Beaumont City Council
August 15, 2023

CITY COUNCIL CLOSED & REGULAR SESSION
AGENDA

Tuesday, August 15, 2023
Closed Session: 5:00 PM Regular Meeting: 6:00 PM
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

CLOSED SESSION
A.CALL TO ORDER
Mayor Martinez, Mayor Pro Tem Fenn, Council Member Lara, Council Member Voigt, Council Member White
B.PUBLIC COMMENTS REGARDING CLOSED SESSION
B.1 Conference with Legal Counsel Regarding Anticipated Litigation Pursuant to Government Code Section 54956.9(d)(2) and/or (3):

Four Claims: (i) Braiden Goedhart; (ii)James Albert Pietronico; (iii)Shannon Luellen (Application for Permission to file Late Claim); and (iv.) Gary Blackwell (Application for Permission to File a Late Claim) B.2 Conference with Real Property Negotiators Pursuant to Government Code Section 54956.8.

Property: City’s interchange property at 4th Street and Potrero Agency negotiator: City Manager
Negotiating parties: The City of Beaumont And ASM Beaumont Investors, LLC
Under negotiation: price and terms of sale.

B.3 Conference with Legal Counsel - Anticipated Litigation Initiation of litigation pursuant to government code Section 54956.9(d)(4):
(One case)
C.ADJOURNMENT TO CLOSED SESSION

REGULAR SESSION
D.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
E.ANNOUNCEMENTS / RECOGNITION / PROCLAMATIONS /

CORRESPONDENCE
E.1 Introduction of Oakley
F.PUBLIC COMMENT PERIOD (ITEMS NOT ON THE AGENDA)
Any one person may address the City Council on any matter not 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.

G.CONSENT CALENDAR
Items on the consent calendar are taken as one action item unless an item is pulled for further discussion here or at the end of action items. Approval of all Ordinances and Resolutions to be read by title only.

G.1 Ratification of Warrants 7
Recommended Action:

Ratify Warrants dated:

July 27, 2023
August 4, 2023
G.2 Approval of Minutes 43
Recommended Action:

Approve Minutes dated August 1, 2023
G.3 Approve the Transfer of the Developer of Record from Tesla to Swell Energy for the Grant Funded Energy Resiliency Projects at Upper Oak Valley and Beaumont Mesa Lift Stations
49 Transfer the Developer of Record from Tesla to Swell Energy to keep two grant-funded projects viable.

Recommended Action:

Approve the transfer of the developer of record from Tesla to Swell Energy for the Grant Funded Resiliency Projects at Upper Oak Valley and Beaumont Mesa Lift Stations.

H.YOUTH COUNCIL REPORT
Beaumont Youth Council Report Out and City Council Direction I.PUBLIC HEARINGS
Approval of all Ordinances and Resolutions to be read by title only.

I.1 Hold a Public Hearing to Consider a Resolution Approving Rates for Wastewater Service Effective September 1, 2023, and Rescinding all Prior Established Wastewater Rates
51 Hold a public hearing to consider adopting a resolution approving rates for wastewater services.

Recommended Action:

Hold a Proposition 218 Public Hearing; and
Waive the full reading and adopt by title only, “A Resolution of the City Council of the City of Beaumont, California, Approving Rates for Wastewater Service Effective September 1, 2023, and Rescinding all Prior Established Wastewater Rates”
I.2 First Reading of an Ordinance Rescinding Ordinance No. 1091 and Amending Chapter 3.39 of the Beaumont Municipal Code – Western Riverside County Transportation Uniform Mitigation Fee Program 142
Amendment of Chapter 3.39, Section 060 “Procedures for the Levy, Collection and Disposition of Fees,” to authorize TUMF fees to be collected directly by WRCOG from the developers from the effective date

of this ordinance forward.

Recommended Action:

Waive the full first reading of “An Ordinance of the City of Beaumont, California Amending Section 060 Beaumont Municipal Code Section 3.39 To Include a Process Whereby the Western Riverside Council of Governments (WRCOG) Shall Calculate and Collect Fees Under the Western Riverside County Transportation Uniform Mitigation Fee (TUMF) Program Directly”
J.ACTION ITEMS
Approval of all Ordinances and Resolutions to be read by title only.

J.1 Award a Professional Services Agreement in an Amount Not-to-Exceed $997,160 to Tom Dodson & Associates for the Preparation of an Adaptive Management and Mitigation Plan
157
Prepare an Adaptive Management and Mitigation Plan as part of the process of implementing a recycled water program.

Recommended Action:

Authorize the Mayor to execute a Professional Services Agreement with Tom Dodson & Associates for an Adaptive Management and Mitigation Plan in an amount not to exceed $997,160.

J.2 Award a Professional Services Agreement to Willdan Financial Services for a Variety of Development Impact Fee Studies in a Not-to-Exceed Amount of $79,080
244
Award an agreement with Willdan Financial Services for professional services to conduct a development impact fee study.

Recommended Action:

Approve a professional services agreement with Willdan Financial Services at a not to exceed cost of $79,080 to conduct a variety of development impact fee studies.

J.3 Second Amendment to the Professional Service Agreement with EXP U.S. Services, Inc.
290
Second Amendment to the Professional Services Agreement for Engineering Services to EXP U.S. Services, Inc. for the Beaumont Master Drainage Plan (MDP) Line 2, Stage 1 Project (CIP2019-019).

Recommended Action:

Approve a second amendment to the Professional Services Agreement with EXP U.S. Services, Inc. to extend the term for one-year and a new not-to-exceed amount of $524,064.96.

J.4 Service Agreement between the County of Riverside and the City of Beaumont for Brookside Avenue Slurry Seal Improvements
339
Cooperative Agreement with the County of Riverside.

Recommended Action:

Approve Cooperative Agreement between the County of Riverside and City of Beaumont for Brookside Avenue Slurry Seal Improvements and

authorize the City Manager to sign the agreement in the amount not to exceed $74,876.60.

J.5 ISF Replacement Vehicles 352
The purchase of seven (7) replacement vehicles and one (1) new vehicle for the Community Services Department through the approved FY 23/24 City-wide budget; and one (1) vehicle maintenance vehicle for the Transit Department funded by the State Transit Assistance grant.

Recommended Action:

Approve a Purchase Order in an amount not to exceed $479,358.56 to Santa Margarita Ford for the Purchase of eight (8) 2022 Ford F-250s for the Community Services Department and one (1) 2023 Ford F-250 for the Transit Department.

J.6 Approval of City Attorney Invoices for the Month of July 2023 364 Recommended Action:

Approve invoices in the amount of $94,373.23
K.LEGISLATIVE UPDATES AND DISCUSSION
L.ECONOMIC DEVELOPMENT UPDATE
Economic Development Committee Report Out and City Council Direction M.CITY TREASURER REPORT
Finance and Audit Committee Report Out and City Council Direction N.CITY CLERK REPORT
O.CITY ATTORNEY REPORT
P.CITY MANAGER REPORT
P.1 Transportation Update 378
Q.FUTURE AGENDA ITEMS
Resource for residents to contact local businesses•
City staff first aid and safety discussion•
Assessment for the need for additional community center(s)• Annexation Agreement with the County•
Enforcement of sidewalk vendors (October)•
R.COUNCIL REPORTS
White
Voigt
Lara
Fenn
Martinez
S.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 Tuesday September 5, 2023, at 6:00 p.m.

unless otherwise posted.

1 CITY COUNCIL CLOSED & REGULAR SESSION

MINUTES

August 1, 2023
Closed Session: 5:00 PM Regular Meeting: 6:00 PM
550 E. Sixth Street, Beaumont, CA
_____________________________________________________________________

CLOSED SESSION
A. CALL TO ORDER at 5:46 p.m.

Present: Mayor Pro Tem Fenn, Council Member Lara, Council Member Voigt, Council Member White (at 5:47 p.m.)

Absent: Mayor Martinez

B. PUBLIC COMMENTS REGARDING CLOSED SESSION
B.1 Conference with Labor Negotiators - Pursuant to Code Section 54957.6 City Designated Representatives City Manager Elizabeth Gibbs and Administrative Services Director Kari Mendoza. Employee Organizations:

Police Managers
Police Officers Association
Managers/Professional/Technical
Motion by Council Member Lara
Second by Mayor Pro Tem Fenn
To approve side letter no. 2 with the POA and the Police Managers.

Approved by a 4-0 vote

Absent: Martinez

2 REGULAR SESSION
D. CALL TO ORDER at 6:13 p.m.

Present: Mayor Pro Tem Fenn, Council Member Lara, Council Member Voigt, Council Member White

Absent: Mayor Martinez
Report out from Closed Session:

Motion by Council Member Voigt
Second by Council Member White
To approve side letter no. 2 with Managers/Professional/Technical For the record, Council Member White was in attendance for the full Closed Session.

Action on any Closed Session Items
Action of any Requests for Excused Absence
Pledge of Allegiance
Adjustments to the Agenda
Conflict of Interest Disclosure

E. ANNOUNCEMENTS / RECOGNITION / PROCLAMATIONS /

CORRESPONDENCE
F. PUBLIC COMMENT PERIOD (ITEMS NOT ON THE AGENDA)
K. Walton - Representing San Gorgonio Pass Water Agency.

G. CONSENT CALENDAR
Items on the consent calendar are taken as one action item unless an item is pulled for further discussion here or at the end of action items. Approval of all Ordinances and Resolutions to be read by title only.

Motion by Council Member White
Second by Council Member Lara
To approve the Consent Calendar
Approved by a 4-0 vote

Absent: Martinez
G.1 Ratification of Warrants
Ratify Warrants dated:

3 July 7, 2023
July 14, 2023
G.2 Approval of Minutes
Approve Minutes dated July 18, 2023.

G.3 Performance Bond Exoneration
Performance bond exoneration for sewer improvements associated with Tract Map No. 31469-7 and traffic signal and sewer lift station improvements associated with Parcel Map No. 36426.

Authorize City staff to issue a Bond Exoneration Letter for Performance and Payment Bonds and Accept Maintenance Bonds for (Project / Bond Number / Improvement / Maintenance Bond Number):
• Tract Map No. 31469-7/ PB03010402910 / Sewer /
PB03010402910-M
• Parcel Map No. 36426/ 107366929 / Traffic Signal / 107736393 • Parcel Map No. 36426/ 107506778 / Lift Station / 107506778 G.4 Storm Water Management Facilities Covenant and Agreement Approve Storm Water Management WQMP/BMP Facilities Covenant and Agreement for 1675 E. Eight Street, Dutch Bros.

Authorize City Manager to execute the Storm Water Management WQMP/BMP Facilities Covenant and Agreement for 1675 E. Eighth Street, Dutch Bros.

G.5 Adoption of a Resolution Authorizing Participation in the Community Development Block Grant Home Investment Partnership Program and Emergency Solutions Grant Program for Fiscal Years 2024-25, 2025-26 and 2026-27
Renewal of the cooperation agreement between the City of Beaumont and the County of Riverside for the Home Investment Partnership Program and Emergency Solutions Grant through Community Development Block Grant participation.

Waive the full reading and adopt by title only, “A Resolution of the City Council of the City of Beaumont Authorizing Participation in the County of Riverside’s Community Development Block Grant Home Investment Partnership Program and Emergency Solutions Grant Program for Fiscal Years 2024-25, 2025-26 and 2026-27.” G.6 FY2022-2023 4th Quarter Budget Update and Financial Status Report Receive and file an update on the FY2022-2023 budget and financial status of city funds.

4 Receive and file report.

G.7 FY2022-2023 4th Quarter Cash and Investment Report
Receive and file the 4th Quarter Cash and Investment Report.

H. YOUTH COUNCIL REPORT
No report.

I. PUBLIC HEARINGS
Approval of all Ordinances and Resolutions to be read by title only.

J. ACTION ITEMS
Approval of all Ordinances and Resolutions to be read by title only.

J.1 Award a Professional Services Agreement for Preparation of a Climate Action Plan (CAP) – Capital Improvement Project CD-05
Update to the City’s Climate Action Plan (CAP) including requirements for the Wastewater Treatment Plant.

Motion by Council Member White
Second by Council Member Voigt
Authorize the Mayor to execute a Professional Services Agreement for preparation of a Climate Action Plan (CAP) with Raimi + Associates in an amount not to exceed $272,601.

Approved

J.2 Parks and Community Services Master Plan – Quarterly Update of Capital Improvement Project P-17
Strategic Plan – Priority Level 2, Target 5, Goal 3
Motion by Council Member White
Second by Council Member Voigt
Receive and file.

Approved

5 J.3 Set Time, Date and Place for a Special Workshop
Workshop to discuss amendments to the current Beaumont Municipal Code Section 17.07 – Signs.

No action.

K. LEGISLATIVE UPDATES AND DISCUSSION
No report.

L. ECONOMIC DEVELOPMENT UPDATE
No report.

M. CITY TREASURER REPORT
Report out from recent Finance and Audit Committee meeting.

N. CITY CLERK REPORT
No report.

O. CITY ATTORNEY REPORT
No report.

P. CITY MANAGER REPORT
Announcement of upcoming Wastewater Treatment Plant Open House event.

P.1 Update on Commercial Landscape Enforcement Activity Commercial shopping center landscape update
Receive and file.

Q. FUTURE AGENDA ITEMS
• Resource for residents to contact local businesses
• City staff first aid and safety discussion

6 • Assessment for the need for additional community center(s) • Annexation Agreement with the County
• Enforcement of sidewalk vendors

R. COUNCIL REPORTS
White - No report
Voigt - Attended recent Summer Concert, gave a report out from the Financial Audit Committee Meeting, a water agency meeting, and the National Night Out event.

Lara - Attended the recent Gov in the Park event.

Fenn - Attended the Financial and Audit Committee Meeting, met with staff in a Land Use Committee meeting.

S. ADJOURNMENT at 6:41 p.m.

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 Tuesday August 15, 2023, at 6:00 p.m. unless otherwise posted.

Staff Report

TO: City Council
FROM: Thaxton Van Belle, Director of W ater Reclamation DATE August 15, 2023
SUBJECT: Approve the Transfer of the Developer of Record from Tesla to Swell Energy for the Grant Funded Energy Resiliency Projects at Upper Oak Valley and Beaumont Mesa Lift Stations

Description Transfer the Developer of Record from Tesla to Swell Energy to keep two grant-funded projects viable.

Background and Analysis:

In June 2021, the City entered an agreement with Tesla for the purchase and installation of four energy storage systems to be funded by the Self -Generation Incentive Program (SGIP) grants. Two of these systems have been installed at the Lower Oak Valley Lift Station and the Wastewater Treatment Plant. The remaining two approved projects, Upper Oak Valley Lift Station and Beaumont Mesa Lift Station, have been granted extensions due to supply chain issues.

Tesla has reached out to the City with information that the battery backup system designated for the two outstanding projects is no longer in production and that the future replacement product may not be available by the December 2023 grant deadline for construction. Therefore, Tesla is recommending a transfer of the project to Swell Energy, an SGIP-approved company that utilizes Tesla technology in its systems. If approved, Tesla and Swell will collaborate to develop the remaining projects under the existing contract.

The City’s legal counsel participated in discussions with Tesla regarding the transfer of the developer of record.

Fiscal Impact:

If approved, continued progression of the two grant-funded projects valued at $1,000,000 each with additional energy savings and resiliency benefits.

If not approved, the potential loss of the approved grant funding for the two projects in the event Tesla is unable to allocate product before the December construction grant deadline. Tesla has also indicated the possibility of seeking damages against the City for the loss of their $50,000 deposits.

The estimated cost to prepare this report is $600.

Recommended Action:

Approve the transfer of the developer of record from Tesla to Swell Energy for the Grant Funded Resiliency Projects at Upper Oak Valley and Beaumont Mesa Lift Stations.

Staff Report

TO: City Council
FROM: Jennifer Ustation, Finance Director
Thaxton Van Belle, Director of W ater Reclamation
DATE August 15, 2023
SUBJECT: Hold a Public Hearing to Consider a Resolution Approving Rates for Wastewater Service Effective September 1, 2023, and Rescinding all Prior Established Wastewater Rates

Description Hold a public hearing to consider adopting a resolution approving rates for wastewater services.

Background and Analysis:

The City is obligated to establish wastewater rates sufficient to cover all costs of providing wastewater service, including, but not limited to, the costs of operating and maintaining the sewer system, debt service, and a provision for a prudent and reasonable reserve, as well as funding for capital projects and asset replacement.

Currently, the City’s sewer rates are not sufficient to cover the costs of providing sewer service to its customers. The City of Beaumont owns and operates the Beaumont Wastewater Treatment Plant (WWTP). The WWTP receives and treats domestic and commercial/industrial wastewater generated within the City of Beaumont and Highland Springs (portions of an unincorporated area of Cherry Valley).

All wastewater discharged from the facility is currently regulated under Order No. R8- 2022-0042, NPDES No. CA105376. The City recently completed a major expansion and upgrade project at the wastewater treatment plant to satisfy State regulatory requirements. Additionally, a 23-mile brine line was constructed across two counties and multiple municipalities to discharge the salts removed from the treatment process.

Proposition 218 Process:

In November 1996, the California electorate approved Proposition 218 which requires certain procedures be followed regarding “prop erty-related” fee increases imposed by governmental agencies. It requires that the City provide written notice by mail of the proposed fee or charge to the record owner of each parcel affected, the amount of the

fee or charge, the basis for which the amoun t was calculated, the reason for the fee increase, and the date, time, and location of the public hearing on the fee increase. The written notice must be sent at least 45 days prior to the public hearing. At the public hearing, the City will consider all protests against the proposed fee or charge. If written protests against the increased fee or charge are presented by a majority (50% +1) of parcel owners, the City will not impose the fee or charge.

Community Involvement, Meetings, and Notice of Hearing:

On December 6, 2022, the City Council held a public meeting and approved a contract for Professional Engineering Services with Raftelis, an independent consulting firm, for the purpose of conducting a cost-of-service analysis and sewer rate study.

On April 10, 2023, the City Council held a public meeting at which staff updated the City Council on the financial needs of the wastewater system and a preliminary proposed amendment to the sewer rates pursuant to the sewer rate study prepared by Raftelis.

On May 30, 2023, the City Council held a public meeting at which staff updated the City Council on the proposed rates based on scenario planning discussions in relation to the financial position of the wastewater fund pursuant to the sewer rate study prepared by Raftelis.

On June 6, 2023, the City Council held another public meeting regarding sewer rate adjustments and approved sending out notices of rate increases to comply with Prop 218 requirements.

Between June 28 and June 30, 2023, the City with the assistance of a third-party vendor, mailed written notices to the record owner and tenant of each parcel affected.

These notices included the amount of the proposed sewer rate increase, the basis on which the proposed rates were calculated, the reason for the rate increases, and the date, time, and location of the public hearing on the proposed rate increases.

On August 3, 2023, the City of Beaumont hosted a Wastewater Treatment Plant Open - House and Tour for the public and Beaumont residents to see firsthand where and how their wastewater is treated.

On August 12, 2023, The Press-Enterprise, a newspaper of general circulation within the City, published a copy of the notice.

Sewer Rate Study Summary

The July 2023 Sewer Rate Study includes a financial plan, cost of service analysis, and a rate design analysis. The financial plan identifies the net revenue requirements for the sewer utility. The cost-of-service analysis determines the cost of providing sewer service to each customer class. The rate study also proposed adjusted rates designed to cover the cost of providing service.

The City currently has 7 types of customer classes based on the type of use at each property and estimated strength characteristics of the effluent put into the sewer system by each customer class. The categories are as follows:

1) Single-Family Residential
2) Multi-Family Residential
3) Schools
4) Commercial-Low
5) Commercial-Medium
6) Commercial-High
7) Significant Industrial Users

Significant Industrial Users (SIUs) are users who use a federally regulated process or have the potential to affect the performance or operation of the wastewater treatment plant. Rates were developed for these five customers individually based on the specific characteristics of the effluent produced by each customer. A fixed charge will be applied to cover costs associated with managing, regulating, and permitting SIUs. The five current SIUs are as follows:

1) Dura Plastics Products
2) Perricone Juice
3) Rudolph Food Company
4) CJ Foods
5) Precision Stamping

The characteristics of the discharges for these industries were reviewed and a rate was calculated based on the strength and treatment demand of each SIUs’ contributions to the wastewater plant. Monthly flow totals will be recorded, and each SIUs’ bill will be calculated using a formula that incorporates the strength characteristics and the volume of flow discharged to the sewer system. If any SIU regularly exceeds its historical or projected strength characteristics a surcharge may be added to ensure equitable practices. Similarly, new industries connecting to the system will be required to pay their fair share of capital and treatment costs.

The July 2023 rate study assumes that the City will not need to issue any addit ional debt to fund major capital projects.

This rate study calculates costs of service and revenue requirements from FY2023/24 through FY2027/28. Commensurate with the findings, the FY2023/24 rates must be adjusted to accurately reflect the customer class, cost of service, and corresponding system impacts. Newly implemented rates for FY2023/24 will result in residential monthly rates increasing from $47.21 to $50.22 per month. Rates for multi-family and non-residential customers will result in a decrease for FY2023/24.

The FY2023/24 rates reflect the appropriate redistribution of costs among the classification of customers. The rate adjustment for FY2023 -24 to FY2027-28 are calculated to increase overall revenues to meet operations and capital requirement s.

The rate model shows that the following rate increases will be required on September 1, 2023, and on July 1 each fiscal year after. The corresponding single-family residential rates are:

Fiscal Year Projected Annual Rate
Increase
Proposed Sewer Rate
FY 2023/24 6.0% $50.22
FY 2024/25 5.0% $52.73
FY 2025/26 3.0% $54.31
FY 2026/27 2.0% $55.40
FY 2027/28 2.0% $56.51

The attached Sewer Rate Study has a detailed discussion of the financial planning and revenue determination process as well as the breakdown of the rate adjustments for each year.

Fiscal Impact:

The approval of increased rates will allow the wastewater fund to meet the projected sewer utility’s financial needs to provide services without subsidy from the General Fund.

Recommended Action:

Hold a Proposition 218 Public Hearing; and

Waive the full reading and adopt by title only, “A Resolution of the City Council of the City of Beaumont, California, Approving Rates for Wastewater Service Effective September 1, 2023, and Rescinding all Prior Established Wastewater Rates” Attachments:

A. Resolution Approving Rates for Wastewater Service
B. Mailed Notice of Public Hearing
C. July 2023 Sewer Rate Study
D. Raftelis Presentation

1 RESOLUTION NO. 2023-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEAUMONT,

CALIFORNIA, APPROVING RATES FOR WASTEWATER SERVICE EFFECTIVE SEPTEMBER 1, 2023, AND RESCINDING ALL PRIOR ESTABLISHED

WASTEWATER RATES

WHEREAS, it is the responsibility of the City Council to establish wastewater rates which are sufficient to cover all costs of providing wastewater service, including, but not limited to , the costs of operating and maintaining the sewer system, debt service and a provision for a prudent and reasonable reserve, as well as funding for capital projects and asset replacement; and

WHEREAS, the Beaumont Municipal Code provides, among other things, that all future fees and charges for wastewater/sewer rates (“sewer rates”) shall be fixed by resolution of the City Council of the City of Beaumont; and

WHEREAS, on December 6, 2023, the City Council approved the contract for Professional Engineering Services with Raftelis, for the purposes of conducting a cost of service analysis and sewer rate study; and

WHEREAS, on April 10, 2023, City staff briefed the City Council on the financial needs of the wastewater system and preliminary necessary amendments to the sewer service rates as determined by the study prepared by Raftelis; and

WHEREAS, on May 30, 2023, City staff briefed the City Council on the final proposed rates based on scenario financial planning discussions in relation to the financial position of the wastewater fund pursuant to the sewer rate study prepared by Raftelis; and

WHEREAS, on June 6, 2023, the City Council approved to send out notices of rate increases to comply with Prop 218 requirements which were completed and mailed between June 28, 2023 and June 30, 2023; and

WHEREAS, the City hosted a Wastewater Treatment Plant Open-House and Tour for Beaumont residents to see firsthand where and how their wastewater is treated; and

WHEREAS, on August 12, 2023, the public hearing was published by publication in The Press- Enterprise, a newspaper of general circulation within the City; and

WHEREAS, on August 15, 2023, the City Council conducted and concluded a duly noticed public hearing concerning the recommended sewer rate increases, at which time it considered all written and oral comments presented; and

WHEREAS, at the close of the public hearing, the City did not receive written protests in an amount of 50% + 1 for the affected parcels; and

2 WHEREAS, the City Council has determined to adopt the revised schedule of rates and charges set forth in Schedule “A” and based on the recommendations contained in the updated sewer rate study attached hereto and incorporated herein as Exhibit “1”.

NOW, THEREFORE, IT IS HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT AS FOLLOWS:

SECTION 1. All of the above recitals are true and correct.

SECTION 2. The City Council hereby approves the sewer rate increases for wastewater services as set forth in Schedule “A”, Schedule of Rates and Charges. The rates and charges set forth in Schedule “A” shall be effective commencing September 1, 2023.

SECTION 3. The City Council hereby finds and determines that such rates do not exceed the costs for providing wastewater/sewer services.

SECTION 4. This Resolution may be interpreted by the City Manager should there be a conflict regarding the rate applicable to a user.

SECTION 5. It is the intention of the City Council to review the rates and charges as determined and set out herein as part of the City’s Annual Budget for the next five fiscal years and all the City’s costs reasonably borne as established at that time, and, if warranted, to revise such rates and charges based thereon up to the level of rates and charges set forth in Schedule “A”, Schedule of Rates and Charges.

SECTION 6. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Resolution, or any part thereof is declared invalid or unconstitutional, such declaration shall not affect the validity of the remaining portions of this Resolution or any part the reof. It is the intention of the City Council to have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 7. All prior established wastewater/sewer rates are hereby rescinded.

SECTION 8. The City Council hereby finds that the provisions of this Resolution are exempt from the provisions of the California Environmental Quality Act (“CEQA”) under Public Resources Code section 21080(b)(8) and the CEQA Guidelines section 15273(a), because the City Council’s action in increasing/amending wastewater service rates are for the purpose of (i) meeting operating expenses, (ii) purchasing or leasing supplies equipment or materials for the wastewater services; (iii) meeting financial reserve needs and requirements for the wastewater system, and (iv) obtaining funds for capital projects necessary to maintain wastewater service within existing service areas. The City Council finds that the provisions of this Resolution are further exempt from CEQA pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a “project” as defined in Section 15378) of the CEQA Guidelines, because it has no potential for resulting in a physical change to the environment, directly or indirectly.

3 SECTION 9. This Resolution shall be in full force and effect on and after September 1, 2023.

ADOPTED this 15th day of August 2023.

______________________________
Julio Martinez, Mayor of the City of
Beaumont, California

ATTEST:

________________________________
Elaine Morgan, City Clerk of the City of
Beaumont, California

4 CERTIFICATION

I, _____________________, City Clerk of the City of Beaumont, California, do hereby certify that foregoing Resolution No. 2023 -____ was regularly introduced and adopted at a regular meeting of the City Council of the City of Beaumont, California, duly held the _______ day of ______________, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Beaumont, California, this _______ day of _______________, 2023.

________________________________
Elaine Morgan, City Clerk of the City of
Beaumont, California

5 SCHEDULE A
Proposed Sewer Rates for FY 2022 – FY 2028
Line
Monthly Service Charge
(A) (B) (C) (D) (E) (F) (G)
Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
1 Residential
2 Single Family $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 3 MF & MH–Rural ($/unit) $29.24 $28.55 $29.98 $30.88 $31.50 $32.13 4 5 Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23 6 7 Commercial Customers

8 Commercial - Low Strength $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 9 Commercial - Medium Strength $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 10 Commercial - High Strength $151.07 $6.14 $6.45 $6.64 $6.77 $6.91 11 12 Industrial Customers

13 Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 14 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 15 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 16 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 17 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 18 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 19 20 Proposed Commodity Rates ($/CCF)
21 (A) (B) (C) (D) (E) (F) (G)
22 Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
23 Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
24 Residential
25 Single Family N/A N/A N/A N/A N/A N/A
26 MF & MH–Rural ($/unit) N/A N/A N/A N/A N/A N/A
27 28 Schools ($/student) N/A N/A N/A N/A N/A N/A
29 30 Commercial Customers
31 Commercial - Low Strength $2.77 $4.91 $5.16 $5.31 $5.42 $5.53 32 Commercial - Medium Strength $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 33 Commercial - High Strength $7.31 $9.88 $10.38 $10.69 $10.90 $11.12 34 35 Industrial Customers

36 Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 37 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 38 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 39 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04 40 CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22 41 Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

6 EXHIBIT 1

SEWER RATE STUDY

City of Beaumont Proposition 218 Notice for Proposed Sewer Rate Increases 1 City of Beaumont
Proposition 218 Notice of Public Hearing
Proposed Increases to Sewer Rates
Hearing Date and Time: August 15, 2023, at 6:00 p.m., or as soon thereafter as the matter may be heard.

Hearing Location: City Council Meeting Chambers
Beaumont Civic Center, 550 E. 6th Street, Beaumont, CA 92223 Important Information About Your Sewer Rates
The City of Beaumont will conduct a public hearing to consider proposed adjustments to the rates charged for sewer service. If approved by the City Council, the increases will take effect on September 1, 2023, with subsequent annual increases on July 1, 2024, through July 1, 2027. The public hearing will be conducted at the time, date, and location specified above. All members of the public are invited to attend the hearing. This notice is being sent to all record owners of property upon which the proposed increased sewer rates will be imposed and any tenants who are directly liable for the payment of such rates (that is, customers of record who are not property owners).

Why Have I Received this Notice?
In 1996, California voters approved Proposition 218, which amended the state constitution as it relates to the passage of property-related fees such as sewer rates. Proposition 218 requires that local governments follow a strictly defined process for setting fees. Generally speaking, the local government must: (1) provide notice to customers that a proposed rate increase is being considered, (2) clearly demonstrate the basis on which proposed fees are calculated, and (3) hold a public hearing at least 45 days after noticing property owners, at which time the local government hears all protests to the proposed rate increases. Proposed rate increases are subject to a “majority protest.” This means that a proposed rate increase will not be passed if a majority of property owners (or tenants who are directly liable for the payment of the rates), submit written and signed protests opposing the increase.

You have received this notice because, in compliance with the requirements of Proposition 218, the City of Beaumont must notify all customers about the proposed increases to sewer rates and the public hearing where adoption of the increases will be considered.

