-of-Service
Analysis
•H o w m u c h
revenue is each
customer class
responsible for?
Rate Design
•H o w a r e r a t e s
structured
among the
customer
classes?
Revenue Requirement Projections
HF&H CONSULTANTS 9
3.54%, Sewer Conveyance
O&M Costs
0.25%, Stormwater
Conveyance O&M Costs
6.75%, Treatment Plant O&M Costs
8.21%, City Op Expenses¹
81.25%, Net Capital
Expenditures²
$165 Million Revenue Requirement
• 1City Operating Expenses are net of non-operating revenues • 2City Capital Expenditures are net of connection fee revenues and use of reserves What is Cost-of-Service Analysis?
• Fees and charges must be proportional to the cost of providing service • COSA apportions costs to fees and charges in proportion to the service provided
• COSA should be performed periodically
• Any time rate structures are modified
• Fixed service charges or variable surcharges
• When proportions among rate structure components shift • Changes in make-up of the revenue requirement – treatment vs collection vs general/administrative functions
• When proportions among customer categories shift
• Changes in accounts, flows, wastewater loading
HF&H CONSULTANTS 10
Current Revenue Compared with Cost of Service
11 • The Revenue Requirement
is allocated among
functions of the wastewater
system. These figures are
divided by the units of
service to generate unit
costs
• Cost of service is calculated
by multiplying the unit costs
by the units of service for
each customer class
HF&H CONSULTANTS
Rate Design: Fixed Service Charge Rate
12 • Rate design utilizes unit costs from
cost-of-service analysis.
• SFDE = Single Family Dwelling
Equivalent
• SFDE fixed charge accounts for
units of service specific to a Single-
Family Dwelling
• Multiple Dwelling Unit Charge is
based on 75% of that of a Single-
Family Dwelling to reflect reduced
wastewater discharge patterns for
multi-family units.
SFDE Flow BOD TSS
Single Family 1 220 240 280
Characteristics
Annualize 1 107 161 188
hcf/yr lbs/yr lbs/yr
Unit Costs $98.49 $6.86 $0.91 $0.57
Annual Cost per SFDE $98.49 $736.05 $146.06 $106.32
Fixed Service Charge per SFDE $1,086.92
Fixed Service Charge per Multiple Dwelling Unit $815.19
HF&H CONSULTANTS
Rate Design: Commercial Surcharge Rates
HF&H CONSULANTS 13
• There are no proposed changes to the
existing commercial surcharge
structure which has four strength
classifications.
• Customers with higher wastewater
strength concentrations place greater
demands on the wastewater system.
Current Proposed Change Strength
User Group Surcharge Surcharge in Rate % Difference Classification Schools $3.72 $7.83 $4.11 110.5% low
Churches $3.72 $7.83 $4.11 110.5% low
Small Store $3.72 $7.83 $4.11 110.5% low
Combination Store & Residence $3.72 $7.83 $4.11 110.5% low Large Store $3.72 $7.83 $4.11 110.5% low
Office Bldg. $3.72 $7.83 $4.11 110.5% low
Car Wash $3.72 $7.83 $4.11 110.5% low
Sales $3.72 $7.83 $4.11 110.5% low
Nurseries $3.72 $7.83 $4.11 110.5% low
Laundromat $3.72 $7.83 $4.11 110.5% low
Hospital $3.72 $7.83 $4.11 110.5% low
Nursing Home $3.72 $7.83 $4.11 110.5% low
Medical Lab $3.72 $7.83 $4.11 110.5% low
Service Shop $3.72 $7.83 $4.11 110.5% low
Light & Heavy Industry $3.72 $7.83 $4.11 110.5% low
Timber & Produce Plant $3.72 $7.83 $4.11 110.5% low
Food Processing $3.72 $7.83 $4.11 110.5% low
OS - Commercial/Industrial $3.72 $7.83 $4.11 110.5% low Recreational $4.09 $9.23 $5.14 125.7% medium
Storage-Warehouse $4.09 $9.23 $5.14 125.7% medium
Petroleum $4.09 $9.23 $5.14 125.7% medium
Hotel-Motels, RV Parks without restaurant $4.09 $9.23 $5.14 125.7% medium Big Box Store $5.27 $12.46 $7.19 136.4% medium high
Shopping Center w/ Dining $5.27 $12.46 $7.19 136.4% medium high Hotel-Motels, RV Parks (w/ restaurant) $5.27 $12.46 $7.19 136.4% medium high Mortuary $6.82 $15.39 $8.57 125.7% high
Food or Beverage $6.82 $15.39 $8.57 125.7% high
Markets (Grocery Store) $6.82 $15.39 $8.57 125.7% high
Rate Design: Industrial User Sewer Rates
14 • Industrial Users rates are calculated
using the unit rates determined in
the cost-of-service analysis.HF&H CONSULTANTS
Flow BOD TSS
Unit Cost of Service $6.86 $0.91 $0.57
per hcf per lb per lb
Proposed Rates $9,166.28 $908.16 $566.65
$/MG $/1,000 lbs $/1,000 lbs
Current $4,232.02 $334.00 $99.92
$ Difference $4,934.26 $574.16 $466.73
Rate Scenario Analysis
• Water Department prepared a 15-year operations, maintenance, and infrastructure plan • The proposed [2027-2031] rate model only considers costs associated with a 10-year plan • Revenue generated from the 5-year Sewer User rate increase, sewer connection, and non- operating are included in the rate model
• Rate Scenarios include:
• All enterprise revenue for a 10-year period
• All O&M + CIP expenses for a 10-year period
• Bond funding and debt service payments
• Rate Scenarios assume:
• Plant 3 Expansion from 32 MGD to 40 MGD by 2031
• Plant 2 Upgrade/Replacement complete by 2033
• Plant 4 Site, Design, and Permitting costs included in 2034-36 WATER DEPARTMENT 15
Rate Scenario 1
Rate at $950 YR1 + 3% Inflation
• Year 1 – 2026-27 $950 284%
• Year 2 – 2027-28 $979 3%
• Year 3 – 2028-29 $1008 3%
• Year 4 – 2029-30 $1038 3%
• Year 5 – 2030-31 $1069 3%
• Bonding Amount Needed:
• $180,000,000
• Monthly “Equivalent”
• $79 in year 1 to $89 in year 5
16 WATER DEPARTMENT
Rate Scenario 2
17 Rate at $700 to $1087 over 5 years
• Year 1 – 2026-27 $700 183%
• Year 2 – 2027-28 $800 14%
• Year 3 – 2028-29 $900 12%
• Year 4 – 2029-30 $1000 11%
• Year 5 – 2030-31 $1087 9%
• Bonding Amount Needed:
• $250,000,000
• Monthly “Equivalent”
• $58 in year 1 to $91 in year 5
WATER DEPARTMENT
Rate Scenario 3
18 Rate at $600 YR1 then increase $100/yr
• Year 1 – 2026-27 $600 143%
• Year 2 – 2027-28 $700 17%
• Year 3 – 2028-29 $800 14%
• Year 4 – 2029-30 $900 13%
• Year 5 – 2030-31 $1000 11%
• Bonding Amount Needed:
• $360,000,000
• Monthly “Equivalent”
• $50 in year 1 to $83 in year 5
WATER DEPARTMENT
Rate Scenario 4
Rate at $475 YR1 then increase $125/yr
• Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $600 26%
• Year 3 – 2028-29 $725 21%
• Year 4 – 2029-30 $850 17%
• Year 5 – 2030-31 $975 15%
• Bonding Amount Needed:
• $410,000,000
• Monthly “Equivalent”
• $40 in year 1 to $81 in year 5
19 WATER DEPARTMENT
7-yr Rate Model + Infrastructure Delay
20 • Rate Model assumes 5-years + additional 2-years [2027-2031 + 2032 + 2033] • Infrastructure must be delayed or significant Plant 2 Bond still required. • Plant 2 – Delay Construction - Upgrade/Replacement
• Maintain Planning schedule - Prepare Design – Obtain Permits – Shovel Ready • Initial Schedule 2031-2033 Construction Estimate $653 million [escalated] • Delayed Schedule 2033-2035 Construction Estimate $700 million [escalated] • Plant 4 – Delay Project
• Budget for Site/Design/Permits = $190 million [escalated dollars] • Move Planning costs in years 11 – 15
• Construction will beyond limit of the 15-year plan
• Plant 3 Expansion capacity will increase to account for 4 additional years of growth
Rate Scenario 5
Rate at $475 YR1 then increase $110/yr
• Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $585 23%
• Year 3 – 2028-29 $695 19%
• Year 4 – 2029-30 $805 16%
• Year 5 – 2030-31 $915 14%
• Year 6 – 2031-32 $1025 12%
• Year 7 – 2032-33 $1135 11%
• No Bonding in 10-year Plan
• Monthly “Equivalent”
• $40 in year 1 to $95 in year 7
21 WATER DEPARTMENT
Rate Scenario 6
Rate at $475 to $1087 over 7 yrs
• Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $575 21%
• Year 3 – 2028-29 $675 17%
• Year 4 – 2029-30 $775 15%
• Year 5 – 2030-31 $875 13%
• Year 6 – 2031-32 $975 11%
• Year 7 – 2032-33 $1087 11%
• Bonding Amount Needed:
• $90,000,000
• Monthly “Equivalent” $40 in year 1 to $91 in year 7
22 WATER DEPARTMENT
Outreach Plan
Community Meetings – Wards 1 - 7
• October 6th – Ward 5 - Koman
• October 13th – Ward 1 - Arias
• October 15th – Ward 7 - Kaur
• October 16th –W a r d 2 -G o n z a l e s
• October 20th –W a r d 3 -W e i r
• October 21st – Ward 6 - Bashirtash
• October 27th – Ward 4 - Smith
• November 13th - Virtual
23WATER DEPARTMENT
Informational Meetings
• August 20th – American Society of Civil
Engineers
• October 8th – Water Association of Kern
County
• October 14th – CA Land Surveyors Association
• November 4th – Greater Bakersfield Chamber
• November 4th - Do the Math
• To Be Determined – Rotary Club
Wastewater Website – Online by October 31
Proposition [Prop] 218 Process
24 Present proposed
rate to Council.
Obtain approval to
begin Prop 218
January
Mail Prop 218
Notice to users
February
45-day Public
Review Period
February-March
Public Hearing
during Regular
Council Meeting
Upon Council
approval, adopt rate
March-April
2026 Rate
incorporated
within Kern County
Property Tax
July 1
WATER DEPARTMENT
• S e w e ru s e rf e e sa r e s u b j e c tt o
Prop 218
• Council is to approve rate and
direct staff to start Prop 218
• Notices are mailed to notify a
user of a proposed fee increase
• Prop 218 allows for a 45-day
review and comment period
• A public hearing is held after the
protest period
• Council will decide on whether
to approve or deny the fee
25 EXHIBIT E. UNDERSTANDING CITY’S SEWER SYSTEM
UNDERSTANDING OUR
SEWER SYSTEM
AND RATES
Wastewater Basics
• What is wastewater?
• Everything that goes down the drain.
• What happens to the wastewater after it
leaves my home?
• It goes through the City’s sewer system from your
home to one of the wastewater treatment plants.
• At the plant, wastewater is treated and discharged
for beneficial use.
