Belmont City Council
April 9, 2024

CITY OF BELMONT

CITY COUNCIL AND BELMONT FIRE

PROTECTION DISTRICT BOARD OF

DIRECTORS
www.belmont.gov

1. ROLL CALL

2. PLEDGE OF ALLEGIANCE

3. REPORT FROM CLOSED SESSION

4. SPECIAL PRESENTATIONS
A. Proclamation Recognizing Outgoing Parks and Recreation Commissioner Karl Mittelstadt
B. Belmont Sports and Multi-Use Fields Update

CITY COUNCIL REGULAR MEETING AGENDA
Tuesday, April 9, 2024
7:00 PM
City Council Chambers
City Hall, One Twin Pines Lane, Belmont, California
The meeting will be broadcast live to Belmont residents on Comcast Cable Channel 27, streamed live via the City’s website at www.Belmont.gov. The public may also attend the meeting in the Chambers and address the Council from the Chambers.

PUBLIC COMMENT:

To maximize time for live public comment, we encourage members of the public to provide comments by joining the Committee meeting via Zoom : For web, visit https://belmont-gov.zoom.us/ select “Join” and enter Meeting ID: 95745673035. Use the Raise Hand feature to request to speak. You may rename your profile if you wish to remain anonymous.

For dial- in comments, call *67 1-(669) 900-6833 (your phone number will appear on the live broadcast if *67 is not dialed prior to the phone number), enter Meeting ID: 95745673035, and press *9 to request to speak. All public comments are subject to a 3-minute time limit unless otherwise determined by the Committee Chair.

If you wish to submit written public comment, you may send an email to [email protected] before the council considers the item. Please indicate the agenda item topic or agenda item number you wish to comment on in your email’s subject line. Any public comment regarding agenda items that are received from the publication of the agenda through the meeting date will be made part of the meeting record but will not be read during the Council meeting.
1 C. American Public Works Association (APWA) Accreditation Update

5. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA

6. COUNCILMEMBER ANNOUNCEMENTS

7. CONSENT BUSINESS
A. Sanitary Sewer Root Abatement Service Agreement
B. Service Agreement Amendment with George Hills Company C. Senate Bill 1 (SB 1) Local Streets and Roads Project List FY 2024-2025

8. PUBLIC HEARINGS - None

9. GENERAL BUSINESS
A. Comprehensive Sewer Rate Study and Proposed Sewer Changes for Fiscal Years 2024- 25 and 2025-26
This portion of the meeting is reserved for persons wishing to address the Body on any City matter not on the agenda. The period for public comment at this point in the agenda is limited to 15 minutes, with a maximum of 3 minutes per speaker. Speakers who requested but did not receive an opportunity to speak during this comment period will be given an opportunity to address the Body later in the meeting. State law prohibits the Body from acting on non-agenda items.

Consent business items are considered to be routine in nature and will be enacted by one motion. There will be no separate discussion on these items unless a member or staf request specific items to be removed for separate action.

The City Attorney will read the title of ordinances to be adopted.

Recommendation: Adopt a resolution authorizing the City Manager to negotiate and execute an agreement with Duke’s Root Control, Inc., for root foaming of sanitary sewer lines for an amount not to exceed $60,000.

Attachment(s):

Staff Report
Resolution
Recommendation: Adopt a resolution authorizing the City Manager to negotiate and execute Amendment No. 3 to the Service Agreement with George Hills Company for claims adjustment and administration services in an amount not-to-exceed $66,000, through June 30, 2025.

Attachment(s):

Staff Report
Implementing Resolution
George Hills' Proposal
Recommendation: Adopt a resolution approving a list of proposed projects for fiscal year (FY) 2024-2025 funded by the Road Repair and Accountability Act of 2017 Attachment(s):

Staff Report
Resolution
2025 Pavement Rehabilitation Street List
General Business items are considered separately, typically in the order listed. The chair will call for public comment on each item when the body considers the item.

Recommendation: Adopt a resolution proposing sewer charges for Fiscal Years 2024-25 and 2 B. Housing Element Annual Progress Report 2023 and Housing Successor Annual Report FY 2022-2023

10. BRIEF VERBAL REPORTS FROM MEMBERS AND STAFF

11. MATTERS OF INTEREST/CLARIFICATION

12. ADJOURNMENT
2025-26, setting a Proposition 218 hearing for June 11, 2024, directing staff to provide notice of the hearing as required by law, and adopting protest procedures Attachment(s):

Staff Report
Resolution
City of Belmont - 2024 Sewer Rate Study DRAFT Report 04.05.24 Recommendation: Review the Housing Element Annual Progress Report 2023 and the Housing Successor Annual Report FY 2023, and direct transmittal to the California Governor’s Office of Planning and Research (OPR) and the California Department of Housing and Community Development (HCD).

Attachment(s):

Staff Report
Housing Element Report
Annual Report FY23
A. Verbal report from Councilmembers on Intergovernmental (IGR) and Subcommittee Assignments
B. Verbal report from City Manager
Items in this category are for discussion and direction to staf only. However, Council/Board may take final action on an item if there is no need for additional staf analysis.

If you need assistance to participate in this meeting, please contact the City Clerk at (650) 595-7413. Notification in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

Meeting information can also be accessed via the internet at:www.belmont.gov. All staf reports will be posted to the web in advance of the meeting, and any writings or documents provided to a majority of the City Council/District Board or Commission regarding any item on this agenda will be made available for public inspection in the City Clerk's Of ice, One Twin Pines Lane, during normal business hours and at the Council Chambers at City Hall, Second Floor, during the meeting.

AGENDA POSTING: I declare a copy of this agenda was posted at City Hall, One Twin Pines Lane, and the City's website www.belmont.gov on , at . /s/
3

2024 Root Foaming Task Order - Staff Report

STAFF REPORT
Meeting Date: April 9, 2024
Agency: City of Belmont
Staff Contact: Tim Murray, Public Works, [email protected], 650-637-2932 Agenda Title: Sanitary Sewer Root Abatement Service Agreement Agenda Action: Resolution
Recommendation
Adopt a resolution authorizing the City Manager to negotiate and execute an agreement with Duke’s Root Control, Inc., for root foaming of sanitary sewer lines for an amount not to exceed $60,000.

Strategic Focus Area
Infrastructure and Mobility
Background
The City has approximately 430,000 feet of sewer mains. Intrusion of roots into sewers is one of the most destructive problems encountered in a wastewater collection system. Root-related problems include:
• Structural damage caused by tree roots penetrating into sewer mains • Formation of septic pools behind root masses
• Sewer stoppages and overflows
In urban locations such as the City of Belmont, good sources of nutrients and moisture for tree roots can be scarce, directing root systems toward the collection system pipes where it finds every opportunity to penetrate the pipe system. Even microscopic openings permit hair-like root systems to penetrate the pipe wall damaging the pipe structure and causing maintenance problems such as blockages and overflows.

Root control treatments help to significantly reduce the likelihood of sanitary sewer overflows in the City’s sewer system. Root foaming is a standard maintenance method of applying a chemical root control agent to the sewer pipe interior to control growth of roots in sewers. The chemical root foaming agent is approved by the U.S. Environmental Protection Agency for this use and is accepted by the Silicon Valley Clean Water wastewater treatment plant, as it has no ill-effects on water quality or treatment system equipment. The foam is pumped through the sewer main from manhole to manhole to compress it against all pipe surfaces. Roots in the sewer stop growing and eventually die upon contact with the herbicide foam; trees are not otherwise harmed with this method. The treatment generally inhibits re-growth for three to five years.

Analysis
The city annually plans to treat approximately 10% of the sewer mains citywide and has averaged approximately $75,000 in root foaming services in previous years. CIP and in house rehab projects have allowed us to remove several lines from the root foaming lists. Last year, this reduced our annual cost by 4

2024 Root Foaming Task Order - Staff Report
over 10%, to $66,000. This year, we have reduced our cost to $60,000. The Public Works Department has made it a priority to remove certain sections of the system from future root-foaming once confirmed that those sections will or have been repaired by capital improvement projects or in house repairs thus negating the need for root foaming service.

In an ongoing effort to conduct preventative maintenance on the sanitary sewer mains, staff is proposing to engage Duke’s Root Foaming (Duke) to treat sewer mains city-wide. Duke will be performing root foaming treatment of a select group of our sanitary sewer main lines with heavy root intrusion. This root foaming treatment will help kill current root growth in the sewer system and prevent future growth for up to three years per Duke’s warranty terms. The select group of sewer main lines include 420 feet of 10- inch pipe, 1,597 feet of 8-inch pipe and 31,051 feet of 6-inch pipe. The City has satisfactory experience using Duke on previous contracts and is using a cooperative procurement process described below to contract with Duke for the upcoming preventative maintenance work.

In 2016, the City Council authorized the City to enter a cooperative purchasing contract through HGACBuy in lieu of following the City’s competitive procurement process. HGACBuy is a "Governmentto-Government" procurement service available nationwide. Using this service makes the governmental procurement process more efficient by establishing competitively priced contracts at larger scales for goods and services and providing the customer service necessary to help its members achieve their procurement goals. All contracts available to members of HGACBuy have been awarded by virtue of a public competitive procurement process compliant with state statutes. All units of local government, including non-profits providing governmental services, are eligible to join HGACBuy provided the governing body (City Council) authorizes the contract
Alternatives

1. Take no action.

2. Refer back to staff for further information.

Attachments
A. Resolution.

Fiscal Impact
☐ No Fiscal Impact
☒ Funding Source Confirmed:
$60,000 is anticipated for root foaming service for the remainder of the current fiscal year and the funding has been allocated in the current year’s operating budget in the Sewer Collections Fund (Account Number 501-3-710-8351).

Source: Purpose: Public Outreach:

Staff Discretionary Action Posting of Agenda
5

RESOLUTION NO. 2024 –

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELMONT

AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE A TASK ORDER WITH DUKE’S ROOT CONTROL, INC., FOR ROOT FOAMING OF SANITARY SEWER LINES FOR AN AMOUNT NOT TO EXCEED $60,000 WHEREAS, in 2016, the City Council authorized the City to enter into a cooperative purchasing contract through (Houston-Galveston Area Council Buy) in lieu of following the City’s competitive procurement process; and,
WHEREAS, HGACBuy is a "Government-to-Government" procurement service available nationwide, and using this service makes the governmental procurement process more efficient by establishing competitively priced contracts at larger scales for goods and services; and,
WHEREAS, $60,000 is currently budgeted in Fiscal Year 2023 in Account Number 501-3-710-8351/Other Professional Technical.

NOW, THEREFORE, the City Council of the City of Belmont resolves as follows:

SECTION 1.: The City Manager is authorized to negotiate and execute an agreement purchasing sanitary sewer line root foaming service from Duke’s Root Control, Inc. for an amount not to exceed $60,000.
* * *
ADOPTED April 9, 2024 by the City of Belmont City Council by the following vote:

Ayes:

Noes:

Absent:

Abstain:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
6

7

Claims Administration Services Amendment

STAFF REPORT
Meeting Date: April 9, 2024
Agency: City of Belmont
Staff Contact: Grace Castaneda, Finance Director, [email protected] Nawel Voelker, Management Analyst, [email protected] Agenda Title: Service Agreement Amendment with George Hills Company Agenda Action: Resolution
Recommendation
Adopt a resolution authorizing the City Manager to negotiate and execute Amendment No. 3 to the Service Agreement with George Hills Company for claims adjustment and administration services in an amount not-to-exceed $66,000, through June 30, 2025.

Strategic Focus Area
Fiscal and Organizational Sustainability
Background
George Hills Company (George Hills) has served as the City’s third-party claims administrator (TPA) since 1996. The third-party administrator assists the City in responding to liability claims quickly and effectively, and performs thorough investigations as needed. In addition, the TPA provides guidance to the City practices and decisions related to claims adjusting, performs regular quarterly reviews on outstanding claims with staff and the City’s insurance broker, takes initiative on processing claims from submittal to close of file, and reports applicable claims to the City’s excess insurance carrier, including monitoring of those claims to close of file.

In 2016, City Council approved a 3-year contract with George Hills for $50,000 on a time and expense basis. In 2019 and 2022, additional Amendments were executed for additional 3 years, respectively, each for $50,000 on the same time and expense basis.

The City is currently a little over halfway through the term of its second Amendment with George Hills and, as of November 2023, funds for Amendment No. 2 are depleted. Staff has been working closely with George Hills to identify reasons for the accelerated rate in which funds were being expended.

Analysis
There were a few reasons as to why the funds have been depleted at an accelerated rate. Firstly, as a result of their own internal audit (at the City’s request), the vendor discovered that there were some billing irregularities whereby the adjuster had overlooked certain charges to bill in the months in which the services were performed, so those charges were subsequently invoiced in batches at a later time, which crossed fiscal years. As a concession, George Hills has offered a credit to be applied towards these invoices. Secondly, as is consistent with the current market trend, the City’s claim frequency increased 8

Claims Administration Services Amendment
58% from FY 2021-22 to FY 2022-23 and is on pace to increase yet again this fiscal year. As such, this has impacted the amount of time and expense spent on each claim.

Notwithstanding the above-mentioned reasons, the City and consultant are reviewing procedural improvements that can be applied to the City’s internal process that will help to reduce time and expense charges on behalf of the adjuster. Further, the City has requested that George Hills reassign a new adjuster to the City to meet the City’s service and efficiency goals that will again help to reduce costs under this contract.

Staff has analyzed the option of moving to a fixed fee contract as proposed by the TPA to explore all options of savings, but analysis showed that using the current time and expense approach is more economical and aligns better with the City’s needs, especially with a revised internal process and a new adjuster that are expected to reduce overall cost.

Additional funds are needed to continue the City’s claims administration services with George Hills Company through contract term that is set to expire on June 30, 2025. After performing an analysis of current costs due and estimating time and expense costs of claims administration through the contract term, staff is requesting that the City Council adopt the attached Resolution authorizing the City Manager to negotiate and execute Amendment No. 3 to the Service Agreement with George Hills Company in an amount of $60,000 plus a 10% contingency for a total not-to-exceed amount of $66,000. $19,000 of this amount is estimated to cover this fiscal year with the remaining amount to be incorporated into the proposed FY 2024-25 budget.

Alternatives

1. With direction, seek an alternative third-party claims administrator.

2. Take no action.

Attachments
A. Implementing Resolution
B. George Hills Proposal
Fiscal Impact
☐ No Fiscal Impact
☒ Funding Source Confirmed:

There is sufficient funding in the Liability Insurance Fund (Account #571-1-503-8351) to cover for the estimated cost in the current fiscal year. Estimated cost for the next fiscal year will be incorporated in the FY 2024-25 budget development process.

Source: Purpose: Public Outreach:

Staff Discretionary Action Posting of Agenda
9

RESOLUTION NO. 2024 –

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELMONT

AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE
AMENDMENT NO. 3 TO THE SERVICE AGREEMENT WITH GEORGE HILLS

COMPANY FOR CLAIMS ADJUSTMENT AND ADMINISTRATION SERVICES FOR A TOTAL AMOUNT NOT TO EXCEED $66,000
WHEREAS, the City has need of third party claims administration services; and, WHEREAS, George Hills Company (GHC) has demonstrated expertise in this field and has served as the City’s third-party administrator since 1996; and, WHEREAS, in May 2022, the City executed Amendment No. 2 with GHC to provide these services from July 1, 2022 through June 30, 2025 for an amount not to exceed $50,000; and,
WHEREAS, as of November 2023, Amendment No. 2 funds have been depleted; and, WHEREAS, additional claims adjusting and administration services are needed in order to complete the contract term through June 30, 2025; and, WHEREAS, GHC has provided the City with a full scope of work, attached hereto as Exhibit A.

WHEREAS, There is sufficient funding in the Liability Insurance Fund (Account #571- 1-503-8351) to cover for the estimated cost in the current fiscal year. Estimated cost for the next fiscal year will be incorporated in the FY 2024-25 budget development process and subject to budget approval.

NOW, THEREFORE, the City Council of the City of Belmont resolves as follows:

SECTION 1. The City Manager is authorized to negotiate and execute an amendment purchasing claims adjusting and administration services from George Hills Company for $60,000 plus a 10% contingency for a total amount not to exceed $66,000. * * *
10

ADOPTED April 9, 2024 by the City of Belmont City Council by the following vote:

Ayes:

Noes:

Absent:

Abstain:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
11 Our minds over your matters
April 4, 2024
Nawel Voelker
Management Analyst – Finance Department
City of Belmont
One Twin Pines Lane, Suite 320
Belmont, CA 94002
Ms. Voelker,
Pursuant to our negotiations regarding the contract between the City of Belmont and George Hills, we respectfully request the following amendments to the contract:

We are asking for an increase in the not-to-exceed amount of the contract to be raised by an additional $60,000.00 to cover the term of the current contract through June 30, 2025. This is in part due to the increase in claim frequency we have seen in claims reported by the City. Prior to the pandemic the City was reporting an average of 12 claims per year to George Hills. In 2023 there were 34 claims reported to George Hills, this year is tracking towards 26. The current “not to exceed” compensation figure is not sufficient to support the claim work in the scope of services in the contract, in addition to the work that is not claim specific yet required, which makes up the work covered by the admin fee and the MMSEA Medicare reporting fee.

Additionally, we have mutually discussed making an adjuster change. To facilitate that, we ask that the “key personnel” language be removed from the contract so we may assign appropriate claim professionals to these claims.

Essentially, we are asking for two modifications:

1. The “not-to-exceed amount” to be increased to $60,000.00 through June 30, 2025 and,

2. Pursuant to the City’s desire to engage a different adjuster, we ask for the removal of the key personnel requirement.

All other scope of service items in our contract would remain unchanged.

Should you have any questions, please direct them to my attention.

Many Thanks,
Chris Shaffer ARM-P
Chief Operating Officer
George Hills
916.859.4826
[email protected]
12

Senate Bill 1 (SB 1) Local Streets and Roads Project List FY 2024-2025 - Staff Report.docx

STAFF REPORT
Meeting Date: April 9, 2024
Agency: City of Belmont
Staff Contact: Harry Mar, Public Works, (650) 226-6862, [email protected] Agenda Title: Senate Bill 1 (SB 1) Local Streets and Roads Project List FY 2024-2025 Agenda Action: Resolution
Recommendation
Adopt a resolution approving a list of proposed projects for fiscal year (FY) 2024-2025 funded by the Road Repair and Accountability Act of 2017.

Strategic Focus Area
Infrastructure and Mobility
Background
On April 28, 2017, after years of advocating for a solution to the state’s transportation crisis, the Legislature passed and the Governor signed Senate Bill 1 (SB 1) also known as the Road Repair and Accountability Act of 2017, increasing transportation funding and instituting much-needed reforms. SB 1 provides the first significant, stable, and on-going increase in state transportation funding in more than two decades to address basic road maintenance, rehabilitation, and critical safety needs on state highways, local streets and road systems. With SB 1, the Road Maintenance and Rehabilitation Account (RMRA) was established to fund road repair and rehabilitation projects.

SB 1 emphasizes the importance of accountability and transparency in the delivery of California’s transportation programs. To be eligible, the City must adopt by resolution a list of all projects proposed to receive funding from RMRA, created by SB 1. The proposed project list must include a description, location of each proposed project, a schedule for the project’s completion, and the estimated useful life of the improvement.

In February 2024, the City Council approved a five-year pavement plan for FY 2024-2028. The plan consists of the City allocating an average of $2.4 million in street maintenance repairs for the current fiveyear paving plan, with RMRA funds of approximately $500k per year.

Analysis
For FY 2024-2025, funding from SB1 funds will provide for preparation of contract documents and the construction cost for pavement rehabilitation project across various streets where the estimated useful life of improvements range approximately between fifteen to twenty years. Please refer to Attachment B for full tentative list of streets proposed for the 2025 Pavement Rehabilitation Project. 13

Senate Bill 1 (SB 1) Local Streets and Roads Project List FY 2024-2025 - Staff Report.docx It is anticipated that construction will begin in April 2025 and that construction will be completed in September 2025.

Alternatives

1. Take no action
Attachments
A. Resolution
B. 2025 Pavement Project Tentative List of Streets
Fiscal Impact
☐ No Fiscal Impact
☒ Funding Source Confirmed: SB 1 funding through RMRA will be allocated in FY 2024-25 budget and five-year capital improvement program.

Source: Purpose: Public Outreach:

Staff Statutory/Contractual Requirement Posting of Agenda 14

RESOLUTION NO. 2024 –

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELMONT ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2024-2025 FUNDED BY SENATE BILL 1:

THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and,
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of Belmont are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and, WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and, WHEREAS, the City, will receive an estimated $500,000 in RMRA funding in Fiscal Year 2024-2025 from SB 1; and,
WHEREAS, this is the seventh year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and, WHEREAS, the City has undergone a robust public process to ensure public input into our community’s transportation project priorities list including providing information on City’s website, conducting presentations at the Council meeting discussing existing and proposed street capital improvement projects; and,
WHEREAS, the City used a pavement management system to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the communities priorities for transportation investment, said list was developed using P-Tap program as well as 5-year Pavement Program; and,
WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate 8 streets throughout the City this year and a number of similar projects into the future, currently estimated at one or two capital improvement project per fiscal year; and, WHEREAS, the 2018 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in a fair condition and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into a good condition; and,
WHEREAS, the SB 1 project list and overall investment in our local streets and roads 15

infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE, IT IS HEREBY RESOLVED, ORDERED, AND FOUND BY the City Council of the City of Belmont, State of California, as follows:

SECTION 1. The foregoing recitals are true and correct.

SECTION 2. The following list of newly proposed projects will be funded in-part or solely with Fiscal Year 2024-2025 Road Maintenance and Rehabilitation Account revenues:

Project Title: 2025 Pavement Rehabilitation Project
Project Description: heavy and light rehabilitation of 8 street segments with associated curb ramps and drainage improvements
Project Location: City of Belmont (Forest Avenue, Coronet Blvd. (2 segments), Monte Cresta Drive (3 segments), Pullman Avenue, Lower Lock Avenue)
Estimated Project Schedule: Start (06/24)– Completion (10/25) based on the component being funded with RMRA funds
Estimated Project Useful Life: fifteen years.

SECTION 3. The following previously proposed and adopted project may also utilize Fiscal Year 2024-2025 Road Maintenance and Rehabilitation Account revenues in its delivery.

With the relisting of these projects in the adopted fiscal year resolution, the City of Belmont is reaffirming to the public and the State our intent to fund these projects with Road Maintenance and Rehabilitation Account revenues:

Project Title: 2023 Pavement Project
Project Description: heavy rehabilitation of Middle Rd and Lyon Avenue with associated curb ramps and drainage improvements
Project Location: City of Belmont (Middle Rd between Davey Glen Rd and Notre Dame Avenue, and Lyon Avenue between Mezes Avenue and Alameda de las Pulgas) Estimated Project Schedule: Start (03/24)– Completion (08/25) based on the component being funded with RMRA funds
Estimated Project Useful Life: fifteen years
* * *
ADOPTED April 9, 2024 by the City of Belmont City Council by the following vote:

Ayes:

Noes:

Absent:

Abstain:
16

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
17 ATTACHMENT B
2025 PAVEMENT PROJECT LIST OF STREETS
Street Name Beginning Location End Location Length
(LF) Width (LF) SectionArea (SF)
Current
PCI
FOREST AVENUE ALAMEDA DE LAS PULGAS CIPRIANI BOULEVARD 950 18 17,100 29 CORONET BOULEVARD ARTHUR AVENUE PRINDLE ROAD 1,550 22 34,100 40 CORONET BOULEVARD LYON AVENUE ARTHUR AVENUE 1,750 22 38,500 66 MONTE CRESTA DRIVE SAN JUAN BOULEVARD BARCLAY WAY 1,600 22 35,200 42 MONTE CRESTA DRIVE BARCLAY WAY MONTE CRESTA COURT 225 22 4,950 81 MONTE CRESTA DRIVE MONTE CRESTA COURT DEAD END 600 22 13,200 36 PULLMAN AVENUE COVINGTON ROAD CORONET BOULEVARD 2,150 20 43,000 54 LOWER LOCK AVENUE END OF PAVED ROAD HILLCREST DRIVE 950 26 24,700 51

18

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report

STAFF REPORT
Meeting Date: April 9, 2024
Agency: City of Belmont
Staff Contact: Peter Brown, Public Works, (650) 595-7459, [email protected] Alberto Espinoza, Public Works, (650) 595-7465, [email protected] Agenda Title: Comprehensive Sewer Rate Study and Proposed Sewer Charges for Fiscal Years 2024-25 and 2025-26
Agenda Action: Resolution
Recommendation
Adopt a resolution proposing sewer charges for Fiscal Years 2024-25 and 2025-26, setting a Proposition 218 hearing for June 11, 2024, directing staff to provide notice of the hearing as required by law, and adopting protest procedures.

Strategic Focus Area
Fiscal and Organizational Sustainability
Background
The City’s sewer operation is a revenue neutral utility, and the sewer fees reflects only those charges sufficient to support the community’s sewer conveyance and treatment services. The sewer rate revenue is used to fund operations, maintenance, and debt service for the capital improvements associated with the City’s sewer utility systems, and to fund City’s portion of sewer treatment costs at the wastewater treatment plant managed by Silicon Valley Clean Water (SVCW).

In November of 2023, the City retained the services of HDR Inc. (HDR) to update the comprehensive sewer rate study for Fiscal Years 2024-25 and 2025-26. The study reviews the adequacy of the existing sewer rates to meet the system improvement needs and provide the basis for appropriate rate structures for each customer classification. In developing the sewer revenue requirement, it was assumed the utility must financially “stand on its own” and be properly funded. As a result, the revenue requirement analysis as developed assumes the full and proper funding needed to operate and maintain the system on a financially sound and prudent basis.

Analysis
Based on the sewer operational needs of the City, HDR has prepared the rate analysis for the next five fiscal years. Reviewing a multi-year time period is recommended to identify any major expenses that may be on the horizon. By anticipating future financial requirements, the City can begin planning for these changes sooner, thereby minimizing short-term rate impacts and planning for long-term rate needs. The City’s working group consisting of the Public Works and Finance staff has reviewed the analysis and concurs with HDR’s assessment that Fiscal Years 2024-25 and 2025-26 rate increase of 4% each year over the current rates are adequate for the City to receive sufficient revenues to meet its expenditure obligations and its planned capital improvement program. 19

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report Most the City’s rate revenues are derived from residential customers. Currently, the City has two major classes of service: residential and non-residential customers. Non-residential customers are further categorized between low-strength and high-strength customers, depending on amount of water used. The City’s sewer rate structure includes a fixed component, as well as a component based on the customers’ winter water average consumption. Each year, the City requests the water consumption data from the MidPeninsula Water District (MPWD) to develop the proposed sewer rates and the revenue forecast for the next fiscal years.

Expense
Operation and maintenance (O&M) expenses are incurred by the City to operate and maintain the existing plant in service (i.e., infrastructure). Escalation factors were developed for the basic types of expenses the City incurs: labor, benefits, materials and supplies, utilities, insurance, and miscellaneous expenses.