Basis of Proposed Sewer Rate Increases
A Sewer Cost-of-Service Rate Study (Study) was recently conducted on behalf of the City of Beaumont by Raftelis Financial Consultants, Inc. (Raftelis), an independent financial consulting firm, with the support from City staff. The Study evaluated the 5-year budget projection for the

City of Beaumont Proposition 218 Notice for Proposed Sewer Rate Increases 2 City’s Sewer Enterprise Fund and analyzed its capacity to implement its capital improvement plan while maintaining cash reserve requirements. The City Council reviewed the results of the Study at a workshop of the Council on May 30, 2023. The Study recommends increasing sewer rates to meet the revenue requirements of the Sewer Enterprise Fund in light of projected increasing expenditures. The Sewer Cost of Service Study can be viewed at www.beaumontca.gov and is also on file and available for public review at the City of Beaumont at the following location: Beaumont Civic Center, 550 E. 6th Street, Beaumont, CA 92223.

Why are Sewer Rate Increases Necessary?
The City’s previous sewer cost-of-service rate study was completed in June 2017. This study resulted in the adoption of sewer rates for fiscal years (FY) 2018 – FY 2023. The City retained the services of Raftelis to determine whether existing FY 2023 rates (that is, current rates without any increases) are adequate to pay for projected Sewer Enterprise Fund operating costs and capital improvement expenditures during the five-year period FY 2024 – FY 2028. The results of the Study indicated that in order to maintain adequate cash reserves, the level of rate revenues provided by sewer customers must increase.

The need for additional sewer rate revenues was driven by two key factors. The first factor is projected capital improvement program expenditures for infrastructure improvements required to maintain service quality. Projected FY 2024 – FY 2028 capital improvement program expenditures are approximately $20.8 million. The second factor is the projected increase in Sewer Enterprise Fund operating costs for FY 2024 – FY 2028 which are projected to increase over 28% from approximately $7.8 million in FY 2023 to approximately $10.0 million in FY 2028.

This increase is caused by high inflation in the overall economy and an increase in the cost of services provided to the Sewer Enterprise Fund by the City of Beaumont.

Proposed Monthly Sewer Service Charges

Monthly Service Charge
Customer Class
Current
Sept.
2023
July
2024
July
2025
July
2026
July
2027
Residential
Single Family $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 Multi-Family & Mobile Home-Rural (per unit) $29.24 $28.55 $29.98 $30.88 $31.50 $32.13

Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23

Commercial Customers
Commercial – Low $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 Commercial – Medium $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 Commercial – High $151.07 $6.14 $6.45 $6.64 $6.77 $6.91

Industrial Customers
Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26

City of Beaumont Proposition 218 Notice for Proposed Sewer Rate Increases 3 Monthly Service Charge - Dollar Increase
Customer Class
Current
Sept.
2023
July
2024
July
2025
July
2026
July
2027
Residential
Single Family ---- $3.01 $2.51 $1.58 $1.09 $1.11
Multi-Family & Mobile Home-Rural (per unit) ---- ($0.69) $1.43 $0.90 $0.62 $0.63

Schools ($/student) ---- $0.03 $0.05 $0.03 $0.02 $0.02

Commercial Customers
Commercial – Low ---- ($19.63) $0.31 $0.19 $0.13 $0.14 Commercial – Medium ---- ($41.07) $0.31 $0.19 $0.13 $0.14 Commercial – High ---- ($144.93) $0.31 $0.19 $0.13 $0.14

Industrial Customers
Dura Plastics Products ---- $553.02 $27.65 $17.42 $11.96 $12.20 Perricone Juice ---- $553.02 $27.65 $17.42 $11.96 $12.20 Rudolph Food Company ---- $383.75 $27.65 $17.42 $11.96 $12.20 CJ Foods #1 ---- $553.02 $27.65 $17.42 $11.96 $12.20 CJ Foods #2 ---- $553.02 $27.65 $17.42 $11.96 $12.20 Precision Stamping ---- $404.78 $27.65 $17.42 $11.96 $12.20

Proposed Commodity Rates - $/One Hundred Cubic Feet (HCF) of Billed Consumption

Proposed Commodity ($/HCF)
Volumetric
Current
Sept.
2023
July
2024
July
2025
July
2026
July
2027
Residential
Single Family N/A N/A N/A N/A N/A N/A
Multi-Family & Mobile Home-Rural (per unit) N/A N/A N/A N/A N/A N/A

Schools ($/student) N/A N/A N/A N/A N/A N/A

Commercial Customers
Commercial - Low $2.77 $4.91 $5.16 $5.31 $5.42 $5.53 Commercial - Medium $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 Commercial - High $7.31 $9.88 $10.38 $10.69 $10.90 $11.12

Industrial Customers
Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04 CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22
Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

City of Beaumont Proposition 218 Notice for Proposed Sewer Rate Increases 4 Commodity Rates ($/HCF) - Dollar Increase
Volumetric
Current
Sept.
2023
July
2024
July
2025
July
2026
July
2027
Residential
Single Family N/A N/A N/A N/A N/A N/A
Multi-Family & Mobile Home-Rural (per unit) N/A N/A N/A N/A N/A N/A

Schools ($/student) N/A N/A N/A N/A N/A N/A

Commercial Customers
Commercial – Low ---- $2.14 $0.25 $0.15 $0.11 $0.11 Commercial – Medium ---- $2.16 $0.30 $0.19 $0.13 $0.13 Commercial – High ---- $2.57 $0.49 $0.31 $0.21 $0.22

Industrial Customers
Dura Plastics Products ---- $1.28 $0.26 $0.16 $0.11 $0.11 Perricone Juice ---- $7.93 $0.54 $0.34 $0.24 $0.24
Rudolph Food Company ---- $0.00 $0.00 $0.00 $0.00 $0.00 CJ Foods #1 ---- $2.31 $0.67 $0.42 $0.29 $0.29
CJ Foods #2 ---- $2.49 $0.41 $0.26 $0.18 $0.18
Precision Stamping ---- $0.00 $0.00 $0.00 $0.00 $0.00

How to Protest the Proposed Sewer Rate Increases
Any customer or property owner receiving sewer service from the City of Beaumont may file a written protest against the proposed sewer rate increases by mailing a letter to the address listed below. Protests can also hand delivered and dropped off at the address listed below during regular business hours (Monday – Thursday: 8:00 am to 5:00 pm and Friday from 8:00 am to 12:00 pm):

City of Beaumont
Beaumont Civic Center
550 E. 6th Street
Beaumont, CA 92223.

A valid written protest letter must contain: (1) a statement of opposition to the proposed sewer rate increases, (2) the property address or assessor parcel number at which sewer service is received, and (3) the name and original signature of the property owner or utility customer of record registering the protest. If the name of the property owner or utility customer on the written protest does not match City records, the protest will not be considered valid. Only one protest will be counted for each address or parcel. Electric protests (email, social media messages, etc.) will not qualify as a written protest under state requirements.

Protest letters received by August 15, 2023, will be tabulated and presented to the City Council at the public hearing regarding the proposed rate increases to be held on August 15, 2023, at 6:00 p.m. at the following location:

City Council Meeting Chambers
Beaumont Civic Center
550 E. 6th Street
Beaumont, CA 92223

City of Beaumont Proposition 218 Notice for Proposed Sewer Rate Increases 5 Any customer or property owner may appear at the hearing to make comments regarding the proposed rates. Protest letters may be delivered in-person and must be received prior to the conclusion of the August 15, 2023, public hearing.

Pursuant to Government Code Section 53759, there is a 120-day statute of limitations for any judicial action or proceeding challenging any new, increased, or extended water and sewer fee or charge.

Notificación de la Propuesta 218 de la Ciudad de Beaumont para los aumentos propuestos en las tarifas de alcantarillado 1 Ciudad de Beaumont
Notificación de audiencia pública sobre la Propuesta 218 Aumentos propuestos en las tarifas de alcantarillado

Fecha y hora de la audiencia: 15 de agosto de 2023, a las 6:00 p. m., o tan pronto como sea posible realizar la audiencia después de esa fecha.

Lugar de la audiencia: Sala de reuniones del Consejo de la Ciudad (City Council Meeting Chambers) Beaumont Civic Center, 550 E. 6th Street, Beaumont, CA 92223

Información importante sobre las tarifas de alcantarillado La ciudad de Beaumont llevará a cabo una audiencia pública para analizar los ajustes propuestos a las tarifas que se cobran por el servicio de alcantarillado. De ser aprobados por el Consejo de la Ciudad los aumentos entrarán en vigor el 1 de septiembre de 2023, con posteriores incrementos anuales desde el 1 de julio de 2024 hasta el 1 de julio de 2027. La audiencia pública se llevará a cabo en la fecha, hora y lugar que se indican más arriba. Se invita a todo el público a asistir a la audiencia. Este aviso se envía a todos los propietarios registrados de bienes inmuebles a los que se impondrá el aumento propuesto de las tarifas de alcantarillado y a todos los inquilinos que sean directamente responsables del pago de dichas tarifas (es decir, clientes registrados que no sean propietarios de bienes inmuebles).

¿Por qué he recibido este aviso?
En 1996, los votantes de California aprobaron la Propuesta 218, que modificaba la Constitución del Estado en lo relativo a la aprobación de tarifas relacionadas con la propiedad como las tarifas de alcantarillado. La Propuesta 218 exige que los gobiernos locales sigan un proceso estrictamente definido para fijar las tarifas. En términos generales, el gobierno local debe: (1) notificar a los clientes de que se está estudiando una propuesta de aumento de tarifas, (2) demostrar claramente los fundamentos sobre los que se calculan las tarifas propuestas y (3) tener una audiencia pública al menos 45 días después de avisar a los propietarios, momento en el que el gobierno local escucha todas las protestas a los aumentos de tarifas propuestos. Los aumentos de tarifas propuestos están sujetos a una "protesta mayoritaria". Esto significa que una propuesta de aumento de tarifas no se aprobará si la mayoría de los propietarios (o inquilinos que sean directamente responsables del pago de las tarifas), presentan protestas por escrito y firmadas oponiéndose al aumento.

Usted ha recibido este aviso porque, en cumplimiento de los requisitos de la Propuesta 218, la Ciudad de Beaumont debe notificar a todos los clientes sobre los aumentos propuestos a las tarifas de alcantarillado y la audiencia pública donde se considerará la adopción de los aumentos.

Fundamento de los aumentos propuestos en las tarifas de alcantarillado Raftelis Financial Consultants, Inc. (Raftelis), una consultora financiera independiente, con el apoyo del personal municipal, llevó a cabo recientemente un estudio sobre las tarifas del costo del servicio de alcantarillado en nombre de la ciudad de Beaumont. El estudio evaluó la proyección presupuestaria a 5 años del Fondo de la Empresa de Alcantarillado de la Ciudad y analizó su capacidad para ejecutar su plan de mejoras de capital manteniendo al mismo tiempo los requisitos de reserva de efectivo. El Consejo de

Notificación de la Propuesta 218 de la Ciudad de Beaumont para los aumentos propuestos en las tarifas de alcantarillado 2 la Ciudad revisó los resultados del Estudio en un taller que se llevó a cabo el 30 de mayo de 2023. El Estudio recomienda aumentar las tarifas de alcantarillado para satisfacer las necesidades de ingresos del Fondo de la Empresa de Alcantarillado a la luz del aumento previsto de los gastos. El estudio sobre el costo del servicio de alcantarillado se puede ver en www.beaumontca.gov y también está archivado y a disposición del público en la siguiente dirección de la ciudad de Beaumont: Beaumont Civic Center, 550 E. 6th Street, Beaumont, CA 92223.

¿Por qué es necesario aumentar las tarifas de alcantarillado? El anterior estudio de tarifas de costo de servicio de alcantarillado de la ciudad se realizó en junio de 2017. Este estudio dio lugar a la adopción de las tarifas de alcantarillado para los ejercicios fiscales 2018- 2023. La ciudad contrató los servicios de Raftelis para determinar si las tarifas existentes para el año fiscal 2023 (es decir, las tarifas actuales sin ningún aumento) son adecuadas para pagar los gastos operativos previstos del Fondo de la Empresa de Alcantarillado y los gastos de mejoras de capital durante el período de cinco años comprendido entre los ejercicios fiscales 2024 y 2028. Los resultados del Estudio indicaron que, para mantener unas reservas de tesorería adecuadas, debía aumentar el nivel de ingresos por tarifas aportados por los clientes de alcantarillado.

La necesidad de ingresos adicionales por tarifas de alcantarillado se debe a dos factores clave. El primer factor son los gastos previstos del programa de mejora de las infraestructuras necesarias para mantener la calidad del servicio. Los gastos del programa de mejoras de capital proyectados para los ejercicios fiscales 2024-2028 son de aproximadamente $20.8 millones. El segundo factor es el aumento previsto de los costos operativos del Fondo de la Empresa de Alcantarillado para los ejercicios fiscales 2024-2028, que se prevé que aumenten más de un 28 %, de aproximadamente $7.8 millones en el ejercicio fiscal 2023 a aproximadamente $10 millones en el ejercicio fiscal 2028. Este aumento se debe a la elevada inflación de la economía general y al incremento del costo de los servicios prestados al Fondo de la Empresa de Alcantarillado por la ciudad de Beaumont.

Cargos mensuales propuestos para el servicio de alcantarillado

Cargo mensual de servicio
Clase de cliente
Actual
Sept.
2023
Julio
2024
Julio
2025
Julio
2026
Julio
2027
Residencial
Unifamiliar $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 Vivienda multifamiliar y casa móvil/rural (por
unidad)
$29.24 $28.55 $29.98 $30.88 $31.50 $32.13

Escuelas ($/estudiante) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23

Clientes comerciales
Comercial - Bajo $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 Comercial - Medio $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 Comercial - Alto $151.07 $6.14 $6.45 $6.64 $6.77 $6.91

Clientes industriales
Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26

Notificación de la Propuesta 218 de la Ciudad de Beaumont para los aumentos propuestos en las tarifas de alcantarillado 3 Cargo mensual por servicio - Aumento en dólares
Clase de cliente
Actual
Sept.
2023
Julio
2024
Julio
2025
Julio
2026
Julio
2027
Residencial
Unifamiliar ---- $3.01 $2.51 $1.58 $1.09 $1.11
Vivienda multifamiliar y casa móvil/rural (por
unidad) ---- ($0.69) $1.43 $0.90 $0.62 $0.63

Escuelas ($/estudiante) ---- $0.03 $0.05 $0.03 $0.02 $0.02

Clientes comerciales
Comercial - Bajo ---- ($19.63) $0.31 $0.19 $0.13 $0.14 Comercial - Medio ---- ($41.07) $0.31 $0.19 $0.13 $0.14 Comercial - Alto ---- ($144.93) $0.31 $0.19 $0.13 $0.14

Clientes industriales
Dura Plastics Products ---- $553.02 $27.65 $17.42 $11.96 $12.20 Perricone Juice ---- $553.02 $27.65 $17.42 $11.96 $12.20 Rudolph Food Company ---- $383.75 $27.65 $17.42 $11.96 $12.20 CJ Foods #1 ---- $553.02 $27.65 $17.42 $11.96 $12.20 CJ Foods #2 ---- $553.02 $27.65 $17.42 $11.96 $12.20 Precision Stamping ---- $404.78 $27.65 $17.42 $11.96 $12.20

Tarifas especificadas propuestas - $/Cien pies cúbicos (CPC) de consumo facturado

Tarifas especificadas propuestas ($/CPC)
Volumétrica
Actual
Sept.
2023
Julio
2024
Julio
2025
Julio
2026
Julio
2027
Residencial
Unifamiliar N/A N/A N/A N/A N/A N/A
Vivienda multifamiliar y casa móvil/rural (por unidad) N/A N/A N/A N/A N/A N/A

Escuelas ($/estudiante) N/A N/A N/A N/A N/A N/A

Clientes comerciales
Comercial - Bajo $2.77 $4.91 $5.16 $5.31 $5.42 $5.53 Comercial - Medio $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 Comercial - Alta $7.31 $9.88 $10.38 $10.69 $10.90 $11.12

Clientes industriales
Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04 CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22
Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Notificación de la Propuesta 218 de la Ciudad de Beaumont para los aumentos propuestos en las tarifas de alcantarillado 4 Tarifas especificadas ($/CPC) - Aumento en dólares
Volumétrica
Actual
Sept.
2023
Julio
2024
Julio
2025
Julio
2026
Julio
2027
Residencial
Unifamiliar N/A N/A N/A N/A N/A N/A
Vivienda multifamiliar y casa móvil/rural (por
unidad) N/A N/A N/A N/A N/A N/A

Escuelas ($/estudiante) N/A N/A N/A N/A N/A N/A

Clientes comerciales
Comercial - Bajo ---- $2.14 $0.25 $0.15 $0.11 $0.11 Comercial - Medio ---- $2.16 $0.30 $0.19 $0.13 $0.13 Comercial - Alto ---- $2.57 $0.49 $0.31 $0.21 $0.22

Clientes industriales
Dura Plastics Products ---- $1.28 $0.26 $0.16 $0.11 $0.11 Perricone Juice ---- $7.93 $0.54 $0.34 $0.24 $0.24
Rudolph Food Company ---- $0.00 $0.00 $0.00 $0.00 $0.00 CJ Foods #1 ---- $2.31 $0.67 $0.42 $0.29 $0.29
CJ Foods #2 ---- $2.49 $0.41 $0.26 $0.18 $0.18
Precision Stamping ---- $0.00 $0.00 $0.00 $0.00 $0.00

Cómo protestar contra los aumentos propuestos de las tarifas de alcantarillado Cualquier cliente o propietario que haga uso del servicio de alcantarillado de la ciudad de Beaumont puede presentar una protesta por escrito contra los aumentos propuestos de la tarifa de alcantarillado enviando una carta a la dirección que se indica a continuación. Las protestas también pueden entregarse personalmente y depositarse en la dirección que figura a continuación durante el horario laboral habitual (de lunes a jueves: de 8:00 a. m. a 5:00 p. m. y viernes de 8:00 a. m. a 12:00 p. m.):

City of Beaumont
Beaumont Civic Center
550 E. 6th Street
Beaumont, CA 92223.

Una carta de protesta válida debe contener lo siguiente: (1) una declaración de oposición a los aumentos propuestos en las tarifas de alcantarillado, (2) la dirección de la propiedad o el número de parcela del asesor en la que se recibe el servicio de alcantarillado, y (3) el nombre y la firma original del propietario o cliente del servicio público que registra la protesta. Si el nombre del propietario o cliente del servicio público que figura en la protesta escrita no coincide con los registros de la Ciudad, la protesta no se considerará válida. Solo se contabilizará una protesta por cada dirección o parcela. Las protestas que se presenten por medios electrónicos (correo electrónico, mensajes en redes sociales, etc.) no se considerarán protestas escritas según los requisitos estatales.

Las cartas de protesta recibidas antes del 15 de agosto de 2023 se tabularán y se presentarán ante el Concejo de la Ciudad en la audiencia pública relativa a los aumentos de tarifas propuestos que se llevara a cabo el 15 de agosto de 2023 a las 6:00 p. m. en el siguiente lugar:

Sala de reuniones del Consejo de la Ciudad (City Council Meeting Chambers)
Beaumont Civic Center
550 E. 6th Street
Beaumont, CA 92223

Notificación de la Propuesta 218 de la Ciudad de Beaumont para los aumentos propuestos en las tarifas de alcantarillado 5 Cualquier cliente o propietario puede comparecer en la audiencia para hacer comentarios sobre las tarifas propuestas. Las cartas de protesta podrán entregarse en persona y deberán recibirse antes de que concluya la audiencia pública del 15 de agosto de 2023.

De conformidad con la Sección 53759 del Código de Gobierno, existe un estatuto de limitaciones de 120 días para cualquier acción o procedimiento judicial que impugne cualquier tarifa o cargo de agua y alcantarillado nuevo, aumentado o ampliado.

CITY OF BEAUMONT
202 4 Sewer Rate Study
REPORT / J uly 1 8 , 2023

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445 S. Figueroa Street , Suite 1925, Los Angeles , CA 90071

www.raftelis.com
July 18, 2023

Ms. Jennifer Ustation
Director of Finance
City of Beaumont

Subject: 2024 Sewer Rate Study Report

Dear Ms. Ustation

Raftelis is pleased to provide this sewer rate study report to the City of Beaumont (City). The City’s overarching goals for the study included:
• Fair and reasonable sewer rates and fees for a five-year period • Ten-Year financial plan to provide necessary revenue for the City’s CIP needs • Updated financing and rate schedule models

The report describes the methodologies and rationale used to achieve the City’s goals and develop projected sewer rates for the period FY 2024 - FY 2028.

Sincerely,

John Wright
Senior Manager

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CITY OF BEAUMONT 2024 SEWER RATE STUDY
Contents

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

1.1. Background ...................................................................................................................1

1.2. Rate Study Process and Approach .............................................................................1

1.3. Sewer Rate Study Summary .........................................................................................1

2. Study Background ........................................................................ 8

2.1. Sewer Utility Overview ..................................................................................................8

2.2. Rate Study Overview ....................................................................................................8

2.3. Report Contents ............................................................................................................8

2.4. Proposition 218 .............................................................................................................9

2.5. Reliance on City Provided Data ...................................................................................9

3. Financial Plan & Revenue Requirement Projection .................. 10

3.1. Overview of the Financial Planning Process ............................................................ 10

3.2. Focus on the Sewer Utility Operating Reserve ......................................................... 10

3.3. Financial Plan Components ....................................................................................... 11

4. Cost-of-Service Analysis ............................................................ 26

4.1. Cost-of-Service Methodology .................................................................................... 26

4.2. Cost-of-Service Process ............................................................................................. 26

4.3. FY 2024 Revenue Requirement .................................................................................. 26

4.4. FY 2024 Revenue Requirement Allocations .............................................................. 27

4.5. Units of Service Determination .................................................................................. 31

4.6. Unit Cost-of-Service Determination ........................................................................... 35

4.7. Customer Class Cost-of-Service ............................................................................... 35

5. Rate Design ................................................................................ 37

5.1. Monthly Service Charge ............................................................................................. 37

5.2. Commodity Rate .......................................................................................................... 38

5.3. Proposed FY 2024 – FY 2028 Rate Increases ........................................................... 38

5.4. Customer Bill Impacts ................................................................................................ 39

ii

CITY OF BEAUMONT 2024 SEWER RATE STUDY
Tables
Table 1-1: Current Sewer Rates ...................................................................................................2 Table 1-2: Proposed Rate Revenue Increases .............................................................................3 Table 1-3: FY 2024 Sewer Customer Class Cost-of-Service ........................................................5 Table 1-4: Proposed Sewer Rates for FY 2022 – FY 2028 ...........................................................6 Table 1-5: Estimated Change in Monthly Sewer Bills ...................................................................7 Table 3-1: Projected Growth in Billing Units ............................................................................... 11 Table 3-2: Projected Customer Billing Units ............................................................................... 12 Table 3-3: Projected Customer Accounts ................................................................................... 12 Table 3-4: Projected Billed Discharges (CCF) ............................................................................ 13 Table 3-5: Current Sewer Rates ................................................................................................. 13 Table 3-6: Projected Revenue at Existing Rates ........................................................................ 14 Table 3-7: Non-Operating Revenues .......................................................................................... 14 Table 3-8: Projected Inflation Rates / Cost Escalation Factors ................................................... 14 Table 3-9: Projected Operating Expenses (O&M Expenses) ...................................................... 15 Table 3-10: Projected Debt Service Payments ........................................................................... 15 Table 3-11: Projected Contribution to the Repair & Replacement Reserve ................................ 15 Table 3-12: Projected Rate Funded (PAYGO) CIP Expenditures ............................................... 16 Table 3-13: Projected Total CIP Expenditures ............................................................................ 17 Table 3-14: Target for Cash Reserves and Debt Service Coverage ........................................... 17 Table 3-15: Status Quo Financial Plan - Operating Reserve ...................................................... 19 Table 3-16: Proposed Rate Revenue Increases ......................................................................... 20 Table 3-17: Financial Plan – Operating Reserve ........................................................................ 22 Table 3-18: Projected Capital Reserve ....................................................................................... 24 Table 3-19: Projected Repair and Replacement Reserve ........................................................... 24 Table 3-20: Summary Projection of Combined Cash Reserves .................................................. 25 Table 3-21: Revenue Requirement Projection ............................................................................ 25 Table 4-1: FY 2024 Revenue Requirement ................................................................................ 27 Table 4-2: Functionalized Sewer System Assets ........................................................................ 27 Table 4-3: Asset Allocation to Cost Causation Components ...................................................... 28 Table 4-4: Capital Costs Allocation to Cost Causation Components .......................................... 28 Table 4-5: Functionalized Operating Costs ................................................................................. 29 Table 4-6: Operating Cost Allocation to Cost Causation Components ....................................... 30 Table 4-7: Non-Operating Revenues Allocation to Cost Causation Components ....................... 30

iii

CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-8: Summary Allocation to Cost Causation Components ................................................ 31 Table 4-9: Customer Wastewater Treatment Plant Contributions ............................................... 33 Table 4-10: Basis for Commercial BOD and TSS Strength Loadings ......................................... 33 Table 4-11: Allocation of Infiltration and Inflow ........................................................................... 34 Table 4-12: Units of Service ....................................................................................................... 34 Table 4-13: Units Cost-of-Service Calculation ............................................................................ 35 Table 4-14: Customer Class Cost-of-Service ............................................................................. 36 Table 5-1: FY 2024 Monthly Service Charge Calculation ........................................................... 37 Table 5-2: FY 2024 Commodity Rate Calculation ....................................................................... 38 Table 5-3: Proposed Rate Revenue Increases ........................................................................... 38 Table 5-4: Proposed Sewer Rates for FY 2022 – FY 2028 ......................................................... 39 Table 5-5: Estimated Change in Monthly Sewer Bills ................................................................. 40

Figures
Figure 1-1: Status Quo Financial Plan – Operating Reserve ........................................................3 Figure 1-2: Status Quo Financial Plan: Combined Reserves ........................................................3 Figure 1-3: Financial Plan - Operating Reserve ............................................................................4 Figure 1-4: Financial Plan - Combined Reserves .........................................................................4 Figure 3-1: Status Quo Financial Plan - Operating Reserve ....................................................... 20 Figure 3-2: Status Quo Financial Plan - Combined Reserves .................................................... 20 Figure 3-3: Financial Plan - Operating Reserve .......................................................................... 23 Figure 3-4: Financial Plan - Combined Cash Reserves .............................................................. 23

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CITY OF BEAUMONT 2024 SEWER RATE STUDY
Glossary
Terms Descriptions
AWWA Manual M1 American Water Works Association, Manual of Water Supply Practices M1, Principles of Water Rates, Fees, and Charges,7th Edition
BOD Biochemical Oxygen Demand
CCF Hundred cubic feet or 100 cubic feet, 1 CCF = 748 gallons CIP Capital Improvement Program
COS Cost-of-Service
FY Fiscal Year (July 1 – June 30)
Industrial Admin. Industrial administration is the process of testing the discharges of high discharge strength customers in the Industrial customer class to ensure compliance with City and other regulatory requirements
I/I Infiltration and Inflow
MF & MH-Rural Multi-Family and Mobile Home-Rural
mg/l Milligrams per Liter. A reflection of the strength of customer wastewater discharges for BOD, TSS or TDS
Monthly Service Charge A fixed monthly charge assessed on both the water and wastewater bills.

O&M Operations and Maintenance
Raftelis Raftelis Financial Consultants, Inc.

Rate Funded (PAYGO) CIP Capital improvement expenditures funded by rate revenues that are often referred to a “pay -as- you-go” (PAYGO) CIP.

Return Flow The amount of billed sewer discharges that are received at the City of Beaumont’s Wastewater Treatment Plant.

TDS Total Dissolved Solids
TSS Total Suspended Solids
WEF Manual 27 Water Environment Federation, Manual of Practice No. 27, Financing and Charges for Sewer Systems,4th Edition
WWTP Wastewater Treatment Plant

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CITY OF BEAUMONT 2024 SEWER RATE STUDY

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1 CITY OF BEAUMONT 2024 SEWER RATE STUDY

1. Executive Summary

1.1. Background
On December 6, 2022, the City of Beaumont, CA (City) engaged Raftelis to assist with the completion of a sewer rate study. The City’s overarching goals for the study included:
• Fair and reasonable sewer rates and fees for a five-year period • Ten-Year financial plan to provide necessary revenue for the City’s CIP needs • Updated financing and rate schedule models

As an outcome of the study, Raftelis developed projected sewer rates for the five-year period FY 2024 - FY 2028.

On June 6, 2023, the Beaumont City Council authorized the issuance of a Proposition 218 public notice in order to begin the process of implementing the proposed sewer rates developed as part of the study.

1.2. Rate Study Process and Approach
The sewer rate study was informed by the City’s financial management and policy objectives, its current sewer rates, and projected costs, as well as the legal requirements in California (namely, Proposition 218). The resulting cost of service analyses and rate design process followed four key steps to derive proposed rates that fulfill the City’s objectives, follow industry standard rate setting practices, and align with the intent of Proposition 218.

Step 1: Financial Planning and Revenue Requirement Determination The rate-making process begins by creating a financial plan that estimates the amount of sewer rate revenue that will be required to cover the sewer utility’s projected operating costs (the revenue requirement). The revenue requirement is determined for a base year, also known as a test-year or rate-setting year. The base year for the sewer rate study is fiscal year (FY) 2024 which runs from July 1, 2023, to June 30, 2024.

Step 2: Cost-of-Service Analysis
After determining the annual revenue requirement as part of the financial planning process, the projected costs incurred to provide utility service are then distributed among customer classes in proportion to the demands and associated costs they impose on the utility system. This is accomplished in the cost-of-service (COS) analysis.

Step 3: Rate Design and Calculation
After allocating the revenue requirement for each system to its corresponding customer classes, the rate design process begins. Rates must be designed to recover the COS for each customer class as determined in the COS analysis.

Step 4: Report Preparation
A formal report creates an administrative record that documents the rate study results and describes the assumptions and calculations used to derive proposed rates.

Step 5: Proposition 218 Process
The financial step in the rate study process is to comply with the procedures specified in Proposition 218 for the adoption of new rates.

1.3. Sewer Rate Study Summary

Existing Rates
The sewer rates currently charged by the City are shown in Table 1-1. Under the current sewer rate structure,

2 CITY OF BEAUMONT 2024 SEWER RATE STUDY
residential customers and schools do not pay $/CCF commodity rates. Instead, the full cost of providing service to these customers is recovered through a monthly fixed charge. Commercial customers pay both a monthly service charge and $/CCF commodity rates based on the estimated strength of their sewer discharges. Industrial customers pay unique monthly service charges and $/CCF commodity rates that reflect the volume and strength of their sewer discharges.

