CITY COUNCIL SPECIAL MEETING WORKSHOP
AGENDA
Tuesday, May 30, 2023
5:00 p.m.
550 E. Sixth Street, Beaumont, CA
Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packets are available for public inspection in the City Clerk’s office at 550 E. 6th Street during normal business hours.
MEETING PARTICIPATION NOTICE
This meeting will will be recorded for live streaming as well as open to public attendance. Please use the following link during the meeting for live stream access: beaumontca.gov/livestream Public comments will be accepted using the following options.
1. Written comments will be accepted via email and will be read aloud during the corresponding item of the meeting. Public comments shall not exceed three (3) minutes unless otherwise authorized by City Council. Comments can be submitted anytime prior to the meeting as well as during the meeting up until the end of the corresponding item. Please submit your comments to:
[email protected] with "Public Comment" in the subject line.
2. Phone-in comments will be accepted by joining a conference line prior to the corresponding item of the meeting. Public comments shall not exceed three (3) minutes unless otherwise authorized by City Council. Please use the following phone number to join the call (951) 922 - 4845.
3. In-person comments are accepted by notifying the City Clerk using a provided Request to Speak Form prior to the start of the Public Comment Period. Public comments shall not exceed three (3) minutes unless otherwise authorized by City Council.
In compliance with the American Disabilities Act, if you require special assistance to participate in this meeting, please contact the City Clerk's office using the above email or call (951) 572 - 3196.
Notification 48 hours prior to a meeting will ensure the best reasonable accommodation arrangements.
Pages
WORKSHOP SESSION
A.CALL TO ORDER
Mayor Martinez, Mayor Pro Tem Fenn, Council Member Lara, Council Member Voigt, Council Member White
Report out from Closed Session
Action on any Closed Session Items
Action of any Requests for Excused Absence
Pledge of Allegiance
Invocation
Adjustments to the Agenda
Conflict of Interest Disclosure
B.PUBLIC COMMENT PERIOD
Any one person may address the City Council on any matter on this agenda. If you wish to speak, please fill out a “Public Comment Form” provided at the back table and give it to the City Clerk. There is a three (3) minute time limit on public comments. There will be no sharing or passing of time to another person. State Law prohibits the City Council from discussing or taking actions brought up by your comments.
C.ACTION ITEMS
Approval of all Ordinances and Resolutions to be read by title only.
C.1 Continued Discussion of Sewer Rate Study 3
Continue the discussion on the Sewer Rate Study and provide direction on scenarios.
Recommended Action:
Review scenarios presented by Raftelis and provide direction to City staff.
D.ADJOURNMENT
The next regular meeting of the Beaumont City Council, Beaumont Financing Authority, the Beaumont Successor Agency (formerly RDA), the Beaumont Utility Authority, the Beaumont Parking Authority and the Beaumont Public Improvement Agency is scheduled for June 6, 2023, at 6:00 p.m. unless otherwise posted.
Staff Report
TO: City Council
FROM: Jennifer Ustation, Finance Director
Thaxton Van Belle, General Manager of Utilities
DATE May 30, 2023
SUBJECT: Continued Discussion of Sewer Rate Study
Description Continue the discussion on the Sewer Rate Study and provide direction on scenarios.
Background and Analysis:
On December 6, 2022, City Council approved a contract with Raftelis Financial Consultants, Inc. dba Raftelis, to complete a sewer rate study th at will independently evaluate and make recommendations related to the City’s existing wastewater rates and fee schedule. The final goals of the project include the development of the following:
Fair and reasonable wastewater rates and fees for a five-year (5) period. Ten-Year (10) Financial Plan to provide necessary revenue for the City’s CIP needs.
Updating financing and rate schedule models.
Raftelis completed the financial planning, cost-of-service analysis, and preliminary proposed FY2024 rates and presented them to the City Council on April 10, 2023. The City Council provided direction to bring back information on the following:
Provide scenarios that include the General Fund charging the full amount of administrative overhead as identified in the Cost Allocation Plan approved in June 2022.
List of capital improvement projects used within the study. Any debt scenarios to list the potential projects the debt would fund. Determine what was driving the potential rate increases being proposed, i.e., growth vs operations.
Raftelis has completed two financial plans. Scenario 1 ramps up the administrative overhead charge with the full amount charge by FY2028. Scenario 2 has the full
administrative overhead charged in FY2025. Neither scenario requires the use of debt to fund projects as was originally proposed due to the reduction of a duplicated project in the capital improvement plan schedule.
Both models provide different rate increases determined by the revenue requirements to meet both operational and capital costs.
Fiscal Impact:
The estimated cost to prepare this report is $106.
Recommended Action:
Review scenarios presented by Raftelis and provide direction to City staff .
