Beverly Hills City Council
November 7, 2023

STAFF REPORT
Meeting Date: November 7, 2023
To: Honorable Mayor & City Council
From: Shana Epstein, Director of Public Works
Robert Welch, P.E., Utilities General Manager
Melissa Gomez, Senior Management Analyst
Subject: Distribution of the Water and Wastewater Rates Public Notice Attachments: 1. Staff Report on Water Operations and Emergency Storage dated September 12, 2022

2. Proposed Water Rates

3. Proposed Wastewater Rates

4. Proposed Wastewater Commercial Strength Class
Restructure

5. Combined Customer Bill Impacts

6. Draft Public Notice

INTRODUCTION
Executive Summary
The City’s Water and Wastewater Utilities are enterprise entities, and their expenses and revenues are separate from the City’s General Fund. In essence, customers pay a rate for water and wastewater services. Customer rates must generate sufficient revenues to sustain operations, maintenance, debt payments and capital improvement projects as well as the costs of oversight and administrative functions performed by the City’s internal service departments.

Every five years, the City aims to perform a cost of service and rate design study to ensure that adequate revenues are generated to support the water and wastewater systems and that the revenue needs are allocated to each customer class based on the cost of the service to that class. In 2021, the City contracted with HF&H Consultants, LLC (HF&H) to conduct a cost-ofservice study for the Water and Wastewater Enterprises. The rate study process was an 18- month collaboration between staff, the Public Works Commission (Commission), the City Council/Public Works Commission Liaison (Liaison), and financial consultants (HF&H). The water rate study concluded that the City needs a nominal increase in water revenue during the next five-year period so the City can continue a robust capital improvement program that Meeting Date: November 7, 2023

prioritizes reliability and resilience. The wastewater rate study concluded that no additional revenue from rates is necessary during the next five-year period. However, after evaluating the current wastewater rate structures, staff is proposing changes that are more reasonable for the customers.

City Council is not being asked to approve or authorize the proposed rates at this time. Instead, staff requests City Council authorize the distribution of the Proposition 218 notice to begin the community outreach process at the start of the new year and schedule a public hearing in February 2024 for consideration of the proposed rates. In summary, the proposed water rate adjustments include:

1. Increasing the bi-monthly fixed water meter service charges and fire meter service charges;

2. Adjusting the bi-monthly quantity (volumetric) charges;

3. Changing the tier sizes for single family residential customers to reflect changing customer demands and thereby align the level of service with the cost of providing that service within each tier.

4. Updating the water shortage revenue stabilization factors;

5. Maintaining the Water Reliability 30-year rate schedule previously approved by City Council. The Water Reliability Charge for Inside and Outside City customers will increase by $0.01 per HCF (Hundred Cubic Feet) each year during the five-year planning period; and

6. Maintaining the ability to exercise pass-through charges in the event wholesale water purchases are higher than what was budgeted for a five-year period.

The proposed wastewater rate adjustments include:

1. Decreasing the bi-monthly wastewater service charge for residential customers and increasing the charge for commercial customers;

2. Changing the wastewater rate structure to add a quantity (volumetric) charge for the wastewater residential customer class; and

3. Changing the commercial wastewater customer classes to include a third class (low, medium, and high strength).

DISCUSSION
Background
On December 19, 2017, the Beverly Hills City Council adopted a five-year schedule of water rate adjustments through January 1, 2022. The ordinance adopted by City Council also allowed pass-through of Metropolitan Water District (MWD) rate increases to Beverly Hills water customers with notice. On February 5, 2019, the Beverly Hills City Council approved restructured water rate adjustments based on a cost-of-service study conducted by HF&H through January 1, 2022. The restructured rate adjustments accounted for changes to the existing consumption and fixed service charges, implemented a water reliability charge, and adopted water shortage revenue stabilization factors. As for wastewater, present rates have not been updated since FY 2009-10. Although at the time, staff recommended automatic consumer price index (CPI) rate increases for future years, the CPI rate has not been exercised. HF&H evaluated the current wastewater rates in 2017 and found that revenue was sufficient to continue the enterprise’s strong financial position through FY 2021-22 without any need for a rate increase.

Meeting Date: November 7, 2023

Water Rates
The City’s Water Enterprise provides potable water to commercial, residential, and municipal customers within its City limits, approximately 8,500 connections. In addition to these connections, the City also serves a portion of customers located in West Hollywood, an additional 1,800 connections. The City owns, operates, and maintains the water system within its service area. The water system includes storage reservoirs, pump stations, wells, pipelines, and the Foothill Water Treatment Plant.

The City purchases water from Metropolitan Water District (MWD) to deliver approximately 8,500 acre-feet per year to its customers. The City also produces a portion of its water supply from various wells and treats the water at the Foothill Water Treatment Plant.

Revenue Requirements
The purpose of evaluating the revenue requirement is to establish the revenue needs of the water utility. Understanding the financial resources needed over the next 10 years is critical to managing and planning for the future, as well as to avoid drastic rate fluctuations year to year.

A spreadsheet model was developed to derive revenue requirements for FY 2022-23 through FY 2031-32. This study relied on the City’s Operations and Maintenance (O&M) budget for FY 2022-23 and the City’s Capital Improvements Plan (CIP) budget covering FY 2022-23 through FY 2027-28. Results of the revenue requirements evaluation determined that revenue increases are necessary to overcome the revenue shortfall projected through FY 2028-29. After implementing the rate increases proposed in the study, results show a need for a moderate annual revenue increase for the Water Enterprise over the next four years starting on January 1, 2025. This funding level is forecast to support moderate increases in operations and maintenance and a robust capital improvement program. The additional funding is a significant investment by our community into the reliability and resilience of our vital water resources and infrastructure.

Cost-of-Service Study and Rate Structure Design
A cost-of-service analysis determines the costs of services in the form of rates that customers pay in proportion to the services they receive. The cost-of-service analysis allocated FY 2022- 23 projected expenses, based on CIP spending. Key discussion points and major updates are discussed below.

CIP Options
There were three different CIP options considered as part of this study. All options include funding for three Reservoir Management Systems (RMS) totaling approximately $3M. With the addition of the new RMS at Greystone (19.4MG), Coldwater (8.3MG), and Sunset (6MG) reservoirs, which make up 77% of the total storage within the City, operational storage will be increasing by 25% (8.5MG).
 Option 1 includes funding for the Cabrillo Forebay project. This option would supplement resilience to existing LADWP interconnections and the Montecielo pump station. The improvements for Option 1 include a new pump station for the hillside along with a forebay storage area of approximately 300,000 gallons, new transmission line, and backup power.
 Option 2 includes funding for the full-scale Cabrillo Reservoir project, which includes a new pump station for the hillside, a reservoir with a capacity of 4.3MG, new transmission line, and backup power.

Meeting Date: November 7, 2023

 Option 3 includes funding for the Cabrillo Forebay project and the Reservoir 4C project. The improvements associated with Option 3 include at Cabrillo, a pump station and forebay storage area of 300,000 gallons, and a 1MG reservoir at the existing Reservoir 4C site.

Since the cost-of-service analysis is directly influenced by choice of one of the three options listed, Public Works staff worked directly with the Fire Department to review the City’s emergency water resiliency as it pertains to the water system operations and emergency water storage. The results of this review were presented to City Council during Study Session on September 12, 2022 (Attachment 1). Details shared included information regarding fire suppression and how the existing water system has been developed to fight structure fires and has the ability to provide for the necessary demand for fire suppression for structure fires. When discussing wildfires, Vegetation Management, Fuel Modification, and Home Hardening are just a few of the programs that provide a means of property/home protection.

The City continues to emphasize the importance of water resiliency and independence by focusing on development of the water well field. Staff has been implementing the Integrated Water Resources Master Plan (IWRMP) which identified the need for additional wells in the La Brea Subbasin. The addition of La Cienega Well 1 at the former Coffee Bean Site is the first of three wells to be developed in the La Brea Subbasin, and there are efforts to obtain additional property in the near future. Also, the design of the Reservoir Management Systems (RMS) at the City’s three largest reservoirs is near complete, and construction should be complete by the end of 2024. With the addition of the new RMS at Greystone (19.4 MG), Coldwater (8.3 MG) and Sunset (6 MG) reservoirs, which make up 77% (33.7MG) of the total storage within the City, these reservoirs will be able to sustain a higher operational water level (ranging from 60% level to full), which will maintain approximately an additional 8.5 MG of available emergency storage at these three reservoirs during cycling.

The Commission discussed the various CIP options at the August 31, 2022, meeting and recommended CIP Option 2, the full-scale Cabrillo Reservoir project. However, on May 31, 2023, after discussing the CIP Options with the Liaison, the Liaison determined Option 1 was best, as it caused the least increase in revenue requirements. Proposed water rates (which include funding for projects proposed under CIP Option 1) are included as Attachment 2.

It is important to note that inside and outside City customers pay the same fixed water and fire service charges. However, the quantity charge and water reliability charge differ between inside and outside City customers. The difference is explained later in this report. As part of the costof-service analysis, the tier structure was reviewed and determined that the single-family customer tiers need to be updated to reflect current customer demand patterns. Accordingly, the sizes of the tiers are proposed to be adjusted to reflect changing customer demands and thereby align the level of service with the cost of providing that service within each tier. Tier 1 will increase from 0 to 26 HCF to 0 to 32 HCF, Tier 2 will decrease from 27-48 HCF to 33-48 HCF, Tier 3 will decrease from 49-86 HCF to 49-83 HCF and Tier 4 will expand from 86+ HCF to 84+ HCF.

Fixed Charge Revenue
Staff, HF&H, and the Public Works Commission recommend maintaining the current fixed charge revenue balance (approximately 17.4% from fixed service plus fire service charges and 81.7% from variable quantity charges). Approximately 71% of expenses incurred by the Water Enterprise are fixed. Therefore, the proposed fixed charges will recover a portion of the fixed costs (e.g., personnel, capital). The remaining fixed costs are recovered through the non- Meeting Date: November 7, 2023

seasonal variable quantity charge revenue. Even though the majority of the Water Enterprise fund’s costs are fixed, this ratio has allowed customers to manage their bills through consumption. At the same time, the Water Enterprise fund has maintained revenue stability.

The Commission and Liaison agreed to maintain the fixed charge revenue balance.

Outside City Rate Differential
The City provides water services to a portion of the City of West Hollywood. During the previous cost-of-service study, it was determined that Beverly Hills customers (Inside City customers) and West Hollywood customers (Outside City customers) should pay different quantity charges mainly due to the contribution of the services provided by the City of Beverly Hills’ General Fund to the Water Enterprise. These services include public safety from police and fire, use of government facilities such as City Hall and corporation yards, and right-of-way maintenance.

Inside City customers pay for these services through property taxes. Outside City customers do not contribute property taxes, so their rates reflect an increase over Inside City rates to account for these costs and reimburse the General Fund. For the current cost-of-service study, it was determined that the Outside City rate differential would decrease from $0.89 to $0.66 per HCF due to the decrease in Outside City water flow. (For context, one HCF is equivalent to 748 gallons.) The Commission and Liaison agreed to the decrease in the Outside City rate differential. The Water Reliability Charge for Outside City customers also incorporates a rate differential which is explained in the Water Reliability Charge section below.