Table 1-1: Current Sewer Rates
(A) (B) (C)
Line Customer Class
Monthly
Service Charge
Commodity Rates
($/CCF)
1 Residential
2 Single Family $47.21 N/A
3 Multi-Family & Mobile Home-Rural ($/unit) $29.24 N/A 4 5 Schools ($/student) $1.07 N/A
6 7 Commercial Customers

8 Commercial – Low Strength $25.77 $2.77
9 Commercial – Medium Strength $47.21 $3.75
10 Commercial – High Strength $151.07 $7.31
11 12 Industrial Customers

13 Dura Plastics Products N/A $3.84
14 Perricone Juice N/A $2.94
15 Rudolph Food Company $169.27 $0.00
16 CJ Foods #1 N/A $11.07
17 CJ Foods #2 N/A $5.71
18 Precision Stamping $148.24 $0.00

Financial Plan Overview
The Microsoft Excel financial model developed for the City has the capability to produce sewer utility financial plans over a variety of time horizons (for example, 5 years, 10 years, or 15 years). Raftelis, with the assistance of City staff, focused on the creation of a detailed 5-year financial plan for the period FY 2024 - FY 2028. This five- year planning horizon corresponds to the sewer rate projection period specified in the City’s RFP and also reflects the fact that the City does not have detailed capital improvement expenditure projections for the years after FY 2028. The results of the financial planning process are shown below. A detailed discussion of the financial planning and revenue requirement determination process is provided in Section 3 of this report.

Status Quo Financial Plan (No Rate Revenue Increases)
To demonstrate the need for sewer rate revenue increases a “status quo” financial plan was developed. The status quo financial plan presents the projected cash reserve outcomes of maintaining the City’s current sewer rates (i.e., having no sewer rate revenue increases). Figure 1-1 shows the results of this analysis.

In FY 2025, the Operating Reserve ending cash balance falls below the minimum target. In FY 2026, the Operating Reserve ending cash balance turns negative and falls below $0. As shown in Figure 1-2, by FY 2028, the sewer utility’s combined cash reserves, which consist of the Operating Reserve, the Capital Reserve, and the Repair and Replacement Reserve, are projected to fall below the combined target minimums. This demonstrates the insufficiency of the City’s current sewer rates to support the sewer utility’s financial needs over the next five years.

3 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Figure 1-1: Status Quo Financial Plan – Operating Reserve

Figure 1-2: Status Quo Financial Plan: Combined Reserves

Proposed Financial Plan (Rate Revenue Increases)
Raftelis and City staff evaluated various sewer rate revenue adjustment scenarios before arriving at the proposed annual sewer rate revenue adjustments shown in Table 1-2. The percentages shown in Column B of Table 1-2 reflect the required total system rate revenue increase. The actual percentage increase in rates experienced by each customer class will vary based on the outcome of the COS analyses discussed in Section 4 of this report.

Table 1-2: Proposed Rate Revenue Increases

(A) (B) (C)
Line Fiscal Year Proposed Rate Revenue Increase Effective Date 1 FY 2024 6.0% September 2023
2 FY 2025 5.0% July 2024
3 FY 2026 3.0% July 2025
4 FY 2027 2.0% July 2026
5 FY 2028 2.0% July 2027
($8,000,000)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
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
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Reserve Ending Balance Combined Reserve Target Balance

4 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Figure 1-3 shows the projected Operating Reserve cash outcomes of the proposed sewer rate revenue increases shown in Table 1-2. In all years, projected operating cash flows meet or exceed the City’s target balances.

Similarly, as shown in Figure 1-4, the sewer utility’s combined cash reserves are projected to exceed target minimums. The combined cash reserves consist of the Operating Reserve, the Capital Reserve, and the Repair and Replacement Reserve. The primary funding source for the Capital Reserve are capacity fees paid by developers who connect to the sewer utility system. Capacity fees can only be used to pay for growth -related CIP costs. They cannot be used to fund on-going utility operating costs.

Figure 1-3: Financial Plan - Operating Reserve

Figure 1-4: Financial Plan - Combined Reserves

Cost-of-Service Analysis
The COS analysis allocates the overall FY 2024 rate revenue requirement to each customer class based on the proportionate demands and associated costs they are projected to place on the utility system. It was conducted using industry-standard cost allocation principles as discussed in the Water Environment Federation publication, Manual of Practice No. 27, Financing and Charges for Sewer Systems, Fourth Edition (WEF Manual 27).

$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
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 Reserve Ending Balance Combined Reserve Target Balance

5 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 1-3 shows the results of the FY 2024 COS analysis, which allocates the total FY 2024 revenue requirement of $13,893,236 (Line 13). The dollar amounts shown in Column B of Table 1-3 reflect the estimated proportional share of the FY 2024 revenue requirement that must be recovered from each customer class based on the proportionate demands they are projected to impose on the City’s sewer utility system. A detailed discussion of the financial planning and revenue requirement determination process is provided in Section 4 of this report .

Table 1-3: FY 2024 Sewer Customer Class Cost-of-Service

(A) (B) (C)
Line Customer Class Cost-of-Service % of Total
1 Single Family $10,451,116 75.2%
2 Multi-Family F & Mobile Home–Rural $830,664 6.0%
3 Schools $164,852 1.2%
4 Commercial – Low Strength $477,828 3.4%
5 Commercial – Medium Strength $260,108 1.9%
6 Commercial – High Strength $365,735 2.6%
7 Dura Plastics Products $12,372 0.1%
8 Perricone Juice $563,776 4.1%
9 Rudolph Food Company $6,647 0.0%
10 CJ Foods #1 $697,050 5.0%
11 CJ Foods #2 $56,439 0.4%
12 Precision Stamping $6,647 0.0%
13 Total $13,893,236 100.0%

Proposed Rates
The FY 2024 sewer rates shown in Table 1-4 are designed to recover the total FY 2024 COS from each customer class. In general, the structure of the proposed rates is similar to the current rate structure. Specifically, residential customers and schools continue to pay a monthly service charge but no $/CCF commodity rates. Commercial and industrial customers pay both a monthly service charge and a $/CCF commodity rate that reflect the assumed strength of their sewer discharges. Key items to note about the rates shown in Table 1-4 include:

• Column C: FY 2024 rates are based on the COS analysis which allocated the required 6.0% total system rate revenue increase to customer classes based on their proportionate demands. The 6.0% annual increase over the rate revenues produced by current rates is shown in Line 1 of Table 1-2.

• Column D: FY 2025 rates reflect a 5.0% increase over FY 2024 COS rates based on the financial plan increase of 5.0% is shown in Line 2 of Table 1-2.

• Column E: FY 2026 rates reflect a 3.0% increase over FY 2025 rates based on the financial plan increase of

3.0% is shown in Line 3 of Table 1-2.

• Column F: FY 2027 rates reflect a 2.0% increase over FY 2026 rates based on the financial plan increase of

2.0% is shown in Line 4 of Table 1-2.

• Column G: FY 2028 rates reflect a 2.0% increase over FY 2027 rates based on the financial plan increase of

2.0% is shown in Line 5 of Table 1-2.

6 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 1-4: Proposed Sewer Rates for FY 2022 – FY 2028
Line
Monthly Service Charge
(A) (B) (C) (D) (E) (F) (G)
Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
1 Residential

2 Single Family $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 3 MF & MH–Rural ($/unit) $29.24 $28.55 $29.98 $30.88 $31.50 $32.13 4 5 Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23 6 7 Commercial Customers
8 Commercial - Low Strength $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 9 Commercial - Medium Strength $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 10 Commercial - High Strength $151.07 $6.14 $6.45 $6.64 $6.77 $6.91 11 12 Industrial Customers
13 Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 14 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 15 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 16 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 17 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 18 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 19 20 Proposed Commodity Rates ($/CCF)
21 (A) (B) (C) (D) (E) (F) (G)
22 Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
23 Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
24 Residential

25 Single Family N/A N/A N/A N/A N/A N/A
26 MF & MH–Rural ($/unit) N/A N/A N/A N/A N/A N/A
27 28 Schools ($/student) N/A N/A N/A N/A N/A N/A
29 30 Commercial Customers

31 Commercial - Low Strength $2.77 $4.91 $5.16 $5.31 $5.42 $5.53 32 Commercial - Medium Strength $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 33 Commercial - High Strength $7.31 $9.88 $10.38 $10.69 $10.90 $11.12 34 35 Industrial Customers
36 Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 37 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 38 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 39 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04 40 CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22 41 Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Estimated Bill Impacts
Table 1-5 shows estimated customer sewer bills for the period FY 2024 – FY 2028 based on the proposed sewer rates presented in Table 1-4. Key items to note about the rates shown in Table 1-5 include:

• Residential Customers and School Estimated Bills (Lines 1 -5): Residential customers and schools do not pay commodity rates. The monthly bills for these customers are based on the proposed change in monthly service charges.

7 CITY OF BEAUMONT 2024 SEWER RATE STUDY
• Commercial Customer Estimated Bills (Lines 7-10): . Commercial customer bills reflect both commodity charges and monthly service charges. The estimated bills for commercial customers assume monthly billed sewer discharges of 40 CCF. This assumption was made for low, medium, and high strength commercial customers. Each commercial customer will have a unique amount of billed sewer discharges. Therefore, the bill impacts shown in Table 1-5 are but one example of an infinite range of potential outcomes.

• Industrial Customer Bills (Lines 12-18): The estimated bills for commercial customers reflect the estimated projected billed discharges applicable to each customer. Industrial customer bills reflect both commodity charges and monthly service charges.

Table 1-5: Estimated Change in Monthly Sewer Bills

Line
Projected Monthly Bills

Customer Class
(A) (B) (C) (D) (E) (F)
Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
1 Residential

2 Single Family $47.21 $50.22 $52.74 $54.32 $55.40 $56.51 3 MF & MH–Rural ($/unit) $29.24 $28.55 $29.97 $30.87 $31.49 $32.12 4 5 Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23 6 7 Commercial Customers
8 Commercial - Low Strength $136.57 $202.65 $212.78 $219.17 $223.55 $228.02 9 Commercial - Medium Strength $197.21 $242.45 $254.57 $262.21 $267.45 $272.80 10 Commercial - High Strength $443.47 $401.18 $421.24 $433.87 $442.55 $451.40 11 12 Industrial Customers
13 Dura Plastics Products $358.33 $1,031.00 $1,082.55 $1,115.02 $1,137.32 $1,160.07 14 Perricone Juice (Note 1) $13,852.50 $46,981.34 $49,330.41 $50,810.32 $51,826.53 $52,863.06 15 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 16 CJ Foods #1 $47,608.33 $58,087.53 $60,991.91 $62,821.67 $64,078.10 $65,359.66 17 CJ Foods #2 $2,891.67 $4,703.25 $4,938.41 $5,086.56 $5,188.29 $5,292.06 18 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 19 20 Change in Monthly Bills
21 (G) (H) (I) (J) (K) (L)
22 Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 23 Residential
24 Single Family --- $3.01 $2.51 $1.58 $1.09 $1.11
25 MF & MH–Rural ($/unit) --- ($0.69) $1.43 $0.90 $0.62 $0.63 26 27 Schools ($/student) -- $0.03 $0.05 $0.03 $0.02 $0.02 28 29 Commercial Customers

30 Commercial - Low Strength -- $66.08 $10.13 $6.38 $4.38 $4.47 31 Commercial - Medium Strength -- $45.24 $12.12 $7.64 $5.24 $5.35 32 Commercial - High Strength -- ($42.29) $20.06 $12.64 $8.68 $8.85 33 34 Industrial Customers

35 Dura Plastics Products -- $672.66 $51.55 $32.48 $22.30 $22.75 36 Perricone Juice (Note 1) -- $33,128.84 $2,349.07 $1,479.91 $1,016.21 $1,036.53 37 Rudolph Food Company -- $383.75 $27.65 $17.42 $11.96 $12.20 38 CJ Foods #1 -- $10,479.20 $2,904.38 $1,829.76 $1,256.43 $1,281.56 39 CJ Foods #2 -- $1,811.58 $235.16 $148.15 $101.73 $103.77 40 Precision Stamping -- $404.78 $27.65 $17.42 $11.96 $12.20 Note 1: The monthly bills for Perricone Juice (Line 14) and the monthly bill changes (Line 36) reflect the discharge volumes and strength loadings specified in an agreement between Perricone Juice and the City.

8 CITY OF BEAUMONT 2024 SEWER RATE STUDY

2. Study Background

2.1. Sewer Utility Overview
The City of Beaumont is located in Riverside County. The City is located approximately 11 miles north of the City of Hemet, 5 miles east of the City of Banning, 12 miles east of City of Monero Valley, and 7 miles southeast of the City of Yucaipa. The City currently encompasses an area greater than 26,000 acres, with an approximate population of 52,000 residents.

The City’s sewer utility provides wastewater collection and treatment services to approximately 17,852 sewer customer accounts. The collection system consists of approximately 200 miles of mains and 10 lift stations that convey flows to the Beaumont Sewer Treatment Plant (WWTP). The WWTP treats, on average, approximately

3.66 mgd of wastewater flows, collecting flows from 11 different tributary basins.

Improvements to the WWTP’s treatment technologies were completed in 2022. The improvements were necessary to meet the environmental mandates of the Santa Ana Regional Water Quality Control Board and the projected demands of customer growth. On September 27, 2018, the City issued $90 million in bonds to pay for the construction of the new plant and related system improvements. Approximately $17.8 million of the costs come from capacity fees. The remaining $3.1 million was funded from Community Facilities District tax proceeds. The entire project budget is $110.9 million.

2.2. Rate Study Overview
The City’s most recent sewer rate study was completed in June 2018 by an independent third-party consulting firm.

The 2018 study resulted in proposed sewer rates for the period FY 2019 - FY 2023. On October 6, 2022, the City issued a Request for Proposals (RFP) seeking an independent consultant to complete a new sewer rate study. After conducting a competitive selection process, the City selected Raftelis. A professional service agreement between the City and Raftelis was executed on December 6, 2022. The objectives of the sewer rate study, as described in the City’s RFP, were:
• Fair and reasonable sewer rates and fees for a five-year period • Ten-Year financial plan to provide necessary revenue for the City’s CIP needs • Updated financing and rate schedule models

2.3. Report Contents
This report contains the following sections:

Section 1: Executive Summary: Summarizes the results for the financial planning, cost of service analysis, and rate design portions of the sewer rate study.

Section 2: Study Background: Provides an overview of the sewer rate study.

Section 3: Financial Planning and Requirement Determination: Discussion of the development of the sewer utility financial plan and revenue requirement projections for the FY 2024 – FY 2028 financial planning period.

Section 4: Cost-of-Service Analysis: Discussion of the process used to functionalize, allocate, and distribute the FY 2024 sewer rate revenue requirement to customer classes.

Section 5: Rate Design: Discussion of the process used to develop the recommended sewer rate structure and proposed sewer rates for the period FY 2024 – FY 2028.

9 CITY OF BEAUMONT 2024 SEWER RATE STUDY

2.4. Proposition 218
In November 1996, California voters approved Proposition 218, which amended the California Constitution by adding Article XIII C and Article XIII D. Article XIII D placed substantive limitations on the use of the revenue collected from property-related fees and on the amount of the fee that may be imposed on each parcel.

Additionally, it established procedural requirements for imposing new, or increasing existing, property-related fees.

The California Supreme Court has determined that sewer service fees are property-related fees.

Proposition 218 requires that municipal utility rates cannot be “arbitrary and capricious,” meaning that the rate- setting methodology must be sound and that there must be a nexus between the costs and the rates charged in addition to meeting the substantive requirements set forth therein. These provisions require that a property-related fee must meet all of the following requirements:

• Revenues derived from the fee must not exceed the funds required to provide the property-related service.

• Revenues from the fee must not be used for any purpose other than that for which the fee is imposed.

• The amount of a fee imposed upon any parcel or person as an incident of property ownership must not exceed the proportional cost of the service attributable to the parcel.

• The fee may not be imposed for a service, unless the service is actually used by, or immediately available to, the owner of the property subject to the fee. A fee based on potential or future use of a service is not permitted and stand-by charges must be classified as assessments subject to the ballot protest and proportionality requirements for assessments.

• No fee may be imposed for general governmental services, such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners.

The five substantive requirements in Article XIII D are structured to place limitations on (1) the use of the revenue collected from property-related fees and (2) the allocation of costs recovered by such fees to ensure that they are proportionate to the cost of providing the service attributable to each parcel.

Industry standard rate setting methodologies for sewer and water utilities are, in many ways, similar to the requirements of Proposition 218. As stated in the WEF Manual 27, “the process of identifying the service characteristics of the utility's customers and distributing costs in proportion to their service demands are critical steps in the development of equitable rates and charges." Similarly, the American Water Works publication, Manual of Water Supply Practice M1, Principles of Water Rates, Fees, and Charges,7th Edition, states that “water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers.”

California Courts have made clear that, while agencies are authorized to use industry-standard rate setting methodologies set forth in WEF Manual 27 and AWWA Manual M1 rates for sewer and water service must meet the substantive requirements of Proposition 218.

2.5. Reliance on City Provided Data
During the study, City staff provided Raftelis with a variety of technical information including demand, cost, and revenue data. Raftelis did not independently assess or test the accuracy of such data – historic or projected. Raftelis has relied on this data in the formulation of our findings and subsequent recommendations, as well as in the preparation of this report. Raftelis also relied on cost allocation data provided by the Department as needed to complete the COS and rate design analysis.

10 CITY OF BEAUMONT 2024 SEWER RATE STUDY

3. Financial Plan & Revenue
Requirement Projection

3.1. Overview of the Financial Planning Process
The primary goal of the financial planning process is to identify the total amount of annual sewer rate revenue required to support the sewer utility’s financial needs. The critical steps in developing a sewer utility financial plan include:

• Projecting Sewer Units of Service (Demand Forecast): The demand forecast projects the “units of service” subject to each specific rate or charge. Units of service include number of customer accounts and bills, the quantity of customer water consumption and associated billed sewer discharge volumes (flow), and the quantity of sewer discharges based on customer strength loading characteristics (pounds).

• Projecting Sewer Rate Revenues at Existing Rates: This step in the financial planning process determines how much rate revenue will be generated annually if there are no rate increases. The level of rate revenues at existing rates is compared to projected expenditures to determine the annual funding shortfall that must be met by the appropriate combination of rate revenue increases or external debt financing.

• Projecting Miscellaneous Non-Rate Revenue: Miscellaneous non-rate revenue items can include interest income from cash reserves, grants, capacity fee receipts, and miscellaneous ancillary fees. Miscellaneous non- rate revenues assist in closing the annual funding shortfall and reduce the revenue requirement from rates (i.e., the level of amount of rate revenue that must be recovered from customers).

• Projecting Operating and Maintenance Expenses and Existing Debt Service: This step in the financial planning process projects the O&M expenses that will be incurred to provide utility service as well as required debt service payments on existing debt obligations.

• Determining a Capital Financing Strategy: In many utilities, the key driver of the annual funding shortfall is projected CIP expenditures. In this step in the financial planning process, the utility determines the optimal mix of annual rate revenue increases and external debt financing to cover the funding shortfall. An outcome of this process is the identification of rate revenue funded CIP expenditures, required debt proceeds, and projected debt service costs.

• Identifying Cash Reserve and Debt Service Coverage Targets: Utilities must not only have sufficient revenues to pay for projected costs, but they must also maintain prudent cash reserves and meet both contractually obligated and target debt service coverage requirements. The sewer revenue requirement from rates therefore must include the cost of meeting both cash reserve and debt service coverage targets.

• Determining Annual Revenue Requirement from Rates: The final outcome of the financial planning process is the determination of the annual amount of rate revenue that must be recovered from customers to pay for all projected Sewer Enterprise costs and meet financial targets.

3.2. Focus on the Sewer Utility Operating Reserve
The City tracks its sewer utility activities through three types of cash reserve funds:

• Operating Reserve: The financial plan discussed in this report is focused on the Operating Reserve. This reserve reflects ongoing sewer utility activities such as revenues earned from rates and the costs incurred to provide services. They include operating costs, rate funded capital improvement program (CIP) expenditures, and debt service payments.

11 CITY OF BEAUMONT 2024 SEWER RATE STUDY
• Capital Reserve: The Capital Reserve reflects revenues and costs associated with the funding of growth-related CIP expenditures. The primary funding source for growth-related CIP expenditures are capacity fees paid by developers who connect to the sewer utility system. Capacity fees can only be used to pay for growth-related CIP costs. They cannot be used to fund on-going utility operating costs. As part of the sewer rate study, a projection of cash reserves for the period FY 2023 – FY 2028 was prepared.

• Repair and Replacement Reserve: The Repair and Replacement reserve is used to track the cost of non-growth repair and replacement CIP expenditures. The source of funding for the Repair and Replacement Reserve is rate revenues earned from customers that are transferred in from the Operating Reserve. The Operating Reserve revenue requirement includes the transfer of rate revenues to the Repair and Replacement Reserve.

3.3. Financial Plan Components

Projected Units of Service (Demand Forecast)
The financial plan assumes the growth in customer billing units shown in Table 3-1. The growth rates developed in consultation with City staff based on recent historical trends and projected development during the FY 2024-FY 2028 financial planning horizon.

Table 3-1: Projected Growth in Billing Units
(A) (B) (C) (D) (E) (F) (G) (H)
Line Customer Type Billing Unit
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Residential EDUs 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
2 Schools Students 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
3 Commercial Accounts 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
4 Industrial Accounts 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Table 3-2 shows the projected customer billing units for the FY 2024-FY 2028 financial planning horizon. The City bills the monthly sewer service charge for residential customers based on equivalent dwelling units (EDUs).

Schools are billed on a per student basis. Commercial and industrial customers are billed on a per account basis.

The projected billing units shown in

Table 3-2 reflect the growth rates shown in Table 3-1 projected forward from a baseline of actual FY 2022 billing units.

Table 3-3 shows the projected accounts for the FY 2024-FY 2028 financial planning horizon. The projected accounts shown in Table 3-3 reflect the growth rates shown in Table 3-1 projected forward from a baseline of actual FY 2022 accounts.

Table 3-4 shows projected customer billed sewer discharges for the FY 2024 – FY 2028 financial planning horizon.

The City determines the monthly billed sewer discharges for commercial and industrial customers based on their winter average billed water consumption during the previous year. The months used to calculate the winter average

12 CITY OF BEAUMONT 2024 SEWER RATE STUDY
are January – April. The City obtains monthly billed water consumption data for each customer from the Beaumont Cherry Valley Water District. Note that the billed water consumption for residential customers and schools is marked “N/A” (Lines 1 – 6 in Table 3-4). This is because the entire cost of providing sewer service to residential customers and schools is recovered via monthly fixed charges. Thus, they do not have actual billed sewer discharge volumes.

Table 3-2: Projected Customer Billing Units

(A) (B) (C) (D) (E) (F) (G) (H)
Line Customer Class
Billing
Units
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Residential

2 Single Family EDUs 17,084 17,341 17,601 17,865 18,133 18,405 3 Multi-Family & Mobile Home-Rural EDUs 2,388 2,424 2,460 2,497 2,535 2,573 4 Total Residential EDUs 19,473 19,765 20,061 20,362 20,668 20,978 5 6 Schools Students 12,332 12,517 12,705 12,896 13,089 13,285 7 8 Commercial

9 Commercial - Low Strength Accounts 290 295 299 304 308 313 10 Commercial - Medium Strength Accounts 63 64 65 66 67 68 11 Commercial - High Strength Accounts 63 64 65 66 67 68 12 Total Commercial Accounts 416 422 429 435 442 448
13 14 Industrial

15 Dura Plastics Products Accounts 1 1 1 1 1 1
16 Perricone Juice Accounts 1 1 1 1 1 1
17 Rudolph Food Company Accounts 1 1 1 1 1 1
18 CJ Foods #1 Accounts 1 1 1 1 1 1
19 CJ Foods #2 Accounts 1 1 1 1 1 1
20 Precision Stamping Accounts 1 1 1 1 1 1
21 Total Industrial Accounts 6 6 6 6 6 6

Table 3-3: Projected Customer Accounts
(A) (B) (C) (D) (E) (F) (G)
Line Customer Class
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Residential

2 Single Family 17,084 17,341 17,601 17,865 18,133 18,405 3 Multi-Family & Mobile Home-Rural 72 73 74 75 76 78
4 Total Residential 17,157 17,414 17,675 17,940 18,209 18,482 5 6 Schools 10 10 10 10 10 10
7 8 Commercial

9 Commercial - Low Strength 290 295 299 304 308 313
10 Commercial - Medium Strength 63 64 65 66 67 68
11 Commercial - High Strength 63 64 65 66 67 68
12 Total Commercial 416 422 429 435 442 448
13 14 Industrial

15 Dura Plastics Products 1 1 1 1 1 1

13 CITY OF BEAUMONT 2024 SEWER RATE STUDY
16 Perricone Juice 1 1 1 1 1 1
17 Rudolph Food Company 1 1 1 1 1 1
18 CJ Foods #1 1 1 1 1 1 1
19 CJ Foods #2 1 1 1 1 1 1
20 Precision Stamping 1 1 1 1 1 1
21 Total Industrial 6 6 6 6 6 6
22 23 Total 17,589 17,852 18,120 18,391 18,667 18,947

Table 3-4: Projected Billed Discharges (CCF)
(A) (B) (C) (D) (E) (F) (G)
Line Customer Class
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Residential

2 Single Family N/A N/A N/A N/A N/A N/A
3 Multi-Family & Mobile Home-Rural N/A N/A N/A N/A N/A N/A 4 Total Residential N/A N/A N/A N/A N/A N/A
5 6 Schools N/A N/A N/A N/A N/A N/A
7 8 Commercial

9 Commercial - Low Strength 91,472 92,844 94,237 95,650 97,085 98,541 10 Commercial - Medium Strength 42,593 43,232 43,881 44,539 45,207 45,885 11 Commercial - High Strength 35,980 36,519 37,067 37,623 38,188 38,760 12 Total Commercial 170,045 172,596 175,185 177,812 180,480 183,187 13 14 Industrial

15 Dura Plastics Products 1,119 1,119 1,119 1,119 1,119 1,119 16 Perricone Juice 56,457 51,233 51,233 51,233 51,233 51,233 17 Rudolph Food Company 0 0 0 0 0 0
18 CJ Foods #1 51,631 51,631 51,631 51,631 51,631 51,631 19 CJ Foods #2 6,075 6,075 6,075 6,075 6,075 6,075
20 Precision Stamping 0 0 0 0 0 0
21 Total Industrial 115,282 110,058 110,058 110,058 110,058 110,058 22 23 Total 285,327 282,653 285,242 287,870 290,537 293,244

Projected Revenues at Existing Rates
The sewer rates currently charged by the City are shown in Table 3-5. The rates were used in the development of projection of sewer rate revenues under existing rates as described below.

Table 3-5: Current Sewer Rates
(A) (B) (C)
Line Customer Class
Monthly
Service Charge
Commodity Rates
($/CCF)
1 Residential
2 Single Family $47.21 N/A
3 Multi-Family & Mobile Home-Rural ($/unit) $29.24 N/A 4 5 Schools ($/student) $1.07 N/A
6 7 Commercial Customers

8 Commercial – Low Strength $25.77 $2.77

14 CITY OF BEAUMONT 2024 SEWER RATE STUDY
9 Commercial – Medium Strength $47.21 $3.75
10 Commercial – High Strength $151.07 $7.31
11 12 Industrial Customers

13 Dura Plastics Products N/A $3.84
14 Perricone Juice N/A $2.94
15 Rudolph Food Company $169.27 $0.00
16 CJ Foods #1 N/A $11.07
17 CJ Foods #2 N/A $5.71
18 Precision Stamping $148.24 $0.00
Table 3-6 shows a summary of detail of projected rate revenues for the period FY 2023 – FY 2028 assuming that existing sewer rates remain unchanged. The projection of revenues at existing rates, when compared to projected expenditures, allows for the quantification of the funding gap that must be filled by rate revenue increases, external debt financing, or some other form of funding. The revenues shown in Table 3-6 were calculated by multiplying the projected units of service for each year by the existing sewer rates.

Table 3-6: Projected Revenue at Existing Rates
(A) (B) (C) (D) (E) (F) (G)
Line Customer Class
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Total Rate Revenues $12,948,348 $13,106,827 $13,283,295 $13,462,410 $13,644,211 $13,828,740

Projected Non-Operating Income
In addition to revenues produced by the City’s sewer rates, the City also earns non-operating revenues from miscellaneous sources. Revenue from non-operating sources reduces the annual revenue requirement and the rates that must ultimately be paid by customers. Table 3-7 shows the projection of these non-operating revenues. Line 1 labeled “Miscellaneous” includes revenues earned from activities such as inspections, fines and forfeitures, and special sewer services. Line 2 of Table 3-7 reflects the projected interest income on Operating Reserves based on an assumption of a 2.5% interest rate earned on cash reserve balances.

Table 3-7: Non-Operating Revenues
(A) (B) (C) (D) (E) (F) (G)
Line Revenue
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Miscellaneous $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 2 Interest Income $130,575 $94,890 $71,121 $62,089 $60,941 $63,609 3 Total $326,113 $295,316 $276,558 $272,662 $276,778 $284,842

Projected Inflation Rates / Cost Escalation Factors
The financial plan projects both operating costs and capital improvement costs for the FY 2024 – FY 2028 financial planning period, starting from a baseline of the City’s FY 2023 sewer utility budget. The costs contained in the FY 2023 budget were escalated using the factors shown in Table 3-8. These factors reflect an estimate of inflation during each year of the planning horizon and were developed in consultation with City staff.

Table 3-8: Projected Inflation Rates / Cost Escalation Factors (A) (B) (C) (D) (E) (F) (G)
Line Customer Class
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 General N/A 5.0% 5.0% 4.0% 3.0% 2.0%
2 Personnel N/A 2.5% 2.5% 2.5% 2.5% 2.5%
3 Administrative N/A 5.0% 3.0% 3.0% 3.0% 2.0%

15 CITY OF BEAUMONT 2024 SEWER RATE STUDY
4 Operating (Fleet Costs, Program Costs,
Repairs and Maintenance, Supplies,
Special Services, Equipment Leasing)
N/A 5.0% 3.0% 3.0% 3.0% 2.0%
5 Utilities N/A 5.0% 5.0% 5.0% 5.0% 5.0%
6 Capital N/A 5.0% 5.0% 4.0% 3.0% 3.0%

Projected Operating Expenses
Projected sewer utility operating expenses for the FY 2024 – FY 2028 financial planning period are shown in Table 3-9. Personal service costs (Line 1) reflect salary and benefits costs for all sewer utility personnel (administrative, treatment, field operations, and customer service). Operating costs (Line 2) reflect the cost of fleet operations, special programs, repairs and maintenance, supplies, special services, and equipment leasing). Capital outlay costs (Line 3) reflect the purchase of vehicles, the purchase of equipment, and contingencies. The amounts shown in Table 3-9 were projected forward starting from a baseline of the City’s FY 2023 sewer utility budget using the escalation factors shown in Table 3-8.