A major cost for the sewer utility is the cost of wastewater treatment from SVCW. SVCW’s costs have been increasing due to their recent major capital projects, but also because of their operating cost associated with regulatory and utility cost increases. SVCW costs are allocated proportionally among the JPA members based on their capacity rights, average annual flow rates, and strength of the sewer generated by each member agency.

The total operation and maintenance expenses for the City are projected to be approximately $7.4 million in FY 2024-25. Of this amount, approximately $3.5 million, is related to SVCW wastewater treatment costs. The SVCW wastewater treatment costs are purchased services and are thus not a “locally controlled” sewer cost.

Capital Funding Needs
A key component in the development of the City’s sewer revenue requirement is properly funding the capital improvement needs. The City’s capital and capacity improvements needs is estimated at $28.1 million over the next 5 fiscal years. This study updated the capital improvement funding analysis based on the City’s current capital plan and funding approach. However, the City is in process of finalizing its Sewer Masterplan and once it’s finalized and approved, we’ll revisit the capital investment needs based on the more updated information. A key consideration in issuing debt is the establishment of rates sufficient to support repayment of the debt, but also, sufficient to meet rate covenants associated with the debt (e.g., reserves, minimum debt service coverage ratios).

Debt Service
In FY 2015-16, the city issued $16 million in bonds to fund capital project needs. The new level of annual debt service payments resulting from this issue is approximately $1 million a year. In FY 2019-20 the City issued $17 million of additional long-term borrowing to fund capital improvements. This debt issuance results in an additional $1.2 million in annual debt service payments.

Revenue Requirements
Similar to the results of the prior sewer rate study, rate adjustments are necessary to meet the annual O&M renewal and replacement and capital needs of the sewer system. The projected rate adjustments allow the City to meet three key prudent financial criteria, including:
20

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report • Meeting Debt Service Coverage Ratios – During the prior rate study this was a key driver in the results of the proposed rate adjustments. The proposed rate adjustments in this study allow the City to maintain a strong debt service coverage ratio.
• Adequate Renewal and Replacement Funding – The need to maintain the system is key to minimizing future deferred capital needs. This study continued the annual renewal and replacement funding needs to prudent levels over the 5-year plan. • Maintaining Prudent Reserve Fund Levels – The study has continued funding to increase reserve fund ending balances to typical industry levels. Given that the City receives semi-annual payments for services, it is important to have sufficient reserves (cash on hand) to fund operations between payments.

Table 1 below shows the total deficiency of revenues before any sewer rate adjustments, and it ranges from $579,000 in FY 2024-25 to $3.2 million by FY 2028-29. The rate adjustments needed to meet the above criteria are 4% in FYs 2024-25 and 2025-26.

Table 1 – Summary of Sewer Utility Revenue Requirements For illustrative purposes, Table 2 below shows how the present and proposed monthly sewer rates will change on a monthly bill assuming an average of eight Hundred Cubic Feet (HCF) multiplied by the Drought Regulation Adjustment (DRA).
21

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report Table 2 – Present and Proposed Rates with DRA
For this two-year rate period, the proposed rates include a 10% DRA. The City implemented the DRA in 2016 in order to adjust for the revenue shortfall as a result of water conservation impacts on the related fixed cost of the system and revenues received by the City through the consumption component of the City’s sewer rate. It should also be noted that the majority of the City’s collection costs are fixed and do not vary depending on the level of sewer flows. The one cost that would vary is the cost of treatment from the SVCW.

In 2026, the City will review the possibility of excluding the DRA in its rate calculation due to continual patterns in water consumption. The winter consumption data will be adjusted to “normal” levels assuming 22

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report a factor that represents the MPWD customer’s actual on-going water usage in effect during the winter water period used for rate setting. In this way, the City will be able to maintain target revenues during extreme drought or wet cycle situation as well as normalizing the ongoing consumption patterns.

Table 3 below shows the side-by-side comparison of the present and proposed sewer rates for FY 2024- 25 and 2025-26 rates. It is important to note that the City is not adopting the FY 2026-2028 rates as those rates are for illustrative purposes to forecast the operational costs for the outer years. Staff is recommending that the City Council set the maximum sewer rates with a drought regulation adjustment as noted below for FY 2024-25 and FY 2025-26.

Table 3 – Present and Proposed Sewer Rates
Note: The present and proposed Drought Regulation Adjustment (DRA) is Hundred Cubic Feet (HCF) X 1.10 X $/HCF In developing the revenue requirement analysis, consideration was given to the financial planning considerations of the City. In particular, emphasis was placed on attempting to minimize rates, yet still have adequate funds to support the operational activities and capital projects throughout the projected time period.
23

Introduction of 2024-25 and 2025-26 Sewer Rates - Staff Report Upon City Council review and direction on staff’s recommendation for the proposed adjustments in rates, staff is requesting Council direction to provide notice for setting a hearing date for consideration of the maximum rates per the Proposition 218 process as described below. Based on Council direction, staff will prepare a Notice for distribution to customers and an authorizing resolution stating the City’s intention to increase sewer rates effective FY 2024-25 and 2025-26, and schedule a public hearing on the proposed rate structure.

Proposition 218
Charges for sewer service are property-related charges subject to Proposition 218. These charges need not be submitted to an election of voters or property owners, but they are subject to a majority protest proceeding. That process is summarized as follows: (1) the City calculates a budget sufficient to cover the cost of service and determines how to spread that budget as rates across different kinds of customers (e.g., single-family, multi-family, non-residential), (2) the City provides 45 days mailed notice of a public hearing on the proposed new rates to every property owner or customer of record who will pay the new rates, (3) the City conducts the hearing and accepts written protests from property owners and customers of record, and (4) the City tallies the protests; if more than half of the affected property owners and customers of record protest the new rates in writing before the end of the hearing, the agency cannot impose the new rates; otherwise it may impose the rates at any level which does not exceed the rates stated in the notice. Majority protests under these rules are not common except when a very small number of ratepayers are involved.

Alternatives

1. Refer to Staff for additional information

2. Take no action
Attachments
A. Resolution
B. HDR Comprehensive Sewer Rate Study
Fiscal Impact
☐ No Fiscal Impact
☒ Funding Source Confirmed: Sewer rates are accounted for in the Sewer Collections Fund and incorporated into the budget development process.

Source: Purpose: Public Outreach:

Staff Statutory/Contractual Requirement Posting of Agenda

24

RESOLUTION NO. 2024 –

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BELMONT STATING

ITS INTENTION TO REVISE THE CITY'S SEWER CHARGES EFFECTIVE TAX YEAR 2024-25 AND 2025-26
WHEREAS, Belmont City Code Section 21.93 and California Health and Safety Code Section 5470 et seq. authorize the City of Belmont to levies charges for sewer services; and, WHEREAS, the City Council desires to conduct a proceeding to revise the rate and methodology for the sewer charges, to be effective beginning the 2024-25 and 2025-26 tax years.

NOW, THEREFORE, the City Council of the City of Belmont resolves as follows:

SECTION 1. The City Council proposes the imposition of the sewer charges and rate methodology generally described in Exhibit “A” to this Resolution.

SECTION 2. The City Council will hold a public hearing under California Constitution Article XIIID, Section 6, subdivision (a)(2) on June 11, 2024, at 7:00 PM or as soon thereafter as may be practicable in the City Council Chambers located at One Twin Pines Lane, Belmont, California to consider the proposed sewer charges and protests against the proposed charges.

SECTION 3. The City Council directs staff to give notice of the hearing in the manner required by law.

SECTION 4. The City will accept and tabulate protests against the proposed rate revision pursuant to the procedures set forth in Exhibit “B” to this Resolution. * * *
ADOPTED April 9, 2024 by the City of Belmont City Council by the following vote:

Ayes:

Noes:

Absent:

Abstain:
25

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

City Attorney
26 EXHIBIT A
Proposed Sewer Charge Rate Schedule
Each parcel’s sewer charge will be the sum of the base charges and flow charges for both collection and treatment.

FY 2024-25 FY 2025-26
Collection
Residential
Base Charge - Annual $447.89 $465.80
Flow Charge ($/HCF x 1.10 DRA) $6.38 $6.63
Commercial
Base Charge
Flow Charge ($/HCF x 1.10 DRA)
Low strength
$447.89
$6.38
$465.80
$6.63
High Strength $12.39 $12.88
Treatment
Residential
Base Charge - Annual $235.39 $244.81
Flow Charge ($/HCF x 1.10 DRA) $3.15 $3.28
Commercial
Base Charge
Flow Charge ($/HCF x 1.10 DRA)
Low strength
$235.39
$3.15
$244.81
$3.28
High Strength $6.14 $6.38
DRA=Drought Regulation Adjustment
Standby Charge
For Non-metered parcels:
• $245.40 per dwelling unit per year
Wastewater Discharge Fee
Wastewater discharge fee will be the sum of the Flow Charges for both Collection and Treatment for each user classification in the table above.
27 EXHIBIT B

GUIDELINES FOR THE SUBMISSION AND TABULATION OF PROTESTS Submission of Protests

1. Any property owner may submit a written protest to the City Clerk, either by delivery to the office of the City Clerk or by submitting the protest at the public hearing. Protests must be received by the end of the public hearing. No postmarks will be accepted.

2. Each protest must identify the affected property (by assessor’s parcel number or street address) and include the signature of the record property owner. Email protests cannot be accepted. Although oral comments at the public hearing will not qualify as a formal protest unless accompanied by a written protest, the City Council welcomes input from the community during the public hearing on the proposed charges.

3. If a parcel served by the City is owned by more than a single record owner, each owner may submit a protest, but only one protest will be counted per parcel and any one protest submitted in accordance with these rules will be sufficient to count as a protest for that property.

4. In order to be valid a protest must bear the original signature of the record owner with respect to the property identified on the protest. Protests not bearing the original signature of a record owner shall not be counted.

5. Any person who submits a protest may withdraw it by submitting to the City Clerk a written request that the protest be withdrawn. The withdrawal of a protest shall contain sufficient information to identify the affected parcel and the name of the record owner or record customer who submitted both the protest and the request that it be withdrawn.

6. A charge protest proceeding is not an election.

7. To ensure transparency and accountability in the charge protest tabulation, protests shall constitute disclosable public records from and after the time they are received.

Tabulation of Protests

1. The City Clerk shall determine the validity of all protests. The City Clerk shall not accept as valid any protest if the City Clerk determines that any of the following conditions exist:
a. The protest does not identify a property served by the City. b. The protest does not bear an original signature of a record owner of the parcel identified on the protest.
c. The protest does not state its opposition to the proposed charges. 28 d. The protest was not received by the City Clerk before the close of the public hearing on the proposed charges.
e. A request to withdraw the protest is received prior to the close of the public hearing on the proposed charges.

2. The City Clerk’s decision that a protest is not valid or does not apply to a specific charge shall constitute a final action of the City and shall not be subject to any internal appeal.

3. A majority protest exists if written protests are timely submitted and not withdrawn by the record owners of a majority of the properties subject to the proposed charge.

4. At the conclusion of the public hearing, the City Clerk shall complete the tabulation of all protests received, including those received during the public hearing and shall report the results of the tabulation to the City Council upon completion. If review of the protests received demonstrates that the number received is manifestly less than one-half of the parcels served by the City with respect to the charge which is the subject of the protest, then the Clerk may advise the City Council of the absence of a majority protest without determining the validity of all protests.
29 Draft Report
City of Belmont
Comprehensive Sewer
Rate Study
April 2024
DRAFT
30 900 108th Ave NE, Suite 1300
Bellevue, WA 98004
April 9, 2024
Mr. Peter Brown
Director of Public Works
City of Belmont
One Twin Pines Lane
Belmont, California 94002
Subject: City of Belmont 2024 Comprehensive Sewer Rate Study Draft Report Dear Mr. Brown:

HDR Engineering, Inc. (HDR) is pleased to present the Draft report for the comprehensive sewer rate study conducted for the City of Belmont (City). The overall objective in conducting the rate study was to establish cost-based rates that provide adequate and sustainable funding for the operational and capital needs of the sewer utility. This report outlines the approach, methodology, findings, and conclusions of the rate study process undertaken for the City’s sewer utility.

This report was developed utilizing the City’s specific accounting, operating, and historical customer billing records. HDR utilized this information to develop our analyses, which shaped our findings, conclusions, and recommendations. At the same time, this study was developed utilizing generally accepted rate setting principles as outlined in the Water Environment Federation Manual of Practice No. 27 rate setting manual to meet the proportionality requirements of Proposition 218. The conclusions and recommendations contained within this report provide the City with cost-based and proportional rates for its customers.

We appreciate the assistance provided by the City staff, management, and the City Council in the development of this study.

Sincerely yours,
HDR Engineering, Inc.

Shawn Koorn
Associate Vice President
DRAFT
31 Table of Contents i
City of Belmont – Comprehensive Sewer Rate Study
Executive Summary
Introduction .................................................................................................................. 1 Overview of the Rate Study Process .............................................................................. 2 Key Study Results .......................................................................................................... 3 Overview of the Sewer Rate Study................................................................................. 4 Summary of the Revenue Requirement Analysis.................................................. 4 Summary of the Cost of Service Analysis ............................................................. 6 Summary of the Rate Design Analysis.................................................................. 7 City Council Review ..................................................................................................... 10 Summary ..................................................................................................................... 10 1 Overview of the Rate Setting Process

1.1 Introduction ...................................................................................................... 11

1.2 Generally Accepted Rate Setting Principles..…………………………………………………….11

1.3 Prudent Financial Planning ..........................…………………………………………………….11

1.4 Overview of the Rate Study Process ..……………………………………………………………….12

1.5 Determining the Revenue Requirement ............................................................ 13

1.6 Analyzing the Sewer Cost of Service .................................................................. 13

1.7 Designing Sewer Rates....................................................................................... 14

1.8 Summary………………………………… ..................…………………………………………………….14 2 Development of the Sewer Revenue Requirement

2.1 Introduction.......................................................................................................16

2.2 Determining the Sewer Utility Revenue Requirement........................................ 16

2.2.1 Determining the Time Period and Methodology.....................................16

2.2.2 Flow Impacts on Calculating Revenues...................................................17

2.2.3 Projection of Sewer Revenues................................................................18

2.2.4 Projection of Sewer Operation and Maintenance Expenses....................19

2.2.5 Projection of Sewer Capital Improvement Projects and Funding.............21

2.2.6 Projection of Debt Service ......................................................................22

2.2.7 Reserve Funding .....................................................................................23

2.2.8 Summary of the Sewer Revenue Requirement .......................................22

2.2.9 Debt Service Coverage Ratios................................................................. 25

2.2.10 Review of the Sewer Reserve Levels.......................................................25

2.2.11 Consultant’s Conclusions........................................................................26

2.3 Summary............................................................................................................26 Table of Contents
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32 Table of Contents ii
City of Belmont – Comprehensive Sewer Rate Study
3 Development of the Sewer Cost of Service Analysis

3.1 Introduction..................................................................................................... 27

3.2 Objectives of a Cost of Service Study................................................................ 27

3.3 Determining the Customer Classes of Service.................................................... 28

3.4 General Cost of Service Procedures................................................................... 28

3.4.1 Functionalization of Costs..................................................................... 28

3.4.2 Allocation of Costs................................................................................ 29

3.4.3 Development of Distribution Factors.................................................... 29

3.4.4 Functionalization and Allocation of Sewer Plant in Service ................... 30

3.4.5 Functionalization and Allocation of Operating Expenses....................... 31

3.4.6 Major Assumptions of the Cost of Service Study................................... 31

3.5 Summary of the Cost of Service Analysis ........................................................... 32

3.6 Consultant’s Conclusions and Recommendations.............................................. 32

3.7 Summary ........................................................................................................... 33 4 Development of the Sewer Rate Design

4.1 Introduction ...................................................................................................... 34

4.2 Rate Design Goals and Objectives...................................................................... 34

4.3 Development of Cost Based Sewer Rates........................................................... 34

4.4 Present and Proposed Sewer Rates ................................................................... 35

4.5 Average Residential Local Bill Comparison......................................................... 38

4.6 City Council Review ........................................................................................... 38

4.7 Summary of the Sewer Rate Study..................................................................... 38 Technical Appendix
Proposition 218 Notice
DRAFT
33 Executive Summary 1
City of Belmont – Comprehensive Sewer Rate Study
Introduction
HDR Engineering, Inc. (HDR) was retained by the City of Belmont (City) to perform a comprehensive sewer rate study, which is an update to the prior rate studies completed by HDR for the City. The latest study having been completed in 2022. The 2022 study set rates for the two-year period for Fiscal Years (FY) 2022-2023 and 2023-2024. The City’s sewer treatment services are provided for the City through its participation in Silicon Valley Clean Water (SVCW), which owns and operates a sub-regional wastewater treatment plant and related conveyance facilities that serve the City of Belmont, as well as the cities of Redwood City, San Carlos, and the West Bay Sanitary District. SVCW allocates its costs between the agencies based on their capacity rights, average annual flow rates, and strength of the sewer generated by each member agency.

The collection system component is based on the City’s costs to operate and maintain the City’s sewer system.

The City’s sewer rate is comprised of two components, a collection system component and a treatment system component. The collection system component is based on the costs to operate the City’s sewer collection system. The treatment costs are based on the current treatment costs projections and are adjusted as the City is notified of cost changes by SVCW. The City bills customers on the tax rolls. Each parcels’ sewer charge is the sum of the base charge and flow charges for both collection and treatment.

The vast majority of the City’s rate revenues are derived from residential customers. Currently, the City has two major classes of service: residential/non-residential low strength and high strength non-residential customers. The City’s sewer rate structure includes a fixed component, as well as a flow based component based on the customers’ winter water average consumption.

Annually, the City requests the water consumption data from the Mid-Peninsula Water District to develop the proposed sewer rates, and resulting revenue forecast, for the next fiscal year. In the 2016 rate study, it was recommended that the City make adjustments to the winter water calculation that takes into account the mandated conservation on the City’s sewer customers.

This resulted in the City adopting a drought regulation adjustment on each customer’s winter period consumption, or a multiplier, to develop the consumption for rate setting purposes. The consumption data from Mid-Peninsula Water District is reviewed and a determination made as to the level of the drought regulation adjustment. For this study, the adjustment factor was maintained at 10% as there were no significant changes in consumption levels from the prior study..

This study is based on the previous sewer rate study methodologies and analyses completed by HDR over the past 10 years. The prior studies provided recommendations, and proposed rates, to fund an adequate level of renewal and replacement and include funding of capital projects from prior years. This study reviews the adequacy of the existing sewer rates to meet identified system improvement needs and provides the basis for appropriate rate levels for each customer Executive Summary
DRAFT
34 Executive Summary 2
City of Belmont – Comprehensive Sewer Rate Study
classification. The projected rate adjustments allow the City to meet three key prudent financial criteria, these are:
• Meeting Debt Service Coverage Ratios (DSC) – DSC ratios are the measurement of a utility’s ability to repay outstanding debt. As noted in the City’s 2019 JPFA Sewer Revenue Bond issuance, a minimum debt service coverage ratio of 2.0 is targeted. The proposed rate adjustments in this study allow the City to maintain a debt service coverage ratio greater than 2.0.
• Adequate Renewal and Replacement Funding – The need to maintain the system is key to minimizing future capital needs. This study has continued with increasing the City’s annual renewal and replacement funding needs to prudent levels, which exceed depreciation over the rate planning period. This reflects the funding needs of past deferred capital improvements and necessary inflow and infiltration (I&I) capital improvement needs.
• Maintaining Prudent Reserve Fund Levels – The study has continued to provide ending reserve fund balances to be in line with industry best practices. Given that the City receives semi-annual revenue payments for services, it is important to have sufficient cash reserves on hand to fund operations between revenue payments.

Meeting these three key criteria is critical to the City being able to fund, or finance future capital through the issuance of long-term debt. By adjusting rates, the City is demonstrating to the outside financial community its willingness and commitment to maintain a strong financial position. This willingness to address financial issues and adjust rates accordingly will be beneficial when issuing future long-term debt for the sewer system’s capital needs. As a point of reference, HDR is not acting as the City’s municipal advisor or calculating or verifying the debt service coverage ratios for the City for financial projections.

The development of this study examines the adequacy and proportionality of the current sewer ratesfor the City’s sewer utility and provides the cost-basis for recommended sewer rate revenue adjustments. This report describes the overall methodology used to analyze the City’s sewer rates along with the findings, conclusions, and recommendations.

Overview of the Rate Study Process
A comprehensive sewer rate study uses three interrelated analyses to address the adequacy and proportionality of a utility’s rates. These three analyses are a revenue requirement analysis, a cost of service analysis, and a rate design analysis. These three analyses are illustrated below in Figure ES-1.

DRAFT
35 Executive Summary 3
City of Belmont – Comprehensive Sewer Rate Study
Figure ES – 1
Overview of the Comprehensive Rate Analyses
For the City’s sewer rate study, HDR completed each of the three analyses, a revenue requirement analysis, cost of service analysis, and rate design analysis. The results from each task of the rate study were used as the basis for establishing cost-based and proportional rates for the City’s customers.

Key Study Results
The sewer utility was financially evaluated on a stand-alone basis. By reviewing the sewer utility individually, the revenues required to adequately fund both O&M and capital infrastructure for the sewer utility must be balanced against the rate impacts to customers. Likewise, future rate impacts should be considered and evaluated as part of the study projections. For example, the delayed action to fund capital improvements in the current time period could result in higher future costs and in turn increased rate adjustments as well as risk associated with catastrophic system failures. It is challenging to balance the desire for least cost rates with the operating and capital needs required to provide a high-level service to customers.

Based on the technical analysis undertaken as part of this study, the following findings, conclusions, and recommendations were noted.
• The revenue requirement analysis for the sewer utility was developed for FY 2023-2024 – 2031-2032.
• The starting point for the revenue requirement analysis was the City’s FY 2023-2024 adopted sewer budget and the sewer utility capital improvement plan. • Wastewater treatment is provided by Silicon Valley Clean Water (SVCW) and is included within the City’s operation and maintenance expenses. The SVCW FY 2023-2024 budget was escalated annually based on the projections provided by SVCW. • The current flow adjustment factor has been maintained at 10% to reflect the minimal changes expected for the winter water averages for the two-year rate setting period.

Revenue Requirement Analysis
Cost of Service Analysis
Rate Design Analysis
Compares the revenues to the expenses to
determine the overall
revenue adjustment required
Proportionally distributes the revenue
requirement to the sewer utility customer
classes of service
Reflects the revenue requirement and
cost of service results to collect the
target level of revenues
DRAFT
36 Executive Summary 4
City of Belmont – Comprehensive Sewer Rate Study
• Escalation factors were developed to project operating expenses in future years. These factors ranged from 2% to 7% per year depending on the specific expense and reflect the inflationary increases experienced by the City in the past. • A cost of service analysis was developed to review the proportionality of the existing rates. The results of the cost of service analysis indicated minimal cost differences between the customer classes of service. Given these results, it is recommended that no adjustments in the cost relationships between the classes of service be made at this time. • Proposed rates were developed for consideration by the City Council for FY 2024-2025 and FY 2025-2026.
• Rate projections were developed for a 5-year period through FY 2028-2029, to provide the City Council with a projection of the rates necessary to meet future operating and capital needs.
• The proposed rate adjustments are necessary for the City to adequately fund its financial needs and maintain prudent financial measures and operating metrics  Maintain a healthy financial outlook for future long-term borrowing by targeting a 2.0 minimum debt service coverage ratio
 Adequate funding of capital improvements from rates to prudently maintain the City’s existing infrastructure (i.e., renewal and replacement programs) as well as I&I improvements
 Maintain adequate minimum reserve levels for routine operating and capital needs as well as emergency situations
Provided below is the executive summary of the technical analyses undertaken for the City’s study and the findings, conclusions, and recommendations of this study.

Overview of the Sewer Rate Study
The sewer rate study determines the overall adequacy of the existing sewer rates, on a financial stand-alone basis, at current rate levels. That is, no funding sources other than those generated by the sewer utility were used to fund sewer utility expenses. For the sewer rate study, a concerted effort was made to minimize rate impacts over the five-year review period while also maintaining the City’s financial targets for debt service coverage ratio, capital improvement funding, and operating and capital cash reserve levels.

Summary of the Revenue Requirement Analysis
The development of the revenue requirement analysis is used to determine the overall adequacy of the sewer utility rates. The starting point of the sewer revenue requirement analysis was the City’s FY 2023-2024 adopted sewer utility budget. HDR and City staff developed a projection of revenues and expenses for future years based on assumed escalation (inflationary) factors. The sewer study was developed to project future rate needs based on projected operating costs and identified capital needs over the multi-year period. However, the focus for purposes of rate setting was the next two-year period (FY 2024-2025 – 2025-2026). The summary of the sewer revenue requirement is shown below in Table ES-1. It indicates the need for rate adjustments in order to properly fund the sewer utility.

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37 Executive Summary 5
City of Belmont – Comprehensive Sewer Rate Study
Table ES – 1
Summary of Sewer Revenue Requirement ($000s)
Budget Projected
2023-24[1] 2024-25 2025-26 2026-27 2027-28 2028-29
Revenues
Retail Rate Revenues $14,337 $14,481 $14,625 $14,772 $14,919 $15,069 Other Revenues 138 872 804 782 688 719
Total Revenues $14,476 $15,353 $15,430 $15,554 $15,607 $15,788 Expenses
Collection O&M Expenses $3,895 $4,021 $4,148 $4,280 $4,418 $4,561 Treatment O&M Expenses 3,625 3,496 4,090 4,270 4,470 4,670 Repair & Replace. Funding 3,000 5,000 5,200 5,500 6,000 6,400 I/I Capital Funding 650 668 686 705 724 744
Total Debt Service 2,500 2,503 2,498 2,501 2,501 2,497
Change in Working Capital +/- 805 244 1 142 29 181
Total Expenses $14,476 $15,932 $16,623 $17,398 $18,141 $19,053 Balance/(Deficiency) of Funds $0 ($579) ($1,193) ($1,844) ($2,534) ($3,265) Cumulative as a % of Rates 0.0% 4.0% 8.2% 12.5% 17.0% 21.7% Proposed Rate Adjustments 0.0% 4.0% 4.0% 4.0% 4.0% 4.0% Debt Service Coverage Ratio
Before Rate Adjustment 2.73 3.08 2.82 2.74 2.63 2.57
After Rate Adjustment 2.73 3.31 3.30 3.48 3.64 3.88
[1] Note: FY 2023-24 includes the revenues at the adopted rate levels from the prior rate study. Therefore, no rate adjustment is included in FY 2023-24.

Table ES–1 shows the total deficiency of revenues, before the proposed sewer rate adjustments, ranges from $579,000 in FY 2024-25 increasing to $3.3 million by FY 2028-29. A 4.0% annual sewer revenue adjustment is proposed for the projected time period of FY 2024-2025 through FY 2028-2029. The projected rate adjustments allow the City to meet three key prudent financial metric criteria, these are:
• Meet Prudent Debt Service Coverage Ratios – Minimum DSC target of 2.0. • Adequate Renewal and Replacement Funding – Annual renewal and replacement funding needs exceed depreciation over the 5-year plan as well as I&I capital funding needs.
• Maintain Prudent Reserve Fund Levels – Operating reserve target equal to annual minimum of 180 days of O&M; Capital project reserve target equal to two years of annual depreciation.