• City’s Infrastructure
• ~1,100 miles of sewer pipe
• 56 sewer lift stations
• 2 wastewater treatment plants
2 Lift station
Wastewater Basics
3 Land disposal
Discharge to
percolation
ponds and
farm fields
Wastewater Treatment Plant No. 1
• Where is Plant No. 1?
Decommissioned and no longer
in service.
4 HWY 58
Mt. Vernon
Wastewater Treatment Plant No. 2
5 Wastewater Treatment Plant No. 2
6 Wastewater Treatment Plant No. 2
• Initially built in 1939
• Has had three significant expansions
• 1950
• 1977
• 1997
• Trickling filter treatment process
7 Design Criteria
25Flow [MGD]
327Total Suspended Solids [mg/L]
251Biochemical Oxygen Demand [mg/L]
Actuals
11.6 407
433
Wastewater Treatment Plant No. 2
8 Wastewater Treatment Plant No. 2
9 Wastewater Treatment Plant No. 2
10 Wastewater Treatment Plant No. 2
11 Wastewater Treatment Plant No. 3
12 Wastewater Treatment Plant No. 3
City Sewer Rates 13
Wastewater Treatment Plant No. 3
14 Wastewater Treatment Plant No. 3
• Initially built in 1970
• Expansions:
• 1984
• 1988
• 1997
• 2007
• Activated sludge treatment process
15 Design Criteria
32Flow [MGD]
333Total Suspended Solids [mg/L]
500Biochemical Oxygen Demand [mg/L]
Actuals
21.2 306
378
Wastewater Treatment Plant No. 3
16 10
20 30
40 50
60 70
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Flow (MGD)
Year
WWTP #3 Actual and Future Capacity
Influent at 1,500 houses/yr Influent at 2,400 houses/yr Influent at 4,700 houses/yr Plant Design Development of Sewer User Rate
• Developed a 10-year Infrastructure Master Plan
• Identified maintenance, regulatory and growth projects • Included staffing needed to operate expanded facilities and manage projects
• Developed a 10-year Budget
• Evaluated and analyzed O&M line-item expenses
• Prepared rate studies
• Incorporated costs identified in the master plan
• Determined revenue needed to meet O&M and CIP
expenses
17 Development of Sewer User Rate
18 FY 34-35FY 33-34FY 32-33FY 31-32FY 30-31FY 29-30FY 28-29FY 27-28FY 26-27FY 25-26 $53.7 M$51.4 M$49.3 M$47.3 M$42.2 M$39.8 M$38.4 M$36.4 M$34.0 M$32.2 MO&M $105.5 M$79.1 M$214.5 M$182.4 M$262.0 M$113.6 M$39.9 M$41.3 M$33.0 M$16.0 MCIP $0 $0 $6.6 M$8.9 M$13.1 M$13.1 M$13.1 M$13.1 M$13.1 M$13.1 MDebt Reserve $159.2 M$130.5 M$270.4 M$238.5 M$317.3 M$166.4 M$91.3 M$90.8 M$80.1 M$61.3 MTotal Annual Cost
$72.2 M$70.9 M$68.9 M$66.0 M$64.8 M$52.3 M$51.3 M$50.0 M$49.0 M$48.9 MTotal Revenue ($87.0 M)($59.6 M)($201.5 M)($172.5 M)($252.4 M)($114.1 M)($40.0 M)($40.8 M)($31.1 M)($12.4 M)Shortfall Projected Costs and Revenue
* Amounts shown are from the 2025 Supplemental Report
Sewer User Rate Comparisons
19 Current and Proposed Rates Compared to other Cities/Districts *Rates shown are as of October 1, 2025 $0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
$1,800.00
$2,000.00
Monthly RateCity / District
$20.59City of Bakersfield
$25.75City of Fresno
$25.75Kern County – KSA
$34.41City of Shafter
$35.08NORSD
$60.55City of Arvin
$69.35City of Sacramento
Early 2025 Prop 218 Efforts
• March 12th – Presented rates options to City Water Board • March 26th – City Council authorized staff to mail out Prop 218 notices • April 11th – Notices mailed out to affected sewer users • April 18th – Plant 2 tour for Councilmembers and Mayor • April 23rd – City Council made referral to staff to rescind notice • April 25th –M e d i a D a y a t P l a n t 2
• May 6th – Presented to Greater Bakersfield Chamber of Commerce • May 14th – City Council rescinded notice
20 Lessons Learned
21 Next Steps
• May 2025 – Began working with HF&H Consultants to complete a full cost-of-service analysis • September 2025 – Began community outreach efforts
• October 2025 - Community Meetings
• October 22nd – Present to Council the cost-of-service analysis results and provide rate options • November 4th – Present to Greater Bakersfield Chamber of Commerce • January 2026 – Council to authorize Prop 218 notice
• March 2026 - Council to adopt proposed rate
• July 1, 2026 – New rate to go into effect
22 Community Meetings
Meetings begin at 6:00 p.m.
• October 6th –S o u t h w e s t L i b r a r y
• October 13th – South High School Performing Arts Center • October 15th – Ridgeview High School Library
• October 16th – Mill Creek Park Community House
• October 20th – Chipman Jr . High
• October 21st – Kern City Civic Association
• October 27th – NOR Recreation Center
• November 13th –V i r t u a l
23 Thank You
24 EXHIBIT F. RATE DEVELOPMENT AND SCENARIOS
RATE DEVELOPMENT
AND SCENARIOS
1 Water and HF&H Coordination
2 • HF&H reviewed the Water Department
2025 Report and provided some
revisions
• Water utilized HF&H recommendations
to update FY2026-27 to FY2035-36
Financial Plan [15-years]
• HF&H prepared 2026 COSA using the
Rate Model with Financial Plan expenses
• HF&H staff to present 2026 COSA
findings
Wastewater Rates Background
3 Residential
Commercial
Industrial
Wastewater customer classes:
Wastewater Rates Background
4 Rate Study Process
5 Comprehensive rate study comprises three steps:
Estimates for Major Infrastructure Projects
6 PLANT 3 Expansion
Constructed by 2031
PLANT 2 Upgrade
Constructed by 2033
• Planning, Design, & Permits
• $53 Million
• Construction
• $563 million
• Construction Management
• $90 million
• TOTAL
• $706 Million [escalated $]
• Planning, Design, & Permits
• $14 Million
• Construction
• $152 million
• Construction Management
• $16 million
• TOTAL
• $182 Million [escalated $]
• Site Acquisition:
• $20 million
• Planning, Design, & Permits
• $169.5 Million
• Construction
• $830 million
• Construction Management
• $133 million
• TOTAL
• $1.15 Billion [escalated $]
PLANT 4 New Facility
Constructed by 2039
Current Revenue Compared with Cost of Service
7 • Revenue Requirement
is allocated among
functions of the
wastewater system.
These figures are
divided by the units of
s e r v i c et og e n e r a t eu n i t
costs
• Cost of service is
calculated by
multiplying the unit
costs by the units of
service for each
customer class
Rate Design: Fixed Service Charge Rate
8 • Rate design utilizes unit costs from
cost-of-service analysis.
• SFDE = Single Family Dwelling
Equivalent
• SFDE fixed charge accounts for
units of service specific to a Single-
Family Dwelling
• Multiple Dwelling Unit Charge is
based on 75% of that of a Single-
Family Dwelling to reflect reduced
wastewater discharge patterns for
multi-family units.
SFDE Flow BOD TSS
Single Family 1 220 240 280
Characteristics
Annualize 1 107 161 188
hcf/yr lbs/yr lbs/yr
Unit Costs $98.49 $6.86 $0.91 $0.57
Annual Cost per SFDE $98.49 $736.05 $146.06 $106.32
Fixed Service Charge per SFDE $1,086.92
Fixed Service Charge per Multiple Dwelling Unit $815.19
Rate Model Variables and Considerations
• There are certain triggers that will impact the annual rate and the bonding amount required, these include:
• Modifying the timing of Major Infrastructure Projects • Increase the annual rate to collect more revenue
• Plan for rate increases to go beyond the initial 5-year Prop 218, knowing a second 5- year Prop 218 effort will need to occur in 2031
• Supplement the rate revenue with bond funding
• Items to consider that could impact costs and service:
• Delaying infrastructure will increase cost due to escalation and could result in service impacts
• Bonding will place costs on current and future users – share in the costs 9 Original Rate Scenario
10 ASSUMPTIONS:
• Plant 3 Expansion - 32 to 40 MGD by 2031
• Plant 2 Upgrade/Replacement by 2033
• Plant 4 Site/PSE/Permits in 2034 - 2036Rate at $950 YR1 + 3% Inflation • Year 1 – 2026-27 $950 284%
• Year 2 – 2027-28 $979 3%
• Year 3 – 2028-29 $1008 3%
• Year 4 – 2029-30 $1038 3%
• Year 5 – 2030-31 $1069 3%
• Bonding Amount Needed:
• $180,000,000
• Monthly “Equivalent”
• $79 in year 1 to $89 in year 5
Rate Scenario – Large Bond
11 ASSUMPTIONS:
• Plant 3 Expansion - 32 to 40 MGD by 2031
• Plant 2 Upgrade/Replacement by 2033
• Plant 4 Site/PSE/Permits in 2034 - 2036Rate at $475 YR1 then increase $125/yr • Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $600 26%
• Year 3 – 2028-29 $725 21%
• Year 4 – 2029-30 $850 17%
• Year 5 – 2030-31 $975 15%
• Bonding Amount Needed:
• $410,000,000
• Monthly “Equivalent”
• $40 in year 1 to $81 in year 5
Rate Scenario – No Bond
12 ASSUMPTIONS:
• Plant 3 Expansion - 32 to 40 MGD by 2031
• Plant 2 Upgrade/Replacement by 2035
• Plant 4 Site/PSE/Permits in 2037 - 2039Rate at $475 YR1 then increase $110/yr • Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $585 23%
• Year 3 – 2028-29 $695 19%
• Year 4 – 2029-30 $805 16%
• Year 5 – 2030-31 $915 14%
• Year 6 – 2031-32 $1025 12%
• Year 7 – 2032-33 $1135 11%
• No Bonding in 10-year Plan
• Monthly “Equivalent”
• $40 in year 1 to $95 in year 7
Rate Scenario – Moderate Bond
13 ASSUMPTIONS:
• Plant 3 Expansion - 32 to 40 MGD by 2031
• Plant 2 Upgrade/Replacement by 2034
• Plant 4 Site/PSE in 2035-2036Rate at $475 to $1087 over 7 yrs • Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $575 21%
• Year 3 – 2028-29 $675 17%
• Year 4 – 2029-30 $775 15%
• Year 5 – 2030-31 $875 13%
• Year 6 – 2031-32 $975 11%
• Year 7 – 2032-33 $1087 11%
• Year 8 – 2033-34 $1120 3%
• Year 9 – 2034-35 $1153 3%
• Year 10 – 2035-26 $1188 3%
• Bonding Amount Needed:
• $270,000,000
• Monthly “Equivalent” $40 in yr1 to $99 in yr10
Proposition [Prop] 218 Process
14 Present proposed
rate to Council.