Table 3-9: Projected Operating Expenses (O&M Expenses)
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Personnel Services $2,545,415 $2,981,044 $3,149,003 $3,221,580 $3,295,776 $3,491,615 2 Operating Costs $4,705,585 $4,908,364 $5,885,115 $6,016,699 $6,152,230 $6,245,294 3 Capital Outlay $558,023 $1,037,473 $220,500 $322,771 $335,995 $285,256 4 Total $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164

Projected Debt Service Expenditures
In 2018, the Beaumont Public Improvement issued $81.1 million of revenue bonds to finance improvements at the City’s WWTP. The projected debt service payments shown in Table 3-10 reflect the contractually required debt service payments associated with these revenue bonds during the FY 2024 – FY 2028 financial planning period (Line 1). There is no proposed debt service (Line 2).

Table 3-10: Projected Debt Service Payments
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Existing Debt Service $5,073,213 $5,073,713 $5,070,713 $5,069,088 $5,073,463 $5,073,588 2 Proposed Debt Service $0 $0 $0 $0 $0 $0
3 Total $5,073,213 $5,073,713 $5,070,713 $5,069,088 $5,073,463 $5,073,588

Projected Contribution to the Repair & Replacement Reserve In 2023, the City established a sewer utility Repair and Replacement Reserve to accumulate funds to pay for future CIP expenditures related to the repair and replacement of existing infrastructure such as underground pipelines and lift stations. The initial contribution to this fund was $1 million via a transfer of cash from the Operating Reserve.

As shown in Table 3-11, the financial plan for FY 2024 – FY 2028 features an annual contribution of approximately $2.0 million being transferred into the Repair and Replacement Reserve from the Operating Reserve. The estimate of $2.0 million represents 85% of the annual depreciation expense for collection and conveyance system assets assuming a 60 year useful life. The exact equation is as follows:

($141,085,109 original cost / 60 years = $2,351,418 annual depreciation expense) * .85 = $1.998,706

Table 3-11: Projected Contribution to the Repair & Replacement Reserve (A) (B) (C) (D) (E) (F) (G)

16 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Repair & Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 2 Total $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706

Projected Rate Funded (PAYGO) CIP Expenditures
The annual revenue requirement from rates includes both an annual contribution to the Repair and Replacement Reserve (Table 3-11) and the cost of rate funded CIP which is often referred to as pay-as-you-go or “PAYGO” CIP.

Table 3-12 shows the projected rate funded (PAYGO) CIP expenditures for the FY 2024 – FY 2028 financial planning horizon. The projects shown in Table 3-12 were provided by City staff in current year 2023 dollars (i.e., without estimated construction cost inflation). Starting in FY 2024 (Column C), the projected cost for each project has been inflated using the cost escalation factors shown in Line 6 of Table 3-8

Table 3-12: Projected Rate Funded (PAYGO) CIP Expenditures (A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Office Expansion $0 $0 $0 $573,300 $0 $0
2 Crane Truck $0 $0 $0 $0 $0 $364,928
3 CCTV Main Line Inspection System $0 $241,962 $0 $0 $0 $0 4 4th Street Manhole Replacement $200,000 $0 $0 $0 $0 $0 5 Oak Valley Lift Station Access Point $210,000 $0 $0 $0 $0 $0 6 Vactor Dump Station $450,000 $0 $0 $0 $0 $0
7 Total $860,000 $241,962 $0 $573,300 $0 $364,928

Projected Total CIP Expenditures
Table 3-13 summarizes projected sewer utility CIP expenditures for the FY 2024 – FY 2028 financial planning period which are based on the projects identified in the City of Beaumont’s Draft 2021 Wastewater Master Plan.

The financial plan does not feature the use of external debt financing. Instead, four types of CIP expenditure funding sources are projected to be used:

• Rate Funded (PAYGO) CIP Expenditures (Lines 1-8): These CIP expenditures are funded directly from the operational cash flows earned from rate revenues. As such, they are reflected in the Operating Reserve. Rate Funded (PAYGO) CIP expenditures can be for both non-growth CIP that does not increase the capacity of sewer system to serve new customers and growth-related CIP that does increase system capacity.

• Capacity Fee Funded CIP Expenditures (Lines 10-13): Capacity fees can only be used to fund growth-related CIP expenditures that increase the capacity of the sewer system to serve new customers. Capacity fee receipts/revenues and the cost of growth-related CIP expenditures are reflected in the Capital Reserve.

• CIP Expenditures Funded CIP Expenditures (Lines 15-28): As noted previously, in 2023, the City established a sewer utility Repair and Replacement Reserve to accumulate funds to pay for future CIP expenditures related to the repair and replacement of existing infrastructure such as underground pipelines and lift stations. Funding for the Repair and Replacement Reserve is provided by cash transfers from the Operating Reserve Fund.

• Grant Funded CIP Expenditures (Lines 30-32): The FY 2024 – FY 2028 financial plan projects the receipt of $2.3 million dollars of grant funding for CIP expenditures (Line 31). The grant funding will be used to pay for a growth-related CIP project. Therefore, they are reflected in the Capital Reserve.

17 CITY OF BEAUMONT 2024 SEWER RATE STUDY

Table 3-13: Projected Total CIP Expenditures
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Rate Funded (PAYGO) CIP

2 Office Expansion $0 $0 $0 $573,300 $0 $0
3 Crane Truck $0 $0 $0 $0 $0 $364,928
4 CCTV Main Line Inspection System $0 $241,962 $0 $0 $0 $0 5 4th Street Manhole Replacement $200,000 $0 $0 $0 $0 $0 6 Oak Valley Lift Station Access Point $210,000 $0 $0 $0 $0 $0 7 Vactor Dump Station $450,000 $0 $0 $0 $0 $0
8 Total $860,000 $241,962 $0 $573,300 $0 $364,928
9 10 Capacity Fee Funded CIP

11 Mesa Lift Station Construction $3,650,000 $2,835,000 $0 $0 $0 $0 12 1211 Petition with Adaptive Management & Mitigation Plan $0 $2,205,000 $0 $0 $0 $0 13 Total $3,650,000 $5,040,000 $0 $0 $0 $0
14 15 CIP Funded by the Repair & Replacement Reserve

16 Apron Lane Pipeline Replacement $0 $0 $303,188 $0 $0 $0 17 Edgar Ave Pipeline Replacement $0 $0 $650,475 $0 $0 $0 18 Lift Station Condition $0 $0 $441,000 $458,640 $472,399 $486,571 19 On-going Pipeline Replacement Program $0 $0 $551,250 $573,300 $708,599 $729,857 20 I&I System Repairs - Phase 3 $0 $0 $220,500 $0 $0 $0 21 UV Bulb Replacement $0 $0 $165,375 $0 $0 $0
22 RO Module Replacement $0 $0 $0 $343,980 $0 $0
23 Vactor Truck $0 $0 $0 $0 $826,699 $0
24 Huber 4MM Coarse Screen Retrofit $0 $52,500 $0 $0 $0 $0 25 Sewer Bridge Coating/Inspection $0 $0 $55,125 $0 $0 $0 26 Lift Station Spare Pump Program $300,000 $0 $0 $0 $0 $0 27 VFD $250,000 $0 $0 $0 $0 $0
28 Total $550,000 $52,500 $2,386,913 $1,375,920 $2,007,697 $1,216,428 29 30 Grant Funded CIP

31 Mesa Lift Station Construction $100,000 $2,415,000 $0 $0 $0 $0 32 Total $100,000 $2,415,000 $0 $0 $0 $0
33 34 Grand Total $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356

Target Cash Reserves and Debt Service Coverage
The target minimum cash reserve and debt service coverage metrics reflected in the financial plan are shown in Table 3-14.

Table 3-14: Target for Cash Reserves and Debt Service Coverage (A) (B)
Line Description Minimum Target

18 CITY OF BEAUMONT 2024 SEWER RATE STUDY
1 Operating Reserve Ending balance equivalent to 25% of annual operating expenses 2 Capital Reserve Ending balance equivalent to 75% of the four-year rolling average of projected growth- related CIP expenditures
3 Repair and Replacement Reserve Ending Balance equivalent to 100% of annual collection and conveyance system depreciation expense assuming a 60 year useful life
4 Revenue Bond Debt Service
Coverage

1.20x contractually required debt service coverage

1.50x minimum target debt service coverage*
Capacity fees are included in the revenues used to calculate debt service coverage

Status Quo Financial Plan (No Rate Revenue Increases)
To demonstrate the need for sewer rate revenue increases a “status quo” financial plan was developed. The status quo financial plan presents the projected cash reserve outcomes of maintaining the City’s current sewer rates (i.e., having no sewer rate revenue increases).

19 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 3-15 shows the results of this analysis.

In FY 2025, the Operating Reserve ending cash balance falls below the minimum target (Line 56). In FY 2026, the Operating Reserve ending cash balance turns negative and falls below $0 (Line 54). These outcomes are presented in a graphical format in

Figure 3-1: Status Quo Financial Plan - Operating Reserve

Figure 3-2: Status Quo Financial Plan - Combined Reserves

. Further, as shown in Figure 3-2, by FY 2028, the sewer utility’s combined cash reserves consisting of the Operating Reserve, the Capital Reserve, and the Repair and Replacement Reserve, are projected to fall below target minimums. This demonstrates the insufficiency of the City’s current sewer rates to support the sewer utility’s financial needs over the next five years.

($8,000,000)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
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
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Reserve Ending Balance Combined Reserve Target Balance

20 CITY OF BEAUMONT 2024 SEWER RATE STUDY
It is also important to note that under the status quo financial plan, the sewer utility fails to meet the minimum of

1.50x debt service coverage target in FY 2024 and the contractually required debt service coverage of 1.20x in FY 2027.

21 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 3-15: Status Quo Financial Plan - Operating Reserve (A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Rate Revenue

2 Annual Rate Revenue % Increase 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3 4 Revenue at Existing Rates $12,948,348 $13,106,827 $13,283,295 $13,462,410 $13,644,211 $13,828,740 5 Revenue from Rate Increases $0 $0 $0 $0 $0 $0
6 Total Rate Revenue $12,948,348 $13,106,827 $13,283,295 $13,462,410 $13,644,211 $13,828,740 7 8 Non-Operating Revenue
9 Miscellaneous $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 10 Interest Income $130,575 $89,963 $41,365 $0 $0 $0 11 Total Non-Operating Revenue $326,113 $290,389 $246,802 $210,572 $215,837 $221,233 12 13 Total Revenue $13,274,461 $13,397,216 $13,530,097 $13,672,982 $13,860,048 $14,049,973 14 15 Operating Expenses
16 Personnel Services $2,545,415 $2,981,044 $3,149,003 $3,221,580 $3,295,776 $3,491,615 17 Operating Costs $4,705,585 $4,908,364 $5,885,115 $6,016,699 $6,152,230 $6,245,294 18 Capital Improvements $558,023 $1,037,473 $220,500 $322,771 $335,995 $285,256 19 Total Operating Expenses $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164 20 21 Capital Costs
22 Existing Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 23 Rate Funded (PAYGO) CIP $860,000 $241,962 $0 $573,300 $0 $364,928 24 Transfer to Repair & Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 25 Total Capital Costs $6,933,213 $6,553,323 $6,308,811 $6,373,821 $6,311,149 $6,676,183 26 27 Total Expenditures $14,742,236 $15,480,204 $15,563,430 $15,934,871 $16,095,149 $16,698,348 28 Net Operating Cash Flow (Change in Cash) ($1,467,774) ($2,082,989) ($2,033,333) ($2,261,889) ($2,235,101) ($2,648,375) 29 30 Debt Service Coverage Calculation
31 Net Revenues Available for Debt Service $5,465,438 $4,470,335 $4,275,478 $4,111,932 $4,076,048 $4,027,808 32 Add: Capacity Fees $3,783,021 $2,586,380 $2,026,956 $1,905,618 $1,149,502 $1,917,477 33 Net Revenues Available for Debt Service $9,248,459 $7,056,714 $6,302,434 $6,017,550 $5,225,550 $5,945,285 34 35 Annual Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 36 Calculated Coverage 1.82 1.64 1.46 1.58 1.21 1.38 37 38 Operating Reserve Cash Balance
39 Beginning Balance $6,022,186 $4,684,987 $2,691,961 $699,993 ($1,561,896) ($3,796,997) 40 41 Sources of Funds
42 Rate Revenues $12,948,348 $13,106,827 $13,283,295 $13,462,410 $13,644,211 $13,828,740 43 Non-Operating Revenue $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 44 Interest Income $130,575 $89,963 $41,365 $0 $0 $0 45 Total Sources $13,274,461 $13,397,216 $13,530,097 $13,672,982 $13,860,048 $14,049,973 46 47 Uses of Funds
48 Operating Expenses $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164 49 Existing Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 50 Rate Funded (PAYGO) CIP $860,000 $241,962 $0 $573,300 $0 $364,928 51 Transfer to Repair & Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 52 Total Uses $14,742,236 $15,480,204 $15,563,430 $15,934,871 $16,095,149 $16,698,348 53 54 Ending Balance $4,554,412 $2,601,998 $658,628 ($1,561,896) ($3,796,997) ($6,445,372) 55 Minimum Target $1,952,256 $2,231,720 $2,313,655 $2,390,263 $2,446,000 $2,505,541 56 Variance from Target $2,732,731 $460,241 ($1,613,662) ($3,952,159) ($6,242,997) ($8,950,913)

22 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Figure 3-1: Status Quo Financial Plan - Operating Reserve

Figure 3-2: Status Quo Financial Plan - Combined Reserves

Proposed Financial Plan (Rate Revenue Increases)
The proposed financial plan features annual sewer rate revenue adjustments shown in Table 3-16. The percentages shown in Column B of Table 3-16 reflect the required total system rate revenue increase. The actual percentage increase in rates experienced by each customer class will vary based on the outcome of the COS analyses discussed in Section 4 of this report.

Table 3-16: Proposed Rate Revenue Increases

(A) (B) (C)
Line Fiscal Year Proposed Rate Revenue Increase Effective Date 1 FY 2024 6.0% September 2023
2 FY 2025 5.0% July 2024
3 FY 2026 3.0% July 2025
4 FY 2027 2.0% July 2026
5 FY 2028 2.0% July 2027
($8,000,000)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
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
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Reserve Ending Balance Combined Reserve Target Balance

23 CITY OF BEAUMONT 2024 SEWER RATE STUDY
The outcome of increasing rate revenues in the manner shown in Table 3-16 can be observed in the proposed financial plan presented in Table 3-17.

• The proposed Operating Reserve ending meets or exceeds the minimum target in all years of the FY 2024 – FY 2028 financial planning horizon (Line 57 of Table 3-18) and Figure 3-3.

• Debt service coverage exceeds the contractually obligated minimum of 1.20x and meets or exceeds the minimum target of 150x in each year of the FY 2024 – FY 2028 financial planning horizon (Line 36 of Table 3-17: Financial Plan – Operating Reserve (Table 3-17).

• As shown in
• Figure 3-4, combined cash reserves consisting of the Operating Reserve, the Capital Reserve, and the Repair and Replacement Reserve, are projected to exceed combined target minimums. The primary funding source for the Capital Reserve are capacity fees paid by developers who connect to the sewer utility system. Capacity fees can only be used to pay for growth-related CIP costs. They cannot be used to fund on-going utility operating costs.

24 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 3-17: Financial Plan – Operating Reserve
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Rate Revenue

2 Annual Rate Revenue % Increase 0.0% 6.0% 5.0% 3.0% 2.0% 2.0% 3 4 Revenue at Existing Rates $12,948,348 $13,106,827 $13,283,295 $13,462,410 $13,644,211 $13,828,740 5 Revenue from Rate Increases $0 $655,341 $1,501,012 $1,970,762 $2,310,208 $2,664,856 6 Total Rate Revenue $12,948,348 $13,762,168 $14,784,307 $15,433,172 $15,954,419 $16,493,596 7 8 Non-Operating Revenue
9 Miscellaneous $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 10 Interest Income $130,575 $98,155 $76,921 $69,957 $70,755 $75,437 11 Total Non-Operating Revenue $326,113 $298,580 $282,358 $280,529 $286,591 $296,670 12 13 Total Revenue $13,274,461 $14,060,749 $15,066,665 $15,713,701 $16,241,010 $16,790,265 14 15 Operating Expenses
16 Personnel Services $2,545,415 $2,981,044 $3,149,003 $3,221,580 $3,295,776 $3,491,615 17 Operating Costs $4,705,585 $4,908,364 $5,885,115 $6,016,699 $6,152,230 $6,245,294 18 Capital Improvements $558,023 $1,037,473 $220,500 $322,771 $335,995 $285,256 19 Total Operating Expenses $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164 20 21 Capital Costs
22 Existing Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 23 Rate Funded (PAYGO) CIP $860,000 $241,962 $0 $573,300 $0 $364,928 24 Transfer to Repair & Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 25 Total Capital Costs $6,933,213 $6,553,323 $6,308,811 $6,373,821 $6,311,149 $6,676,183 26 27 Total Expenditures $14,742,236 $15,480,204 $15,563,430 $15,934,871 $16,095,149 $16,698,348 28 Net Operating Cash Flow(Change in Cash) ($1,467,774) ($1,419,456) ($496,765) ($221,170) $145,862 $91,918 29 30 Debt Service Coverage Calculation
31 Net Revenues Available for Debt Service $5,465,438 $5,133,868 $5,812,046 $6,152,651 $6,457,011 $6,768,101 32 Add: Capacity Fees $3,783,021 $2,586,380 $2,026,956 $1,905,618 $1,149,502 $1,917,477 33 Net Revenues Available for Debt Service $9,248,459 $7,720,247 $7,839,002 $8,058,269 $7,606,513 $8,685,578 34 35 Annual Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 36 Calculated Coverage 1.82 1.79 1.82 2.12 1.76 2.01 37 38 Operating Reserve Cash Balance
39 Beginning Balance $6,022,186 $4,684,987 $3,363,686 $2,943,842 $2,792,628 $3,009,245 40 41 Sources of Funds
42 Rate Revenues $12,948,348 $13,762,168 $14,784,307 $15,433,172 $15,954,419 $16,493,596 43 Non-Operating Revenue $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 44 Interest Income $130,575 $98,155 $76,921 $69,957 $70,755 $75,437 45 Total Sources $13,274,461 $14,060,749 $15,066,665 $15,713,701 $16,241,010 $16,790,265 46 47 Uses of Funds
48 Operating Expenses $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164 49 Existing Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 50 Rate Funded (PAYGO) CIP $860,000 $241,962 $0 $573,300 $0 $364,928 51 Transfer to Repair & Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 52 Total Uses $14,742,236 $15,480,204 $15,563,430 $15,934,871 $16,095,149 $16,698,348 53 54 Ending Balance $4,554,412 $3,265,531 $2,866,921 $2,722,671 $2,938,490 $3,101,162 56 Minimum Target $1,952,256 $2,231,720 $2,313,655 $2,390,263 $2,446,000 $2,505,541 57 Variance from Target $2,732,731 $1,131,965 $630,187 $402,366 $563,245 $671,058

25 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Figure 3-3: Financial Plan - Operating Reserve

Figure 3-4: Financial Plan - Combined Cash Reserves

Projection of Other Cash Reserve Balances
As noted previously the financial plan and revenue requirement from rates discussed in this report is focused on the Operating Reserve. The Operating Reserve reflects ongoing sewer utility activities such as revenues earned from rates and the costs incurred to provide services. This fact notwithstanding, an outcome of the financial planning process was the development of projections for the Capital Reserve and the Repair and Replacement Reserve.

Table 3-18 shows the projected Capital Reserve cash balances for the FY 2024 – FY 2028 financial planning horizon. The Capital Reserve reflects revenues and costs associated with the funding of growth-related CIP expenditures. The primary funding source for growth-related CIP expenditures are capacity fees paid by developers who connect to the sewer utility system. The projection of capacity fee receipts shown in Line 4 of Table 3-18 was prepared by City staff.

Table 3-19 shows the projected Repair and Replacement Reserve cash balances for the FY 2024 – FY 2028 financial planning horizon. The Repair and Replacement reserve is used to track the cost of non-growth repair and $0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
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 Reserve Ending Balance Combined Reserve Target Balance

26 CITY OF BEAUMONT 2024 SEWER RATE STUDY
replacement CIP expenditures. The source of funding for the Repair and Replacement Reserve is rate revenues earned from customers that are transferred in from the Operating Reserve. The amount of this annual transfer as show in Line 4 of Table 3-19 is discussed in the narrative presented regarding Table 3-11.

Table 3-18: Projected Capital Reserve
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Beginning Balance $6,431,327 $6,726,794 $3,640,103 $5,013,284 $5,784,942 $6,322,905 2 3 Sources of Funds

4 Capacity Fees $3,783,021 $2,586,380 $2,026,956 $1,905,618 $1,149,502 $1,917,477 5 Grants $100,000 $2,415,000 $0 $0 $0 $0
6 Interest Income $162,446 $127,986 $106,832 $133,311 $149,480 $172,528 7 Total Sources $4,045,467 $5,129,366 $2,133,788 $2,038,930 $1,298,982 $2,090,005 8 9 Uses of Funds

10 Operating Reserve Portion of Existing Debt Service $0 $761,057 $760,607 $1,267,272 $761,019 $761,038 11 Capacity Fee Funded CIP $3,650,000 $5,040,000 $0 $0 $0 $0 12 Grant Funded CIP $100,000 $2,415,000 $0 $0 $0 $0 13 Total Uses $3,750,000 $8,216,057 $760,607 $1,267,272 $761,019 $761,038 14 15 Ending Balance $6,726,794 $3,640,103 $5,013,284 $5,784,942 $6,322,905 $7,651,871 16 Minimum Target $1,118,250 $93,969 $190,757 $290,449 $393,131 $498,894 17 Variance from Target $5,608,544 $3,546,134 $4,822,527 $5,494,493 $5,929,773 $7,152,977

Table 3-19: Projected Repair and Replacement Reserve
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Beginning Balance $0 $455,625 $2,437,549 $2,105,428 $2,788,634 $2,849,247 2 3 Sources of Funds

4 Transfer-In from Rate Revenues $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 5 Interest Income $5,625 $35,718 $56,086 $60,421 $69,603 $81,010 6 Total Sources $1,005,625 $2,034,424 $2,054,792 $2,059,126 $2,068,309 $2,079,715 7 8 Uses of Funds

9 Repair & Replacement CIP $550,000 $52,500 $2,386,913 $1,375,920 $2,007,697 $1,216,428 10 Total Uses $550,000 $52,500 $2,386,913 $1,375,920 $2,007,697 $1,216,428 11 12 Ending Balance $455,625 $2,437,549 $2,105,428 $2,788,634 $2,849,247 $3,712,534 14 Minimum Target $2,351,418 $2,351,418 $2,351,418 $2,351,418 $2,351,418 $2,351,418 15 Variance from Target ($1,895,793) $86,130 ($245,990) $437,216 $497,829 $1,361,116

Summary Projection of Combined Cash Reserves
Table 3-20 presented a summary of the sewer utility’s combined cash reserves for the FY 2024 – FY 2028 financial planning horizon. A definition of the minimum targets for each reserve are presented in Table 3-14.

27 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 3-20: Summary Projection of Combined Cash Reserves (A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Ending Balance

2 Operating Reserve $4,554,412 $3,265,531 $2,866,921 $2,722,671 $2,938,490 $3,101,162 3 Capital Reserve $6,726,794 $3,640,103 $5,013,284 $5,784,942 $6,322,905 $7,651,871 4 Repair & Replacement Reserve $455,625 $2,437,549 $2,105,428 $2,788,634 $2,849,247 $3,712,534 5 Total $11,736,830 $9,343,183 $9,985,633 $11,296,248 $12,110,642 $14,465,568 6 7 Minimum Targets
8 Operating Reserve $1,952,256 $2,231,720 $2,313,655 $2,390,263 $2,446,000 $2,505,541 9 Capital Reserve $1,118,250 $93,969 $190,757 $290,449 $393,131 $498,894 10 Repair & Replacement Reserve $2,351,418 $2,351,418 $2,351,418 $2,351,418 $2,351,418 $2,351,418 11 Total $5,421,924 $4,677,108 $4,855,830 $5,032,130 $5,190,550 $5,355,854 12 13 Variance from Minimum Target
14 Operating Reserve $2,602,156 $1,033,811 $553,266 $332,409 $492,490 $595,621 15 Capital Reserve $5,608,544 $3,546,134 $4,822,527 $5,494,493 $5,929,773 $7,152,977 16 Repair & Replacement Reserve ($1,895,793) $86,130 ($245,990) $437,216 $497,829 $1,361,116 17 Total $6,314,906 $4,666,075 $5,129,803 $6,264,118 $6,920,092 $9,109,714

Revenue Requirement Projection
The final outcome (and primary purpose) of the financial planning process is the determination of the projected revenue requirement from rates. Table 3-21 shows this projection for the FY 2024 – FY 2028 financial planning horizon.

Table 3-21: Revenue Requirement Projection
(A) (B) (C) (D) (E) (F) (G)
Line Item
Estimated
FY 2023
Projected
FY 2024
Projected
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2028
1 Operating Expenses

2 Personnel Services $2,545,415 $2,981,044 $3,149,003 $3,221,580 $3,295,776 $3,491,615 3 Operating Costs $4,705,585 $4,908,364 $5,885,115 $6,016,699 $6,152,230 $6,245,294 4 Capital Outlay $558,023 $1,037,473 $220,500 $322,771 $335,995 $285,256 5 Total Operating Expenses $7,809,023 $8,926,881 $9,254,618 $9,561,050 $9,784,000 $10,022,164 6 7 Capital Costs
8 Existing Debt Service $5,073,213 $4,312,656 $4,310,106 $3,801,816 $4,312,443 $4,312,549 9 Rate Funded (PAYGO) CIP $860,000 $241,962 $0 $573,300 $0 $364,928 10 Transfer to Repair and Replacement Reserve $1,000,000 $1,998,706 $1,998,706 $1,998,706 $1,998,706 $1,998,706 11 Total Capital Costs $6,933,213 $6,553,323 $6,308,811 $6,373,821 $6,311,149 $6,676,183 12 13 Total Expenditures $14,742,236 $15,480,204 $15,563,430 $15,934,871 $16,095,149 $16,698,348 14 15 Net Operating Cash Flow (Change in Cash) ($1,467,774) ($1,419,456) ($496,765) ($221,170) $145,862 $91,918 16 Gross Revenue Requirement from Rates $13,274,461 $14,060,749 $15,066,665 $15,713,701 $16,241,010 $16,790,265 17 18 Less: Non- Operating Revenues
19 Miscellaneous $195,537 $200,426 $205,437 $210,572 $215,837 $221,233 20 Interest Income $130,575 $98,155 $76,921 $69,957 $70,755 $75,437 21 Total Non-Operating Revenue $326,113 $298,580 $282,358 $280,529 $286,591 $296,670 22 24 Net Revenue Requirement from Rates $12,948,348 $13,762,168 $14,784,307 $15,433,172 $15,954,419 $16,493,596

28 CITY OF BEAUMONT 2024 SEWER RATE STUDY

4. Cost-of-Service Analysis

4.1. Cost-of-Service Methodology
This section details the sewer cost of service (COS) analysis. A COS analysis distributes a utility’s revenue requirements from rates (costs) to each customer class based on their proportionate share of total system sewer demand. The COS analysis completed by Raftelis follows industry standard cost allocation principl es as presented in the Water Environment Federation’s Manual of Practice No. 27, Financing and Charges for Sewer Systems, Fourth Edition. (WEF Manual No. 27).

4.2. Cost-of-Service Process
The framework and methodology used to develop the COS analysis and to apportion the revenue requirement to each customer class is informed by the processes outlined in WEF Manual No. 27. COS analyses are tailored specifically to meet the unique needs of each customer class’s use of the sewer system. Five key steps are often completed in a COS analysis to recover costs from customers in an equitable and defensible manner:

• Revenue Requirement Determination: The first step in the COS analysis is to determine the amount of revenue required from rates (i.e., costs). The revenue requirement is determined during the financial planning process discussed in Section 3 of this report.

• Cost Functionalization: When possible, the revenue requirement is assigned to sewer system functions such as treatment, lift stations, and collection and conveyance, etc. The functionalization process answers the question of what types of functional activities are being paid for by the costs included in the revenue requirement.

• Cost Allocation to Cost Causation Components: Functionalized costs are then allocated to cost causation components based on the types of customer demands they are incurred to meet. Cost causation components often include flow (the volume of sewer discharges), and strength loading characteristics such as COD and TSS. The allocation process answers the question of what types of customer demands are being paid for by the costs included in the revenue requirement.

• Unit COS Development: In order to allocate the revenue requirement to customer classes, a unit cost of service must be determined for cost causation component. For example, the $/CCF for flow, or $/pound for BOD or TSS. The unit COS for each cost causation component is determined by dividing the revenue requirement allocated to each cost component by the appropriate total system units of service.

• Revenue Requirement Distribution to Customer Classes: The revenue requirement for each customer class is determined by multiplying the unit COS for each cost causation component by the customer class units of service determined for each customer class.

4.3. FY 2024 Revenue Requirement
Table 4-1 shows a detail of the FY 2024 Operating Reserve revenue requirement from rates expressed on an operating cost and capital cost basis. The net revenue requirement before adjustment shown in Column D, Line 13 of Table 4-1 matches Line 24 of Table 3-21.

Line 24 of Table 4-1 shows adjustment that increases the revenue requirement by $131,068. This adjustment is required because the FY 2024 rate revenue increase of 6.0% will not become effective at the start of FY 2024 on July 1, 2023. Instead, the rate revenue increase of 6.0% will become effective on September 1, 2023. The adjustment of $131,068 ensures that the sewer utility will recover the level of rate revenue requited to fully cover its costs in FY 2024.