Previously Adopted Water Charges Up for Discussion for Reapproval In addition to the last water rate adjustments, City Council adopted pass-through charges, water reliability charges, and water shortage revenue stabilization factors. As part of the current costof-service study, the pass-through adjustments, water reliability charge, and revenue stabilization factors need to be re-noticed to the community to allow the charges to be implemented for an additional five years.

Pass-Through Adjustments
Government Code Section 53756 allows an agency that provides water and wastewater services to adopt a schedule of fees or charges authorizing automatic adjustments that pass-through increases in wholesale charges for water or wastewater treatment. City Council adopted passthrough adjustments that would allow increases in wholesale water charges for purchasing water from MWD to be passed through directly to customers if they are higher than the adopted budgeted costs. If future MWD rates are more than what was projected in the cost-of-service study, then the incremental difference will be passed through to customers. Customers will be notified prior to the effective date of adjustment. Since the pass-through adoption, the City has not exercised the adjustments. Every five years, this provision needs to be included in the Proposition 218 notification. The pass-through adjustments will be approved for use (if needed) for an additional five years beginning 30 days after adoption of the ordinance approving the rate adjustments. The Commission and Liaison agreed to maintain the pass-through adjustments.

Water Reliability Charge
The water reliability charge provides dedicated funding for the expansion of the water system to the La Brea subarea. Developing the La Brea basin will increase local groundwater production and reduce the City’s dependence on MWD for water supply. Estimated project costs for the calculation of the water reliability charge were derived from the La Brea Subarea Wells, Water Treatment and Transmission Main Project Preliminary Design Report from May 2017. The water reliability charge is in addition to the quantity and service charges. A customer’s water reliability charge is the product of the water reliability charge rate multiplied by the customer’s water consumption during the billing period. The water reliability charge will be billed to both Inside Meeting Date: November 7, 2023

and Outside City customers over 30 years to cover the cost of the project. The 30-year projection of this rate in the last cost of service study was retained for the current cost of service study and the next five years were included. The rate per HCF is proposed to continue to increase by $0.01 each year, bringing the proposed water reliability charges beginning July 1, 2024 to $0.27 for Inside City customers and $0.42 for Outside City customers. This rate differential between Inside City customers and Outside City customers is due to a $10 million General Fund contribution which subsidized the Inside City customer charge. The Commission and Liaison agreed to maintain the water reliability charge. If approved, the increased water reliability charge will replace the current charges on July 1, 2024.

Water Shortage Revenue Stabilization Factors
The State of California has experienced intense periods of drought or water disruptions due to unforeseen events like an earthquake, resulting in mandatory water restrictions. In extreme cases, restrictions could negatively affect water utility revenues. To prepare, the City adopted a schedule of revenue stabilization factors to be implemented during water shortages with City Council approval and 30 days’ notice to water customers. The factors are correlated with reductions in each customer class’s required level of conservation for each Stage. The factors are lowest for multi-family customers because their water use has less irrigation than, for example, single-family customers (during water shortages, irrigation water use is restricted more than indoor water uses). The revenue stabilization factors act as a multiplier to the customers’ existing quantity charge rates. Once the water shortage is over, rates will return to the normal rate schedule. The revenue stabilization rates replaced the drought surcharge implemented in prior years. Since the adoption of the revenue stabilization factors, the City has not exercised the factors. The revised water shortage revenue stabilization factors are included in Attachment

2. The Commission and Liaison agreed to the water shortage revenue stabilization factors. If approved, the updated factors will replace the current factors 30 days after the adoption of the ordinance approving the rate adjustments.

Wastewater Rates
The City provides sewer service only to customers within the City boundary. The City owns, operates, and maintains the sewer collection system. However, the City discharges all wastewater to the City of Los Angeles’s system via the Hyperion Water Reclamation Plant. For this treatment service, the City reimburses the City of Los Angeles for its proportionate share of discharge volumes. The City’s collection system consists only of gravity pipelines. On average, the City conveys approximately 3.5 million gallons per day (MGD) to Hyperion Water Reclamation Plant without the aid of lift stations.

Revenue Requirements
The purpose of evaluating the revenue requirement is to establish the revenue needs of the wastewater utility. Understanding the financial resources needed over the next 10 years is critical to managing and planning for the future, as well as to avoid drastic rate fluctuations year to year. A spreadsheet model was developed to derive revenue requirements for FY 2022-23 through FY 2031-32. This study relied on the City’s Operations and Maintenance (O&M) budget for FY 2022-23 and the City’s Capital Improvements Plan (CIP) budget covering FY 2022-23 through FY 2027-28.

Results of the revenue requirements evaluation determined that no additional revenue from rates is necessary during the next five-year period. However, current revenue is less than expenses; therefore, a total of $10.6 million (over a five-year period) of capital expenses will be funded using reserve funds. Although no additional rate revenue is needed to fund wastewater Meeting Date: November 7, 2023

operations, this cost-of-service study determines if each of the customer classes’ rates contribute revenue in proportion to their cost of service. In this case, the cost of service has shifted between the customer classes since the last time a cost-of-service study was conducted, and the proposed wastewater rates reflect that rebalancing.

Cost-of-Service Study and Rate Structure Design
A cost-of-service analysis determines the costs of services in the form of rates that customers pay in proportion to the services they receive. The cost-of-service analysis accounts for the load that each class places on the wastewater collection and treatment system. Their respective loads are measured in terms of the estimated volumes of wastewater discharged to the sewers and the estimated strength concentrations (i.e., the amounts of organic and inorganic matter) of those discharges. Over the last 13 years since the previous cost-of-service study was conducted, the relative proportions of the loadings have shifted due to different growth rates among the classes as well as other factors (e.g., the diversion of organics in commercial wastewater to solid waste collection and disposal). To reflect the current cost of service, rates have been rebalanced in proportion to the cost of service as shown in the proposed rates included as Attachment 3.

Currently, residential customers (single-family and multi-family) are charged only a fixed rate per dwelling unit, which is the same for both classes. Commercial customers pay a fixed rate per account, a flow charge based on actual water use, and some excess strength customers pay an additional water quality surcharge. Commercial customers with higher strength wastewater (e.g., restaurants, grocery stores), which requires greater treatment to meet discharge requirements, are charged a higher flow charge than those customers with average strength wastewater.

The residential wastewater rate structure was evaluated in this cost-of-service study for a few reasons. First, the installation of a separate landscape meter for all existing properties has been a City Council priority since FY 2016-17. The current deliverable for this priority is to implement a volumetric rate structure for the wastewater residential class. The proposed rate structure will incentivize the installation of a separate irrigation meter as water used for irrigation will not be assessed a wastewater charge. Secondly, during the last water rate cycle, residents expressed their concerns about the current residential wastewater rate structure given that a multi-family unit is charged the same wastewater charge as a single-family home. A few City Council members expressed their interest in exploring alternative wastewater rate structures for the residential class, and City staff agreed to investigate restructuring the residential wastewater rates which will encourage residents to install an irrigation meter. Lastly, due to the disparity between revenues and the cost of service for each customer class, staff, HF&H, and the Commission explored alternative rate structures to better align revenue from each class with their respective cost of service.

Staff and HF&H presented three rate structures to consider, the existing flat rate, fixed and volumetric, and all volumetric. The criteria used to evaluate the structures included revenue stability, ratepayer equity, conservation, and implementation. The Liaison concluded that introducing a flow-based quantity (volumetric) charge for the residential class (single-family and multi-family) would help address the concerns. Additionally, adding a flow-based quantity (volumetric) charge for the residential customer class will allow for customers to be in control of their bill as it is directly influenced by water use. It is expected that over the long-term charging residential customers a volumetric charge for their wastewater discharge will result in water conservation by encouraging the installation of water efficient appliances. The water savings could amount to 5% of water demand as well as a 10% reduction in wastewater discharge.

Meeting Date: November 7, 2023

The proposed quantity charges for all customer classes would be based on estimated sewered flow by factoring down each customer’s actual water use by a Sewer Return Factor, which reflects the fact that not all water use (e.g., irrigation) returns to the sewer system. Sewer Return Factors were derived for each customer class and are applied to all customers in each class as part of the proposed rates. At the September 8, 2022, Commission meeting, the Commission supported the use of Sewer Return Factors based on a three-year average of the lowest month for each year. The calendar years used were 2017, 2018, and 2019 (all preCOVID) to reflect typical use patterns. The lowest months in each respective calendar year are as follows: December 2017, February 2018, and December 2019. The Liaison concurred with the Commission’s recommendation.

Commercial customers currently have low-strength (“Domestic Strength”) and a high-strength (“Excess Strength”) customer categories. There is currently no medium-strength class.

However, the Commission recommends adding a third commercial strength category for multiuse and other “medium” strength properties. Some commercial accounts are composed of multiple businesses with a mix of domestic (e.g., retail) and excess strength (e.g., restaurants) wastewater and are served by the same meter. Introducing a third commercial class between domestic and excess strength is a common industry practice and will recognize mixed-use properties, which are not 100% domestic or 100% excess strength, as well as other mediumstrength businesses. Introducing a medium-strength class would require the evaluation of each commercial property using business licenses to identify the medium-strength customers.

Medium-strength customers would remain in their current strength classes until staff evaluates the properties and determines if there should be a change in their strength class. In order to work effectively with each customer, staff anticipates the transition process from the two current commercial classes to the proposed three commercial classes would take approximately a year.

The proposed commercial strength class restructure is included as Attachment 4.

Customer Bill Impacts
Bill impacts will vary by customer class and actual water use from billing period to billing period.

The Commission and Liaison agreed in concept with the residential rates being implemented over time to minimize impacts. With consultation from the City Attorney’s Office, it was determined that revised commercial wastewater rates should be implemented in the first year instead of gradually phasing in over five years as commercial customers are seeing a decrease in wastewater rates and should receive that impact sooner rather than later. Also, revised residential wastewater rates will continue to be implemented over five years with the use of reserves. No phase-in is recommended for water rates. Customer bill impacts for both water and wastewater are included as Attachment 5.

Alternatives
City Council could choose to request changes to any elements of the studies, including rate structure or revenue requirements. However, impacts may include loss of potential revenues and differed initiation of capital projects for the Water Enterprise. Impacts for the Wastewater Enterprise may include delays in implementing a more reasonable rate structure for customers.

Proposition 218 Notice and Public Hearing
Under California law, customers must be officially noticed and have the opportunity to protest proposed water and wastewater rates. An extensive outreach plan has been developed (as outlined below) for the proposed rate adjustments and reflects staff’s commitment to involve customers and stakeholders in decisions that affect them.

Meeting Date: November 7, 2023

If approved, the Public Notice, in compliance with Proposition 218, will be mailed to all property owners and customers by December 2023, followed by community meetings and presentations as outlined in the community outreach schedule in the section below. The Public Hearing will be held in February 2024, and, in the absence of a majority protest, if the proposed rate adjustments are approved, a second reading of the ordinance will be scheduled for March 2024.

Wastewater rates and the Water Reliability Charge would be effective July 1, 2024, if adopted.