The revenue requirement developed in this sewer rate study will allow the City to develop costbased rates that meet the City’s goals and objectives for maintaining the existing system and funding future capital needs. While the revenue requirement analysis projected operating and DRAFT
38 Executive Summary 6
City of Belmont – Comprehensive Sewer Rate Study
capital needs over a five-year period, the focus of the proposed rates, for Proposition 218 purposes, is the next two fiscal years, FY 2024-2025 and FY 2025-2026.

Summary of Cost of Service Analysis
A cost of service analysis determines the proportional distribution of the previously developed revenue requirement to each of the customer classes of service. The objectives of the cost of service analysis are different from determining revenue requirement. A revenue requirement analysis determines the utility's overall financial needs, while the cost of service study determines the proportional manner to collect the revenue requirement from the customer classes of service (e.g., rate schedules). The City has two rate schedules, low strength and high strength. Low strength includes all residential customers, and the non-residential customers that have domestic strength wastewater. High strength is for non-residential customers that have wastewater strengths greater than domestic strength levels. Table ES-2 provides a summary of the cost of service analysis for the FY 2024-2025 test year.

Table ES – 2
Summary of the FY 2024-25 Sewer Cost of Service Analysis ($000’s) Classes of Service
Present Rate
Revenues
Distributed
Costs
$
Difference
%
Difference
Low Strength
Residential and Non-Residential $14,233 $14,806 ($574) 4.0% High Strength
Non-Residential 248 254 (6) 3.9%
Total $14,481 $15,060 ($579) 4.0%
The results of the cost of service analysis indicated very minimal cost differences between the customer classes of service. It should be noted that the cost of service analysis developed by HDR is not a simple fixed/variable analysis. Rather, the cost of service analysis distributes costs between the customer classes of service based on each customer class’s proportional share of volume, strength, and customer-related costs. Given that, no adjustments to the cost relationships between the customer classes of service are recommended at this time.

Summary of the Rate Design Analysis
The final step of the comprehensive sewer rate study process is the design of sewer rates to collect the desired level of revenue, based on the results of the revenue requirement and cost of service analyses. The individual allocated totals were then distributed to each customer class.

The distributed expenses were then aggregated to determine the overall responsibility of each customer class of service.

Developing proportional rates is of paramount importance in developing the proposed sewer rates. Given this, the City’s proposed sewer rates have been developed with the intent of meeting the legal requirements of California Constitution Article XIII D, section 6 (Article XIII D), commonly DRAFT
39 Executive Summary 7
City of Belmont – Comprehensive Sewer Rate Study
referred to as Proposition 218. A key component of Article XIII D is the development of rates which reflect the cost of providing service and are proportionally allocated among the customer classes of service. HDR would point out that there is no single methodology for proportionally assigning costs to the various customer groups. The Water Environment Federation (WEF) Manual of Practice No. 27 clearly delineates various methodologies which may be used to establish cost‐based rates. Article XIII D does not prescribe a particular methodology for establishing rates. Consequently, HDR developed the City’s proposed sewer rates based on the WEF MOP #27 methodology and the City’s sewer system operating and customer characteristics, in order to provide an administrative record of the steps taken to establish the City’s proposed sewer rates to meet the requirements of Article XIII D.

HDR is of the opinion that the proposed rates comply with the legal requirements of Article XIII D. HDR reaches this conclusion based upon the following:
 The revenue derived from sewer rates does not exceed the funds required to provide the property related service (i.e., sewer service). The proposed rates are designed to collect the overall revenue requirement of the City’s sewer utility.  The revenues derived from sewer rates shall not be used for any purpose other than that for which the fee or charge is imposed. The revenues derived from the City’s sewer rates are used exclusively to operate and maintain the City’s sewer system.  The amount of a fee or charge imposed upon a parcel or person as an incident of property ownership shall not exceed the proportional costs of the service attributable to the parcel.

The cost of service analysis was specifically developed to focus on the issue of the proportional assignment of costs.

The City’s sewer rate is comprised of two components, a collection system component and a treatment system component. The collection system component is based on the costs to operate the City’s sewer system, except for treatment costs. The treatment costs are based on the current treatment costs projections and is adjusted as the City is notified of cost changes by the wholesale provider (SVCW). Each parcels’ sewer charge is the sum of the base charge and flow charges for both collection and treatment. The proposed sewer rate designs maintain their current rate structure.

For the five-year rate period, the rates have maintained the 10% flow adjustment factor that reflects the historical change in consumption given mandated and targeted conservation. MidPeninsula Water District consumption billing data was reviewed and utilized in the development of the study. As a result of there being no significant changes in consumption levels since the prior study, the adjustment factor was maintained at 10%. The flow adjustment factor will allow the City to maintain sufficient revenues during the proposed rate period of FY 2024-2025 and FY 2025-2026. The flow adjustment factor will be reviewed again during the next rate study and a determination made as to adjust the flow adjustment factor or to eliminate, and restart, the flow adjustment factor.

The same formula for this adjustment will remain as follows: (HCF = 100 cubic feet) Formula: Actual Volume Usage x (1 + (flow adjustment factor)) = adjusted volume usage DRAFT
40 Executive Summary 8
City of Belmont – Comprehensive Sewer Rate Study
Example: 8 HCF x (1+ .10) = 8.8 HCF adjusted volume usage Table ES-3 provides the present and proposed rates for the residential and non-residential customers for the next five fiscal years.

Table ES – 3
Present and Proposed Sewer Rates (Annual)
Present
Rates
Proposed
Rates
FY 2024-25
Proposed
Rates
FY 2025-26
Forecasted
Rates
FY 2026-27
Forecasted
Rates
FY 2027-28
Forecasted
Rates
FY 2028-29

COLLECTION
Residential
Base Charge $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge ($/HCF)[1] 6.13 6.38 6.63 6.90 7.17 7.46
Non-Residential
Base Charge $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge Low
Strength ($/HCF)[1]

6.13 6.38 6.63 6.90 7.17 7.46
Flow Charge High
Strength ($/HCF)[1]

11.91 12.39 12.88 13.40 13.93 14.49

TREATMENT
Residential
Base Charge $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge ($/HCF)[1] 3.03 3.15 3.28 3.41 3.54 3.69
Non-Residential
Base Charge $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge Low
Strength ($/HCF)[1]

3.03 3.15 3.28 3.41 3.54 3.69
Flow Charge High
Strength ($/HCF)[1]

5.90 6.14 6.38 6.64 6.90 7.18

COMBINED
Residential
Base Charge $657.00 $683.28 $710.61 $739.04 $768.60 $799.34 Flow Charge ($/HCF) 9.16 9.53 9.91 10.30 10.72 11.14
Non-Residential
Base Charge $657.00 $683.28 $710.61 $739.04 $768.60 $799.34 Flow Charge Low
Strength ($/HCF)]

9.16 9.53 9.91 10.30 10.72 11.14
Flow Charge High
Strength ($/HCF)

17.81 18.52 19.26 20.03 20.84 21.67
At present rates, a typical residential customer with 8 hundred cubic feet of winter water average would have a monthly bill of $135.36 (8 HCF X 1.10 = 8.80 HCF). Under the proposed rates, with the flow adjustment factor remaining at 10%, the same customer would have a monthly bill of DRAFT
41 Executive Summary 9
City of Belmont – Comprehensive Sewer Rate Study
$140.77 in FY 2024-25. Table ES-4 shows the average residential bill for FY 2024-25 through FY 2028-29.

Table ES – 4
Present and Proposed Sewer Rates (Monthly)
Proposed
FY 2024-25
Proposed
FY 2025-26
Forecasted
FY 2026-27
Forecasted
FY 2027-28
Forecasted
FY 2028-29
Proposed Revenue Adjustment 4.0% 4.0% 4.0% 4.0% 4.0%
Present Average Monthly Bill [1] $135.36
After Proposed Rate Adj. [2] $140.77 $146.41 $152.26 $158.35 $164.68 Monthly Bill Difference 5.41 5.63 5.86 6.09 6.33
Cumulative Bill Difference 5.41 11.05 16.91 22.99 29.32 % Change to Monthly Bill 4.0% 4.0% 4.0% 4.0% 4.0%
[1] – Current average bill assumes 10% flow adjustment factor and 8 HCF monthly consumption [2] –Proposed average bill assumes a 10% flow adjustment factor and 8 HCF monthly consumption This report provides a more detailed discussion of the sewer rate study revenue requirement, cost of service, and rate design analyses undertaken for the City.

City Council Review
At the time of this report, the study results were anticipated to be presented to the City Council on April 9, 2024. If approved, and moved by the City Council, a public hearing will be set and the customer notification sent to the customers.

Summary
The adequacy and proportionality of the City’s sewer rates were reviewed by HDR through the development of a comprehensive sewer rate study. Based on the analyses developed herein, which included the budgeted operating and capital expenses, HDR has proposed a comprehensive set of revenue recommendations for the sewer utility. The following sections of the report provide a more detailed discussion of the technical analyses undertaken, along with the findings, conclusions
DRAFT , and recommendations of the study.
42 Introduction and Overview of the Rate Setting Process 10 City of Belmont – Comprehensive Sewer Rate Study

1.1 Introduction
HDR Engineering, Inc. (HDR) was retained by the City of Belmont (City) to conduct a comprehensive sewer rate study. The objective in conducting a comprehensive sewer rate study is to develop cost-based and proportional rates which adequately fund the City’s operation and maintenance (O&M) needs, along with the necessary capital improvements (i.e., capital infrastructure) to provide service. This study determines the adequacy of the existing sewer rates and provides the analytical framework for any needed future adjustments.

1.2 Generally Accepted Rate Setting Principles
As a practical matter, utilities should consider setting their rates around generally accepted or global principles and guidelines. Utility rates should be:
 Cost-based, proportional, and set at a level that meets the utility’s full revenue requirement
 Easy for the customer to understand and easy for the utility to administer  Designed to conform with generally accepted rate setting techniques  Stable in their ability to provide adequate revenues to meet the utility’s financial, operating, capital infrastructure and regulatory requirements  Established at a level that is, from the customer’s perspective, stable from year-to-year These general principles and guidelines have historically been used by the City to establish their current sewer rates. For this study, they were again applied in the rate analyses developed for the City.

1.3 Prudent Financial Planning
Financial rate-setting policies and guidelines are integral to the process of developing a utility rate study. Financial policies are intended to provide guidance in the financial planning and ratesetting process, and in the day-to-day financial management of the City’s utilities. Adoption of financial policies provides a strong foundation for the long-term financial sustainability of the utility and provides the outside financial community with a better understanding of the City’s commitment to managing the utility in a
financially prudent manner. As a part of the City’s previous rate studies, key financial and rate-setting policies/targets were developed and established. These key financial
policies address issues such as maintaining minimum
reserves for cash flow and capital improvement purposes, minimum debt service coverage (DSC) ratios, and consistent and adequate rate funding of capital

1.0 Overview of the Rate Setting Process
“Financial policies are
intended to provide guidance
in the financial planning and
rate-setting
process…Adoption of
financial policies provides a
strong foundation for the
long-term financial
sustainability of the utility...”
DRAFT
43 Introduction and Overview of the Rate Setting Process 11 City of Belmont – Comprehensive Sewer Rate Study
projects for the City. Each of the key financial planning and rate setting objectives were carried forward from the City’s prior sewer rate studies.

1.4 Overview of the Rate Study Process
A comprehensive study generally consists of three interrelated analyses performed for the sewer utility. Figure 1 - 1 provides an overview of these analyses.

Figure 1 – 1
Overview of the Comprehensive Rate Analyses
In a comprehensive rate study, the revenue requirement analysis is concerned with the overall funding sources (revenues) and expenses (both operating and capital) of the utility. From this analysis, a determination can be made as to the overall level of adjustment to rate revenues.

Next, a cost of service analysis is performed to proportionally distribute the revenue requirement to the various types of customers served (e.g., residential, commercial). Finally, given the overall level of revenues to be collected, along with the proportional distribution of those costs, the last step of the rate study process is the designing of rates to collect the appropriate level of revenues while considering the other rate design goals and objectives of the utility (e.g., revenue stability, conservation, ease of administration, customer understanding). However, a key component of the study is supporting the requirements of Proposition 218 for the proposed rates while considering rate design goals and objectives.

In the case of the City’s study, all three analyses (revenue requirement, cost of service, rate design) were conducted for the sewer utility. The results from each task of the rate study were used as the basis for establishing cost-based and proportional rates for the City’s customers.

In developing this study, HDR utilized generally accepted cost of service and rate setting techniques as well as industry best practices in the development of the City’s sewer rate study.

Revenue Requirement Analysis
Cost of Service Analysis
Rate Design Analysis
Compares the revenues to the expenses to
determine the overall
revenue adjustment required
Proportionally distributes the revenue
requirement to the sewer utility customer
classes of service
Reflects the revenue requirement and
cost of service results to collect the
target level of revenues
DRAFT
44 Introduction and Overview of the Rate Setting Process 12 City of Belmont – Comprehensive Sewer Rate Study

1.5 Determining the Revenue Requirement
Most public utilities use the “cash basis” methodology for establishing their revenue requirement and setting rates. This revenue requirement methodology conforms to most public utility budgetary requirements and the calculation is easy to understand. Under the cash basis revenue requirement methodology, a public utility:
 Adds operation and maintenance (O&M) expenses to applicable taxes or transfer payments to determine total operating expenses. Operation and maintenance expenses include the materials, electricity, labor, supplies, etc., needed to keep the utility functioning.
 Calculates capital costs by adding debt service payments (principal and interest) to capital improvements financed with rate revenues. In lieu of including capital improvements financed with rate revenues, a utility sometimes includes (i.e., substitutes) annual depreciation expense to stabilize the annual revenue requirement from year-to-year.

Note that the two portions of the capital expense component (debt service and capital improvements financed from rates) are necessary under the cash basis methodology because utilities generally cannot finance all their capital facilities with strictly rates or long-term debt.

Under the cash basis revenue requirement methodology, the sum of the operating expenses and capital costs equals the utility’s total revenue requirement during any period of time (see Table 1-1).

Table 1 – 1
Overview of the Sewer Utility Cash Basis Revenue Requirement + Sewer Operation and Maintenance Expenses
 Planning and Project Management
 Sanitary Sewer Operations
+ Repair and Replacement Funded from Rates
+ Debt Service (P + I) – Existing and Future
± Change in Working Capital
= Total Sewer Revenue Requirement
− Miscellaneous Revenues
= Net Revenue Requirement (Balance Required from Rates) The analyses developed within this report utilized the cash basis methodology. This is consistent with past practices of the City’s utility rate-setting.

1.6 Analyzing the Sewer Cost of Service
After the total revenue requirement is determined, it is then distributed to the users (i.e., customers) receiving sewer service. The proportional distribution, as analyzed through a cost of service analysis, reflects the cost relationships for collecting and conveying wastewater along with the costs from SVWC to treat the wastewater. The approach for establishing the cost of DRAFT
45 Introduction and Overview of the Rate Setting Process 13 City of Belmont – Comprehensive Sewer Rate Study
service analysis is based on the Water Environment Federation Manual of Practice No. 27 (WEF MOP #27). As discussed in the manual, a cost of service analysis requires three analytical steps, which are:

1. Costs are functionalized or grouped into the various cost categories related to providing service (e.g., for pumping; treatment, collection). This step is largely accomplished by the utility’s accounting system

2. The functionalized costs are then allocated to the appropriate cost component(s).

Allocation refers to the arrangement of the functionalized data into cost components. For example, sewer utility costs are typically allocated as volume, strength (BOD/TSS), customer-related, or a combination of the cost components

3. Once the costs are allocated to the cost components, they are proportionally distributed to the customer classes of service (e.g., residential/ low-strength non-residential, highstrength non-residential). The distribution is based on each customer class’s relative contribution to the cost component (i.e., benefits received from and burdens placed on the system and its resources). For example, customer-related costs are distributed to each class of service based on the total number of customers in that class of service. Once costs are distributed, the revenues from each customer class of service required to achieve cost-based rates can be determined
At the conclusion of the cost of service study, two key pieces of information are provided. First, the cost of service provides an understanding of the total revenues to be collected from each class of service. In other words, the revenue requirement is, for example, $10.0 million and the cost of service provides a proportional method to distribute that total cost of $10.0 million between the sewer customer classes of service (e.g., residential/ low-strength non-residential, high-strength non-residential ). The other important piece of information provided by the cost of service analysis is the average unit costs. Average unit costs are the distributed costs divided by the appropriate consumption (billing) units. This provides an understanding of the cost on a $/customer/month and $/hundred cubic feet (HCF) basis.

1.7 Designing Sewer Rates
The design of the proposed sewer rates for adoption by the City concludes the analytical or technical analysis portion of the rate study process. In designing proposed sewer rates, the results from both the revenue requirement and cost of service analyses are used to develop rates that achieve the overall goals and objectives of the City. These goals and objectives may include the consideration of cost-based rates, but may also consider items such as ability to pay, continuity of past rate philosophy, conservation (efficient use), encouragement of economic development, ease of customer understanding and billing administration, legal requirements, etc. It is important to understand that cost of service is only one goal or objective in designing final sewer rates. However, it is an important one, and necessary to meet the proportionality requirements of Proposition 218.

1.8 Summary
This section of the report has provided a brief introduction to the general principles, techniques, and economic theory used to set sewer utility rates. These principles and methodologies have been the basis for the City’s past utility rate studies and continue to be the basis for the City’s DRAFT
46 Introduction and Overview of the Rate Setting Process 14 City of Belmont – Comprehensive Sewer Rate Study
current rate study. The next three sections of the report discuss the sewer utility rate study and the technical analyses undertaken.

DRAFT
47 Development of the Sewer Revenue Requirement Analysis 15 City of Belmont – Comprehensive Sewer Rate Study

2.1 Introduction
This section of the City’s rate study report discusses the development of the sewer revenue requirement analysis and proposed sewer rate revenue transition plan. The main objective of the revenue requirement is to develop cost-based sewer rates while attempting to minimize the impact to the utility’s customers. Provided below is a detailed discussion of the revenue requirement, along with our findings, conclusions and recommendations.

2.2 Determining the Sewer Utility Revenue Requirement
The starting point of the sewer revenue requirement analysis was the FY 2023-24 adopted sewer budget. HDR and the City developed a projection of revenues and expenses for future years based on assumed escalation (inflationary) factors. The sewer study developed future rate needs based on operating and capital expenses over a five-year period, through FY 2028-2029. However, the focus for purposes of rate setting was the next two-year period (FY 2024-2025 and FY 2025-2026).

A rate transition plan was developed to provide a smooth transition to fully funding the sewer utility over the long-term.

The sewer capital funding plan was developed based on the current sewer utility capital improvement plan (CIP). This plan does not assume additional issuances of long-term debt at this time, while continuing the transition of rate funded capital to strengthen the level of renewal and replacement and capital project funding over the 5-year planning period.

2.2.1 Determining the Time Period and Methodology
The first step in calculating the revenue requirement for the sewer utility was to establish a time frame for the revenue requirement analysis. For this study, the revenue requirement was developed for FY 2023-2024 through FY 2028-2029, with the focus for rate setting purposes on FY 2024-2025 and FY 2025-2026. Reviewing a multi-year time period is recommended in an attempt to identify significant expenses that may be on the horizon. By anticipating future financial requirements, the City can begin planning for these changes sooner, thereby minimizing short-term rate impacts and overall long-term rates.

The second step in determining the revenue requirement for the City was to determine the basis of accumulating costs. For the City’s revenue requirement, the “cash basis” approach was utilized. The cash basis approach is the most commonly used methodology by municipal utilities to set their revenue requirement, and the method used in previous rate studies developed for the City by HDR. The actual revenue requirement developed for the City was customized to follow the City’s system of accounts (budget documents). However, even with these modifications, the City’s sewer revenue requirement still contains the basic cost components of the cash basis methodology. Table 2-1 provides a summary of the cash basis approach used to develop the City’s sewer revenue requirement.

2.0 Development of the Sewer Revenue Requirement
DRAFT
48 Development of the Sewer Revenue Requirement Analysis 16 City of Belmont – Comprehensive Sewer Rate Study
Table 2 – 1
Overview of the Cash Basis Revenue Requirement
+ Collection O&M Expenses
+ Treatment O&M Expenses
+ Repair & Replacement Funded from Rates
+ I/I Capital Funding
+ Debt Service (P + I) – Existing and Future
± Change in Working Capital
= Total Sewer Revenue Requirement
− Miscellaneous Revenues
= Net Revenue Requirement (Balance Required from Rates) Given a time period around which to develop the revenue requirement and a method to accumulate the costs, the focus shifts to the development and projection of the revenues and expenses of the sewer utility.

The primary financial inputs in the development of the revenue requirement wasthe City’s 2023- 2024 adopted sewer budget, historical winter customer characteristics data (e.g., number of customers and average winter consumption), and current adopted rates. Presented below is a detailed discussion of the steps and key assumptions used in the development of the projections of the City’s sewer revenues and expenses.

2.2.2 Flow Impacts on Calculating Revenues
The City has a sewer rate structure that includes a fixed component as well as a volumetric component based on the customers’ winter water average consumption. Each year, the City requests the water consumption data from the Mid-Peninsula Water District to develop the proposed sewer rates, and resulting revenue forecast, for the next fiscal year. The City adopted a drought regulation factor during the 2016 rate study, which is now called the flow adjustment factor. This adjustment factor has been in place since that time. However, during the comprehensive rate study process, the factor is reviewed, and updated, if necessary, to reflect current and projected consumption levels.

As mentioned previously, this study has maintained the current flow adjustment factor of 10%.

Based on the impact of the flow factor adjustment on the sewer billing units, the City will be projected to maintain target revenues during this next two-year period as customer winter water is impacted by conservation, possible drought conditions, and future conservation efforts by MidPeninsula Water District. The flow adjustment factor will be reviewed again during the next rate study and adjusted at that time, or depending on conditions, reset, with rates set at adequate levels assuming no flow adjustment factor. The same formula for this adjustment will remain as follows (HCF = 100 cubic feet):

DRAFT
49 Development of the Sewer Revenue Requirement Analysis 17 City of Belmont – Comprehensive Sewer Rate Study
Formula: Actual Volume Usage x (1 + (flow adjustment factor)) = adjusted volume usage Example: 8 HCF x (1+ .10) = 8.80 HCF adjusted volume usage It should also be noted that the majority of the City’s costs are fixed and do not vary depending on the level of sewer flows. The one cost that can vary is the cost of treatment from Silicon Valley Clean Water (SVCW). The cost of treatment is flow based and would change as a result of decreased sewer flows. Given all of the above, a decline in annual winter water consumption, which is the basis for establishing sewer billing units and subsequent sewer rate revenues, will have an impact on the necessary rate adjustment to prudently fund the City’s operating and capital expenses.

2.2.3 Projection of Sewer Revenues
Once the billing units were developed, based on the winter water data, the next step in developing the revenue requirement was to develop a projection of rate revenues, at present rate levels. In general, this process involved developing projected billing units for each customer group. The billing units for each customer group were then multiplied by the applicable current sewer rates. This method of independently calculating revenues assures the projected revenues used within the analysis tie to the projected billing units.

The vast majority of the City’s rate
revenues are derived from residential
customers. Currently, the City has two
major classes of service: Low strength
customers, and high strength customers.

Residential customers are low strength
customers as are those non-residential
customers that have domestic strength
flow based on the customer type. The high
strength customers reflect those customers
with higher strength wastewater flows given the type of business activity which impacts the costs of treatment. This is an important distinction as SVCW allocates costs, in part, between the member agencies on the strength of the wastewater flows. In total, and at currently adopted rate levels, the City is projected to receive approximately $14.5 million in rate revenue in FY 2024-25.

This is based on the projected winter water billing data, plus the flow adjustment factor of 10%.

Future years are projected at an additional 1.0% annual customer growth.

In addition to rate revenues, the City also receives a variety of miscellaneous revenues, which include interest on investments, standby fees, and other miscellaneous revenues. The utility is projected to annually receive an average of approximately $773,000 in miscellaneous revenues over the projected planning horizon.

On a combined basis, taking into account the rate revenues along with miscellaneous revenues, the City’s total projected revenues are expected to be approximately $15.4 million in FY 2024- 25, increasing to approximately $15.8 million in FY 2028-2029 prior to projected rate adjustments.
$13,178
$248 $1,055
Projected FY 2024 - 25
Rate Revenues
By Customer Type ($000)
Residential
Commercial LS
Commercial HS
DRAFT
50 Development of the Sewer Revenue Requirement Analysis 18 City of Belmont – Comprehensive Sewer Rate Study

2.2.4 Projection of Sewer Operation and Maintenance Expenses Operation and maintenance (O&M) expenses are incurred by the City to operate and maintain the existing collection and conveyance system as well as the treatment charges from SVCW. In general, O&M expenses are grouped into a number of different major functional categories (see Table 2-1). For each major functional category, the City maintains a number of subaccounts. To begin the process of projecting O&M expenses over the planning horizon, escalation factors were developed.

Escalation factors were developed for the basic types of expenses the City incurs: labor, benefits, materials and supplies, utilities, insurance, and miscellaneous expenses. The escalation factors used were in the range of two to seven percent per year, depending on the type of cost and recent inflationary trends. A major cost for the sewer utility is the cost of wastewater treatment from Silicon Valley Clean Water (SVCW). SVCW’s costs have been increasing due to capital projects and operating costs associated with regulatory and utility cost increases. SVCW costs are allocated proportionally between the members based on their capacity rights, average annual flow rates and strength of the sewer generated by each member agency. Based on the SVCW budget for FY 2023-2024, Belmont’s share of $3.6 million in treatment costs were included in the study. The SVCW treatment costs were based on the SVCW planning document and are increasing at approximately 5.4% annually over the five-year period.

Provided below in Table 2-3 is a summary of the escalation factors used to develop the projected O&M expenses for FY 2024-2025 through FY 2028-2029.

DRAFT
51 Development of the Sewer Revenue Requirement Analysis 19 City of Belmont – Comprehensive Sewer Rate Study
Table 2 – 3
Overview of the Sewer Utility Escalation Factors
FY
2024-25[1]
FY
2025-26
FY
2026-27
FY
2027-28
FY
2028-29
Revenues
Rate Revenues (Growth) 1.0% 1.0% 1.0% 1.0% 1.0%
Other Revenues Flat Flat Flat Flat Flat
Expense
Labor 2.0% 2.0% 2.0% 2.0% 2.0%
Professional/Contractual 2.0% 2.0% 2.0% 2.0% 2.0%
Data Processing 3.0% 3.0% 3.0% 3.0% 3.0%
Benefits – Medical 7.0% 7.0% 7.0% 7.0% 7.0%
Benefits – Other 5.3% 5.3% 5.3% 5.3% 5.3%
Materials & Supplies 3.0% 3.0% 3.0% 3.0% 3.0%
Equipment/Vehicles 3.0% 3.0% 3.0% 3.0% 3.0%
Education/Training 2.0% 2.0% 2.0% 2.0% 2.0%
Indirect Expense 3.0% 3.0% 3.0% 3.0% 3.0%
Miscellaneous 3.0% 3.0% 3.0% 3.0% 3.0%
Utilities 5.0% 5.0% 5.0% 5.0% 5.0%
SVCW Treatment -3.6% 17.0% 4.4% 4.7% 4.5%
Inflation Factor 2.7% 2.7% 2.7% 2.7% 2.7%
[1] Rate revenue for FY 2024/2025 was based on the projected billing units and current adopted sewer rates. Other revenues were calculated.