Attachments:
A. Raftelis Presentation
B. Capital Improvement Schedule
City of
Beaumont
Sewer Rate Study
City Council Meeting
May 30, 2023
Agenda
2 Project Scope
Proposition 218
Financial Planning
Rates and Bills
Rate Survey
Project Scope
3 Page 7 of 26
Review of Project Scope
•10-Year Financial Plan
•Cost-of-Service Analysis
•Five-Year Rate Projection
•Adjacent Agency Benchmarking
•Microsoft Excel Model
•Rate Study Report
4 Page 8 of 26
Proposition 218
5 Page 9 of 26
Review of Proposition 218
•Revenues Cannot Exceed Costs
•Revenues Must Be Used for Utility Service
•Fees Must Be Proportional to the Cost to Provide Service •Service Must Be Available
6 Page 10 of 26
Financial Planning
7 Page 11 of 26
Previous Presentation at the
Council Workshop on April 10, 2023
8 •Financial planning scenario presented with $7 million debt financing
•In today’s presentation, the financial planning scenarios presented do not reflect the use of any debt financing.
Changes Since the April 10th Workshop
9 Item FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total Capital Improvement Expenditures
Revised CIP Expenditures $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 $20,834,647 Original CIP Expenditures $5,560,000 $7,014,462 $6,796,913 $3,095,820 $2,952,495 $4,257,498 $29,677,187 CIP Expenditure Reduction ($400,000)$735,000 ($4,410,000)($1,146,600)($944,798)($2,676,141)($8,842,540) Capacity Fees
Revised Capacity Fees $3,783,021 $2,586,380 $2,026,956 $1,905,618 $1,149,502 $1,917,477 $13,368,954 Original Capacity Fees $2,665,372 $1,770,236 $1,392,178 $1,905,618 $1,149,502 $1,917,477 $10,800,383 Increase in Capacity Fees $1,117,649 $816,144 $634,778 $0 $0 $0 $2,568,571 Summary of Changes:$8,842,540 Less CIP Expenditures
$2,568,571 More Capacity Fee Receipts
$11,411,111 Total Positive Improvements
Revised Financial Planning Scenarios
Scenario 1:
Ramp-Up to $1.499 million annual administrative overhead No debt financing
Scenario 2:
$1.499 million annual administrative overhead beginning in FY 2025 No debt financing
10 Page 14 of 26
Scenario 1: Ramp-Up to Full Admin OH
11 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rate Revenue Adjustment 0.0%5.0%4.0%3.0%3.0%2.0%
External Debt Financing $0 $0 $0 $0 $0 $0
Administrative Overhead $650,000 $650,000 $862,250 $1,074,500 $1,286,750 $1,499,000 $0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance
Operating Reserve Ending Balance Operating Reserve Target Balance $0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Cash Reserves Ending Balance
Combined Reserve Ending Balance Combined Reserve Target Balance
Scenario 2: $1.499 Million Admin OH in FY 2025
12 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rate Revenue Adjustment 0.0%6.0%5.0%3.0%2.0%2.0%
External Debt Financing $0 $0 $0 $0 $0 $0
Administrative Overhead $650,000 $650,000 $1,499,000 $1,499,000 $1,499,000 $1,499,000 $0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance
Operating Reserve Ending Balance Operating Reserve Target Balance $0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Cash Reserves Ending Balance
Combined Reserve Ending Balance Combined Reserve Target Balance
CIP Financing Summary: Scenarios 1 and 2
13 $0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rates Debt Capacity Fees Grants
Key Drivers of Required Rate Increases
•Planned CIP Expenditures: Inflation Adjusted Total of $20.9 million* •Continued Funding of the Repair and Replacement Reserve Fund $2 million annual rate-funded contribution
Dollars used throughout the planning horizon for repair and replacement CIP projects •Inflation
14 Category FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
General 5.0%5.0%4.0%3.0%2.0%
Personnel 2.5%2.5%2.5%2.5%2.5%
Administrative 5.0%3.0%3.0%3.0%2.0%
Operating 5.0%3.0%3.0%3.0%2.0%
Utilities 5.0%5.0%5.0%5.0%5.0%
Construction Costs 5.0%5.0%4.0%3.0%3.0%
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total
Total CIP $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 $20,834,647 * Detail of CIP provided in the Council agenda packet
Proposed
FY 2024 Rates
15 Page 19 of 26
FY 2024
Rates
Under
Each
Scenario
16 Line Fixed Charges ($/Month)Current Rates Scenario 1 Scenario 2 1 Single Family $47.21 $49.83 $50.22
2 Multi-Family & Mobile Home-Rural $29.24 $28.32 $28.55 3 4 Schools $1.07 $1.09 $1.10
5 6 Commercial - Low $25.77 $6.11 $6.14
7 Commercial - Medium $47.21 $6.11 $6.14
8 Commercial - High $151.07 $6.11 $6.14
9 10 Dura Plastics Products $0.00 $553.08 $553.02