Pass-through charges, although currently not effective, will be approved for use (if needed) for an additional five years 30 days after approval of the ordinance, along with the Water Shortage Revenue Stabilization Factors which would also be approved for an additional five years 30 days after approval of the ordinance. Revised water rates would become effective January 1, 2025. The Draft Proposition 218 Notice is included as Attachment 6. Additionally, both the Proposition 218 Notice and the Cost-of-Service Reports will be publicly available on the City’s website.

Community Outreach
Below is the schedule of meetings/outreach leading up to the November 7, 2023, City Council Study Session presentation.

Meeting/ Outreach Date
Water and Wastewater Rates Ad Hoc Committee Meeting May 23, 2022 Presentation/Discussion at Public Works Commission June 9, 2022 Water and Wastewater Rates Ad Hoc Committee Meeting July 12, 2022 Presentation/Discussion at Public Works Commission July 21, 2022 Beverly Hills Weekly Rates Article July 21, 2022
Presentation/Discussion at Public Works Commission August 11, 2022 Presentation/Discussion at Public Works Commission August 31, 2022 Presentation/Discussion at Public Works Commission September 8, 2022 Beverly Hills Courier Article September 9, 2022
City Council/Public Works Commission Liaison September 13, 2022 City Council/Public Works Commission Liaison September 29, 2022 City Council/Public Works Commission Liaison January 27, 2023 City Council/Public Works Commission Liaison May 31, 2023 Moving forward, community engagement includes hosting two town hall meetings to present the proposed rates, the impact on customers’ bills, and how the rate adjustments will allow the Water and Wastewater Enterprises to continue serving the community. Since each customer will be impacted differently, a bill impact calculator will be provided on the City’s website.

Customers will be able to input their water use data and compare their bill under the current and proposed rates. Staff will also provide ample time to respond to questions and concerns from the public. The date, time, and location of the town hall meetings will be advertised in local newspapers, on the City’s website, and through multiple social media channels, including Instagram, Facebook and Twitter. In addition, staff will attend community meetings through February 2024. Staff will present the proposed rate adjustments to the Chamber of Commerce to address any concerns from the business community. Staff will also include information on the proposed water and wastewater rate adjustments in the Public Works newsletter, The Backbone, and the City’s social media accounts.

Meeting Date: November 7, 2023

Should City Council authorize staff to move forward with noticing, the proposed community outreach schedule would proceed as follows:

Meeting/Action Date
Presentation to City Council (with draft Proposition 218 notice)
November 7, 2023
Public Notice Distributed December 2023
Presentation/Discussion at the Public Works
Commission
February 8, 2024
Community Outreach
 Town Hall Meetings
 Commission Meeting Presentations
 Community Presentations
 Presentation to the Chamber of Commerce
 Article in the Backbone Newsletter
 Newspaper Ads
 Social Media Posts
 Website
 Bill Impact Calculator
January - February 2024
Public Hearing (First Reading of Ordinance) February 20, 2024* Second Reading of Ordinance March 5, 2024*
Rates Effective July 1, 2024 (Wastewater Rates and
Water Reliability Charge),
30 days after reading (Pass-Through
Charges and Water Shortage
Revenue Stabilization Factors), and
January 1, 2025 (Water Rates)
*Anticipated City Council meeting date but subject to change.

FISCAL IMPACT
There are no direct financial impacts from the current action. The costs to prepare and send the Proposition 218 Notice have been programmed into the current year budget.

The proposed water rates, if adopted and if CIP Option 1 as recommended by the Liaison is chosen, would generate an additional $5.8 million for the Water Enterprise over the five-year study period to address operational and capital investment needs.

The proposed adjustments to wastewater rates, if adopted, will generate no additional revenue for the Wastewater Enterprise. The proposed Wastewater rates are intended to be revenue neutral. However, current revenue is less than expenses, therefore a total of $10.6 million (over a five-year period) of capital expenses will be funded using reserve funds. The proposed adjustments will better align the rates for each customer class with the costs attributable to providing their respective services. Wastewater rates will be phased in for residential customers to avoid large impacts on customers by using $2.0 million from reserves over the five-year planning period. With the use of reserves to fund capital expenses and the phase-in recommendation, the Wastewater reserve fund ending balance is projected to be approximately $28.1 million, which will still exceed the City’s reserve target of 50% of annual Operating & Maintenance in reserves at all times.

Meeting Date: November 7, 2023

RECOMMENDATION
Staff recommends that City Council authorize staff to proceed with a Public Notice and schedule a Public Hearing in February 2024 for the proposed recommended five-year water and wastewater customer rate adjustments in compliance with Proposition 218 requirements.

Shana Epstein,
Director of Public Works
Approved By
Attachment 1

STAFF REPORT
Meeting Date: September 12, 2022
To: Honorable Mayor & City Council
From: Robert Welch, P.E., Utilities General Manager
Vince Damasse, P.E., Water Resources and Operations Manager Subject: Request by Vice-Mayor Gold, to Discuss Water Operations and Emergency Storage
Attachments: None

INTRODUCTION
Per the request of Vice-Mayor Gold, City Council is requested to review the management of the City’s water system operations and emergency water storage in preparation of the City Council reviewing the Cost of Service analysis. This fall, the City Council will be reviewing a Cost of Service analysis associated with the City’s water and wastewater operations.

DISCUSSION
The City owns, operates, and maintains the water system within the City’s service area.

The water service area includes the entire City of Beverly Hills plus a portion of the City of West Hollywood. The water system includes 10 storage reservoirs, 9 pump stations, 7 groundwater wells (5 currently permitted with 2 wells, Well 6 and LCW-1, pending permit amendment), approximately 170 miles of pipelines, approximately 10,800 water meters and the Foothill Water Treatment Plant (WTP), three (3) emergency interconnections with Los Angeles Department of Water and Power (LADWP) and imported water connections from Metropolitan Water District (MWD).

Operations of Reservoir System
The City has 10 Reservoirs with a maximum storage of 43 Million Gallons (MG). The City operates its current system in a way that enables our reservoirs to be 35% to full at all times. As one reservoir drains the others fill, so at no time are all reservoirs at a 35% level. The City also follows a reservoir top-off procedure where reservoirs are filled if there is a red flag day, for water supply interruptions, or emergency events. Staff is currently in the process of preliminary design for Reservoir Management Systems (RMS) at the three largest reservoirs. With the addition of the new RMS at Greystone (19.4 MG), Coldwater (8.3 MG) and Sunset (6 MG) reservoirs, which make up 77% of the total storage within the City, these reservoirs will be able to sustain a higher operational water level (ranging from 60% level to full) which will add approximately 8.5 MG of available

BEVERLY
HILLS
.~
Meeting Date: September 12, 2022

emergency storage at these three reservoirs. Also, most inspections and/or repairs to our reservoirs can be done without draining the reservoirs by the use of certified divers.

Water Distribution
The City receives water from MWD for distribution as well as water from the Water Treatment Plant. The average daily demand for water within the City is forecasted to be

9.8 MG. The City has five (5) wells currently permitted and operational. With the addition of two more wells (Well 6 at Burton and Foothill and LCW-1 within Los Angeles along La Cienega Blvd.) planned in 2022, the water treatment plant can provide up to

2.3 MG (approximately 25%) from local ground-water sources annually. Along with our MWD imported water connections, the City has three (3) LADWP Emergency Connections located at strategic points within the City that can supply water into our system.

Resiliency
Through the development of the City’s Integrated Water Resources Master Plan (IWRMP) (Nov. 2020), emergency resiliency was evaluated and in particular emergency storage. The emergency storage calculation performed in the 2020 IWRMP was a theoretical one and very conservative compared to industry standards. The analysis was conducted to determine the duration (days) of emergency storage available in the event that the MWD water supply is offline and no other emergency interconnections are available (the City has three emergency interconnections from LADWP). It is important to note that emergency storage duration is calculated based on above ground storage in reservoirs and groundwater supplies. For example, the Foothill WTP capacity will supply approximately 2.3 MGD of local supply, which is equivalent to a 2.3 MG above ground reservoir that can be refilled and replenished daily. Our groundwater wells serve as a renewable source of underground storage.

MWD Administrative Code § 4503 explains that, “Whenever repairs or maintenance of the District's system, … Each member agency shall have sufficient resources such as local reservoir storage, groundwater production capacity, system interconnections or alternate supply source to sustain: (1) A seven-day interruption in Metropolitan deliveries from raw and treated water distribution facilities based on average annual demands of the affected facility.”
As outlined in Appendix C of the IWRMP, the City took a conservative approach in its emergency storage evaluation and required that it provide a total of 7-days of storage based on peak summer month demands assuming all reservoirs were at a theoretical operating level of 25% with no additional contributions from the City’s other imported water connections or emergency interconnections.

Table 6 below indicates the results of the calculation assuming all reservoirs operating at 25% of operating capacity with peak summer month demand. Note that the City currently operates its system in a way that enables our reservoirs to be 35% to full at all times. As one reservoir drains the others fill, so at no time are all reservoirs at only a 35% level. The City also follows a reservoir top-off procedure where reservoirs are filled if there are any indications of fire hazards, high winds, water supply interruptions, or other emergency events. For reference, the City’s recent daily water use demand was in the last two months approximately 9.4 MGD. Also, note that the total available supply from the Water Treatment Plant will not be realized until La Brea well is brought online later this year.

Meeting Date: September 12, 2022

Table 7 below is the result of the calculation assuming all reservoirs operating at a full operating capacity with peak summer month demand. This chart more accurately represents how the City operates the reservoir system since we would fill reservoirs to full capacity prior to any outage.

As shown in Table 7, even with a conservative average summer demand and the WTP online, the emergency storage ranges from 4.2 days to 8.3 days with various levels of conservation (assuming 2021 Scenario). Please note that the City’s average water use per day in July 2022 was 9.1 MG and is a 26.7% reduction in water use from the measured baseline from August 2013. For comparison, the City used 10.0 MG in July 2020 and 10.4 MG in July 2021.

Fire Suppression
Working with the Fire Department, staff prepared an analysis to ensure the water system can fight structure fires, in the event there was a loss of MWD imported water connections and no contribution from LADWP’s emergency connection. Please note that this analysis was for structure fires only and was not intended to simulate a wildfire.

The analysis was performed assuming four (4) simultaneous structure fires in the hills (Zone 8) with a fire flow demand requirement of 1,250 gpm for 2 hours. Other assumptions made for this analysis included that it was during the hottest summer day Table 6: Emergency Storage Summary - Reservoirs at Low Operating Level Available Average Emergency Emergency Emergency Emergency Storage with Supply Summer Average Storage with Storage with Storage with Scenario from Month 10% Reduced 25% Reduced 40% Reduced WTP Demand Summer Demand Demand Demand Month (MGD) (MGD) Demand I 2020 OMGD 10.9MGD 0.4 days 0.5 days 0.6 days 0.7 days I (Foothill WTP offline) 2021
I (Foothill WTP Design 2.3 MGD 11.3 MGD 0.5 days 0.6 days 0.8 days 1.1 days Build Complete)
2023-2025
j (Foothill WTP w/ 3.3 MGD 12.7 MGD 0.5 days 0.6 days 0.8 days 1.1 days Expansion)
Table 7: Emergency Storage Summary - Reservoirs at Full Capacity Avallable Average Emergency Emergency Emergency Emergency Supply Summer Storage with Storage with Storage with Storage with Scenario from Month Average 10°.4 Reduced 25% Reduced 40°.4 Reduced WTP Demand Summer Demand Demand Demand Month (MGD) (MGD) Demand I 2020 OMGD 10.9 MGD 3.4 days 3.8 days 4.6 days 5.7 days I (Foothill WTP offline) 2021
I (Foothill WTP Design 2.3 MGD 11.3 MGD 4.2 days 4.7 days 6.0 days 8.3days Build Comoletel 2023-2025
I (Foothill WTP w/ 3.3 MGD 12.7 MGD 4.0 days 4.6 days 6.0 days 8.7 days Expansion)
Meeting Date: September 12, 2022

with the most water demand in the City, our reservoirs were full to start, and both MWD and LADWP water connections were unavailable. Reservoirs start full due to our continued coordination with the Fire Department. The results of the analysis indicate that the Fire Department could fight four (4) simultaneous structure fires, for 2 hours, and repeat this for two (2) days. Note, that with the imported connections from MWD, the Fire Department could sustain this scenario indefinitely.