29 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-1: FY 2024 Revenue Requirement
(A) (B) (C) (D)
Line Revenue Requirement Component Operating Costs Capital Costs Total Costs 1 O&M
2 Personnel Services $2,981,044 $2,981,044
3 Operating Costs $4,908,364 $4,908,364
4 Capital Outlay $1,037,473 $1,037,473
5 Total Operating Expenses $8,926,881 $0 $8,926,881
6 7 Capital
8 Existing Debt Service $4,312,656 $4,312,656
9 Rate Funded (PAYGO) CIP $241,962 $241,962
10 Tranter to Repair & Replacement Reserve $1,998,706 $1,998,706 11 Net Change in Cash Reserve ($1,419,456) ($1,419,456) 12 Total Capital Costs $5,133,868 $5,133,868
13 14 Gross Revenue Requirement $8,926,881 $5,133,868 $14,060,749 15 16 Less: Non-Operating Revenues
17 Miscellaneous $200,426 $200,426
18 Interest Income $98,155 $98,155
19 Total Non-Operating Revenues $298,580 $0 $298,580
20 21 Net Revenue Requirement Before Adjustment $8,628,300 $5,133,868 $13,762,168 22 23 Revenue Requirement Adjustments
24 Adjustment for Mi-Year Effective Data $131,068 $131,068 25 Total Revenue Requirement Adjustment $0 $131,068 $131,068 26 27 Net Revenue Requirement from Rates $8,628,300 $5,264,936 $13,893,236

4.4. FY 2024 Revenue Requirement Allocations

FY 2024 Capital Cost Allocation
Functionalization of Asset Values: As a first step in the FY 2024 capital cost allocation process, the functions associated with the sewer utility assets were identified based on the City’s asset accounting records. The estimated value of the City’s sewer assets as of FY 2022 was based on the metric replacement cost less depreciation. A detail of these assets is shown in Table 4-2. The estimated replacement cost less depreciation of the assets (Column F) was determined using historical construction cost data for the Los Angeles region as obtained from the publication, Engineering News-Record.

Table 4-2: Functionalized Sewer System Assets

(A) (B) (C) (D) (E) (F)
Line Asset Function Original Cost
Original Cost
Less
Depreciation
Replacement
Cost
Replacement
Cost Less
Depreciation
Replacement
Cost Less
Depreciation %
of Total
1 Treatment $254,104,711 $225,417,691 $294,170,308 $246,207,054 61.07% 2 Lift Stations $34,241,213 $17,840,374 $49,299,280 $24,539,591 6.09% 3 General $28,690,611 $23,118,124 $36,007,492 $24,906,543 6.18% 4 Land $2,002,560 $2,002,560 $2,278,393 $2,278,393 0.57% 5 Collection and Conveyance $141,085,109 $58,167,402 $262,543,603 $105,248,515 26.10% 6 Total $460,124,203 $326,546,152 $644,299,076 $403,180,096 100.00%

30 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Allocation of Assets to Cost Causation Components: The second step in the FY 2024 capital cost allocation process was to associate each asset function (Table 4-2) with a cost causation component. Cost causation components reflect the types of demand that must be met to serve sewer customers. For example, as shown in Line 1 of Table 4-3, assets associated with the treatment function were allocated 40% to the flow cost causation component (Column C), and 20% to the strength components of Biochemical Oxygen Demand (BOD), Total Suspended Solids (TSS) or Total Dissolved Solids (TDS) as shown in Line 1, Columns D, E, and F of Table 4-3.

The percentage allocations shown in Table 4-3 were determined in consultation with City staff.

Table 4-3: Asset Allocation to Cost Causation Components

(A) (B) (C) (D) (E) (F) (G) (H) (I)
Line Asset Function Value Flow BOD TSS TDS
Industrial
Admin.

Customer
Service
General &
Admin.
1 Treatment $246,207,054 40% 20% 20% 20% 0% 0% 0%
2 Lift Stations $24,539,591 100% 0%
3 General $24,906,543 100%
4 Land $2,278,393 50% 25% 25% 0% 0% 0% 0%
5 Collection and
Conveyance $105,248,515 90% 5% 5% 0% 0% 0% 0%
6 Total $403,180,096
7 8 Treatment $246,207,054 $98,482,821 $49,241,411 $49,241,411 $49,241,411 $0 $0 $0 9 Lift Stations $24,539,591 $24,539,591 $0 $0 $0 $0 $0 $0 10 General $24,906,543 $0 $0 $0 $0 $0 $0 $24,906,543
11 Land $2,278,393 $1,139,197 $569,598 $569,598 $0 $0 $0 $0 12 Collection and
Conveyance $105,248,515 $94,723,664 $5,262,426 $5,262,426 $0 $0 $0 $0 13 Total $403,180,096 $218,885,273 $55,073,435 $55,073,435 $49,241,411 $0 $0 $24,906,543 14 15 % Allocation 100.0% 54.3% 13.7% 13.7% 12.2% 0.0% 0.0% 6.2%

Allocation of the FY 2024 Capital Cost Revenue Requirement to Cost Causation Components: The FY 2024 capital cost revenue requirement, before any adjustments, is $5,130,603 as show in Column C, Line 12 14, and 21, of Table 4-1. Table 4-4 shows the allocation of this amount to cost causation components using the percentage allocations developed for the City’s existing sewer utility assets as show in Table 4-3. Note that the final aggregate allocation percentages shown in Line 8 of Table 4-4 match those shown in Line 15 of Table 4-3.

Table 4-4: Capital Costs Allocation to Cost Causation Components

(A) (B) (C) (D) (E) (F) (G) (H) (I)
Line Capital Cost Component Flow BOD TSS TDS
Industrial
Admin.

Customer
Service
General &
Admin. Total
1 Existing Debt Service $2,341,328 $589,098 $589,098 $526,716 $0 $0 $266,415 $4,312,656 2 Non-Growth PAYGO Capital $131,360 $33,051 $33,051 $29,551 $0 $0 $14,947 $241,962 3 Repair and Replacement Reserve $1,085,091 $273,018 $273,018 $244,107 $0 $0 $123,471 $1,998,706 4 Net Operating CF (Change in Cash) ($770,618) ($193,894) ($193,894) ($173,362) $0 $0 ($87,687) ($1,419,456) 5 Mid-Year Adjustment $71,157 $17,904 $17,904 $16,008 $0 $0 $8,097 $131,068 6 Total Capital Costs $2,858,318 $719,178 $719,178 $643,020 $0 $0 $325,243 $5,264,936 7 8 % Allocation 54.3% 13.7% 13.7% 12.2% 0.0% 0.0% 6.2% 100.0%

FY 2024 Operating Cost Allocation
Functionalization of Operating Costs: Unlike sewer utility assets, the City’s accounting system does not allow operating costs to be directly assigned to functions such as treatment, lift stations, and collection and conveyance, etc. This fact notwithstanding, operating costs can be assigned to high level categories that approximate functions.

Table 4-5 shows these functional assignments which were developed in consultation with City staff.

31 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-5: Functionalized Operating Costs
(A) (B) (C)
Line Operating Costs Amount % of Total
1 Personnel Services

2 Allocation to Administration $814,763 25.0%
3 Allocation to Treatment $977,715 30.0%
4 Allocation to Field Operations $1,303,620 40.0%
5 Allocation to Customer Service $162,953 5.0%
6 Total Personnel Services $3,259,050 100.0%
7 8 Operating Costs
9 Allocation to Treatment $2,555,019 60.0%
10 Allocation to Field Operations $1,703,346 40.0%
11 Total Operating Costs $4,258,364 100.0%
12 13 Capital Outlay
14 Equipment $702,500 67.7%
15 Vehicles $124,973 12.0%
16 Contingency Costs $210,000 20.2%
17 $1,037,473 100.0%
18 19 Additional Operating Costs
20 New Positions $179,993 48.4%
21 Contribution to Repair & Replace $192,001 51.6%
22 Total Additional Operating Costs $371,994 100.0% 23 24 Total Operating Costs $8,926,881

Allocation of Operating Costs to Cost Causation Components: The City’s FY 2024 operating cost revenue requirement, before any adjustments, is $8,926,881 as shown in Column B, Lines 5 and 14 of Table 4-1. Sewer utility operating costs are tracked in approximately 63 general ledger accounts within the City’s financial accounting system. City staff and Raftelis reviewed each operating expense item to determine the most appropriate assignment to cost causation components. The aggregate outcome of these allocation is show in Line 30 of Table 4-6.

32 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-6: Operating Cost Allocation to Cost Causation Components (A) (B) (C) (D) (E) (F) (G) (H) (I)
Line Operating Costs Flow BOD TSS TDS
Industrial
Admin.

Customer
Service
General &
Admin. Total
1 Personnel Services

2 Allocation to Administration $0 $0 $0 $0 $40,738 $0 $774,024 $814,763 3 Allocation to Treatment $391,086 $195,543 $195,543 $195,543 $0 $0 $0 $977,715 4 Allocation to Field Operations $1,173,258 $65,181 $65,181 $0 $0 $0 $0 $1,303,620 5 Allocation to Customer Service $0 $0 $0 $0 $0 $162,953 $0 $162,953 6 Total Personnel Services $1,564,344 $260,724 $260,724 $195,543 $40,738 $162,953 $774,024 $3,259,050 7 % Allocation 48.0% 8.0% 8.0% 6.0% 1.3% 5.0% 23.8% 100.0% 8 9 Operating Costs
10 Allocation to Treatment $1,022,007 $511,004 $511,004 $511,004 $0 $0 $0 $2,555,019 11 Allocation to Field Operations $1,533,011 $85,167 $85,167 $0 $0 $0 $0 $1,703,346 12 Total Operating Costs $2,555,019 $596,171 $596,171 $511,004 $0 $0 $0 $4,258,364 13 % Allocation 60.0% 14.0% 14.0% 12.0% 0.0% 0.0% 0.0% 100.0% 14 15 Capital Outlay
16 Equipment $381,385 $95,960 $95,960 $85,798 $0 $0 $43,397 $702,500 17 Vehicles $67,847 $17,071 $17,071 $15,263 $0 $0 $7,720 $124,973 18 Contingency Costs $114,008 $28,685 $28,685 $25,648 $0 $0 $12,973 $210,000 19 Total Capital Outlay $563,241 $141,716 $141,716 $126,709 $0 $0 $64,090 $1,037,473 20 % Allocation 54.3% 13.7% 13.7% 12.2% 0.0% 0.0% 6.2% 100.0% 21 22 Additional Operating Costs
23 New Positions $97,718 $24,587 $24,587 $21,983 $0 $0 $11,119 $179,993 24 Contribution to Repair & Replace $104,237 $26,227 $26,227 $23,450 $0 $0 $11,861 $192,001 25 Total Additional Operating Costs $201,954 $50,813 $50,813 $45,433 $0 $0 $22,980 $371,994 26 % Allocation 54.3% 13.7% 13.7% 12.2% 0.0% 0.0% 6.2% 100.0% 27 28 Total Operating Costs $4,884,558 $1,049,425 $1,049,425 $878,688 $40,738 $162,953 $861,095 $8,926,881 29 30 % Allocation 54.7% 11.8% 11.8% 9.8% 0.5% 1.8% 9.6% 100.0%

FY 2024 Non-Operating Revenue Allocation
The net revenue requirement from rates is determined by calculating a gross revenue requirement consisting of operating and capital costs. Non-operating revenues from miscellaneous items serve as an offset to the gross revenue requirement (i.e., they reduce the gross revenue requirement) and reduce the amount of rate revenues that must be collected from customers. Table 4-7 shows the allocation of non-operating revenues to cost causation components. Both miscellaneous non-operating revenues and interest income (Lines 1 and 2) were allocated using the aggregate operating cost allocations shown in Line 30 of Table 4-6.

Table 4-7: Non-Operating Revenues Allocation to Cost Causation Components

(A) (B) (C) (D) (E) (F) (G) (H) (I)
Line Non-Operating Revenue Flow BOD TSS TDS
Industrial
Administration
Customer
Service
General &
Administrative Total
1 Miscellaneous $109,668 $23,562 $23,562 $19,728 $915 $3,659 $19,333 $200,426 2 Interest Income $53,708 $11,539 $11,539 $9,662 $448 $1,792 $9,468 $98,155 3 Total Non-Operating Revenue $163,375 $35,100 $35,100 $29,390 $1,363 $5,450 $28,801 $298,580 4 5 % Allocation 54.7% 11.8% 11.8% 9.8% 0.5% 1.8% 9.6% 100.0%

Summary of FY 2024 Revenue Requirement Allocations
A final summary of the FY 2024 revenue requirement to cost causation components is presented in

33 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-8. The mid-year adjustment $131,068 (discussed for Table 4-1) was allocated based on the capital cost allocation percentages shown in Line 8 of Table 4-4.

Table 4-8: Summary Allocation to Cost Causation Components (A) (B) (C) (D) (E) (F) (G) (H) (I)
Line
Revenue Requirement
Component Flow BOD TSS TDS
Industrial
Admin.

Customer
Service
General &
Admin. Total
1 Operating Costs

2 Personnel Services $1,564,344 $260,724 $260,724 $195,543 $40,738 $162,953 $774,024 $3,259,050 3 Operating Costs $2,555,019 $596,171 $596,171 $511,004 $0 $0 $0 $4,258,364 4 Capital Outlay $563,241 $141,716 $141,716 $126,709 $0 $0 $64,090 $1,037,473 5 Additional Operating Costs $201,954 $50,813 $50,813 $45,433 $0 $0 $22,980 $371,994 6 Total Operating Costs $4,884,558 $1,049,425 $1,049,425 $878,688 $40,738 $162,953 $861,095 $8,926,881 7 8 Capital Costs
9 Existing Debt Service $2,341,328 $589,098 $589,098 $526,716 $0 $0 $266,415 $4,312,656 10 Rate Funded (PAYGO) CIP $131,360 $33,051 $33,051 $29,551 $0 $0 $14,947 $241,962 11 Transfer to R&R Reserve $1,085,091 $273,018 $273,018 $244,107 $0 $0 $123,471 $1,998,706 12 Net Op. CF Chg. in Cash) ($770,618) ($193,894) ($193,894) ($173,362) $0 $0 ($87,687) ($1,419,456) 13 Mid-Year Adjustment $71,157 $17,904 $17,904 $16,008 $0 $0 $8,097 $131,068 14 Net CF (Change in Cash) $2,858,318 $719,178 $719,178 $643,020 $0 $0 $325,243 $5,264,936 15 16 Gross Revenue Requirement $7,742,876 $1,768,602 $1,768,602 $1,521,708 $40,738 $162,953 $1,186,337 $14,191,817 17 Less: Non-Operating Revenue $163,375 $35,100 $35,100 $29,390 $1,363 $5,450 $28,801 $298,580 18 Net Revenue Requirement $7,579,500 $1,733,502 $1,733,502 $1,492,319 $39,376 $157,502 $1,157,536 $13,893,236 19 20 % Allocation 54.6% 12.5% 12.5% 10.7% 0.3% 1.1% 8.3% 100.0%

4.5. Units of Service Determination

Customer Contributed Units of Service
The work completed in Section 4.4 determined the costs that must be allocated to each cost causation component.

In order to allocate these costs to specific customer classes and eventually determine proposed FY 2024 sewer rates, the units of service for each cost causation component must be estimated.

Table 4-9 provides a summary allocation of the units of service determined for each customer class. Important points to note about Table 4-9 include:

• Single Family Residential (Line 1): Although single family residential customers do not pay $/CCF commodity rates under the existing or proposed sewer rate structure, the volume of flow and the strength loadings they contribute to the City of Beaumont’s WWTP must be estimated in order to equitably reflect the proportionate demands they place on the utility system.

The hypothetical annual billed sewer discharges shown in Column B were based on FY 2022 single family winter average billed water consumption during the months of January – April using data provided by the Beaumont Cherry Valley Water District. The estimated return flow percentage of 47.5% (Column C) reflects the estimated billed sewer discharges returning to the WWTP. The value of 47.5% was required to approximate the total volume of customer sanitary sewer discharges reaching the WWTP after calculating the return flows for all other customer classes.

The Column E and F strength loading assumption of 250 mg/l (milligrams per liter) for BOD and TSS were based on data published by the California State Water Resources Control Board in its Revenue Program Guidelines, March 1998 edition. The TDS estimate of 300 mg/l shown in Column G was provided by City staff. The permitted TDS limit for the City’s wastewater discharge basin is 300 mg/l.

34 CITY OF BEAUMONT 2024 SEWER RATE STUDY
• Multi-Family and Mobile Home-Rural (Line 2): Although multi-family, mobile home or rural customers do not pay $/CCF commodity rates under the existing or proposed sewer rate structure, the volume of flow and the strength loadings they contribute to the WWTP must be estimated in order to equitably reflect the proportionate demands they place on the utility system.

The hypothetical annual billed sewer discharges shown in Column B were based on FY 2022 winter average billed water consumption during the months of January – April using data provided by the Beaumont Cherry Valley Water District. The estimated return flow percentage of 100% (Column C) reflects the estimated billed sewer discharge returning to the WWTP. The value of 100% assumes that the water consumption of multi- family residential customers is for non-discretionary indoor purposes and therefore returns entirely to the WWTP.

The Column E and F strength loading assumption of 250 mg/l for BOD and TSS were based on data published by the California State Water Resources Control Board in its Revenue Program Guidelines, March 1998 edition. The TDS estimate of 300 mg/l shown in Column G was provided by City Staff. The permitted TDS limit for the City’s wastewater discharge basin is 300/mg/l.

• Schools (Line 5): Although schools do not pay $/CCF commodity rates under the existing or proposed sewer rate structure, the volume of flow and the strength loadings they contribute to the WWTP must be estimated in order to equitably reflect the proportionate demands they place on the utility system.

The annual billed sewer discharges shown in Column B were based on FY 2022 billed water consumption during the months of January – April using data provided by the Beaumont Cherry Valley Water District. The estimated return flow percentage of 80% reflects the estimated billed sewer discharge returning to the City of Beaumont’s WWTP. The value of 80% reflects the fact that even during the winter months, some level of school water consumption is used for outdoor irrigation purposes and does not return to the WWTP.

The Column E and F strength loading assumptions of 100 mg/l for BOD and 130 mg/l for TSS were based on data published by the California State Water Resources Control Board in its Revenue Program Guidelines, March 1998 edition. The TDS estimate of 300 mg/l shown in Column G was provided by City staff. The permitted TDS limit for the City’s wastewater discharge basin is 300 mg/l.

• Commercial Low, Medium, and High Strength (Lines 7 – 10): The annual billed sewer discharges shown in Column B were based on FY 2022 billed water consumption during the months of January – April using data provided by the Beaumont Cherry Valley Water District. The estimated return flow percentage of 85% reflects the estimated billed sewer discharge returning to the WWTP as estimated in the City of Beaumont’s Draft 2021 Wastewater Master Plan (see for example, Section 3.2.2 on page 155).

The Column E and F strength loading assumptions for BOD and TSS were based on data, for a selection of different types of commercial sewer customers, published by the California State Water Resources Control Board in its Revenue Program Guidelines, March 1998 edition. A detail of this information which shows how the strength loadings were determined for commercial low, medium, and high strength customers is shown in Table 4-10. The TDS estimates shown in Column G were developed in consultation with City staff and reflect the current best estimate of TDS discharge strengths. Medium and high strength customers are estimated to exceed the 300 mg/l permitted TDS limit for the City’s wastewater discharge basin.

• Industrial Customers (Lines 13 – 18): The flow and strength loading for each industrial customer were provided by City staff. The estimated return flow percentage of 85% reflects the estimated billed sewer discharge returning to the City of Beaumont’s WWTP as estimated in the City of Beaumont’s Draft 2021 Wastewater Master Plan (see for example, Section 3.2.2 on page 155). The flow and strength loading assumptions for each industrial customer were provided by City staff based on their testing of customer sanitary sewer discharges.

35 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-9: Customer Wastewater Treatment Plant Contributions (A) (B) (C) (D) (E) (F) (G) (H) (I) (J)
Line Customer Class
Billed
Flow
(CCF)
Return
Flow
Factor %
Contributions
(CCF)
BOD
(mg/L)
TSS
(mg/L)
TDS
(mg/L)
BOD
Pounds
TSS
Pounds
TDS
Pounds
1 Residential
2 Single Family 2,871,072 47.5% 1,363,387 250 250 300 2,127,831 2,127,831 2,553,397 3 MF & MH-Rural 125,154 100.0% 125,154 250 250 300 195,327 195,327 234,393 4 5 Schools 36,279 80.0% 29,023 130 100 300 23,554 18,119 54,356 6 7 Commercial
8 Low Strength 92,844 85.0% 78,917 140 115 300 68,973 56,656 147,799 9 Medium Strength 43,232 85.0% 36,748 235 175 600 53,911 40,146 137,644 10 High Strength 36,519 85.0% 31,042 933 667 900 180,866 129,190 174,407 11 12 Industrial
13 Dura Plastics Products 1,119 85.0% 951 71 138 480 422 819 2,850 14 Perricone Juice 51,233 85.0% 43,548 1,420 410 1,200 386,042 111,463 326,233 15 Rudolph Food Company 0 85.0% 0 0 0 0 0 0 0
16 CJ Foods #1 51,631 85.0% 43,886 1,775 602 1,700 486,301 164,931 465,753 17 CJ Foods #2 6,075 85.0% 5,164 575 83 1,500 18,535 2,676 48,353 18 Precision Stamping 0 85.0% 0 140 115 300 0 0 0
19 20 Total 3,315,158 1,757,819 3,541,762 2,847,158 4,145,183

Table 4-10: Basis for Commercial BOD and TSS Strength Loadings

(A) (B) (C)
Line Customer Type BOD (mg/L) TSS (mg/L)
1 Commercial Low Strength
2 Professional Office 130 80
3 Department and Retail Store 150 150
4 Average 140 115
5 6 Commercial Medium Strength
7 Repair Shop with Service Station 180 280
8 Bars without Dining Facilities 200 200
9 Hospital and Convalescent 250 100
10 Hotel/Motel without Dining 310 120
11 Average 235 175
12 13 Commercial High Strength
14 Market with Garbage Disposal 800 800
15 Bakery, Wholesale 1,000 600
16 Restaurant 1,000 600
17 Average 933 667

Allocation of Infiltration and Inflow
Before the final calculation of customer class units of service can be finalized, a basis for determining the annual amount of Infiltration and Inflow (I/I) received at the City of Beaumont’s WWTP must be determined. The COS analysis assumes that 4% of the volumes received at the City’s wastewater treatment plant were associated with I/I. Infiltration is water entering the wastewater collection system through leaky sewer pipelines. Inflow is water introduced into the wastewater collection and conveyance system through direct connections such as manhole covers. I/I volumes and strength loadings (if applicable) are allocated to customers because there is a cost to treat the I/I received at the WWTP. This cost must be borne by the customers whose rates pay for the wastewater utility system.

36 CITY OF BEAUMONT 2024 SEWER RATE STUDY
There is no industry-standard, one-size-fits-all approach for the allocation of I/I in every situation. Methods for allocating I/I to customer classes range from relying entirely on the proportionate share of contributed volume from each customer class (100% volume) to relying entirely on the proportionate share of customer accounts/wastewater service connections (100% accounts). The COS analysis allocated I/I to customer classes based 67% on accounts and 33% on contributed volumes. The rationale for this approach is that the majority of infiltration entering the wastewater system is from leaky connections from service lines that connect to individual customer premises. Table 4-11 the percentage allocation of flow based on this allocation approach (Column B). I/I was not assigned any strength loadings. Therefore, no allocation of strength between accounts and flow is necessary for BOD, TSS, or TDS (Columns D, E, and F).

Table 4-11: Allocation of Infiltration and Inflow
(A) (B) (C) (D) (E) (F)
Line
Allocation of I/I to
Accounts & Volume
Percentage
Allocation
Estimated Flow
(CCF)
Estimated COD
Pounds
Estimated
TSS Pounds
Estimated
TDS Pounds
1 % Allocated on Accounts 67% 23,894 0 0 0
2 % Allocated on Flow 33% 47,788 0 0 0
3 Total 100% 71,681 0 0 0

Table 4-12 shows the final calculation of the FY 2024 total system units of service (Line 20) and the individual units of service for each customer class (Lines 2 – 17).

Table 4-12: Units of Service
(A) (B) (C) (D) (E) (F) (G) (H) (I) (H)
Flow (CCF) Strength (Pounds)
Line Customer Class
Contributed
to Treatment
Plant
I/I
Allocated
on Accounts
I/I
Allocated
on Volume
Total
Units
of Flow BOD TSS TDS Accounts

EDUs
1 Residential
2 Single Family 1,363,387 46,418 18,532 1,428,338 2,127,831 2,127,831 2,553,397 17,341 17,341 3 MF & MH-Rural 125,154 196 1,701 127,051 195,327 195,327 234,393 73 2,424 4 Total Residential 1,488,541 46,614 20,234 1,555,389 2,323,158 2,323,158 2,787,790 17,414 19,765 4 5 Schools 29,023 27 395 29,444 23,554 18,119 54,356 10 6 7 Commercial
8 Commercial - Low 78,917 789 1,073 80,779 68,973 56,656 147,799 295 9 Commercial - Medium 36,748 171 500 37,418 53,911 40,146 137,644 64 10 Commercial - High 31,042 171 422 31,634 180,866 129,190 174,407 64 11 Total Commercial 146,706 1,131 1,994 149,831 303,750 225,993 459,850 422 12 13 Industrial
12 Dura Plastics Products 951 3 13 967 422 819 2,850 1 13 Perricone Juice 43,548 3 592 44,143 386,042 111,463 326,233 1 14 Rudolph Food
Company 0 3 0 3 0 0 0 1
15 CJ Foods #1 43,886 3 597 44,485 486,301 164,931 465,753 1 16 CJ Foods #2 5,164 3 70 5,236 18,535 2,676 48,353 1 17 Precision Stamping 0 3 0 3 0 0 0 1
18 Total Industrial 93,549 16 1,272 94,837 891,300 279,889 843,188 6 19 20 Total 1,757,819 47,788 23,894 1,829,501 3,541,762 2,847,158 4,145,183 17,852 19,675

4.6. Unit Cost-of-Service Determination
Having established the units of service shown in

37 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-12, a unit COS can be calculated for each cost causation component. Table 4-13 shows this calculation which for both variable costs (flow and strength in Columns B – F) and fixed costs (Columns F and G). Key things to note about
Table 4-12 include:

• The revenue requirement amounts shown on Line 4 were originally presented in Line 18 of Table 4-8.

• As shown on Line 6 General administrative costs (Column H) were allocated to the customer cost causation component (Line 7 of Column G) because these costs do not vary with the volume or strength of customer sewer discharges.

• The units of service shown on Line 9 can be traced to Line 20 on • Table 4-12.

• The final calculation of the unit COS for each cost causation component is shown in Line 11 of Table 4-13.

The specific calculation is:

Cost Causation Component Total COS (Line 9) / Units of Service (Line 10) = Unit COS (line 11)

Table 4-13: Units Cost-of-Service Calculation
(A) (B) (C) (D) (E) (F) (G) (H) (I)
Variable Fixed
Line Revenue Requirement Component Flow BOD TSS TDS Ind. Admin Customer G&A Total 1 Total Operating Expenses $4,884,558 $1,049,425 $1,049,425 $878,688 $40,738 $162,953 $861,095 $8,926,881 2 Total Capital Costs $2,858,318 $719,178 $719,178 $643,020 $0 $0 $325,243 $5,264,936 3 Total Non-Operating Revenues ($163,375) ($35,100) ($35,100) ($29,390) ($1,363) ($5,450) ($28,801) ($298,580) 4 Total Revenue Requirement $7,579,500 $1,733,502 $1,733,502 $1,492,319 $39,376 $157,502 $1,157,536 $13,893,236 5 6 Allocation of G&A 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 7 Allocation of G&A $0 $0 $0 $0 $0 $1,157,536 ($1,157,536) $0 8 9 Total System Cost of Service $7,579,500 $1,733,502 $1,733,502 $1,492,319 $39,376 $1,315,038 10 Total System Units of Service 1,829,501 3,541,762 2,847,158 4,145,183 6 17,852 11 Unit Cost of Service $4.14 $0.49 $0.61 $0.36 $6,562.59 $73.66 12 Units $/CCF $/lb. $/lb. $/lb. $/Account $/Account

4.7. Customer Class Cost-of-Service
The final step in the COS analysis is the determination of the FY 2024 COS for each customer class as shown in Table 4-14. The is accomplished by the straightforward process of multiplying the unit COS for each cost causation component (Line 11 of Table 4-13) by the customer class units of service summarized in Table 4-12.

38 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 4-14: Customer Class Cost-of-Service
(A) (B) (C) (D) (E) (F) (G) (H) (I)
Variable Fixed % of
Line Class Flow BOD TSS TDS Ind Admin Customer Total Total 1 Residential

2 Single Family $5,917,508 $1,041,459 $1,295,537 $919,255 $0 $1,277,357 $10,451,116 75.2% 3 MF & MH-Rural $526,364 $95,602 $118,926 $84,384 $0 $5,388 $830,664 6.0% 4 Total Residential $6,443,872 $1,137,061 $1,414,463 $1,003,640 $0 $1,282,745 $11,281,780 81.2% 5 6 Schools $121,987 $11,528 $11,032 $19,569 $0 $737 $164,852 1.2% 7 8 Commercial
9 Commercial - Low $334,661 $33,759 $34,495 $53,210 $0 $21,704 $477,828 3.4% 10 Commercial - Medium $155,020 $26,386 $24,443 $49,554 $0 $4,705 $260,108 1.9% 11 Commercial - High $131,059 $88,524 $78,658 $62,789 $0 $4,705 $365,735 2.6% 12 Commercial $620,741 $148,669 $137,596 $165,552 $0 $31,114 $1,103,672 7.9% 13 14 Industrial
15 Dura Plastics Products $4,005 $206 $499 $1,026 $6,563 $74 $12,372 0.1% 16 Perricone Juice $182,880 $188,947 $67,865 $117,448 $6,563 $74 $563,776 4.1% 17 Rudolph Food Company $11 $0 $0 $0 $6,563 $74 $6,647 0.0% 18 CJ Foods #1 $184,300 $238,018 $100,419 $167,677 $6,563 $74 $697,050 5.0% 19 CJ Foods #2 $21,694 $9,072 $1,629 $17,408 $6,563 $74 $56,439 0.4% 20 Precision Stamping $11 $0 $0 $0 $6,563 $74 $6,647 0.0% 21 Industrial $392,902 $436,243 $170,411 $303,558 $39,376 $442 $1,342,932 9.7% 22 23 Total $7,579,500 $1,733,502 $1,733,502 $1,492,319 $39,376 $1,315,038 $13,893,236 100.0%

39 CITY OF BEAUMONT 2024 SEWER RATE STUDY

5. Rate Design

5.1. Monthly Service Charge
The monthly service charge is used to recover the cost of customer service functions and the general and administrative costs incurred to operate the sewer utility. In the case of industrial customers, the monthly service charge is also used to recover the cost of industrial customer administration which involves routine testing of the discharges of high discharge strength customers in the Industrial customer class to ensure compliance with City and other regulatory requirements. Table 5-1 shows the calculation of the proposed FY 2024 monthly service charge. Key points to note include:

• The total revenue requirement that must be recovered from each customer class (Column D) can be traced to Table 4-14.

• Residential customers and schools to not pay commodity charges. Therefore, variable costs allocated to these customer types (Column A) must be recovered through the monthly service charge.