The development of the revenue requirement was based on the City’s FY 2023-2024 adopted sewer budget. Using the escalation factors developed in Table 2 – 3, a forecast of future O&M expenses was developed. As noted, the SVCW treatment costs were based on the projections provided by SVCW. The revenue requirement maintained the overall functional nature of the City’s system of accounts (i.e., salaries and wages, benefits, supplies). It should be noted that no other significant changes or extraordinary increases over the FY 2023-2024 budget levels for operating expenses were assumed.

Total operation and maintenance
expenses for the City are projected to be
approximately $7.5 million in FY 2024-
2025. Of this amount, approximately
47% or $3.5 million is related to SVCW
wastewater treatment costs. The SVCW
wastewater treatment costs are
purchased services and are thus not a
“locally controlled” sewer cost. Over the
$4,021
$3,496
$5,000
$668 $2,503
$244
Projected FY 2024 - 25
Expenses ($000)
Collection O&M
Treatment (S.V.C.W)
R&R Funding
I&I Funding
Debt Service
Working Capital
DRAFT
52 Development of the Sewer Revenue Requirement Analysis 20 City of Belmont – Comprehensive Sewer Rate Study
planning horizon, the O&M expenses are projected to increase to approximately $9.2 million by FY 2028-2029.

2.2.5 Projection of Sewer Capital Improvement Projects and Funding A key component in the development of the City’s sewer revenue requirement was properly funding capital improvement needs. The sewer capital funding plan was developed from the City’s current sewer capital improvement plan and ongoing master plan.

As noted in prior rate studies, and in this rate study, a key objective is setting proposed rates at a level that establishes a prudent funding level for renewal and replacement needs above annual depreciation expense. This study includes a transition to continue to strengthen the level of renewal and replacement and capital project funding over the 5-year planning period. Renewal and replacement funding is approximately $5.0 million in FY 2024-2025, increasing to $6.4 million in FY 2028-2029.

In addition to the sewer capital plan, additional capital improvements have been outlined to reduce inflow and infiltration (I&I) in the sewer system. I&I rate funded capital is $668,000 in FY 2024-2025, increasing to $744,000 in FY 2028-2029. Shown below in Table 2–4 is a summary of the sewer capital improvement plan and funding.

Table 2 - 4
Summary of the Sewer Capital Improvement Plan ($000s)
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Total Sewer Capital Projects $4,833 $10,390 $8,061 $12,363 $7,640 $6,400 Less: Funding Sources
Operating Fund Reserves $0 $0 $0 $0 $0 $0
Capital Fund Reserves 83 3,640 1,111 4,863 40 0
Connection Fee Reserves 1,750 1,750 1,750 2,000 1,600 0 Grants 0 0 0 0 0 0
Total Funding Sources $1,833 $5,390 $2,861 $6,863 $1,640 $0 Sewer Capital from Rates $3,000 $5,000 $5,200 $5,500 $6,000 $6,400 I&I Capital Funding $650 $668 $686 $705 $724 $744
The City, based on the rate transition plan developed as part of this revenue requirement, is projected to have adequate resources to provide funding for these capital projects. Prior rate study capital funding analyses have included the periodic issuance of long-term debt to fund identified capital improvement needs. For this study, no new long-term debt is planned to be issued given the availability of existing reserves and rate funding available to fund the City’s capital plan. Provided below is an overview of the funding sources the City has used, and will continue to use, to fund the planned improvements over the next five-year period.

DRAFT
53 Development of the Sewer Revenue Requirement Analysis 21 City of Belmont – Comprehensive Sewer Rate Study
Rate Funding – A general financial guideline states that, at a minimum, a utility should annually fund from rates an amount equal to or greater than annual depreciation expense for renewal and replacement funding. In this case, annual depreciation expense reflects the City’s current investment in sewer collection plant being depreciated or “losing” its useful life. Therefore, this portion of plant investment needs to be replaced to maintain the existing level of infrastructure.

More importantly, for a sewer utility, failure to maintain the collection system infrastructure could lead to infiltration and inflow (I&I) issues. With increased flows, the City’s overall cost of wastewater treatment would, in turn, also increase. That being the case, it becomes very costeffective to properly and adequately maintain the collection system in order to minimize I&I issues on the system. The City has taken a proactive approach in past studies and in this analysis to maintain capital funding equal to or greater than annual depreciation.

Capital Reserve Funding – The capital reserve can serve different purposes, but capital reserves are primarily a means to set aside funds for larger capital projects that may require funding greater than the annual rate funding component provides. Maintaining adequate capital reserves helps to smooth out the fluctuations in capital improvement spending, but it also provides the City with greater financial flexibility during the planning and construction of projects. As part of the current capital funding plan, there will be approximately $44.9 million in capital projects over the five year period, with an annual average ending cash balance of $21.6 million in capital reserves used as a funding source over the five-year rate setting period (FY 2024-25 – FY 2028- 29). Over the planning horizon, close attention should be given to the capital reserve balance as to not reduce fund balances below minimum targets. The target minimum capital reserve amount is typically set equal to two-years of annual depreciation expense.

Long-Term Debt – Another funding source for capital projects is the issuance of long-term debt (e.g., low-interest loans, revenue bonds). While there are certain advantages and disadvantages with the issuance of long-term debt, it is important to weigh all of them when deciding whether to issue new debt or fund a project by other means. Long-term debt is often issued for major capital projects which have an immediate impact on rates while also being a financing mechanism to smoothly finance / fund the major capital project. For this analysis, the City is not anticipating issuing any additional long-term debt during the five-year planning period.

2.2.6 Projection of Debt Service
The final component of the City’s revenue requirement is annual debt service payments. The City currently has three outstanding debt obligations; the 2016 Refunding, and the 2016 and 2019 revenue bonds, amounting to a total annual debt service of approximately $2.5 million for FY 2024-2025. As mentioned previously, the City is not anticipating issuing additional long-term debt at this time. As a result, the three outstanding debt issuances will comprise the debt service payments for the planning period.

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54 Development of the Sewer Revenue Requirement Analysis 22 City of Belmont – Comprehensive Sewer Rate Study

2.2.7 Reserve Funding
This study has used reserve funding, or transfers to and from sewer reserve funds, to smooth and mitigate the rate adjustments in any particular year. Funds can be drawn down to mitigate the need for a rate adjustment or increased to replenish reserves if they have been drawn down in prior years. In this analysis, change in working capital is primarily used to balance the revenue requirement to the proposed rate adjustments. From year-to-year, the use of these reserves, or change in working capital, is very minimal.

2.2.8 Summary of the Sewer Revenue Requirement
Given the above projections of revenues and expenses, a summary of the revenue requirement for the sewer utility can be developed. In developing the final revenue requirement, consideration was given to the financial planning objectives of the City. In particular, emphasis was placed on attempting to minimize rates, yet still have adequate funds to support the operational and capital expenses as well as meet the City’s target financial metrics throughout the projected time period. Presented below in Table 2-5 is a summary of the sewer revenue requirement. A detailed analysis of the sewer revenue requirement can be found in the Technical Appendix.

Table 2 – 5
Summary of Sewer Revenue Requirement ($000s)
Budget Projected
2023-24[1] 2024-25 2025-26 2026-27 2027-28 2028-29
Revenues
Retail Rate Revenues $14,337 $14,481 $14,625 $14,772 $14,919 $15,069 Other Revenues 138 872 804 782 688 719
Total Revenues $14,476 $15,353 $15,430 $15,554 $15,607 $15,788 Expenses
Collection O&M Expenses $3,895 $4,021 $4,148 $4,280 $4,418 $4,561 Treatment O&M Expenses 3,625 3,496 4,090 4,270 4,470 4,670 Repair & Replace. Funding 3,000 5,000 5,200 5,500 6,000 6,400 I/I Capital Funding 650 668 686 705 724 744
Total Debt Service 2,500 2,503 2,498 2,501 2,501 2,497
Change in Working Capital +/- 805 244 1 142 29 181
Total Expenses $14,476 $15,932 $16,623 $17,398 $18,141 $19,053 Balance/(Deficiency) of Funds $0 ($579) ($1,193) ($1,844) ($2,534) ($3,265) Cumulative as a % of Rates 0.0% 4.0% 8.2% 12.5% 17.0% 21.7% Proposed Rate Adjustments 0.0% 4.0% 4.0% 4.0% 4.0% 4.0% Debt Service Coverage Ratio
Before Rate Adjustment 2.73 3.08 2.82 2.74 2.63 2.57
After Rate Adjustment 2.73 3.31 3.30 3.48 3.64 3.88
[1] Note: FY 2023-24 includes the revenues at the adopted rate levels from the prior rate study. Therefore, no rate adjustment is included in FY 2023-24.

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55 Development of the Sewer Revenue Requirement Analysis 23 City of Belmont – Comprehensive Sewer Rate Study
It is important to note that the “Balance/(Deficiency) of Funds” row in Table 2-5 is cumulative.

That is, any adjustments in the initial years will reduce the deficiency in later years. Rates need to be adjusted approximately 21.7% in order to adequately fund annual O&M expenses, annual repair and replacement funding, and the system’s capital needs over the five-year period. The size and timing of the adjustments is critical as it is proposed that the City set rates for a two year period. This is important as the
rate transition plan, or
proposed rate adjustments,
have been developed for a 5-
year period. Any adjustments
to the proposed rate
adjustments shown in the
initial years will result in the
need to adjust rates, more or
less, in the later years
depending on the adjustments
made in the initial years. The
graph above illustrates the
projected revenues, expenses,
and reserve funds.

Table 2 – 5 shows the total deficiency of revenues before any sewer rate adjustments ranges from $579,000 in FY 2024-2025 to $3.3 million by FY 2028-2029. A 4.0% sewer revenue adjustment is proposed annually for each of the five years of the projected time period. As noted, this study is focused on the proposed rates for FY 2024-2025 and FY 2025-2026. The projected rate adjustments allow the City to meet three key prudent financial criteria, these are:
• Debt Service Coverage Ratios – DSC target of 2.0
• Adequate Renewal and Replacement Funding – Annual renewal and replacement funding exceed depreciation over the 5-year plan
• Maintain Prudent Reserve Fund Levels – Operating reserve target equal to annual minimum of 180 days of O&M; Capital reserve target equal to two years of annual depreciation expense
Meeting these three key criteria are critical to the City being able to fund/finance capital projects with long-term debt in the future. By adjusting rates, the City is demonstrating to the outside financial community its willingness and commitment to maintain a strong financial position.

The revenue requirement developed in this sewer rate study will allow the City to develop costbased rates that meet the City’s goals and objectives for maintaining the existing system and funding past deferred capital projects. The rate transition plan provides smooth increases in rates over a 5-year period.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29
Summary of the Revenue Requirement ($000's)
O&M Expenses Rate Funded Capital
Debt Service Change in Working Capital Revenues
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56 Development of the Sewer Revenue Requirement Analysis 24 City of Belmont – Comprehensive Sewer Rate Study

2.2.9 Debt Service Coverage Ratios
Generally, revenue bonds contain covenants requiring rates to be set at an adequate level to assure repayment of the annual principal and interest debt obligations. The financial measure of rate adequacy is typically determined using a debt service coverage ratio (DSC). The DSC ratio is a financial measure of the utility’s ability to repay the debt. Based on the City’s approach, the DSC ratio is set at a level such that revenues less operating expenses will be 2.0 times greater than the maximum annual debt service on the outstanding debt. That is, rates will be sufficient to pay projected O&M and have an additional annual debt service payment.

As noted above, the City has
established a target of
maintaining a 2.0 DSC ratio.

At present rate levels, the
sewer utility is meeting the
policy minimum.

While the City is not
planning on issuing
additional long-term debt
at this time, the DSC ratio
decreases before the
proposed rate adjustments
due to O&M costs
increasing while revenue
remains relatively flat. Due to this, the proposed rate adjustments are necessary in order to maintain strong coverage ratios and remain above the target of a 2.0 DSC ratio. 1 This is an
important financial target as planning around the absolute minimum level (e.g., 1.25 bond requirement) can result in a technical default on the bonds if unplanned expenditures occur or revenues are lower than anticipated in a given year. Planning a minimum DSC target of 2.0 was recommended by the City’s financial advisors during the most recent bond issues. A higher DSC ratio can result in a higher bond rating and lower interest rates and bond costs. As noted, for purposes of the rate study, HDR is not acting as a municipal advisor to the City, or calculating DSC ratios for reporting or verification purposes.

2.2.10 Review of the Sewer Reserve Levels
There can be many different purposes for reserves, and they can also be a good indicator of the long-term financial health of the utility. The City’s sewer utility currently has one reserve fund, however, for rate setting purposes, it was split into three reserve funds: an operating reserve fund, capital reserve fund, and connection fee reserve fund. The operating fund reserve has a minimum ending fund balance target of 180 days of O&M expenses plus an emergency reserve 1 A debt service coverage (DSC) ratio is an indicator of the amount of funds available to pay debt service after O&M expenses and other pre-debt obligations have been met. A DSC ratio of 1.25 means the utility has 25% more funds available to pay debt service than the amount of the debt service payment(s). For example, assuming a utility has a $1.0 million debt service payment, a DSC of 1.25 means that the utility has $1.25million available to pay debt service (i.e. $1.25 million ÷ $1.0 million = 1.25 DSC).

0.00 0.50

1.00 1.50

2.00 2.50

3.00 3.50

4.00 4.50
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29
Debt Service Coverage Ratio
Before Proposed Rate Adjustment A�er Proposed Rate Adjustment Policy Target
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57 Development of the Sewer Revenue Requirement Analysis 25 City of Belmont – Comprehensive Sewer Rate Study
of $2.0 million, which is approximately $7.1 million for FY 2024-2025. The capital fund reserve has a target minimum of approximately two years of annual depreciation expense, or approximately $3.7 million for FY 2024-2025. The connection fee reserve does not have a specific target minimum as
connection fees may only
be used for system
expansion, or debt service
issued for expansion of the
system. Combined, the
City’s target minimum
reserve is approximately
$10.8 million for FY 2024-
2025, increasing to $12.2
million by FY 2028-2029.

Over this planning period,
the City is projected to
maintain adequate
operating and capital
reserves and not fall below these recommended minimum reserve levels. The annual cash flow and ending reserve balances should be reviewed each year to make sure that the uses of funds do not place the reserve balance below the minimum level. Additionally, as the sewer reserves approach the minimums, the need for rate adjustments should be evaluated in order to avoid future, large rate adjustments for customers. It should also be noted that the funding source for the capital reserve is through current and future long-term debt issuances which are placed in the capital reserve fund.

2.2.11 Consultant’s Conclusions
Based on the City’s revenue requirement analysis, the overall sewer rate adjustment should be adjusted annually by 4.0% over the projected five year period. These proposed rate adjustments are needed to fully fund the projected operating costs of the sewer utility and the annual capital improvement needs. HDR has reached this conclusion for the following reasons:
• Rate adjustments are necessary to continue to fund the City’s annual renewal and replacement needs.
• Rate adjustments are necessary to maintain prudent financial metrics for debt service coverage ratio and reserve levels.
• The proposed rate adjustments maintain the City’s sewer system strong financial health, which is important as the City continues to maintain the existing system.

The rate transition plan presented in this study provides the City with the ability to meet the goals and objectives for the sewer system.

2.3 Summary
This section of the report has provided a discussion of the City’s revenue requirement analysis.

The revenue requirement analysis developed a financial plan to support the City’s operating and DRAFT
58 Development of the Sewer Revenue Requirement Analysis 26 City of Belmont – Comprehensive Sewer Rate Study
capital needs for the sewer utility. The next section will discuss the cost of service analysis developed for the City.

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59 Development of the Sewer Cost of Service Analysis 27 City of Belmont – Comprehensive Sewer Rate Study

3.1 Introduction
The purpose of a cost of service analysis is to proportionally distribute the total revenue requirement to the sewer customer classes of service. For the City’s study, the customer classes of service are low strength (residential and commercial low) and high strength commercial. The previously developed revenue requirement for FY 2024-2025 was utilized in the development of the cost of service analysis.

In order to determine the proportional distribution of costs to each customer class of service on the sewer system, a cost of service analysis is conducted. As outlined in the WEF MOP #27, and to meet the requirements of Proposition 218, the cost of service functionalizes, allocates, and distributes the sewer revenue requirement to each class of service in a proportional manner. In recent years, increasing emphasis has been placed on cost of service studies by government agencies, customers, utility regulatory commissions, and other parties. This interest has been generated in part by continued inflationary trends, increased operating and capital expenditures, as well as concerns of equity in rates among customers. Following the generally-accepted guidelines and principles of a cost of service analysis will inherently lead to rates which are equitable, cost-based, and not viewed as arbitrary or capricious in nature. Provided below is a detailed discussion of the cost of service analysis for the sewer utility.

3.2 Objectives of a Cost of Service Study
There are two primary objectives in conducting a cost of service study:
• Proportionally distribute the allocated revenue requirement to the customer classes of service
• Derive average unit costs for subsequent rate designs The objectives of a cost of service analysis are different from determining the revenue requirement. As noted previously, a revenue requirement analysis determines the utility’s overall financial (revenue) needs, while the cost of service study determines the proportional manner to collect the revenue requirement.

The second rationale for conducting a cost of service analysis is to design the rates such that they properly reflect the costs incurred by the City to provide sewer service. For example, the City may incur costs related to flow or total volume, the strength of wastewater flow, and customer cost components. Each of these types of costs may be collected in a slightly different manner to allow for the development of a rate that collects costs in the same manner as they are incurred.

In order to determine the cost to serve each customer class on a system, three basic analytical tasks are completed: functionalization, allocation, and distribution of the FY 2024-2025 revenue requirement. Each of these steps in the cost of service analysis is discussed in detail below.

3.0 Development of the Sewer Cost of Service Analysis
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60 Development of the Sewer Cost of Service Analysis 28 City of Belmont – Comprehensive Sewer Rate Study

3.3 Determining the Customer Classes of
Service
One of the first tasks of a cost of service analysis is to determine the classes of service for the analysis. In
determining classes of service, the objective is to group customers together into similar or homogeneous groups
based upon wastewater flow and strength characteristics and/or sewer facility requirements. Based on the current rate schedules, the classes of service used within the sewer study are:
 Low Strength
 Residential
 Non-Residential – Low
 High Strength
 Non-Residential – High
In this case, low strength represents domestic level
wastewater for residential customers and commercial
customers with domestic strength wastewater flow. High
strength represents commercial customers with higher
strength wastewater, which is more costly to treat.

Furthermore, the City is billed by SVCW based on the
strength of the wastewater. In developing these customer classes of service, the costs of treatment can be distributed proportionately to reflect the impacts placed on the system.

3.4 General Cost of Service Procedures
In order to determine the cost to serve each customer class of service on the City’s system, a cost of service analysis is conducted. A cost of service study utilizes a three-step approach to review costs, and take the form of
functionalization, allocation, and distribution. Provided below is a detailed discussion of the sewer cost of service study conducted for the City, and the specific steps taken within the analysis.

3.4.1 Functionalization of Costs
The first analytical step of the sewer cost of service study is called functionalization. Functionalization is the
arrangement of sewer expenses and asset (infrastructure) data by major operating functions. This is generally
accomplished through the utility’s system of accounts. In this study, the City’s system of accounts was used to functionalize sewer plant assets and operating expenses.

Terminology of a Cost of
Service Analysis
Functionalization – The
arrangement of the cost data by
functional category (e.g.
treatment, collection, etc.).

Allocation – The assignment of
functionalized costs to cost
components (e.g. volume,
strength, and customer related).

Distribution – Distributing the
allocated costs to each customer
class based on the proportional
contribution to that specific cost
component.

Volume Costs – Costs that are
classified as volume related vary
with the total flow of sewer (e.g.
chemical use at the treatment
facility).

Strength Costs – Costs classified
as strength related refer to the
wastewater treatment function.

Typically, strength-related costs
are further defined as
biochemical oxygen demand
(BOD) and suspended solids (SS).

Customers with higher
wastewater strength
characteristics cost more to
treat. Facilities are often
designed and sized around
meeting these costs.

Direct Assignment – Costs that
can be clearly identified as
belonging to a specific customer
class.

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61 Development of the Sewer Cost of Service Analysis 29 City of Belmont – Comprehensive Sewer Rate Study

3.4.2 Allocation of Costs
The second analytical task performed is the allocation of the functionalized expenses to cost components. This task reviews each cost and attempts to determine why the sewer cost was incurred and what type of need was being met (e.g. volume, strength, customer etc.). The cost classifiers used for the sewer utility cost of service study are as follows:
• Volume Related Costs: Volume-related costs are those that tend to vary according to the quantity of wastewater collected and treated. An example of a volume related cost is electricity used for pumping wastewater.
• Strength Related Costs: Strength related costs are those costs associated with the additional handling and treatment of high “strength” wastewater. Wastewater strength is typically measured in biochemical oxygen demand (BOD) and total suspended solids (SS). Increased levels of BOD or SS generally equate to increased treatment costs. Pretreatment is generally required if the discharge is known to regularly exceed the typical (i.e., domestic level) waste strength.
• Customer Related Costs: Customer-related costs vary with the addition or deletion of a customer. Customer related costs typically include the costs of billing, collecting, and accounting. Customer-related costs may also be further categorized as actual or weighted.
• Revenue Related: Some costs associated with the sewer utility may vary with the amount of revenue received by the utility. An example of a revenue related cost would be a utility tax, which is based on gross utility revenue.
• Direct Assignment: Certain costs associated with operating the utility may be directly traced to a specific sewer customer or class of service. These costs are then directly assigned to that specific class of service. It should be noted that there were not any costs that were directly assigned during the development of the City’s cost of service analysis.

Once the costs have been allocated, the next step is to distribute the costs proportionally between the customer classes of service. Provided in the next section is a summary of the development of the distribution factors.

3.4.3 Development of Distribution Factors
Once the allocation process is complete, and the customer groups have been defined, the allocated costs are distributed to the customer classes of service. The City’s allocated costs were distributed using the following distribution factors:
 Volume Distribution Factor: Volume-related costs are distributed on the basis of contribution to wastewater flows. In order to develop this distribution factor, some knowledge of the contribution to flows must be determined. The assumed wastewater contribution by customer class for FY 2024-2025 was the basis for the development of the volume allocation factor. Sewer flows were projected based on historical winter water billing for residential customers, and average water consumption for commercial customers.

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62 Development of the Sewer Cost of Service Analysis 30 City of Belmont – Comprehensive Sewer Rate Study
 Strength Distribution Factor: Strength-related costs are allocated between biochemical oxygen demand (BOD) and suspended solids (SS). Both of these types of costs are distributed to the various classes of service based upon the relative estimated strengths that each class of service contributed to the overall flow at the plant. Strength factors for the low strength and high strength customers were based on industry standard data.  Customer Distribution Factor: Customer costs within the cost of service study are distributed to the various customer classes of service based upon their respective customer counts. Two types of customer distribution factors were developed, actual and weighted.

The actual customer distribution factor was based on the actual number of accounts for each customer class. The weighted customer factor reflects the disproportionate costs associated with serving different types of customers. for purposes of the City’s study, no cost differences were determined for the weighted customer factor.  Revenue Related Distribution Factor: The revenue related distribution factor was developed from the projected rate revenues for FY 2024-2025 for each customer group. As a point of reference, no costs were allocated to the revenue component and therefore the revenue distribution factor was not used.

The development of distribution factors is based on generally accepted principles as developed in the WEF MOP #27 to meet the proportionality requirements of Proposition 218. Given the development of the distribution factors, the final step in the cost of service study is to distribute the allocated costs to the various customer classes of service.

3.4.4 Functionalization and Allocation of Sewer Plant in Service The next step of the cost of service is the functionalization and allocation of sewer plant in service. In performing the functionalization of plant in service, HDR utilized the City’s historical plant records. The allocation process included reviewing each group of assets and determining which cost classifiers the assets were related to. For example, the City’s assets were allocated as:
volume-related, strength-related, customer-related, or revenue-related. Provided below is a brief discussion of the allocation process used.

The City’s system assets are mostly collection related in nature. In this study, the collection plant was classified as 65% volume and 35% actual customer to reflect a portion of the assets being in place to simply move wastewater from the customer to the treatment system as well as a portion being related to providing service based on the number of customers on the system. Table 3-1 shows the detail of the classification for the City’s sewer plant in service. A more detailed exhibit of the City’s functionalization and classification of plant investment can be found in the Sewer Technical Appendix.

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63 Development of the Sewer Cost of Service Analysis 31 City of Belmont – Comprehensive Sewer Rate Study
Table 3 - 1
Summary of the Allocation of Sewer Plant in Service
Category
Volume
Related
BOD
Related
SS
Related
Actual
Customer
Direct
Assign
Improvements 65.0% 0% 0% 35.0% 0%
Machinery & Equipment 100.0% 0% 0% 0% 0%

3.4.5 Functionalization and Allocation of Operating Expenses Operating expenses are generally functionalized and allocated in a manner similar to the corresponding plant account. For example, maintenance of collection lines is typically allocated in the same manner (allocation percentages) as the plant account for collection lines. This approach to the allocation of operating expenses was used for this analysis.

Table 3 - 2
Summary of the Allocation of Sewer Expenses
Category
Volume
Related
BOD
Related
SS
Related
Actual
Customer
Weighted
Customer
SVCW Treatment 39.6% 29.5% 30.9% 0% 0%
Planning and Project
Management, Sewer
Operations, (Overall) 56.9% 7.0% 7.3% 24.7% 4.1%
Computer, Administrative
Charge 0% 0% 0% 0% 100%
For the City’s study, the revenue requirement for FY 2024-2025 was functionalized, allocated, and distributed. As noted earlier, the City utilized a cash basis revenue requirement, which was comprised of operation and maintenance expenses, debt service, and capital additions funded from rates. The SVCW treatment costs were allocated based on the SVCW wholesale contract for billing. A more detailed review of the allocation of the revenue requirement can be found in the Technical Appendix.

3.4.6 Major Assumptions of the Cost of Service Study
A number of key assumptions were used within the City’s cost of service study. Below is a brief discussion of the major assumptions used.
 The methodology used within the sewer cost of service study was based on generally accepted industry standard approaches and is consistent with the methodology used in the City’s prior sewer comprehensive rate studies
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64 Development of the Sewer Cost of Service Analysis 32 City of Belmont – Comprehensive Sewer Rate Study
 The test period used for the sewer cost of service analysis was FY 2024-2025. The revenue and expense data were previously developed within the revenue requirement analysis  The cash basis approach was utilized, which conforms to generally accepted sewer cost of service approaches and methodologies
 The allocation of plant in service was developed based on generally accepted cost allocation techniques and the City’s specific asset data
 Customer volumes used within this study were provided for each class of service by the City through Mid Peninsula’s average winter billing data
 Strength distribution factors were based on overall strength levels at the treatment plant within the City’s records.