A second analysis was performed that had all the same assumptions above, but included the future ultimate Cabrillo Reservoir (4.3MG) maximum storage. The results of the analysis indicate that the Fire Department could fight four (4) simultaneous structure fires, for 2 hours, and repeat this scenario for 2.5 days. Again, with the imported connections from MWD, the Fire Department could repeat this scenario indefinitely.

All of the City’s reservoirs, pump stations, imported connections and wells can be operated remotely from the Water Treatment Plant through a SCADA control system.

This software is also available on our operator’s laptops allowing for even more mobility.

The reservoirs, pump stations and imported connections are equipped with backup generators that will automatically power on during a power outage. The City also regularly inspects our pump stations, wells, and reservoirs, removing vegetation as a preemptive fire protection measure. Also, all site locations are equipped with CCTV camera’s that are available to the operators remotely at the Water Treatment Plan.

Staff is in the process of to initiate a project for Advanced Metering Infrastructure (AMI) for the City’s water meters. This program will be replacing all existing meters with new meter technology allowing for real time meter reading and remote operational options.

In regards to fire suppression, the existing water system has been developed to fight structure fires and has the ability to provide for the necessary demand for fire suppression for structure fires. When discussing wildfires, Vegetation Management, Fuel Modification, and Home Hardening are just a few of the programs that provides a means of property / home protection. These programs are made to give their homes a fighting chance when they are told to evacuate.

FISCAL IMPACT
No impact to the City’s budget at this time. A water and wastewater Cost of Service analysis will be brought forward to City Council this fall that anticipate future water infrastructure improvements (e.g. Cabrillo Reservoir).

RECOMMENDATION
This report is provided to City Council regarding the operation of the City’s water system and emergency water storage in preparation of the City Council’s upcoming review of the Cost of Service analysis.

Shana E Epstein,
Director of Public Works
Approved By
Attachment 2
Attachment 2: Proposed Water Rates
Bi-Monthly Water Meter Service Charges & Fire Meter Service Charges (All Customers) Service Current Proposed (All Customer Classes; Inside and Outside City) Size Charge 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Water Meter Service Charges
1" $53.51 $53.51 $58.64 $59.81 $61.01 $62.23
1-1/2" $93.84 $93.84 $100.69 $102.70 $104.75 $106.85
2" $142.24 $142.24 $151.15 $154.17 $157.25 $160.40
3" $271.30 $271.30 $285.72 $291.43 $297.26 $303.21
4" $416.50 $416.50 $437.11 $445.85 $454.77 $463.87
6" $819.82 $819.82 $857.63 $874.78 $892.28 $910.13
8" $1,311.71 $1,311.71 $1,362.26 $1,389.51 $1,417.30 $1,445.65 10" $1,967.57 $1,967.57 $3,548.99 $3,619.97 $3,692.37 $3,766.22 Fire Meter Service Charges
<= 2" $29.73 $29.73 $30.32 $30.93 $31.55 $32.18
2 1/2" $44.32 $44.32 $45.21 $46.11 $47.03 $47.97
3" $64.56 $64.56 $65.85 $67.17 $68.51 $69.88
4" $124.69 $124.69 $127.18 $129.72 $132.31 $134.96
6" $340.52 $340.52 $347.33 $354.28 $361.37 $368.60
8" $712.74 $712.74 $726.99 $741.53 $756.36 $771.49
10" $1,272.63 $1,272.63 $1,298.08 $1,324.04 $1,350.52 $1,377.53 12" $1,654.42 $1,654.42 $1,687.51 $1,721.26 $1,755.69 $1,790.80 Bi-Monthly Quantity (Volumetric) Charges
Current Quantity Charge Rates Recommended Quantity Charge Rates Current Proposed New Proposed
Tier Size $/HCF Tier Size 7/1/2024 Tier Size 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Inside City $/HCF $/HCF $/HCF $/HCF $/HCF
Single-Family/Duplex Single-Family/Duplex
Tier 1 0-26 HCF $3.65 Tier 1 0-26 HCF $3.65 0-32 HCF $3.75 $3.83 $3.91 $3.99 Tier 2 27-48 HCF $7.12 Tier 2 27-48 HCF $7.12 33-48 HCF $6.36 $6.49 $6.62 $6.75 Tier 3 49-86 HCF $10.48 Tier 3 49-86 HCF $10.48 49-83 HCF $10.52 $10.73 $10.94 $11.16 Tier 4 86+ HCF $14.87 Tier 4 86+ HCF $14.87 84+ HCF $14.94 $15.24 $15.54 $15.85 Multi-Family Multi-Family
Tier 1 0-8 HCF $4.66 Tier 1 0-8 HCF $4.66 0-8 HCF $5.06 $5.16 $5.26 $5.37 Tier 2 9+ HCF $13.31 Tier 2 9+ HCF $13.31 9+ HCF $14.73 $15.02 $15.32 $15.63 Commercial $7.24 Commercial $7.24 $7.43 $7.58 $7.73 $7.88 Water Reliability (all customers) $0.26 $0.27 $0.28 $0.29 $0.30 $0.31 Outside City Tier Size $/HCF Tier Size $/HCF Tier Size $/HCF $/HCF $/HCF $/HCF Single-Family/Duplex Single-Family/Duplex
Tier 1 0-26 HCF $4.54 Tier 1 0-26 HCF $4.54 0-32 HCF $4.43 $4.52 $4.61 $4.70 Tier 2 27-48 HCF $8.01 Tier 2 27-48 HCF $8.01 33-48 HCF $7.04 $7.18 $7.32 $7.47 Tier 3 49-86 HCF $11.36 Tier 3 49-86 HCF $11.36 49-83 HCF $11.20 $11.42 $11.65 $11.88 Tier 4 86+ HCF $15.77 Tier 4 86+ HCF $15.77 84+ HCF $15.62 $15.93 $16.25 $16.58 Multi-Family Multi-Family
Tier 1 0-8 HCF $5.55 Tier 1 0-8 HCF $5.55 0-8 HCF $5.74 $5.85 $5.97 $6.09 Tier 2 9+ HCF $14.19 Tier 2 9+ HCF $14.19 9+ HCF $15.41 $15.72 $16.03 $16.35 Commercial $8.14 Commercial $8.14 $8.11 $8.27 $8.44 $8.61 Water Reliability (all customers) $0.41 $0.42 $0.43 $0.44 $0.45 $0.46 Water Shortage Revenue Stabilization Factors
Stage A Stage B Stage C Stage D Stage E
Up to Up to Up to Up to Up to
Class (5% Reduction) (10% Reduction) (20% Reduction) (30% Reduction) (50% Reduction) Single Family 6% 12% 24% 36% 56%
Multi-Family 3% 6% 11% 17% 36%
Commercial 4% 7% 14% 22% 41%
Irrigation 13% 26% 51% 77% 100%
Stage A Stage B Stage C Stage D Stage E
Up to Up to Up to Up to Up to
Class (5% Reduction) (10% Reduction) (20% Reduction) (30% Reduction) (50% Reduction) Single Family 1.041 1.088 1.203 1.360 1.827
Multi-Family 1.018 1.038 1.081 1.129 1.361
Commercial 1.024 1.050 1.109 1.179 1.453
Irrigation 1.095 1.224 1.685 3.180 n/a
To be applied to the non-shortage rates in effect at the time of the shortage declaration Revenue Stabilization Factors by Customer Class
Water Shortage Reductions by Customer Class
j
Attachment 3
Attachment 3: Proposed Wastewater Rate Schedule
Charge Type Current Proposed
Customer Class Rates 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Bi-Monthly Service Charge
Single Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Multi Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08
Commercial - Low Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Commercial - Medium Strength n/a $40.08 $40.08 $40.08 $40.08 $40.08 Commercial - High Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge Rate per hcf [1]
Single Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Multi Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Commercial - Low Strength $4.74 $3.58 $3.58 $3.58 $3.58 $3.58 Commercial - Medium Strength n/a $5.24 $5.24 $5.24 $5.24 $5.24 Commercial - High Strength $7.08 $6.95 $6.95 $6.95 $6.95 $6.95 [1] Quantity charge applied to sewered water use. Sewered water use is calculated as actual water use x Return to Sewer Factor.

Return to Sewer Factors are as follows:

Single Family = 52%
Multi Family = 90%
Commerical = 83%
Attachment 4
Attachment 4: Proposed Wastewater Commercial Strength Class Restructure  Low strength (0 to 250 ppm BOD/TSS)*
o Single family, multi family, retail
 Medium strength (251 to 600 ppm BOD/TSS)*
o Hotels with dining, mixed use commercial
 High strength (over 600 ppm BOD/TSS)*
o Restaurants
Low Medium High
• Banks & Financial Institutions • Appliance Repair • Bakeries Butcher Shops • Barber Shops / Hair Salons • Barber Shops/Hair Salons • Bars & Taverns (w/ Dining) (Hair Cutting Only) (Haircutting w/Add'l Treatments) • Catering • Halls & Lodges • Bars & Taverns (w/o Dining) • Coffee Shops • Libraries • Car Rental/Car Service • Eatery
• Offices (Business and Professional) • Car Washes • Grocery Stores or Markets • Post Offices/Government • Commercial Laundromats • Ice Cream Parlors • Retail Stores • Dry Cleaners • Juice Bars
• Schools • Gym or Health Club • Mini Marts (w/ Dish Washer • Hotels, Motels, or Bed & Breakfast or Garbage Disposal) • Medical Offices/Hospitals • Restaurants
• Mini Mart with Gas Pumps
(w/o Dish Washer or Garbage Disposal)
• Nail Salons
• Pet Groomers
• Pools with Restrooms (Clubhouse)
• Service Stations, Garages, Auto Repair Shops
• Spa
• Tasting Rooms
• Theaters
Attachment 5
Attachment 5: Combined Customer Bill Impacts
Combined Customer Bill Impacts- Low Water Use
Single Family/Duplex - Inside City - Low Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 28 28
Return to Sewer Factor n/a 52%
Sewered Flow n/a 15
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $109.14 $109.14 $105.00 $107.24 $109.48 $111.72 Water Reliability Charge $7.28 $7.56 $7.84 $8.12 $8.40 $8.68 Total $169.93 $170.21 $171.48 $175.17 $178.89 $182.63
Increase/(Decrease) $0.28 $1.27 $3.69 $3.72 $3.74
Wastewater
Service Charge $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Quantity Charge $0.00 $10.80 $21.45 $32.25 $42.90 $53.70 Total $87.38 $88.72 $89.91 $91.25 $92.44 $93.78
Increase/(Decrease) $1.34 $1.19 $1.34 $1.19 $1.34
Total Bi-monthly Bill $257.31 $258.93 $261.39 $266.42 $271.33 $276.41 Incr/(decr) compared to Prior Yr $1.62 $2.46 $5.03 $4.91 $5.08 Cumulative Change $1.62 $4.08 $9.11 $14.02 $19.10
Multi Family - Inside City - Low Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 47 47
Dwelling Units 10 10
Average Water Consumption (per unit) 4.7 4.7
Return to Sewer Factor n/a 90.0%
Sewered Flow n/a 4.2
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $219.02 $219.02 $237.82 $242.52 $247.22 $252.39 Water Reliability Charge $12.22 $12.69 $13.16 $13.63 $14.10 $14.57 Total $325.08 $325.55 $351.67 $358.85 $366.07 $373.81
Increase/(Decrease) $0.47 $26.12 $7.18 $7.22 $7.74
Wastewater
Service Charge $873.80 $779.20 $684.60 $590.00 $495.40 $400.80 Quantity Charge $0.00 $30.24 $60.06 $90.30 $120.12 $150.36 Total $873.80 $809.44 $744.66 $680.30 $615.52 $551.16
Increase/(Decrease) ($64.36) ($64.78) ($64.36) ($64.78) ($64.36) Total Bi-monthly Bill $1,198.88 $1,134.99 $1,096.33 $1,039.15 $981.59 $924.97 Incr/(decr) compared to Prior Yr ($63.89) ($38.66) ($57.18) ($57.56) ($56.62) Cumulative Change ($63.89) ($102.55) ($159.73) ($217.29) ($273.91)