Obtain approval to
begin Prop 218
February 11
Mail Prop 218
Notice to users
February 27
45-day Public
Review Period
March - April
Public Hearing
during Regular
Council Meeting
Upon Council
approval, adopt rate
April 22
2026 Rate
incorporated
within Kern County
Property Tax
July 1
• S e w e ru s e rf e e sa r e s u b j e c tt o
Prop 218
• Council is to approve rate and
direct staff to start Prop 218
• Notices are mailed to notify a
user of a proposed fee increase
• Prop 218 allows for a 45-day
review and comment period
• A public hearing is held after the
protest period
• Council will decide on whether
to approve or deny the fee
15 THANK YOU
EXHIBIT G. COUNCIL – SEWER RECOMMENDATIONS
SEWER USER RATE
INCREASE UPDATE AND
RECOMMENDATIONS
1 February 11, 2026
Presentation Outline
• 2025 Sewer User Rate Timeline
• Rate Scenarios presented during Community meetings
• AECOM Alternatives Evaluated
• Recommended Sewer User Rate for Proposition 218 process • Next Steps
WATER DEPARTMENT 2
2025 Sewer User Rate Timeline
• March: Staff proposed Sewer User rate
increase to $950 [no bond]
• May: HF&H was hired to support staff
• July: AECOM began Plant Evaluations
• October:
• 1st round of Community Meetings began
• Staff prepared 2026 Sewer Rate & Fees Report
• HF&H proposed $1087 COS [no bond]
• Water staff presented 6 rate scenario
• November: AECOM provided initial plant
evaluation findings to Water staff
• December: 2 nd round of Community
meetings began
3 Community Meeting - Rate Development & Scenarios
• Original Rate Scenario Increase rate to $950 + 3%/yr for 5-yrs + $180 mil Bond [October 22 - Rate Scenario 1]
• Large Bond Scenario Increase rate to $475 + $125/yr for 5-yrs + $410 mil Bond [October 22 - Rate Scenario 4]
• No Bond Scenario Increase rate to $475 + $110/year for 7-years [October 22 - Rate Scenario 5]
• Moderate Bond Scenario Increase rate to $475 + $100/yr for 7-yrs + $270 mil Bond [October 22 - Rate Scenario 6]
WATER DEPARTMENT 4
Upgrade Plant 2 + Expand Plant 3
Eliminate Plant 2 + Centralize at Plant 3
Eliminate Plant 2 + Build Plant 4
Centralize Treatment at new Plant 4
1 2
3 4
AECOM Alternatives Evaluated
MAJOR INFRASTRUCTURE
2050 PLAN
6 Replace aged equipment,
flare system and headworks to improve safety,
efficiencies, and odor control.
Upgrade Plant 2 - replace
trickling filter media, electrical and mechanical
equipment, admin/shop/warehouse facilities
Expand plant from 32 to 40
MGD - Maintain MLE process
Construct New 25 MGD Plant -
Plant 4 @ Plant 2 [S. Planz] - Utilize MLE Process
PLANT 4
Major Infrastructure Cost Comparisons
TOTAL $40,300,000
TOTAL $158,500,000 TOTAL $381,000,000
TOTAL $569,000,000 TOTAL $241,000,000
TOTAL $796,400,000 TOTAL $528,000,000
TOTAL $1,523,900,000 TOTAL $1,190,300,000
WWTP2 Replace WWTP2 Phase 0
WWTP4 New Plant WWTP4 New Plant @2
ORIGINAL 2026 Cost Estimates RECOMMENDED 2026 Cost Estimates WWTP3 Phase 0
WWTP3 Expand-40 WWTP3 Expand-40
7 PLEASE NOTE: The RECOMMENDED 2026 Cost
Estimates, shown above and provided during the
February 11, 2026, Council meeting, were developed
during the AECOM workshops in January 2026.
In late February, AECOM provided updated analysis
and estimates that are analyzed in the 2026-2030 Report and are included in Exhibit I.
Updated Major Infrastructure Schedule
FY 2028-29 WWTP3 Phase 0 Construction + CM
FY 2031-33 WWTP2 Phase 0 Construction + CM
FY 2033-36 WWTP3 Expand-40 Construction + CM
FY 2036-39 WWTP4 New Plant @2 Construction + CM
FY 2039-40 WWTP4 New Plant @2 Start-up operations with WWTP2 8 RECOMMENDED RATE
Based on Revised AECOM Estimates
9 • Year 1 – 2026-27 $475 92%
• Year 2 – 2027-28 $575 21%
• Year 3 – 2028-29 $675 17%
• Year 4 – 2029-30 $775 15%
• Year 5 – 2030-31 $875 13%
• Year 6 – 2031-32 $975 11%
• Year 7 – 2032-33 $1005 3%
• Year 8 – 2033-34 $1035 3%
• Year 9 – 2034-35 $1065 3%
• Year 10 – 2035-26 $1095 3%
• Bonding Amount anticipated:
• $150,000,000
PROP 218 REQUIRED
Recommended Rate
10 Based on AECOM Estimates & Schedule
for Major Infrastructure
11 Recommended Rate - Revenue and Expenses
Original Rate [$950] verses Recommended Rate
YEAR YEAR
FY 2026-27 950$ 284% FY 2026-27 475 $ 92% FY 2027-28 979$ 3% FY 2027-28 575 $ 21% FY 2028-29 1,008$ 3% FY 2028-29 675 $ 17% FY 2029-30 1,038$ 3% FY 2029-30 775 $ 15% FY 2030-31 1,069$ 3% FY 2030-31 875 $ 13% FY 2031-32 1,072$ 3% BOND $180 Million FY 2031-32 975$ 11% BOND $150 Million FY 2032-33 1,104$ 3% FY 2032-33 1,005 $ 3% FY 2033-34 1,137$ 3% FY 2033-34 1,035 $ 3% FY 2034-35 1,171$ 3% FY 2034-35 1,065 $ 3% FY 2035-36 1,206$ 3% FY 2035-36 1,095 $ 3%
RECOMMENDED RATE ORIGINAL RATE
2026 Proposition 218
2031 Proposition 218
2026 Proposition 218
2031 Proposition 218
12 Rate Comparison to other Cities
13 Next Steps
14 Present proposed
rate to Council.
Obtain approval to
begin Prop 218
February 11
Mail Prop 218
Notice to users
February 27
45-day Public
Review Period
March - April
Public Hearing
during Regular
Council Meeting
Upon Council
approval, adopt rate
April 22
2026 Rate
incorporated
within Kern County
Property Tax
July 1
• Council to direct staff to start
Prop 218 using Recommended
Rate
• Staff and HF&H to finalize 2026
Sewer Rate and Fees Report and
Cost of Service Analysis
• Notices mailed to notify a user
of Recommended Rate increase
• Prop 218 allows for a 45-day
review and comment period
• Public hearing to be held April
22 during regular Council
• Council will decide on whether
to approve or deny the fee
15 THANK YOU
EXHIBIT H. PROPOSITION 218 NOTICE
PROPOSITION 218 NOTIFICATION:
PROPOSED ANNUAL RATE INCREASE FOR SEWER SERVICES
WHY BAKERSFIELD NEEDS RATE INCREASES
Bakersfield provides comprehensive wastewater (sewer) service to protect and enhance the environment and to safeguard the health, safety, and welfare of the community. This service is financially self-sufficient and is not supported by General Fund revenues. The City’s rate structure ensures that the cost of service is fairly and equitably recovered from all customer groups. The proposed rate increases are necessary to fund operational and capital costs and to ensure sufficient reserves to meet long-term needs.
HOW TO FILE A WRITTEN PROTEST
Property owners or tenants of the affected parcels may submit a written protest against the proposed sewer rate increase. Only one protest per parcel is allowed.
WRITTEN PROTESTS MUST:
• State that the identified property owner opposes the proposed sewer rates
• Provide the property address and assessor’s parcel number • Include an original signature from the property owner or tenant submitting the protest – an electronic signature CANNOT be counted
Under California Government Code section 53759, there
is a 120-day statute of limitations for challenging any new, increased, or extended fee or charge. This statute of limitations applies to the sewer service rates proposed in this notice. For reasonable ADA and Title VI accommodations, interpreting services, and materials in other languages, please contact the City Clerks Office at 661-326-3767. This service is free.
To view the report,
you can go to
BakersfieldCity.us or
scan the QR code
WEDNESDAY, APRIL 22, 2026
at 5:15 P.M.
City Hall South - Council Chambers
1501 Truxtun Avenue
MAIL WRITTEN PROTESTS
City of Bakersfield
City Clerk
RE: Protest – Proposed Sewer Rates
1600 Truxtun Avenue
Bakersfield, California 93301
Protests must be received by the City
before the public hearing concludes.
PUBLIC HEARING ON PROPOSED SEWER RATE INCREASE
LEARN MORE!
SEWER USER RATE is included in the property tax bill
PROPOSITION 218
HOW WERE ANNUAL RATES
CALCULATED?
COMPREHENSIVE RATE STUDY
In 2025, the City had AECOM, a local consultant with experience in wastewater, conduct a comprehensive evaluation of the City’s sewer system, identifying deficiencies due to aging infrastructure and technology. In 2026, the city utilized information from this engineering evaluation and prepared a 2026-2030 Sewer Rates and Fees Report, with support from HF&H consultants, an independent third-party firm. The study provides a detailed review of costs and the rate structure needed to meet those costs and continue providing safe and reliable sewer maintenance services.
The proposed service fee increase was calculated by evaluating the overall cost of providing sewer services to city residents and identifies future bonding needs and payments. These costs are divided proportionally among properties receiving sewer services, as required by Proposition 218. Customers will be charged only for the cost of providing sewer services to their property.
THE REASONS FOR THE RATE INCREASE INCLUDE:
• Covering the cost of operating and maintaining the sewer system • Complying with new regulations
• Funding essential projects to repair, maintain, and properly operate the sewer system infrastructure to keep the system running smoothly The City of Bakersfield provides sewer service to more
than 400,000 people, 106,000 parcels within the
City, including 8,200 businesses, as well as an additional 13,600 parcels outside City boundaries.
CITY’S SEWER INFRASTRUCTURE
~1,100 miles
of sewer pipe
56 sewer
lift stations
2 wastewater
treatment plants
~1,000 miles
of storm drainpipes387 basins 36 storm
lift stations
ABOUT SEWER TREATMENT PLANTS
• Plant 2 Upgrade: Initially built in 1939, last up-
dated in 1997 to a trickling filter system
• Plant 3: Constructed in 1972, last updated in
2010 to convert to activated sludge treatment
MAJOR INFRASTRUCTURE
PROJECTS INCLUDE
• Plant 2 Upgrade
• Plant 3 Expansion
Service Rate Changes - Effective July 1, 2026
PROPOSED CHANGES TO
COMMERCIAL RATES
The City of Bakersfield will implement new software for sewer surcharge billing. Once the system is live, sewer surcharges will no longer be calculated based on prior-year water consumption.
Instead, billing will be based on current monthly water usage.
CURRENT COMMERCIAL RATE
Commercial sewer rates vary by customer class or business type.
Sewer fees for commercial customers include a flat rate and surcharges. Commercial customers are charged surcharges only when actual water flow exceeds the amount covered by their flat rate charges. Sewer surcharges for commercial customers is currently based on prior calendar-year water consumption.
CHANGES TO RESIDENTIAL RATES
Residential sewer rates are proposed to increase from $247.13 to $475.00 fiscal year 2026-27, and then increase by $100 for the following four years. Residential customers pay a flat sewer rate. The sewer fee is collected annually on the property tax bill.
In the first year, the rate goes up by less than $20 per month (less than $5 weekly).