3.5 Summary of the Cost of Service Analysis
Given the allocation and distribution of the FY 2024-2025 revenue requirement, a summary of the distributed costs as compared to the current revenues can be developed. Provided in Table 3-2 is a summary of the cost of service analysis.

Table 3 – 2
Summary of the FY 2024-25 Sewer Cost of Service Analysis ($000’s) Classes of Service
Present Rate
Revenues
Distributed
Costs
$
Difference
%
Difference
Low Strength
Residential and Non-Residential $14,233 $14,806 ($574) 4.0% High Strength
Non-Residential 248 254 (6) 3.9%
Total $14,481 $15,060 ($579) 4.0%
The results of the cost of service analysis indicate very minimal cost differences between the customer classes of service. It should be noted that the cost of service analysis developed by HDR is not a simple fixed/variable analysis. Rather, the cost of service analysis distributes costs between the customer classes of service based on each customer class’s proportional share of volume, strength, and customer-related costs. As the City continues to monitor rates and cost of service results through future studies, cost of service adjustments may be made as the results are driven by customer consumption. Given that, no adjustments in the cost relationships between the customer classes of service are recommended at this time.

3.6 Consultant’s Conclusions and Recommendations
The overall allocation of costs between low strength customers (e.g., residential and low strength non-residential) and high strength customers reflects the overall system average increase. In addition, it was noted that customers have been adjusting their water consumption habits and consumptive use has changed over the last several years, which has a direct impact on the rates charged in future years. As the City continues to monitor rates and cost of service results through future studies, cost of service adjustments may be made as the results are driven by customer DRAFT
65 Development of the Sewer Cost of Service Analysis 33 City of Belmont – Comprehensive Sewer Rate Study
consumption. Given these results, no adjustments in the cost relationships between the customer classes of service are recommended at this time. As a result, the overall proposed revenue/rate adjustments will be applied equally across all customers and rate components.

3.7 Summary
This section of the report has provided a summary of the cost of service analysis developed for the City. This analysis was prepared using generally accepted cost of service techniques and principles. The next section of the study will review the present and proposed sewer rates for the City.

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66 Development of the Sewer Rate Designs 34
City of Belmont – Comprehensive Sewer Rate Study

4.1 Introduction
The final step of the City’s comprehensive sewer rate study is the designing of sewer rates to collect the desired levels of revenues, based on the results of the revenue requirement and cost of service analyses. In reviewing sewer rate designs, consideration is given to the level of the rates and the structure of the rates.

4.2 Rate Design Goals and Objectives
Prudent rate administration dictates that several criteria must be considered when setting utility rates. Some of these rate design criteria are listed below:
 Rates which are easy to understand from the customer’s perspective  Rates which are easy for the utility to administer
 Consideration of the customer’s ability to pay
 Continuity, over time, of the rate making philosophy
 Policy considerations (encourage efficient use, economic development, etc.)  Provide revenue stability from month to month and year to year  Promote efficient allocation of the resource
 Equitable and non-discriminatory (cost-based)
Many industry experts and regulatory agencies recognize that the last consideration, equitable and cost-based rates, should be of paramount importance and provide the primary guidance to utilities on rate structure and policy. It is important that the City provide its customers with a proper price signal as to what their consumption or usage is costing. This goal may be approached through rate level and structure. When developing the proposed rate designs, all of the above listed criteria can be taken into consideration. However, it should be noted that it is difficult, if not impossible, to design a rate that meets all the goals and objectives listed above. For example, it may be difficult to design a rate that takes into consideration the customer’s ability to pay, and one which is cost-based. In designing rates, there are always trade-offs between these various goals and objectives.

4.3 Development of Cost Based Sewer Rates
As mentioned, developing cost-based and proportional rates is of paramount importance in developing proposed sewer rates. While it is always a key consideration in developing rates, meeting the legal requirements and documenting the steps taken to meet the requirements, has been in the forefront with the recent legal challenges in the State of California on utility rates.

Given this, the City’s proposed sewer rates have been developed to meet the requirements of California Constitution Article XIII D, Section 6 (Article XIII D). A key component of Article XIII D is the development of rates which reflect the cost of providing service and are proportionally distributed between the various customer classes of service. HDR would point out that there is no single methodology for proportionally assigning costs to the customer classes of service. The Water Environment Federation Manual of Practice No. 27 provides various methodologies which

4.0 Development of the Sewer Rate Design
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67 Development of the Sewer Rate Designs 35
City of Belmont – Comprehensive Sewer Rate Study
may be used to establish cost‐based rates. Unfortunately, Article XIII D is not prescriptive and does not provide a specific methodology for establishing rates. Given that, HDR developed the City’s proposed sewer rates based on generally accepted rate setting methodologies to meet the requirements of Article XIII D.

HDR is of the opinion that the proposed rates meet the legal requirements of Article XIII D. HDR reached this conclusion based upon the following:
• The revenue derived from sewer rates does not exceed the funds required to provide the property related service (i.e., sewer service). The proposed rates are designed to collect the overall revenue requirement of the City’s sewer system as identified in this study. • The revenues derived from sewer rates shall not be used for any purpose other than that for which the fee or charge is imposed. The revenues derived from the City’s sewer rates are used exclusively to operate and maintain the City’s sewer system. • The amount of a fee or charge imposed upon a parcel or person as an incident of property ownership shall not exceed the proportional costs of the service attributable to the parcel.

The cost of service analysis focused exclusively on the issue of proportional assignment of costs to customer classes of service. The proposed rates have appropriately grouped customers into customer classes of service (low strength and high strength) that reflect the varying wastewater volumes and system requirements (i.e., the benefits they receive from and burdens they place on the system) of each customer class of service. The grouping of customers and rates into these classes of service creates the proportionality expected under Proposition 218 by having differing rates by customer classes of service, which reflect both the level of revenue to be collected by the utility, and the manner in which these costs are incurred. As a result, these costs are assigned to customer classes of service based upon their proportional impacts.

4.4 Present and Proposed Sewer Rates
The City’s sewer rate is comprised of two components, a collection system component and a treatment system component. The collection system component is based on the costs to operate the City’s sewer system, excluding treatment costs. The treatment costs are based on the current treatment costs projections from SVCW and can be adjusted as the City is notified of cost changes by the wholesale provider. Each parcel’s sewer charge is the sum of the base charge and flow charges for both collection and treatment. The proposed sewer rate designs maintain their current rate structure and only the level of the rates is adjusted given the results of the revenue requirement and cost of service analyses.

For the five year planning period, the rates maintain the 10% flow adjustment factor that was established in the prior rate study. Recent Mid-Peninsula Water District consumption billing data was reviewed and based on that data, the recommendation is to maintain the flow adjustment factor at 10% for the two year rate setting period. The flow adjustment factor will allow the City to maintain sufficient revenues during the proposed rate period of FY 2024-2025 and FY 2025- 2026. The flow adjustment factor will be reviewed again during the next rate study and a determination made as to adjust the flow adjustment factor or to eliminate, and restart, the flow adjustment factor.

DRAFT
68 Development of the Sewer Rate Designs 36
City of Belmont – Comprehensive Sewer Rate Study
The same formula for this adjustment will remain as follows: (HCF = 100 cubic feet) Formula: Actual Volume Usage x (1 + (flow adjustment factor)) = adjusted volume usage Example: 8 HCF x (1+ .10) = 8.8 HCF adjusted volume usage Table 4-1 provides the present and proposed rates for the residential and non-residential customers for the next five fiscal years.

Table 4 – 1
Present and Proposed Sewer Rates (Annual)
Present
Rates
Proposed
Rates
FY 2024-25
Proposed
Rates
FY 2025-26
Forecasted
Rates
FY 2026-27
Forecasted
Rates
FY 2027-28
Forecasted
Rates
FY 2028-29

COLLECTION
Residential
Base Charge $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge ($/HCF)[1] 6.13 6.38 6.63 6.90 7.17 7.46
Non-Residential
Base Charge $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge Low
Strength ($/HCF)[1]

6.13 6.38 6.63 6.90 7.17 7.46
Flow Charge High
Strength ($/HCF)[1]

11.91 12.39 12.88 13.40 13.93 14.49

TREATMENT
Residential
Base Charge $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge ($/HCF)[1] 3.03 3.15 3.28 3.41 3.54 3.69
Non-Residential
Base Charge $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge Low
Strength ($/HCF)[1]

3.03 3.15 3.28 3.41 3.54 3.69
Flow Charge High
Strength ($/HCF)[1]

5.90 6.14 6.38 6.64 6.90 7.18

COMBINED
Residential
Base Charge $657.00 $683.28 $710.61 $739.04 $768.60 $799.34 Flow Charge ($/HCF) 9.16 9.53 9.91 10.30 10.72 11.14
Non-Residential
Base Charge $657.00 $683.28 $710.61 $739.04 $768.60 $799.34 Flow Charge Low
Strength ($/HCF)]

9.16 9.53 9.91 10.30 10.72 11.14
Flow Charge High
Strength ($/HCF)

17.81 18.52 19.26 20.03 20.84 21.67
DRAFT
69 Development of the Sewer Rate Designs 37
City of Belmont – Comprehensive Sewer Rate Study
The above rates are based on the rate transition plan developed in the revenue requirement analysis and the proportional distribution of costs in the cost of service analysis. As noted above, the rate is split between collection and treatment to allow the City to pass-through any increases in the wholesale treatment costs. Each component of the rate structure – fixed and variable – are proposed to be increased to meet the target revenue levels based on the rate transition plan.

At present rates, a typical residential customer with 8 hundred cubic feet of winter water average usage would have a monthly bill of $135.36 (8 HCF X 1.10 = 8.80 HCF). Under the proposed rates, the same customer would have a monthly bill of $140.77 in FY 2024-25. Table 4-2 shows the average residential bill for FY 2024-25 through FY 2028-29.

Table 4 – 2
Present and Proposed Sewer Rates (Monthly)
Proposed
FY 2024-25
Proposed
FY 2025-26
Forecasted
FY 2026-27
Forecasted
FY 2027-28
Forecasted
FY 2028-29
Proposed Revenue Adjustment 4.0% 4.0% 4.0% 4.0% 4.0%
Present Average Monthly Bill [1] $135.36
After Proposed Rate Adj. [2] $140.77 $146.41 $152.26 $158.35 $164.68 Monthly Bill Difference 5.41 5.63 5.86 6.09 6.33
Cumulative Bill Difference 5.41 11.05 16.91 22.99 29.32 % Change to Monthly Bill 4.0% 4.0% 4.0% 4.0% 4.0%
[1] – Current average bill assumes 10% flow adjustment factor and 8 HCF monthly consumption [2] –Proposed average bill assumes a 10% flow adjustment factor and 8 HCF monthly consumption As a point of reference, the proposed rates for FY 2024-2025 and FY 2025-2026 are the focus of this study and the only rates proposed. The forecasted rates are for information only to provide the City with the expected future rates for planning purposes based on the assumptions of this study. Proposed rates for future periods will be developed as part of future comprehensive sewer rate studies and may be revised based on the study assumptions at that time.

DRAFT
70 Development of the Sewer Rate Designs 38
City of Belmont – Comprehensive Sewer Rate Study

4.5 Average Residential Local Bill Comparison
A comparison of the City’s current average residential rate to other local surrounding sewer utilities has been developed. Provided in the chart below is a comparison of the City’s current and proposed rates compared to other SVCW member agencies and other local utilities.

As can be seen in the above graph, with the potential adjustments, the City’s sewer rates remain very competitive while funding O&M, increased renewal and replacements, and deferred capital costs.

4.6 City Council Review
At the time of this report, the study results were anticipated to be presented to the City Council on April 9, 2024. If approved, and moved by the City Council, a public hearing will be set and the customer notification sent to the customers.

4.7 Summary of the Sewer Rate Study
This completes the analysis for the City’s sewer rate study. The proposed sewer rates were developed using generally accepted rate making methods and principles and the City’s system specific customer data and information. The proposed sewer rate adjustments for FY 2024-2025 and FY 2025-2026 are needed to adequately support the operating and capital needs of the City’s sewer system. Adoption of the proposed sewer rates for FY 2024-2025 and FY 2025-2026 are projected to provide adequate funding for the sewer utility over the two-year period, while financially positioning the utility for anticipated future capital and operation needs. Even with these proposed annual adjustments, it is prudent for the City to annually revisit the sewer rates to confirm their ability to cover expenses and maintain the identified financial metrics (e.g., reserve targets, debt service coverage ratios, etc.).
$0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 Hillsborough, Town of - Jul 23
San Mateo, City of - Aug 23
Foster City - Jul 24
Foster City - Jul 23
Millbrae, City of - Jul 23
Belmont - Proposed Jul 25
San Bruno, City of - Jul 23
San Bruno, City of - Jul 24
Belmont - Proposed Jul 24
Belmont - Present
San Carlos, City of - Jul 22
West Bay SD - Jul 23
West Bay SD - Jul 24
Burlingame, City of - Jan 24
Redwood City - Jul 23
Burlingame, City of - Jan 23
San Mateo, City of - Jul 24
$332.08
$159.14
$142.57
$139.77
$142.85
$146.41
$137.80
$144.62
$140.77
$135.36
$116.77
$108.83
$111.00
$97.24
$89.28
$89.22
$163.88
Average Residen�al Monthly Sewer Bill
(Based on flat rate of 8 HCF* of monthly winter water use) SVCW Agency Member
DRAFT
71 Development of the Sewer Rate Designs 39
City of Belmont – Comprehensive Sewer Rate Study
Technical Appendix
DRAFT
72 Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Sources of Funds
Operating Revenues $14,337,171 $14,480,542 $14,625,348 $14,771,601 $14,919,317 $15,068,510 $15,219,195 $15,371,387 $15,525,101 Other Revenue 138,406 872,198 804,264 782,063 687,643 719,411 729,025 436,843 437,126 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Total Sources of Funds $14,475,576 $15,352,740 $15,429,611 $15,553,664 $15,606,960 $15,787,921 $15,948,220 $15,808,230 $15,962,227 Applications of Funds
Collection O&M Expense $3,894,949 $4,021,143 $4,147,857 $4,279,897 $4,417,527 $4,561,027 $4,710,693 $4,866,837 $5,029,787 Treatment O&M Expenses 3,625,358 3,496,047 4,090,000 4,270,000 4,470,000 4,670,000 4,880,000 5,100,000 5,320,000 Repair and Replacement Funding 3,000,000 5,000,000 5,200,000 5,500,000 6,000,000 6,400,000 7,250,000 7,400,000 7,600,000 I/I Capital Funding 650,000 668,000 686,000 705,000 724,000 744,000 764,000 785,000 806,000 Total Debt Service 2,500,446 2,503,071 2,498,196 2,501,071 2,501,071 2,496,846 2,496,446 2,498,531 2,493,831 Change in Working Capital +/- 804,823 243,700 987 142,137 28,535 180,684 (114,978) 14,172 434,681 Total Revenue Requirements $14,475,576 $15,931,961 $16,623,040 $17,398,105 $18,141,133 $19,052,558 $19,986,162 $20,664,540 $21,684,299 Total Balance/(Deficiency) $0 ($579,221) ($1,193,429) ($1,844,441) ($2,534,173) ($3,264,637) ($4,037,942) ($4,856,310) ($5,722,072) Cumulative Balance as a % of Rate Revenues 0.0% 4.0% 8.2% 12.5% 17.0% 21.7% 26.5% 31.6% 36.9% Proposed Rate Adjustment 0.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Additional Revenue from Adjustment $0 $579,222 $1,193,428 $1,844,441 $2,534,174 $3,264,636 $4,037,942 $4,856,310 $5,722,072 Total Balance/(Deficiency) $0 $0 ($0) $0 $0 ($0) $0 ($0) ($0) Additional Rate Adjustment Required 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Residential Bill Comparison (8 HCF X Adjustment Factor) Monthly
After Proposed Rate Adjustment $135.36 $140.77 $146.41 $152.26 $158.35 $164.68 $171.27 $178.12 $185.24 Monthly Bill Difference $5.41 $5.63 $5.86 $6.09 $6.33 $6.59 $6.85 $7.12 Cumulative Bill Difference $5.41 $11.05 $16.91 $22.99 $29.32 $35.91 $42.76 $49.89 Debt Service Coverage Ratio (Revenue Bonds Only)
Before Proposed Rate Adjustment 2.73 3.08 2.82 2.74 2.63 2.57 2.49 2.28 2.20 After Proposed Rate Adjustment 2.73 3.31 3.30 3.48 3.64 3.88 4.11 4.23 4.49 Ending Reserve Balances $36,689,592 $33,292,891 $32,182,866 $27,461,863 $29,050,250 $29,530,934 $14,921,826 $14,935,998 $15,370,679 Target Minimum (Operating + Capital) $10,732,000 $10,845,000 $11,320,000 $11,586,000 $11,884,000 $12,173,000 $12,484,000 $12,807,000 $13,131,000 City of Belmont
Sewer Cost of Service Study - Rate Transition Plan
Summary of Revenue Requirement
Exhibit 1
Projected
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73 City of Belmont
Sewer Cost of Service Study
Exhibit 2
Data Assumptions
Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Escalation Factors
Revenues
Rate Revenue Estimated 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Other Revenues Budget 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% Interest 0.4% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Flat 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Expenses
Labor Budget 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Profess/Contractual Budget 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Data Processing Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Benefits - Medical Budget 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% Benefits - Other Budget 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% 5.3% Materials & Supplies Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Equipment/Vehicles Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Education/Training Budget 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Indirect Expense Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Miscellaneous Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Utilities Budget 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% SVCW Treatment Budget -3.6% 17.0% 4.4% 4.7% 4.5% 4.5% 4.5% 4.3% As Inflation Inflation 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% Revenue Bond Issue
Term in Years 30 30 30 30 30 30 30 30 30
Rate 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Projected
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74 City of Belmont
Sewer Cost of Service Study Page 1 of 4
Exhibit 3
Sources and Applications of Funds
Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Notes

REVENUES
Operating Revenues
6805 Sewer Use Fees - Rate Revenues $14,337,171 $14,480,542 $14,625,348 $14,771,601 $14,919,317 $15,068,510 $15,219,195 $15,371,387 $15,525,101 As Rate Revenue ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Rate Revenues $14,337,171 $14,480,542 $14,625,348 $14,771,601 $14,919,317 $15,068,510 $15,219,195 $15,371,387 $15,525,101 Miscellaneous Revenues
6705 Public Works Service Charges $0 $0 $0 $0 $0 $0 $0 $0 $0 As Flat 6706 City CIP Chargeback 0 0 0 0 0 0 0 0 0 As Flat
6850 Sewer Lateral Certificate Fee 0 0 0 0 0 0 0 0 0 As Flat 7111 Interest Earnings - Investments 0 733,792 665,858 643,657 549,237 581,005 590,619 298,437 298,720 As Interest 7112 Other Interest Earnings 0 0 0 0 0 0 0 0 0 As Flat
7113 Interest Revenue - Change 0 0 0 0 0 0 0 0 0 As Flat 7252 Reimbursements 0 0 0 0 0 0 0 0 0 As Flat
Standby Charges 138,406 138,406 138,406 138,406 138,406 138,406 138,406 138,406 138,406 As Flat ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Miscellaneous Revenues $138,406 $872,198 $804,264 $782,063 $687,643 $719,411 $729,025 $436,843 $437,126 TOTAL REVENUES $14,475,576 $15,352,740 $15,429,611 $15,553,664 $15,606,960 $15,787,921 $15,948,220 $15,808,230 $15,962,227