Commercial - Inside City - Low Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 57 57
Return to Sewer Factor n/a 83.0%
Sewered Flow 57 47
Commercial Strength Domestic Low
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $412.68 $412.68 $423.51 $432.06 $440.61 $449.16 Water Reliability Charge $14.82 $15.39 $15.96 $16.53 $17.10 $17.67 Total $481.01 $481.58 $498.11 $508.40 $518.72 $529.06
Increase/(Decrease) $0.57 $16.53 $10.29 $10.32 $10.34
Wastewater
Service Charge $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge $270.18 $168.26 $168.26 $168.26 $168.26 $168.26 Total $304.38 $208.34 $208.34 $208.34 $208.34 $208.34
Increase/(Decrease) ($96.04) $0.00 $0.00 $0.00 $0.00
Total Bi-monthly Bill $785.39 $689.92 $706.45 $716.74 $727.06 $737.40 Incr/(decr) compared to Prior Yr ($95.47) $16.53 $10.29 $10.32 $10.34 Cumulative Change ($95.47) ($78.94) ($68.65) ($58.33) ($47.99) Single Family/Duplex - Outside City - Low Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 28 28
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $134.06 $134.06 $124.04 $126.56 $129.08 $131.60 Water Reliability Charge $11.48 $11.76 $12.04 $12.32 $12.60 $12.88 Total $199.05 $199.33 $194.72 $198.69 $202.69 $206.71
Increase/(Decrease) $0.28 ($4.61) $3.97 $4.00 $4.02
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $199.05 $199.33 $194.72 $198.69 $202.69 $206.71 Incr/(decr) compared to Prior Yr $0.28 ($4.61) $3.97 $4.00 $4.02 Cumulative Change $0.28 ($4.33) ($0.36) $3.64 $7.66
Multi Family - Outside City - Low Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 47 47
Dwelling Units 10 10
Average Water Consumption (per unit) 4.7 4.7
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $260.85 $260.85 $269.78 $274.95 $280.59 $286.23 Water Reliability Charge $19.27 $19.74 $20.21 $20.68 $21.15 $21.62 Total $373.96 $374.43 $390.68 $398.33 $406.49 $414.70
Increase/(Decrease) $0.47 $16.25 $7.65 $8.16 $8.21
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $373.96 $374.43 $390.68 $398.33 $406.49 $414.70 Incr/(decr) compared to Prior Yr $0.47 $16.25 $7.65 $8.16 $8.21 Cumulative Change $0.47 $16.72 $24.37 $32.53 $40.74
Commercial - Outside City - Low Water use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 57 57
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Commercial Strength n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $463.98 $463.98 $462.27 $471.39 $481.08 $490.77 Water Reliability Charge $23.37 $23.94 $24.51 $25.08 $25.65 $26.22 Total $540.86 $541.43 $545.42 $556.28 $567.74 $579.22
Increase/(Decrease) $0.57 $3.99 $10.86 $11.46 $11.48
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $540.86 $541.43 $545.42 $556.28 $567.74 $579.22 Incr/(decr) compared to Prior Yr $0.57 $3.99 $10.86 $11.46 $11.48 Cumulative Change $0.57 $4.56 $15.42 $26.88 $38.36
Combined Customer Bill Impacts- Average Water Use
Single Family/Duplex - Inside City - Average Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 56 56
Return to Sewer Factor n/a 52%
Sewered Flow n/a 29
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $335.38 $335.38 $305.92 $312.24 $318.56 $324.96 Water Reliability Charge $14.56 $15.12 $15.68 $16.24 $16.80 $17.36 Total $403.45 $404.01 $380.24 $388.29 $396.37 $404.55
Increase/(Decrease) $0.56 ($23.77) $8.05 $8.08 $8.18
Wastewater
Service Charge $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Quantity Charge $0.00 $20.88 $41.47 $62.35 $82.94 $103.82 Total $87.38 $98.80 $109.93 $121.35 $132.48 $143.90
Increase/(Decrease) $11.42 $11.13 $11.42 $11.13 $11.42
Total Bi-monthly Bill $490.83 $502.81 $490.17 $509.64 $528.85 $548.45 Incr/(decr) compared to Prior Yr $11.98 ($12.64) $19.47 $19.21 $19.60 Cumulative Change $11.98 ($0.66) $18.81 $38.02 $57.62
Multi Family - Inside City - Average Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 93 93
Dwelling Units 10 10
Average Water Consumption (per unit) 9.3 9.3
Return to Sewer Factor n/a 90.0%
Sewered Flow n/a 8.4
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $545.83 $545.83 $596.29 $608.06 $619.96 $632.79 Water Reliability Charge $24.18 $25.11 $26.04 $26.97 $27.90 $28.83 Total $663.85 $664.78 $723.02 $737.73 $752.61 $768.47
Increase/(Decrease) $0.93 $58.24 $14.71 $14.88 $15.86
Wastewater
Service Charge $873.80 $779.20 $684.60 $590.00 $495.40 $400.80 Quantity Charge $0.00 $60.48 $120.12 $180.60 $240.24 $300.72 Total $873.80 $839.68 $804.72 $770.60 $735.64 $701.52
Increase/(Decrease) ($34.12) ($34.96) ($34.12) ($34.96) ($34.12) Total Bi-monthly Bill $1,537.65 $1,504.46 $1,527.74 $1,508.33 $1,488.25 $1,469.99 Incr/(decr) compared to Prior Yr ($33.19) $23.28 ($19.41) ($20.08) ($18.26) Cumulative Change ($33.19) ($9.91) ($29.32) ($49.40) ($67.66) Commercial - Inside City - Average Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 113 113
Return to Sewer Factor n/a 83.0%
Sewered Flow 113 94
Commercial Strength Domestic Low
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $818.12 $818.12 $839.59 $856.54 $873.49 $890.44 Water Reliability Charge $29.38 $30.51 $31.64 $32.77 $33.90 $35.03 Total $901.01 $902.14 $929.87 $949.12 $968.40 $987.70
Increase/(Decrease) $1.13 $27.73 $19.25 $19.28 $19.30
Wastewater
Service Charge $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge $535.62 $336.52 $336.52 $336.52 $336.52 $336.52 Total $569.82 $376.60 $376.60 $376.60 $376.60 $376.60
Increase/(Decrease) ($193.22) $0.00 $0.00 $0.00 $0.00
Total Bi-monthly Bill $1,470.83 $1,278.74 $1,306.47 $1,325.72 $1,345.00 $1,364.30 Incr/(decr) compared to Prior Yr ($192.09) $27.73 $19.25 $19.28 $19.30 Cumulative Change ($192.09) ($164.36) ($145.11) ($125.83) ($106.53) Single Family/Duplex - Outside City - Average Water Use Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 56 56
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $385.14 $385.14 $344.00 $350.88 $357.84 $364.96 Water Reliability Charge $22.96 $23.52 $24.08 $24.64 $25.20 $25.76 Total $461.61 $462.17 $426.72 $435.33 $444.05 $452.95
Increase/(Decrease) $0.56 ($35.45) $8.61 $8.72 $8.90
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $461.61 $462.17 $426.72 $435.33 $444.05 $452.95 Incr/(decr) compared to Prior Yr $0.56 ($35.45) $8.61 $8.72 $8.90 Cumulative Change $0.56 ($34.89) ($26.28) ($17.56) ($8.66) Multi Family - Outside City - Average Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 93 93
Dwelling Units 10 10
Average Water Consumption (per unit) 9.3 9.3
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $628.47 $628.47 $659.53 $672.36 $685.99 $699.75 Water Reliability Charge $38.13 $39.06 $39.99 $40.92 $41.85 $42.78 Total $760.44 $761.37 $800.21 $815.98 $832.59 $849.38
Increase/(Decrease) $0.93 $38.84 $15.77 $16.61 $16.79
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $760.44 $761.37 $800.21 $815.98 $832.59 $849.38 Incr/(decr) compared to Prior Yr $0.93 $38.84 $15.77 $16.61 $16.79 Cumulative Change $0.93 $39.77 $55.54 $72.15 $88.94
Commercial - Outside City - Average Water use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 113 113
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Commercial Strength n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $919.82 $919.82 $916.43 $934.51 $953.72 $972.93 Water Reliability Charge $46.33 $47.46 $48.59 $49.72 $50.85 $51.98 Total $1,019.66 $1,020.79 $1,023.66 $1,044.04 $1,065.58 $1,087.14 Increase/(Decrease) $1.13 $2.87 $20.38 $21.54 $21.56
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $1,019.66 $1,020.79 $1,023.66 $1,044.04 $1,065.58 $1,087.14 Incr/(decr) compared to Prior Yr $1.13 $2.87 $20.38 $21.54 $21.56 Cumulative Change $1.13 $4.00 $24.38 $45.92 $67.48
Combined Customer Bill Impacts- High Water Use
Single Family/Duplex - Inside City - High Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 112 112
Return to Sewer Factor n/a 52%
Sewered Flow n/a 58
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $1,036.40 $1,036.40 $1,023.22 $1,043.91 $1,064.60 $1,085.93 Water Reliability Charge $29.12 $30.24 $31.36 $32.48 $33.60 $34.72 Total $1,119.03 $1,120.15 $1,113.22 $1,136.20 $1,159.21 $1,182.88 Increase/(Decrease) $1.12 ($6.93) $22.98 $23.01 $23.67
Wastewater
Service Charge $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Quantity Charge $0.00 $41.76 $82.94 $124.70 $165.88 $207.64 Total $87.38 $119.68 $151.40 $183.70 $215.42 $247.72
Increase/(Decrease) $32.30 $31.72 $32.30 $31.72 $32.30
Total Bi-monthly Bill $1,206.41 $1,239.83 $1,264.62 $1,319.90 $1,374.63 $1,430.60 Incr/(decr) compared to Prior Yr $33.42 $24.79 $55.28 $54.73 $55.97 Cumulative Change $33.42 $58.21 $113.49 $168.22 $224.19 Multi Family - Inside City - High Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 186 186
Dwelling Units 10 10
Average Water Consumption (per unit) 18.6 18.6
Return to Sewer Factor n/a 90.0%
Sewered Flow n/a 16.7
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $1,783.66 $1,783.66 $1,966.18 $2,004.92 $2,044.72 $2,086.38 Water Reliability Charge $48.36 $50.22 $52.08 $53.94 $55.80 $57.66 Total $1,925.86 $1,927.72 $2,118.95 $2,161.56 $2,205.27 $2,250.89 Increase/(Decrease) $1.86 $191.23 $42.61 $43.71 $45.62
Wastewater
Service Charge $873.80 $779.20 $684.60 $590.00 $495.40 $400.80 Quantity Charge $0.00 $120.24 $238.81 $359.05 $477.62 $597.86 Total $873.80 $899.44 $923.41 $949.05 $973.02 $998.66
Increase/(Decrease) $25.64 $23.97 $25.64 $23.97 $25.64
Total Bi-monthly Bill $2,799.66 $2,827.16 $3,042.36 $3,110.61 $3,178.29 $3,249.55 Incr/(decr) compared to Prior Yr $27.50 $215.20 $68.25 $67.68 $71.26 Cumulative Change $27.50 $242.70 $310.95 $378.63 $449.89 Commercial - Inside City - High Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 226 226
Return to Sewer Factor n/a 83.0%
Sewered Flow 226 188
Commercial Strength Domestic Low
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $1,636.24 $1,636.24 $1,679.18 $1,713.08 $1,746.98 $1,780.88 Water Reliability Charge $58.76 $61.02 $63.28 $65.54 $67.80 $70.06 Total $1,748.51 $1,750.77 $1,801.10 $1,838.43 $1,875.79 $1,913.17 Increase/(Decrease) $2.26 $50.33 $37.33 $37.36 $37.38
Wastewater
Service Charge $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge $1,071.24 $673.04 $673.04 $673.04 $673.04 $673.04 Total $1,105.44 $713.12 $713.12 $713.12 $713.12 $713.12 Increase/(Decrease) ($392.32) $0.00 $0.00 $0.00 $0.00
Total Bi-monthly Bill $2,853.95 $2,463.89 $2,514.22 $2,551.55 $2,588.91 $2,626.29 Incr/(decr) compared to Prior Yr ($390.06) $50.33 $37.33 $37.36 $37.38 Cumulative Change ($390.06) ($339.73) ($302.40) ($265.04) ($227.66) Single Family/Duplex - Outside City - High Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 112 112
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $1,135.96 $1,135.96 $1,099.38 $1,121.19 $1,143.64 $1,166.54 Water Reliability Charge $45.92 $47.04 $48.16 $49.28 $50.40 $51.52 Total $1,235.39 $1,236.51 $1,206.18 $1,230.28 $1,255.05 $1,280.29 Increase/(Decrease) $1.12 ($30.33) $24.10 $24.77 $25.24 Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $1,235.39 $1,236.51 $1,206.18 $1,230.28 $1,255.05 $1,280.29 Incr/(decr) compared to Prior Yr $1.12 ($30.33) $24.10 $24.77 $25.24 Cumulative Change $1.12 ($29.21) ($5.11) $19.66 $44.90
Multi Family - Outside City - High Water Use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1.5" meter 1.5" meter
Total Water Consumption 186 186
Dwelling Units 10 10
Average Water Consumption (per unit) 18.6 18.6
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Water
Fixed Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Quantity Charge $1,948.14 $1,948.14 $2,092.66 $2,134.32 $2,176.78 $2,220.30 Water Reliability Charge $76.26 $78.12 $79.98 $81.84 $83.70 $85.56 Total $2,118.24 $2,120.10 $2,273.33 $2,318.86 $2,365.23 $2,412.71 Increase/(Decrease) $1.86 $153.23 $45.53 $46.37 $47.48
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $2,118.24 $2,120.10 $2,273.33 $2,318.86 $2,365.23 $2,412.71 Incr/(decr) compared to Prior Yr $1.86 $153.23 $45.53 $46.37 $47.48 Cumulative Change $1.86 $155.09 $200.62 $246.99 $294.47 Commercial - Outside City - High Water use
Current Proposed
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Assumptions
Meter Size 1" meter 1" meter
Average Water Consumption 226 226
Return to Sewer Factor n/a n/a
Sewered Flow n/a n/a
Commercial Strength n/a n/a
Water
Fixed Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Quantity Charge $1,839.64 $1,839.64 $1,832.86 $1,869.02 $1,907.44 $1,945.86 Water Reliability Charge $92.66 $94.92 $97.18 $99.44 $101.70 $103.96 Total $1,985.81 $1,988.07 $1,988.68 $2,028.27 $2,070.15 $2,112.05 Increase/(Decrease) $2.26 $0.61 $39.59 $41.88 $41.90
Wastewater Not Applicabe; City of Beverly Hills does not provide Wastewater service to Outside City customers.