Plant 2
Plant 3
WHAT DO SEWER RATES PAY FOR?
$ $$ $$ $$ $
Operations &
Preventive
Maintenance: 60%
Condition Assessment
& Repair/Rehabilitation: 34%
24-hour
Emergency
Response: 3%
Administration
Costs: 3%
PROPOSED INCREASES TO SEWER
RATES FOR FISCAL YEARS 2026-27
THROUGH 2030-31
Flat Rate - Collected on Property Tax Bill
Strength
Classification
Current FY 26/27 FY 27/28 FY 28/29 FY
29/30
FY 30/31
Single Family
Residence $247.13 $475.00 $575.00 $675.00 $775.00 $875.00 Multiple
Dwelling $185.35 $356.25 $431.25 $506.25 $581.25 $656.25 Commercial
Low Strength $247.13 $475.00 $575.00 $675.00 $775.00 $875.00 Commercial
Medium
Strength
$247.13 $475.00 $575.00 $675.00 $775.00 $875.00
Commercial
Medium-High
Strength
$247.13 $475.00 $575.00 $675.00 $775.00 $875.00
Commercial
High Strength $247.13 $475.00 $575.00 $675.00 $775.00 $875.00 Surcharge per Hundred Cubic Foot of Water Consumed
Strength
Classification Current FY 26/27 FY 27/28 FY 28/29 FY
29/30 FY 30/31
Commercial
Low Strength $1.89 $3.26 $3.95 $4.64 $5.33 $6.02
Commercial
Medium
Strength
$2.08 $3.80 $4.60 $5.40 $6.20 $7.00
Commercial
Medium-High
Strength
$2.68 $5.06 $6.13 $7.20 $8.27 $9.34
Commercial
High Strength $3.46 $6.19 $7.49 $8.79 $10.09 $11.39
Permitted Industrial User Sewer Fee
Parameter Current FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 Flow / Million
Gallons $2,150.81 $3,862.30 $4,675.42 $5,488.54 $6,301.66 $7,114.78 Biochemical
Oxygen
Demand
(BOD) /
1,000 pounds
$169.94 $351.64 $425.67 $499.70 $573.73 $647.76
Total
Suspended
Solids (TSS) /
1,000 pounds
$102.25 $219.41 $265.60 $311.79 $357.98 $404.17
EXHIBIT I. AECOM MAJOR INFRASTRUCTURE
TECHNICAL MEMO
AECOM
5001 E. Commercenter Dr., Suite 100
Bakersfield, CA 93309
Technical Memorandum
Subject City of Bakersfield, Wastewater Treatment Plant Expansion & Rehabilitation Date February 23, 2026
Introduction
The City of Bakersfield (City) operates a wastewater utility that provides wastewater collection, treatment, and disposal services for residents and businesses within the City and some adjacent areas within the unincorporated areas of Kern County. Wastewater is used water that is discharged from homes, schools, and businesses to wastewater treatment plants which remove contaminants from sewage and produce clean water that can be safely disposed of or reused.
Funding for the wastewater utility comes from customer fees, which for City residents is a flat annual fee that is billed with property taxes. Businesses, industry, and new developments are charged fees based on impacts to the utility. Operation, maintenance, and capital improvements are funded from these fees.
The purpose of this technical memorandum is to summarize the current condition of the City’s two wastewater treatment plants and outline capital improvements needed to continue operation through 2050.
AECOM Approach
AECOM conducted a high-level condition assessment of existing treatment infrastructure, reviewed operational data, and interviewed City staff. Flow projections were prepared with a 25-year planning horizon (2050) and evaluated growth using data from Kern County Council of Government, California Economic Forecast, and California Department of Finance. Hydraulic and process capacity analyses were performed to identify capacity limitations. Conceptual capital projects were then developed and evaluated to upgrade and expand capacity to meet the flow projections and future regulatory requirements.
As part of this project, two sets of three-day workshops were held with City staff in late 2025 and early 2026 to get feedback on the evaluation results and proposed capital projects. These workshops included participation of stakeholders: County of Kern, Kern Sanitation Authority, and East Niles Community Services District.
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Wastewater Treatment Plant No. 2 (Plant 2) 1
Plant 2 is a secondary level treatment facility
using primary settling, trickling filter biological
treatment and secondary settling to reduce
organic loads before discharge to large storage
ponds. Treatment processes include influent
screening, influent pumping, grit removal tanks,
primary clarifiers, large trickling filters, secondary
clarifiers ahead of effluent storage. Residual
solids from the biological processes are stabilized in digester tanks and dried on open beds.
A formal condition assessment conducted of the facility determined that much of the mechanical and electrical equipment is now at the end of its useable life, requiring major rehabilitation for continued operation. The design life for this equipment is typically 10 to 20 years, and it has now been 27 years since the last upgrade.
Hydraulically, Plant 2 has sufficient capacity as water conservation measures have reduced per capita sewage generation since the 1990’s. The current flow in 2025 at Plant 2 is 12 MGD 2 and the
projected flow in 2050 is 25 MGD. As a result, Plant 2 does not require hydraulic capacity expansion.
The heart of Plant 2 are the trickling filters. Trickling filters are a simple and effective means of accomplishing secondary treatment at minimal cost. Trickling filters do not remove nitrogen, however. Currently the City is not required by the California Regional Water Quality Control Board (Regional Board) to remove nitrogen at Plant 2. Nitrogen removal is typically required at new or rehabilitated wastewater facilities. At some point in the future, it is likely that Regional Board will require the City to remove nitrogen, which will require construction of new secondary treatment technology. It takes approximately 10 years to design, construct, and permit a new or expanded wastewater treatment plant. Because of this it is important for the City to begin planning for that replacement now.
Water conservation, while reducing flow to the plant, has significantly increased the concentration of organic matter, which has resulted in the treatment processes being biologically overwhelmed.
Recommendations to improve treatment include a new grit removal system, adding chemical s at the primary clarifiers, installation of forced air ventilation at the trickling filters, addition of sludge thickeners, restoring an old anaerobic digester into service , and a mechanical solids dewatering facility to replace open drying beds . Doing the work described above will rehabilitate and restore Plant 2 to its 1999 condition and keep it operating for another 10 to 20 years.
AECOM evaluated multiple options for rehabilitating Plant 2 , including replacing the existing trickling filters with a new secondary treatment process on the current site. The City instead selected the permanent solution to construct a new plant adjacent to Plant 2, which is tentatively referred to as “Plant 4”. Plant 2 would need to be upgraded and rehabilitated to keep operating for the next
1 What happened to Wastewater Treatment Plant No. 1? Plant 1 was the City’s first treatment facility constructed in the early 1900’s. It was decommissioned in the 1980’s and sewage was consolidated at Plant 2. The former site of Plant 1 is today the location of the City’s Animal Control facility on S. Mt. Vernon Ave. 2 Hydraulic capacity is described as million gallons per day (MGD), which is the average flow over a 24 -hour period. For comparison, 1 MGD is equivalent to filling 1.5 Olympic-sized swimming pools each day. • Located at 1700 E. Planz Road
• Originally Constructed in 1939
• Last Upgraded in 1999
• Permitted Capacity is 25 MGD
• Population Served is 147,800 (2025)
• Projected Population is 186,000 (2050)
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decade while Plant 4 is constructed and brought online. Plant 2 would then be demolished and the land used for other purposes.
Wastewater Treatment Plant No. 3 (Plant 3)
Plant 3 is an advanced treatment facility capable of
reducing organic loads plus ammonia and total
nitrogen. That designates this facility as a biological nutrient removal plant, which can produce high
quality effluent for direct introduction into the
groundwater. Plant 3 has screening, grit removal,
primary settling, aeration tanks and secondary
settling processes. The high-quality effluent is
discharged into percolation ponds for groundwater
recharge. Residual solids from the biological processes are concentrated, stabilized in digester tanks and dewatered to a truckable concentration for disposal on agricultural land.
At Plant 3 the issue is not treatment capacity, but hydraulic capacity. The secondary treatment system uses the activated sludge process, which is a modern technology capable of treating today’s concentrated wastewater. Hydraulically, however, Plant 3 is nearing its permitted capacity.
Expansion of the treatment plant capacity is needed for the City to comply with state and federal regulations.
The condition of Plant 3 is generally good compared to Plant 2. Some equipment does need to be replaced including sludge dewatering centrifuges, sludge thickeners, and digester gas flare. During construction of the last upgrade of Plant 3 in 2010 the City decided to reduce costs by not installing all the planned equipment to achieve its design capacity . This has reduced the functional capacity of Plant 3 to approximately 24 MGD . The maximum 7 -day average flow was 24.8 MGD in 2025.
Additional equipment must be installed in the existing tanks to meet the permitted 32 MGD treatment capacity.
Flow by 2050 is projected to increase to 45 MGD due to growth of new development and densification within existing neighborhoods. A phased approach to expansion was developed with Phase 1 at 8 MGD (40 MGD total) by 2035 and Phase 2 at 5 MGD (45 MGD total) by 2050. Only Phase 1 expansion is evaluated for this technical memorandum, as Phase 2 would occur after 2040.
Wastewater Treatment Plant No. 4 (Plant 4)
Plant 4 is a proposed new wastewater treatment plant that would be located adjacent to Plant 2 on the south side of E. Planz Road. The proposed land for Plant 4 is owned by the City.
The intent is for Plant 4 to be a replacement for Plant 2 with the same total capacity of 25 MGD.
Plant 4 is anticipated to use an advanced biological nutrient removal process for secondary treatment and total nitrogen reduction. This technology is the same process used at Plant 3 . New effluent storage ponds would be constructed south of Plant 4 with the same size and volume currently used at Plant 2.
Plant 4 is also proposed to include 5 MGD of tertiary treatment processes, including filtration and disinfection. Tertiary treatment is an additional step that further purifies water to meet California’s high quality reuse standard, so that it can be used for more purposes including landscape irrigation at parks and a wider variety of crops. Plant 3 currently has 2 MGD tertiary treatment capacity.
• Located at 6901 McCutchen Road
• Originally constructed in 1972
• Last Upgraded in 2010
• Permitted Capacity is 32 MGD
• Population Served is 262,700 (2025)
• Projected Population is 457,400 (2050)
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Project Descriptions
Plant 2, Phase 0: Rehabilitate Existing (25 MGD Total). Plant 2 will be rehabilitated so that it treats wastewater in compliance with the City’s current discharge permit. The hydraulic capacity and treatment process would remain the same. It is planned that these improvements will operate for approximately 10 years while a new wastewater treatment plant (Plant 4) is designed, constructed, and permitted. The following are the components anticipated as part of this work (see Figure 1):
(1) Preliminary Treatment
a. Construct a new influent pump station (2,000 square feet). b. Install two (2) new vortex grit chambers (18-foot diameter each) and a new classifier structure (2,100 square feet).
c. Demolish existing influent pump station and aerated grit chamber. (2) Primary Treatment
a. Modify Distribution Box No. 1 to manage peak flow.
b. New scum pump station.
c. New primary sludge pump station.
d. Add CEPT (chemically enhanced primary treatment) at the primary clarifiers. (3) Secondary Treatment
a. Replace the distributor mechanisms and media at all three (3) existing trickling filters.
b. Install four (4) forced air ventilation fans at each trickling filter; twelve (12) fans total.