EXPENSES
Planning and Project Management (701)
Personnel
8101 Regular Salaries $479,542 $488,945 $498,532 $508,307 $518,274 $528,436 $538,798 $549,362 $560,134 As Labor 8102 Permanent Part-Time 0 0 0 0 0 0 0 0 0 As Labor
8103 Temporary Part-Time 3,500 $3,569 3,639 3,710 3,783 3,857 3,932 4,010 4,088 As Labor 8111 Overtime 0 0 0 0 0 0 0 0 0 As Labor
8112 Standby/Unscheduled 974 993 1,013 1,032 1,053 1,073 1,094 1,116 1,138 As Labor 8114 Acting Pay 0 0 0 0 0 0 0 0 0 As Labor
8119 Termination Pay 0 0 0 0 0 0 0 0 0 As Labor
8211 P.E.R.S. Retirement 110,606 116,468 122,641 129,141 135,985 143,193 150,782 158,773 167,188 As Benefits - Other 8221 F.I.C.A Social Security 217 229 241 253 267 281 296 312 328 As Benefits - Other 8231 Health Insurance 0 0 0 0 0 0 0 0 0 As Benefits - Medical 8232 Medicare 6,504 6,959 7,446 7,968 8,525 9,122 9,761 10,444 11,175 As Benefits - Medical 8233 Life & Disability Insurance 2,042 2,185 2,338 2,501 2,677 2,864 3,064 3,279 3,508 As Benefits - Medical 8235 State Unemployment Insurance 0 0 0 0 0 0 0 0 0 As Benefits - Other 8241 Dental Plan 2,824 3,022 3,233 3,459 3,701 3,961 4,238 4,534 4,852 As Benefits - Medical 8242 Vision Plan 813 870 931 996 1,066 1,141 1,221 1,306 1,398 As Benefits - Medical 8253 Allowances 1,050 1,106 1,164 1,226 1,291 1,359 1,431 1,507 1,587 As Benefits - Other 8259 Deferred Compensation 12,625 13,294 13,999 14,741 15,522 16,345 17,211 18,123 19,084 As Benefits - Other 8271 SEC 125 Benefits 69,343 74,197 79,390 84,948 90,894 97,257 104,065 111,349 119,144 As Benefits - Medical 8281 Benefit Prefunding 33,971 35,772 37,667 39,664 41,766 43,980 46,311 48,765 51,350 As Benefits - Other 8283 GASB 68 Pension Expense 0 0 0 0 0 0 0 0 0 As Benefits - Other 8284 GASB 75 OPEB Expense 0 0 0 0 0 0 0 0 0 As Benefits - Other 8285 Workers' Compensation 12,305 12,957 13,644 14,367 15,128 15,930 16,774 17,663 18,600 As Benefits - Other ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Personnel $736,316 $760,564 $785,878 $812,314 $839,932 $868,798 $898,978 $930,544 $963,573 Supplies & Services
8314 Equipment Allocation - IT Charge $0 $0 $0 $0 $0 $0 $0 $0 $0 As Equipment/Vehicles 8351 Other Professional/Technical 5,000 5,098 5,198 5,300 5,404 5,510 5,618 5,728 5,840 As Profess/Contractual 8356 EOC - Disaster Preparedness 0 0 0 0 0 0 0 0 0 As Education/Training 8359 Computer Software License 0 0 0 0 0 0 0 0 0 As Materials & Supplies 8442 Equipment/Vehicle Rental 0 0 0 0 0 0 0 0 0 As Equipment/Vehicles 8522 Liability Insurance Charge 8,481 8,735 8,997 9,267 9,545 9,832 10,127 10,431 10,743 As Miscellaneous 8531 Postage/Delivery Service 0 0 0 0 0 0 0 0 0 As Materials & Supplies 8532 Telephone 0 0 0 0 0 0 0 0 0 As Utilities
8550 Printing & Binding 0 0 0 0 0 0 0 0 0 As Materials & Supplies 8580 Travel & Training 1,500 1,530 1,561 1,592 1,624 1,656 1,689 1,723 1,757 As Education/Training 8591 Membership & Dues 4,800 4,896 4,994 5,094 5,196 5,300 5,406 5,514 5,624 As Education/Training 8599 Miscellaneous 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 As Miscellaneous 8610 General Supplies 300 309 318 328 338 348 358 369 380 As Materials & Supplies 8612 Small Tools 0 0 0 0 0 0 0 0 0 As Miscellaneous
8680 Books/Manuals/Subscriptions 0 0 0 0 0 0 0 0 0 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services $23,081 $23,658 $24,251 $24,859 $25,483 $26,123 $26,780 $27,454 $28,146 Projected
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75 City of Belmont
Sewer Cost of Service Study Page 2 of 4
Exhibit 3
Sources and Applications of Funds
Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Notes Projected
Administrative & Other
8307 Vehicle Usage Charge $9,862 $10,158 $10,463 $10,776 $11,100 $11,433 $11,776 $12,129 $12,493 As Equipment/Vehicles 8308 Computer Usage Charge 52,615 54,193 55,819 57,494 59,219 60,995 62,825 64,710 66,651 As Data Processing 8309 Building Maintenance Charge 31,704 32,655 33,635 34,644 35,683 36,754 37,856 38,992 40,162 As Miscellaneous 8310 Administrative Support 118,682 122,242 125,910 129,687 133,578 137,585 141,713 145,964 150,343 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $212,863 $219,249 $225,826 $232,601 $239,579 $246,767 $254,170 $261,795 $269,648 Total Planning and Project Management (701) $972,260 $1,003,472 $1,035,955 $1,069,774 $1,104,994 $1,141,687 $1,179,927 $1,219,793 $1,261,367 Sanitary Sewer Operations (710)
Personnel
8101 Regular Salaries $737,697 $752,162 $766,910 $781,948 $797,280 $812,913 $828,852 $845,104 $861,675 As Labor 8103 Temporary Part-Time 0 0 0 0 0 0 0 0 0 As Labor
8111 Overtime 10,000 10,196 10,396 10,600 10,808 11,020 11,236 11,456 11,681 As Labor 8112 Standby/Unscheduled 18,918 19,289 19,667 20,053 20,446 20,847 21,256 21,673 22,098 As Labor 8114 Acting Pay 0 0 0 0 0 0 0 0 0 As Labor
8119 Termination Pay 0 0 0 0 0 0 0 0 0 As Labor
8211 P.E.R.S. Retirement 176,101 185,435 195,263 205,612 216,509 227,984 240,067 252,791 266,189 As Benefits - Other 8221 F.I.C.A. Social Security 0 0 0 0 0 0 0 0 0 As Benefits - Other 8231 Health Insurance 0 0 0 0 0 0 0 0 0 As Benefits - Medical 8232 Medicare 11,501 12,306 13,167 14,089 15,075 16,131 17,260 18,468 19,761 As Benefits - Medical 8233 Life & Disability Insurance 3,462 3,704 3,963 4,241 4,538 4,855 5,195 5,559 5,948 As Benefits - Medical 8235 State Unemployment Insurance 0 0 0 0 0 0 0 0 0 As Benefits - Other 8241 Dental Plan 8,773 9,387 10,044 10,747 11,499 12,304 13,166 14,087 15,073 As Benefits - Medical 8242 Vision Plan 2,021 2,163 2,314 2,476 2,649 2,835 3,033 3,246 3,473 As Benefits - Medical 8251 Uniform Allowance 0 0 0 0 0 0 0 0 0 As Benefits - Other 8253 Allowances 420 442 466 490 516 544 573 603 635 As Benefits - Other 8259 Deferred Compensation 25,020 26,346 27,742 29,213 30,761 32,391 34,108 35,916 37,819 As Benefits - Other 8271 SEC 125 Benefits 195,084 208,740 223,352 238,987 255,716 273,616 292,769 313,263 335,191 As Benefits - Medical 8281 Benefit Prefunding 61,293 64,542 67,963 71,565 75,358 79,352 83,557 87,986 92,649 As Benefits - Other 8282 Compensated Absences 0 0 0 0 0 0 0 0 0 As Labor
8285 Workers' Compensation 85,938 90,493 90,493 90,493 90,493 90,493 90,493 90,493 90,493 As Benefits - Other ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Personnel $1,336,229 $1,385,204 $1,431,740 $1,480,512 $1,531,648 $1,585,283 $1,641,564 $1,700,643 $1,762,683 Supplies & Services
8305 After Hours Dispatch Service $10,000 $10,196 $10,396 $10,600 $10,808 $11,020 $11,236 $11,456 $11,681 As Profess/Contractual 8311 Property Tax Admin Fee 55,000 55,550 56,106 56,667 57,233 57,806 58,384 58,967 59,557 As Rate Revenue 8314 Equipment Allocation - IT Charge 0 0 0 0 0 0 0 0 0 As Equipment/Vehicles 8351 Other Professional/Tech 94,000 95,843 97,722 99,639 101,592 103,584 105,615 107,686 109,798 As Profess/Contractual 8359 Computer Software License 0 0 0 0 0 0 0 0 0 As Materials & Supplies 8411 Water 10,000 10,500 11,025 11,576 12,155 12,763 13,401 14,071 14,775 As Utilities 8417 Other Waste Water Treatment 250,000 262,500 275,625 289,406 303,877 319,070 335,024 351,775 369,364 As Utilities 8418 S.V.C.W. Sewer Treatment 3,625,358 3,496,047 4,090,000 4,270,000 4,470,000 4,670,000 4,880,000 5,100,000 5,320,000 As SVCW Treatment 8430 Repair & Maintenance Service 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 As Miscellaneous 8441 Land/Building Rentals 0 0 0 0 0 0 0 0 0 As Miscellaneous 8442 Equipment/Vehicle Rental 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 As Equipment/Vehicles 8522 Liability Insurance Charge 50,320 51,830 53,384 54,986 56,636 58,335 60,085 61,887 63,744 As Equipment/Vehicles 8530 Communications 9,000 9,270 9,548 9,835 10,130 10,433 10,746 11,069 11,401 As Materials & Supplies 8532 Telephone 0 0 0 0 0 0 0 0 0 As Materials & Supplies 8580 Travel And Training 5,000 5,100 5,202 5,306 5,412 5,520 5,631 5,743 5,858 As Education/Training 8590 Street Access Fee 204,204 204,204 204,204 204,204 204,204 204,204 204,204 204,204 204,204 As Flat 8591 Memberships & Dues 7,000 7,140 7,283 7,428 7,577 7,729 7,883 8,041 8,202 As Education/Training 8599 Miscellaneous 2,500 2,575 2,652 2,732 2,814 2,898 2,985 3,075 3,167 As Miscellaneous 8610 General Supplies 6,500 6,695 6,896 7,103 7,316 7,535 7,761 7,994 8,234 As Materials & Supplies 8612 Small Tools 12,000 12,360 12,731 13,113 13,506 13,911 14,329 14,758 15,201 As Materials & Supplies 8613 Safety Equipment 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 As Miscellaneous 8632 Natural Gas & Electricity 55,000 57,750 60,638 63,669 66,853 70,195 73,705 77,391 81,260 As Utilities 8639 Gasoline 27,000 28,350 29,768 31,256 32,819 34,460 36,183 37,992 39,891 As Utilities 8641 Repair & Maintenance Supplies 40,000 41,200 42,436 43,709 45,020 46,371 47,762 49,195 50,671 As Miscellaneous 8680 Books/Manuals/Subscriptions 0 0 0 0 0 0 0 0 0 As Materials & Supplies ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services
DRAFT
$4,498,882 $4,394,190 $5,013,808 $5,220,566 $5,448,469 $5,677,568 $5,917,919 $6,169,580 $6,422,611 4 04/05/2024
76 City of Belmont
Sewer Cost of Service Study Page 3 of 4
Exhibit 3
Sources and Applications of Funds
Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Notes Projected
Administrative & Other
8307 Vehicle Usage Charge $248,131 $255,575 $263,242 $271,139 $279,274 $287,652 $296,281 $305,170 $314,325 As Equipment/Vehicles 8308 Computer Usage Charge 143,114 147,407 151,830 156,385 161,076 165,908 170,886 176,012 181,293 As Data Processing 8309 Building Maintenance Charge 90,672 93,392 96,194 99,080 102,052 105,114 108,267 111,515 114,861 As Miscellaneous 8310 Administrative Support 165,819 170,794 175,917 181,195 186,631 192,230 197,997 203,936 210,055 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $647,736 $667,168 $687,183 $707,799 $729,033 $750,904 $773,431 $796,634 $820,533 Total Sanitary Sewer Operations (710) $6,482,847 $6,446,562 $7,132,731 $7,408,877 $7,709,149 $8,013,755 $8,332,914 $8,666,856 $9,005,826 Sanitary Sewer Capital Operations (730)
Supplies & Services
8331 Engineering/Architecture $0 $0 $0 $0 $0 $0 $0 $0 $0 As Miscellaneous 8351 Other Professional/Tech 8,400 8,652 8,912 9,179 9,454 9,738 10,030 10,331 10,641 As Miscellaneous 8354 Bond Issuance Costs 0 0 0 0 0 0 0 0 0 As Miscellaneous 8361 Bond Amortization Expense 0 0 0 0 0 0 0 0 0 As Miscellaneous 8368 City Project Management & Services 0 0 0 0 0 0 0 0 0 As Miscellaneous 8531 Postage/Delivery Service 0 0 0 0 0 0 0 0 0 As Miscellaneous 8550 Printing and Binding 0 0 0 0 0 0 0 0 0 As Miscellaneous 8599 Miscellaneous 0 0 0 0 0 0 0 0 0 As Miscellaneous
8610 General Supplies 0 0 0 0 0 0 0 0 0 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services $8,400 $8,652 $8,912 $9,179 $9,454 $9,738 $10,030 $10,331 $10,641 Administrative & Other
8310 Administrative Support $56,800 $58,504 $60,259 $62,067 $63,929 $65,847 $67,822 $69,857 $71,953 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $56,800 $58,504 $60,259 $62,067 $63,929 $65,847 $67,822 $69,857 $71,953 Capital Outlay
9030 Improvement Other Than Building $0 $0 $0 $0 $0 $0 $0 $0 $0 As Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Capital Outlay $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sanitary Sewer Capital Operations (730) $65,200 $67,156 $69,171 $71,246 $73,383 $75,585 $77,852 $80,188 $82,593 Total Operating & Maintenance Expense $7,520,307 $7,517,190 $8,237,857 $8,549,897 $8,887,527 $9,231,027 $9,590,693 $9,966,837 $10,349,787 Repair and Replacement Funding $3,000,000 $5,000,000 $5,200,000 $5,500,000 $6,000,000 $6,400,000 $7,250,000 $7,400,000 $7,600,000 FY 2022-23 Approx. Depr. $1,703,958 I/I Capital Funding Transfer $650,000 $668,000 $686,000 $705,000 $724,000 $744,000 $764,000 $785,000 $806,000 Deferred Capital Funding (Debt Service) $0 $0 $0 $0 $0 $0 $0 $0 $0 Debt Service
2016 Sewer Revenue Refunding $767,505 $771,255 $768,505 $764,505 $769,255 $771,455 $773,355 $773,950 $771,550 Debt Schedule 2016 Sewer Revenue 621,941 621,191 620,191 628,941 621,941 619,141 616,341 618,331 617,531 Debt Schedule 2019 Sewer Revenue 1,111,000 1,110,625 1,109,500 1,107,625 1,109,875 1,106,250 1,106,750 1,106,250 1,104,750 Debt Schedule New Low Interest Loan 0 0 0 0 0 0 0 0 0
New Revenue Bond 2024/2025 0 0 0 0 0 0 0 0 0
New Revenue Bond 2027/2028 0 0 0 0 0 0 0 0 0
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Debt Service $2,500,446 $2,503,071 $2,498,196 $2,501,071 $2,501,071 $2,496,846 $2,496,446 $2,498,531 $2,493,831 5 DRAFT 04/05/2024
77 City of Belmont
Sewer Cost of Service Study Page 4 of 4
Exhibit 3
Sources and Applications of Funds
Budget
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Notes Projected
Change in Working Capital +/-
Operating (Cash) Reserve Transfer $804,823 $243,700 $987 $142,137 $28,535 $180,684 ($114,978) $14,172 $434,681 Capital Reserve Transfer 0 0 0 0 0 0 0 0 0
Connection Fee Transfer 0 0 0 0 0 0 0 0 0
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Change in Working Capital +/- $804,823 $243,700 $987 $142,137 $28,535 $180,684 ($114,978) $14,172 $434,681 TOTAL REVENUE REQUIREMENT $14,475,576 $15,931,961 $16,623,040 $17,398,105 $18,141,133 $19,052,558 $19,986,162 $20,664,540 $21,684,299 Total Balance/(Deficiency) of Funds $0 ($579,221) ($1,193,429) ($1,844,441) ($2,534,173) ($3,264,637) ($4,037,942) ($4,856,310) ($5,722,072) Total Incr. as a % of Current Rates 0.0% 4.0% 8.2% 12.5% 17.0% 21.7% 26.5% 31.6% 36.9% Proposed Rate Adjustment 0.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Additional Revenue from Rate Increase $0 $579,222 $1,193,428 $1,844,441 $2,534,174 $3,264,636 $4,037,942 $4,856,310 $5,722,072 Balance/(Deficiency) of Funds $0 $0 ($0) $0 $0 ($0) $0 ($0) ($0) Deficiency as a % of Retail Rate Revenues 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Residential Bill Comparison (8 HCF X Adjustment Factor) After Proposed Rate Adjustment $135.36 $140.77 $146.41 $152.26 $158.35 $164.68 $171.27 $178.12 $185.24 Monthly Bill Difference $5.41 $5.63 $5.86 $6.09 $6.33 $6.59 $6.85 $7.12 Cumulative Bill Difference $5.41 $11.05 $16.91 $22.99 $29.32 $35.91 $42.76 $49.89 Percentage Overall Change 4.0% 7.8% 11.5% 15.1% 18.5% 21.8% 25.0% 28.0%

4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Debt Service Coverage Ratio (Revenue Bonds Only)
Before Proposed Rate Adjustment 2.73 3.08 2.82 2.74 2.63 2.57 2.49 2.28 2.20 Minimum 1.0/Min Target 1.25 After Proposed Rate Adjustment 2.73 3.31 3.30 3.48 3.64 3.88 4.11 4.23 4.49 Minimum 1.0/Min Target 1.25 Reserve Balances 39,855,067
Operating (Cash) Reserve
Beginning Reserve Balance $7,500,000 $8,304,823 $8,548,524 $8,549,510 $8,691,647 $8,720,183 $8,900,867 $8,785,889 $8,800,061 Plus: To Reserves 804,823 243,700 987 142,137 28,535 180,684 0 14,172 434,681 Less: Transfers to Capital Reserve 0 0 0 0 0 0 0 0 0 Needs to be (-) Less: Other Uses of Funds 0 0 (0) 0 0 (0) (114,978) (0) (0) Ending Reserve Balance $8,304,823 $8,548,524 $8,549,510 $8,691,647 $8,720,183 $8,900,867 $8,785,889 $8,800,061 $9,234,742 Target Minimum = 180 Days of O&M $5,060,000 $5,100,000 $5,500,000 $5,690,000 $5,910,000 $6,120,000 $6,350,000 $6,590,000 $6,830,000 Emergency/Litigation Reserve $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Target Minimum $7,060,000 $7,100,000 $7,500,000 $7,690,000 $7,910,000 $8,120,000 $8,350,000 $8,590,000 $8,830,000 Capital Project Reserve
Beginning Reserve Balance $28,467,526 $28,384,769 $24,744,367 $23,633,356 $18,770,216 $20,330,067 $20,630,067 $6,135,937 $6,135,937 Plus: To Reserves 0 0 0 0 0 0 0 0 0
Plus: Bond Funds Year 1 0 0 0 0 0 0 0 0 0 Input from City Projections Plus: Bond Funds Year 2 0 0 0 0 0 0 0 0 0
Plus: Transfers from Operating Reserve 0 0 0 0 0 0 0 0 0 Plus: From CIP 0 0 0 0 1,600,000 300,000 0 0 0
Less: CIP (82,757) (3,640,402) (1,111,011) (4,863,140) (40,149) 0 (14,494,130) 0 0 Less: Other Uses of Funds 0 0 0 0 0 0 0 0 0
Ending Reserve Balance $28,384,769 $24,744,367 $23,633,356 $18,770,216 $20,330,067 $20,630,067 $6,135,937 $6,135,937 $6,135,937 Target Minimum = 2 Yr's of Ann Depr Exp $3,672,000 $3,745,000 $3,820,000 $3,896,000 $3,974,000 $4,053,000 $4,134,000 $4,217,000 $4,301,000 FY 2022-23 Approx. Depr. $1,703,958 X 2 Connection Fee Reserve (Restricted)
Beginning Reserve Balance $3,887,541 $3,137,541 $2,387,541 $1,637,541 $637,541 $37,541 $1,037,541 $287,541 $1,287,541 Plus: To Reserves 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Less: Use of Funds (1,750,000) (1,750,000) (1,750,000) (2,000,000) (1,600,000) 0 (1,750,000) 0 0 Ending Reserve Balance $3,137,541 $2,387,541 $1,637,541 $637,541 $37,541 $1,037,541 $287,541 $1,287,541 $2,287,541 Ending Reserve Balances $36,689,592 $33,292,891 $32,182,866 $27,461,863 $29,050,250 $29,530,934 $14,921,826 $14,935,998 $15,370,679 Target Minimum (Operating + Capital) $10,732,000 $10,845,000 $11,320,000 $11,586,000 $11,884,000 $12,173,000 $12,484,000 $12,807,000 $13,131,000 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $25,957,592 $22,447,891 $20,862,866 $15,875,863 $17,166,250 $17,357,934 $2,437,826 $2,128,998 $2,239,679 Monthly
6 DRAFT 04/05/2024
78 City of Belmont
Sewer Cost of Service Study
Exhibit 4
Capital Improvement Projects
Capital Improvement Projects FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 Total Notes Capacity Related Projects (Fund 503)
San Juan LS $1,500,000 $1,750,000 $1,750,000 $0 $0 $0 $0 $0 $0 $5,000,000 CCIP 1 115,515 269,535 0 0 0 0 0 0 0 385,050
CCIP 2 632,388 1,475,572 0 0 0 0 0 0 0 2,107,960
CCIP 3 0 59,922 139,818 0 0 0 0 0 0 199,740
CCIP 6 0 0 0 321,120 749,280 0 0 0 0 1,070,400
CCIP 7 0 0 0 77,760 181,440 0 0 0 0 259,200
CCIP 8 0 0 0 0 710,829 0 4,278,630 0 0 4,989,459
CCIP 4 0 0 0 0 0 0 391,200 0 0 391,200
CCIP 5 0 0 0 0 0 0 1,486,300 0 0 1,486,300
CCIP 9 0 0 0 0 0 0 1,869,920 0 0 1,869,920
CCIP 12 0 0 0 0 0 0 203,830 0 0 203,830
Sewer System Capacity Study Update 200,000 0 0 0 0 0 0 0 0 200,000 HIA Cost of Sewer Service Annexation 30,000 0 0 0 0 0 0 0 0 30,000 HIA Cost of Sewer Service Annexation / CIP-1 0 0 0 5,354,000 0 0 0 0 0 5,354,000 HIA Cost of Sewer Service Annexation / CIP-2 0 0 0 1,341,000 0 0 0 0 0 1,341,000 HIA Cost of Sewer Service Annexation / CIP-3 0 0 0 199,820 0 0 0 0 0 199,820 Total Sewer Capacity Improvement Projects $2,477,903 $3,555,029 $1,889,818 $7,293,700 $1,641,549 $0 $8,229,880 $0 $0 $25,087,879 Condition Related Projects (Fund 501)
Sewer Rehabilitation - Annual $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $900,000 San Juan FM 878,274 1,024,653 1,024,653 0 0 0 0 0 0 2,927,580 Hiller LS 567,000 1,323,000 0 0 0 0 0 0 0 1,890,000
HIA Cost of Sewer Service Annexation / CIP-3 0 0 0 257,500 0 0 0 0 0 257,500 HIA Cost of Sewer Service Annexation / CIP-5 0 0 0 420,000 0 0 0 0 0 420,000 Island Park LS and FM 0 1,321,560 1,541,820 1,541,820 0 0 0 0 0 4,405,200 Sports Complex FM 0 44,160 51,520 51,520 0 0 0 0 0 147,200 Hiller FM 0 323,400 754,600 0 0 0 0 0 0 1,078,000
Ralston Ranch LS 0 0 0 0 0 0 1,320,000 0 0 1,320,000
CIP-4 0 0 0 0 0 0 26,000 0 0 26,000
CIP-6 0 0 0 0 0 0 227,000 0 0 227,000
Pipeline Rehab Batch 1 / Residential Gravity Replacement 809,580 1,889,020 0 0 0 0 13,591,250 0 0 16,289,850 Pipeline Rehab Batch 2 / Residential Gravity Replacement 0 809,580 1,889,020 0 0 0 0 0 0 2,698,600 Pipeline Rehab Batch 3 / Residential Gravity Replacement 0 0 809,580 1,889,020 0 0 0 0 0 2,698,600 Pipeline Rehab Batch 4 / Residential Gravity Replacement 0 0 0 809,580 1,889,020 0 0 0 0 2,698,600 Pipeline Rehab Batch 5 / Residential Gravity Replacement 0 0 0 0 809,580 0 0 0 0 809,580 Total Condition Related Projects $2,354,854 $6,835,373 $6,171,193 $5,069,440 $2,798,600 $100,000 $15,264,250 $100,000 $100,000 $38,793,710 Total Capital Improvement Projects $4,832,757 $10,390,402 $8,061,011 $12,363,140 $4,440,149 $100,000 $23,494,130 $100,000 $100,000 $63,881,589 Future Unidentified Capital Needs $0 $0 $0 $0 $1,600,000 $6,000,000 $0 $7,300,000 $7,500,000 $22,400,000 To Capital Reserve Fund $0 $0 $0 $0 $1,600,000 $300,000 $0 $0 $0 $1,900,000 Total Sewer Capital $4,832,757 $10,390,402 $8,061,011 $12,363,140 $7,640,149 $6,400,000 $23,494,130 $7,400,000 $7,600,000 $88,181,589 Less: Funding Sources
Grants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Reserve 82,757 3,640,402 1,111,011 4,863,140 40,149 0 14,494,130 0 0 24,231,589 Connection Fee Reserve 1,750,000 1,750,000 1,750,000 2,000,000 1,600,000 0 1,750,000 0 0 10,600,000 Additional Long-Term Debt 0 0 0 0 0 0 0 0 0 0
Total Funding Sources $1,832,757 $5,390,402 $2,861,011 $6,863,140 $1,640,149 $0 $16,244,130 $0 $0 $34,831,589 Total Capital Improvement Funded Through Rates $3,000,000 $5,000,000 $5,200,000 $5,500,000 $6,000,000 $6,400,000 $7,250,000 $7,400,000 $7,600,000 $53,350,000 FY 2022-23 Approx. Depr. $1,703,958 I/I Capital Funding $650,000 $668,000 $686,000 $705,000 $724,000 $744,000 $764,000 $785,000 $806,000 $6,532,000 7 DRAFT 04/05/2024
79 City of Belmont
Sewer Cost of Service Study
Exhibit 5E
Projected Revenue At Present Rates for 2023-2024
Use Description
Billing
Units 0.10
Rate Per
Billing Unit Total
Standby Charge 533 $245.40 $130,798.20
Residential
Collection
Base Charge $/Unit 10,748 $430.66 $4,628,651.83
Flow Charge $/HCF 588,130 653,478 $6.13 4,005,817.53
Total 660,643 $8,634,469.36
Treatment
Base Charge $/Unit 10,748 $226.34 $2,432,659.30
Flow Charge $/HCF 588,130 653,478 $3.03 1,980,037.05
Total $4,412,696.35
Total Residential Revenue $13,047,165.71
Commercial
Collection
LS - Base Charge $/Unit 208 $430.66 $89,574.80
HS - Base Charge $/Unit 19 $430.66 8,182.54
Low Strength Flow Charge $/HCF 89,206 99,118 $6.13 607,593.80 High Strength Flow Charge $/HCF 11,772 13,080 $11.91 155,778.29 Total 689,108 765,675 $861,129.42
Treatment
LS - Base Charge $/Unit 208 $226.34 $47,077.42
HS - Base Charge $/Unit 19 $226.34 4,300.46
Low Strength Flow Charge $/HCF 89,206 99,118 $3.03 300,327.77 High Strength Flow Charge $/HCF 11,772 13,080 $5.90 77,169.76 Total $428,875.41
Total Commercial Revenue $1,290,004.83
Summary of Revenues at Present Rates
Total Number of Billing Units
Standby 533
Residential 10,748
LS Commercial 208
HS Commercial 19
Total 11,508
Total Annual Flow
Residential 588,130
LS Commercial 89,206
HS Commercial 11,772
Total 689,108
Total Revenue
Standby Charge Revenue $130,798
Residential Revenue $13,047,166
LS Commercial 1,044,574
HS Commercial 245,431
Total $14,337,171
Total Revenue $14,467,969
2020-21 2021-22 2022-23 Average 2023-24
Billed HCF 722,463 807,524 722,463 750,817 689,108
% Adjustment Factor 0.09 0.09 0.10 0.100
Total HCF 787,485 880,202 794,710
DRAFT
820,799 765,675
8 04/05/2024
80 City of Belmont
Sewer Cost of Service Study
Exhibit 6
Development of the Volume Distribution Factor
FY 2024-25 11.0% Total Annual Avg. Daily
Annual Wastewater Inflow and Flow at Plant Flow At % of Flow (CCF) [1] Infiltration [2] [3] (CCF) Plant (MGD) [4] Total Residential 588,130 64,694 652,824 1.34 85.3%
Commercial 89,206 9,813 99,019 0.20 12.9%
Commercial High S. 11,772 1,295 13,067 0.03 1.7%
------------- ------------- ------------- ------------- ------------- Total Consumption 689,108 75,802 764,910 1.57 100.0%
Estimated Plant Flow [4] 1.94
Distribution Factor (VOL)
Note:
[1] Based on 2022/23 customer’s winter period consumption, plus estimated growth for FY 23/24 [2] Calculated based on billing report versus total plant flow. - Inflow represents external groundwater that can enter the sewer at service connections where the pipe is broken, at defective joints, at connections to manholes, etc. - Infiltration is water discharged to sewer from sources such as roof leaders, cellar, yard and drains from springs and other wet areas, storm sewers, catch basins, surface water runoff, etc [3] Total I&I allocated to each class of service based on flow. [4] City provided total flow for FY 2022/23 plus one year growth. 9 DRAFT 04/05/2024
81 City of Belmont
Sewer Cost of Service Study
Exhibit 7
Development of the Customer Distribution Factor
Number of % of Number of Weighting Weighted % of
Units Total Bills [1] Factor Customer Total
Residential 10,748 97.9% 10,748 1.0 10,748 97.9%
Commercial 208 1.9% 208 1.0 208 1.9%
Commercial High S. 19 0.2% 19 1.0 19 0.2%
------------- ------------- ------------- ------------- ------------- Total Customers 10,975 100.0% 10,975 10,975 100.0%
Distribution Factor (AC) (WCA)
Note:
[1] Number of Residential bills from billing records.