• The billing units shown in Column E can be traced to
• Table 4-12

• The process calculating the rates shown in Column G is:

Revenue requirement (Column D) / Billing Units (Column E) = Proposed $/Month Service Charge (Column G)

Table 5-1: FY 2024 Monthly Service Charge Calculation
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J)
Revenue Requirement
Line Customer Class Variable Fixed Total
Billing
Units
Type of
Billing
Unit
Proposed
$/Month
Current
$/Month $ Change % Change
1 Residential

2 Single Family $9,173,759 $1,277,357 $10,451,116 17,341 EDU $50.22 $47.21 $3.01 6.4% 3 MF & MH-Rural ($/Unit) $825,276 $5,388 $830,664 2,424 EDU $28.55 $29.24 ($0.69) -2.4% 4 5 Schools ($/Student) $164,115 $737 $164,852 12,517 Students $1.10 $1.07 $0.03 2.6% 6 7 Commercial
8 Commercial - Low $21,704 $21,704 295 Accounts $6.14 $25.77 ($19.63) -76.2% 9 Commercial - Medium $4,705 $4,705 64 Accounts $6.14 $47.21 ($41.07) -87.0% 10 Commercial - High $4,705 $4,705 64 Accounts $6.14 $151.07 ($144.93) -95.9% 11 12 Industrial
13 Dura Plastics Products $6,636 $6,636 1 Accounts $553.02 $0.00 $553.02 0.0% 14 Perricone Juice $6,636 $6,636 1 Accounts $553.02 $0.00 $553.02 0.0% 15 Rudolph Food Company $6,636 $6,636 1 Accounts $553.02 $169.27 $383.75 226.7% 16 CJ Foods #1 $6,636 $6,636 1 Accounts $553.02 $0.00 $553.02 0.0% 17 CJ Foods #2 $6,636 $6,636 1 Accounts $553.02 $0.00 $553.02 0.0% 18 Precision Stamping $6,636 $6,636 1 Accounts $553.02 $148.24 $404.78 273.1% 19 20 Total $10,163,150 $1,354,414 $11,517,564

40 CITY OF BEAUMONT 2024 SEWER RATE STUDY

5.2. Commodity Rate
The commodity rate, which is billed on a $/CCF basis, is used to recover the volume of flows and the strength of customer sewer discharges. Table 5-2 shows the calculation of the proposed FY 2024 commodity charges. Key points to note include:

• The total revenue requirement that must be recovered from each customer class (Column D) can be traced to Table 4-14.

• Residential customers and schools to not pay commodity charges. Therefore, these customer classes are not show in in Table 5-2.

• The billing units shown in Column E can be traced to Column B of Table 4-9.

• The process calculating the rates shown in Column G is:

Revenue requirement (Column D) / Billing Units (Column E) = Proposed $/Month Service Charge (Column G)

Table 5-2: FY 2024 Commodity Rate Calculation
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J)
Revenue Requirement
Line Customer Class Variable Fixed Total
Billing
Units
Type of
Billing
Unit
Proposed
$/CCF
Current
$/CCF $ Change % Change
1 Commercial

2 Commercial – Low $456,124 $456,124 92,844 CCF $4.91 $2.77 $2.14 77.4% 3 Commercial – Medium $255,403 $255,403 43,232 CCF $5.91 $3.75 $2.16 57.5% 4 Commercial – High $361,030 $361,030 36,519 CCF $9.88 $7.31 $2.57 35.1% 5 6 Industrial
7 Dura Plastics Products $5,736 $5,736 1,119 CCF $5.13 $3.84 $1.28 33.4% 8 Perricone Juice $557,140 $557,140 51,233 CCF $10.87 $2.94 $7.93 269.3% 9 Rudolph Food Company $11 $11 0 CCF $0.00 $0.00 $0.00 0.0% 10 CJ Foods #1 $690,414 $690,414 51,631 CCF $13.37 $11.07 $2.31 20.8% 11 CJ Foods #2 $49,803 $49,803 6,075 CCF $8.20 $5.71 $2.49 43.5% 12 Precision Stamping $11 $11 0 CCF $0.00 $0.00 $0.00 0.0% 13 14 Total $2,375,672 $0 $2,375,672 3,315,158

5.3. Proposed FY 2024 – FY 2028 Rate Increases
Having established the FY 2024 monthly service charge (Table 5-1) and the FY 2024 commodity charges (Table 5-2), the rates for FY 2025 – FY 2028 must be calculated. The increase in rates each year is tied to the overall annual rate revenue process determined as part of the financial planning process. Table 5-3 shows these increases. Table 5-4 shows the projected rates for FY 2024 – FY 2028.

Table 5-3: Proposed Rate Revenue Increases

(A) (B) (C)
Line Fiscal Year Proposed Rate Revenue Increase Effective Date 1 FY 2024 6.0% September 2023
2 FY 2025 5.0% July 2024
3 FY 2026 3.0% July 2025
4 FY 2027 2.0% July 2026
5 FY 2028 2.0% July 2027

41 CITY OF BEAUMONT 2024 SEWER RATE STUDY
Table 5-4: Proposed Sewer Rates for FY 2022 – FY 2028
Line
Monthly Service Charge
(A) (B) (C) (D) (E) (F) (G)
Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
1 Residential

2 Single Family $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 3 MF & MH–Rural ($/unit) $29.24 $28.55 $29.98 $30.88 $31.50 $32.13 4 5 Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23 6 7 Commercial Customers
8 Commercial - Low Strength $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 9 Commercial - Medium Strength $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 10 Commercial - High Strength $151.07 $6.14 $6.45 $6.64 $6.77 $6.91 11 12 Industrial Customers
13 Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 14 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 15 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 16 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 17 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 18 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 19 20 Proposed Commodity Rates ($/CCF)
21 (A) (B) (C) (D) (E) (F) (G)
22 Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
23 Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
24 Residential

25 Single Family N/A N/A N/A N/A N/A N/A
26 MF & MH–Rural ($/unit) N/A N/A N/A N/A N/A N/A
27 28 Schools ($/student) N/A N/A N/A N/A N/A N/A
29 30 Commercial Customers

31 Commercial - Low Strength $2.77 $4.91 $5.16 `$5.31 $5.42 $5.53 32 Commercial - Medium Strength $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 33 Commercial - High Strength $7.31 $9.88 $10.38 $10.69 $10.90 $11.12 34 35 Industrial Customers
36 Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 37 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 38 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 39 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04 40 CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22 41 Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

5.4. Customer Bill Impacts
Table 5-5 shows estimated customer sewer bills for the period FY 2024 – FY 2028 based on the proposed sewer rates presented in Table 1-4. Key items to note about the rates shown in Table 5-5Table 1-5 include the following:

• Residential Customers and School Estimated Bills (Lines 1 -5): Residential customers and schools do not pay commodity rates. The monthly bills for these customers are based on the proposed change in monthly service charges.

42 CITY OF BEAUMONT 2024 SEWER RATE STUDY
• Commercial Customer Estimated Bills (Lines 7-10): . Commercial customer bills reflect both commodity charges and monthly service charges. The estimated bills for commercial customers assume monthly billed sewer discharges of 40 CCF. This assumption was made for low, medium, and high strength commercial customers. Each commercial customer will have a unique amount of billed sewer discharges. Therefore, the bill impacts shown in Table 1-5 are but one example of an infinite range of potential outcomes.

• Industrial Customer Bills (Lines 12-18): The estimated bills for commercial customers reflect the estimated projected billed discharges applicable to each customer. Industrial customer bills reflect both commodity charges and monthly service charges.

Table 5-5: Estimated Change in Monthly Sewer Bills

Line
Projected Monthly Bills

Customer Class
(A) (B) (C) (D) (E) (F)
Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
1 Residential

2 Single Family $47.21 $50.22 $52.74 $54.32 $55.40 $56.51 3 MF & MH–Rural ($/unit) $29.24 $28.55 $29.97 $30.87 $31.49 $32.12 4 5 Schools ($/student) $1.07 $1.10 $1.15 $1.19 $1.21 $1.23 6 7 Commercial Customers
8 Commercial - Low Strength $136.57 $202.65 $212.78 $219.17 $223.55 $228.02 9 Commercial - Medium Strength $197.21 $242.45 $254.57 $262.21 $267.45 $272.80 10 Commercial - High Strength $443.47 $401.18 $421.24 $433.87 $442.55 $451.40 11 12 Industrial Customers
13 Dura Plastics Products $358.33 $1,031.00 $1,082.55 $1,115.02 $1,137.32 $1,160.07 14 Perricone Juice (Note 1) $13,852.50 $46,981.34 $49,330.41 $50,810.32 $51,826.53 $52,863.06 15 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 16 CJ Foods #1 $47,608.33 $58,087.53 $60,991.91 $62,821.67 $64,078.10 $65,359.66 17 CJ Foods #2 $2,891.67 $4,703.25 $4,938.41 $5,086.56 $5,188.29 $5,292.06 18 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 19 20 Change in Monthly Bills
21 (G) (H) (I) (J) (K) (L)
22 Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 23 Residential
24 Single Family --- $3.01 $2.51 $1.58 $1.09 $1.11
25 MF & MH–Rural ($/unit) --- ($0.69) $1.43 $0.90 $0.62 $0.63 26 27 Schools ($/student) -- $0.03 $0.05 $0.03 $0.02 $0.02 28 29 Commercial Customers

30 Commercial - Low Strength -- $66.08 $10.13 $6.38 $4.38 $4.47 31 Commercial - Medium Strength -- $45.24 $12.12 $7.64 $5.24 $5.35 32 Commercial - High Strength -- ($42.29) $20.06 $12.64 $8.68 $8.85 33 34 Industrial Customers

35 Dura Plastics Products -- $672.66 $51.55 $32.48 $22.30 $22.75 36 Perricone Juice (Note 1) -- $33,128.84 $2,349.07 $1,479.91 $1,016.21 $1,036.53 37 Rudolph Food Company -- $383.75 $27.65 $17.42 $11.96 $12.20 38 CJ Foods #1 -- $10,479.20 $2,904.38 $1,829.76 $1,256.43 $1,281.56 39 CJ Foods #2 -- $1,811.58 $235.16 $148.15 $101.73 $103.77 40 Precision Stamping -- $404.78 $27.65 $17.42 $11.96 $12.20 Note 1: The monthly bills for Perricone Juice (Line 14) and the monthly bill changes (Line 36) reflect the discharge volumes and strength loadings specified in an agreement between Perricone Juice and the City.

City of
Beaumont
Sewer Rate Study
Public Hearing for Sewer Increases
August 15, 2023

Agenda
2 Purpose of the Hearing
Rate Study Process
Financial Planning
Cost-of-Service Analysis
Proposed Rates
Projected Bills

Purpose of
Today’s Hearing
3 Page 124 of 379

Proposition 218 Hearing
to Consider Sewer Rate Changes
•Proposition 218 Procedures
➢Requires public hearing to consider all
protests to proposed rate changes
➢Public hearing can be held no less than
45 days from mailing notice
➢If a majority protest, the proposed rate
changes cannot be adopted
4 •Proposition 218 Requirements
➢Rate revenues cannot exceed costs
➢Rate revenues must be used for utility
service
➢Rates must be proportional to the cost
of providing service
➢Service must be available

Your Sewer Utility
•Operating Facts
›Customers served:
–17,084 single-family residential
–72 multi-family residential
–426 commercial
–6 industrial
›Wastewater treated:
–1.34 billion gallons (FY 2023)
5 •Funding Sources
›Funded entirely by the rates
paid by customers
–Rates pay for all operating costs
–Rates pay for all non-growth
infrastructure investments
›Enterprise fund
–Does not receive money from
taxes

Rate Study Process
6 Page 127 of 379

Rate Study Process
Step 1:

Financial
Planning
How much rate
revenue is
required from
all customers?
Step 2:

Cost of
Service
Analysis
How much
should each
customer class
pay given the
costs they
impose on the
system?
Step 3:

Rate
Design
What rates
should each
customer class
pay to recover
their cost of
service?
7Page 128 of 379

Financial
Planning
8 Page 129 of 379

Proposed Rate Revenue Increases
9 Fiscal Year
Proposed Rate
Revenue Increases Effective Date
2024 6.0%September 2023
2025 5.0%July 2024
2026 3.0%July 2025
2027 2.0%July 2026
2028 2.0%July 2027

Why Are Rate Increases Necessary?
•Inflation:
›Last rate study was completed in 2018. During the period FY 2018 - FY 2023:
–Los Angeles Consumer Price Index for All Urban Consumers increased by 21.07% –Engineering News Record Construction Cost Index for Los Angles increased by 24.76% •Regulatory Requirements:
›Completed a $110 million wastewater treatment plant upgrade to comply with regulatory requirements
•Continuing Capital Improvement Expenditures
10 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total
$7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 $15,674,647Page 131 of 379

Operating Reserve Projected Cash Balances
11 ($8,000,000)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance Operating Reserve Target Balance $0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance Operating Reserve Target Balance Without Proposed Rate Revenue Increases With Proposed Rate Revenue Increases

Cost-of-Service
Analysis
12 Page 133 of 379

What is a Cost-of-Service Analysis?
13 •Process used to allocate costs to different customer classes ➢Different types of customers generate different costs because their usage characteristics vary
o Volume of wastewater discharges
o Strength of wastewater discharges
•Cost of service matches rate revenue recovery to the costs incurred by the utility to provide service
➢Each customer class “pays its own way”
➢Maximizes fairness and equity
➢Eliminates cross subsidies between customer classes

FY 2024
Cost-of-Service
Results
14 Class Total % of Total
Residential
Single Family $10,451,116 75.2%
MF & MH-Rural $830,664 6.0%
Total Residential $11,281,780 81.2%
Schools $164,852 1.2%
Commercial
Commercial - Low $477,828 3.4%
Commercial - Medium $260,108 1.9%
Commercial - High $365,735 2.6%
Commercial $1,103,672 7.9%
Industrial
Dura Plastics Products $12,372 0.1%
Perricone Juice $563,776 4.1%
Rudolph Food Company $6,647 0.0%
CJ Foods #1 $697,050 5.0%
CJ Foods #2 $56,439 0.4%
Precision Stamping $6,647 0.0%
Industrial $1,342,932 9.7%
Total $13,893,236 100.0%Page 135 of 379

Rate Design
15 Page 136 of 379

What is a Rate Design?
16 •Process used to recover required revenues from each customer class ➢The customer class required rate revenue is determined in the cost-of-service analysis
•No fundamental change in the City’s existing sewer rate design ➢Single family residential and multi-family residential continue to pay a fixed service charge (no commodity rates)
➢Schools continue to pay on a per student basis
➢Commercial and industrial customers continue to have a monthly service charge and commodity rates

Proposed Monthly Service Charges
17 Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
Residential
Single Family $47.21 $50.22 $52.73 $54.31 $55.40 $56.51 MF & MH–Rural ($/unit)$29.24 $28.55 $29.98 $30.88 $31.50 $32.13 Schools ($/student)$1.07 $1.10 $1.15 $1.19 $1.21 $1.23
Commercial Customers
Commercial - Low Strength $25.77 $6.14 $6.45 $6.64 $6.77 $6.91 Commercial - Medium Strength $47.21 $6.14 $6.45 $6.64 $6.77 $6.91 Commercial - High Strength $151.07 $6.14 $6.45 $6.64 $6.77 $6.91 Industrial Customers
Dura Plastics Products N/A $553.02 $580.67 $598.09 $610.05 $622.26 Perricone Juice N/A $553.02 $580.67 $598.09 $610.05 $622.26 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #1 N/A $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #2 N/A $553.02 $580.67 $598.09 $610.05 $622.26 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26 Page 138 of 379

Projected Commodity Rates ($/CCF)
18 Customer Class Current
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Effective
9/1/23
Effective
7/1/24
Effective
7/1/25
Effective
7/1/26
Effective
7/1/27
Residential
Single Family N/A N/A N/A N/A N/A N/A
MF & MH–Rural ($/unit)N/A N/A N/A N/A N/A N/A
Schools ($/student)N/A N/A N/A N/A N/A N/A
Commercial Customers (40 CCF)
Commercial - Low Strength $2.77 $4.91 $5.16 `$5.31 $5.42 $5.53 Commercial - Medium Strength $3.75 $5.91 $6.20 $6.39 $6.52 $6.65 Commercial - High Strength $7.31 $9.88 $10.38 $10.69 $10.90 $11.12 Industrial Customers
Dura Plastics Products $3.84 $5.13 $5.38 $5.54 $5.65 $5.77 Perricone Juice $2.94 $10.87 $11.42 $11.76 $11.99 $12.23 Rudolph Food Company $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 CJ Foods #1 $11.07 $13.37 $14.04 $14.46 $14.75 $15.04
CJ Foods #2 $5.71 $8.20 $8.61 $8.87 $9.04 $9.22
Precision Stamping $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Page 139 of 379

Projected Monthly Bills
19 Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Residential
Single Family $47.21 $50.22 $52.74 $54.32 $55.40 $56.51 MF & MH–Rural ($/unit)$29.24 $28.55 $29.97 $30.87 $31.49 $32.12 Schools ($/student)$1.07 $1.10 $1.15 $1.19 $1.21 $1.23
Commercial Customers
Commercial - Low Strength $136.57 $202.65 $212.78 $219.17 $223.55 $228.02 Commercial - Medium Strength $197.21 $242.45 $254.57 $262.21 $267.45 $272.80 Commercial - High Strength $443.47 $401.18 $421.24 $433.87 $442.55 $451.40 Industrial Customers
Dura Plastics Products $358.33 $1,031.00 $1,082.55 $1,115.02 $1,137.32 $1,160.07 Perricone Juice $13,852.50 $46,981.34 $49,330.41 $50,810.32 $51,826.53 $52,863.06 Rudolph Food Company $169.27 $553.02 $580.67 $598.09 $610.05 $622.26 CJ Foods #1 $47,608.33 $58,087.53 $60,991.91 $62,821.67 $64,078.10 $65,359.66 CJ Foods #2 $2,891.67 $4,703.25 $4,938.41 $5,086.56 $5,188.29 $5,292.06 Precision Stamping $148.24 $553.02 $580.67 $598.09 $610.05 $622.26

2020 Page 141 of 379

Staff Report

TO: City Council
FROM: Jeff Hart, Public Works Director
DATE August 15, 2023
SUBJECT: First Reading of an Ordinance Rescinding Ordinance No. 1091 and Amending Chapter 3.39 of the Beaumont Municipal Code – Western Riverside County Transportation Uniform Mitigation Fee Program

Description Amendment of Chapter 3.39, Section 060 “Procedures for the Levy, Collection and Disposition of Fees,” to authorize TUMF fees to be collected directly by WRCOG from the developers from the effective date of this ordinance forward.

Background and Analysis:

The City of Beaumont is a Member Jurisdiction of the Western Riverside Council of Governments (“WRCOG”), a joint powers agency comprised of the County of Riverside and eighteen (18) cities located in Western Riverside County. Acting in concert, in 2002-2003, WRCOG member jurisdictions developed a plan whereby the shortfall in funds needed to enlarge the capacity of the Regional System of Highways and Arterials due to new development in Western Riverside County could be made up in part by a Transportation Uniform Mitigation Fee (“TUMF”) on future residential, commercial, and industrial development.

Currently, staff calculates TUMF fees for all development projects. Applicable fees are due at the issuance of a Certificate of Occupancy, but the developer m ay elect to pay as early as issuance of a building permit. Fees are remitted to WRCOG monthly, and building permits are audited on a yearly basis.

The process to calculate TUMF fees for non-residential uses can be tedious and time consuming. Additionally, under the current process and as defined in the TUMF Administrative Plan, “Any balance in TUMF obligation due to incorrect development project information will be the responsibility of the participating jurisdiction.”

Staff is proposing to modify the process in which TUMF fees are calculated and payment is processed. WRCOG created a process in 2017 which allows for WRCOG staff to calculate applicable TUMF fees for all development projects as well as accept

payment should the participating agency elect to do so and modify their respective ordinances accordingly.

Converting the manner which TUMF fees are calculated and paid directly to WRCOG significantly reduces the risk of the City being responsible for any incorrect fee calculations. Under the proposed process and consistent with the TUMF Administrative Plan, “In the event a participating jurisdiction makes the election to have WRCOG calculate and collect TUMF, WRCOG shall take full responsibility for calculating the TUMF obligation and any shortfall in the calculation shall not be the responsibility of the participating jurisdiction.”

Existing, and future credit agreements for the benefit of City improvements will still be managed and reported monthly by City staff, consistent with the current procedure.

Staff is recommending that City Council approve amending section 060 of Chapter 3.39 to allow TUMF fees to be calculated and processed directly by WRCOG.

Fiscal Impact:

The cost of preparing the staff report is estimated to be $500.

Recommended Action:

Waive the full first reading of “An Ordinance of the City of Beaumont, California Amending Section 060 Beaumont Municipal Code Section 3.39 To Include a Process Whereby the Western Riverside Council of Governments (WRCOG) Shall Calculate and Collect Fees Under the Western Riverside County Transportation Uniform Mitigation Fee (TUMF) Program Directly”
Attachments:

A. Proposed Ordinance
B. Public Notice

1 ORDINANCE NO. _______

AN ORDINANCE OF THE CITY OF BEAUMONT, CALIFORNIA
AMENDING SECTION 060 OF BEAUMONT MUNICIPAL CODE
SECTION 3.39 TO INCLUDE A PROCESS WHEREBY

WESTERN RIVERSIDE COUNCIL OF GOVERNMENTS
(WRCOG) SHALL CALCULATE AND COLLECT OF FEES

UNDER THE WESTERN RIVERSIDE COUNTY

TRANSPORTATION UNIFORM MITIGATION FEE (TUMF)

PROGRAM DIRECTLY

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BEAUMONT DOES ORDAIN AS FOLLOWS:

SECTION 1. CEQA. The City Council finds that the actions contemplated by this Ordinance are exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15060 (c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.

SECTION 2. Severability. The City Council hereby declares that if any provision, section, paragraph, sentence, or word of this Ordinance is rendered or declared to be invalid or unconstitutional by any final court action in a court of competent jurisdiction, or by reason of any preemptive legislation, such invalidity shall not affect the other provisions, sections, paragraphs, sentences or words of this Ordinance, and to this end the provisions of this Ordinance are severable. The City Council declares that it would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance enforced.

SECTION 3. Findings. The City Council of the City of Beaumont (the “City”) is a member agency of the Western Riverside Council of Governments (“WRCOG”), a joint powers agency comprised of the County of Riverside and 18 cities located in Western Riverside County. Acting in concert, the WRCOG Member Agencies WRCOG developed a plan whereby the shortfall in funds needed to enlarge the capacity of the Regional System of Highways and Arterials in Western Riverside County could be made up in part by a Transportation Uniform Mitigation Fee (“TUMF”) on future residential, commercial and industrial development; and WRCOG, upon the recommendation of the WRCOG Executive Committee, has adopted a process in which WRCOG calculates and collects TUMF on behalf of member agencies directly from the developer upon which the fee is imposed under the Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance of 2018 and the City Council so desires WRCOG to collect the TUMF on behalf of the City.

2 SECTION 4. No provisions of this Ordinance shall entitle any person who has already paid the TUMF to receive a refund, credit or reimbursement of such payment. This Ordinance does not create any new TUMF.

SECTION 5. Chapter 3.39 is hereby amended and restated in full to read as follows:

3.39.010. Title.

This Ordinance shall be known as the “Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance of 2017” (“Ordinance”).

3.39.020. Findings.

A. The City is a member agency of the Western Riverside Council of Governments (“WRCOG”), a joint powers agency comprised of the County of Riverside and 18 cities located in Western Riverside County. Acting in concert, the WRCOG Member Agencies developed a plan whereby the shortfall in funds needed to enlarge the capacity of the Regional System of Highways and Arterials in Western Riverside County (the “Regional System”) could be made up in part by a Transportation Uniform Mitigation Fee (“TUMF”) on future residential, commercial and industrial development. A map depicting the boundaries of Western Riverside County and the Regional System is attached here as Exhibit “A” and incorporated herein.

B. WRCOG, with the assistance of TUMF Participating Jurisdictions, has prepared an updated nexus study entitled “Transportation Uniform Mitigation Fee Nexus Study: 2016 Update” (“2016 Nexus Study”) pursuant to California Government Code sections 66000 et seq. (the Mitigation Fee Act), for the purpose of updating the fees. On July 10, 2017, the WRCOG Executive Committee reviewed the 2016 Nexus Study and TUMF Program and recommended TUMF Participating Jurisdictions amend their applicable TUMF ordinances to ref lect changes in the TUMF network and the cost of construction in order to update the TUMF Program.

C. The City Council has been informed and advised, and hereby finds, that if the capacity of the Regional System is not enlarged and unless development contributes to the cost of improving the Regional System, the result will be substantial traffic congestion in all parts of Western Riverside County, with unacceptable Levels of Service. Furthermore, the failure to mitigate growing traffic impacts on the Regional System will substantially impair the ability of public safety services (police and fire) to respond and, thus, adversely affect the public health, safety and welfare. Therefore, continuation of a TUMF Program is essential.

D. The City Council finds and determines that there is a reasonable and rational relationship between the use of the TUMF and the type of development projects on which the fees are imposed because the fees will be used to construct the transportation improvements that are necessary for the safety, health and welfare of the residential and non-residential users of the development in which the TUMF will be levied.

E. The City Council finds and determines that there is a reasonable and rational relationship between the need for the improvements to the Regional System and the type of development projects on which the TUMF is imposed because it will be necessary for the residential and non-residential users of such projects to have access to the Regional system.

Such development will benefit from the Regional System improvements and the burden of such developments will be mitigated in part by payment of the TUMF.

3 F. The City Council finds and determines that the cost estimates set forth in the new 2016 Nexus Study are reasonable cost estimates for constructing the Regional System improvements and the facilities that compromise the Regional System, and that the amount of the TUMF expected to be generated by new development will not exceed the total fair share cost to such development.

G. The fees collected pursuant to this Chapter shall be used to help pay for the design, planning, construction of and real acquisition for the Regional System improvements and its facilities as identified in the 2016 Nexus Study. The need for the improvements and facilities is related to new development because such development results in additional traffic and creates the demand for the improvements.

H. By notice duly given and published, the City Council set the time and place for a public hearing on the 2016 Nexus Study and the fees proposed thereunder and at least ten (10) days prior to this hearing, the City Council made the 2016 Nexus Study available to the public.

I. At the time and place set for the hearing, the City Council duly considered data and information provided by the public relative to the cost of the improvements and facilities for which the fees are proposed and all other comments, whether written or oral, submitted prior to the conclusion of the hearing.

J. The City Council finds that the 2016 Nexus Study proposes a fair and equitable method for distributing a portion of the unfunded costs of improvements and facilities to the Regional system.

K. The City Council hereby adopts the 2016 Nexus Study and its findings. The 2016 Nexus Study is attached and incorporated herein as Exhibit “B.”

3.39.030. Definitions.

For the purpose of this Ordinance, the following words, terms and phrases shall have the following meanings:

A. “Class ‘A’ Office” means an office building that is typically characterized by high quality design, use of high end building materials, state of the art technology for voice and data, on site support services/maintenance, and often includes full service ancillary uses such as, but not limited to a bank, restaurant/office coffee shop, health club, printing shop, and reserved parking. The minimum requirements of an office building classified as Class ‘A” Office shall be as follows: (i) minimum of three stories (exception will be made for March JPA, where height requirements exist); (ii) minimum of 10,000 square feet per floor; (iii) steel frame construction; (iv) central, interior lobby; and (v) access to suites shall be from inside the building unless the building is located in a central business district with major foot traffic, in which case the first floor may be accessed from the street to provide entrances/ exits for commercial uses within the building.

B. “Class ‘B’ Office” means an office building that is typically characterized by high quality design, use of high end building materials, state of the art technology for voice and data, on site support services/maintenance, and often includes full service ancillary uses such as, but not limited to a bank, restaurant/office coffee shop, health club, printing shop, and reserved parking. The minimum requirements of an office building classified as Class ‘B” Office shall be as follows: (i) minimum of two stories; (ii) minimum of 15,000 square feet per floor; (iii) steel

4 frame, concrete or masonry shell construction; (iv) central, interior lobby; and (v) access to suites shall be from inside the building unless the building is located in a central business district with major foot traffic, in which case the first floor may be accessed from the street to provide entrances/exits for commercial uses within the building.

C. “Development Project” or “Project” means any project undertaken for the purposes of development, including the issuance of a permit for construction.

D. “Gross Acreage” means the total property area as shown on a land division of a map of record, or described through a recorded legal description of the property. This area shall be bounded by road rights of way and property lines.

E. “Habitable Structure” means any structure or part thereof where persons reside, congregate or work and which is legally occupied in whole or part in accordance with applicable building codes, and state and local laws.

F. “Industrial Project” means any development project that proposes any industrial or manufacturing use allowed in the following Ordinance No. 1016 zoning classifications: I-P, M, M-S-C, M-M, M-H, M-R, M-R-A, A-1, A-P, A-2, A-D, W-E, or SP with one of the aforementioned zones used as the base zone.

G. “Low Income Residential Housing” means ”Residential Affordable Units”: (A) for rental housing, the units shall be made available, rented and restricted to “lower income households” (as defined in Health and Safety Code Section 50079.5) at an “affordable rent” (as defined in Health and Safety Code Section 50053), ). Affordable units that are rental housing shall be made available, rented, and restricted to lower income households at an affordable rent for a period of at least fifty-five (55) years after the issuance of a certificate of occupancy for new residential development. and (B) for for-sale housing, the units shall be sold to “persons or families of low or moderate income” (as defined in Health and Safety Code Section 50093) at a purchase price that will not cause the purchaser’s monthly housing cost to exceed “affordable housing cost (as defined in Health and Safety Code Section 50052.5) Affordable units that are for-sale housing units shall be restricted to ownership by persons and families of low or moderate income for at least forty-five (45) years after the issuance of a certificate of occupancy for the new residential development.

H. “Multi-Family Residential Unit” means a development project that has a density of greater than eight (8) residential dwelling units per gross acre.

I. “Non-Residential Unit” means retail commercial, service commercial and industrial development which is designed primarily for non-dwelling use, but shall include hotels and motels.

J. “Recognized Financing District” means a Financing District as defined in the TUMF Administrative Plan as may be amended from time to time.

K. “Residential Dwelling Unit” means a building or portion thereof used by one (1) family and containing but one (1) kitchen, which is designed primarily for residential occupancy including single-family and multi-family dwellings. “Residential Dwelling Unit” shall not include hotels or motels.