(4) Solids Treatment
a. Construct a new thickening building (3,000 square feet) for secondary sludge. Install two (2) rotating drum thickeners including sludge pumps and piping. b. Rehabilitate Digester No. 1 and bring it into operation. c. Install a new digester gas flare. Current California air quality regulations require ultra-low N ox (nitrous oxides) flares and hydrogen sulfide removal (e.g., Sulf- A- Treat).
(5) Electrical and Instrumentation. Replace the existing electrical and instrumentation equipment.
(6) Non-Process Facilities
a. Construct a new Administration Building (5,000 square feet). b. Construct a new Shop and Warehouse (5,000 square feet each).
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Figure 1: Plant 2, Phase 0 Improvements
The following is the estimated development schedule for Plant 2, Phase 0. • Pre-Design FY 2027-28
• Pre-Purchase FY 2030-31
• Design FY 2029-31
• Construction FY 2031-33
The conceptual budgetary cost for Plant 2, Phase 0 is approximately $226 million. See the Appendix for a detailed cost breakdown and a description of the cost estimating methodology assumptions.
Plant 3, Phase 0: Rehabilitate Existing (32 MGD Total). Plant 3 is permitted to treat up to 32 MGD but functionally only has equipment installed to treat up approximately 24 MGD. Phase 0 includes the recommended improvements to achieve the permitted 32 MGD treatment capacity, which consists of the items below (see Figure 2).
(1) Secondary Treatment
• Install new air piping, submersible mixers, and instrumentation equipment at the four (4) non-functional aeration basins.
• Replace the existing flat plate diffusers in all ten (10) aeration basins with 9 -inch diameter disc diffusers. All diffusers need to be the same type for even air distribution between aeration basins. The existing diffusers are also nearing the end of their useful life. Approximately 2,000 diffusers per aeration basin are required, for 20,000 total diffusers.
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• Remove all the covers on the anoxic and aerobic tanks. These facilities should not generate odor when the facility is operating properly and covers are not necessary for odor control. The covers also interfere with the operator’s ability to see how the aeration basins are functioning.
(2) Solids Treatment. Install a new digester gas flare. The existing flare is near the end of its useable life and the digester gas booster blower project may cause the gas system to exceed the existing flare’s operational capacity. Current California air quality regulations re quire ultra-low NOx flares and hydrogen sulfide removal (e.g., Sulf-A-Treat). This new flare should be sized for the 2050 capacity (45 MGD) and include a 3:1 turndown so it will be useable throughout the phased improvements described below.
(3) Odor Control. Install a new bio -trickling filter odor control system for the headworks building. This would include installing a new ventilation system for personnel safety. The new equipment would be located adjacent to the headworks building.
Figure 2: Plant 3, Phase 0 Improvements
The following is the estimated development schedule for Plant 3, Phase 0. • Pre-Design FY 2026-27
• Pre-Purchase FY 2027-28
• Design FY 2027-28
• Construction FY 2028-29
The conceptual budgetary cost for Plant 3, Phase 0 is approximately $37 million. See the Appendix for a detailed cost breakdown and a description of the cost estimating methodology assumptions.
Plant 3, Phase 1 : 8 MGD Expansion (40 MGD Total) . Phase 1 is an 8 MGD expansion for a total capacity of 40 MGD. Below is a summary of recommended improvements to increase hydraulic and process capacity (see Figure 3).
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(1) Preliminary Treatment
a. Construct a new headworks building (3,000 square feet) that includes four (4) mechanical bar screens and six (6) influent pumps with a capacity of 45 MGD. b. Because the existing grit chamber is integral with the existing headworks, it is recommended that three (3) new vortex grit chambers be installed with a capacity of 45 MGD.
c. The new headworks building will also require new odor control and ventilation. (2) Secondary Treatment
a. Install new recirculation pumps in all ten (10) aeration basins. b. Install one (1) new single -stage blower with a capacity of 14,000 scfm, approximately 800 hp, and will increase blower capacity to 45 MGD. This will require an expansion of the existing blower building.
(3) Solids Treatment
a. Construct two (2) new anaerobic digesters for eight (8) total. This will include an additional digester control building (1,750 square feet per floor). Digester Nos. 1 and 2, which are decommissioned, will be demolished.
b. Construct a new thickening/dewatering building (7,500 square feet per floor). Install 4 new sludge thickeners and 5 new centrifuges for sludge dewatering. The existing DAF tanks and existing dewatering building would be demolished. New odor control would be included as part of this new building.
(4) Odor Control. Install bio-trickling filter odor control at the primary clarifiers.
(5) Non-Process Facilities
a. Remodel the existing Administrative Building.
b. Construct a new Operations Building (5,200 square feet). c. Construct a new Warehouse (5,000 square feet).
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Figure 3: Plant 3, Phase 1 Improvements
The following is the estimated development schedule for Plant 3, Phase 1. • Pre-Design FY 2029-31
• Pre-Purchase FY 2031-32
• Design FY 2031-33
• Construction FY 2033-36
The conceptual budgetary cost for Plant 3, Phase 1 is approximately $398 million. See the Appendix for a detailed cost breakdown and a description of the cost estimating methodology assumptions.
Plant 4: New Facility (25 MGD). Below is a summary of the total work needed to construct a new 25 MGD facility using biological nutrient removal (see Figure 4). (1) Preliminary Treatment. Screens, vortex grit removal, odor control, and headworks building.
(2) Primary Treatment. Primary clarifiers and sludge pumps.
(3) Secondary Treatment . Aeration basins with diffusors, blowers, blower building, and secondary clarifiers.
(4) Solids Treatment . Anaerobic digesters , sludge thickeners, sludge dewatering, thickening/dewatering building, odor control, and gas systems.
(5) Tertiary Treatment. Cloth disk filters, UV disinfection, recycled water storage.
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(6) Non-Process Facilities . Administrative building, operations building, warehouse, shop, parking, access roads, fencing, security systems, effluent storage ponds, and parking facilities.
Figure 4: Plant 4 Construction
The following is the estimated development schedule for Plant 4. • Pre-Design FY 2032-34
• Pre-Purchase FY 2034-35
• Design FY 2034-36
• Construction FY 2036-39
• Startup FY 2039-40
The conceptual budgetary cost for Plant 4 is approximately $574 million. See the Appendix for a detailed cost breakdown and a description of the cost estimating methodology assumptions.
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Summary
AECOM conducted condition assessment s, evaluated hydraulic capacity, and reviewed treatment process capacity at both Plants 2 and 3. Based on this data conceptual capital projects were developed to address current deficiencies and prepare for future growth. The projects selected by the City consist of the following:
• Plant 2, Phase 0. Stabilize and rehabilitate the existing facility to continue operation through 2040.
• Plant 3, Phase 0. Rehabilitate and install equipment to treat the permitted 32 MGD capacity. • Plant 3, Phase 1. Construct an 8 MGD expansion to Plant 3, which would increase the total capacity to 40 MGD.
• Plant 3, Phase 2. Constru ct a 5 MGD expansion to Plant 3, which would increase the total capacity to 45 MGD.
• Plant 4. Construct a new wastewater treatment plant adjacent to and south of Plant 2. This new 25 MGD facility will replace Plant 2. Plant 2 would be demolished after Plant 4 is permitted and in operation.
Table 1 provides a summary of the projects described above that are scheduled through 2040.
Please note that the future expansion of Plant 3 to 45 MGD (Phase 2) is not included as it is anticipated to occur after 2040.
Table 1. Summary of proposed projects through 2040
Project
Construction
Schedule Cost
Plant 2, Phase 0: Rehabilitate Existing (25 MGD Total) FY 2031-33 $ 226,200,000 Plant 3, Phase 0: Rehabilitate Existing (32 MGD Total) FY 2028-29 $ 36,690,000 Plant 3, Phase 1: 8 MGD Expansion (40 MGD Total) FY 2033-36 $ 397,705,000 Plant 4: New Facility (25 MGD) FY 2036-40 $ 573,700,000
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APPENDIX: CONCEPTUAL COST DATA
Cost Methodology. Association for the Advancement of Cost Estimating (AACE) Level 5 estimates were prepared for the phases and options described below. This is based on conceptual sizing of facilities. No detailed design has been prepared. The following factors were used:
• Mobilization & Demobilization 5%
• Construction Escalation 4% per year from 2025
• Design Engineering 15%
• Construction Management 15%
• Contingency 30%
Costs were escalated between 2025 and the mid-point of construction. The level of confidence for AACE Level 5 is between -20% and +50%.
Please note that these estimates are for capital improvements for expansion only and do not include maintenance costs. The majority of the mechanical, process, electrical, and instrumentation equipment has a usable life between 10 to 20 years and will require periodic replacement as part of ongoing maintenance through 2050 and beyond.
Conceptual Cost Estimates. The following tables provide a summary of conceptual costs for each of the phases previously described.
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Table 2. Budget estimate for Plant 2, Phase 0: Rehabilitate Existing (25 MGD Total) Description Cost
General Conditions $ 15,610,000
Site Work - Miscellaneous $ 8,790,000
Wet well and Influent Pumping $ 12,580,000
Grit Removal $ 8,710,000
Primary Clarifiers $ 6,610,000
Trickling Filters $ 27,230,000
Sludge Thickeners $ 7,220,000
Digesters $ 10,280,000
Sulf-a-Treat System $ 3,950,000
Odor Control $ 1,600,000
Site Piping Improvements $ 5,540,000
Electrical/Instrumentation $ 26,020,000
Maintenance shop $ 2,810,000
Miscellaneous Improvements $ 6,920,000
Warehouse $ 3,170,000
Administration Building $ 3,760,000
Subtotal $ 150,800,000
Engineering/Admin/CM (25%) $ 37,700,000
Contingency (25%) $ 37,700,000
Environmental/Permitting $ - Total $ 226,200,000
Table 3. Budget estimate for Plant 3, Phase 0: Rehabilitate Existing (32 MGD Total) Description Cost
General Conditions $ 2,880,000
Site Work - Miscellaneous $ 1,350,000
Aeration Basins $ 13,150,000
Odor Control $ 700,000
Site Piping Improvements $ 1,350,000
Electrical/Instrumentation $ 1,910,000
Gas Handling Upgrades $ 2,640,000
Miscellaneous Improvements $ 480,000
Subtotal $ 24,460,000
Engineering/Admin/CM (25%) $ 6,115,000
Contingency (25%) $ 6,115,000
Environmental/Permitting $ -
Total $ 36,690,000
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Table 4. Budget estimate for Plant 3, Phase 1: 8 MGD Expansion (40 MGD Total) Description Cost
General Conditions $ 27,240,000
Site Work - Miscellaneous $ 6,590,000
Screening Facility $ 15,090,000
Influent Pumping $ 10,800,000
Grit Removal $ 6,510,000
Aeration Basins & Blowers $ 13,740,000
Sludge Thickeners $ 8,790,000
Digesters $ 44,680,000
Dewatering System $ 42,180,000
Odor Control $ 3,700,000
Site Piping Improvements $ 9,870,000
Electrical/Instrumentation $ 45,570,000
Miscellaneous Improvements $ 10,370,000
Warehouse $ 6,010,000
Administration Building $ 920,000
Operations Building $ 9,410,000
Subtotal $ 261,470,000
Engineering/Admin/CM (25%) $ 65,367,500
Contingency (25%) $ 65,367,500
Environmental/Permitting $ 3,000,000
Land Acquisition $ 2,500,000
Total $ 397,705,000
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Table 5. Budget estimate for Plant 4: New Facility (25 MGD) Description Cost
Headworks $ 12,200,000
Primary Clarifier $ 23,200,000
Digested Sludge Pumps $ 2,200,000
Sludge Dewatering $ 11,400,000
Odor Control for Dewatered Sludge Loadout $ 1,600,000 Centrifuge Building $ 22,600,000
Polymer Storage and Feed System $ 700,000
Aeration Basin $ 135,000,000
RAS/WAS $ 36,900,000
Gravity Thickeners $ 13,900,000
Sludge Building $ 20,900,000
Secondary Clarifier $ 29,800,000
Sulf-a-Treat $ 6,600,000
Waste Biogas Thermal Treatment $ 3,500,000
Anaerobic Digester $ 8,400,000
Disinfection (UV System) $ 2,900,000
New Storage Ponds $ 7,000,000
Plant 2 - Demolition $ 10,000,000
Non-Process Facilities $ 25,000,000
Miscellaneous Improvements $ 4,000,000
Subtotal $ 377,800,000
Engineering/Admin/CM (25%) $ 94,450,000
Contingency (25%) $ 94,450,000
Environmental/Permitting $ 7,000,000
Total $ 573,700,000
EXHIBIT J. PERSONNEL MEMO
MEMORANDUM
TO: Kristina Budak, Water Director
FROM: Dawn Spangler, Fiscal & Administrative Services Officer II DATE: February 27,2026
SUBJECT: 2026-2027 to 2035-36 Wastewater Personnel Requests
As part of the Water Department’s commitment to enhancing the operational capacity and sustainability of the wastewater treatment facilities, a 10-yr infrastructure improvement plan was initiated, aimed at optimizing performance, co mpliance, and long-term service reliability. To ensure the successful implementation and manage ment 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 and the complex demands of overseeing signif icant infrastructure upgrades 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 role s, responsibilities, and expertise required to complement the engineering, technical, and ope rational teams responsible for executing the 10-year infrastructure plan. By securing the necessary talent we will be positioned to maintain uninterrupted service, enhance treatment capa bilities, and align with future regulatory standards and compliance.