Total Bi-monthly Bill $1,985.81 $1,988.07 $1,988.68 $2,028.27 $2,070.15 $2,112.05 Incr/(decr) compared to Prior Yr $2.26 $0.61 $39.59 $41.88 $41.90 Cumulative Change $2.26 $2.87 $42.46 $84.34 $126.24
Attachment 6
Learn more about the City’s Proposed Rate Adjustments on page 3, including examples of the proposed revised charges across residential and non-residential customer classes. For information about the proposed revised charges in 2025, 2026, 2027 and 2028, see pages 3-7.

Notice of Public Hearing for Proposed Water
and Wastewater Rate Adjustments
Public Hearing At a Glance
The City of Beverly Hills (City) hereby gives notice of a public hearing to consider rate adjustments to the City’s charges to its customers for water service and wastewater service (collectively, Proposed Rate Adjustments) (see below tables). In addition, the City proposes to authorize automatic adjustments that pass-through to the water customers increases in wholesale water charges for water purchased by the City from the Metropolitan Water District of Southern California (MWD).

You are receiving this notice in compliance with Proposition 218 to inform property owners and water and wastewater customers that the Proposed Rate Adjustments are being considered by the Beverly Hills City Council. The Proposed Rate Adjustments are based on updated Cost of Service Studies conducted by City staff and consultants, with input from the City’s Public Works Commission and Public Works Liaison Committee. The Proposed Rate Adjustments were presented to the Beverly Hills City Council on November 7, 2023, and the City Council scheduled a public hearing to consider the Proposed Rate Adjustments on February XX, 2024.

The Cost of Service Studies and information regarding this public process are available online at www.beverlyhills.org/waterrates and can be reviewed in-person at the City Clerk’s office during regular business hours.

The City Council will hold a public hearing on the Proposed Rate Adjustments at the following place and time:

At the public hearing, the City Council will hear and consider all objections or protests to the Proposed Rate Adjustments. Any owner of a property that receives water service or property tenant who is directly responsible for the payment of the water service charges (each, a “water customer”) may submit a written protest against the Proposed Rate Adjustments for the water service charges. Any owner of a property that receives wastewater service or property tenant who is directly responsible for the payment of the wastewater service charges (each, a “wastewater customer”) may submit a written protest against the Proposed Rate Adjustments for the wastewater service charges. If a parcel has more than one water customer and/or wastewater customer, only one written protest against the Proposed Rate Adjustments for the water service charges or wastewater service charges, as applicable, will be counted. Written protests may be delivered to the City Clerk at the public hearing, prior to the end of the public hearing. Written protests also may be mailed or personally delivered to the City Clerk at City Hall, 455 N. Rexford Drive, Room 290, Beverly Hills, CA 90210, and must be received by the City Clerk before 5:00 p.m. on February XX, 2024.

Continued on next page
Proposed Rate Adjustments
Single Family*—Based on the average
water usage,** single-family residential
customers in Beverly Hills will see an
increase of $11.98 on their bi-monthly
bill in 2024 for water and wastewater
service.
*Duplexes fall under the single-family customer
class.
**On average, a single-family residential
customer with a 1-inch meter uses
approximately 56 HCF or 41,890.9 gallons of
water bi-monthly.

Multi-Family—Based on the average
water usage*, customers living in a
multi-family unit in Beverly Hills will see
a decrease of $3.19 per dwelling unit
on their bi-monthly bill in 2024 for water
and wastewater service.
*On average, a multi-family dwelling unit with
a 1.5-inch meter uses approximately 9.3 HCF or
6,956.4 gallons of water bi-monthly.

Commercial—Based on the average
water usage*, businesses in Beverly Hills
will see a decrease of $192.09 on their
bi-monthly bill in 2024 for water and
wastewater service.
*On average, a business with a 1-inch meter
uses approximately 113 HCF or 84,529.9
gallons of water bi-monthly.

Date: Location:

February XX, 2024 City Council Chambers
455 N. Rexford Drive
Beverly Hills, CA 90210
Time:
7:00 p.m.
$3.19
$192.09
$11.98
Attend one of these informational
meetings to learn more and share
your valuable input.
• January X, 2024
• February X, 2024
Learn more at
www.beverlyhills.org/waterrates.

DRAFT
Proposition 218 Notification
e t
Proactive investment is
needed now!
How were the Proposed Rate
Adjustments determined?

1. 2.

3. 1.

2. 3.

Increasing Water Independence—
Frequent and prolonged droughts as well
as regulatory demands have jeopardized
the City’s purchased water sources.

Developing local groundwater wells is
needed to secure future water supplies.

Upgrading Aging Infrastructure—
Much of the City’s water and wastewater
infrastructure is aging and needs to be
replaced to reduce main line breaks and
keep the City’s infrastructure operating
efficiently.

Offset Inflation—While the City works
hard to operate efficiently to control
costs, inflation is increasing both capital
and operational costs, including labor,
equipment, materials, treatment, and
testing.

First, all financial impacts to the water and
wastewater systems are projected, including
operations and maintenance costs, capital
improvement costs, debt service, and reserve
requirements.

Next, specific water and wastewater infrastructure
improvements are prioritized. These projects
support near and long-term needs, from regular
system operations and maintenance needs to
contractual obligations that help the City obtain
water reliability and dispose of wastewater
properly.

A third-party rate consultant leads the cost of
service study in partnership with City staff and
the Public Works Commission and City Council
Liaison/ Public Works Commission Committee.

Recommendations for changes to Beverly Hills’s water and wastewater service charges involve a series of steps to ensure that rates remain affordable, that the revenues the City collects from the water and wastewater charges do not exceed the funds required to provide the respective water service or wastewater service, and that the revenue needs are allocated to each customer class based on the cost of the service to that class.

Calculate your
bill! Visit
www.beverlyhills.org/waterrates.