5 L. “Retail Commercial Project” means any development project that proposes any retail commercial activity use not defined as a service commercial project allowed in the following Ordinance No. 1016 classifications: R-1, R-R, R-R-O, R-1-A, R-A, R-2, R-2-A, R-3, R- 3-A, R-T, R-T-R, R-4, R-5, R-6, C-1/C-P, C-T, C-P-S, C-R, C-O, R-V-C, C-V, W-2, R-D, N-A, W- 2-M, W -1, CC, CG or SP with one of the aforementioned zones used as the base zone, which can include any eating/dining facility residing on the retail commercial development premises.

M. “Service Commercial Project” means any development project that is predominately dedicated to business activities associated with professional or administrative services, and typically consists of corporate offices, financial institutions, legal, and medical offices eating/dining facilities, and other uses related to personal or professional services.

N. “Single Family Residential Unit” means each residential dwelling unit in a development that has a density of eight (8) units to the gross acre or less.

O. “TUMF Participating Jurisdiction” means a jurisdiction in Western Riverside County which has adopted and implemented an ordinance authorizing participation in the TUMF Program and complies with all regulations established in the TUMF Administrative Plan, as adopted and amended from time to time by the WRCOG.

P. “Disabled Veteran” means any veteran who is retired or is in process of medical retirement from military service who is or was severely injured in a theatre of combat operations and has or received a letter of eligibility for the Veterans Administration Specially Adapted Housing (SAH) Grant Program.

Q. Government/public buildings, public schools, and public facilities means any owned and operated facilities by a government entity in accordance with Section G.

Exemptions, Subsection 2. of this Ordinance. A new development that is subject to a long-term lease with a government agency for government/public buildings, public schools, and public facilities shall apply only if all of the following conditions are met:
(a) The new development being constructed is subject to a long-term lease with a government agency.
(b) The project shall have a deed restriction placed on the property that limits the use to government/public facility for the term of the lease, including all extension options, for a period of not less than 20 years. Any change in the use of the facility from government shall trigger the payment of the TUMF in effect at the time of the change is made.
(c) No less than ninety percent of the total square footage of the building is leased to the government agency during the term of deed restriction the long term and any extensions thereof.
(d) The new development is constructed at prevailing wage rates. (e) A copy of the lease is provided to the applicable jurisdiction and to WRCOG.
(f) Based on the facts and circumstances WRCOG determines that the intent of the lease is to provide for a long-term government use, and not to evade payment of TUMF.

R. “Non-profit Organization” means an organization operated exclusively for exempt purposes set forth in section 501(c)(3) of the Internal Revenue Code, and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial port of its activities

6 and it may not participate in any campaign activity for or against political candidates. For the purposes of the TUMF Program, the non-profit may be a 501(c) (3) charitable organization as defined by the Internal Revenue Service.

S. “Long-Term Lease” as used in the TUMF Program, a “long-term lease” shall mean a lease with a term of no less than twenty years.

T. “Mixed-Use Development” as used in the TUMF Program, means Developments with the following criteria: (1) three or more significant revenue-producing uses, and (2) significant physical and functional integration of project components.

U. “Guest Dwellings” and “Detached Second Units” according to the State of California legal definition as following: 1) The second unit is not intended for sale and may be rented; 2) The lot is zoned for single-family dwellings; 3) The lot contains an existing single- family dwelling; 4) The second unit is either attached to the existing dwelling and located within the living area of the existing dwelling or detached from the existing dwelling and located on the same lot as the existing dwelling; and 5) Are ministerially amended by each jurisdiction’s local codes.
.V. “TUMF Administrative Plan” means that the TUMF Administration Plan adopted by the WRCOG Execution Committee May 5, 2003, as amended, setting forth detailed administration procedures and requirements f or the TUMF program.

3.39.040. Establishment of the Transportation Uniform Mitigation Fee.

A. Adoption of TUMF Schedule. The City Council shall adopt an applicable TUMF schedule through a separate resolution, which may be amended from time to time.

B. Fee Calculation. The fees shall be calculated according to the calculation methodology fee set forth in the WRCOG TUMF Fee Calculation Handbook adopted July 14, 2003, as amended from time to time. In addition to data in the Fee Calculation Handbook, WRCOG Staff and the local agency may consider the following items when establishing the appropriate fee calculation methodology:

 Underlying zoning of the site
 Land-use classifications in the latest Nexus Study
 Project specific traffic studies
 Latest Standardized reference manuals such as the Institute of Traffic Engineers Trip Generation Manual
 Previous TUMF calculations for similar uses
 WRCOG staff shall approve final draft credit / reimbursement agreement prior to execution

WRCOG shall have final determination regarding the appropriate methodology to calculate the fee based on the information provided. In case of a conflict between the applicant, WRCOG, and/or the local agency regarding the fee calculation methodology, the dispute resolution process in the TUMF Administrative Plan will apply.

C. Fee Adjustment. The fee schedule may be periodically reviewed and the amounts adjusted by the WRCOG Executive Committee. By amendment to the Resolution

7 referenced as subsection A, above, the fees may be increased or decreased to reflect the changes in actual and estimated costs of the Regional System including, but not limited to, debt service, lease payments and construction costs. The adjustment of the fees may also reflect changes in the facilities required to be constructed, in estimated revenues received pursuant to this Ordinance, as well as the availability or lack thereof of other funds with which to construct the Regional System. WRCOG shall review the TUMF Program no less than every four (4) years after the effective date of this Ordinance.

D. Purpose. The purpose of the TUMF is to fund those certain improvements to the Regional System as depicted in Exhibit “A” and identified in the 2016 Nexus Study, Exhibit “B.”

E. Applicability. The TUMF shall apply to all new development within the City, unless otherwise exempt hereunder.

F. Exemptions. The following types of new development shall be exempt from the provisions of this Ordinance and in TUMF Administrative Plan:

1. Low income residential housing as described in Section 3 Definitions, Subsection G of this Ordinance and in the TUMF Administrative Plan.

2. Government/public buildings, public schools, and public facilities as described in Section 3. Definitions, Subsection Q. of this Ordinance and in the TUMF Administrative Plan. Airports that are public use airports and are appropriately permitted by Caltrans or other state agency.

3. Development Projects which are the subject of a Public Facilities Development Agreement entered into pursuant to Government Code section 65864 et seq, prior to the effective date of Ordinance No. 839, wherein the imposition of new fees are expressly prohibited, provided that if the term of such a Development Agreement is extended by amendment or by any other manner after the effective date of Ordinance No. 839, the TUMF shall be imposed.

4. The rehabilitation and/or reconstruction of any habitable structure in use on or after January 1, 2000, provided that the same or fewer traffic trips are generated as a result thereof.

5. Guest Dwellings and Detached Second Units as described in this Ordinance in Section 3. Definitions, Subsection U. and in the Administrative Plan

6. Kennels and Catteries established in connection with an existing single family residential unit.

7. Any sanctuary, or other activity under the same roof of a church or other house of worship that is not revenue generating and is eligible for a property tax exemption (excluding concert venues, coffee/snack shops, book stores, for-profit pre- school day-cares, etc., which would be assessed TUMF.)

8. Any nonprofit corporation or nonprofit organization offering and conducting full-time day school at the elementary, middle school or high school level for students between the ages of five and eighteen years.

9. New single-family homes, constructed by non-profit organizations, specially adapted and designed for maximum freedom of movement and independent living for qualified Disabled Veterans.”

10. Other uses may be exempt as determined by the WRCOG Executive Committee as further defined in the TUMF Administrative Plan.

8 G. Credit. Regional System improvements may be credited toward the TUMF in accordance with the TUMF Administrative Plan and the following:

Regional Tier
i. Arterial Credits: If a developer constructs arterial improvements identified on the Regional System, the developer shall receive credit for all costs associated with the arterial component based on approved Nexus Study for the Regional System effective at the time the credit agreement is entered into. WRCOG staff must pre-approve any credit agreements that deviate from the standard WRCOG approved format.
ii. Other Credits: In special circumstances, when a developer constructs off-site improvements such as an interchange, bridge, or railroad grade separation, credits shall be determined by WRCOG and the City in consultation with the developer.

All such credits must have prior written approval from WRCOG. iii. The amount of the development fee credit shall not exceed the maximum amount determined by the Nexus Study for the Regional System at the time the credit agreement is entered into or actual costs, whichever is less.

Local Tier
i. The local jurisdictions shall compare facilities in local fee programs against the Regional System and eliminate any overlap in its local fee program except where there is a Recognized Financing District has been established. ii. If there is a Recognized Financing District established, the local agency may credit that portion of the facility identified in both programs against the TUMF in accordance with the TUMF Administrative Plan.

3.39.050. Reimbursements.

Should the developer construct Regional System improvements in excess of the TUMF fee obligation, the developer may be reimbursed based on actual costs or the approved Nexus Study effective at the time the agreement was entered into, whichever is less. Reimbursements shall be enacted through an agreement between the developer and the City, contingent on funds being available and approved by WRCOG. In all cases, however, reimbursements under such special agreements must coincide with construction of the transportation improvements as scheduled in the five-year Zone Transportation Improvement Program’s adopted annually by WRCOG.

3.39.060. Procedures for the Levy, Collection and Disposition of Fees.

A. Authority of the Building Department. The Director of Building & Safety, or his/her designee, is hereby authorized provide WRCOG with development project specifics for the calculation of TUMF in a manner consistent with the TUMF Administrative Plan.

B. Payment and Collection. Payment of the fees shall be as follows:

i. All fees collected hereunder shall be collected by WRCOG directly from the developer for deposit, investment, accounting and expenditure in accordance with the provisions of this Ordinance, TUMF Administrative Plan, and the Mitigation Fee Act.

ii. The TUMF fees shall be paid by the developer to WRCOG at the time a certificate of occupancy is issued for the Development Project or upon final inspection,

9 whichever comes first (the “Payment Date”). However this section should not be construed to prevent payment of the TUMF fees by the developer to WRCOG prior to issuance of an certificate of occupancy or final inspection. TUMF fees may be paid at the issuance of a building permit, and the fee payment shall be calculated based on the TUMF fee in effect at that time, provided the developer tenders the full amount of his/her TUMF obligation. If the developer makes only a partial payment prior to the Payment Date, the amount of the fee due shall be based on the TUMF fee schedule in place on the Payment Date. The fees shall be calculated according to fee schedule set forth in the Ordinance and the calculation methodology set forth in the Fee Calculation Handbook adopted July 14, 2003, as amended from time to time.

iii. The fees required to be paid shall be the fee amounts in effect at the time of payment is due under this Ordinance, not the date the Ordinance is initially adopted.

The City shall not enter into a development agreement which freezes future adjustments of the TUMF.

iv. If all or part of any development project is sold prior to payment of the fee, the property shall continue to be subject to the requirement for payment of the fee. The obligation to pay the fee shall run with the land and be binding on all the successors in interest to the property.

v. Fees shall not be waived.

C. Issuance of Certificate of Occupancy. The City shall not issue a certificate of occupancy for any Development Project until WRCOG has provided written evidence that it has collected the fee.

D. Appeals. Appeals shall be filed with WRCOG in accordance with the provisions of the TUMF Administrative Plan. Appealable issues shall be the application of the fee, application of credits, application of reimbursement, application of the legal action stay and application of exemption.

E. Reports to WRCOG. The Director of Building and Safety, or his/her designee, shall prepare and deliver to the Executive Director of WRCOG, periodic reports as will be established under Section 7 of this Ordinance.

3.39.070. Appointment of the TUMF Administrator.

WRCOG is hereby appointed as the Administrator of the Transportation Uniform Mitigation Fee Program. WRCOG is hereby authorized to receive all fees generated from the TUMF within the City, and to invest, account for and expend such fees in accordance with the provisions of this Ordinance and the Mitigation Fee Act. The detailed administrative procedures concerning the implementation of this Ordnance shall be contained in the TUMF Administrative Plan.

Furthermore, the TUMF Administrator shall use the Fee Calculation Handbook adopted July 14, 2003, as amended from time to time, for the purpose of calculating a developer’s TUMF obligation. In addition to detailing the methodology for calculating all TUMF obligations of different categories of new development, the purpose of the Fee Calculation Handbook is to clarify for the TUMF Administrator, where necessary, the definition and calculation methodology for uses not clearly defined in the respective TUMF ordinances.

10 WRCOG shall expend only that amount of the funds generated from the TUMF for staff support, audit, administrative expenses, and contract services that are necessary and reasonable to carry out its responsibilities and in no case shall the funds expended for salaries and benefits exceed one percent (1%) of the revenue raised by the TUMF Program. The TUMF Administrative Plan further outlines the fiscal responsibilities and limitations of the Administrator.

SECTION 6. Effective Date.

This Ordinance shall take effect thirty (30) days after its adoption.

INTRODUCED and READ for the first time and ordered posted at a regular meeting of the City Council of the City of Beaumont, California, held upon this ____ day of ____ 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Beaumont, California, held on the ___ day of _______, 2023.

AYES:

NOES:

ABSTAIN:

ABSENT:

Julio Martinez III, Mayor

Attest:

Nicole Wheelwright, Deputy City Clerk

Approved as to from:

John O. Pinkney, City Attorney

11

TUMF Ord (5209298) - Page 1 of 1
3512 14 Street
Riverside, California 92501
(951) 368-9229
[email protected]
City of Beaumont
550 E. 6th Street
Beaumont, California 92223
Account Number:5209298
Ad Order Number:0011617076
Customer's Reference/PO Number:

Publication:The Press-Enterprise
Publication Dates:08/04/2023
Total Amount:$236.84
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Amount Due:$236.84
Notice ID:xVcKDws7TIOA0z1iQiO4
Invoice Text:On August 15, 2023 at approximately 6:00 p.m. at the City of Beaumont Council meeting, in City Council Chambers at City of Beaumont Civic Center, 550 E 6th Street, Beaumont, Ca 92223, the Council will consider the following matter: AN

ORDINANCE OF THE CITY OF BEAUMONT AMENDING AMENDING SECTION 060 OF ORDINANCE NO. 1091 TO INCLUDE A PROCESS WHEREBY WRCOG

SHALL CALCULATE AND COLLECT OF FEES UNDER THE WESTERN

RIVERSIDE COUNTY TRANSPORTATION UNIFORM MITIGATION FEE (TUMF) PROGRAM INSTEAD OF THE CITY The City of Beaumont seeks to amend Ordinance No. 1091, Section 060 “Procedures for the Levy, Collection and Disposition of Fees,” to authorize the TUMF fees to be collected by WRCOG directly from the developers from the effective date of this Ordinance forward. The Council will conduct a public hearing to receive testimony and comments from all interested persons. Public comments can be made in person, using the public comment phone line or by written email. Phone-in comments will be accepted by calling the designated public comment phone line (951) 922-4845 prior to the corresponding item. Public comments shall not exceed three minutes unless otherwise authorized by City Council. Written comments can be emailed to [email protected] Public comments accepted via email will be read aloud during the corresponding item of the meeting. Comments can be submitted anytime prior to the meeting as well as during the meeting until the end of the corresponding item. This meeting will be conducted in person and also and will be recorded for live streaming. All City of Beaumont public meetings will be made available via live streaming and made available on the City’s

TUMF Ord (5209298) - Page 1 of 1
The Press-Enterprise
3512 14 Street
Riverside, California 92501
(951) 368-9229
City of Beaumont
550 E. 6th Street
Beaumont, California 92223
Publication: The Press-Enterprise

PROOF OF PUBLICATION OF
Ad Desc: 0011617076
FILE NO. 0011617076

PROOF OF PUBLICATION
I am a citizen of the United States. I
am over the age of eighteen years and
not party to or interested in the above-
entitled matter. I am an authorized
representative of THE PRESS-
ENTERPRISE, a newspaper of general
circulation, printed and published daily
in the County of Riverside, and which
newspaper has been adjudicated a
newspaper of general circulation by the
Superior Court of the County of
Riverside, State of California, under
date of April 25, 1952, Case Number
54446, under date of March 29, 1957,
Case Number 65673, under date of
August 25, 1995, Case Number
267864, and under date of September
16, 2013, Case Number RIC 1309013;
that the notice, of which the annexed is
a printed copy, has been published in
said newspaper in accordance with the
instructions of the person(s) requesting
publication, and not in any supplement
thereof on the following dates, to wit:
08/04/2023
I certify (or declare) under the penalty
of perjury that the foregoing is true and
correct.

Date: August 4, 2023.

At: Riverside, California
______________________________
Signature

Staff Report

TO: City Council
FROM: Thaxton Van Belle, Director of W ater Reclamation DATE August 15, 2023
SUBJECT: Award a Professional Services Agreement in an Amount Not-to-Exceed $997,160 to Tom Dodson & Associates for the Preparation of an Adaptive Management and Mitigation Plan

Description Prepare an Adaptive Management and Mitigation Plan as part of the process of implementing a recycled water program.

Background and Analysis:

The purpose of this Adaptive Management and Mitigation Plan (AMMP) is to provide a framework for implementing the City of Beaumont (City) recycled water program with flows from the City’s wastewater reclamation plant, currently discharging to Cooper’s Creek.

On June 8, 2023, staff released a request for proposals (RFP) for an Adaptive Management and Mitigation Plan. The time frame for responses was extended two weeks after feedback through the bid portal site. A total of thirty-five (35) firms accessed the proposal. Upon closing of the RFP on July 25, 2023, the City received a single proposal from Tom Dodson & Associates.

Staff has reviewed the proposal from Tom Dodson & Associates and found it complete with additional recommended elements for time savings and completeness. Tom Dodson & Associates has substantial experience in this narrow field with solid references and recommendations from peers. Staff interviewed the firm and its partners on August 10, 2023, and found them to be knowledgeable and committed to the City’s goals.

Tom Dodson & Associates proposed a three (3) phase approach to the project. The first phase consists of characterizing historical and current conditions to support the development of the AMMP. The second phase is a feasibility assessment incorporating the first phase findings and implementation of baseline monitoring. The third phase is the preparation of the AMMP and the continuation of baseline monitoring.

The proposal was presented to the RFP subcommittee for their approval.

Tom Dodson & Associates provided pricing with the following table that includes three phases to complete.

Recommended Budget for Tasks Performed
Phase 1 $267,160
Phase 2 $589,000
Phase 3 $141,000
Total $997,160

Fiscal Impact:

The estimated cost to prepare this report is $350.

The cost for the Adaptive Management and Mitigation Plan will be paid using recycled water capacity fees from CIP WW -14 which has a total allocation of $2,100,000.

WW-14 Adaptive Management and Mitigation Plan Project Accounting Summary
Funding Summary
Funding Year Funding Source Amount
23/24 Recycled Water DIF $2,100,000
Total Project Funding = $2,100,000
Budget Summary
Project Component Budget Encumbered Paid to
Date
Remaining
Budget
Project Management $2,100,000 $0 $0 $2,100,000
Preliminary Services $0 $0 $0 $0
Environmental $0 $0 $0 $0
Design $0 $0 $0 $0
Construction $0 $0 $0 $0
Construction Management $0 $0 $0 $0
Permits $0 $0 $0 $0
Equipment $0 $0 $0 $0
Project Summary Totals $2,100,000 $0 $0 $2,100,000

Recommended Action:

Authorize the Mayor to execute a Professional Services Agreement with Tom Dodson & Associates for an Adaptive Management and Mitigation Plan in an amount not to exceed $997,160.

Attachments:

A. RFP for Adaptive Management and Mitigation Plan
B. Professional Services Agreement
C. Tom Dodson & Associates Proposal
D. Levine Act – Conflict of Interest Disclosure

Request for Proposals
for
Adaptive Management and
Mitigation Plan

Questions Due By: Proposals Due By:
5:00 P.M. 2:00 P.M
Thursday, June 22, 2023 Tuesday, July 11, 2023

Contact:

Grace Wichert
Procurement and Contracts Specialist
[email protected]

RFP Available:
www.publicpurchase.com or
https://www.beaumontca.gov/949/Bids-and-RFPs

Website:
www.beaumontca.gov

Address:
550 E. 6th Street
Beaumont, CA 92223

Phone:
951.769.8520

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

1 1. INTRODUCTION
The City of Beaumont (“City”) requests written responses to a Request for Proposal (RFP) for the development of an Adaptive Management and Mitigation Plan (AMMP) to support current and future discharges from the Beaumont Wastewater Treatment Plan to Cooper Creek. The selected consultant will be one that has demonstrated experience and professionalism in the preparation of final construction documents and specifications required for final city plan approvals.

Responses must conform to the requirements of this Request for Proposal (RFP). The City reserves the right to waive any irregularity in any proposal, withdraw or amend this RFP or reject any proposal that does not comply with this RFP or City policies.

2. THE CITY OF BEAUMONT
The City was incorporated in November 1912 and is located in the San Gorgonio Pass portion of western Riverside County. It is bounded on the west by Calimesa and unincorporated areas, on the north by unincorporated county areas (Cherry Valley), on the south by unincorporated county areas and the City of San Jacinto, and on the east by the City of Banning. The land area within the City’s boundary is approximately 30 square miles.

The City of Beaumont is rated one of the safest cities in southern California. The City has its own police department. Fire and paramedic services are contracted through Riverside County. The City of Beaumont has been one of the fastest growing cities in California over the past 15 years and has a population of approximately 55,000. An average of 500 new homes have been permitted annually since 2013 and the population has grown by approximately 1,500 residents each year. Beaumont has seen significant growth in its quality of workforce with educational levels and technical skills. The community has also seen growth in its household income levels.

As a result of this growth, the City must continue to provide residents with the quality of life they expect. This involves expanding park and recreational amenities, maintaining a quality police force to keep pace with growth, construction of regional surface transportation projects, and to perform economic development activities to diversify the city’s tax base and increase employment opportunities in the region.

The City Government
The Beaumont City Council is comprised of five Council members, each sharing equal voting powers on all items coming before the Council. Council members are elected to at-large positions for four-year terms, with elections held in November of even-numbered years. The City Council meets annually to select one of its members to serve as Mayor and another to serve as Mayor Pro Tem for one year but no more than two consecutive years.

The City Council provides legislative and policy direction to the City Manager, who implements their decisions to direct the activities of the City. The City Council responds to issues and concerns of the community by allocating resources, developing policies, and formulating strategies that support the vitality and economic viability of the City. All of their decisions must be made at public meetings.

The City Council appoints the City Manager and City Attorney and members of all advisory boards, commissions, and committees. The City Council also serves as the Board of Directors for the Beaumont Financing Authority, Beaumont Utility Authority, and the Beaumont Parking Authority.

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

2 3. BACKGROUND
Founded at the turn of the 20th century, Beaumont is proud of its rich history and rural charm.

The town served as a welcome “stopping-off point” for early travelers making their way from the Mohave desert to Los Angeles, and later for L.A. residents eager to vacation in Palm Springs.

Some, however, set down roots, drawn by the beautiful mountain vistas; clean, crisp air; and the abundance of cherry and apple orchards.

Beaumont provides the very best of rustic, rural beauty and charm, combined with the planned growth, abundant recreational opportunities, and rich community life offered by the finest Southern California cities. The progressive city of over 54,000 people, sits at 2,612 feet in elevation between Riverside and Palm Springs in the Inland Empire. The city operates 18 city- owned parks, including a 20-acre sports park as well as an extensive trails system. The Beaumont School District, with 12 schools, has an outstanding reputation, and it ranks highly in the Pass Area. The city is rounded out with various local service clubs, a state-of-the-art community recreation center, a library, two four-star golf courses, and multiple churches.

Beaumont owns and operates the Beaumont Wastewater Treatment Plant (WWTP). The WWTP receives and treats domestic and commercial/industrial wastewater generated within the City of Beaumont and the Highland Springs area (portions of the unincorporated area of Cherry Valley).

The City recently completed a WWTP upgrade and expansion project that brought capacity to 6 MGD and the ability to produce recycled water through an MBR/RO/UV treatment process.

Wastewater discharges from the Facility are currently regulated under Order No. R8-2022-042 NPDES Number CA105376 (Permit).

4. SCOPE OF WORK
The intent of this Request for Proposal (RFP) is to secure the services of a qualified professional firm (Consultants) to develop an Adaptive Management and Mitigation Plan (AAMP) to support the Beaumont Wastewater Treatment current and future discharge into Cooper Creek. The AMMP is required as a part of the State Water Resources Control Board (SWRCB) Division of Water Rights Wastewater Change Petition under California Water Code Section 1211.

Consultant must be proactive and knowledgeable of all regulations required for project acceptance. Consultant shall be an advisor, advocate, and produce a product with the best interest intended for the City within the required schedule and budget.

The Scope of Service outlined in Exhibit A is provided as a guideline and is intended to identify the City’s initial expectations and requirements. Consultants may suggest modifications to the proposed Scope of Services and shall expand the scope to include additional and/or optional tasks if deemed necessary to execute and facilitate the proposed services to complete the Project.

5. TERM
The term of the agreement shall be for the duration of the project. Notwithstanding anything in this Agreement to the contrary, this Agreement shall automatically terminate after five (5) years, unless extended by the parties with the approval of the City Council of the CITY. All fees should be fixed for the duration of project.

6. PROPOSAL REQUIREMENTS
The proposal shall clearly address all the information requested herein. To achieve a uniform review process and obtain the maximum degree of comparability, it is required that proposals be organized and contain all information as specified below.

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

3 A. Cover Letter: Maximum of two (2) pages serving as an Executive Summary which shall include an understanding of the scope of services. The RFP shall be transmitted with a cover letter that must be signed by an official authorized to bind the consultant contractually. The letter accompanying the RFP shall also provide the name, title, address, and telephone number of individuals with the authority to negotiate and contractually bind the consultant. The cover letter constitutes certification by the consultant, under penalty of perjury, that the consultant complies with nondiscrimination requirements of the State and Federal Government. An unsigned proposal or one signed by an individual unauthorized to bind the consultant may be rejected.

B. Introduction/Information: Introduction of the service proposal, including a statement of understanding for the types of services contemplated. Provide a discussion on how the objectives of the scope of services will be accomplished. Provide the name of the firm submitting the proposal, its mailing address, telephone number, and the name of the individual to contact if further information is required. Any participating firms and proposed sub-consultants shall be identified and included in the proposal (all sub-consultants must be approved by City prior to signing the agreement with City).

C. Approach: The firm’s approach to delivering the scope of services. Provide a description of the firm’s approach to communicating effectively with City staff and officials, other jurisdictional stakeholders, and the public, to facilitate successful delivery of assigned tasks.

D. Firm Profile: Provide a description of the firm, including number of professional personnel, years in business, office location(s), organizational structure (e.g., corporation, partnership, sole practitioner, etc.), areas of particular expertise, etc.

E. Location of principal office that will be responsible for the implementation of this contract.

F. Proposed Team: Provide a summary description of all personnel who will be involved in this project, their roles and responsibilities, and their experience in similar past projects.

The proposal must name a project manager. In addition to this summary, full resumes limited to 2 pages per proposed team member must be provided as an attachment to the proposal.

G. References: Provide at least three (3) references from previous cities, counties or other agencies for similar work completed within the last five (5) years, which include: name, address, contact person and phone number for the agency, length of time services were provided, staff assigned to each project by your firm, and a description of the services provided. All submitted materials shall become the property of the City of Beaumont.

H. Scope of Services: Provide a detailed outline of tasks, sub-tasks and deliverables that will be provided to develop an AAMP with final approval from local, State and Federal agencies. Any additional items not mentioned in Exhibit A- Scope of Services but required to obtain final approval, shall be included in the proposal as additional items for consideration. The fully recommended Scope of Services should be presented as an attachment to the proposal and shall be in a logical format that can be easily attached to

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

4 the Professional Services Agreement (Exhibit B).

I. Project Schedule: Provide a comprehensive Critical Path Method (CPM) schedule describing the nature and estimated timeline of proposed work objectives and milestones.

Gannt chart preferred.

JK. Cost proposal: Provide detailed cost of services in a separate sealed envelope.

Costing should include:
 Break down by task on an hourly rate bases with hourly rates to remain fixed for the duration of the project.
 Provide a table with estimates based on information outlined in this RFP.  Fixed prices, including out-of-pocket expenses, for all costs associated within the scope of this proposal,
 Total fees and expenses for the entire scope of the project  Any area which proposers believe should be included in the scope of work in this proposal, but which is not stipulated in this RFP, and identifies the costs associated with the services rendered.

Please note, Proposers shall be expected to preplan to make cost saving reductions wherever possible. Pricing shall be all-inclusive.

L. List of all current/outstanding contracts with the City of Beaumont, their status, and the completion date for each contract.

M. Any other information which should be considered, such as any special services or customer service philosophy which define your firm’s practice.

N. The firm will be required to have professional liability insurance including liability at a minimum of one million per occurrence, worker’s compensation, and vehicle coverage including comprehensive and collision insurance naming the City of Beaumont as additional insured. The proposal shall state whether such insurances will be in force at time of contract execution.

7. SUBMITTAL
Two (2) bound copies, one (1) unbound copy and one (1) color digital pdf copy (flash drive) of the proposal must be submitted no later than July 11, 2023 at 2:00 P.M. The cost proposal shall be submitted in a separate sealed envelope. Proposal must be titled “RFP for Adaptive Management and Mitigation Plan.” All proposals shall be submitted to:

City of Beaumont
c/o Grace Wichert
550 E. 6th Street
Beaumont, CA 92223

Electronic submittals of the proposal will not be accepted. Proposals received after the stated date and time will not be accepted. Once submitted, proposals, including the composition of the consulting staff, cannot be altered without prior written consent of the City.

All costs associated with the preparation of any proposal shall be the sole responsibility of the

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

5 proposer. Each proposal shall be limited to a maximum of 25 pages, using a minimum 12-point font size excluding cover, tabs, and attachments for scope of services and 2-page resumes.

*DUE DATE FOR QUESTIONS IS June 22, 2023 @ 5:00 P.M.*

All questions shall be submitted via PublicPurchase.com. Answers will be posted on the same website to allow all users to review the City’s responses to all questions within one (1) week of the question due date.

8. SCHEDULE

Event Date
RFP Issued Thursday, June 8, 2023
RFC/ Questions Due Thursday, June 22, 2023 @ 5:00 P.M.

Proposals Due Tuesday, July 11, 2023 @ 2:00 P.M.

Interviews (if required) TBD
Award Date TBD

9.. CONFIDENTIALITY
Prior to the proposal submittal deadline, all proposals will be designated confidential to the extent permitted by the California Public Records Act. After the proposal submittal deadline, all responses will be regarded as public record and will be subject to review by the public. Any language purported to render confidential all or portions of the proposals will be regarded as non- effective and will be disregarded.

10. AMENDMENTS TO REQUEST FOR PROPOSALS
The City reserves the right to amend the RFP by addendum prior to the final proposal submittal date.