In addition to the position justifications below, the 2026-2035 Financial Plan identifies the year the position is to be hired and the Step 5 salary plus a 60% escalator for benefits and computers for each position. The total personnel budget in the Financial Plan will ensure adequate revenue is collected to fund the positions needed to operate and maintain the wastewater and storm drain systems efficiently.
Compaction – Assistant Directors and Director Salary Adjustment Justification:
Following the recent rate studies for the Municipal and Sewer User funds, the Water Department identified several critical hires necessary fo r our long-term water operation needs. A key component of this plan was the addition of a Ci vil Engineer IV to manage the engineering unit and oversee the Department’s ten-year financial plan.
While the hiring of the Civil Engineer IV is a major step forward, it has created a significant salary compaction issue within the Department’s management team. Currently, the Civil Engineer IV reports directly to the Assistant Water Director-Wastewater, yet the salary schedules for both positions are identical. This lack of separation between a supervisor and their subordinate is a structural flaw that creates several administrative challenges.
New Personnel Request
Wastewater Division
This is not a unique situation. Public Works rece ntly resolved an identical conflict between their Civil Engineer IVs and Assistant Directors. In that instance, the City approved a 6.2% adjustment for the Assistant Directors and the Director to restore a logical pay spread.
To maintain internal equity and ensure confor mity with the City’s past practice, we are requesting a matching 6.2% adjustment for the Assistant Water Directors and Water Director which will restore the organizational chart so that responsibility and compensation actually line up. Funds for this adjustment are reflected in the financial plans and rates of the Water Department.
Reclassification Requests
Reclassification: Fiscal and Administrative Services Officer II (FASO II) to a Fiscal and Administrative Services Manager
Justification:
The FASO II position is responsible for managing the fiscal and administrative functions within the department. As a result of the Water Resources Department and Wastewater Division merging to create the Water Department, FASO II now manages four enterprise revenue funds including Sewer User, Sewer Connection, Municipal Service and Water Availability fee, two fee structured accounts and tracks and reconciles revenues and expenditures for Subregional Wastewater Management Technical Advisory Committee (T.A.C.) as well as the Kern Levee District and Kern River Groundwater Sustainability Agency (KRGSA).
The position now functions as the primary fisc al and administrative manager for the Water Department and is responsible for oversight of four enterprise revenue funds (Sewer User, Sewer Connection, Municipal Service, and Water Ava ilability), two fee-structured accounts, and multiple special revenue and assessment programs. The position manages and administers a current departmental operating and capital budget exceeding $90 million, projected to exceed $200 million annually beginning FY 20 26-27 due to major capital infrastructure investments. Additionally, the position ove rsees financial planning and administration associated with an estimated $2 billion ten-year Capital Improvement Program (CIP) for treatment plant expansions, system upgrades, and regulatory compliance.
The position is responsible for long-range financial planning, revenue forecasting, rate modeling, and financial strategies necessary to ensure adequate funding for capital expansion and operational sustainability. This includes prep aration and presentation of rate studies, recommendations for rate adjustments, and coordination of Proposition 218 processes. The incumbent has been instrumental in supporting the department through major municipal water and sewer rate increases and will continue to le ad annual rate updates and future Prop 218 efforts. At the direction of the Council, this po sition will need to track, review, analyze, report and present revenue generation annually for the department’s enterprises.
The position exercises direct supervision over si x professional fiscal staff (one Accountant and five Administrative & Fiscal Services Specialists I/ II), with staffing projected to increase to eight within five years. Supervisory duties include hiring, training, assigning and reviewing work, conducting performance evaluations, reco mmending disciplinary action, and ensuring compliance with City financial policies and procedures.
New Personnel Request
Wastewater Division
Additional expanded responsibilities include ov ersight of departmental financial systems and implementation of new software platforms, de velopment of fiscal policies and procedures, grant research and administration, bond disclosu re reporting, enterprise billing oversight, and direct presentations to executive leadership and City Council. The position independently develops and manages the department’s annual operating and capital budgets, monitors expenditure and revenues, approves all financ ial transactions, and ensures compliance with applicable laws, regulations, and City policies.
Due to the magnitude of fiscal responsibility, supervisory authority, policy development, strategic planning, and independent decision-making required, the position now performs at a managerial level consistent with the Fiscal & Administrative Services Manager classification rather than a Fiscal & Administrative Services Officer II.
New Position Requests
Position: Civil Engineer IV
Justification:
This addition to the Water Department personne l is needed to address the engineering needs of the Water Department based on the comp lexity and amount of capital improvement projects in the short term and the long term. Wi th the significant population growth of the City of Bakersfield, the constant changes and restri ctions 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.
Projects include the wastewater treatment plant equipment, process replacement and improvement due to aging infrastructure. Current ly the Wastewater Division is undergoing a technical evaluation and preparing studies on the short-term and long-term planning to expand plant 3 and upgrade/rebuild plant 2 and relevant facilities.
Position: Fiscal & Administrative Services Supervisor
Justification:
This addition to the Water Department personnel is needed to address the fiscal, administrative, and supervisory needs of the Water Department’s Wastewater Division. With the City undertaking large-scale infrastructure projects , including the wastewater plant upgrade and expansion, this role ensures that financial, bu dgeting, and reporting activities are conducted with precision, efficiency, and compliance. By supervising fiscal staff and managing administrative workflows, the supervisor guarantees that departmental operations are organized, accurate, and aligned with the City’s strategic objectives.
This position is also critical to the full and successful implementation of the City’s VertexOne software system. The complexity of system integr ation, data validation, financial configuration, workflow alignment, and ongoing oversight requir es dedicated fiscal leadership to ensure the software is implemented accurate ly and utilized to its full capaci ty. Without this position, the Department risks delays, data inconsistencies, compliance issues, and underutilization of the system’s capabilities. The Fiscal & Administrative Services Supervisor will provide the necessary oversight to ensure seamless coordination between financial processes and system functionality, supporting accurate billing, reporting, and financial management operations.
New Personnel Request
Wastewater Division
This position is essential to managing the incr eased fiscal complexity and workload associated with these projects. The supervisor monitors and controls budgets to ensure expenditures remain within approved limits, prepares and presents comprehensive financial reports to senior management and oversight bodies, and implemen ts cost-control measures and procedures that support operational efficiency. The role provides guidance on financial planning, forecasting, and resource allocation, ensuring that the City’s large-scale projects are executed successfully, on time, and within budget.
By centralizing oversight of financial planning, budget development, administrative operations, and enterprise system implementation, the Fiscal & Administrative Services Supervisor enhances accountability, mitigates financia l risk, and ensures the effective allocation of resources. This position not only supports senior management with accurate, timely, and actionable financial information but also strengthens operational efficiency and departmental performance, making it indispensable to the successful completion of critical infrastructure projects, the full implementation of the VertexOne system, and the achievement of the City’s financial and operational goals.
Position: Administrative & Fiscal Services Specialist I Justification:
Due to the increased workload resulting from the Plant Upgrade and Expansion projects, there will be a growing need for an additional Administrative & Fisc al Services Specialist I.
These large-scale infrastructure initiatives will significantly raise the volume of administrative and fiscal tasks, such as managing financial transa ctions, processing invoices, tracking resources, and handling payroll documentation. Additional staffing will be necessary to ensure accurate financial records, compliance with procurem ent and budgeting polic ies, and a timely generation of reports. The new hire will support the fiscal team in managing these increased responsibilities, ensuring smooth operations and oversight of the projects.
Position: Water Inspector I/II
Justification:
The hiring of Water Inspector I/II is essential fo r overseeing the expansion and upgrade of both wastewater treatment plants and Municipal wa ter system. The inspector will ensure that construction projects, managed by Water Department including infrastructure associated with sewer, drainage and municipal systems, comp ly with engineering plans, contracts, and regulatory standards. Responsibilities include inspecting construction work, maintaining records, preparing cost estimates, conducting safety in spections, and ensuring compliance with safety regulations. This role will be crucial in keeping the project on track, mitigating risks, and ensuring that all work is completed to specification, budget, and timeline, supporting the successful completion of the plant upgrades.
The Water Inspector I/II will provid e oversight during all phases of construction, ensuring that projects are completed on time, within budg et, and in full compliance with regulatory standards. This position will be critical in ma naging the risks associated with these large-scale initiatives, ensuring the integrity and sustainability of the infrastructure improvements.
New Personnel Request
Wastewater Division
This is a critical position that needs to be solely responsible for overseeing the construction of water infrastructure due to complexities of th e projects. With the mechanical and electrical nature of the facilities, a full-time effort is required to learn, understand and gain knowledge which will ensure the proper implementation of capital improvements and upgrades. It is imperative that the Water Inspector understands the operations of the department and specifically the various structures owned and operated by the City to provide technical oversight during construction.
Water Inspector I/II is a position that requires additional certifications above and beyond the Construction Inspectors as regulations requir e Water Inspectors to obtain California Grade II Drinking Water Distribution Operator certification to work with drinking water system infrastructure. The certification allows the Water Inspector to understand the operation and maintenance of a water system as activities are heavily regulated and monitored by the Department of Drinking Water.