The Proposed Rate Adjustments are necessary
for the following purposes:

Public Hearing (continued)
A majority protest against the Proposed Rate Adjustments for the water service charges will exist if, at the end of the public hearing, there are written protests submitted that represent a majority of the parcels that receive water service. A majority protest against the Proposed Rate Adjustments for the wastewater service charges will exist if, at the end of the public hearing, there are written protests submitted that represent a majority of the parcels that receive wastewater services.

The City Council cannot adopt the Proposed Rate Adjustments to the water service charges or the wastewater charges if a majority protest exists. No late postmarks will be accepted and emailed, faxed or photocopied protests will not be counted.

A written protest must include all of the following to be considered in determining whether there is a majority protest:

1. Clearly stated opposition to the Proposed Rate Adjustments for the water service charges, wastewater service charges, or both, as applicable;

2. Name of the record property owner or customer of record who is submitting the protest;

3. Identification by parcel number, street address or utility account number of the property for which the protest is made; and

4. Signature and legibly printed name of the record property owner or customer of record who is submitting the protest.

Oral comments at the public hearing will not be counted in the determination of a majority protest.
2 DRAFT
Proposed
Water Rates
Proposed Changes to the Current
Water Rate Structure and Rates
Water rates are based on a simple concept — recovering the costs needed to operate and maintain the water system. Many of the costs associated with treating and delivering water to homes and businesses are fixed. These include maintaining existing infrastructure such as water mains, pipes, wells, and pumps, as well as repaying loans and bonds used to build that infrastructure. Additionally, the rates cover personnel costs for workers who provide water service day and night. Variable costs, which depend on actual water usage, include expenses for water, electricity, and chemical treatment.

Some costs, such as the price of purchasing water, fluctuate and are beyond the control of the City. When the City’s supplier, Metropolitan Water District (MWD), increases the cost of water, the City must pay more, and these increases are passed through to customers. It is important to note that the Water Utility does not generate a profit. While the City is dedicated to keeping costs low, the City’s rate structure and rates must reflect the full needs of providing reliable water service while protecting our water resources and the public’s health.

Changes to Single-Family Tiers: The sizes of the tiers are proposed to be adjusted to reflect changing customer demands and thereby align the level of service with the cost of providing that service within each tier. For single-family residential customers, the tier breakpoints for the water quantity charges will be modified on account of changes in water use patterns since the previous cost of service study conducted in 2018. Tier 1 will increase from 0 to 26 HCF to 0 to 32 HCF, Tier 2 will decrease from 27-48 HCF to 33-48 HCF, Tier 3 will decrease from 49-86 HCF to 49-83 HCF and Tier 4 will expand from 86+ HCF to 84+ HCF. Note: Hundred Cubic Feet (HCF) = 748 Gallons.

Fixed service charges and quantity (volumetric) charges—which vary per customer class, meter size and tier size—will be adjusted to cover the increased costs needed to operate and maintain the water system (see tables below).

Water Reliability Charges—which provide dedicated funding for the expansion of the water system to the La Brea subarea—will increase by $0.01 each year, bringing the proposed charges beginning July 1, 2024 to $0.27 for customers inside the City (Inside City Customers) and $0.42 for customers outside the City (Outside City Customers).

Water Shortage Revenue Stabilization Factors will be adjusted to minimize the impact of water shortages on the financial health of the Water Utility.

1. 2.

3. 4.

QUALITY CONTROL PUMP STATION USAGE
3 Service Size Current Charge
Proposed Rates
7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Water Meter Service Charges
1” $53.51 $53.51 $58.64 $59.81 $61.01 $62.23
1-1/2” $93.84 $93.84 $100.69 $102.70 $104.75 $106.85
2” $142.24 $142.24 $151.15 $154.17 $157.25 $160.40
3” $271.30 $271.30 $285.72 $291.43 $297.26 $303.21
4” $416.50 $416.50 $437.11 $445.85 $454.77 $463.87
6” $819.82 $819.82 $857.63 $874.78 $892.28 $910.13
8” $1,311.71 $1,311.71 $1,362.26 $1,389.51 $1,417.30 $1,445.65 10” $1,967.57 $1,967.57 $3,548.99 $3,619.97 $3,692.37 $3,766.22 Fire Meter Service
<= 2” $29.73 $29.73 $30.32 $30.93 $31.55 $32.18
2-1/2” $44.32 $44.32 $45.21 $46.11 $47.03 $47.97
3” $64.56 $64.56 $65.85 $67.17 $68.51 $69.88
4” $124.69 $124.69 $127.18 $129.72 $132.31 $134.96
6” $340.52 $340.52 $347.33 $354.28 $361.37 $368.60
8” $712.74 $712.74 $726.99 $741.53 $756.36 $771.49
10” $1,272.63 $1,272.63 $1,298.08 $1,324.04 $1,350.52 $1,377.53 12” $1,654.42 $1,654.42 $1,687.51 $1,721.26 $1,755.69 $1,790.80 Proposed Water Meter & Fire Meter Service Charges
Bi-Monthly (All Customer Classes: Inside & Outside City) DRAFT
Extreme water shortage conditions resulting in mandatory water restrictions could negatively affect Water Utility revenues, as most of our Water Utility expenses are fixed. In 2019, the City Council adopted Water Shortage Revenue Stabilization Factors, allowing the City to offset loss of revenue needed to provide water to customers and minimize the impact of water shortages on the financial health of the Water Utility by applying the factors as a multiplier to the regular quantity charges in effect when a water shortage is declared. While not exercised to date, these factors may be implemented during prolonged water shortages. In such a case, the City will provide a 30-day notice to customers. Rates will return to the regular schedule once the water shortage is resolved.

Proposed Water Rates
Customer Class
Current Rates Proposed Rates
Tier Size $/HCF 7/1/24
$/HCF
New
Tier Size
1/1/25
$/HCF
1/1/26
$/HCF
1/1/27
$/HCF
1/1/28
$/HCF
Inside City
Single Family
Tier 1 0-26 HCF $3.65 $3.65 0-32 HCF $3.75 $3.83 $3.91 $3.99 Tier 2 27-48 HCF $7.12 $7.12 33-48 HCF $6.36 $6.49 $6.62 $6.75 Tier 3 49-86 HCF $10.48 $10.48 49-83 HCF $10.52 $10.73 $10.94 $11.16 Tier 4 86+ HCF $14.87 $14.87 84+ HCF $14.94 $15.24 $15.54 $15.85 Multi-Family
Tier 1 0-8 HCF $4.66 $4.66 0-8 HCF $5.06 $5.16 $5.26 $5.37 Tier 2 9+ HCF $13.31 $13.31 9+ HCF $14.73 $15.02 $15.32 $15.63 Commercial $7.24 $7.24 $7.43 $7.58 $7.73 $7.88
Water Reliability* $0.26 $0.27 $0.28 $0.29 $0.30 $0.31
Outside City Tier Size $/HCF 7/1/24
$/HCF
New
Tier Size
1/1/25
$/HCF
1/1/26
$/HCF
1/1/27
$/HCF
1/1/28
$/HCF
Single Family
Tier 1 0-26 HCF $4.54 $4.54 0-32 HCF $4.43 $4.52 $4.61 $4.70 Tier 2 27-48 HCF $8.01 $8.01 33-48 HCF $7.04 $7.18 $7.32 $7.47 Tier 3 49-86 HCF $11.36 $11.36 49-83 HCF $11.20 $11.42 $11.65 $11.88 Tier 4 86+ HCF $15.77 $15.77 84+ HCF $15.62 $15.93 $16.25 $16.58 Multi-Family
Tier 1 0-8 HCF $5.55 $5.55 0-8 HCF $5.74 $5.85 $5.97 $6.09 Tier 2 9+ HCF $14.19 $14.19 9+ HCF $15.41 $15.72 $16.03 $16.35 Commercial $8.14 $8.14 $8.11 $8.27 $8.44 $8.61
Water Reliability* $0.41 $0.42 $0.43 $0.44 $0.45 $0.46
Water Shortage Reductions By Customer Class
Customer Class Stage A
[5% reduction]
Stage B
[10% reduction]
Stage C
[20% reduction]
Stage D
[30% reduction]
Stage E
[50% reduction]
Single Family 6% 12% 24% 36% 56%
Multi Family 3% 6% 11% 17% 36%
Commercial 4% 7% 14% 22% 41%
Irrigation 13% 26% 51% 77% 100%
Revenue Stabilization Factors by Customer Class
Customer Class Stage A
[5% reduction]
Stage B
[10% reduction]
Stage C
[20% reduction]
Stage D
[30% reduction]
Stage E
[50% reduction]
Single Family 1.041 1.088 1.203 1.360 1.827
Multi Family 1.018 1.038 1.081 1.129 1.361
Commercial 1.024 1.050 1.109 1.179 1.453
Irrigation 1.095 1.224 1.685 3.180 N/A
Proposed Water Shortage Revenue Stabilization Factors
4 * All customers
Bi-Monthly Quantity (Volumetric) Charges (All Customers) The proposed revised Water Shortage Revenue Stabilization Factors shown in the table above—adjusted from those adopted in 2019— correspond with the mandatory water reductions by stage and customer class. These factors would be applied as a multiplier to the regular quantity charges in effect prior to a shortage being declared. Water Shortage Revenue Stabilization Factors may be implemented 30 days after adoption.

DRAFT
Proposed
Wastewater Rates
The City provides safe and reliable wastewater collection to Inside City customers through its network of sanitary sewer pipelines.

Wastewater is conveyed through the City’s underground sewer system and delivered to the City of Los Angeles Hyperion Water Reclamation Plant where it is treated. The treated water is either disposed or repurposed. Common wastewater includes water flushed from a toilet, shower water, or water from laundry and dishes.

Revenue collected for wastewater charges pays for the cost of maintenance, operations like staff and vehicles costs, capital improvement projects for sewer system improvements, and contractual obligations like the contract with the City of Los Angeles for sewer treatment and disposal.

It is important to note that the Wastewater Utility does not generate a profit. While the City is dedicated to keeping costs low, the City’s rate structure and rates must reflect the full needs of providing reliable wastewater services. The last wastewater rate adjustment was effective in 2009/2010.

Proposed Changes to the Current Wastewater Rate Structure

1. Currently, both single-family and multi-family residential wastewater customers pay a fixed bi-monthly rate per dwelling unit of $87.38. This means a single-family customer who uses on average 56 HCFs of water bi-monthly pays the same wastewater charge as one multi-family unit customer who uses on average

9.3 HCFs bi-monthly. The proposed restructure of the residential customer classes includes the addition of a flow-based quantity (volumetric) charge and reduction of the fixed charge. The quantity charge is based on an estimated sewer flow which is metered water use factored down to eliminate water that is not sewered such as irrigation. This method is called a “return to sewer” factor which is calculated for each customer class. Adding a volumetric charge for the residential customer classes will allow for customers to be in control of their bill as it is directly influenced by water use. If the Proposed Rate Adjustments are approved, residential customers will see on their bill, commencing July 1, 2024, a volumetric charge in addition to the fixed service charge.