Actual Customer Customer Service & Accounting
10 DRAFT 04/05/2024
82 City of Belmont
Sewer Cost of Service Study
Exhibit 8
Development of the Strength Distribution Factor
Annual Flow Avg. Factor Calculated % of Avg. Factor Calculated % of (CCF) (mg/l) [1] Pounds [2] Total (mg/l) [1] Pounds [2] Total Residential 652,824 250 1,018,742 82.8% 220 896,493 82.8% Commercial 99,019 250 154,521 12.6% 220 135,978 12.6%
Commercial High S. 13,067 700 57,093 4.6% 616 50,242 4.6% ------------- ------------- ------------- ------------- ------------- Total Strength 764,910 1,230,356 100.0% 1,082,713 100.0% Distribution Factor (BOD) (SS)
Note:
[1] Average BOD and SS strength factors based on typical residential customer from similar studies. High strength based on 2.8 times residential based on WA State Dept Health, Rule Development Committee Issue Research Report, Wastewater Quality/Strength/Content, page 6 of 18. [2] Calculated pounds equals (annual flow (x) 748 (x) strength factor mg/l (x) 8.34 /1,000,000) Biochemical Oxygen Demand Suspended Solids
11 DRAFT 04/05/2024
83 City of Belmont
Sewer Cost of Service Study
Exhibit 9
Development of the Revenue Related Distribution Factor
Projected Year % of
FY 2024-25 Total
Residential $13,177,637 91.0%
Commercial 1,055,020 7.3%
Commercial High S. 247,885 1.7%
--------------- -------------
Total Rate Revenues $14,480,542 100.0%
Distribution Factor (RR)
12 DRAFT 04/05/2024
84 City of Belmont
Sewer Cost of Service Study
Exhibit 10
Functionalization and Allocation of Plant in Service
Customer Related
Weighted for:

Total Operating Biochemical Suspended Actual Customer
Plant Volume Oxygen Demand Solids Customer Acct/Svcs Revenue Direct FY 2021 (VOL) (BOD) (SS) (AC) (WCA) (RR) (DA)
Sewer Operations (501)
Land $14,793 $9,615 $0 $0 $5,178 $0 $0 $0 65.0% VOL 35% AC Improvements 8,442,998 5,487,949 0 0 2,955,049 0 0 0 65.0% VOL 35% AC Machinery and Equipment 261,761 261,761 0 0 0 0 0 0 100.0% VOL --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Sewer Operations (501) $8,719,552 $5,759,325 $0 $0 $2,960,227 $0 $0 $0 Sewer Capital (503)
Land $0 $0 $0 $0 $0 $0 $0 $0 65.0% VOL 35% AC
Construction in Progress 5,254,615 3,415,500 0 0 1,839,115 0 0 0 65.0% VOL 35% AC Improvements 33,530,504 21,794,828 0 0 11,735,676 0 0 0 65.0% VOL 35% AC Machinery and Equipment 9,098 9,098 0 0 0 0 0 0 100.0% VOL --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Sewer Capital (503) $38,794,217 $25,219,425 $0 $0 $13,574,792 $0 $0 $0 TOTAL PLANT IN SERVICE $47,513,769 $30,978,751 $0 $0 $16,535,019 $0 $0 $0 Less: Accumulated Depreciation
Improvements
Sewer Operations (501) ($6,754,397) ($4,390,358) $0 $0 ($2,364,039) $0 $0 $0 As Sewer Operations (501) Sewer Capital (503) (10,343,235) (6,723,103) 0 0 (3,620,132) 0 0 0 As Sewer Capital (503) --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Accum Depr Imprv. ($17,097,632) ($11,113,461) $0 $0 ($5,984,171) $0 $0 $0 Machinery and Equipment
Sewer Operations (501) ($251,179) ($251,179) $0 $0 $0 $0 $0 $0 As Sewer Operations (501) Sewer Capital (503) (9,098) (5,914) 0 0 (3,184) 0 0 0 As Sewer Capital (503) --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Accum Depr Mach & Equip ($260,277) ($257,093) $0 $0 ($3,184) $0 $0 $0 Total Accumulated Depreciation ($17,357,909) ($11,370,554) $0 $0 ($5,987,356) $0 $0 $0 Net Plant in Service $30,155,860 $19,608,197 $0 $0 $10,547,663 $0 $0 $0 Basis of Allocation
13 DRAFT 04/05/2024
85 City of Belmont
Sewer Cost of Service Study Page 1 of 3
Exhibit 11
Functionalization and Allocation of
Revenue Requirements
Weighted for:

Biochemical Suspended Actual Customer
Total Volume Oxygen Demand Solids Customer Acct/Svcs Revenue Direct FY 2024-25 (VOL) (BOD) (SS) (AC) (WCA) (RR) (DA)

EXPENSES
Planning and Project Management (701)
Personnel
Regular Salaries $488,945 $317,926 $0 $0 $171,019 $0 $0 $0 As Net Plant In Svc Permanent Part-Time 0 0 0 0 0 0 0 0 As Net Plant In Svc Temporary Part-Time 3,569 2,320 0 0 1,248 0 0 0 As Net Plant In Svc Overtime 0 0 0 0 0 0 0 0 As Net Plant In Svc
Standby/Unscheduled 993 646 0 0 347 0 0 0 As Net Plant In Svc Acting Pay 0 0 0 0 0 0 0 0 As Net Plant In Svc
Termination Pay 0 0 0 0 0 0 0 0 As Net Plant In Svc
P.E.R.S. Retirement 116,468 75,731 0 0 40,737 0 0 0 As Net Plant In Svc F.I.C.A Social Security 229 149 0 0 80 0 0 0 As Net Plant In Svc Health Insurance 0 0 0 0 0 0 0 0 As Net Plant In Svc
Medicare 6,959 4,525 0 0 2,434 0 0 0 As Net Plant In Svc Life & Disability Insurance 2,185 1,421 0 0 764 0 0 0 As Net Plant In Svc State Unemployment Insurance 0 0 0 0 0 0 0 0 As Net Plant In Svc Dental Plan 3,022 1,965 0 0 1,057 0 0 0 As Net Plant In Svc Vision Plan 870 566 0 0 304 0 0 0 As Net Plant In Svc
Allowances 1,106 719 0 0 387 0 0 0 As Net Plant In Svc
Deferred Compensation 13,294 8,644 0 0 4,650 0 0 0 As Net Plant In Svc SEC 125 Benefits 74,197 48,245 0 0 25,952 0 0 0 As Net Plant In Svc Benefit Prefunding 35,772 23,260 0 0 12,512 0 0 0 As Net Plant In Svc GASB 68 Pension Expense 0 0 0 0 0 0 0 0 As Net Plant In Svc GASB 75 OPEB Expense 0 0 0 0 0 0 0 0 As Net Plant In Svc Workers' Compensation 12,957 8,425 0 0 4,532 0 0 0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Personnel $760,564 $494,541 $0 $0 $266,024 $0 $0 $0 Supplies & Services
Equipment Allocation - IT Charge $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Svc Other Professional/Technical 5,098 3,315 0 0 1,783 0 0 0 As Net Plant In Svc EOC - Disaster Preparedness 0 0 0 0 0 0 0 0 As Net Plant In Svc Computer Software License 0 0 0 0 0 0 0 0 As Net Plant In Svc Equipment/Vehicle Rental 0 0 0 0 0 0 0 0 As Net Plant In Svc Liability Insurance Charge 8,735 5,680 0 0 3,055 0 0 0 As Net Plant In Svc Postage/Delivery Service 0 0 0 0 0 0 0 0 As Net Plant In Svc Telephone 0 0 0 0 0 0 0 0 As Net Plant In Svc
Printing & Binding 0 0 0 0 0 0 0 0 As Net Plant In Svc
Travel & Training 1,530 995 0 0 535 0 0 0 As Net Plant In Svc Membership & Dues 4,896 3,184 0 0 1,712 0 0 0 As Net Plant In Svc Miscellaneous 3,090 2,009 0 0 1,081 0 0 0 As Net Plant In Svc General Supplies 309 201 0 0 108 0 0 0 As Net Plant In Svc Small Tools 0 0 0 0 0 0 0 0 As Net Plant In Svc
Books/Manuals/Subscriptions 0 0 0 0 0 0 0 0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services $23,658 $15,383 $0 $0 $8,275 $0 $0 $0 Administrative & Other
Vehicle Usage Charge $10,158 $6,605 $0 $0 $3,553 $0 $0 $0 As Net Plant In Svc Computer Usage Charge 54,193 0 0 0 0 54,193 0 0 100% WCA Building Maintenance Charge 32,655 21,233 0 0 11,422 0 0 0 As Net Plant In Svc Administrative Support 122,242 0 0 0 0 122,242 0 0 100% WCA ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $219,249 $27,838 $0 $0 $14,975 $176,436 $0 $0 Total Planning and Project Management (701) $1,003,472 $537,762 $0 $0 $289,274 $176,436 $0 $0 Strength Related
Basis of Allocation
14 DRAFT 04/05/2024
86 City of Belmont
Sewer Cost of Service Study Page 2 of 3
Exhibit 11
Functionalization and Allocation of
Revenue Requirements
Weighted for:

Biochemical Suspended Actual Customer
Total Volume Oxygen Demand Solids Customer Acct/Svcs Revenue Direct FY 2024-25 (VOL) (BOD) (SS) (AC) (WCA) (RR) (DA)
Strength Related
Basis of Allocation
Sanitary Sewer Operations (710)
Personnel
Regular Salaries $752,162 $489,077 $0 $0 $263,085 $0 $0 $0 As Net Plant In Svc Temporary Part-Time 0 0 0 0 0 0 0 0 As Net Plant In Svc Overtime 10,196 6,630 0 0 3,566 0 0 0 As Net Plant In Svc Standby/Unscheduled 19,289 12,542 0 0 6,747 0 0 0 As Net Plant In Svc Acting Pay 0 0 0 0 0 0 0 0 As Net Plant In Svc
Termination Pay 0 0 0 0 0 0 0 0 As Net Plant In Svc
P.E.R.S. Retirement 185,435 120,575 0 0 64,860 0 0 0 As Net Plant In Svc F.I.C.A. Social Security 0 0 0 0 0 0 0 0 As Net Plant In Svc Health Insurance 0 0 0 0 0 0 0 0 As Net Plant In Svc
Medicare 12,306 8,002 0 0 4,304 0 0 0 As Net Plant In Svc Life & Disability Insurance 3,704 2,408 0 0 1,296 0 0 0 As Net Plant In Svc State Unemployment Insurance 0 0 0 0 0 0 0 0 As Net Plant In Svc Dental Plan 9,387 6,104 0 0 3,283 0 0 0 As Net Plant In Svc Vision Plan 2,163 1,406 0 0 756 0 0 0 As Net Plant In Svc Uniform Allowance 0 0 0 0 0 0 0 0 As Net Plant In Svc
Allowances 442 288 0 0 155 0 0 0 As Net Plant In Svc
Deferred Compensation 26,346 17,131 0 0 9,215 0 0 0 As Net Plant In Svc SEC 125 Benefits 208,740 135,729 0 0 73,011 0 0 0 As Net Plant In Svc Benefit Prefunding 64,542 41,967 0 0 22,575 0 0 0 As Net Plant In Svc Compensated Absences 0 0 0 0 0 0 0 0 As Net Plant In Svc Workers' Compensation 90,493 58,841 0 0 31,652 0 0 0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Personnel $1,385,204 $900,699 $0 $0 $484,505 $0 $0 $0 Supplies & Services
After Hours Dispatch Service $10,196 $6,630 $0 $0 $3,566 $0 $0 $0 As Net Plant In Svc Property Tax Admin Fee 55,550 36,120 0 0 19,430 0 0 0 As Net Plant In Svc Equipment Allocation - IT Charge 0 0 0 0 0 0 0 0 As Net Plant In Svc Other Professional/Tech 95,843 0 0 0 0 95,843 0 0 100% WCA Computer Software License 0 0 0 0 0 0 0 0 As Net Plant In Svc Water 10,500 6,827 0 0 3,673 0 0 0 As Net Plant In Svc
Other Waste Water Treatment 262,500 103,981 77,487 81,031 0 0 0 0 40% VOL 30% BOD 31% SS S.V.C.W. Sewer Treatment 3,496,047 1,384,849 1,031,999 1,079,199 0 0 0 0 40% VOL 30% BOD 31% SS Repair & Maintenance Service 20,600 13,395 0 0 7,205 0 0 0 As Net Plant In Svc Land/Building Rentals 0 0 0 0 0 0 0 0 As Net Plant In Svc Equipment/Vehicle Rental 1,030 670 0 0 360 0 0 0 As Net Plant In Svc Liability Insurance Charge 51,830 33,701 0 0 18,129 0 0 0 As Net Plant In Svc Communications 9,270 6,028 0 0 3,242 0 0 0 As Net Plant In Svc Telephone 0 0 0 0 0 0 0 0 100% WCA
Travel And Training 5,100 3,316 0 0 1,784 0 0 0 As Net Plant In Svc Street Access Fee 204,204 204,204 0 0 0 0 0 0 100% VOL
Memberships & Dues 7,140 4,643 0 0 2,497 0 0 0 As Net Plant In Svc Miscellaneous 2,575 1,674 0 0 901 0 0 0 As Net Plant In Svc General Supplies 6,695 4,353 0 0 2,342 0 0 0 As Net Plant In Svc Small Tools 12,360 8,037 0 0 4,323 0 0 0 As Net Plant In Svc Safety Equipment 15,450 10,046 0 0 5,404 0 0 0 As Net Plant In Svc Natural Gas & Electricity 57,750 57,750 0 0 0 0 0 0 100.0% VOL Gasoline 28,350 18,434 0 0 9,916 0 0 0 As Net Plant In Svc Repair & Maintenance Supplies 41,200 26,789 0 0 14,411 0 0 0 As Net Plant In Svc Books/Manuals/Subscriptions 0 0 0 0 0 0 0 0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services $4,394,190 $1,931,447 $1,109,486 $1,160,231 $97,183 $95,843 $0 $0 Administrative & Other
Vehicle Usage Charge $255,575 $166,182 $0 $0 $89,393 $0 $0 $0 As Net Plant In Svc Computer Usage Charge 147,407 0 0 0 0 147,407 0 0 100% WCA Building Maintenance Charge 93,392 60,726 0 0 32,666 0 0 0 As Net Plant In Svc Administrative Support 170,794 0 0 0 0 170,794 0 0 100% WCA ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $667,168 $226,908 $0 $0 $122,059 $318,201 $0 $0 Total Sanitary Sewer Operations (710) $6,446,562 $3,059,055 $1,109,486 $1,160,231 $703,746 $414,044 DRAFT
$0 $0
15 04/05/2024
87 City of Belmont
Sewer Cost of Service Study Page 3 of 3
Exhibit 11
Functionalization and Allocation of
Revenue Requirements
Weighted for:

Biochemical Suspended Actual Customer
Total Volume Oxygen Demand Solids Customer Acct/Svcs Revenue Direct FY 2024-25 (VOL) (BOD) (SS) (AC) (WCA) (RR) (DA)
Strength Related
Basis of Allocation
Sanitary Sewer Capital Operations (730)
Supplies & Services
Engineering/Architecture $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Svc Other Professional/Tech 8,652 0 0 0 0 8,652 0 0 100% WCA Bond Issuance Costs 0 0 0 0 0 0 0 0 As Net Plant In Svc Bond Amortization Expense 0 0 0 0 0 0 0 0 As Net Plant In Svc City Project Management & Services 0 0 0 0 0 0 0 0 As Net Plant In Svc Postage/Delivery Service 0 0 0 0 0 0 0 0 As Net Plant In Svc Printing and Binding 0 0 0 0 0 0 0 0 As Net Plant In Svc Miscellaneous 0 0 0 0 0 0 0 0 As Net Plant In Svc
General Supplies 0 0 0 0 0 0 0 0 As Net Plant In Svc
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Supplies & Services $8,652 $0 $0 $0 $0 $8,652 $0 $0 Administrative & Other
Administrative Support
Administrative Support $58,504 0 0 0 0 58,504 0 0 100% WCA ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Administrative & Other $58,504 $0 $0 $0 $0 $58,504 $0 $0 Capital Outlay
Improvement Other Than Building $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Capital Outlay $0 $0 $0 $0 $0 $0 $0 $0
Total Sanitary Sewer Capital Operations (730) $67,156 $0 $0 $0 $0 $67,156 $0 $0 Total Operating & Maintenance Expense $7,517,190 $3,596,817 $1,109,486 $1,160,231 $993,020 $657,636 $0 $0 Net Capital Funded Through Rates $5,668,000 $3,685,495 $0 $0 $1,982,505 $0 $0 $0 As Net Plant In Svc Deferred Capital Funding (Debt Service) $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Svc Debt Service
2016 Sewer Revenue Refunding $771,255 $501,492 $0 $0 $269,763 $0 $0 $0 As Net Plant In Svc 2016 Sewer Revenue 621,191 403,916 0 0 217,275 0 0 0 As Net Plant In Svc 2019 Sewer Revenue 1,110,625 722,160 0 0 388,465 0 0 0 As Net Plant In Svc New Low Interest Loan 0 0 0 0 0 0 0 0 As Net Plant In Svc New Revenue Bond 2024/2025 0 0 0 0 0 0 0 0 As Net Plant In Svc ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Debt Service $2,503,071 $1,627,568 $0 $0 $875,503 $0 $0 $0 Change in Working Capital +/- $243,700 $158,461 $0 $0 $85,239 $0 $0 $0 As Net Plant In Svc TOTAL REVENUE REQUIREMENTS $15,931,961 $9,068,340 $1,109,486 $1,160,231 $3,936,268 $657,636 $0 $0 Less: Miscellaneous Revenue
Public Works Service Charges $0 $0 $0 $0 $0 $0 $0 $0 As Net Plant In Svc City CIP Chargeback 0 0 0 0 0 0 0 0 As Net Plant In Svc Sewer Lateral Certificate Fee 0 0 0 0 0 0 0 0 100% Vol
Interest Earnings - Investments 733,792 417,668 51,101 53,438 181,296 30,289 0 0 As Total Rev. Req.

Other Interest Earnings 0 0 0 0 0 0 0 0 As Total Rev. Req.

Interest Revenue - Change 0 0 0 0 0 0 0 0 As Total Rev. Req.

Reimbursements 0 0 0 0 0 0 0 0 As Total Rev. Req.

Standby Charges 138,406 78,779 9,638 10,079 34,196 5,713 0 0 As Total Rev. Req. ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Miscellaneous Revenues $872,198 $496,448 $60,739 $63,517 $215,492 $36,002 $0 $0 NET REVENUE REQUIREMENTS FROM RATES $15,059,763 $8,571,893 $1,048,747 $1,096,714 $3,720,776 $621,634 $0 $0 % Net Revenue Requirement
DRAFT 100.0% 56.9% 7.0% 7.3% 24.7% 4.1% 0.0% 0.0%
16 04/05/2024
88 City of Belmont
Sewer Cost of Service Study
Exhibit 12
Allocation of Revenue Requirements
Net Revenue
Allocation Components Requirement Residential Low Strength High Strength Distribution Factor Volume Related $8,571,893 $7,315,816 $1,109,647 $146,429 (VOL) Strength Related
Bio-oxygen Demand $1,048,747 $868,369 $131,712 $48,666 (BOD) Suspended Solids 1,096,714 908,085 137,736 50,892 (SS)
Total Strength Related $2,145,461 $1,776,454 $269,449 $99,558 Customer Related
Actual Customer $3,720,776 $3,643,819 $70,516 $6,442 (AC) Weighted Customer 621,634 608,776 11,781 1,076 (WCA)
Total Customer Related $4,342,410 $4,252,595 $82,297 $7,518 Revenue Related $0 $0 $0 $0 (RR)
Direct Assignment $0 $0 $0 $0 (DA)
NET REVENUE REQUIREMENT $15,059,763 $13,344,865 $1,461,393 $253,505 Commercial
17 DRAFT 04/05/2024
89 City of Belmont
Sewer Cost of Service Study
Exhibit 13
Summary of the Cost of Service Analysis
FY 2024-25
Expenses Residential Low Strength High Strength
Revenues at Present Rates $14,480,542 $13,177,637 $1,055,020 $247,885 Distributed Revenue Requirement $15,059,763 $13,344,865 $1,461,393 $253,505 ----------------- ----------------- ----------------- --------------- Balance/(Deficiency) of Funds ($579,221) ($167,228) ($406,374) ($5,620) Required % Change in Rates 4.0% 1.3% 38.5% 2.3%
Last Study 7.0% 5.8% 23.2% -2.7%
Proposed Rate Adjustment 4.0%
Additional Revenue from Rate Adjustment $579,222 $513,264 $56,207 $9,750 Proposed Adjustment Based on COSA 4.0% 3.9% 5.3% 3.9%
Last Study 7.0% 6.9% 8.1% 6.4%
Commercial
18 DRAFT 04/05/2024
90 City of Belmont
Sewer Cost of Service Study
Exhibit 14
Average Unit Cost
Total Residential Low Strength High Strength
Volume - $/100 cf [1] $10.79 $11.45 $8.07 $8.07
Strength - $/100 cf $2.70 $2.78 $1.96 $5.49
Revenue/Direct - $/100 cf $0.00 $0.00 $0.00 $0.00
---------- ---------- ---------- ----------
Total $/100 cf $13.49 $14.23 $10.03 $13.56
Customer Costs - $/account/annual $395.67 $395.67 $395.67 $395.67 Average Total Cost $/100 cf $18.95 $20.88 $10.63 $13.97 Average Current Revenue $/100 cf $18.22 $20.62 $7.67 $13.66 Notes: [1] Volume per 100 cubic feet is based on annualized average monthly winter water usage values.

Annual Cost - $/account/year $1,372.21 $1,241.64 $7,026.12 $13,342.36 Annual Revenue - $/account/year $1,319.44 $1,226.08 $5,072.35 $13,046.60 Basic Data:

Annual Volume(/100 cf) 794,710 639,065 137,500 18,145
Number of Accounts 10,975 10,748 208 19
Commercial
19 DRAFT 04/05/2024
91 Demand Adjustment Factor 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% Revenue Adjustment July 1 each year 4.0% 4.0% 4.0% 4.0% 4.0% Present FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Collection
Residential
Base Charge - Annual $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge (S/HCF) $6.13 $6.38 $6.63 $6.90 $7.17 $7.46 Non-Residential
Base Charge $430.66 $447.89 $465.80 $484.43 $503.81 $523.96 Flow Charge (S/HCF)
Low strength $6.13 $6.38 $6.63 $6.90 $7.17 $7.46
High Strength $11.91 $12.39 $12.88 $13.40 $13.93 $14.49 Treatment
Residential
Base Charge - Annual $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge (S/HCF) $3.03 $3.15 $3.28 $3.41 $3.54 $3.69 Non-Residential
Base Charge $226.34 $235.39 $244.81 $254.60 $264.79 $275.38 Flow Charge (S/HCF)
Low strength $3.03 $3.15 $3.28 $3.41 $3.54 $3.69
High Strength $5.90 $6.14 $6.38 $6.64 $6.90 $7.18
City of Belmont
Sewer Utility
Proposed Rate Adjustments - 5 Year Rate Transition Plan 20 DRAFT 04/05/2024
92 Proposition 218 Notice
DRAFT
93

Annual Housing Reports

STAFF REPORT
Meeting Date: April 9, 2024
Agency: City of Belmont
Staff Contact: Kathy Kleinbaum, Assistant City Manager, [email protected] Laura Russell, Deputy Community Development Director, [email protected] Agenda Title: Housing Element Annual Progress Report 2023 and Housing Successor Annual Report FY 2022-23
Agenda Action: For Information Only
Recommendation
Review the Housing Element Annual Progress Report 2023 and the Housing Successor Annual Report FY 2023, and direct transmittal to the California Governor’s Office of Planning and Research (OPR) and the California Department of Housing and Community Development (HCD).

Strategic Focus Area
Economic Development and Housing
Background
Housing Element Annual Progress Report 2023
Government Code 65400 requires each governing body to prepare an annual report on the status and progress of implementing the jurisdiction’s Housing Element of the General Plan. Housing Element Annual Progress Reports (APR), using forms and definitions adopted by HCD, are due annually in April, covering the previous calendar year. Therefore, this year’s report evaluates the progress made towards housing production during the time period between January 2023 and December 2023. The Housing Element Annual Progress Report 2023 is included as Attachment A.

Housing Successor Annual Report Fiscal Year 2022-23
Housing Successor entities must provide an Annual Report that details compliance with the expenditure limitations detailed in Senate Bill 341 (H&SC 34176.1(f)) during each five-year compliance period. The information should be reported at the same time as the Housing Element Annual Report due in April of each calendar year. The current reporting period is fiscal year 2022-23, covering July 1, 2022 through June 30, 2023. The Housing Successor Annual Report FY 2022-23 is included as Attachment B.

Analysis
Housing Element Annual Progress Report 2023
The Regional Housing Needs Assessment (RHNA) 6
th cycle covers the years 2023 through 2031, making
2023 the first year of the planning period. Although Belmont’s Housing Element is not yet certified by HCD, the City is required to report on progress towards meeting the Regional Housing Needs Allocation (RHNA) and Housing Element Programs. The report format is set by HCD and cannot be altered. The City reports on projects that have received completed entitlements, building permits issued, and building permits finaled. Only projects with building permits issued in the reporting year count towards RHNA. 94

Annual Housing Reports
Because this is the first year in the 6th cycle and the nuances of State law, some units count from 2022 in this 2023 report; these units are captured in the first column in the table below. In 2023, the City issued building permits for 21 Accessory Dwelling Units (ADUs) and four single family homes. There were no building permits issued for larger housing projects in 2023; those types of projects do not happen every year but when they do they increase the housing production numbers significantly. RHNA progress is shown in the table below.

INCOME
LEVEL RHNA 6/30/2022-1/30/2023
2023
(remainder
of year)
TOTAL
UNITS
RHNA
NEED
Very Low 488 6 6 482
Low 281 6 6 275
Moderate 283 12 7 19 264
Above Mod 733 16 6 22 711
Total Units 1,785 28 25 53 1,732
In addition to the permitted units summarized above, the City of Belmont has approved entitlements in 2023 for an additional 140 units, 53 of which are affordable.

Housing Successor Annual Report
The Housing Successor Annual Report for the Low Moderate Income Housing Asset Fund (Belmont Affordable Housing Fund 275) has been prepared pursuant to CA Health and Safety Code Section 34176.1(f) and is included as Attachment B. The financial data contained in this report is based on the Belmont Annual Comprehensive Financial Report (audit) prepared by Maze and Associates for fiscal year 2022-23. The report includes summaries of the deposits to, ending balance of, and expenditures from the Belmont Affordable Housing Fund. The report also includes a description of the Housing Successor Agency’s Assets, including real property and loans receivable. Based on the information provided in the attached report, the Belmont Housing Successor remains in compliance with all applicable sections of the Health and Safety Code.