11. CITY OF BEAUMONT RIGHTS AND OPTIONS
This RFP does not commit the City of Beaumont to award a contract or to pay any cost incurred with the preparation of a proposal or contract for services described herein. The City may, in its sole discretion and without any obligation to act reasonably, reject any and all proposals, waive informalities and minor irregularities in any proposal reviewed, negotiate with any qualified source submitting a proposal, extend deadlines, and/or request additional information. Subsequent to negotiations, prospective consultants may be required to submit revisions to their proposals. The City may reject any proposal that does not conform to the instructions provided in this RFP.

Additionally, the City reserves the right to negotiate all final terms and conditions of any proposal received before entering into final contract.

The City reserves the right to postpone selection for its own convenience, to withdraw this RFP at any time, and to reject any and all proposals without indicating any reason for such rejection.

As a function of the RFP process, the City of Beaumont reserves the right to remedy technical errors in response to the RFP and to modify the published scope of services and scope of work.

Proposals submitted in response to the RFP will not be returned.

12. CONFLICT OF INTEREST

City of Beaumont
Request for Proposal
Adaptive Management
and
Mitigation Plan

6 The Consultant shall disclose any personal or professional financial, business, or other relationships with the City that may have an impact on the outcome of this contract or any resulting project. The consultant shall also list current clients who may have a financial interest in the outcome of this contract.

13. PROPOSAL EVALUATION/SELECTION
The City intends to engage the most qualified consultant available that demonstrates a thorough understanding of the City’s needs. City staff will use the following criteria to evaluate the proposals:

Criteria & Scoring

Points
Understanding the scope of services and completeness of RFP 20 Related Experience and Demonstrated skills 30
Approach to performing this type of service 40
Cost and Cost Effectiveness 10
Total 100

The City may request a qualification interview with the highest ranked consultant(s) prior to determining the final ranking. This selection will be conducted according to the City’s adopted procedures. The City reserves the right to reject any and all proposals.

CONTACT WITH ANY CITY EMPLOYEE OTHER THAN THE CONTACT NAMED IS STRICTLY PROHIBITED AND WILL BE CAUSE FOR DISQUALIFICATION OF THE PROPOSAL.

Attachments

A. Exhibit A- Proposed Scope of Services
B. Exhibit B- Professional Services Agreement (PSA)

1 AGREEMENT FOR PROFESSIONAL SERVICES BY INDEPENDENT CONTRACTOR

THIS AGREEMENT FOR PROFESSIONAL SERVICES BY INDEPENDENT CONTRACTOR is made and effective as of the 1st day of October 2023, by and between the CITY OF BEAUMONT (“CITY”) whose address is 550 E. 6th Street, Beaumont, California 92223 and Tom Dodson & Associates, whose address is PO Box 2307, San Bernardino, CA 92406 (“CONTRACTOR”).

RECITALS

This Agreement is entered into on the basis of the following facts, understandings and intentions of the parties to this Agreement:

A. CITY desires to engage CONTRACTOR to provide an Adaptive Management and Mitigation Plan; and

B. CONTRACTOR has made a proposal (“Proposal”) to the CITY to provide such professional services, which Proposal is attached hereto as Exhibit “A” and incorporated herein by this reference; and

C. CONTRACTOR agrees to provide such services pursuant to, and in accordance with, the terms and conditions of this Agreement, and represents and warrants to CITY that CONTRACTOR possesses the necessary skills, licenses, certifications, qualifications, personnel and equipment to provide such services.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals and mutual covenants contained herein, CITY and CONTRACTOR agree as follows:

1. Term of Agreement. This Agreement is effective as of the date first above written and shall continue until terminated as provided for herein. Notwithstanding anything in this Agreement to the contrary, this Agreement shall automatically terminate after three (3) year(s) unless extended by the parties with the approval of the City Council of the CITY.

2. Services to be Performed. CONTRACTOR agrees to provide the services (“Services”) as follows: provide an Adaptive Management and Mitigation Plan for the Wastewater Treatment Plant per Exhibit “A”. All Services shall be performed in the manner and according to the timeframe set forth in the Proposal. CONTRACTOR designates Tom Dodson as CONTRACTOR’S professional(s) responsible for overseeing the Services provided by CONTRACTOR.

3. Associates and Subcontractors. CONTRACTOR may, at CONTRACTOR’s sole cost and expense, employ such competent and qualified independent associates, subcontractors and consultants as CONTRACTOR deems necessary to perform the Services; provided, however, that CONTRACTOR shall not subcontract any of the Services without the written consent of CITY.

2 4. Compensation.

4.01 CONTRACTOR shall be paid at the rates set forth in the Proposal and shall not increase any rate without the prior written consent of the CITY. Notwithstanding anything in this Agreement to the contrary, total fees and charges paid by CITY to CONTRACTOR under this Agreement shall not exceed Nine Hundred Ninety-Seven Thousand One Hundred Sixty ($997,160.00).

4.02 CONTRACTOR shall not be compensated for any Services rendered nor reimbursed for any expenses incurred in excess of those authorized unless approved in advance by the CITY, in writing.

4.03 CONTRACTOR shall submit to CITY, on or before the fifteenth (15th) of each month, itemized invoices for the Services rendered in the previous month. The CITY shall not be obligated to pay any invoice that is submitted more than sixty (60) days after the due date of such invoice. CITY shall have the right to review and audit all invoices prior to or after payment to CONTRACTOR. This review and audit may include, but not be limited to CITY’s:

a. Determination that any hourly fee charged is consistent with this Agreement's approved hourly rate schedule;
b. Determination that the multiplication of the hours billed times the approved rate schedule dollars is correct;
c. Determination that each item charged is the usual, customary, and reasonable charge for the particular item. If CITY determines an item charged is greater than usual, customary, or reasonable, or is duplicative, ambiguous, excessive, or inappropriate, CITY shall either return the bill to CONTRACTOR with a request for explanation or adjust the payment accordingly, and give notice to CONTRACTOR of the adjustment.

4.04 If the work is satisfactorily completed, CITY shall pay such invoice within thirty (30) days of its receipt. Should CITY dispute any portion of any invoice, CITY shall pay the undisputed portion within the time stated above, and at the same time advise CONTRACTOR in writing of the disputed portion.

5. Obligations of CONTRACTOR.

5.01 CONTRACTOR agrees to perform all Services in accordance with the terms and conditions of this Agreement and the Proposal. In the event that the terms of the Proposal shall conflict with the terms of this Agreement, or contain additional terms that purport to bind the CITY other than the Services to be rendered and the price for the Services, the terms of this Agreement shall govern and said additional or conflicting terms shall be of no force or effect.

5.02 Except as otherwise agreed by the parties, CONTRACTOR will supply all personnel, materials and equipment required to perform the Services. CONTRACTOR

3 shall provide its own offices, telephones, vehicles and computers and set its own work hours. CONTRACTOR will determine the method, details, and means of performing the Services under this Agreement.

5.03 CONTRACTOR shall keep CITY informed as to the progress of the Services by means of regular and frequent consultations. Additionally, when requested by CITY, CONTRACTOR shall prepare written status reports.

5.04 CONTRACTOR is responsible for paying, when due, all income and other taxes, fees and withholding, including withholding state and federal taxes, social security, unemployment and worker’s compensation, incurred as a result of the compensation paid under this Agreement. CONTRACTOR agrees to indemnify, defend and hold harmless CITY for any claims, costs, losses, fees, penalties, interest, or damages suffered by CITY resulting from CONTRACTOR’s failure to comply with this provision.

5.05 In the event CONTRACTOR is required to prepare plans, drawings, specifications and/or estimates, the same shall be furnished in conformance with local, state and federal laws, rules and regulations.

5.06 CONTRACTOR represents that it possesses all required licenses necessary or applicable to the performance of Services under this Agreement and the Proposal and shall obtain and keep in full force and effect all permits and approvals required to perform the Services herein. In the event CITY is required to obtain an approval or permit from another governmental entity, CONTRACTOR shall provide all necessary supporting documents to be filed with such entity.

5.07 CONTRACTOR shall be solely responsible for obtaining Employment Eligibility Verification information from CONTRACTOR’s employees, in compliance with the Immigration Reform and Control Act of 1986, Pub. L. 99-603 (8 U.S.C. 1324a), and shall ensure that CONTRACTOR’s employees are eligible to work in the United States.

5.08 In the event that CONTRACTOR employs, contracts with, or otherwise utilizes any CalPERS retirees in completing any of the Services performed hereunder, such instances shall be disclosed in advance to the CITY and shall be subject to the CITY’s advance written approval.

5.09 Drug-free Workplace Certification. By signing this Agreement, the CONTRACTOR hereby certifies under penalty of perjury under the laws of the State of California that the CONTRACTOR will comply with the requirements of the Drug-Free Workplace Act of 1990 (Government Code, Section 8350 et seq.) and will provide a drug- free workplace.

5.10 CONTRACTOR shall comply with all applicable local, state and federal laws, rules, regulations, entitlements and/or permits applicable to, or governing the Services authorized hereunder.

6. Insurance. CONTRACTOR hereby agrees to be solely responsible for the health

4 and safety of its employees and agents in performing the Services under this Agreement and shall comply with all laws applicable to worker safety including but not limited to Cal-OSHA.

Therefore, throughout the duration of this Agreement, CONTRACTOR hereby covenants and agrees to maintain insurance in conformance with the requirements set forth below. Attached hereto as Exhibit “B” are copies of Certificates of Insurance and endorsements as required by Section 7.02. If existing coverage does not meet the requirements set forth herein, CONTRACTOR agrees to amend, supplement or endorse the existing coverage to do so.

CONTRACTOR shall provide the following types and amounts of insurance:

6.01 Commercial general liability insurance in an amount of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate; CONTRACTOR agrees to have its insurer endorse the general liability coverage required herein to include as additional insured’s CITY, its officials, employees and agents. CONTRACTOR also agrees to require all contractors and subcontractors to provide the same coverage required under this Section 6.

6.02 Business Auto Coverage in an amount no less than $1 million per accident.

If CONTRACTOR or CONTRACTOR’s employees will use personal autos in performance of the Services hereunder, CONTRACTOR shall provide evidence of personal auto liability coverage for each such person.

6.03 Workers’ Compensation coverage for any of CONTRACTOR’s employees that will be providing any Services hereunder. CONTRACTOR will have a state-approved policy form providing statutory benefits as required by California law. The provisions of any workers’ compensation will not limit the obligations of CONTRACTOR under this Agreement. CONTRACTOR expressly agrees not to use any statutory immunity defenses under such laws with respect to CITY, its employees, officials and agents.

6.04 Optional Insurance Coverage. Choose and check one: Required __ /Not Required ___; Errors and omissions insurance in a minimum amount of $2 million per occurrence to cover any negligent acts or omissions committed by CONTRACTOR, its employees and/or agents in the performance of any Services for CITY.

7. General Conditions pertaining to Insurance Coverage

7.01 No liability insurance coverage provided shall prohibit CONTRACTOR from waiving the right of subrogation prior to a loss. CONTRACTOR waives all rights of subrogation against CITY regardless of the applicability of insurance proceeds and shall require all contractors and subcontractors to do likewise.

7.02. Prior to beginning the Services under this Agreement, CONTRACTOR shall furnish CITY with certificates of insurance, endorsements, and upon request, complete copies of all policies, including complete copies of all endorsements. All copies of policies and endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf.

7.03. All required policies shall be issued by a highly rated insurer with a minimum A.M. Best rating of “A:VII”). The insurer(s) shall be admitted and licensed to do business

5 in California. The certificates of insurance hereunder shall state that coverage shall not be suspended, voided, canceled by either party, or reduced in coverage or in limits, except after thirty (30) days' prior written notice has been given to CITY.

7.04 Self-insurance does not comply with these insurance specifications.

CONTRACTOR acknowledges and agrees that that all insurance coverage required to be provided by CONTRACTOR or any subcontractor, shall apply first and on a primary, non- contributing basis in relation to any other insurance, indemnity or self-insurance available to CITY.

7.05 All coverage types and limits required are subject to approval, modification and additional requirements by CITY, as the need arises. CONTRACTOR shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect CITY’s protection without CITY’s prior written consent.

7.06 CONTRACTOR agrees to provide immediate notice to CITY of any claim or loss against CONTRACTOR or arising out of the Services performed under this Agreement. CITY assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve CITY.

8. Indemnification.

8.01 CONTRACTOR and CITY agree that CITY, its employees, agents and officials should, to the extent permitted by law, be fully protected from any loss, injury, damage, claim, lawsuit, cost, expense, attorneys’ fees, litigation costs, defense costs, court costs or any other costs arising out of or in any way related to the performance of this Agreement by CONTRACTOR or any subcontractor or agent of either as set forth herein.

Accordingly, the provisions of this indemnity are intended by the parties to be interpreted and construed to provide the fullest protection possible under the law to CITY.

CONTRACTOR acknowledges that CITY would not enter into this Agreement in the absence of the commitment of CONTRACTOR to indemnify and protect CITY as set forth herein.

a. To the fullest extent permitted by law, CONTRACTOR shall defend, indemnify and hold harmless CITY, its employees, agents and officials, from any liability, claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, damages or costs of any kind, whether actual, alleged or threatened, actual attorneys’ fees incurred by CITY, court costs, interest, defense costs, including expert witness fees and any other costs or expenses of any kind whatsoever without restriction or limitation incurred in relation to, as a consequence of or arising out of, or in any way attributable actually, allegedly or impliedly, in whole or in part to the performance of this Agreement.

CONTRACTOR’s obligation to defend, indemnify and hold harmless shall include any and all claims, suits and proceedings in which CONTRACTOR (and/or CONTRACTOR’s agents and/or employees) is alleged to be an employee of CITY.

All obligations under this provision are to be paid by CONTRACTOR as they are

6 incurred by CITY.
b. Without affecting the rights of CITY under any provision of this Agreement or this Section, CONTRACTOR shall not be required to indemnify and hold harmless CITY as set forth above for liability attributable solely to the fault of CITY, provided such fault is determined by agreement between the parties or the findings of a court of competent jurisdiction.

8A. Indemnification Design Professionals.

8A.01 In the event that CONTRACTOR is a design professional under California Civil Code Section 2782.8 this Section 8A shall apply instead of Section 8. To the fullest extent permitted by California law and in accordance with California Civil Code section 2782.8, CONTRACTOR shall indemnify, and hold harmless the City, its officers, employees, trustees and members (“Indemnified Parties”) from any and all actions, assessments, counts, citations, claims, costs, damages, demands, judgments, liabilities (legal, administrative or otherwise), losses, notices, expenses, fines, penalties, proceedings, responsibilities, violations, attorney’s and consultants’ fees and causes of action including, but not limited to those for, injury to property or persons, including personal injury and/or death (“Claim(s)”), to the extent that the Claim(s) arises out of, pertains to, or relates to the negligence, recklessness, or willful misconduct of CONTRACTOR, its directors, officials, officers, employees and consultants arising out of, connected with, or resulting from the performance of the Services, the Project, or this Agreement. This indemnity excludes liability caused by the negligence or willful misconduct of any of the Indemnified Parties.

The cost to indemnify, hold harmless, and defend charged to CONTRACTOR shall not exceed CONTRACTOR’S proportionate percentage of fault.

9. Additional Services, Changes and Deletions.

9.01 In the event CONTRACTOR performs additional or different services than those described herein without the prior written approval of the City Manager and/or City Council of CITY, CONTRACTOR shall not be compensated for such services.

CONTRACTOR expressly waives any right to be compensated for services and materials not covered by the scope of this Agreement or authorized by the CITY in writing.

9.02 CONTRACTOR shall promptly advise the City Manager and Finance Director of CITY as soon as reasonably practicable upon gaining knowledge of a condition, event or accumulation of events which may affect the scope and/or cost of Services. All proposed changes, modifications, deletions and/or requests for additional services shall be reduced to writing for review and approval by the CITY and/or City Council.

10. Termination of Agreement.

10.01 Notwithstanding any other provision of this Agreement, CITY, at its sole option, may terminate this Agreement with or without cause, or for no cause, at any time by giving twenty (20) days’ written notice to CONTRACTOR.

10.02 In the event of termination, the payment of monies due CONTRACTOR for undisputed Services performed prior to the effective date of such termination shall be paid

7 within thirty (30) business days after receipt of an invoice as provided in this Agreement.

Immediately upon termination, CONTRACTOR agrees to promptly provide and deliver to CITY all original documents, reports, studies, plans, specifications and the like which are in the possession or control of CONTRACTOR and pertain to CITY.

11. Status of CONTRACTOR.

11.01 CONTRACTOR shall perform the Services in CONTRACTOR’s own way as an independent contractor, and in pursuit of CONTRACTOR’s independent calling, and not as an employee of CITY. However, CONTRACTOR shall regularly confer with CITY’s City Manager as provided for in this Agreement.

11.02 CONTRACTOR agrees that it is not entitled to the rights and benefits afforded to CITY’s employees, including disability or unemployment insurance, workers’ compensation, retirement, CalPERS, medical insurance, sick leave, or any other employment benefit. CONTRACTOR is responsible for providing, at its own expense, disability, unemployment, workers’ compensation and other insurance, training, permits, and licenses for itself and its employees and subcontractors.

11.03 CONTRACTOR hereby specifically represents and warrants to CITY that it possesses the qualifications and skills necessary to perform the Services under this Agreement in a competent, professional manner, without the advice or direction of CITY and that the Services to be rendered pursuant to this Agreement shall be performed in accordance with the standards customarily applicable to an experienced and competent professional rendering the same or similar services in the same geographic area where the CITY is located. Further, CONTRACTOR represents and warrants that the individual signing this Agreement on behalf of CONTRACTOR has the full authority to bind CONTRACTOR to this Agreement.

12. Ownership of Documents; Audit.

12.01 All draft and final reports, plans, drawings, studies, maps, photographs, specifications, data, notes, manuals, warranties and all other documents of any kind or nature prepared, developed or obtained by CONTRACTOR in connection with the performance of Services performed for the CITY shall become the sole property of CITY, and CONTRACTOR shall promptly deliver all such materials to CITY upon request. At the CITY’s sole discretion, CONTRACTOR may be permitted to retain original documents, and furnish reproductions to CITY upon request, at no cost to CITY.

12.02 Subject to applicable federal and state laws, rules and regulations, CITY shall hold all intellectual property rights to any materials developed pursuant to this Agreement. CONTRACTOR shall not such use data or documents for purposes other than the performance of this Agreement, nor shall CONTRACTOR release, reproduce, distribute, publish, adapt for future use or any other purposes, or otherwise use, any data or other materials first produced in the performance of this Agreement, nor authorize others to do so, without the prior written consent of CITY.

12.03 CONTRACTOR shall retain and maintain, for a period not less than four years following termination of this Agreement, all-time records, accounting records and

8 vouchers and all other records with respect to all matters concerning Services performed, compensation paid and expenses reimbursed. At any time during normal business hours and as often as CITY may deem necessary, CONTRACTOR shall make available to CITY’s agents for examination all of such records and shall permit CITY’s agents to audit, examine and reproduce such records.

13. Miscellaneous Provisions.

13.01 This Agreement, which includes all attached exhibits, supersedes any and all previous agreements, either oral or written, between the parties hereto with respect to the rendering of Services by CONTRACTOR for CITY and contains all of the covenants and agreements between the parties with respect to the rendering of such Services in any manner whatsoever. Any modification of this Agreement will be effective only if it is in writing signed by both parties.

13.02 CONTRACTOR shall not assign or otherwise transfer any rights or interest in this Agreement without the prior written consent of CITY. Unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under this Agreement.

13.03 CONTRACTOR shall timely file FPPC Form 700 Conflict of Interest Statements with CITY if required by California law and/or the CITY’s conflict of interest policy.

13.04 If any legal action or proceeding, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees and costs, in addition to any other relief to which that party may be entitled.

13.05 This Agreement is made, entered into and shall be performed in the County of Riverside in the State of California and shall in all respects be interpreted, enforced and governed under the laws of the State of California. The parties agree that venue in any litigation between them shall be in Riverside County, California.

13.06 CONTRACTOR covenants that neither it nor any officer or principal of its firm has any interest, nor shall they acquire any interest, either directly or indirectly, which will conflict in any manner or degree with the performance of their Services hereunder.

CONTRACTOR further covenants that in the performance of this Agreement, no person having such interest shall be employed by it as an officer, employee, agent, or subcontractor.

13.07 CONTRACTOR has read and is aware of the provisions of Section 1090 et seq. and Section 87100 et seq. of the Government Code relating to conflicts of interest of public officers and employees. CONTRACTOR agrees that they are unaware of any financial or economic interest of any public officer or employee of the CITY relating to this Agreement. It is further understood and agreed that if such a financial interest does exist at the inception of this Agreement, the CITY may immediately terminate this Agreement by giving notice thereof. CONTRACTOR shall comply with the requirements

9 of Government Code section 87100 et seq. and section 1090 in the performance of and during the term of this Agreement.

13.08 Improper Consideration. CONTRACTOR shall not offer (either directly or through an intermediary) any improper consideration such as, but not limited to, cash, discounts, services, the provision of travel or entertainment, or any items of value to any officer, employee or agent of the CITY in an attempt to secure favorable treatment regarding this Agreement or any contract awarded by CITY. The CITY, by notice, may immediately terminate this Agreement if it determines that any improper consideration as described in the preceding sentence was offered to any officer, employee or agent of the CITY with respect to the proposal and award process of this Agreement or any CITY contract. This prohibition shall apply to any amendment, extension or evaluation process once this Agreement or any CITY contract has been awarded. CONTRACTOR shall immediately report any attempt by any CITY officer, employee or agent to solicit (either directly or through an intermediary) improper consideration from CONTRACTOR.

13.09 Severability. If any portion of this Agreement is declared invalid, illegal or otherwise unenforceable by a court of competent jurisdiction, the entire balance of this Agreement not so affected shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereby have made and executed this Agreement to be effective as of the day and year first above written.

CITY: CONTRACTOR:

CITY OF BEAUMONT Tom Dodson & Associates

By: By:

Julio Martinez, III, Mayor
Print Name:

Title:

EXHIBIT “A”

PROPOSAL

(insert behind this page)

EXHIBIT “B”

CERTIFICATES OF INSURANCE AND ENDORSEMENTS

(insert behind this page)

PROPOSAL

FOR THE CITY OF BEAUMONT

ADAPTIVE MANAGEMENT AND MITIGATION PLAN

Submitted to:

Submitted by:

Tom Dodson and Associates
P.O. Box 2307
San Bernardino, California 92406
(909) 882-3612

In Partnership with:

West Yost
23692 Birtcher Drive
Lake Forest, CA 92630
(949) 420-3030

and

Jacobs
(Lisa Patterson, Biological Resources/Regulatory Team)

Proposal Due Date and Time:

July 25, 2023
2:00 p.m.

Tom Dodson & Associates, West Yost, and Jacobs
City of Beaumont
Adaptive Management and Mitigation Plan

i i

Table of Contents

A. Cover Letter 1

B. Introduction 3

C. Approach 4

D. Firm Profile 8

E. Firm Location 9

F. Proposed Team 9

G. References 12

H. Scope of Services 17

I. Project Schedule 17

J. Outstanding Contracts with the City of Beaumont 20

K. Additional Information and Services 20

L. Liability Insurance 20

Fee Rate Schedule and Cost Proposal are provided under a separate cover

ATTACHMENTS

Attachment 1: Scope of Services
Attachment 2: Resumes

Tom Dodson & Associates, West Yost, and Jacobs
City of Beaumont
Adaptive Management and Mitigation Plan
1 1

1 MEMORANDUM

July 22, 2023

FROM: Tom Dodson & Kaitlyn Dodson-Hamilton, Tom Dodson & Associates Samantha Adams, West Yost
Lisa Patterson, Jacobs

TO: Grace Wichert, City of Beaumont

SUBJECT: Proposal to Provide Consulting Services to Prepare an Adaptive Management and Mit igation Plan for the City of Beaumont

Tom Dodson & Associates (TDA), in partnership with West Yost Associates, Inc. (West Yost) and Jacobs is pleased to submit this proposal to provide consulting services to prepare an Adaptive Management and Mitigation P lan (AMMP) for the City of Beaumont (City).

It is our understanding that the City intends to submit a Petition for Change of Wastewater Discharge to the State Water Resources Control Board for its recycled water discharge to Cooper’s Creek (Riverside Coun ty, CA). The water that is currently discharged to Cooper’s Creek can then be delivered for direct or indirect reuse (such as irrigation or groundwater recharge). The City has recognized that reducing its discharge has the potential to impact downstream biological resources (e.g. creek and riparian habitat). To address the potential for impacts, the City will develop the AMMP, the objective of which is to establish a monitoring, analysis, and reporting framework that will document changes in the hydrogeologic system and biological resources as discharge is reduced and inform the need for implementing management measures that will mitigate impacts of the reduced discharge. The development of the AMMP will be a multi-year effort produced in phases.

Our team carefully reviewed the RFP and have prepared an approach and scope of work that we believe will result in the development and approval of a robust AMMP that will serve as the framework for implementing the City’s recycled water program. Our proposal includes all the requisite elements defined in the RFP, including submitting our cost proposal under separate cover. Our proposal provides an approach that will be implemented over three to five years and will include the following three phases:
• Phase 1 – Characterize Historical and Current Conditions to Support Development of AMMP • Phase 2 – Assess Feasibility of Reduced Discharge and Perform Initial Baseline Monitoring • Phase 3 – Prepare Adaptive Monitoring and Mitigation Plan and Continue Baseline Monitoring

Our project team has extensive experience working together to develop and implement complex water management programs, including development of monitoring and mitigation programs to address environmental, hydrogeologic, and biologic impacts of water resources projects. We believe that our team is well suited to support the City in achieving its recycled water use and discharge goals. We have a strong resume demonstrating successful outcomes for our clients, most particularly our team’s support of the Chino Basin Watermaster in the development and implementation of its

Tom Dodson & Associates, West Yost, and Jacobs
City of Beaumont
Adaptive Management and Mitigation Plan
2 2

2 Optimum Basin Management Program, which includes a robust adaptive monitoring and mitigation program for the Prado Basin Habitat Sustainability Committee.

Our team is fully committed and available to perform the multi-year services requested by the City and will enhance your capacity to efficiently develop the AMMP. We are confident that the City will be completely satisfied with the quality of our work and our commitment to provide the highest possible level of support while considering cost and efficiency. The team will provide the City:
• A commitment to working collaboratively. We are committed to working with City staff to develop an approach that will result in a high-quality, scientifically defensible AMMP that will provide for ease of adaptation as new information is learned or the City’s plans and priorities evolve. • Leadership you can trust to deliver. Our project team leadership is comprised of industry leaders in environmental, water, and biological resources. Our team will be led by Project Manager, Kaitlyn Dodson- Hamilton (TDA). She will be supported by Principles-in-Charge, Tom Dodson (TDA) and Samantha Adams (West Yost) and technical advisor Andy Malone, PG (West Yost). Technical work will be led by Veva Weamer (West Yost) and Lisa (Jacobs). This team brings a strong history of delivering on challenging multi-disciplinary projects. • A team with a deep bench to deliver projects that expertly meet your needs. Our team offers a full-service approach across the entire spectrum of disciplines, including: planning, data analysis, modeling, engineering feasibility, CEQA, regulatory support, and grant funding. • A project management plan that will keep the team engaged. Our project managers will keep our internal team and City staff engaged and meet the project goals and objectives. Our proactive project management plans include monthly updates (or other frequencies as appropriate), action item and decision logs, and oversight by our team’s Principal-in-Charge and Technical Advisor.

We appreciate this opportunity to serve the City and we look forward to discussing our recommended approach and scope of work.

Sincerely,

Kaitlyn Dodson-Hamilton, Vice President, TDA.

Please contact Kaitlyn, Tom, or Samantha. Our direct contact information is below:

Kaitlyn Dodson-Hamilton Samantha Adams
Email: [email protected] Email: [email protected]
Phone: (909) 882-3612 Phone: 949.238.0698

Tom Dodson
Email: [email protected]
Phone: (909) 882-3612

Tom Dodson & Associates, West Yost, and Jacobs
City of Beaumont
Adaptive Management and Mitigation Plan
3 3

3 B. INTRODUCTION

Tom Dodson & Associates, in partnership with West Yost and Jacobs, has prepared this proposal to develop an Adaptive Management and Mitigation Plan (AMMP) for the City of Beaumont (City). Our team carefully reviewed the RFP and have prepared an approach and scope of work that we believe will result in the development and approval of a robust AMMP that will serve as the framework for implementing the City’s recycled water program.

It is our understanding that the City intends to submit a Petition for Chang e of Wastewater Discharge to the State Water Resources Control Board for its recycled water discharge to Cooper’s Creek (Riverside County, CA). The water that is currently discharged to Cooper’s Creek can then be delivered for direct or indirect reuse (suc h as irrigation or groundwater recharge). The City has recognized that reducing its discharge has the potential to impact downstream biological resources (e.g. creek and riparian habitat). To address the potential for impacts, the City will the AMMP, the o bjective of which is to establish a monitoring, analysis, and reporting framework that will document changes in the hydrogeologic system and biological resources as discharge is reduced and inform the need for implementing management measures that will mitigate impacts of the reduced discharge.

Our team has extensive experience working together to develop and implement complex water management programs, including development of monitoring and mitigation programs to address environmental, hydrogeologic, and biologic impacts of water resources projects. We believe that our team is well suited to support the City in achieving its recycled water use and discharge goals. We have a strong resume demonstrating successful outcomes for our clients, most particularly our team’s support of the Chino Basin Watermaster in the development and implementation of its Optimum Basin Management Program, which includes a robust adaptive monitoring and mitigation program for the Prado Basin Habitat Sustainability Committee.

Our team has a successful approach and record in achieving our clients’ objectives. We will do the same for the City in accomplishing the scope of services to develop an AMMP through our tried and true practices for project management and communication, which include:

1. Prior to entering into contract. We will work with the City to review the proposed scope of work and ensure we are in alignment on the project needs and objectives. Key milestones are defined as well as “off -ramps” that lead to revisiting the scope if initial investigations and analysis warrant a change to the project or approach. Through this process, the scope, schedule, and cost are refined as necessary to establish a final budget that considers any necessary contingencies to address challenges that may arise.

2. As early as possible, we identify the data and tools needed and available to support the project development, define the technical approaches that could be applied to meet the project objectives, and establish criteria to evaluate analytical outcomes. We strive to communicate when there are important data and analytical tool gaps that could impact the implementation of the scope of work so that adjustments to the scope of work and expected outcomes can be made.

3. We create a team whose skills match the unique needs of the project, including senior technical review at defined points within the scope. Our project team has a deep bench of skilled scientists, engineers, hydrogeologists, and biologists available to build a multi-disciplinary team that will ensure all aspects of the project are expertly addressed.