2. Commercial customers currently have a low-strength (“Domestic Strength”) and a high-strength (“Excess Strength”) customer category. There is currently no medium strength class. The Proposed Rate Adjustments include adding a third commercial strength category for multi-use and other “medium” strength properties. Some commercial accounts are composed of
multiple businesses with a mix of domestic (e.g., retail) and excess strength (e.g., restaurants) wastewater and are served by the same meter. Introducing a third commercial class between domestic and excess strength is a common industry practice and will recognize mixed-use properties, which are not 100% domestic or 100% excess strength, as well as other medium strength businesses like gyms, hotels, and nail salons. Introducing a medium strength class would require the evaluation of each commercial property using business licenses to identify the medium strength customers. Customers believed to be a Medium-strength customer would remain in their
current strength classes until staff evaluates the properties and determines if there should be a change in their strength class.

3. Sewer return factors were derived for each customer class and are applied to all customers in each class as part of the proposed rates. For wastewater charges, quantity charges would be based on an estimated sewer flow by factoring down each customer’s actual water use by the sewer return factor, which reflects the fact that not all water use (e.g. irrigation) returns to the sewer. Sewer return factors are listed in the below rates.

4. The rates for all wastewater customers will be adjusted as shown in the below table.

Proposed Wastewater Rates
Customer Class Current Rates Proposed Rates
7/1/24 1/1/25 1/1/26 1/1/27 1/1/28
Bi-Monthly Service Charge
Single Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Multi Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08
Commercial - Low Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Commercial - Medium Strength N/A $40.08 $40.08 $40.08 $40.08 $40.08 Commercial - High Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge Rate per hcf [1]
Single Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Multi Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Commercial - Low Strength $4.74 $3.58 $3.58 $3.58 $3.58 $3.58 Commercial - Medium Strength N/A $5.24 $5.24 $5.24 $5.24 $5.24 Commercial - High Strength $7.08 $6.95 $6.95 $6.95 $6.95 $6.95 [1] Quantity charge applied to sewered water use. Sewered water use is calculated as actual water use x Return to Sewer Factor.

Return to Sewer Factors are as follows: Single Family = 52%, Multi-Family = 90%, Commerical = 83%

VEHICLE COSTS STAFF COSTS MAINTENENCE IMPROVEMENTS
5 Low strength (0 to 250 ppm BOD/TSS)*
Example: Single family, multi family, retail
Medium strength (251 to 600 ppm BOD/TSS)*
Example: Hotels with dining, mixed use commercial
High strength (over 600 ppm BOD/TSS)*
Example: Restaurants
DRAFT
c::::,
o~~~
''"''
Combined Bill Impact of Proposed
Rate Adjustments
Average Bi-Monthly Bill Impacts - Inside City Customers [Includes Water and Wastewater Rates for Each Customer Class] Customer Class/Charge Type
Current Proposed
Assumptions Current Bill Assumptions 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Single Family/Duplex
Meter Size: 1”
Water Use: 56 HCF
RSF*: N/A
Sewered Flow: N/A
Meter Size: 1”
Water Use: 56 HCF
RSF*: 52%
Sewered Flow: 29
Fixed Water Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Water Quantity Charge $335.38 $335.38 $305.92 $312.24 $318.56 $324.96 Water Reliability Charge $14.56 $15.12 $15.68 $16.24 $16.80 $17.36 Water Sub-Total $403.45 $404.01 $380.24 $388.29 $396.37 $404.55 Wastewater Service Charge $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Wastewater Quantity Charge $0.00 $20.88 $41.47 $62.35 $82.94 $103.82 Wastewater Sub-Total $87.38 $98.80 $109.93 $121.35 $132.48 $143.90 Total Bill $490.83 $502.81 $490.17 $509.64 $528.85 $548.45 $ Change From Prior Year $11.98 ($12.64) $19.47 $19.21 $19.60 Cumulative Change $11.98 ($0.66) $18.81 $38.02 $57.62
Multi-Family**
Meter Size: 1.5”
Water Use: 93 HCF
RSF*: N/A
Sewered Flow: N/A
Meter Size: 1.5”
Water Use: 93 HCF
RSF*: 90%
Sewered Flow: 8.4
Fixed Water Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Water Quantity Charge $545.83 $545.83 $596.29 $608.06 $619.96 $632.79 Water Reliability Charge $24.18 $25.11 $26.04 $26.97 $27.90 $28.83 Sub-Total $663.85 $664.78 $723.02 $737.73 $752.61 $768.47 Wastewater Service Charge $873.80 $779.20 $684.60 $590.00 $495.40 $400.80 Wastewater Quantity Charge $0.00 $60.48 $120.12 $180.60 $240.24 $300.72 Sub-Total $873.80 $839.68 $804.72 $770.60 $735.64 $701.52 Total Bill $1,537.65 $1,504.46 $1,527.74 $1,508.33 $1,488.25 $1,469.99 $ Change From Prior Year ($33.19) $23.28 ($19.41) ($20.08) ($18.26) Cumulative Change ($33.19) ($9.91) ($29.32) ($49.40) ($67.66) Commercial
Meter Size: 1”
Water Use: 113 HCF
RSF*: N/A
Sewered Flow: 113
Meter Size: 1”
Water Use: 113 HCF
RSF*: 83%
Sewered Flow: 94
Fixed Water Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Water Quantity Charge $818.12 $818.12 $839.59 $856.54 $873.49 $890.44 Water Reliability Charge $29.38 $30.51 $31.64 $32.77 $33.90 $35.03 Sub-Total $901.01 $902.14 $929.87 $949.12 $968.40 $987.70 Wastewater Service Charge $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Wastewater Quantity Charge $535.62 $336.52 $336.52 $336.52 $336.52 $336.52 Sub-Total $569.82 $376.60 $376.60 $376.60 $376.60 $376.60 Total Bill $1,470.83 $1,278.74 $1,306.47 $1,325.72 $1,345.00 $1,364.30 $ Change From Prior Year ($192.09) $27.73 $19.25 $19.28 $19.30 Cumulative Change ($192.09) ($164.36) ($145.11) ($125.83) ($106.53) 6 * RSF = Return to Sewer Factor **Assumptions based on 10 units with average water consumption (per unit) of 9.3 HCFs DRAFT
Average Bi-Monthly Bill Impacts - Outside City Customers [Water Only. The City of Beverly Hills does not provide wastewater service to Outside City customers] Customer Class/Charge Type
Assumptions Current Proposed
Meter Size Water Use RSF* Sewered Flow Current Bill 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Single Family/Duplex 1” 56 N/A N/A
Fixed Water Service Charge $53.51 $53.51 $58.64.69 $59.81 $61.01 $62.23 Water Quantity Charge $385.14 $385.14 $344.00 $350.88 $357.84 $364.96 Water Reliability Charge $22.96 $23.52 $24.08 $24.64 $25.20 $25.76 Total Bill $461.61 $462.17 $426.72 $435.33 $444.05 $452.95 $ Change From Prior Year $0.56 ($35.45) $8.61 $8.72 $8.90 Cumulative Change $0.56 ($34.89) ($26.28) ($17.56) ($8.90) Multi-Family** 1.5” 93 N/A N/A
Fixed Water Service Charge $93.84 $93.84 $100.69 $102.70 $104.75 $106.85 Water Quantity Charge $628.47 $628.47 $659.53 $672.36 $685.99 $699.75 Water Reliability Charge $38.13 $39.06 $39.99 $40.92 $41.85 $42.78 Total Bill $760.44 $761.37 $800.21 $815.98 $832.59 $849.38 $ Change From Prior Year $0.93 $38.84 $15.77 $16.61 $16.79 Cumulative Change $0.93 $39.77 $55.54 $72.15 $88.94
Commercial 1” 113 N/A N/A
Fixed Water Service Charge $53.51 $53.51 $58.64 $59.81 $61.01 $62.23 Water Quantity Charge $919.82 $919.82 $916.43 $934.51 $953.72 $972.93 Water Reliability Charge $46.33 $47.46 $48.59 $49.72 $50.85 $51.98 Total Bill $1,019.66 $1,020.79 $1,023.66 $1,044.04 $1,065.58 $1,087.14 $ Change From Prior Year $1.13 $2.87 $20.38 $21.54 $21.56 Cumulative Change $1.13 $4.00 $24.38 $45.92 $67.48
* RSF = Return to Sewer Factor **Assumptions based on 10 units with average water consumption (per unit) of 9.3 HCFs Reauthorization of Automatic Annual Adjustments that
Pass-Through Increases in Wholesale Water Charges
At the public hearing on February XX, 2024, the City Council will consider reauthorizing automatic adjustments, effective 30 days after adoption of the ordinance and be in effect for the next five years that would pass through to the water customers increases in wholesale water charges for purchasing water from MWD if the wholesale charges are higher than the adopted budgeted costs. Wholesale purchased water costs fluctuate for a variety of reasons that are beyond the control of Beverly Hills. Rather than budgeting higher costs at this time and increasing water charges now, this pass-through mechanism will be used when actual needs are known. Notice of any adjustment to the pass-through charge will be given not less than 30 days before the effective date of the adjustment.

DRAFT
7 City of Beverly Hills
Department of Public Works
345 Foothill Road
Beverly Hills, CA 90210
First Class
Presorted
US Postage

P A I D
Permit 3328
Los Angeles CA
Timeline for Rate Adjustments
On February XX, 2024, the Beverly Hills City Council will hold a public hearing to consider the Proposed Rate Adjustments. If adopted, the Proposed Rate Adjustments for the Wastewater charges, the Water Reliability Charge will take effect commencing on July 1, 2024. Future adjustments will occur on January 1, 2025, 2026, 2027, and 2028. If adopted Pass-through and Water Shortage Revenue Stabilization factors although currently not used, will be approved for use (if needed) for an additional five years beginning 30 days after adoption of the ordinance. The adjustments to the water fixed service charges and volumetric charges will take effect commencing on January 1, 2025. Future adjustments will occur on January 1, 2026, 2027, and 2028.

EXPLORE: Use our Bill Calculator Tool and read
more information about the proposed water rates and
wastewater rates at www.beverlyhills.org/waterrates
LEARN: Attend Town Halls on on January X, 2024 and
February X, 2024 at 6:00 p.m. at the Beverly Hills City Hall Municipal Gallery, 455 N. Rexford Drive, Beverly Hills
ATTEND: The Public Works Commission Meeting
on January X, 2024 at 8:00 a.m. at the
Beverly Hills City Hall, Room 280A,
455 N. Rexford Drive, Beverly Hills and
the Public Hearing for the Proposed Rate
Adjustments on Tuesday, February X, 2024
at 7:00 p.m., or—as soon thereafter as the
matter may be heard—at the City Council Meeting,
City Council Chambers, 455 N. Rexford Drive, Beverly Hills WATCH: Tune into Beverly Hills Television
on February X, 2024 to watch the City Council
meeting or view the meeting live online at
www.beverlyhills.org/living/beverlyhillstelevision/watchlive LISTEN: Schedule a presentation about the
Proposed Rate Adjustments for your group
by contacting Public Works Customer
Service at [email protected]
or (310) 285-2467
SHARE: Facebook, Twitter,
Instagram - @cityofbevhills
QUESTIONS: Contact Public Works
Customer Service at [email protected]
or (310) 285-2467
?

IMPORTANT NOTICE - THIS MAY IMPACT YOU
Beverly Hills PROPOSED WATER RATE CHANGES
DRAFT
[6]