Alternatives

1. Direct staff to make amendments to the Annual Housing Reports.

Attachments
A. Housing Element Annual Progress Report 2023
B. Housing Successor Annual Report FY 2022-23
Fiscal Impact
☒ No Fiscal Impact
☐
Funding Source
Confirmed:

Source: Purpose: Public Outreach:

Staff Statutory/Contractual Requirement Posting of Agenda 95 Table A2
2 3 5 6
Prior APN+ Current APN Street Address Project Name+ Local Jurisdiction Tracking ID
Unit Category
(SFA,SFD,2 to
4,5+,ADU,MH)
Tenure
R=Renter
O=Owner
Very LowIncome Deed
Restricted
Very LowIncome Non
Deed Restricted
Low- Income
Deed Restricted
Low- Income
Non Deed
Restricted
ModerateIncome Deed
Restricted
ModerateIncome Non
Deed Restricted
Above
ModerateIncome
Entitlement
Date Approved # of Units issued
Entitlements
Row: Start Data Entry Below 22 6 30 6 0 5 89 158
045163070 900 EL CAMINO REAL LINC HOUSING PA2018-0074 5+ R 22 14 1 2/17/2023 37 044091350 1744 TERRACE DR B2022-0142 ADU R 1 4/7/2023 1 045202250 1401 ARDEN LN B2022-0316 ADU R 1 2/3/2023 1
044082100 2042 FOREST AVE B2022-0407 ADU R 1 2/3/2023 1 043221330 3301 HASKINS DRIVE B2022-0410 ADU R 1 11/6/2023 1 44124140 1714 NOTRE DAME AVE B2022-0460 ADU R 1 2/27/2023 1 044351040 1513 FOLGER DR B2022-0498 ADU R 1 4/26/2023 1 043290480 2713 MONSERAT AVE B2022-0503 ADU R 1 7/25/2023 1 044123230 1586 WINDING WAY B2022-0508 ADU R 1 3/3/2023 1 043062290 3806 NAUGHTON AVE B2023-0001 ADU R 1 7/13/2023 1 044322070 1730 FRANCIS CT B2023-0020 ADU R 1 6/13/2023 1 044273220 2227 PULLMAN AVE B2023-0062 ADU R 1 7/28/2023 1 044043530 2203 CORONET BLVD B2023-0064 ADU R 1 5/18/2023 1 044271330 2423 CORONET BLVD B2023-0075 ADU R 1 5/31/2023 1 040343100 1170 KEDITH ST B2023-0077 ADU R 1 10/3/2023 1 044232030 2424 CORONET BLVD B2023-0103 ADU R 1 10/3/2023 1 043322530 2839 SAN JUAN BLVD B2023-0143 ADU R 1 7/6/2023 1 044013260 2107 LYON AVE B2023-0196 ADU R 1 10/5/2023 1
040281020 503 CHESTERTON AVE B2023-0206 ADU R 1 9/25/2023 1 044351040 1513 FOLGER DR B2021-0534 SFD O 0
044024100 2244 SEMERIA AVE B2022-0150 SFD O 0
043221210 3288 OAK COURT B2022-0232 SFD O 0
043191290 3041 SAN JUAN BLVD B2022-0234 SFD O 0
044093160 709 ALAMEDA DE LAS
PULGAS B2022-0181 ADU R 0
043171140 2723 BARCLAY WAY B2022-0254 ADU R 0
043390020 3850 W NAUGHTON AVE B2022-0270 ADU R 0
045111190 1724 FERNWOOD WAY B2018-0288 ADU R 0
040381100 228 OXFORD WAY B2020-0153 ADU R 0
044283330 813 COVINGTON RD B2020-0333 ADU R 0
045372140 1015 CONTINENTALS WAY B2021-0033 ADU R 0
045372140 1015 CONTINENTALS WAY B2021-0034 ADU R 0
045372140 1015 CONTINENTALS WAY B2021-0035 ADU R 0
044112310 1520 WILLIAMS ST B2021-0365 ADU R 0
045462060 2551 SOMERSET DR B2021-0408 ADU R 0
045151090 926 SOUTH RD B2021-0435 ADU R 0
045152090 860 LAUREL AVE B2021-0479 ADU R 0
044312070 912 AVON ST B2021-0492 ADU R 0
043322020 2504 RALSTON AVE B2022-0029 ADU R 0
044142110 917 RUTH AVE B2022-0048 ADU R 0
044053080 2014 MONROE AVE B2022-0256 ADU R 0
044271320 2427 CORONET BLVD #A B2022-0260 ADU R 0
044342410 1506 PINE KNOLL DR B2022-0331 ADU R 0
043021710 2011 BISHOP ROAD B2018-0042 SFD O 0
044260160 2280 RALSTON AVE B2019-0239 SFD O 0
043122430 3213 UPPER LOCK AVE B2019-0397 SFD O 0
044281130 816 COVINGTON RD B2020-0393 SFD O 0
046032030,
046032040,
046032080 &
046032090
604, 608, & 610 HARBOR BLVD PA2020-0011 5+ R 16 87 6/26/2023 103
1 4
Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units Project Identifier Unit Types Affordability by Household Incomes - Completed Entitlement 96 Table A2
Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units 8 9
Current APN Street Address Project Name+
Very LowIncome Deed
Restricted
Very LowIncome Non
Deed Restricted
Low- Income
Deed
Restricted
Low- Income
Non Deed
Restricted
ModerateIncome Deed
Restricted
ModerateIncome Non
Deed Restricted
Above
ModerateIncome
Building Permits
Date Issued
# of Units Issued
Building Permits
0 6 0 6 0 7 6 25
045163070 900 EL CAMINO REAL LINC HOUSING 0
044091350 1744 TERRACE DR 1 10/17/2023 1
045202250 1401 ARDEN LN 1 2/9/2023 1
044082100 2042 FOREST AVE 1 2/8/2023 1
043221330 3301 HASKINS DRIVE 1 11/13/2023 1
44124140 1714 NOTRE DAME AVE 1 4/27/2023 1
044351040 1513 FOLGER DR 1 5/18/2023 1
043290480 2713 MONSERAT AVE 1 8/11/2023 1
044123230 1586 WINDING WAY 1 5/8/2023 1
043062290 3806 NAUGHTON AVE 1 8/1/2023 1
044322070 1730 FRANCIS CT 1 6/13/2023 1
044273220 2227 PULLMAN AVE 1 9/26/2023 1
044043530 2203 CORONET BLVD 1 6/1/2023 1
044271330 2423 CORONET BLVD 1 7/18/2023 1
040343100 1170 KEDITH ST 1 10/27/2023 1
044232030 2424 CORONET BLVD 1 10/12/2023 1
043322530 2839 SAN JUAN BLVD 1 7/7/2023 1
044013260 2107 LYON AVE 1 10/13/2023 1
040281020 503 CHESTERTON AVE 1 10/4/2023 1
044351040 1513 FOLGER DR 1 5/18/2023 1
044024100 2244 SEMERIA AVE 1 10/26/2023 1
043221210 3288 OAK COURT 1 10/6/2023 1
043191290 3041 SAN JUAN BLVD 1 10/3/2023 1
044093160 709 ALAMEDA DE LAS
PULGAS 1 3/16/2023 1
043171140 2723 BARCLAY WAY 1 4/27/2023 1
043390020 3850 W NAUGHTON AVE 1 1/9/2023 1
045111190 1724 FERNWOOD WAY 0
040381100 228 OXFORD WAY 0
044283330 813 COVINGTON RD 0
045372140 1015 CONTINENTALS WAY 0
045372140 1015 CONTINENTALS WAY 0
045372140 1015 CONTINENTALS WAY 0
044112310 1520 WILLIAMS ST 0
045462060 2551 SOMERSET DR 0
045151090 926 SOUTH RD 0
045152090 860 LAUREL AVE 0
044312070 912 AVON ST 0
043322020 2504 RALSTON AVE 0
044142110 917 RUTH AVE 0
044053080 2014 MONROE AVE 0
044271320 2427 CORONET BLVD #A 0
044342410 1506 PINE KNOLL DR 0
043021710 2011 BISHOP ROAD 0
044260160 2280 RALSTON AVE 0
043122430 3213 UPPER LOCK AVE 0
044281130 816 COVINGTON RD 0
046032030,
046032040,
046032080 &
046032090
604, 608, & 610 HARBOR BLVD 0
7 Project Identifier Affordability by Household Incomes - Building Permits 97 Table A2
Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units 11 12
Current APN Street Address Project Name+
Very LowIncome Deed
Restricted
Very LowIncome Non
Deed
Restricted
Low- Income
Deed
Restricted
Low- Income
Non Deed
Restricted
ModerateIncome Deed
Restricted
ModerateIncome Non
Deed Restricted
Above
ModerateIncome
Certificates of
Occupancy or other
forms of readiness
(see instructions) Date
Issued
# of Units issued
Certificates of
Occupancy or
other forms of
readiness
0 0 0 0 0 16 4 20
045163070 900 EL CAMINO REAL LINC HOUSING 0
044091350 1744 TERRACE DR 0
045202250 1401 ARDEN LN 0
044082100 2042 FOREST AVE 0
043221330 3301 HASKINS DRIVE 0
44124140 1714 NOTRE DAME AVE 0
044351040 1513 FOLGER DR 0
043290480 2713 MONSERAT AVE 0
044123230 1586 WINDING WAY 0
043062290 3806 NAUGHTON AVE 0
044322070 1730 FRANCIS CT 0
044273220 2227 PULLMAN AVE 0
044043530 2203 CORONET BLVD 0
044271330 2423 CORONET BLVD 0
040343100 1170 KEDITH ST 0
044232030 2424 CORONET BLVD 0
043322530 2839 SAN JUAN BLVD 0
044013260 2107 LYON AVE 0
040281020 503 CHESTERTON AVE 0
044351040 1513 FOLGER DR 0
044024100 2244 SEMERIA AVE 0
043221210 3288 OAK COURT 0
043191290 3041 SAN JUAN BLVD 0
044093160 709 ALAMEDA DE LAS
PULGAS 0
043171140 2723 BARCLAY WAY 0
043390020 3850 W NAUGHTON AVE 0
045111190 1724 FERNWOOD WAY 1 2/28/2023 1
040381100 228 OXFORD WAY 1 2/17/2023 1
044283330 813 COVINGTON RD 1 2/28/2023 1
045372140 1015 CONTINENTALS WAY 1 4/5/2023 1
045372140 1015 CONTINENTALS WAY 1 4/5/2023 1
045372140 1015 CONTINENTALS WAY 1 1/20/2023 1
044112310 1520 WILLIAMS ST 1 7/28/2023 1
045462060 2551 SOMERSET DR 1 4/3/2023 1
045151090 926 SOUTH RD 1 5/31/2023 1
045152090 860 LAUREL AVE 1 3/8/2023 1
044312070 912 AVON ST 1 4/25/2023 1
043322020 2504 RALSTON AVE 1 3/20/2023 1
044142110 917 RUTH AVE 1 8/16/2023 1
044053080 2014 MONROE AVE 1 11/22/2023 1
044271320 2427 CORONET BLVD #A 1 9/1/2023 1
044342410 1506 PINE KNOLL DR 1 5/10/2023 1
043021710 2011 BISHOP ROAD 1 11/17/2023 1
044260160 2280 RALSTON AVE 1 7/11/2023 1
043122430 3213 UPPER LOCK AVE 1 6/5/2023 1
044281130 816 COVINGTON RD 1 7/24/2023 1
046032030,
046032040,
046032080 &
046032090
604, 608, & 610 HARBOR BLVD 0
Affordability by Household Incomes - Certificates of Occupancy 10 Project Identifier
98 Table A2
Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units Streamlining Infill
Housing without Financial
Assistance or Deed
Restrictions
Term of Affordability or
Deed Restriction
13 14 15 16 17 18 19 20 21 22 23 24
Current APN Street Address Project Name+
How many of the
units were
Extremely Low
Income?
Please select the
streamlining
provision the project
was APPROVED
pursuant to. (may
select multiple)
Infill Units?
Y/N+
Assistance Programs
for Each Development
(may select multiple -
see instructions)
Deed Restriction
Type
(may select multiple -
see instructions)
For units affordable without
financial assistance or deed
restrictions, explain how the
locality determined the units
were affordable
(see instructions)
Term of Affordability or Deed
Restriction (years) (if
affordable in perpetuity enter
1000)+
Number of
Demolished/Destroyed
Units
Demolished or
Destroyed Units
Demolished/Des
troyed Units
Owner or Renter
Total Density Bonus Applied to
the Project (Percentage
Increase in Total Allowable
Units or Total Maximum
Allowable Residential Gross
Floor Area)
Number of Other
Incentives, Concessions,
Waivers, or Other
Modifications Given to
the Project (Excluding
Parking Waivers or
List the incentives,
concessions,
waivers, and
modifications
(Excluding Parking
Waivers or Parking
Did the project receive a
reduction or waiver of
parking standards? (Y/N)
22 0
045163070 900 EL CAMINO REAL LINC HOUSING 22 SB 35 (2017) Y RDA DB 55 61.0% 9 Development
Standards Modification Yes
044091350 1744 TERRACE DR NONE Y
045202250 1401 ARDEN LN NONE Y ABAG ADU Affordability
Methodology
044082100 2042 FOREST AVE NONE Y ABAG ADU Affordability Methodology
043221330 3301 HASKINS DRIVE NONE Y ABAG ADU Affordability Methodology
44124140 1714 NOTRE DAME AVE NONE Y ABAG ADU Affordability Methodology
044351040 1513 FOLGER DR NONE Y ABAG ADU Affordability
Methodology
043290480 2713 MONSERAT AVE NONE Y ABAG ADU Affordability Methodology
044123230 1586 WINDING WAY NONE Y ABAG ADU Affordability Methodology
043062290 3806 NAUGHTON AVE 0 NONE Y ABAG ADU Affordability Methodology
044322070 1730 FRANCIS CT 0 NONE Y ABAG ADU Affordability Methodology
044273220 2227 PULLMAN AVE 0 NONE Y ABAG ADU Affordability Methodology
044043530 2203 CORONET BLVD 0 NONE Y ABAG ADU Affordability Methodology
044271330 2423 CORONET BLVD 0 NONE Y ABAG ADU Affordability Methodology
040343100 1170 KEDITH ST 0 NONE Y ABAG ADU Affordability Methodology
044232030 2424 CORONET BLVD NONE Y ABAG ADU Affordability Methodology
043322530 2839 SAN JUAN BLVD NONE Y ABAG ADU Affordability Methodology
044013260 2107 LYON AVE NONE Y ABAG ADU Affordability
Methodology
040281020 503 CHESTERTON AVE NONE Y ABAG ADU Affordability Methodology
044351040 1513 FOLGER DR NONE Y
044024100 2244 SEMERIA AVE NONE Y
043221210 3288 OAK COURT NONE Y
043191290 3041 SAN JUAN BLVD NONE Y
044093160 709 ALAMEDA DE LAS

PULGAS NONE Y
043171140 2723 BARCLAY WAY NONE Y ABAG ADU Affordability Methodology
043390020 3850 W NAUGHTON AVE NONE Y ABAG ADU Affordability Methodology
045111190 1724 FERNWOOD WAY NONE Y Housing Element 2nd Dwelling Unit Study
040381100 228 OXFORD WAY NONE Y Housing Element 2nd Dwelling Unit Study
044283330 813 COVINGTON RD NONE Y Housing Element 2nd Dwelling Unit Study
045372140 1015 CONTINENTALS WAY NONE Y Housing Element 2nd Dwelling Unit Study
045372140 1015 CONTINENTALS WAY NONE Y Housing Element 2nd Dwelling Unit Study
045372140 1015 CONTINENTALS WAY NONE Y Housing Element 2nd Dwelling Unit Study
044112310 1520 WILLIAMS ST NONE Y Housing Element 2nd Dwelling Unit Study
045462060 2551 SOMERSET DR NONE Y Housing Element 2nd Dwelling Unit Study
045151090 926 SOUTH RD NONE Y Housing Element 2nd Dwelling Unit Study
045152090 860 LAUREL AVE NONE Y Housing Element 2nd Dwelling Unit Study
044312070 912 AVON ST NONE Y Housing Element 2nd Dwelling Unit Study
043322020 2504 RALSTON AVE NONE Y Housing Element 2nd Dwelling Unit Study
044142110 917 RUTH AVE NONE Y Housing Element 2nd Dwelling Unit Study
044053080 2014 MONROE AVE NONE Y Housing Element 2nd Dwelling Unit Study
044271320 2427 CORONET BLVD #A NONE Y Housing Element 2nd Dwelling Unit Study
044342410 1506 PINE KNOLL DR NONE Y Housing Element 2nd Dwelling Unit Study
043021710 2011 BISHOP ROAD NONE Y
044260160 2280 RALSTON AVE NONE Y
043122430 3213 UPPER LOCK AVE NONE Y
044281130 816 COVINGTON RD NONE Y
046032030,
046032040,
046032080 &
046032090
604, 608, & 610 HARBOR BLVD NONE Y INC, DB 99 0.0%
1 Other No
Housing with Financial Assistance
and/or Deed Restrictions Project Identifier Demolished/Destroyed Units Density Bonus 99 1 Projection Period 3 4
RHNA Allocation by
Income Level
Projection Period -
06/30/2022-
01/30/2023
2023 2024 2025 2026 2027 2028 2029 2030 2031 Total Units to Date (all years)
Total Remaining
RHNA by Income
Level
Deed Restricted - - - - - - - - - -
Non-Deed Restricted - 6 - - - - - - - -
Deed Restricted - - - - - - - - - -
Non-Deed Restricted - 6 - - - - - - - -
Deed Restricted - - - - - - - - - -
Non-Deed Restricted 12 6 - - - - - - - -
Above Moderate 733 16 6 - - - - - - - - 22 711
1,785
28 24 - - - - - - - - 52 1,733
5 6 7
Extremely low-Income
Need 2023 2024 2025 2026 2027 2028 2029 2030 2031 Total Units to Date Total Units
Remaining
244 - - - - - - - - - - 244
265
6 18 Moderate
488
281
283
6 2
Table B
Regional Housing Needs Allocation Progress
Permitted Units Issued by Affordability
482
275
Total RHNA
Total Units
Income Level
Very Low
Low
Extremely Low-Income Units*
Progress toward extremely low-income housing need, as determined pursuant to Government Code 65583(a)(1). 100
1 2 3 4
Name of Program Objective Timeframe in H.E Status of Program Implementation n/a n/a n/a
The City is continuing to actively pursue certification of the 2023-2031 Housing Element. In response to HCD comments and in an attempt to make our Programs more understandable, we are actively rewriting them at the time of preparation of this APR. The reporting below is based on key programs that we are actively working on or completed even though the Housing Element is not certified.

Zoning Amendments to
increase development
capacity in key districts
Increase FAR and eliminate density
maximum in Corridor Mixed Use District.

Increase FAR in Village Station Core
District
Q1 2024 Completed in January 2024
Zoning Amendments to
allow by right processing
for sites carried over from
past Housing Elements per
State law
Amend Zoning Ordinance Q1 2024 Completed in January 2024 Zoning Amendments to
remove constraints and
ensure consistency with
State law.

Update code related to supportive
housing, mobile home parks,
farmworker housing, residential care
facilities, emergency shelters, and
definition of family.

Q1 2024 Consultant retained with public meetings expected in summer 2024.

Use public funding to
support affordable
housing developments
Add more City supported housing with
affordability restrictions Ongoing
City Council approved increase in City contribution for an 100% affordable housing project a 803 Belmont Avenue. Staff is working closely with developer to finalize documents. Close of escrow anticipated in early April 2024.

Support ADU production
Implement a program to encourage ADU
production including technical
assistance, pre-approved plans, and
financial support for affordable ADUs.

Various beginning in 2025
City is joining Countywide ADU Resource center that will provide these services to Belmont. Initial work product expected summer 2024 with programs coming online through 2025.

Housing Programs Progress Report
Describe progress of all programs including local efforts to remove governmental constraints to the maintenance, improvement, and development of housing as identified in the housing element.

Table D
Program Implementation Status pursuant to GC Section 65583 101
Item # FY 2023
1 $0
2 LMIHAF Revenues:

Sale of Capital Assets (LMI Property) $         2,940,000 Rental/lease income $               83,547
Interest Income 227,547 $
Loan Interest $                     ‐
LEAP Housing Element Grant Reimbursement $            150,000 Miscellaneous $               15,373
TOTAL: $         3,416,467
3 Statement of Fund Balance @ 6/30/23 Year End (Source: FY2023 ACFR) 9,531,128 $ 4 Description of expenditures from LMIHAF
LMIHAF Expenditures:

Occupied Affordable Rental Housing Operations:

Expenditures on Low Income $               56,241
Expenditures on Very Low Income $               18,747
Expenditures on Extremely Low Income $               18,747 Administrative Costs 77,537 $
Housing Successor Owned LMI Property Tax $               18,559 Housing Element Update and EIR $            230,047
$            419,878
5 Statutory Value of Real Property, the value of loans/grants receivable, and the sum of these two amounts.

Loans Receivable (Notes) 4,425,127 $
Total Real Property Plus Loans Receivable 8,483,422 $
6 Description of Transfers:

Description of transfer made, if any, to another housing successor agency pursuant to H&SC 34176.1(c)(2), including whether the funds are encumbered and the status of projects, if any, for which the transferred LMIHAF will be used.

SENATE BILL 341 ANNUAL HOUSING SUCCESSOR REPORT

CITY OF BELMONT LOW MODERATE INCOME HOUSING ASSET FUND
Fiscal Year July 1, 2022 – June 30, 2023
Per H&SC 34176.1
The amount the city, county, or city and county received pursuant to subparagraph (A) of paragraph (3) of subdivision (b) of Section 34191.4.

The amount deposited to the Low and Moderate Income Housing Asset Fund, distinguishing between amounts deposited pursuant to subparagraphs (B) and (C) of paragraph (3) of subdivision (b) of Section 34191.4, amounts deposited for other items listed on the Recognized Obligation Payment Schedule, and other amounts deposited.

No Transfer Made Per H&SC
34176.1(C)(2)
102
7 Project Descriptions:

A description of any project for which the housing
successor receives or holds property tax revenue
pursuant to the Recognized Obligation Payment
Schedule and the status of that project.
8 Status of Compliance with Section 33334.16:

Real Property Owned by Housing Successor Agenc Date
Acquired
DOF Transfer
Approved
Deadline to
Initiate Activity
APN 045‐244‐150, 1365 Fifth Avenue 12/31/1996 8/30/2012 8/31/2017 APN 044‐222‐140, 730 El Camino Real 8/30/1994 8/30/2012 8/31/2017 APN 040‐261‐060, 503 Crestview 5/5/1997 8/30/2012 8/31/2017 APN 045‐261‐010/020/030, 1000 O'Neill Ave #1 & #2 8/2/1994 8/30/2012 8/31/2017 APN 040‐500‐170, 30 Oxford Place 9/5/2007 8/30/2012 8/31/2017 APN 106‐190‐070, 300 Davey Glen Rd #3507 2/19/2009 8/30/2012 8/31/2017 APN 106‐270‐060, 400 Davey Glen Rd #4606 1/30/2009 8/30/2012 8/31/2017 APN 044‐222‐180, 780 El Camino Real 9/25/2008 8/30/2012 8/31/2017 APN 045‐162‐070, 868, 870, 876 El Camino Real 4/2/2009 8/30/2012 8/31/2017 APN 045‐244‐160, 875 O'Neill Avenue 12/31/1996 8/30/2012 8/31/2017 APN 045‐162‐080, 884 El Camino Real, 810 Hill Street 3/10/2010 8/30/2012 8/31/2017 APN 045‐162‐090, 898 El Camino Real, 800 Hill Street 3/10/2010 8/30/2012 8/31/2017 APN 045‐163‐070, 900 El Camino Real 8/20/2010 8/30/2012 8/31/2017 APN 045‐182‐220, 1085 Sixth Avenue 3/20/1996 8/30/2012 8/31/2017 APN 045‐182‐260, 843 Ralston Avenue 10/20/1998 8/30/2012 8/31/2017 APN 045‐244‐010, 1300 El Camino Real 3/14/2011 8/30/2012 8/31/2017 9 Outstanding Obligations Per 33413
A description of any outstanding obligations pursuant
to Section 33413 that remained to transfer to the
housing successor on February 1, 2012, of the housing
successor’s progress in meeting those obligations, and
of the housing successor’s plans to meet unmet
Rezoned via Belmont Village Specific Plan, adopted
November 2017; Developed with interim use open space
plaza.

Firehouse Square Phase 1 Affordable Housing Project;
long term lease executed August 2020, project
construction completed in May 2023.

The Belmont Housing Successor
does not have any obligations to
fulfill under Section 33413.

Rezoned via Belmont Village Specific Plan, adopted
November 2017. In discussions with adjacent property
owner for future redevelopment.

Occupied, very‐low income special needs group home
Occupied, 2‐units moderate‐income
Property sold FY 2023
Property sold FY 2023
Property sold FY 2023
RFP for development of affordable housing issued June
2017; rezoned via General Plan Phase I Zoning November
2017.

Rezoned via Belmont Village Specific Plan (November
2017); Affordable Housing Project ENA with LINC Housing (July 2021)
Firehouse Square Phase 1 Affordable Housing Project;
long term lease executed August 2020,  construction of 65 affordable units completed in May 2023.

DDLA with Linc Housing approved by City Council in
February 2023.

DDLA with Linc Housing approved by City Council in
February 2023.

DDLA with Linc Housing approved by City Council in
February 2023.

Occupied, low‐income special needs group home (Kainos)
For interests in real property acquired by the former redevelopment agency prior to February 1, 2012, a status update on compliance with Section 33334.16. For interests in real property acquired on or after February 1, 2012, a status update on the project.

Status of Compliance with 33334.16
(All properties compliant FY2022)
Firehouse Square Phase 2 Disposition and Development
Agreement (DDA) Executed 10/31/19; Property sold June
2022.

The Housing Successor does not receive or hold property tax revenue; the Belmont Successor Agency fully dissolved in June 2022 and Recognized Obligation Payment Schedules are no longer prepared.
103
10 Income Restrictions:
5% of Real Property Assets & Loans Receivable (Notes): 424,171.12 $ Total Expenditures
Total Expenditures per CAFR: Expenditures In Excess of 5% Cap FY 2014 46,970.12 $         ‐ $
FY 2015 105,896.00 $       ‐ $
FY 2016 135,031.00 $       ‐ $
FY 2017 244,126.56 $       ‐ $
FY 2018 157,155.40 $       ‐ $
FY 2019 124,547.52 $       ‐ $
FY 2020 468,573.00 $       $                  56,730.02 FY 2021 215,889.00 $       ‐ $
FY 2022 447,453.00 $       $                  23,281.88 FY 2023 419,878.00 $       ‐ $
Total 2,365,519.60 $   $                  80,011.90
11 Senior Housing Restrictions:

Unit Category
Assisted Senior Rental Units 0
Total Assisted Rental Units 312
Percentage Senior Rental Housing 0%
12 Excess Surplus: LMIHF Deposits
FY 2023 (3,416,467) $
FY 2022 (4,140,958) $
FY 2021 (285,230) $
FY 2020 (94,253) $
FY 2019 (124,285) $
FY 2018 (130,861) $
FY 2017 (126,233) $
FY 2016 (354,097) $
FY 2015 (122,871) $
Use of Excess Surplus:

The amount of any excess surplus, the amount of time
that the successor agency has had excess surplus, and the housing successor’s plan for eliminating the excess
surplus. “Excess surplus” is defined as an unencumbered amount in the account that exceeds the greater of one
million dollars ($1,000,000) or the aggregate amount
deposited into the account during the housing
successor's preceding four fiscal years, whichever is
greater (H&SC 34176.1(d)).

In FY 2023, total revenues deposited into the LMIHF Affordable Housing Fund was $3,416,467. This included sale of three properties acquired with LMI funds by the former Belmont Redevelopment Agency which netted $2,940,000 as well as a $150,000 grant reimbursement from the State for Housing Element expenditures. All proceeds have been deposited into the LMIHF funds (275). The City Council has approved two Affordable Housing loans to support entitled 100% affordable projects that meet the affordability restrictions. The first is a loan up to $2.5 million to ROEM Development Corporation for development of 125 affordable units at El Camino Real and Belmont Avenue. The second is a loan up to $1 million to Linc Housing Corporation for development of 37 affordable units at Hill Street and El Camino Real. These loans are expected to be paid out in FY 2024. The City anticipates using the remaining surplus funds to provide loans to other pending affordable multifamily developments.

After expenditures allowed for monitoring and preserving the long‐term affordability of units, the housing successor shall expend all funds remaining in the Low and Moderate Income Housing Asset Fund for the development of housing affordable to and occupied by households earning 80 percent or less of the area median income, with at least 30 percent of these remaining funds expended for the development of rental housing affordable to and occupied by households earning 30 percent or less of the area median income and no more than 20 percent of these remaining funds expended for the development of housing affordable to and occupied by households earning between 60 percent and 80 percent of the area median income. A housing successor shall demonstrate in the annual report described in subdivision (f), for 2019, and every five years thereafter, that the housing successor’s expenditures from January 1, 2014, through the end of the latest fiscal year covered in the report comply with the requirements of this subparagraph.

The percentage of units of deed‐restricted rental housing restricted to seniors and assisted individually or jointly by the housing successor, its former redevelopment agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed‐
restricted rental housing assisted individually or jointly by the housing successor, its former redevelopment agency, and its host jurisdiction within the same time period.
104
13 Homeownership Unit Inventory:
(A) The Number of those Units. (A) 19
(B)
(C)
(D) Whether the housing successor has contracted with any outside (D) entity for the management of the units and, if so, the identity of the The Belmont Housing Successor does
not currently  contract with any outside
entity for bmr unit management.

An inventory of homeownership units assisted by the
former redevelopment agency or the housing successor
that are subject to covenants or restrictions or to an
adopted program that protects the former
redevelopment agency’s investment of moneys from the
Low and Moderate Income Housing Fund pursuant to
subdivision (f) of Section 33334.3. This inventory shall include all of the following information:
(B) In the first report pursuant to this subdivision, the number of units lost to the portfolio after February 1, 2012, and the reason or reasons for those losses. For all subsequent reports, the number of the units lost to the portfolio in the last fiscal year and the reason for those losses. (C) Any funds returned to the housing successor as part of an adopted program that protects the former redevelopment agency’s investment of moneys from the Low and Moderate Income Housing Fund.

The proceeds from the sale of the 3
units generated $2,940,000  which was
deposited back to the LMIHF fund
3 units were sold from the portfolio
during fiscal year 2023 to raise funds to
support affordable multifamily  housing
developments.
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