11 Perricone Juice $0.00 $553.08 $553.02
12 Rudolph Food Company $169.27 $553.08 $553.02
13 CJ Foods #1 $0.00 $553.08 $553.02
14 CJ Foods #2 $0.00 $553.08 $553.02
15 Precision Stamping $148.24 $553.08 $553.02
16 17 Variable Charges ($/HCF)Current Rates Scenario 1 Scenario 2 18 Single Family N/A N/A N/A
19 Multi-Family & Mobile Home-Rural N/A N/A N/A
20 21 Schools N/A N/A N/A
22 23 Commercial - Low $2.77 $4.87 $4.91
24 Commercial - Medium $3.75 $5.86 $5.91
25 Commercial - High $7.31 $9.80 $9.88
26 27 Dura Plastics Products $3.84 $5.08 $5.13
28 Perricone Juice $2.94 $10.78 $10.87
29 Rudolph Food Company $0.00 $0.00 $0.00
30 CJ Foods #1 $11.07 $13.26 $13.37
31 CJ Foods #2 $5.71 $8.13 $8.20
32 Precision Stamping $0.00 $4.87 $4.91Page 20 of 26
FY 2024 Monthly Bill Impacts
17 Customer Class Current Bill Scenario 1 Scenario 2 Scenario 1 Scenario 2 Single Family Residential $47.21 $49.83 $50.22 $2.62 $3.01 Multi-Family & Mobile Home-Rural $29.24 $28.32 $28.55 ($0.92)($0.69) Schools (Per Student)$1.07 $1.09 $1.10 $0.02 $0.03
Commercial Low $136.57 $201.01 $202.63 $64.44 $66.06
Commercial - Medium $197.21 $240.45 $242.42 $43.24 $45.21 Commercial - High $443.47 $398.19 $401.54 ($45.28)($41.93) Dura Plastics Products $358.33 $1,027.11 $1,030.94 $668.77 $672.60 Perricone Juice (Note 1)$13,852.50 $46,585.34 $46,976.68 $32,732.84 $33,124.18 Rudolph Food Company $169.27 $553.08 $553.02 $383.81 $383.75 CJ Foods #1 $47,608.33 $57,593.52 $58,081.93 $9,985.19 $10,473.59 CJ Foods #2 $2,891.67 $4,668.00 $4,702.77 $1,776.33 $1,811.10 Precision Stamping $148.24 $675.74 $676.68 $527.50 $528.44 Note 1: Perricone Juice currently has a temporary agreement with the City to implement an onsite treatment program.
Without this agreement, the company's monthly bill would be $43,667.
Monthly Bill Monthly Charnge in Bill
Single Family Residential Bill Comparison
(with Long-Term Debt at FYE 2022)
18 $31.22
$40.07 $40.26
$45.35 $46.09 $47.21 $49.83 $50.23
$62.19
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Next Steps
19 •Today’s Meeting:
Council selects its preferred financial planning scenario •Next Council Meeting:
Projection of proposed rates for FY 2024 –FY 2027
Authorization to Issue Proposition 218 notice
•Proposition 218 Notice Issued
•Council Proposition 218 Hearing:
Held a minimum of 45 days after Proposition 218 Notice Issued Approval of Rates assuming inadequate protests received •Target Effective Date: September 1, 2023
2020 Page 24 of 26
Thank you!
Contacts:
Steve Gagnon –213.262.9308 / [email protected]
John Wright –951.395.1674 / [email protected]
21 Page 25 of 26
FY 2023 - FY 2028 Capital Improvement Plan (Inflation Adjusted Project Costs) Project Funding Type FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Gravity Main Improvements
Apron Lane Pipeline Replacement WW Repair & Replace Non-Growth $303,188 Edgar Ave Pipeline Replacement WW Repair & Replace Non-Growth $650,475 Lift Station Condition Assessment Improvements
Lift Station Condition WW Repair & Replace Non-Growth $441,000 $458,640 $472,399 $486,571 Operation and Maintenance Improvements
On-going Pipeline Replacement Program WW Repair & Replace Non-Growth $551,250 $573,300 $708,599 $729,857 Wastewater Treatment Plant
I&I System Repairs - Phase 3 WW Repair & Replace Non-Growth $220,500 Office Expansion PAYGO Non-Growth $573,300
UV Bulb Replacement WW Repair & Replace Non-Growth $165,375 RO Module Replacement WW Repair & Replace Non-Growth $343,980 Collection System
Vactor Truck WW Repair & Replace Non-Growth $826,699 Crane Truck PAYGO Non-Growth $364,928
Huber 4MM Coarse Screen Retrofit WW Repair & Replace Non-Growth $52,500 CCTV Main Line Inspection System PAYGO Non-Growth $241,962 Sewer Bridge Coating/Inspection WW Repair & Replace Non-Growth $55,125 4th Streen Manhole Replacement PAYGO Non-Growth $200,000 Oak Valley Lift Station Access Point PAYGO Non-Growth $210,000 Vactor Dump Station PAYGO Non-Growth $450,000
Oak Valley Lift Station Access Point
Mesa Lift Station Construction Capacity Fees Growth $3,650,000 $2,835,000 Mesa Lift Station Construction Grants Growth $100,000 $2,415,000 Repair and Replacement
Lift Station Spare Pump Program WW Repair & Replace Non-Growth $300,000 VFD WW Repair & Replace Non-Growth $250,000
Recycled Water
Recycled Water Feasibility Capacity Fees Growth $2,205,000 Total $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 Cumulative Total $5,160,000 $12,909,462 $15,296,375 $17,245,595 $19,253,291 $20,834,647