Position: Wastewater Treatment Plant Operator III
Justification:
Both wastewater treatment plants are currently un derstaffed by industry standards, leading to operational challenges as influent flow increase s annually and previously offline equipment is brought back online to meet growing demand. The planned upgrades and expansions will introduce advanced treatment processes, au tomation, and monitoring systems, further increasing operational complexity. To effectiv ely manage these changes, additional Plant Operator III personnel are essential. These op erators will oversee new equipment, adjust chemical treatments, maintain proper flow, an d ensure key equipment is functioning. With expanded capacity, additional operators are necessary to provide 24/7 shift coverage, perform routine checks, troubleshooting issues, and respon d to after-hour alarms, all while maintaining continuous operation and ensuring compliance with regulatory standards. Plant Operator III staff will also be responsible for leading plan t operations, mentoring junior operators, and conducting laboratory tests to meet regulatory requirements. Given the physical demands of the expanded facilities, these additional positions are crucial to ensuring the ongoing efficiency, safety, and effectiveness of plant operations.
Position: Senior Wastewater Electrical & Instrumentation Technician Justification:
The planned upgrades and expansion of the wa stewater treatment fa cilities will introduce advanced electrical, instrumentation, and auto mation systems, requiring the addition of a Senior Wastewater Electrical & Instrumentat ion Technician. This position will oversee the installation, maintenance, troubleshooting, and operation of these complex systems. In a lead role, the technician will supervise a team, coordinate daily operations, assign tasks, and ensure safety compliance. They will also mentor junior staff, prioritize tasks, and manage the increased workload from the advanced systems. Additiona lly, the lead technician will collaborate with engineers and contractors, ensuring successful system integration, quality control, and preventive maintenance to minimize downtime. This position is critical to ensuring efficient plant operations, maintaining regulatory compliance, and supporting the overall success of the plant upgrades.
New Personnel Request
Wastewater Division
Position: Wastewater Plant Mechanic
Justification:
The planned upgrades and expansion of the wastewater treatment facilities will introduce more advanced and complex equipment, significantl y increasing the scope of maintenance and repair work. To ensure these expanded facilit ies operate efficiently, the addition of a Wastewater Plant Mechanic is essential. This role will be responsible for maintaining and repairing a wide range of mechanical systems, such as pumps, aerators, waste grinders, and valves. As the plant capacity increases, the complexity of the equipment will also grow, requiring more frequent and preventative maintenance to minimize downtime and prevent system failures.
Additionally, much of the equipment at Plant 2 ha s been in service since 1997, and at Plant 3, some newer equipment has been operational for over 14 years, necessitating timely maintenance to ensure optimal function.
As influent flow increases and previously off line equipment is brought back online, the total number of pieces of equipment requiring mainte nance has grown. This increase in equipment and system complexity, combined with aging infrastructure, highlights the need for skilled mechanics. The Wastewater Plant Mechanic will perform critical repairs, maintenance, and adjustments to keep the systems running smoothly and in compliance with regulatory standards.
Hiring additional mechanics will ensure that the expanded facilities meet the growing demands of wastewater treatment while minimizing disruptions, enhancing safety, and ensuring long-term operational efficiency.
Position: Senior Wastewater Plant Mechanic
Justification:
The planned upgrades and expansion of the wastewater treatment facilities will introduce more advanced and complex equipment, significantl y increasing the scope of maintenance and repair work. To ensure these expanded facilities operate efficiently, the addition of a Senior Plant Mechanic is essential. The Senior Plant Mechan ic will oversee and provide leadership in all mechanical maintenance tasks, ensuring that systems are properly maintained and function efficiently. As the plant capacity increases, th e complexity of the equipment will also grow, requiring more frequent and precise preventa tive maintenance to minimize downtime and prevent system failures. Additionally, much of the equipment at Plant 2 has been in service since 1997, and at Plant 3, some newer equipment has been operational for over 14 years, necessitating timely maintenance to ensure optimal function.
As influent flow increases and previously off line equipment is brought back online, the total number of pieces of equipment requiring mainte nance has grown. This increase in equipment and system complexity, combined with aging infrastructure, highlights the need for a skilled mechanic. The Senior Plant Mechanic will play a critical role in managing and prioritizing repair and maintenance tasks, overseeing the mechanical team, and ensuring that all maintenance activities are carried out to the highest standard s. In this leadership position, they will be responsible for troubleshooting complex mechanic al issues, managing critical repairs, and ensuring that all systems are running smoothly and in compliance with regulatory standards.
Hiring the Senior Plant Mechanic will ensure the plant can meet the growing demands of wastewater treatment, minimize disruptions, enhance safety, and ensure long-term operational efficiency while maintaining a skilled and effective maintenance team.
New Personnel Request
Wastewater Division
Position: Service Maintenance Worker
Justification:
The Service Maintenance Worker position is essential to support the ongoing upgrades and expansion of the wastewater treatment facility. As the facility grows, there will be increased needs for routine maintenance, equipment op eration, and emergency response. Service Maintenance Workers will be responsible for operating and maintaining new equipment, performing preventive maintenance to redu ce downtime, and ensuring compliance with regulations. Their role will be critical in mana ging the heightened workload resulting from the plant's expansion, ensuring that operations run smoothly and efficiently while meeting the demands of the upgraded facility.
Position: Maintenance Supervisor
Justification:
As the wastewater treatment plant undergoes si gnificant upgrades and expansion, the need for an experienced Maintenance Supervisor becomes crucial to ensure the effective management and coordination of maintenance operations. With the introduction of new, more complex equipment and systems, a dedicated supervisor will oversee the day-to-day activities of maintenance personnel, ensuring timely and efficient preventive maintenance, repairs, and emergency responses. This role will be instru mental in ensuring that the plant meets its operational and regulatory requirements, as we ll as maintaining the integrity of the newly expanded infrastructure. The Maintenance Superv isor will also be responsible for planning, organizing, and prioritizing maintenance tasks, training staff, and maintaining compliance with safety and environmental regulations. By provid ing leadership, expertise, and oversight, the Maintenance Supervisor will play a key role in minimizing downtime, reducing maintenance costs, and contributing to the overall success of the plant's expansion.
Position: Cogen Technician
Justification:
The creation of a Cogen Tech position at the wastewater treatment plant is essential to optimize the operation of the cogeneration system, wh ich simultaneously generates electricity and thermal energy from methane gas produced du ring the treatment process. The Cogen Tech will be responsible for maintaining, inspec ting, and troubleshooting the cogeneration equipment, ensuring peak performance, and mini mizing downtime. This role will also monitor system performance, support energy optimization, and ensure compliance with environmental and energy regulations. The position is critic al to reducing operational costs, improving sustainability, and helping the plant meet increasing energy demands efficiently and responsibly as it continues to expand.
Position: Tertiary Technician
Justification:
The creation of a Tertiary Tech position at th e wastewater treatment plant is essential for overseeing the advanced tertiary treatment proc esses, such as filtration, disinfection, and chemical treatment. This role will ensure the plant meets effluent quality standards, maintain system performance, troubleshoot issues, and en sure regulatory compliance. The Tertiary Tech will also support process improvements and data analysis to optimize system efficiency. This position is crucial for maintaining high treatment standards, reducing the risk of violations, and ensuring the plant’s continued effectiveness in meeting environmental goals.
New Personnel Request
Wastewater Division
Position: Senior Wastewater Treatment Plant Lab Technician Justification:
As the City’s wastewater treatment facilities undergo expansion and modernization, increased flows and more complex treatment processes w ill significantly elevate the demand for high- quality laboratory testing and regulatory compliance. To meet these needs, staff recommends adding a Senior Wastewater Treatment Plant Lab Technician position. This role will provide leadership and oversight of laboratory operatio ns, focusing on quality control, regulatory compliance, and support for plant performance, rather than routine testing.
The key responsibilities of this position incl ude managing lab quality assurance and ELAP compliance, directing daily lab operations, ment oring staff, ensuring testing accuracy and equipment maintenance, and supporting operational decisions through data analysis.
This position is essential to maintain public and environmental safety, ensuring the City continues to meet strict regulatory standards, and supporting the long-term effectiveness of our upgraded treatment facilities.
Position: Environmental Compliance Inspector
Justification:
The hiring of an Inspector is crucial as the city grows and more areas need to be inspected. With the addition of new treatment processes and infrastructure, it is essential to monitor and enforce compliance with local, state, and federal pretre atment standards. The Pretreatment Inspector will be responsible for inspecting industrial discharges into the wastewater system, ensuring they meet required regulatory limits, and identifying potential issues before they impact the plant’s operations. Key tasks will include conducting in spections of industrial facilities, reviewing wastewater discharge reports, and ensuring th at industrial users comply with permit requirements. By ensuring proper pretreatment of industrial waste, the inspector will help maintain the integrity of the plant’s upgraded processes, minimize regulatory risks, and protect the environment. This position is vital for mana ging and safeguarding the effectiveness of the expanded treatment capacity and ensuring that the plant operates within legal and environmental standards.
Position: Sewer Maintainer II
Justification:
Sewer Maintainer II is essential for the main tenance and operation of the upgraded sewer infrastructure. This position will lead a crew in cleaning and repairing sewer and storm lines, operating specialized equipment, and addressing emergency sewer stoppages. The Sewer Maintainer II will also ensure that all work follows safety regulations and perform routine maintenance, such as manhole and pump servicing. This role will be key to maintaining system integrity, supporting the increased workload as the city continues to expand.
Position: Sewer Maintainer III
Justification:
The addition of a Sewer Maintainer III is cruc ial for managing the increased demands on the sewer system due to city growth. This role will be responsible for overseeing and leading sewer maintenance crews, ensuring that tasks such as cleaning and repairing sewer lines, storm systems, and pump stations are performed effectively.
New Personnel Request
Wastewater Division
The Sewer Maintainer III will also take on supervisory responsibilities during the absence of the supervisor, providing guidance on daily tasks, ensuring proper use of specialized equipment (such as video inspection trucks and lift station repair tools), and preparing daily maintenance reports. Given the complexity of the expanded se wer infrastructure, this position will ensure all work is carried out efficiently and safely, contri buting to the continued functionality and safety of the system. The role is vital for supporting the City growth and enhancing the management of sewer maintenance operations.
Position: Service Maintenance Worker (Sewer & Storm)
Justification:
With the ongoing growth of the city, there is a critical need for additional personnel to support the increased demand on the sewer and storm drain systems. The Service Maintenance Worker will play an essential role in maintaining and ensuring the efficiency of these expanded systems.
This position involves performing routine and semi-skilled manual labor, including cleaning sewer lines, maintaining storm drains, and assisting with infrastructure repairs.
As the city grows, additional sewer lines and stormwater facilities will require regular maintenance to keep them functioning properly . The Service Maintenance Worker will ensure that all equipment is in good working condition and operate it safely to address sewer stoppages and potential blockages. Additionally, the worker will assist in the installation of new infrastructure, including manholes and draina ge systems, and help with post-upgrade inspections to ensure compliance with regulatory standards.
Given the increased scale of operations an d the need for continuous support during construction and post-upgrade phases, hiring a Service Maintenance Worker for sewer and storm drain maintenance will directly contribute to the operational success of the expanded plant. This worker will be crucial for carrying out the essential day-to-day maintenance tasks that keep the sewer and storm drain systems functi oning, ensuring the overall efficiency and reliability of the upgraded wastewater infrastructure.
EXHIBIT K. CAPITAL IMPROVEMENT PROGRAM MEMO
MEMORANDUM
TO: Kristina Budak, Water Director
FROM: Evette Rodan, Assistant Water Director – Wastewater Division DATE: February 24, 2026
SUBJECT: Proposed 10-year Capital Improvement Projects
The cost estimates for Wastewater Treatment Plant [WWTP] 2 and 3 minor infrastructure, sewer collections and storm drain system projects are included in this memo and 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, the estimates are deemed accurate.
The cost estimates provided as part of the 2026- 2030 SEWER RATES & FEES REPORT, were inputted into the 2026 analysis as “today’s dollars” and escalated annually by either the Construction Cost Index or Consumer Price Index, which for this analysis is assumed to be
3.5% annually. T his approach helps us better understand the expected costs of the projects and account for any changes in material and labor prices.
Because the rate adjustment did not take effect July 1, 2025 as initially planned, some of the FY2025-26 projects have been carried forward into FY2026-27 and are included in order to be funded in this 2026-2030 SEWER RATES & FEES REPORT.
Those projects that do not have a specific location are place holders for future projects.
With aging infrastructure and a growing city, replacing and upgrading infrastructure will continue and be ongoing so locations will be filled in as areas within the systems are identified.
Finally, WWTP 2 and 3 and future WWTP 4 project costs and justifications are discussed in AECOMs Technical Memo,
City of Bakersfield, Wastewater Treatment Plant
Expansion & Rehabilitation, which is included in the 2026-2030 SEWER RATES & FEES REPORT as Exhibit I.
Proposed Capital Improvement Projects
Wastewater Division
Sewer Service Plant #2
Project Title: Site Infrastructure
Amount: FY 26-27 $776,250
Council Goal: Reliable Infrastructure
Justification:
Plant #2 is nearing the end of its service life and is scheduled for major upgrades or replacement. This project will provide for necessary site improvements, like access roads, standalone storage or warehouse structures, administration facility upgrades, that are needed between now and when the Plant can be upgraded.
Project Title: Septage Processing Unit Replacement
Amount: FY 26-27 $2,070,000
Council Goal: Reliable Infrastructure
Justification:
This project will replace the septage processing units at Plant 2. Septage that is delivered to the plant by commercial haulers is discharged through one of two units that capture rags and coarse solids prior to being discharged into a storage tank. Over t ime, these units have become uneconomical to maintain and inefficient in capturing rags and coarse solids, which in turn damage other equipment downstream. The upgrade will replace the septage processing units, pipes, and valves.
Project Title: Grit System Rehabilitation
Amount: FY 26-27 $258,750
Council Goal: Reliable Infrastructure
Justification:
The grit removal system at Plant 2 is designed to remove grit that would otherwise damage equipment downstream. The system components are greatly deteriorated and in need of significant repairs and replacement. This project will repair the clam shell, and replace damaged pumps and pipes.
Project Title: Plant Lighting Upgrades
Amount: FY 26-27 $207,000
Council Goal: Reliable Infrastructure
Justification:
A large number of lights at Plant 2 are in need of replacement, these lights are large indoor/outdoor industrial lights and will be upgraded to LED fixtures. This project will provide for purchase and installation.
Proposed Capital Improvement Projects
Wastewater Division
Project Title: Clarifier Rehabilitation
Amount: FY 26-27 $1,035,000
Council Goal: Reliable Infrastructure
Justification:
Plant 2 has three primary clarifiers and three secondary clarifiers that separate solids from liquids through gravity settling. This project involves replacing the drives, recoating various concrete and metal surfaces, skimmer arm replacements, and site re -grading around each clarifier.
Project Title: Annual Capital Improvement Budget (Projects TBD) Amount: FY 26-27 $1,552,500 FY 27-28 $2,678,083 FY28-29 $2,771,795 FY 29-30 $2,868,808 FY 30-31 $2,969,216 FY 31-32 $3,073,138 FY 32-33 $3,180,698 FY 33-34 $3,292,023 FY 34-35 $3,407,243 FY 35-36 $3,526,497
Council Goal: Reliable Infrastructure
Justification:
Projects to be determined.
Sewer Service Plant #3
Project Title: Site Infrastructure
Amount: FY 26-27 $258,750
Council Goal: Reliable Infrastructure
Justification:
As Plant #3 continues to support increasing flows and undergoes planned capacity expansions. This project will provide for necessary site improvements, like access roads, standalone storage or warehouse structures, administration facility upgrades, that are needed between now and when the Plant can be expanded.
Project Title: Secondary Clarifier Rehab Construction
Amount: FY 26-27 $25,875 FY 27-28 $455,271
Council Goal: Reliable Infrastructure
Justification:
Plant 3 has four secondary clarifiers that separate solids from liquids through gravity settling. This project involves replacing the drives, recoating various concrete and metal surfaces, skimmer arm replacements, and site re-grading around each clarifier.
Project Title: Septage Processing Unit Upgrades
Amount: FY 26-27 $1,190,250
Council Goal: Reliable Infrastructure
Justification:
This project will replace the septage processing units at Plant 3. Septage that is delivered to the plant by commercial haulers is discharged through one of two units that capture rags and coarse solids prior to being discharged into a storage tank. These units have become uneconomical to maintain and inefficient in capturing debris, which in turn damage other equipment downstream. The upgrade will replace the septage processing units, pipes, and valves.
Proposed Capital Improvement Projects
Wastewater Division
Project Title: Biofilter Fans Replacement
Amount: FY 26-27 $621,000
Council Goal: Reliable Infrastructure
Justification:
Plant 3 has a foul odor control system that uses five biofilter fans that pull four air from various parts of the plant and push it through biofilters. This project will provide for the purchase and installation of three fans which are in need of replacement.
Project Title: H2S Damage Repair
Amount: FY 26-27 $155,250
Council Goal: Reliable Infrastructure
Justification:
Hydrogen sulfide gas has caused significant corrosion to various structures at Plant 3. This project will repair and replace the damaged items such as ventilation ducting, AC units, and doors.
Project Title: Plant Lighting Upgrade
Amount: FY 26-27 $103,500
Council Goal: Reliable Infrastructure
Justification:
A large number of lights at Plant 3 are in need of replacement, these lights are large indoor/outdoor industrial lights and will be upgraded to LED fixtures. This project will provide for purchase and installation.
Project Title: Primary Influent Gate Repair
Amount: FY 26-27 $103,500
Council Goal: Reliable Infrastructure
Justification:
The primary influent gate located at the grit chamber has been out of service for several years. This project will provide for a temporary shutdown in order to evaluate the gate’s condition and make necessary repairs.
Project Title: Flare Replacement
Amount: FY 26-27 $150,250 FY 27-28 $1,606,838
Council Goal: Reliable Infrastructure
Justification:
The flare at Plant 3 is operated under a permit issued by the SJVAPCD. In year one, this project will evaluate the operation of the flare and determine if it will continue to meet future emission limits or if modifications and/or a replacement is needed. Year two of this project will address any findings from the compliance evaluation.
Proposed Capital Improvement Projects
Wastewater Division
Project Title: Digester Dome Rehab Construction
Amount: FY 26-27 $155,250
Council Goal: Reliable Infrastructure
Justification:
Plant 3 has six anaerobic digesters. Digester No. 3 at Plant 3 exhibits severe cracking and seepage at multiple points around its dome. This project will evaluate the structural integrity of the Digester No. 3 dome, assess the feasibility of repair, and pr ovide alternative recommendations if necessary.
Project Title: Cloth Media Filter Replacement
Amount: FY 27/28 $64,274
Council Goal: Reliable Infrastructure
Justification:
Plant 3’s tertiary treatment system uses a cloth media filter to capture solids; t his project will replace the cloth media filter panels and replace components that are beyond repair.
Project Title: Grit Classifier Replacement Construction Amount: FY 27-28 $535,000
Council Goal: Reliable Infrastructure
Justification:
Plant 3 has two grit classifiers that remove sand, gravel, and other heavy, inorganic particles from the influent wastewater. Due to normal wear and tear, combined with high hydrogen sulfide (H ₂S) levels, the units have corroded and reached the end of their service life. This project will conduct a grit analysis to assess current grit characteristics and replace both existing classifiers.
Project Title: EV Charging Station
Amount: FY 29-30 $1,147,523 FY 30-31 $1,187,686
Council Goal: Reliable Infrastructure
Justification:
In anticipation of transitioning to electrical trucks for hauling biosolids, funds have been identified to construct an electrical vehicle charging station.
Project Title: Annual Capital Improvement Budget (Projects TBD) Amount: FY 26-27 $1,552,500 FY 27-28 $2,678,063 FY28-29 $2,771,795 FY 29-30 $2,868,808 FY 30-31 $2,969,216 FY 31-32 $3,073,138 FY 32-33 $3,180,698 FY 33-34 $3,292,023 FY 34-35 $3,407,243 FY 35-36 $3,526,497
Council Goal: Reliable Infrastructure
Justification:
Projects to be determined.
Proposed Capital Improvement Projects
Wastewater Division
Sewer/Storm Plant #2
Project Title: Storm Drain Lift Station – Chester Ave Amount: FY 26-27 $1,035,000
Council Goal: Reliable Infrastructure
Justification:
The Storm drain lift station at the Chester Avenue/ BNSF railroad crossing is aging and in disrepair. This project will rehabilitate this lift station with new pumps, safety upgrades and other appurtenances necessary to bring the lift station to current st andards. Due to the long lead time of pumps and other lift station equipment, the design phase of this project was funded and completed in FY 24- 25, while construction phase is to be funded in FY 25-26. This estimate is derived from recent bids for storm drain lift station projects, with the City having awarded 6-8 similar projects over the past 2 -3 years. The costs reflect those bids, adjusted with escalation factors to account for projected price increases in the coming years.
Project Title: Storm Drain Improvement – L ST to O St
Amount: FY 26-27 $2,070,000
Council Goal: Reliable Infrastructure
Justification:
The project consists of existing part-circle culverts within the area bounded by L St, O St, Truxtun Avenue and 24
TH St which have caused consistent drainage and maintenance issues due to limited hydraulic capacity and proneness to clogging. The existing part- circle culverts need to be removed and replaced with concrete cross gutters and ADA compliant access ramps to improve surface drainage flow for the affected area. These drainage improvements were identified and recommended as part of the City of Bakersfield’s Downtown Master Strom Drain Study. The design was funded in FY 24-25 and construction will be funded in FY 25-26. This estimate is based on a similar project that the City is constructing near Jewetta Ave and Noriega Road.
Project Title: Sewer Line Replacement – Panama St
Amount: FY 26-27 $5,175,000
Council Goal: Reliable Infrastructure
Justification:
The existing sewer mainline that runs along Jewett Ave and Panama St from 36 th St to James St is deteriorating and undersized for the sewer flows it currently experiences. The existing mainline needs to be upsized to adequately handle sewer flows from the area.
This sewer line replacement was identified and recommended as a part of the City of Bakersfield’s Downtown Master Sewer Study which addressed existing and future deficiencies within the Downtown sewer collection system. The design was funded in FY 24-25 while due to required coordination with railroad for sewer line crossing, construction will be funded in FY 26 -27. This estimate is based on a recently bid sewer improvements project, using actual costs reflective of the current bidding climate.
Proposed Capital Improvement Projects
Wastewater Division